Repeatedly, I observe sales reps spending more time discussing price and pushing product, rather than understanding a client’s business and the root necessity for the product or solution the customer is inquiring about. However, with B2B customers empowered with the proliferation of information on the Internet, quickly moving to product and price discussions gives the customer all the leverage. Based on a CEB study of over 1,400 customers in the B2B markets, customers are typically 60% through their purchasing decision-making process before they contact a sales rep. Since this is the case, the sales rep assumes the customer knows what they want or need, confirms by pushing the product or upselling, then jumping to price negotiations.
So what’s the point of the solutions sales rep?
Placing orders is simple and is vastly automated. Price negotiating becomes irrelevant as products and solutions mature and become commoditized. Sales reps become valuable to customers when they become interested in the customer’s business. I am a big fan of the “Challenger Sale,” but for a sales rep to become a “Challenger,” the sales rep must learn more about the business through research and conversations with stakeholders in the business (outside of the typical decision makers for the solution the rep’s company sells.) This takes some intrinsic motivation from the sales rep, yet there is simple logic in the process of being interested that can spur motivation.
People, Process, Product.
Ultimately, business is about people and what they do. The process of their daily activities determines the need for tools required for their job. This leads to the product or solution that the sales rep’s organization may or may not sell. The reason I say, “may not sell,” is that if the sales rep is approaching the conversation from a consultative perspective, the sales rep should be comfortable with walking away from a sale if the company’s solution will not solve the customer’s problem, fill a need, or help the customer gain a competitive advantage. Again this mentality starts from being interested.
Add value through each stage.
With the consultative approach in mind, start with the people in the customer’s organization. Whether you ask the decision maker directly, or engaging with the stakeholders who will use the product, understand the “day in the life” of the people most affected by the purchasing decision. Learn about them and understand their motivators in their job.
What are the users trying to accomplish? Why did this issue arise in the first place? While the customer may be 60% down the purchasing process, you still know more about the product or solution than the customer (ideally.)
Understand your competitors by asking stakeholders and decision-makers about alternate solutions they are considering. This will help you become creative with the solution, which ultimately benefits the customer.
Understanding the people organically leads to having an interest in business processes. Most businesses establish processes to create efficiencies, harness communication and collaboration, and to hold people accountable. What are those processes? Now you can have the discussion around how your product or solution can help the customer evolve or reinvent their business processes.
At this point, there are essentially three options to for a sales rep. First, you can offer an alternative option, assuming your company offers alternatives. Second, offer to reinvent business processes that add value to your customer’s business (and allows you to cross-sell.) Or, at the very least, confirm your customer’s original decision through a business case based on your findings. Now you’re adding value through a business discussion, so the price should not be as important.
Negotiating with Procurement.
This topic will come in a later blog, but it makes sense to briefly review procurement’s or purchasing’s purpose. It is extremely important to know the people and process of purchasing. The people in procurement will always negotiate price –that is their job. However, if you understand the actual decision-making process within your customer, you will know that procurement typically does not make the final decision. Procurement negotiates price and delivers final price proposals to the business decision-makers, which you should have been speaking to when architecting a solution or understanding the business through “people, process, product.” If your solution is a necessity for your customer’s business, and you’re confident that your solution is superior to competitors, the business decision-makers will be transparent about their budget (and it doesn’t hurt to know your customer’s budgeting process.)
Questions? Thoughts? Need some help? Email me at firstname.lastname@example.org or @yuriym on Twitter.