1) Sales reps should understand their customers' business models in order to better identify how their products and services can add value. 2) A business model describes how a company makes money through its value proposition, market segments, sales channels, revenue streams, and key resources/activities. 3) By asking customers questions about these aspects of their business model using the "5W/H" framework, sales reps can gain a clear understanding of customers' needs and how to position solutions.

1. Why you should understand your customer’s Business Models
This is an article inspired by a wonderful book that I invite every sales rep to read it. The book is
called “Business Model Generation” by Alexander Osterwalder & Yves Pigneur.
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A new sales rep is hired in ACME ISS (Integrated Security Solutions) , walks into the office to
meet his sales manager who hands him/her his “ Territory” and a discussion follows. The sales
manager highlights the huge potential in this particular territory and how the new rep can get
the company pure gold out of it, etc.
Our sales rep takes some time studying the product line of ACME ISS and, as usual, cannot fight
his bias to what he knows from previous experience. Consequently, he draws parallels to his ex-
employer’s products/service lines. Next, he receives the clients’ files, sits with the previous
sales reps and is officially handed over the accounts after a brief introductory meeting with the
clients.
What usually happens is that our sales rep plunges into a sea of requests, price quotations,
inquiries about deliveries, billing request, accounts receivables meetings, etc. and finds no time
to do the proper selling activities and becomes a gear in a huge mediocre machine.
While this is normal in our busy world where we rush to do things without taking the time to
question what we do, how we do it, and why we do it, one should stay away from this pitfall.
Our sales rep must realize it is best to have a fresh start when he/she joins a new company –
take a breath, pause for a while and break the overwhelming circle we run into. Instead, one
should go to the basics; the 5WNH (Five Wannah) or the 5W’s & How (Who, What, When,
Where, Why and How) .
It sounds dull to hear the same advice about asking questions, knowing what your customer
needs, etc. But this time I want you to use the 5WNH to examine your client’s Business Model
and see how you can add value to what they do by motivating them to buy your products and
services.
What is a Business Model? It is “how a company intends to make money for its share holders
and ensure continuous and healthy revenue stream “. We succeed in sales when we know more
about our clients BM and their value proposition to their intended customers / users.
1. Organizations do business by grouping their products and services in what is called
Value Proposition. Its simple definition is “why your customers want to do business with
you”.

2. 2. After organizations build their value proposition, they partition the market into
Segments. They then reach out to the intended segment through Sales Channels.
3. They build a Pricing Structure to generate Revenue Stream from their customers.
4. They do certain Key Activities (manufacturing, developing SW, printing, curing patients)
using Key Resources (SW license, raw materials, medical equipment) and
5. Finally they look after their customers using Client Relationship Management or CRM
mechanisms that employ tools and processes additionally used to prospect for more
customers and the cycle goes on.
The terms we have highlighted are: value proposition, market segments, sales channels,
revenue stream, pricing structure, key resources, key activities and CRM.
Now you should use the 5WNH and get your customer to answer the following questions, if you
do this you will have a very clear idea about what your customer does and be able to map your
products to his needs.
• (VP question) What value do we deliver to the customer?
• (VP question)Which one of our customer’s problems are we helping to solve?
• (VP question)What bundles of products and services are we offering to each Customer
Segment?
• (VP question)What customer needs are we satisfying?
• (Market segment question) For whom are we creating value?
• (Market segment question) Who are our most important customers?
• (Channels question)Through which Channels do our Customer Segments want to be
reached?
• (Channels question)How are we reaching them now?
• (Channels question)How are our Channels integrated?
• (Channels question)Which ones work best?
• (Channels question)Which ones are most cost-efficient?
• (Revenue stream question) For what value are our customers really willing to pay?
• (Revenue stream question)For what do they currently pay?
• (Revenue stream question)How are they currently paying?
• (Revenue stream question)How would they prefer to pay?
• (Pricing structure question)What are the most important costs inherent in our business
model?
• (Pricing structure questions)Which Key Resources are most expensive?
• (Pricing structure questions)Which Key Activities are most expensive?

3. • (Key Resources questions)What Key Resources do our Value Propositions require?
• (Key Resources questions)What is the cost of these resources compared to our
competitors?
• (Key Resources questions)Are there ways to reduce the cost of our resources?
• (Key activities questions)What Key Activities do our Value Propositions require?
• (Key activities questions) How do these activities serve out time-to-market?
• (Key activities questions) How can we optimize these activities?
• (CRM question)What type of relationship does each of our Customer Segments expect
us to establish and maintain with them?
• (CRM question)Which ones have we established?
• (CRM question)How are they integrated with the rest of our business model?
• (CRM question)How costly are they?
Understanding what you customers do, how they do it, why they do it, with whom they do it
and when they do it will help you find many areas where you can offer your products/services
to help them do it better.