In May and June Alexander Group met with over 20 sales leaders at two Summits to discuss the importance of value selling in their growth strategies and the keys to doing it well. This blog post summarizes their observations in two areas:
Is Value Selling For Everyone?
Executives often referred to value selling as “architected selling” where deep business expertise is leveraged to design, build and deliver solutions to customer challenges in both cost management and revenue generation. While architected selling is not right for everyone, it has the potential to be a real differentiator in more situations than you might think. Consider the following graphic:
This graphic explores the relationship between product line breath and complexity to identify where value selling fits best. Above the value frontier architected selling can play an important role in growth strategy. Where product line breadth and complexity come together in the upper right (think high tech hardware/software/service hybrids such as IBM, HP), the opportunity to deliver value by improving customer business processes is robust.
But companies with broad and complex product lines are by no means the only players that should consider architected selling in their growth strategy. Biotech companies, for instance, have relatively narrow product lines but very complex products. Their innovative products can literally change healthcare outcomes and disease management models. Where business process change is possible, architected selling should be considered.
Similarly, industrial distributors (upper left) carry relatively simple products but offer thousands of stock-keeping units. Innovative distributors that combine product breadth with inventory management and/or replenishment processes can also deliver superior value. Either product line breadth OR complexity spells an opportunity to improve process and therefore an opportunity to value sell.
Conclusion: In most businesses creative thinking can identify opportunity for products and services to improve customer business processes. Where this is true architected selling bears consideration.
What Is Needed To Do Value Selling Well?
Value selling or architected selling are catchy phrases. Each is easier said than delivered. Getting value right requires an environment where the company and the culture are tuned to make value delivery job one. This imperative is broader than just the sales organization. It takes cross functional collaboration and teamwork. Here are some of the things Summit leaders felt were critical to creating the kind of environment where value selling can thrive.
A culture of shared purpose. Product Development, Marketing, Sales and Service must have a shared purpose: customer success. This implies cross functional interlock in areas such as planning, coverage, organization, job design, metrics and compensation. Value selling is the opposite of “sell and run.” It is what some executives are beginning to call “accountability coverage,” where the sales person is responsible for the whole customer contact continuum, from discovery to implementation and roll out. That means finding ways to work smoothly across multiple functions.
Several executives offered a perfect illustration of this by pointing out that they were beginning to imbed upside and downside risk in the terms of sale to demonstrate their commitment to customer success. To accept such risk, however, the company and the sales executive need to know that all customer-facing resources are on the same page…that they are all committed to customer success.
The power of the story. Architected selling means targeting commerce leaders at the customer, executives who care about the business, the balance sheet and the income statement. You only get one chance to message these executives, however, so sellers must be prepared. They need to be rock solid on the value they can bring to these commerce leaders. For this they need cases or “stories” that clearly show how their products help run businesses better. Stories from the same vertical or a related industry are nice. Sometimes it’s even more impressive when an unrelated industry with a similar process is cited. Stories confer instant credibility.
Turning insights into impact. Who is in charge of creating these stories? One executive built a new function called the “strategic insights group.” Its job is to mine unstructured social media data and produce a constant stream of insights about what customers are thinking and what they value.
This group teams with marketing and sales to build segment sales strategies. The group also helps sellers prepare for sales calls. And it feeds product development with ideas based on knowing what is on the customer’s mind. It is distinctly cross functional.Other executives referred to putting the sales and marketing functions under a common executive to better align their mutual interests and actions.
The common point, however, is that companies need to supply sales with a steady stream of compelling insights and stories to support their interactions with commerce leaders. They do this by teaming multiple functions to maximize the value of their unique expertise.
No more siloes. Sales, Marketing, Product Development and Service have all been traditionally separate or “siloed.” These walls need to either come down or be bridged if sellers are to become “partners with customer commerce leaders.” One executive referred to this as developing a “co-dependency” between these functions.
This leader pointed to how she had created a new process to team up marketing and sales to garner insight from customer Net Promoter scores. Marketing uses the scores and comments to identify which customers loved and hated what. They teamed with sales to rapidly change or eliminate identified sources of friction and to scale the practices identified as most valuable.
As well, this new process helped identify very satisfied customers to serve as powerful references…which sales quickly put to good use to support their “stories.” New processes are used to interlock elements of customer-facing organizations, so companies can better identify, articulate and deliver what their customers value most.
Embrace a longer sales process. A value-centric sales culture celebrates customer success. Said one exec, “You need to be able to bring the customer an insight, a trend, a fact that they can use to make money. When they make money we make money. But this generally means a longer sales cycle.” Don’t waste time trying to shorten the process. Embrace it. Make up for the time invested by selling bigger more profitable deals.
Value selling takes more time on both the front end (discovery) and the back end (service and implementation). Turn a longer front end into a virtue. Promote the fact that sellers add value by uncovering business improvements “before the customer is even aware of them.” Use a more in-depth front end to avoid the pain of a low margin/high risk RFP on the back end.
Sales means service. What happens after the sale? Solutions get implemented. This is when the customer gets their ROI. And this is where the service organization comes into play. The architected seller needs to care about this. Good implementation will keep the customer satisfied and keep the door open for new sales opportunities. Said one executive, “While you do not want to turn your service organization into sellers you do want them to be a part of the sales discussion.”
One Summit participant has just merged sales and customer support into one group reporting to a single executive in Europe and North America. While the organizations remain separate, common planning and metrics along with coordinated processes keep these two groups aligned. Customer support keeps a sharp eye out for opportunity while sales promotes the full spectrum of products and services, from discovery to implementation, in a more powerful voice.
And more satisfied customers with more compelling results leads to more powerful stories.
Value selling is not for everyone. The breadth and complexity of product line needs to fit. It takes time and investment to set up. It may not deliver results right away. And pulling cross functional teams and processes together is hard work. But as one executive noted, “Value-selling requires you to think like a customer. When you do this you see the world very differently. And that can open up a whole new world of possibilities.” Such a viewpoint is central to enabling both the company and the seller to shift from product pushing to being a true “partner in commerce” with the customer. In an age when value means competitive advantage, companies need to think very carefully about whether and how to develop their own version of architected selling.
Join us July 18th at 1 pm EST (10 am PST) for a brief 30 minute webinar packed with insights on how to create a sales force that generates value. Hear the key insights shared at our recently conducted Regional Forums in New York and San Francisco, where over 75 senior sales leaders gathered. Hear from sales leaders Sal Abbate and Ken Liss, two of our upcoming keynote speakers at our Annual Forum this Fall, who will summarize the lessons from their journey to lead sales forces that create value.