A new sales approach - Creating Clients Value


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In the past, selling offered high rewards to those with the energy to sell hard and the tactics to close deals. In the new era, it will offer even greater bounty to those who can sell smart and understand and implement strategies for creating customer value.

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A new sales approach - Creating Clients Value

  1. 1. Creating Value through the Sales Force Vassilis Engonopoulos Fani Petraki Vassilis Kassimatis
  2. 2. • Based on research by Neil Rackham (author of SPIN® Selling), John De Vincentis of McKinsey & Co. and the team at Imparta • Opportunity planning and account management; strategies and skills Aimed at meeting specific business objectives What is ‘Creating Client Value’?
  3. 3. What’s the purpose of a sales force?
  4. 4. What’s the purpose of a sales force? “The reason for a sales force is to ensure that the customer has the right information about the advantages of your products at the right time, so that the purchasing decision is influenced in your favor.” … Regional Sales Manager Printing Equipment Company “The sales force convinces the client to buy from you rather than from a competitor by showing how your services are superior.” … Senior Consultant Systems Integration and Software Company
  5. 5. What’s the purpose of a sales force? “The sales force exists to show customers that you have something worthwhile to offer that meets their needs.” … Salesperson Office Products Company “The sales function is like a translator: its job is to take your products and services and translate them into language that the customer understands.” … Sales Manager Control Systems Manufacturer “The purpose of a sales force is to communicate to customers the value of your offerings.” … Senior Vice President Sales and Marketing, Large Regional Bank
  6. 6. The common factor: Each definition is about
  7. 7. The shifting marketplace Unique products/services Substitutable products/services 10 9 8 7 6 5 4 3 2 1 ● no competitors ● buyer has no alternative source ● perceived uniqueness ● numerous competitors ● buyer has many options/choices ● no perceived uniqueness
  8. 8. Where are you? Today 10 9 In 3 years Unique products/services 10 9 8 7 3 years ago Substitutable products/services 6 5 4 3 2 1 10 9 8 7 6 5 4 3 2 1 8 7 6 5 4 3 2 1
  9. 9. What’s happening in the Last Years Today 10 9 In 3 years 10 9 8 7 3 years ago 6.4 Substitutable products/services 6 5 4 3 2 1 Unique products/services 10 9 8 7 6 5 4 3 2 1 8 7 6 5 4 3 2 1 4.5 3.7 SSI Data: 47 corporations 773 sales executives
  10. 10. Why are products and services in most markets becoming less unique?
  11. 11. ● New products/services ● Value-added services and support ● Product bundling & pricing ● Customized options Create Differentiation Market Forces Corporate Strategies Decrease Differentiation ● Products/services look more similar ● More of them (Increasing competition) ● More demanding clients ● New Technologies (quicker time to market, internet, etc.)
  12. 12. Creating value vs. Communicating value ● Selling process must create value for clients ● Not enough for salespeople to communicate value ● Salespeople must become value creators Market Forces ● Product/service creates the value ● Salespeople communicate product benefits ● Salespeople succeed through value communication Corporate Strategies Substitutable products/services 6 5 4 3 2 1 Unique products/services 10 9 8 7
  13. 13. …and customers are changing too. What’s the biggest difference in how major customers behave today compared with 3 years ago?
  14. 14. Most people agree that : • Customers are getting tougher to deal with (94%) • They treat you more like a commodity (76%) • But they also demand more expertise and support than ever before (89%) • They are using new purchasing techniques to force greater concessions from their suppliers (75%)
  15. 15. Buying strategies in the new purchasing world Difficulty of obtaining substitute product/service Strategic importance of product/service high low high Shop Leverage Manage Risk Partner
  16. 16. Define “Value”
  17. 17. What is value? Value = Benefits Cost Practical test: Value is something the customer is prepared to pay for.
  18. 18. What is value ? What are the levels of value?
  19. 19. Your Capabilities Customer Needs Strategic Tactical Political Individual In order to define value you need to consider ….
  20. 20. Your Capabilities • Company (reputation, coverage, scope, processes…) • Products and Services (and the specific advantages you can offer) • People (individual expertise, experience, contacts…) • Other (strategic alliances, exclusive agreements, partners, sister companies, etc.)
  21. 21. Client possible needs Broader view of customer’s business = More opportunities Deeper view of what they care about = More value created Functions, Finance Marketing SalesObjectives e.g. IT KPIs Reduce account churn by 10% Challenges Successfully launch new product – £300k sales in Q4 Wider Goals Use extra budget to drive sales growth
  22. 22. What things do we do for our customers during the sales process that are so valuable that customers would be prepared to pay for them?
  23. 23. Customer value survey We asked 1,100 buyers from US companies: Has anyone ever made a sales call on you that was so valuable you would willingly have pulled out a check book and written them a check for the call?”
  24. 24. Where customers perceive value • Talking brochures: negative value add • Customer advocate • Time-stamped info on industry/competition • Problem solving & customized solutions + • Change of strategic direction -
  25. 25. The value map VALUE DISADVANTAGE VALUE ADVANTAGE High cost offering (Y) can compete with low cost offering (X) if it has more benefits. X YCost Benefits
  26. 26. but . . . VALUE DISADVANTAGE VALUE ADVANTAGE Y can’t compete at higher cost without additional benefits. X YYYCost Benefits
  27. 27. Value selling strategy VALUE DISADVANTAGE VALUE ADVANTAGE OPTION 1: Create more value in selling process 1 OPTION 3: Hybrid of options 1 & 2 3 OPTION 2: Slash sales costs 2 YSALES COST VALUE CREATED IN SELLING PROCESS
  28. 28. Which option has the highest success rate? VALUE DISADVANTAGE VALUE ADVANTAGE 1 3 Y 2 Which value is more important ? OPTION 1: Create more value in selling process OPTION 3: Hybrid of options 1 & 2 OPTION 2: Slash sales costs
  29. 29. The toughest strategy to execute VALUE ADVANTAGE 1 3 2 VALUE DISADVANTAGE Y • Most people believe hybrid should be easiest • Very, very difficult with many failures
  30. 30. Customer value types & selling models • “a cheaper, no-hassle pie” Extrinsic value buyers • “a bigger, better tasting pie” Strategic value buyers • “a balanced diet” VALUE = BENEFITS - COST + Enterprise Assets Intrinsic value buyers Transactional Selling Consultative Selling Enterprise selling
  31. 31. ©2010 Neil How do you position your sales force?
  32. 32. Redesign Boundaries with your Customers Unlike transactional or consultative selling, the enterprise relationship is not under the control of a salesperson or even a sales team. There are many more people and many more types of people who participate.
  33. 33. Enterprise Sales: Erase Functional Walls • The key to successful enterprise selling is to eliminate the inefficiencies and waste that exist at the boundary between the customer and the selling organization. • Boundary problems, however, exist not only between companies but also between functions or other departments within a company. • The guiding principle of process thinking is to break down these barriers by organizing work around cross‐functional core processes instead of separate functional departments.
  34. 34. Investing to meet the customers expectations Investment by customer Investmentbysuppliers Consultative sales WASTE Over resourcing RISK Competitive vulnerability Transactional sales Enterprise sales Create extraordinary value Create new value Strip Cost
  35. 35. Is this for real? Are these things happening to our industry? If so, what should we do about it?
  36. 36. The Three selling mode • Transactional sales forces have unsustainably high cost structures • Consultative sales forces don’t sell deeply enough to win business • Enterprise players lack the cross- functional capacity to create enough value to cover the huge costs of this approach
  37. 37. Using sales resources • We can no longer afford to put the most resources to the biggest customers: this is the era of lean selling, especially in transactional sales. • We must put our sales resources where we can create most customer value. • The winners shift transactional business to cheaper channels. • They put more resources into the opportunities where they can create most value.
  38. 38. . . . So what do I do about it? Talking brochures can’t survive. So don’t be caught in the vanishing middle; up the bar and aim for bigger consultative sales. 1 2 3 Ask yourself, “would the customer write a check for this call?” -- that’s how you know if you’re a value creator not just a value communicator. Create more value through understanding customers more deeply than ever before, by problem solving and by customizing solutions. See products & services as tools, not ends in themselves.