Offer Something More
This month in the Harvard Business Review, James C. Anderson, James A. Narus and Marc Wouters wrote an excellent article called “Tie Breaker Selling.”
With today’s new hypercompetitive B2B selling environment, customers/clients are better informed and up against fierce competition in every business sector. AS a result, the ability to differentiate is much harder now. If your product isn’t strategic to the business, prospects are hard-pressed to find differentiation. The HBR article says:
“Customers in B2B markets are becoming increasingly sophisticated about purchasing. Recognizing that most products and services they buy are not strategic to their business, they begin by simply seeking suppliers that will meet their basic specifications at a competitive price. Then, after they’ve winnowed down the contenders, they often ask the finalists to offer something more.
Many suppliers misunderstand this request. They’ll respond with the well-worn tactic of stressing features their offering have but competitors’ lack, and when that doesn’t work, they propose price concessions. But it turns out that customers are looking for neither of those things.”
The article goes on to call this difference “justifiers,” an element of the offering that would make a noteworthy difference to their company’s business.
More and more companies on non-strategic products and services go through the buying process run by the purchasing department. Unless you haven’t noticed, request for proposals (RFPs) are on the rise with many purchases.
The purchasing agent has the pressure of getting the best deal for the company with one big downside: What if the new vendor doesn’t work out?
One of the things we teach in Strategic Selling® is everyone must have a Win-Result; that is, salespeople can win today by showing all of the decision makers a win, including the purchasing agent.
With all of the corporate cut backs, decision makers bear more responsibility without additional resources. Therefore, your solution needs to fill a discrepancy that helps the prospect fix, avoid or accomplish something. In doing so, you’ll put a smile on the purchasing manager’s face. He’ll have something more than price to justify his decision.
Beyond the Product Pitch
On a product that isn’t strategic to a business, salespeople tend to lead their discussions with products and services, pointing out superior features in which the prospect may see no value.
What’s needed is a discussion around what the prospect or existing client/customer sees as his ideal solution, and then proof statements of how your product fulfills his ideal solution. For example, a major manufacturing company was in discussions with many advisory firms on services related to its 401(k) plan. One advisor asked the prospect to “describe what the ideal plan looked like.” The response was lower company cost, better investment fund line-up, and clearer communications. Yet any provider could bring these services to the manufacturer.
However, the retirement advisor believed its differentiation was the ability to take on fiduciary responsibility for the plan, along with his firm’s unique communication and education strategy designed to increase plan participation. That’s what he pitched. Great features, but again not the prospect’s ideal solution.
The HBR article shares another useful example from a director of supply management at a U.S. teaching hospital. She related how a supplier had developed an antimicrobial coating for its sutures, and its salesperson always pitched her this premium-priced product, despite the fact that ordinary sutures work fine for most surgical applications.
Get to the Real Issue
Let’s revisit our manufacturing company example. With a good meeting plan, the salesperson can sequence questions to gather information needed and tie their advantages (justifiers) to the vision the prospect has for the solution. The answer the prospect gave above was too general; the salesperson needs to understand more.
He should ask, “Why are you seeking to change service providers?” or “why do you feel you need to improve communications?” The salesperson needs to get to the heart of the issue and link their value back to the issue. When a prospect says, “we need to lower fees,” the salesperson must determine if lower fees mean administration fees, fund management fees, fees on the fixed portfolio or the equity portfolio, or something else?
The research done by Anderson, Narus and Wouters confirm what we have known for years with Conceptual Selling®. You must focus on what is important to the prospect and link your product back to it. The research states “tiebreaking sellers coach their salespeople to explore this topic with customers and engage them in conversation about their concerns.” After all, most prospects need to be led to the right solution as they don’t have the wealth of knowledge of possible solutions as the salesperson would have.
As we teach in our Conceptual Selling® workshops, we must avoid product dump. Rather, we must focus on what Miller Heiman calls the buying influence’s concept, defined as the prospect’s vision for a solution. This focus allows you to learn more about your prospect than you could possibly learn if you began with a product pitch. By drawing out the prospect’s current interests and concerns with well-thought-out questions, you more naturally focus on the results she really wants to accomplish—not just the results you think your product can or should deliver.
Focus On Results
If you zero in on the prospect’s expectation of the outcome or result, you bulk up your chance of success. Besides, it is the right thing to do. In a world of complex solutions, the vendor’s success is mostly measured by the (successful) performance of the prospect’s business, not the vendor’s products.
Unless you sell commodity products at the lowest price, you sell value―solutions that enable prospects to save money, make money, or improve their existing conditions. Just because your product or service solves a problem, however, doesn’t mean prospects will automatically recognize an opportunity to enhance their status quo. That’s why it’s important to engage prospects in a productive conversation, to explore further their needs and the value you provide. Getting prospects to engage freely is the challenge.
In the end, the ability to offer something more rests on your ability to master the art (and science) of conversation:
Listen attentively. Ask questions behind the questions. Mirror and associate with prospect interests. Be stingy about claims and generous with proof statements. Build a sincere rapport.
Now go out there and converse!
See you on the upside, Bill
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