In this module we discuss the concept of how to reengineer visions associated with active opportunities. Remember, an active opportunity is one in which you have minimal control over the buying process. The buyer’s vision has already been created. They know what they need and likely already know who they want to buy from. You were not part of the needs definition phase.
After completing this module, you will be able to:
Explain the steps involved in reengineering customer visions; and
Use the 9 Block Model for introducing differentiators.
You may become introduced to an active opportunity in a number of ways, including:
Uncovering an active opportunity while prospecting;
Receiving a call asking you to respond to a request for a quote; and
Receiving a formal request for a proposal
The activities you perform may vary according to the way you are introduced to the active opportunity. A key factor is how well the buyer has a competitive vision established in their mind.There is a huge difference between:
Playing the role of column fodder for an evaluation that seems to be already over before you become engaged; versus
Interacting with a prospect whose vision is not yet fully developed, and who is open to exploring options.
Regardless of the origin of an active opportunity, it is a good idea to assess whether the opportunity is a viable one for you and your organization. If you determine that the active opportunity is worth pursuing, you should select a competitive strategy that will determine the kinds of resources you may need to apply to win. As part of your strategy for winning an active opportunity, you will want to reengineer the customer’s existing vision.
Before we look at a sample approach to Vision Reengineering, answer this question: Why wouldn’t you use the same order of questioning for Vision Reengineering as you do in Vision Creation? The answer is quite simply that in Vision Creation the buyer has no vision. So we start in the “Diagnosing Reasons” column of the vision processing model.
In Vision Reengineering, on the other hand, the buyer DOES have a vision of how your capabilities will help them. Thus the salesperson starts in the “Visualize Capabilities” column of the model.
You may even encounter an active vision resulting from your own marketing efforts—where they have a vision of you. In this instance you may be tempted to use the vision creation approach. But we would still suggest engaging in vision reengineering.
That’s because you may still have an opportunity to expand their vision beyond what they were previously thinking
On this and the next slide, you will see the vision processing model for Vision Reengineering. Notice the similarities to the vision processing model for Vision Creation. Also notice the vast, significant differences.
The sequence of questioning follows a different path through the model.
Some of the sample questions in the model have a different context (e.g. the reasons column focuses on “how they do business today without your capabilities” instead of suggesting reasons for a pain).
This model assumes that pain has not been admitted. In the worst-case scenario, you are “column fodder”; the buyer has not admitted pain to you; and you haven’t earned the right to ask about it.
You must theoretically leave the 9 Block Model to explore the pain.
Print the next slide so you will have an aid to help you follow along with this module.
In this block, you ask leading (biased toward your offering) control questions to quantify the negative aspect of business without your capabilities. The customer should be able to answer these questions with yes, no, or a number.
Example: "Today, does that situation cause...? What does that cost you per week?"
Block 5: Diagnose Reasons / Confirm Questions and Pain
Here’s where you play back what you’ve learned and put it into a closed question so you can get confirmation that you’re correct and attempt to get pain admitted by the buyer.
Example: "So the way you do it today is...?“
Get the buyer to share their pain by asking them a question that sounds like, “What is the effect on you and your business of doing it this way today?” Once pain is admitted, quantify it and then explore the impact of it on others.
The Pain Sheet™ can still be used in the Vision Reengineering approach. You simply start with the capabilities that were not introduced as part of the customer’s initial vision.
It is important that you embed your most important product and/or service differentiators as part of the capability visions being articulated. This helps to establish differentiating capabilities that the competition may not have suggested—and could move you from possible “column fodder” to Column A.
The next slides demonstrate the process for diagnosing the reasons for the prospect's problems, exploring their impact throughout the organization, and visualizing the capabilities, ultimately leading to a customer buying vision.
The two players are our seller, Bill Hart, and the buyer, Steve Jones, the VP of Sales & Marketing for Titan Games Inc.
Block 1: Visualize Capabilities / Open Questions
This is where the seller applies the basic principle of making himself equal before attempting to differentiate himself.
SELLER: "How do you see yourself using the capabilities that you are seeking from an e-commerce offering?"
BUYER : "Our salespeople have assigned accounts. Anytime a customer wants to place an order, they must do so through their assigned salesperson. I feel our salespeople spend way too much time doing what I call order taking with their assigned accounts instead of being out there selling into new accounts. So we've decided to implement an e-commerce application that will allow existing customers to place their own orders. First, they'd be able to view inventory levels, then place the order on their own and have it allocated and confirmed all over the Internet. We really think this will allow the salespeople to devote their time to selling into new accounts."
SELLER : [Clarify initial vision] "So, it sounds like when existing customers want to place an order on standard items, you want to make it easy for them to do so whenever they want via the Internet without the involvement of the salesperson. Is that right?"
The salesperson must establish valuable differentiators to earn the right to continue. After Bill has gained a good understanding of Steve's existing vision, the next step is to differentiate himself—that is, change the buying requirements so they include his strengths. The goal is to move into Column A to become the company and salesperson of choice.
SELLER: "As part of your e-commerce initiative, are you also looking for a way to let customers on your Web site access a FAQ page for frequently asked questions, or select a Help option to be connected to the appropriate person in the company?"
BUYER : "That's not currently part of our initiative, but it’s interesting."
SELLER : "Well, I respect that. [Move on to additional capability] Do you think it would help if, when visiting your Web site, your customers could be prompted to submit referrals in exchange for discounts or promotional items?"
BUYER : "Again, it’s not part of our current initiative, but that does intrigue me.“
Now that Bill understands Steve's vision and has piqued his interest in additional capabilities, it's time to uncover the reasons and cost of doing business the way Steve is today without the new capabilities.
SELLER: "Tell me, how do you conduct business today without these capabilities?"
BUYER : "Specifically in regard to handling FAQs, I was intrigued by your description, because today when a customer has a question they go straight to their assigned sales rep. They usually call on a direct line. If the rep isn’t available, the customer can usually reach them on their cell phone."
SELLER : "I'd like to explore that a little further, if I may."
BUYER : "By all means, go ahead."
Now that the buyer has started to describe their current process, the seller can attempt to control the direction of the questioning.
SELLER : " Today , how much time do reps actually spend answering these types of questions?"
BUYER : "They probably spend 15 percent of their day answering FAQs."
SELLER : "And how much time do you think SHOULD be devoted to FAQs?"
BUYER : "Frankly, none. They are salespeople, not customer support. This really takes away from the time that they should be selling into new accounts."
SELLER : "How many new accounts did each sales rep acquire last year?"
BUYER : "On average, each rep probably was assigned 10 new accounts."
SELLER : "And what was the average revenue per new account?"
BUYER : "I would guess conservatively that it was about $75K each."
SELLER : "If the salespeople were free from answering FAQs, could they bring in one new account with the saved time?"
BUYER : "They probably should bring in more, but one account sounds good."
SELLER : "Is it reasonable then that if all the reps—all 50—could bring in one new account each and those accounts yielded at least $75,000, then the company could bring in an additional $3.75 million in revenue?"
BUYER : "That’s a reasonable figure.“
Once Bill established the cost of doing business today without the first differentiating capability, he would then explore the second differentiating capability by asking the open question of Block 3. He would have then explored the cost of doing business today in Block 4 without the second differentiating capability. The dialogue is similar to the drill down conversation that took place for the first differentiating capability.
Block 5: Diagnose Reasons / Confirm Questions and Pain
SELLER: "So, it sounds like from what we just discussed, the way you're doing business today is that (1) your salespeople spend too much time handling repeat business in existing accounts; (2) they're also spending too much time answering FAQs, and this is taking away from their task of prospecting into new accounts; and (3) they also fail to ask customers for referrals and leads. Looking quickly at the numbers, it appears that not having these additional capabilities could be costing you close to $4.75 million in revenue a year. Is that right?"
BUYER: "Yes, the numbers don't lie. I just never would have thought the loss was that high. But the figures I gave you are accurate.“
ADMISSION OF PAIN occurs between Blocks 5 and 6. Here we're assuming the worst case scenario, where the buyer has not admitted their pain. It may become obvious to the salesperson (via the exploration of how they do business today) that the pain is driving the opportunity. But it's important that the buyer admit their own pain. Here we would ask a leading question:
SELLER: "What is the effect on you and your business of doing it this way?"
BUYER: "Frankly, it's having a real bearing on my ability to hit our new account revenue targets."
SELLER: "What is your target? And how short of it do you think you will be?"
BUYER: "Our goal is $5M. At this rate we won't even come close."
Even though some information may have been provided at the beginning of this part of your conversation, it's important to continue to connect the problem throughout the organization. You can either ask outright, "Is the VP of Finance impacted by this problem of missing new account revenue targets?" Or you can use the Socratic method modeled below.
SELLER: "If the new account revenue targets are being missed, is that causing your overall revenue goals to be missed? "
BUYER : "It really is having a huge impact on that."
SELLER : "Have you seen profits affected too?"
BUYER : "Our profits have been stagnant so far. At this rate, the profit targets of the company will be missed."
SELLER : "Do you know what the profit margins are here at TGI?"
BUYER : "I think they're around 30 percent, but I’m not exactly sure."
SELLER : "Which person in your organization is going to be most impacted by missed profit targets?"
BUYER : "That would be Jim Smith, our VP of Finance."
SELLER : "Would declining profits have any major effect on the value of your stock?"
BUYER : "Well, we're all shareholders here. The earnings per share have slipped, but I would say that the declining profits have affected us more in our ability to grow our business."
SELLER : "Who is looking to really grow the business here at TGI?"
BUYER : "We all are, but this is really the responsibility of our CEO, Susan Brown."
SELLER: "From what I just heard, it sounds like your salespeople are frustrated with the effort it requires to hit their quotas, the VP of Finance is challenged with hitting his profit targets, and your CEO is finding it difficult to grow TGI’s business. It sounds like this is not just your problem in Sales & Marketing but a companywide problem. Is that correct? "
BUYER : "Bill, I can’t disagree. You seem to have a real handle on our issues here at TGI."
This summary establishes a new reengineered buying vision. Notice how it's structured. First, you describe the original vision. Then you outline the additional capabilities. Finally, you clarify the goal, tying back in with the value established.
SELLER : "Steve, I just want to confirm our conversation here. When we started talking, you were looking at e-commerce to give you the ability (1) to accommodate customers who want to place orders to view inventory levels, place orders on their own, and have everything allocated and confirmed all over the Internet. Furthermore, you also said you needed a way (2) to allow customers to answer their own questions by clicking on a FAQ Web menu to get those answers or by clicking a help option that would connect them to the appropriate person in the company. You also want your Web site (3) to prompt customers to submit referrals in exchange for discounts or promotional items. If you had all three of these capabilities, could you regain what appears to be a total of $7 million in new account revenue, actually surpassing the shortfall that you shared with me earlier of $5 million?"
BUYER : "You know, I really do believe that we could."