Selling in a Downturn Economy - A summary

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I was very intrigued by the article in the Harvard Business Review, and I wanted to share this with the rest of the world.

If you are in Sales, you definitely want to look at this.

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Selling in a Downturn Economy - A summary

  1. Harvard Business Review Summarized by Satoshi Takano In a Downturn, Provoke Your Customers The companies you serve are slashing their budgets – but you can still make a sale Written by Philip Lay, Todd Hewlin, and Geoffrey Moore
  2. Do you hear your customers telling you…
  3. “No budget.”
  4. “No budget.” “CUTS Across-the-board.”
  5. “No budget.” “CUTS Across-the-board.” “We’ll do with what we got.”
  6. Or, you may soon hear this…
  7. Or worst case…
  8. “I’m no longer the sole decision maker.”
  9. So, what do I do?
  10. things.
  11. “1. You MUST find a way to reach the customer’s resource owners and motivate them to allocate the necessary funds.”
  12. “1. You MUST find a way to reach the customer’s resource owners and motivate them to allocate the necessary funds.” “And 2, persuade them that your solutions are not just nice but essential.”
  13. This is called, “Provocation-based Selling.”
  14. This is called, “Provocation-based Selling.” “And it goes beyond the conventional consultative or solution-selling approach.”
  15. “Product or solution-based selling pushes features, functionality, and benefits in a generic manner.”
  16. “Product or solution-based selling pushes features, functionality, and benefits in a generic manner.” … while provocation-based selling helps customer see their competitive challenges in a new light that makes addressing specific painful problems …
  17. Unmistakably URGENT.
  18. So, how do I learn to become Provocative?
  19. So, how do I learn to become Provocative? (Without the customer becoming defensive?)
  20. Steps
  21. 1 Identify a critical issue
  22. 1 Identify a critical issue 2 Formulate your provocation
  23. 1 Identify a critical issue 2 Formulate your provocation 3 Lodge your provocation
  24. 1 Identify a critical issue
  25. “Identify key issues that matters so deeply that even in a downturn the money will be found to fix it.”
  26. Once identified, subject those issues to 3 sets of questions.
  27. 1 Would it meet the CEO’s “keeps me up at night” threshold? That is, does this problem seriously jeopardize the organization’s ability to compete?
  28. 2 Is it being ignored, neglected, or ineffectively addressed by existing processes, systems or services?
  29. 3 Are you a credible source of advice on the issue?
  30. Here’s some advice…
  31. Here’s some advice… “Observe what the security analysts have said about the target company or industry. If analysts have an issue, you can assume that investors are pressuring management to resolve it.”
  32. 2 Formulate your provocation
  33. “Develop an original point of view about it. Otherwise no senior executive will give you time.”
  34. One way to do this is to go to…
  35. Our customers and industry analysts.
  36. Then compare the target customer situation with their peers.
  37. Then compare the target customer situation with their peers. (AKA - Gain extremely deep understanding of the industry-level issues)
  38. 3 Lodge your provocation
  39. Here’s a caveat… do this carefully.
  40. Here’s a caveat… do this carefully. (Provocation should not be seen as an invitation to behave disrespectfully)
  41. So, here is one way to approach it…
  42. “We’ve worked with companies in your peer group and have seen how the leading players are experiencing this painful problem.”
  43. “We think it’s possible that your company is at risk in this area as well.”
  44. “We think it’s possible that your company is at risk in this area as well.” Your statements should clarify the challenge and demonstrate knowledge of the customer’s current approach to it.
  45. Then follow up and say…
  46. Then follow up and say… “We believe that if you can’t stem the bleeding, you risk losing up to 4% of your market share within the next six to 12 months.”
  47. Then follow up and say… “We believe that if you can’t stem the bleeding, you risk losing up to 4% of your market share within the next six to 12 months.” The goal here is to disturb the equilibrium and status quo – without putting him or her on the defensive.
  48. Proving your point involves some detective work
  49. Once your report is completed, construct the sales proposal in 3 phases…
  50. Once your report is completed, construct the sales proposal in 3 phases… 1. What your company can deliver right away – most often primarily services.
  51. Once your report is completed, construct the sales proposal in 3 phases… 1. What your company can deliver right away – most often primarily services. 2. What your company can deliver within the year – usually a customized, solution-oriented adaptation of the offering.
  52. Finally…
  53. Finally… 3. Everything else the customer wants or will need over time to fully address the problem. (If these additional elements cannot wait, you must look for a partner – even if that means working alongside a competitor. Your ability to bring the components will earn you the status of a trusted advisor.)
  54. 1. Gain access to senior executives, typically with P&L responsibilities – can reallocate resources to create the budget for the offering.
  55. 1. Gain access to senior executives, typically with P&L responsibilities – can reallocate resources to create the budget for the offering. 2. Find their acquaintance, and ask for referral to present to the executive. (can also be through seminars to rigorously find a referral.)
  56. 1. Gain access to senior executives, typically with P&L responsibilities – can reallocate resources to create the budget for the offering. 2. Find their acquaintance, and ask for referral to present to the executive. (can also be through seminars to rigorously find a referral.) And oh, ya…
  57. Social networks ain’t so bad either…
  58. Here’s the key…
  59. “During an economic downturn, the more you make your customer see something that they never knew existed, the process picks up speed, and you WIN.”
  60. “During an economic downturn, the more you make your customer see something that they never knew existed, the process picks up speed, and you WIN.” AKA - The budget gets reallocated to your project.
  61. “While, in an economic downturn, most solution-selling strategies tend to lose momentum at each phase of the Sales Cycle.”
  62. Here’s a simple way to differentiate
  63. Here’s a simple way to differentiate Solution Selling vs. Provocation-Based Selling
  64. Solution Selling Provocation-Based Selling
  65. Solution Selling Provocation-Based Selling Competes for vendor preference within an existing budget
  66. Solution Selling Provocation-Based Selling Competes for vendor preference within Compels project investment outside an an existing budget existing budget
  67. Solution Selling Provocation-Based Selling Competes for vendor preference within Compels project investment outside an an existing budget existing budget Aligns with the prevailing point of view
  68. Solution Selling Provocation-Based Selling Competes for vendor preference within Compels project investment outside an an existing budget existing budget Aligns with the prevailing point of view Challenges the prevailing point of view
  69. Solution Selling Provocation-Based Selling Competes for vendor preference within Compels project investment outside an an existing budget existing budget Aligns with the prevailing point of view Challenges the prevailing point of view Addresses acknowledged pain points
  70. Solution Selling Provocation-Based Selling Competes for vendor preference within Compels project investment outside an an existing budget existing budget Aligns with the prevailing point of view Challenges the prevailing point of view Addresses acknowledged pain points Addresses unacknowledged angst
  71. Solution Selling Provocation-Based Selling Competes for vendor preference within Compels project investment outside an an existing budget existing budget Aligns with the prevailing point of view Challenges the prevailing point of view Addresses acknowledged pain points Addresses unacknowledged angst Targets tactical problems
  72. Solution Selling Provocation-Based Selling Competes for vendor preference within Compels project investment outside an an existing budget existing budget Aligns with the prevailing point of view Challenges the prevailing point of view Addresses acknowledged pain points Addresses unacknowledged angst Targets tactical problems Targets strategic problems
  73. Solution Selling Provocation-Based Selling Competes for vendor preference within Compels project investment outside an an existing budget existing budget Aligns with the prevailing point of view Challenges the prevailing point of view Addresses acknowledged pain points Addresses unacknowledged angst Targets tactical problems Targets strategic problems Begins with technical proof and then builds a business case
  74. Solution Selling Provocation-Based Selling Competes for vendor preference within Compels project investment outside an an existing budget existing budget Aligns with the prevailing point of view Challenges the prevailing point of view Addresses acknowledged pain points Addresses unacknowledged angst Targets tactical problems Targets strategic problems Begins with technical proof and then Begins with the business case and then builds a business case provides technical proof
  75. Solution Selling Provocation-Based Selling Competes for vendor preference within Compels project investment outside an an existing budget existing budget Aligns with the prevailing point of view Challenges the prevailing point of view Addresses acknowledged pain points Addresses unacknowledged angst Targets tactical problems Targets strategic problems Begins with technical proof and then Begins with the business case and then builds a business case provides technical proof Starts as an IT of line-of-business dialogue
  76. Solution Selling Provocation-Based Selling Competes for vendor preference within Compels project investment outside an an existing budget existing budget Aligns with the prevailing point of view Challenges the prevailing point of view Addresses acknowledged pain points Addresses unacknowledged angst Targets tactical problems Targets strategic problems Begins with technical proof and then Begins with the business case and then builds a business case provides technical proof Starts as an IT of line-of-business Starts as an executive level dialogue dialogue
  77. Solution Selling Provocation-Based Selling Competes for vendor preference within Compels project investment outside an an existing budget existing budget Aligns with the prevailing point of view Challenges the prevailing point of view Addresses acknowledged pain points Addresses unacknowledged angst Targets tactical problems Targets strategic problems Begins with technical proof and then Begins with the business case and then builds a business case provides technical proof Starts as an IT of line-of-business Starts as an executive level dialogue dialogue Asks questions to identify needs
  78. Solution Selling Provocation-Based Selling Competes for vendor preference within Compels project investment outside an an existing budget existing budget Aligns with the prevailing point of view Challenges the prevailing point of view Addresses acknowledged pain points Addresses unacknowledged angst Targets tactical problems Targets strategic problems Begins with technical proof and then Begins with the business case and then builds a business case provides technical proof Starts as an IT of line-of-business Starts as an executive level dialogue dialogue Asks questions to identify needs Uses an insightful hypothesis to provoke a response
  79. Solution Selling Provocation-Based Selling Competes for vendor preference within Compels project investment outside an an existing budget existing budget Aligns with the prevailing point of view Challenges the prevailing point of view Addresses acknowledged pain points Addresses unacknowledged angst Targets tactical problems Targets strategic problems Begins with technical proof and then Begins with the business case and then builds a business case provides technical proof Starts as an IT of line-of-business Starts as an executive level dialogue dialogue Asks questions to identify needs Uses an insightful hypothesis to provoke a response Responds to issues described by the customer
  80. Solution Selling Provocation-Based Selling Competes for vendor preference within Compels project investment outside an an existing budget existing budget Aligns with the prevailing point of view Challenges the prevailing point of view Addresses acknowledged pain points Addresses unacknowledged angst Targets tactical problems Targets strategic problems Begins with technical proof and then Begins with the business case and then builds a business case provides technical proof Starts as an IT of line-of-business Starts as an executive level dialogue dialogue Asks questions to identify needs Uses an insightful hypothesis to provoke a response Responds to issues described by the Is proactive and leading, forcing issues customer out
  81. “These differences don’t imply the death of solution selling, which is still the right approach when the customer understands the challenges to be faced….
  82. “These differences don’t imply the death of solution selling, which is still the right approach when the customer understands the challenges to be faced…. …and has the budget in place.”
  83. “While provocation-based selling is most effective when the customer’s problem is unacknowledged or poorly understood, the budget doesn’t exist, and the customer’s main question is….
  84. “How can we change our approach to this problem, because we haven’t yet managed to deal with it effectively?”
  85. In Summary…
  86. “In a severe downturn, provocation-based selling may be the only way to move past the ‘buy nothing’ mantra emanating from customer organizations.”
  87. Thank You stakano@gmail.com

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