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  • 1. The Trust Reader charles h. green article series VOL. 1 FEATURING competitive disadvantage: new sales strategies for new business models This article ebook series is distributed to announce new articles that I’ve published on trustedadvisor.com. In this issue you will find the complete release of one article as well as announce- ments and links to two other new articles that are being released at the same time. If you enjoy these articles, “When strategies change, downstream tactics must change to I encourage you to email them to a friend by following support them. And when business models themselves change, this link. If you received this even the downstream strategies must change.” from a friend or colleague and would like to subscribe to this series, simply click here. TrustedAdvisor associates i INFO 1 © 2009 Trusted Advisor Associates Subscribe to my eBook Series
  • 2. The Trust Reader charles h. green article series VOL. 1 competitive disadvantage: new sales strategies for new business models BY chARlES h. GREEN Other new articles When strategies change, In particular—selling based on recently posted to downstream tactics must competitive models is becoming not trustedadvisor.com just passé, but positively dysfunctional. change to support them. You might even call it “competitive client Service, And when business models disadvantage.” not client Servility themselves change, even the downstream strategies business models Some Kinds of Sales Motivation are Better must change. Old approaches to selling were built than Others to support old business models. One of those business model-change The old competitive business model. times is upon us, and requires Most of us have been raised on the a fundamental shift in sales strategy. idea that business is fundamentally In this case, it’s about moving from about competition. Sustainable a competitive model to what I’ll call competitive advantage. Winning. a commercial model. Gaining the competitive edge. Anti- The shift is dirt-simple to explain and trust legislation. The power of free understand. Yet it’s anything but simple markets. Be number one or number two when it comes to executing on it. in all your markets. Market share. Five The shift from competition to forces of competition. These phrases commerce seems to undermine many and concepts are mother’s milk to unconscious habits and instincts we businesspeople of the last four decades. have acquired over the years. i INFO 2 © 2009 Trusted Advisor Associates Subscribe to my eBook Series
  • 3. The Trust Reader chARlES h. GREEN ARTIclES They worked well, for a long time. new sales They helped create complex corporate strategies needed. forms of organization which competed In the new business model, selling with each other to provide consumers “It is moving from a compe- is more important than it used to be. with better and better solutions. But the same old sales approaches won’t titive model of permanent work. There is much more selling to be The new commercial business model. corporate competitors But things are changing radically. The done; and the nature of the buyer-seller to a commercial model benefits group that used to report to relationship is changing fundamentally. of entities buying from and hR? It’s now outsourced to a company More selling to be done. In the providing benefits services under a selling to each other.” competitive model, buying was done 5-year contract. The old IT department? at the front end of a company’s business Partly shared-services, partly process, and selling was done at outsourced, heavily globalized. the back end. In between—a lot of The dominant change in business these internal transfers. days is not globalization, or networking, Every time a company outsources or outsourcing, but a potent blend of all a function, an internal reporting three. Business is moving from direct relationship is replaced by an external reporting relationships to commercially commercial relationship. That requires contracted relationships; from in-house selling where it didn’t exist before. to outside resources; from vertically managed to horizontally coordinated; When a company re-designs a business from command and control to influence; process, it defines discrete sub- from vertically integrated companies processes which are candidates for to interwoven supply chains; from outsourcing. Technology and global competing to collaborating. communications make global scale possible, driving down costs and making It is moving from a competitive model outsourcing even more likely. It all of permanent corporate competitors adds up to more outsourcing—more to a commercial model of entities buying supply chain configurations—and more from and selling to each other opportunities for selling. And that changes how we must think about selling. i INFO 3 © 2009 Trusted Advisor Associates Subscribe to my eBook Series
  • 4. The Trust Reader chARlES h. GREEN ARTIclES Old sales models, being infrequent, The dominant sales approaches stressed were built around transactions—the keeping your cards close to your vest. one-night stands of the business world. Don’t reveal information; don’t quote They began with introductions, and price until you’ve established value; “But selling is no longer drove for “closing”—in as short a time as always be closing. an episodic, intermittent possible—before moving on to the next “pitch” at the next “dog and pony show.” The competitive view implied zero-sum affair. It is now an ongoing, selling; either the customer is going to unceasing, integral form But selling is no longer an episodic, win, or I’m going to win, and since I get of relationship between intermittent affair. It is now an ongoing, paid on each transaction, I will go for a unceasing, integral form of relationship win on every deal in every quarter. buyer and seller.” between buyer and seller. It doesn’t just involve a raw materials supplier and an That may have worked in a world of end user—it deals with everyone in infrequent, one night stand commercial between, from systems suppliers to relationships. But in a world of recruiters to temp agencies. commercial interdependent supply chains, where buy-sell relationships are no longer one customers want fewer suppliers with night stands—they are frequent, longer-term dependability, one-off pervasive, and ongoing. hustling is a detriment. Changing Relationship. In the Finally, in the old world, buyers knew competitive business model, sales was what they wanted and could say so a function—one of several—whose role clearly to sellers. In the new world, with was to contribute to the sustainable so much outsourced, buyers depend on competitive advantage of the suppliers not just for expertise, but for corporation in its never-ending fight perspective, judgment and wisdom. against competitor X. customers were This means (as Jeff Thull points out) either means to a larger end-poker chips that doing a great job of listening in a game between competitors— and asking probing questions— or competitors themselves. consultative selling—is not enough. customers depend on trusted suppliers to collaboratively help determine their needs. i INFO 4 © 2009 Trusted Advisor Associates Subscribe to my eBook Series
  • 5. The Trust Reader chARlES h. GREEN ARTIclES six gut-checks for your Relationships, not transactions. existing sales strategy. You are not seeking one night stands. let your competitor have those. You check your existing sales model by are not seeking transactions, but “The old model of asking questions in these six areas: relationships. The best short-term competition-based, me-vs.- performance does not come from Confidentiality. Do you start by short-term management—it comes my-client, transactional presuming confidentiality of information from long-term management practiced selling is slowly but surely with your clients? Unless it’s illegal or consistently. unambiguously harmful to someone, going to die off. ” start by assuming you’ll share it. The old model of competition-based, me-vs.-my-client, transactional selling Proposals. Invite your clients to write is slowly but surely going to die off. all future proposals together with you, It is dying off because we are moving in the same room, at the same time. On into a world that values long-term, the same side of the desk. collaborative relationships. Client plans. Do you write 1-year client The value of sales is far higher in the plans? Or 3-year? Why not write 5-year commercial world we are moving into, if plans—and review them for realism with we can only remember the new rules for your clients? selling are different from the old rules. Purchasing and contracts. Stop trying They are the rules of commerce—not to go around the contracts people; they the rules of competition. are your new clients. Your old client said This article appears on so. Deal with it, and start treating them www.raintoday.com as clients. Long term value. Every time you negotiate a contract or sale, discuss with the client: Is this fair to each of us? If we did this deal ten more times, would it feel right? If not, how we can we redress the balance on the next nine? i INFO 5 © 2009 Trusted Advisor Associates Subscribe to my eBook Series
  • 6. The Trust Reader charles h. green article series VOL. 1 Other new articles at TrustedAdvisor.com client service, not client servility You can subscribe to the Most client-serving organizations I know make a pretty big deal about client series by clicking on the icon service. For consulting, law, HR, IT, accounting, software, and salespeople above or by following this link to get the latest on my writings in complex businesses—client service is right at the top of their list of virtues. and conversations of my blog. read more This ebook is protected some kinds of sales motivation are better than others under the creative commons license. No commercial use, I once had a client who asked if I was a motivational speaker. I’d never heard no derivative work. Feel free that one before, and said, “well, I hope what I have to say is motivating to to share it, post it, or copy it. people, but that’s not what I’m setting out to do.” read more charles h. Green is a he has taught in executive education ABOUT chARlES h. GREEN speaker and executive programs for the Kellogg Graduate School educator on trust-based of Business at Northwestern, and for relationships and Trust- columbia University Graduate School based Selling in complex of Business, as well as through his own businesses. he is author firm, Trusted Advisor Associates. his of Trust-based Selling (McGraw-hill, 2005), work centers on improving trust-based and co-author of The Trusted Advisor (with relationship and business development David Maister and Rob Galford, Free Press, skills for businesses with complex service October 2000). charles has spoken before a offerings. Business development, and on variety of industry and functional groups. building profitable trust-based relationships. An engaging and content-rich speaker, 6 © 2009 Trusted Advisor Associates Subscribe to my eBook Series