Selling Your Value Proposition
Page 13
Self-test: value proposition or sales proposition?
You can use the following set of statements to determine whether a value proposition or sales proposition is best for your current needs. Are you mostly concerned with the statement in column A or column B?
A
Select A or B
B
1
Defining the intended customer experience for your customers in terms of their needs and expectations from your business and aligning all teams to understand and deliver this customer experience
Ensuring the customer experience of the sales and marketing process meets customer expectations and is a positive reflection of the company brand
2
Developing persuasive stories that can be used at any level including the company, divisions or business units, customer sectors or segments, persona or buyer type
Creating persuasive stories that are used for an individual customer or prospect at an opportunity level
3
Understanding the main market challenges facing your key customer groups so that you can respond to the following questions:
‘How can you give us competitive advantage?’
‘Why should I consider your company?’
‘Why should I consider your offering?’
Answering the customer’s key buying questions of: ‘Why should I change from what I have now to a new offering?’
‘Why should I buy from you rather than another company?’
‘Why should I buy now?’
4
Configuring and positioning your portfolio of offerings: products, services and solutions at the company level, division or business unit level, customer sector or segment level, persona or buyer type level
Repackaging and bundling the portfolio of offerings: products, services and solutions, at the individual customer or prospect level and/or at an opportunity level
5
Assessing your customer’s alternative options and substitutes to using you. (Looking beyond your traditional competitors.) Identifying precisely how you are different from and better than each of these options.
The sales team’s understanding of the customer’s perceived risks of buying from you.Their ability to differentiate your offerings appropriately for a customer or prospect, considering the range of alternative and substitute options to the customer.
If you have scored:
Mostly As: you need to develop your customer-centric total value proposition.
50/50 A and B: you need to develop both, starting with your overarching value proposition.
Mostly Bs: you need to develop your customer-centric sales proposition.
References
Christensen, Clayton M and Raynor, Michael E. (2003) The Innovator’s Solution, Harvard Business School Publishing Corporation, Boston
Christensen Institute, The (2016) [accessed 23 November 2016] Jobs To Be Done [Online] http//www.christenseninstitute.org/jobs-to-be-done/
Howard, Tamara (2014) Who’s Paying for Lunch?, Verve Business Books Ltd, Oxfordshire
05
The sales process
Many readers of this book will be familiar with the sales process, the sales cycle and the different types of selling. If you are one of these readers, we would suggest you skip this chapter and move on to read about sales storytelling in Chapter 6, a summary of our Laws of Value Proposition Selling in Chapter 7, or ‘Creating the selling organization’ in Chapter 8.
If, on the other hand, you are relatively new to the nuances of selling, you may find this chapter useful. In order to properly exploit your sales proposition it is important to understand each stage of the sales cycle from both the salesperson’s and the customer’s perspective.
Stages of the sales process
A quick review of the standard sales process shows what is happening at each stage:
to progress the sale;
to show what is going on in the mind of the customer;
and to illustrate the different activities of the two sales types mentioned so far.
The circular diagram in Figure 5.1 illustrates the process for any type of sales opportunity and for all types of sales approaches. In large organizations many of these processes may be occurring simultaneously as different sales opportunities arise and customer needs are met. For new customers, the first sales engagement may start as early as the ‘suspect’ stage.
Figure 5.1 The eight steps of the sales process
SOURCE Verve Consulting, 2016
Many organizations use these terms loosely without consideration for what each means in terms of what is going on in a prospective customer’s mind and what a salesperson should be doing. This process is appropriate for any sales process for any type of business – from consumer retail to large, complex B2B sales – the key differences are how much time is spent in each stage and some of the techniques for moving the process forward. The key role of any salesperson is to successfully and efficiently move the customer from stage to stage until a contract is signed and the offering delivered. For simplicity’s sake, the descriptions below will speak about ‘new business’ but these rules apply just as well to new opportunities with an existing customer.
What is happening at each stage of the cycle?
Suspects
Let’s start at the beginning: suspects. Suspects are merely an aggregation or segmentation of businesses, whether by geography or business type, where there might be a business opportunity. For example, new business salespeople are often given a geographic area in which to sell and, until every company is ‘qualified’, everyone on the patch is a potential customer. Of course it would be inefficient for the salesperson to ring every company; there are quicker ways to identify good companies. Ideally, salespeople do not focus on suspects – these individuals would be too expensive a resource to just knock on doors without a good reason. Typically, the marketing department creates campaigns aimed at suspects – for example, social media bursts, mailshots, advertising, seminars – in order to isolate good prospects.
So what’s going on in a suspect’s mind at this stage?
– ‘I don’t know I have a problem/need’ or ‘I don’t know your business exists.’
So, neither consultative nor transactional salespeople should be deployed to chase suspects – it is a waste of resources.
Prospects
Prospects are individuals or businesses that are known to have an interest in a company’s offering. It is at this stage that a salesperson makes contact to determine whether the interest is real.
In the case of transactional salespeople, the questions and the buyers within the organization are straightforward:
Does the prospective customer have a budget?
When and how does the company plan to make a purchase?
How will the decision to buy be made?
These are all qualifying questions that the salesperson should ask in order to turn the prospect into a qualified prospect. This description makes qualifying sound easy and, in some cases, it is. However, in others the initial contact may be someone who is merely ‘shopping’ on behalf of a potential buyer, so the salesperson will need to uncover this relationship and try to gain access to the ultimate decision maker.
The buyer is typically either a procurement professional or a mid-level, departmental manager with a fixed solution in mind.
What’s going on in a prospect’s mind at this stage?
‘I buy something similar to your product (but not from you), but…
I didn’t know you existed or could help me.’
‘I have misconceptions about your product or company.’
‘I don’t have a good reason to move from my current supplier.’
In the case of consultative salespeople, while the objective of this phase is the same, the buyer and the questions are slightly different.
Does the prospective customer have a burning issue or want to exploit a business opportunity?
Is there any time pressure on the prospective customer to ‘do something’ soon?
Can the selling company put together a solution to solve the issue/ exploit the opportunity?
How much is it worth to the buying business? What is the value to the individual who owns the problems?
How will a decision to proceed be made?
Who will make the final decision and does anyone else need to be involved?
The buyer is the business person who owns the problem or opportunity.
What’s going on in a prospect’s mind at this stage?
‘You sound like you know what you are talking about and have some experience solving my issue or exploiting similar opportunities, but… I didn’t know you could help me.’
‘How can I be sure your company will do what you say?’
‘How can I convince my business peers that working with your company is the best option?’
‘How can I minimize the risk to my business of choosing you or your solution?’
Qualified prospect
By the stage of the qualified prospect, two important things should have occurred if the opportunity is worth pursuing. First, the prospect is now aware that the selling company offers a particular product, service or solution. Second, the salesperson now understands the prospect’s needs, budget, time frame and how a decision will be made. It is at this point that the salesperson can begin to sell in earnest or qualify-out the opportunity and not pursue the sale.
By now, in the transactional selling situation, the qualified prospect is thinking:
‘I buy a product similar to one you sell’, and…
‘I know you exist and believe you have a product I could buy.’
‘And we have agreed what you need to do to convince me to buy from you.’
In the consultative selling situation, the qualified prospect is typically cautiously excited. If successful, the salesperson has demonstrated a good understanding of the business environment in which this business operates and can bring the selling company’s experience to bear on solving the issues.
What this individual is thinking:
‘I hope the salesperson is right. If so, it would be a load off my mind!’
‘How can I quickly assess whether to buy, so that if this solution works I can use it for my business as quickly as possible?’
So, in both these instances, by the time a salesperson has reached the qualified prospect stage the target company should know all about the selling company. Knowing that a particular company exists, and understanding the full range of its capabilities, is a very important step. No one can buy from a company if he or she doesn’t know the company or its offerings. Many smaller businesses or those trying to break into new markets may not get asked to bid for opportunities because no one in the prospect’s company has heard of them.
This problem can often be even worse for large, well-recognized brands selling to existing customers.
Why? Well, many reasons and, typically, all of them are found together in large corporations. Most large corporations organize their business in a siloed fashion with multiple sales forces and marketing functions. Such large corporations are myopic and focus more on their own organizations than their customers’, so a value proposition analysis can be a shock to them. In any case, this short-sightedness results in poor communications to the market.
For large customers of these siloed businesses, there may be many salespeople selling different offerings to the same or different departments in the customer business. Often, there is also an account management or relationship management function thrown into the mix as well. With this confusing mix of individuals, the prospect can hear mixed messages or, in some cases, mishear about some of the offerings. He or she may not ask about an offering out of ignorance – and such ignorance is not the fault of the customer! Careful qualifying of all potential opportunities would uncover these situations. Once uncovered, the appropriate salesperson can then engage in selling activity.
It is worth summarizing at this point what is happening in the customer journey thus far and what the salesperson should be facilitating (see Figure 5.2).
Before moving on to the next stage, it is also worth summarizing what sales activities should be carried out at each of the first three stages (see Figure 5.3).
After thorough qualification, should the salesperson or selling team decide to proceed, the next step is to move into the selling phase of the cycle (see Figure 5.4).
Figure 5.2 The customer journey so far
SOURCE Verve Consulting, 2016
Figure 5.3 Prospect issues and sales activities
SOURCE Verve Consulting, 2016
Figure 5.4 Moving sales along
SOURCE Verve Consulting, 2016
Selling
The ‘selling’ stage consists of those activities agreed between the salesperson and the prospective customer during the qualifying stage. Paraphrasing the conversation, what should have been established is who needs to be convinced and how, in order for the prospective customer to agree to buy. The selling phase consists of going through these steps with all the appropriate individuals. There are skills involved in managing this phase correctly, but the process is straightforward. For the selling company, the single most costly mistake in the sales process is moving into this phase without proper qualification. Many companies and salespeople are worried about taking an opportunity off a prospective sales list (sales funnel) so carry on with the process and waste time, resources and money that could be better deployed selling to someone who would buy something. Critical analysis here is vital to assess whether to qualify-out of the sale at this stage.
So, assuming that the salesperson is now working with a fully qualified prospect, what’s happening in the customer’s mind during all the sales activity?
What the prospective customer is thinking at this stage is:
‘I need to be convinced I am making the right decision.’
‘I need my boss/colleagues/the users to be convinced.’
‘I want to understand all the risks and feel comfortable about them.’
These thoughts are the same, no matter which sales style is employed. One good practice during this stage is to communicate regularly with the qualified prospects about the sales activities and findings as well as the responses of various colleagues. Keeping the key contact in the loop helps to make him/her feel more in control of the process, and feeling in control gives the prospective customer comfort. Also, if the customer is kept informed of the proposal preparation throughout the process, commenting and adding critical pieces of information, then when the proposal does arrive it will be expected and welcomed because the customer has had input.
This stage can take anything from a few days to a few months or even years, depending on the prospective customer’s buying process, what is being sold, and how many individuals need to play a role in the decision making. However, the time frame is usually a few weeks or months. During the selling phase, the salesperson can begin to create the final proposal, which is presented at the next phase.
Proposing
Proposing represents the formal ending of the selling phase and can take many forms: written proposal; letter; and/or formal presentations. In some instances, there may be multiple presentations and proposals or combinations of the two, depending on the size and structure of the buyer organization. By this stage, the salesperson or team should have established a relationship with everyone in the prospective customer who has any role in the decision-making process and ‘socialized’ the ideas and arguments that will appear in the final proposal. The contents should not be a shock; if sold properly, the buyer should be expecting whatever is written in the contents of the proposal.
At this stage, the prospective customer is thinking:
‘I need to understand the rational reason for buying this product from your company.’
‘I need to see the options in “black and white”.’
Closing
When ‘closing’, what the customer is thinking and feeling is:
‘I need to be sure and I have heard and seen everything, that I understand what I will be buying and that I am making the right decision.’
‘I need to trust the person and company who is selling to me.’