by Cindy Barnes
Yes, much of what people do in organizations is to get the company fully prepared for the past.
The whole area of value proposition, from design to implementation and selling needs is to be looked at properly, making sure that a business creates a whole system that will elegantly prepare it for the future, and not the past.
Cindy, Helen and Tamara unpack this challenge with passion and skill as professionals who have been at this forefront for a long time. Their contribution is significant for the future, not the last war.
Dr Leandro Herrero
Chief Organization Architect
The Chalfont Project/Viral Change
ACKNOWLEDGEMENTS
In this world of change, the importance of customer value must not be underestimated or understated. For sales professionals and other senior executives in companies of all sizes around the world, harnessing authentic customer value into value propositions which inform sales propositions is a powerful way of generating better business.
Our influencers include all our customers, clients and colleagues who, over the years, have helped to shape and refine our work.
We here express our appreciation to those who supported us, worked with us daily, and helped bring this book to fruition.
First, extensive thanks must go to Mary Pasby for bringing her years of experience in marketing, sales and research to bear on our work. We could not have brought this book to fruition without her.
Paul Waddington was our amazing, patient wordsmith – we’re indebted, Paul.
Suzi McGhee prepared, corrected and co-ordinated the manuscript and illustrations. Our thanks go to her for her continual diligence and perseverance.
Darin De Stefano was our tireless proofreader and insightful copy editor. Our thanks to him for his patience and tenacity.
Other acknowledgements go to: Alison Carter, Lucy Cooper, Jane Tennant, Ostii Ananda, Lynn Serafinn, Catherine Martin, Leandro Herrero, Paul Roberts and Professor Jonathan Smith.
Final acknowledgements go to wonderful social media contacts and friends – some of whom we know and some we have never met but each person has been invaluable with their knowledge, help and support, including: Mike Parker, Neelesh Marik, Rmala d’Aalam, Charles O’Malley, Laura Martinez Galera, Patrick Andrews, Floris Koot, John Kellden, Keith Gould, Nadine Hack and Jan Höglund.
Introduction
There is a paradox in business today. Customers have more power than ever, yet they are less satisfied with the businesses that serve them. The result is that many businesses, particularly those that are well established, are losing out to disruptive new competitors.
In our first book, Creating and Delivering Your Value Proposition (Barnes, Blake and Pinder, 2009), we explored how businesses can reconnect with their customers by creating a better customer experience. There are now 600 implementations of Futurecurve’s Value Proposition Builder™ methodology in organizations around the world. We have been able to observe it in action as companies use it to tackle their own particular challenges. What we have seen has shown that it is a powerful tool for restructuring and repairing customer relationships. However, its output alone is often not enough. To really reap the rewards of value proposition work, companies need to make more profound changes to the way they work and act. Businesses have had varied degrees of success in doing this. In this book, we explore their stories.
In particular, we look at one of the key areas where businesses need to make adjustments: their sales approach. Unless this is modified to take advantage of a company’s value proposition, many of the benefits are lost. This is crucial because, without sales, there is no business.
So why now? What is creating this paradox in modern business?
Many forces have converged to change the face of commerce in recent years. Driven by technology and the relaxation of trade barriers, many large companies have become globalized. During this process, the customer has often been left behind – turned into little more than a number on a balance sheet. This trend holds true for business-to-business as well as consumer sales organizations.
Success, ethics and the millennials
Today, there is a rise in ethical business and business practices, spurred in part by the demands of millennials: those born between 1980 and 1999. This generation has grown up with technology and is more questioning of business. Millennials use social media and other peer-to-peer systems to filter out truth from spin. Twitter, for example, creates a community and a sense of power against big business and bad practice. This age group – which of course comprises potential customers and employees – can quickly and easily find a different supplier or employer.
Making the change
How do companies change to meet the challenges of globalization and empowered, demanding customers? Realizing that they are not mechanical entities but collections of people is an important step. As the world becomes more interconnected and people become more interdependent on each other, psychological insights will play a growing role in helping people to understand and navigate the complex interactions played out daily between employees, customers and all stakeholders. These insights are a huge part of the value proposition approach explored in this book.
The approach we advocate is not about fixing one or two parts of the business: it is a systemic view that examines all key aspects of the business together. Experience shows that it is never just one thing that is broken. When most companies try to fix the problem, the solutions often involve uncoordinated activities that focus on rational factors at the expense of the emotional and psychological. As a result, their efforts fail to halt the business decline.
This failure occurs because they reach what we term The Solution Gap. This phrase describes a disconnection between how a salesperson sees what they are selling, how the customer sees it, what they want to buy and how the business supports the sales process. The Solution Gap can only be bridged using a joined-up approach that encompasses the whole business and its wider stakeholders, especially its customers.
Businesses need to integrate the customer into their core business processes if they want to solve this problem. Selecting and implementing the best marketing strategy and sales approach is key to achieving this objective. That is why this book will focus on these business areas. It will show how the Value Proposition Builder™ approach can be extended to have a long-term, transformational impact on sales, marketing and the whole business.
Many companies have successfully achieved this holistic approach. However, others have implemented value proposition designs by only changing one aspect of their business, without considering the consequences for the whole organization. Often, they focus on short-term gain rather than more systemic, longer-term objectives.
Examples of business demise due to short-termism illustrate what can happen. Remember Blockbuster or, less well known in Europe, the Joseph Schlitz Brewing Company? Much has been written about Blockbuster’s failure as a result of new market disruptors such as Netflix. However, its demise was heavily influenced by the business tactic of focusing on only one or two key areas to increase revenue, notably the charging of late payment fines to customers. This tactical approach left the business blindsided by technological innovations and new competitors. In the case of Schlitz, the challenges of meeting large-volume demands while also cutting the cost of production led it to take shortcuts in the brewing process, which alienated its traditional customers. Ultimately, it was sold to a rival. In this instance, Schlitz ignored what its customers wanted – in the interest of satisfying increasing sales and reducing costs – and in doing so it lost the whole business.
The business press dissects the corpses of failed businesses to understand what can be learned from them. Harder to find are those companies that do play the long game, approaching their businesses in a systemic way and considering all the areas of change that need to be tackled. Unilever is a prime example of a company that acts systematically in all of its businesses, across all of its brands and suppl
y chain, with a goal of making sustainable living commonplace. This behaviour is evident in projects such as The Foundry, a global crowdsourcing platform that looks to solve sustainability issues in the areas of sanitation, hygiene and nutrition (The Foundry, 2016). The core belief that runs like a golden thread throughout Unilever is that it cannot have a healthy business in an unhealthy society. Best-selling author and thought leader Simon Robinson describes sustainability as ‘the quality of an organization’s relationship with all stakeholders’, where those stakeholders are internal, customers, value chain, nature and the individual (Robinson and Moraes Robinson, 2014). This view supports the systemic approach detailed in the pages that follow.
Authenticity, this book and its readers
This book focuses on selling ethically, authentically and successfully. Today we are seeing the growth of ethically driven companies whose values are authentic and underpin their business processes. Throughout the book, all recommendations will steer readers towards developing an authentic business. As part of this process, one important point must be addressed: what is authentic selling? Is it helping customers or manipulating them? In an authentic business, sales tools and techniques are used to help customers. When they sell ethically, the business and its sales staff work with customers to help them shape solutions and offerings that are of genuine value to the customer. In this way, the ethical selling process becomes a win/win situation.
In the groundbreaking book Holonomics (Robinson and Moraes Robinson, 2014) Simon and Maria Robinson argue that people in business must adopt a ‘holonomic’ way of thinking, a dynamic and authentic understanding of the relationships within a business system, and an appreciation of the whole.
So, who should read this book?
This book is aimed at traditional businesses, new businesses and entrepreneurs that want to (re)connect to their customers and provide products and services of genuine value to them. To implement this change successfully, the reader will most likely be a senior executive running an entire company, division or large department.
Any business that sets off on this journey and stays with it will ultimately find itself with happier, more engaged customers and employees; solid revenues; a sense of business community; and a successful sales process. Management – indeed, the whole company – will feel confident. Everyone in the business will know what they are doing, why they are doing it and how this contributes to the customer experience.
However, creating this integrated approach requires special tools and techniques. The Value Proposition BuilderTM framework uses a psychology-based approach (a mix of transactional analysis and phenomenology) to conduct stakeholder interviews. This uncovers unique rational and emotional insights, enabling businesses to address both these dimensions when they change how they work, leading to innovative breakthroughs and integrated processes.
Leading sales expert Dave Brock says: ‘To be truly customer-centric you need to talk in the customer’s language and from their perspective. So you wouldn’t talk about the offerings that you want to sell, rather you would talk about the customer problems that you are going to solve. You wouldn’t talk about the sales process; you would talk about the customer buying process.’ We agree wholeheartedly with Brock. But in this book we are talking primarily to companies that sell, rather than to their customers, so to avoid confusion and for the purpose of simplicity we are going to stick with ‘company-focused’ language. For this reason we talk about ‘sales proposition’ rather than ‘buying proposition’ throughout.
Get ready to read
This book begins by examining the current business climate and how the market has changed forever (Chapter 1). It looks at some of the symptoms of this market shift and how various companies have responded. The world has changed over the past decade and continues to change – businesses ignore this shift at their peril.
Chapter 2 explains why value propositions are central to navigating these changes, and how they form the foundation for effective sales propositions and stories.
In Chapter 3, we cover how to design a value proposition. Does the business approach align with what it is that customers value? If not, what does ‘good’ look like? When a business is not aligned (and many are not), business leaders feel desperate and impotent. In large businesses, making the necessary changes is like turning around a large oil tanker: slow and time-consuming. Sometimes, it is difficult to know where to begin. The Value Proposition Builder™ emphasizes the importance of customer and market research that treats the customer as someone within, not outside, the organization’s boundary. Businesses work with the customer; they are not doing things to them or for them. For many companies, this needs a mental and behavioural shift. In this chapter, we introduce a case study that will be used throughout the book to provide a real example of how a company can move through the whole process of embedding their value proposition into the way it works.
Chapter 4 explains how to translate the value proposition into a sales proposition. There are two components to ‘value proposition selling’: the first is the actual product, service or offering being sold, while the second focuses on ‘how to sell’ or ‘the sales process’. There are many misconceptions about selling: often, companies see it as a single discipline. In fact, there are a range of sales approaches, each requiring different skills, processes and support from the business. For the best results, a business should understand what it sells and then select the best sales approach.
The Value PyramidTM can be used to map customer buying behaviours for any business against its offerings and help to identify any adjustments that the organization needs to make. The customer’s understanding of a business’s offering will be informed by how the offerings have been positioned on the Value PyramidTM. For example, it can help to select the optimal selling style for the business, such as transactional or consultative.
Businesses need to change the way they support this type of selling. In fact, as Dave Brock suggests, they may even need to change the people who do the selling. ‘Our customers don’t need salespeople calling on them. They need business people who sell’ (Brock, 2016). Finally, any company that wants to move up the Value Pyramid™ needs to ensure that all these changes are embedded in the business.
Chapter 5 reviews sales approaches and the sales process, with a particular focus on how the customer feels at each stage. Two elements – the rational and emotional – play a key role in helping a business to design an effective sales strategy and select the most effective sales approach and style.
Chapter 6 focuses on ‘the sales story’. Storytelling is an integral part of sales proposition communication for a number of reasons. It connects listeners to the storyteller emotionally and this bond plays a key role in the sales process. Well-documented research demonstrates that storytelling often provides critical engagement between sales staff and prospective clients. From this research, we know that unique physiological responses occur in the brain when relating to stories. Mirror neurons contribute to coherence between a speaker’s presentation and the receptivity of his/her audience. The speaker and listener together establish a shared context involving various degrees of neural coupling. This process results in senses of shared perspective and empathy between the salesperson and the buyer.
In Chapter 7 we summarize the 10 Laws of Value Proposition Selling:
Law 1: the whole company plays a role in supporting the sales process.
Law 2: the customer is part of the business system.
Law 3: the structures and behaviours of a business must be kept in balance with each other.
Law 4: sales behaviours must be directed towards helping the customer gain maximum value from sales offerings.
Law 5: understand and be clear about the difference between marketing and selling.
Law 6: ensure that all business processes support the market positioning.
Law 7: don’t try to change everything all at once; you need an evolutionary plan.
Law 8: use
the sales process as a guide and select the appropriate sales approach and style for your market positioning.
Law 9: you can’t mix your selling styles in one meeting.
Law 10: this process – the value proposition work and organizational adjustments – never stops.
These are the foundations upon which this book is based. If a business genuinely wants to offer value to its customers, these laws provide an excellent checklist to assess how the business is aligned with this aspiration.
Finally, Chapter 8 explores how organizations have changed their structures to support value proposition selling. We use case studies to illustrate how starting with psychology-based research and the Value Proposition Builder™, companies have gone on to restructure their businesses so that marketing and sales efforts are precisely calibrated to their customers.
References
Barnes, Cindy, Blake, Helen and Pinder, David (2009) Creating and Delivering Your Value Proposition, Kogan Page, London
Brock, Dave (2016) [accessed 7 June 2016] Business People Who Sell [Blog] Partners In EXCELLENCE, 11 March [Online] http:// partnersinexcellenceblog.com/business-people-who-sell/
Robinson, Simon and Moraes Robinson, Maria (2014) Holonomics: Business where people and planet matter, Floris Books, Edinburgh
The Foundry [accessed 9 November 2016] Unilever. © 2016 [Online] https://foundry.unilever.com/
01
How the world has changed
Why should a business change anything? If it is big, successful, has a good track record and is a well-known brand in its marketplace, why fix what does not appear to be broken? The short answer is: because the world is changing.