3 “Collaborate,” Merriam-Webster.com. Accessed November 13, 2013, at www.merriam-webster.com/dictionary/collaborate.
4 Evan Rosen, The Culture of Collaboration: Maximizing Time, Talent and Tools to Create Value in the Global Economy (San Francisco: Red Ape Pub., 2009).
5 Leigh L. Thompson, Creative Conspiracy: The New Rules of Breakthrough Collaboration (Boston: Harvard Business School Publishing, 2013).
6 P. B. Paulus, T. Nakui, V. R. Brown, and V. L. Putman, “Effects of Task Instructions and Brief Breaks on Brainstorming,” Group Dynamics: Theory, Research and Practice 10, no. 3 (2006): 206–219.
Chapter 2
Solution Selling Meets the New Buyer
More than one million sales, sales management, and marketing professionals around the world count on and use our branded sales methodology known as Solution Selling®.1 It enables sellers to sell more, helps marketing to create awareness and generate more leads, and provides management with visibility and predictability—all while better managing buyers' expectations and creating higher levels of customer satisfaction. In simple terms, Solution Selling works by delivering consistent business results for sellers and their buyers.
As owners of the methodology, Sales Performance International (SPI) works diligently to enhance and maintain Solution Selling's relevancy in the marketplace. Our work with clients, our research, and the knowledge we gain from industry analysts enable us to keep the methodology current with buying and selling trends. In spite of this, some pundits have written that “Solution Selling is dead.” This couldn't be further from the truth. Regardless of whether the pundits' statements are made out of ignorance, jealousy, or incorrect assumptions of what is contained in Solution Selling, they are simply wrong.
From its inception, Solution Selling has always been based on the philosophy that a solution is an answer to a business problem or opportunity. And if sellers are in the solutions business, they must help buyers discover problems or opportunities, consultatively diagnose the issues, and then create or reengineer visions of solutions, determine the value of the proposed ideas, reach mutual agreement, and track business results. This philosophy, and the approach based on it, is as relevant today as the day it was first introduced. Solution Selling changed the dynamic between buyers and sellers by requiring sellers to engage consultatively with buyers about their problems and opportunities, rather than about the products or services the sellers represent.
The genesis of Solution Selling started in technology-related industries. The tech boom in the 1980s and 1990s created an array of new, complex business products that made fresh demands on sellers, requiring new knowledge and skills beyond a basic understanding of product offerings. To sell these new capabilities successfully, sellers had to become adept at diagnosing buyers' business problems and helping to shape visions of applicable solutions. Solution Selling provides the skills, process, methods, and supporting sales and marketing tools to do this consistently.
Since the initial introduction of Solution Selling, markets have become increasingly global and competitive. Both the desire and the necessity to preserve margins by selling higher-value solutions have permeated virtually all industries. As a result, we have seen demand for Solution Selling expand dramatically into a broad array of industries, including advanced manufacturing, construction materials, health care, medical devices, logistics, business services, telecommunications, financial services, office products, and even some levels of retail. Our clients all tell us that it is increasingly difficult to maintain product or service superiority over competitors, and therefore they must differentiate in how they engage with buyers. Solution Selling enabled them to do so—and continues to enable them to do so today.
AberdeenGroup conducted two independent surveys in 2011 and 2012 of organizations that implemented sales training projects. In both years, users of SPI's Solution Selling methodology reported higher levels of quota attainment, more repeat business from customers, faster time to productivity for new hires, and larger average sales size, relative to all other alternative training programs.2 The data shows that Solution Selling enables sellers to achieve best-in-class performance levels faster and more consistently.
Based on the continued success of our clients, and on the persistently increasing adoption and use of Solution Selling as a differentiating factor, the issue is not whether the methodology is still relevant; rather, it is why it continues to be so. The reason is found at its very core: Solution Selling is designed to help sellers understand and align with how buyers buy.
However, we cannot deny that buyer behavior has changed in substantial ways as a result of the Internet, new buyer demographics, increased globalization of markets, and international economic trends. It is fortuitous that Solution Selling's essential design has enabled it to reflect these behavior changes very well, but it would be folly to proclaim that the methodology cannot be further improved to accommodate and align with today's buyers. That is the central purpose of this book: to show how Solution Selling meets and aligns with the new buyer, and how it enables sellers to be more productive and successful.
The Emergence of the New Buyer—Buyer 2.0
Based on both independent research and our experience with clients, we have observed four fundamental changes in buyer behavior that have accelerated greatly since 2011:
Buyers are delaying the involvement of sellers in their buying process.
More people are involved in purchase decisions; buying by committee is more common than ever before.
Buyers have developed a higher aversion to risk, resulting in more decisions to do nothing or to simply maintain the status quo.
Buyers are asserting more formalized control over their purchasing processes and are demanding greater seller transparency.
These changes in behavior have become increasingly pervasive, and are rapidly becoming the norm. We call the buyers who exhibit these behaviors “Buyer 2.0.” This new standard of buyer behavior is a result of three principal factors: increased information access, the rise of the Millennial generation, and the persistent unpredictability of global economic trends.
The Effect of Information Access on Buyer 2.0 Behavior
Buyers now wait longer than they used to before talking to sellers directly. A 2010 DemandGen Report study on buyer behavior found that 79 percent of business-to-business buyers do not talk to sellers until they have performed their own independent research—and more than half (51 percent) engage with sellers only after establishing a preferred short list of vendors.3
Forrester Research states, “Although it varies greatly with product complexity and market maturity, today's buyers might be anywhere from two-thirds to 90 percent of the way through their journey before they reach out to [a] vendor.”4
Increased information access is the driver of this fundamental change in buyer behavior. Before the Internet became widely available, sellers controlled most of the flow of information to buyers. If an organization needed a product or service, they contacted several potential vendors, met with sellers, and made their decisions on the information they received from each potential supplier. Sellers provided almost all of the messages and information that purchasers used to make their buying decisions.
Today, however, buyers have easy access to information about potential solutions for their problems. They can simply log on to the Internet and conduct a keyword search. With a little more effort, buyers can learn all about potential suppliers from many sources, including industry analysts, consultants, web bloggers, and customers of those suppliers and their direct competitors. They can find online forums where these groups congregate, and can open dialogues with them.
Buyers are no longer dependent on sellers to provide them with information. In fact, they can find more useful sources of information to form opinions and start an evaluation for potential purchases without any help from a seller's organization.
This behavior shift should not surprise anyone. In fact, it was predicted in 1999
, when Rick Levine, Chris Locke, Doc Searls, and David Weinberger published their Cluetrain Manifesto.5 These futurists and industry observers correctly suggested that the Internet would change buyer behavior in fundamental ways.
“Markets are conversations,” they said. “A powerful global conversation has begun. Through the Internet, people are discovering and inventing new ways to share relevant knowledge with blinding speed. As a direct result, markets are getting smarter—and getting smarter faster than most companies.”
This fundamental shift in buyer behavior has been further confirmed by a growing number of supporting industry research findings:
The industry analyst firm SiriusDecisions conducted research in 2013 and found that online searches are executives' first course of action when researching a potential purchase. They also discovered that, for most business-to-business purchases, buyers do not rely on suppliers' salespeople to provide them with educational information.6
A previous research study by Forbes Insights and Google also showed that executives prefer to conduct their own research on possible purchase alternatives, using mostly online resources to do so.7
AberdeenGroup, another analyst firm that conducts research on business best practices, confirmed in a 2011 survey that “by the time a potential buyer is identified, qualified and engaged, the prospect may already be well into their research and decision-making process” because buyers conduct their own online research in advance of contacting any sellers.8
In a Buyersphere 2013 study of business-to-business purchasing trends, the first choice of executive buyers for information on potential suppliers is browsing their websites.9
A 2013 Zogby Analytics study of over 1,000 buyers discovered that “Today's buyers are increasingly using the Internet to research, inquire about and purchase a variety of high-value products and services for both business and personal use. Most buyers are well-informed prior to engaging with vendors due to the amount of research they perform prior to contact.”10
In 2011, we had the opportunity to observe a seller in action as he dealt with an active evaluation-stage buyer. He was presenting to a financial services firm that was interested in his company's customer relationship management (CRM) software application. We were looking forward to the meeting, as the salesperson was one of the top producers in the company and had a reputation as a polished speaker.
The meeting was attended by many of the company's executives, including the chief financial officer (CFO), who welcomed everyone and started the meeting by saying, “We've done a lot of research on your organization. We've reviewed your website, talked with several consultants, reviewed some reports by industry analysts—we've even chatted with a few of your customers. We're impressed and eager to make a decision, but we need to know if your application can do one important thing for our business.”
The CFO briefly described the key capability that they wanted the application to perform. “If you can show us how you can address that issue, we can start working on a contract.”
We were smiling, as we knew that the software could do exactly what the CFO asked. This was going to be easy for the salesperson—a slam dunk, as they say in basketball.
But that's when it all went wrong.
“Thank you,” the seller replied. “I'd like to begin by telling you a little about our company.” The seller then started his PowerPoint presentation, and proceeded to speak eloquently about his firm, the standards they complied with, their growth rate, their office locations, and their complete set of offerings and services.
After 30 minutes, it was clear that the customer team was getting annoyed. The CFO interrupted the seller in midsentence. “Look,” he said, “we already know all about your company. We just need to answer this one question. Can we dispense with all of this background, and get to that?”
“I understand,” the seller replied calmly. “I just have a few more slides first, and then we'll get to your issue.”
The seller plowed ahead with his presentation, concluding, “And we'd very much want your business.” But he never really addressed the CFO's question. When asked again if he could speak to that issue, the salesperson simply said, “No, but I'm sure I can bring in a subject matter expert who can.”
The meeting ended abruptly at that point. The seller didn't get the order.
Though that seller failed in many ways, he was simply following what he had been taught to do—lead with the company's strengths, explain the features and advantages in language the customer will understand, and ask for the order. And because he worked for a well-known, market-leading supplier, that approach was usually effective.
But in this case, the CFO and his team were already very well educated. They were insulted when the information that they already knew was forced upon them again.
The seller had made several bad assumptions, including acting as if the buyer was early in the purchasing process. The buyer was actually much further along, so the seller and buyer were completely out of alignment. As a result, he lost the opportunity to make the sale.
The Millennials Are Coming
The term Millennial is associated with people born between 1980 and the early 2000s. And to say they are different from baby boomers is an understatement. More than 10,000 baby boomers reach the retirement age of 65 each day in the United States alone. Millennials already make up 36 percent of the U.S. workforce; by 2020 they will be almost half of the workforce. (See Figure 2.1.)
Figure 2.1 The Rise of the Millennials
Millennials behave differently than prior generations of workers:
Sixty-four percent ask about social media policies during job interviews.
Sixty-five percent say that personal development was the most influential factor in choosing their job.
Twenty-two percent say that training and development were the most valuable benefits of an employer.
Millennials switch attention between media platforms an average of 27 times per hour.
Forty-three percent have “liked” more than 20 brands on Facebook.
One in three say they value “social media freedom” and “work mobility” over salary.
Thirty percent started a business in college.
Forty-three percent feel confident they could find another job if they lost or left their current one.
Seventy percent of them plan to change jobs when the economy improves.
Millennial demographics are shaping buyer and seller behavior. Sales organizations will be forced to adapt and leverage new talents and perspectives. Collaboration skills will be essential when engaging with Millennial buyers. Seller transparency will be considered “table stakes” when dealing with Millennial buyers; they expect to be treated as equals throughout their buying process.
Because they are so technically savvy, Millennial buyers will set new standards for doing their own research. Not only do they engage sellers much later in the buying process, but they may not engage sellers at all. Sellers will need to interact with Millennial buyers through social media, in order to improve the chances of shaping their initial buying visions.
The Effect of Economic Uncertainty on Buyer 2.0 Behavior
No matter what buyers are thinking about purchasing, they invariably go through multiple buying phases during their buying process, and their concerns vary in importance in each phase and over time, as illustrated in Figure 2.2.
Figure 2.2 Buying Phases: Shifting Buyer Concerns
Most buying processes begin after some form of planning takes place, when buyers become aware of problems or potential opportunities that need to be addressed. After recognizing a business issue, buyers enter into the determine needs phase, where they are most concerned with identifying what is needed to address the issue and the potential cost or investment required to acquire what is needed. Once their needs are defined and initial budgets are determined (at least informally), their foremost concern shifts to the evaluate alternatives phase of their buying process, where they examine and
compare different alternatives that could meet their requirements and budget expectations. Near the end of their buying process, after they have evaluated alternatives, buyers' concerns shift to the evaluate risk phase of their buying process, where they try to understand the level of risk in making a purchase decision. In this last phase, the cost or price of making a commitment once again becomes important in the minds of buyers.
These psychological buying phases—determining needs, evaluating alternatives, and evaluating risk—may happen very quickly for low-risk transactional purchases or take much longer for higher-risk, larger, or more important purchase decisions.
For example, something as trivial as buying a box of mints in the supermarket may simply be a question of deciding what type of mint might be most desired, looking at the different alternatives on the shelf for the closest fit, and then deciding if you have enough cash to make the purchase. This process may take only a few seconds to complete.
For larger or more important purchases, this process will take much longer. For example, a young couple may decide they'd rather build equity in a house than pay rent. Their initial list of needs may include a number of ideal requirements: three bedrooms, safe neighborhood, less than a 40-minute commute to and from work, two-car garage, convenience to shopping, good schools, and so on. They establish a budget for the price of a house and a monthly mortgage payment they can afford. Once these criteria have been set, they can then compare and evaluate alternatives.
In the past, this meant contacting a real estate broker for help. Today, however, most home buyers begin their search on the Internet, and conduct their own initial research. They will probably not contact a broker until they have a clear idea of what kind of home they want, and where they'd like it to be.
The Collaborative Sale Page 3