by Cindy Barnes
Businesses need to engage their employees in the selling process too. Those that don’t are missing a trick and leaving revenue on the table. Worse than that, disengaged employees can have a negative impact on sales. As we will see in Chapter 8, in companies like Gore and Semco, an inclusive approach makes employees feel more engaged and genuinely part of the business, which can positively affect both their productivity and loyalty. By understanding and delineating the role that each can play, the company gains the chance to improve operational efficiency too. Focusing all the employees on helping the sales process from within their roles is a win–win–win situation for the employees, the business and its customers.
Law 2: the customer is part of the business system
Value proposition work helps businesses to understand what their customers value and, by understanding this value, to structure the company to create a win–win outcome for both. The benefits of genuine customer-centricity are numerous: for example, less customer churn, the ability to price on true value, higher barriers to entry for competitors, and high customer engagement. However, like any relationship, the customer relationship takes work and reflection. The Value Proposition Builder™ is a way to periodically assess this relationship, giving a business the opportunity to realign the company to remain customer-centric.
Qualitative interviews, analysed by specially trained individuals, lead to illuminating insights. In almost all 600-plus examples of value proposition work using the Value Proposition Builder™ process, the participating businesses were surprised (usually pleasantly and occasionally unpleasantly) by their customers’ responses. Those companies that followed through and implemented organizational changes saw substantial benefits, while those that did not gained far less, sometimes nothing. The businesses that made no changes did not extend their business ecosystem to include their customers, and continued to maintain an ‘us’ and ‘them’ attitude and behaviours.
Building on what customers value does not mean doing everything they request. The customer is not always right. What it does mean is gaining a clear appreciation of what customers value about doing business with a company, building on these things, where possible, and understanding where adjustment within the selling business can help resolve customer issues or irritations. Value proposition work provides the information on which a business can make informed decisions and plans.
Law 3: the structures and behaviours of a business must be kept in balance with each other
The leading psychologist and founder of transactional analysis, Eric Berne, wrote extensively about organizations. His theory of organizations as being driven by a combination of structures and behaviours (or what he called ‘dynamics’) provides a thought-provoking challenge to businesses today (Berne, 1963). Structures – including processes, organization charts and tangible ways of structuring the organization – provide the business with support; Dynamics – people’s behaviours you see in the business every day – provide the business with energy. Together the structures and behaviours define the culture of the organization. When in balance, the structures and behaviours together create a healthy and supportive culture; when out of balance, where either the structures or the behaviours have the majority power, the culture tends either to be stifling or chaotic.
Where the structures are few or loose then the dynamics-led organization tends to have a culture of being personality-led and responds to the individual(s) with power. Conversely, the structures-led organization, where the dynamics are subservient to the processes, has a culture that feels more authoritarian and stifling.
Those businesses that truly want to become selling organizations and to have an authentic selling culture must define and create clear and balanced structures and dynamics that allow that culture to flourish. Selling culture, therefore, is not an accident but rather is carefully designed, crafted and managed.
But as we have seen already in this book, sales activities are not the only process that will need adjusting – marketing, customer service, finance, even procurement and delivery systems will need examining and adjustment. In fact, all connections between the business and the outside world – suppliers, customers, even the local neighbourhood and wider environment – should come under the microscope. It is vital to balance the whole commercial ecosystem of a business.
Probably the most difficult change to assess and amend is ‘attitude’ and ‘employee behaviours’. Remember Law 1: the whole company sells? To successfully implement this law, all employees must believe it. Leading by example is a good start, with the executive team ‘walking the walk’. Don’t underestimate staff; employees will spot hypocrisy very quickly, so lead by example and mean it or the company will undergo the wrong sort of behaviour change – where it is okay to say one thing, but do another.
Another factor implicit in change processes and behaviours that are implemented on a company-wide scale is that value proposition work should have visibility, endorsement and sponsorship at the most senior level. In large organizations with traditional structures, these are the only individuals empowered to make these changes. It is virtually impossible to try to change such an organization from the bottom, or even the middle, upward. So for value proposition work, gain executive buy-in or don’t bother.
Law 4: sales behaviours must be directed towards helping the customer gain maximum value from sales offerings
In an authentic business, sales staff will only sell where the prospective customer has a genuine need. That said, not every prospective customer clearly understands complex business issues or all the options available to solve them. One of a salesperson’s jobs is to guide the customer, helping him or her to understand options, including the option of doing nothing, and educating these individuals about the benefits of selecting a particular option. Ideally, this option is what the salesperson is selling, but that might not always be the case.
In the short term, it may take a bit longer to qualify appropriate opportunities. But in the long term, by carefully selecting customers who will benefit from a company’s offering, the salesperson can use all the selling tools and methods available to help the customer buy his/her company’s offering. What this approach also demands is that all sales propositions should be designed within the business, drawn from the value proposition from the top down and not from the bottom up.
One example is the common practice of trying to design an offering in order to justify a desired price increase. Many companies take this approach. Someone – the CEO or financial director or shareholders – says that it is about time to get a 2 per cent, 10 per cent or even 20 per cent price rise. That’s it: they just want a price rise and leave it to the salespeople to justify the increase to the customer. This common practice can, of course, be implemented and work for a while, but the approach has nothing to do with using a sales proposition that is derived from a value proposition. It is just about doing what the company has always done, selling in the same way, and merely increasing prices.
Driven by a value proposition, this process would happen differently. There could still be a price increase, but the sales proposition would be different, as would the sales approach and sales story. Using this methodology, the business would start with its marketing strategy and determining its desired position on the Value Pyramid™. This would then dictate how the offering would be packaged, including understanding its value to the customer. Pricing would be the final step. There might still be a 2 per cent, 10 per cent, 20 per cent or even larger price rise, but the process would start with the customer, rather than just demanding the desired revenue stream.
Law 5: understand and be clear about the difference between marketing and selling
One reason for the confusion between these two terms is that many companies and individuals who sell are embarrassed to use the ‘s’ word: for them it has many negative connotations. So instead they have developed terms such as ‘marketing representative’ to describe the role. While sales staff can be viewed as representa
tives and/or ambassadors of a business’s marketing strategy, the sales role is very different. To clarify the difference between the two, a simple definition of marketing is a useful place to start.
In general, marketing focuses on:
Market: identifying, delineating and quantifying the opportunity (market research).
Customer type: identifying ‘the need’ being satisfied and the triggers that would cause customers to buy.
Offering: packaging the offering, whether product, service or solution, in terms that are attractive to the target customer and market (service offer development and product management). In addition, marketing should feed back information to appropriate departments should any part of the offering no longer be appropriate, so that modifications can be made.
Demand: marketing can try to influence ‘demand’ and customer expectations via all communication material (collateral, website, postings/articles, advertising) as appropriate to the product type and industry (market communications).
Competition: analysing competitive offers, positioning and risk to the business.
Price: understanding the value to the customer and competitive offerings so as to set the optimal price for sales and profits.
Sales channels: ideally, marketing should identify and recommend the best channels to market to support the business’s profitable growth.
Internal messaging and communications to the rest of the company’s ecosystem.
The Value Pyramid™ helps to position a company’s offerings – both current and aspirational – in terms of the value to the target customer. This positioning then dictates the optimal sales approach.
In general, marketing has both a long-term (eg the strategy) and short-term (eg events, advertising) function. In contrast, the sales role is more short term.
Sales, at its most fundamental, is about closing deals and helping to educate prospective and existing customers about the benefits of a particular business’s offerings. In most companies, sales goals are short-term aspirations with sales targets set for daily, weekly, monthly or quarterly sales. In some businesses, with very complex deals and bidding structures, the sales targets can even be measured in years. In general, the further down the Value Pyramid™, the faster the sale and the more short term the selling focus. Closing deals, however, can take many forms:
understanding the customer’s problem;
being bought from, eg retail shops, web-based selling, even sales of expert professionals (marketing plays a huge role here, in creating demand and ‘pull’);
identifying customers with appropriate need and closing the sale (transactional sales);
developing the need and closing (solution selling and consultative selling);
co-developing the need with the customer and fulfilling this need (consultative selling);
developing a joint solution (strategic consulting, joint-venture selling).
All of these approaches are supported by marketing initiatives that create demand and market awareness.
Law 6: ensure that all business processes support the market positioning
When a business shifts a level on the Value Pyramid™, everything changes. This book has focused on the changes in sales approach and some of the necessary adjustments in marketing. However, all of the business must adapt, from customer service to delivery, from production to procurement. Imagine shifting from commodity to high-value services and not making the necessary adjustments to customer service and delivery. All the company’s action must support the sales proposition.
Imagine buying a Tiffany’s diamond bracelet and having it handed to you in a cheap plastic bag with no wrapping or protection. Imagine selling such an item at a discount store or superstore and still trying to obtain the same premium pricing. Imagine buying this jewellery – at full price – from a website that delivers it in cheap packaging in the regular post? In all these instances, the delivery does not support the market image and pricing of the product. In these retail scenarios the disconnect is obvious. But in some B2B environments the situation is less apparent and the same anomalies occur.
A common example is when customers sign up for large, even multimillion-pound, highly profitable contracts and then cannot reach a real person in the business when problems arise. Or customers who pay a premium for extra service and then the contracting company fails to provide it at all touch points. A contract is a promise and businesses should be organized to fulfil those promises or, ultimately, revenues will suffer.
Law 7: don’t try to change everything all at once; you need an evolutionary plan
Gene Leonard, Managing Director of LBS Partners, a leading Lean transformation consultancy, made the following observation when it came to deciding to change his organization:
The content in the research interviews was absolutely key for us. The feedback, what clients said about our business, was quite different from what we would have thought they would say. It was more positive and more complimentary than we had imagined. The words that came out were quite humbling for us – that we were very trusted by our clients – and that has had a huge impact both in our confidence and the way we go to market. However, the clients also said they wanted our business to take on a wider role beyond the niche operational space we had been working in. As a result of the richness of the research process, we felt able to change the organization significantly – but we did it gradually over a two-year period. We had to innovate. It was difficult and it was essential. Over those two years we rebuilt our organization.
Changing processes and behaviours in a large organization is not a one-step process. It requires a programme plan, commitment at the most senior levels and resources to implement the plan. However, the end result is well worth the effort. Like all change programmes, some best practice should be followed:
Understand and honestly assess the existing processes.
Create, articulate and communicate a vision of the desired, transformed business.
Design an evolutionary programme that enables the company to carry on doing business while implementing the changes.
Put in place appropriate milestones and measures to ensure that business is making progress.
Communicate, communicate, communicate. Let employees, customers and anyone else in the company ecosystem know what is happening. Communicate progress and success in a manner appropriate to each audience.
In making these changes, particularly behaviour changes, there are some cornerstones for success:
Lead from the top and demonstrate the behaviour changes that are needed.
Reward or recognize the right behaviours.
Make the shift an evolutionary process, especially for existing customers who will be suspicious of sudden changes in approach, style or offerings.
Create a credible sales story that incorporates the old way with the new approach.
Now let’s focus on the sales proposition as a special example of these changes. Assume that a business has been selling at the Components level of the Value Pyramid™. Existing customers will expect a transactional selling style based on price, service and/or delivery times. The existing salesperson will have a good relationship with most of his/ her customers who will be used to this style and approach. Now, after value proposition work, the company decides that it never intended to be a commodity supplier and that this placement was ‘accidental’ – driven by the market rather than the company’s market strategy. The executives involved in the work determine that their business, in fact, can and should sell Solutions.
This situation poses a challenge. Changing a transactional selling style to a consultative style is very difficult and is often an impossible shift for some sales professionals to make. In addition, these customers who are buying on a transactional basis have been providing the bulk of the business revenues. So, how does the business make this shift without endangering its revenue stream and annoying its customers? How can the existing transactional salesperson help in this situation?
So, how might such a sales meeting take place? If, typically, the salesperson leads with a product specification and/or a price list, leave some of this process in place, but add to it. That way both the salesperson and the customer have familiar territory upon which to start discussions. Then, let the salesperson introduce a new solution as well.
He/she can say, ‘In addition to our usual products/services, we have been looking at your needs and market trends and have spent the last few years developing something that will address them. We can now offer you “X” [whatever solution is relevant] at a price of “Y”. If you find it useful, wonderful, if not, we still offer all of the usual products/services you have been buying – this new solution is just something extra.’