Do You See What I See?
The Fallacy of Believing
Your View of Prospects
One message I continually emphasize: Build your value proposition around what your target prospect values, not what you “think” he values. You must know precisely what the prospect values before you attempt to create a marketing or sales strategy, or line up resources, to win the sale.
It’s easy to say value is meeting prospect needs, but it’s how you deliver the value that sets up the foundation for a long-term relationship. Many great salespeople solve business problems and sell millions of dollars in corporate products or services, such as enterprise resource programs, but are they building customer value for the long term or simply making a big splash on a one-time hit?
Let’s go back to the opening statement. It’s not the value you think you bring to your clients/customers, but the value they perceive. We all know the universal law— perception transcends reality. How your customer sees you is his reality, regardless of what you sold him.
Okay, this may sound simplistic but, in fact, our ability to shape perceptions to the positive is one of the hardest challenges we face in complex selling.
Robert Miller and Stephen Heiman, in their best-selling book The New Successful Large Account Management, use five levels in the Buy-Sell Hierarchy. In the chart below, level one is commodity selling. None of us want to be there. None of us want to admit we sell on price, even when we do. And price selling is ephemeral. You can’t grow a sustainable business on price, especially in professional services.
But it’s tough to overcome commoditization because so many companies place procurement departments on the front lines of the buying process. If you’ve failed to give the prospect ideas, information or tools to differentiate your offer, she will define most products or services as commodities.
If you don’t find a solution before the prospect, and you address an issue the prospect has already realized, you will be relegated to the bottom axis of trusted advisors.
Level 2 – Just Good Enough
To get to Level 2 on the Buy-Sell Hierarchy, you must show your prospect that your products or services are different than the competition. This is where you bring a solution to the prospect that she didn’t see before, one that’s much different from the competition. At this level you can gain a competitive position, but it’s not sustainable. The competition will copy whatever is successful.
Level 3 – Getting Closer
Climbing the Buy-Sell Hierarchy, going to Level 3, you’re not only looked at as bringing excellent products and services but also providing something beyond what normally would be provided by Level 2 players. For example, in my business I spend time helping companies set marketing and sales strategy, then implement systems to ensure new opportunities and prospect relationships are well managed through the sales funnel.
What I bring in at Level 3 (for certain clients) is coaching techniques that elevate the sales team on complex accounts and, in many cases, I accompanying the sales reps on large account sales. This accommodation goes above and beyond mere strategy and training.
Most high-performing companies can get to Level 3 by offering unique approaches to customer service. Since the client expects this, go the extra mile and provide added services to a special group of customers. An example is Hertz with its Gold and Platinum services. A retirement planning firm might provide financial planning services to senior executives.
One caveat, if you outsource any key service which the client views as real added value, you could be eroding your competitive edge. I see this decision as a major problem for companies in certain industries where client services are outsourced to a third-party firm. If the client envisions his brand on the quality service verses your own, you may be creating competition right under your nose.
Level 4 – The Real Goal
The goal of most organizations is to get to Level 4 or 5, but few ever achieve it. This is where the rarified air circulates because, once at this level, you are seen as a strategic partner who helps the company find solutions to key business and organizational issues.
At Level 4, not only are you bringing excellent products and services to the table, you are also trusted to help the client understand its business issues. As Miller Heiman discuss in their book:
“You generate ideas for addressing not just customer’s day-to-day operational needs but their ongoing concerns about things like profit, productivity, and go-to-market strategies. You may provide not just products and services that address those concerns, but a wide range of ancillary supports that may have virtually nothing to do with your product or service.”
Discovering the Real Problem
Here’s an example. Recently, I was approached by a client who wanted a training program for its sale force. In doing my homework on their products and services, I realized that the way the client brought its products and services to market was the real problem.
I could have conducted the training and set the strategy, which would have improved their current revenues; however, by changing its distribution strategy, the client could make a major impact on revenue growth and long-term profitability.
The value I brought was not only changing the channel strategy from company sales reps to strategic partners, but I also helped line up select partners able to improve revenues immediately—a Level 4 relationship.
Level 5 – The Best of All
Of course, Level 5 is the best of all places to occupy because you have decisively blown past any hint of mediocrity. You become a real strategic partner verses a service provider. You contribute to the client company’s revenue and profitability growth. You contribute to overall vision and corporate strategy. You become an external asset and a contributor to the internal decision making process, often with as much say as an actual employee.
No longer a vendor, you are a trusted advisor.
How does Level 5 work?
Using another one of my client relationships as an example, I worked with a registered investment advisory firm on growing its business. In the process, we explored new markets and alliances. The client was stuck at Level 1 and couldn’t get past the Request for Proposal (RFP) revolving door, to compete on its merits in the retirement space.
We know RFPs are a necessary evil of many business sectors but they indenture you to Level 1 commodity pricing wars. In my client’s case, it was becoming extremely difficult to differentiate his firm.
Worse still, my client’s fee income was shrinking. We jointly studied new markets, and found the nonqualified plan business to offer more attractive potential for growth. Research studies showed a decrease in corporate-owned life insurance, which was and is the most popular asset class for funding these plans.
On the rise were mutual funds and ETFs which provided clients major cost savings, and gave my client the opportunity to expand with value added services. At the time of this writing, my client has no major competitor pursuing this segment of the market. This Level 5 involvement put me in the position of trusted advisor.
How do you know where you are on the Buy-Sell Hierarchy? There’s no simple answer.
Are you talking about products or solutions?
Are you uncovering issues your prospects don’t see?
Are you finding solutions before your prospect finds them?
Are you delivering value or services your competition doesn’t?
Are you finding solutions to help your clients/customers grow their market share, revenues, profits or competitive advantage?
If you can answer yes to even one question, you’re making your way up the hierarchy where the air is fresh and the possibilities endless.
See you on the upside,Bill