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What’s it really worth? How to uncover your hidden value
There’s an old axiom in selling; no-one buys a 7mm drill-bit because they want a 7mm drill-bit, they buy one because they want 7mm holes.
That’s true but it’s only part of the story, does anyone, ultimately want 7mm holes? If you’re a DIY enthusiast building cupboards, you want more efficient storage, if you’re a joiner fitting kitchens, you want to make jobs quicker and easier and if you’re a cabinet maker building furniture to sell, you want well-crafted pieces and the profits you receive from selling them. It’s the end product, the output or outcome that a purchase enables that really matters. Of course, as individual consumers we occasionally buy things simply because we want them; that fantastic handbag, that gorgeous motorbike, but in B2B sales, in almost every situation, it’s the final output that matters. That’s where the real, abiding value lies. No-one comes to us at Huthwaite to buy sales training, they come to us to buy improved sales performance.
You may think that’s fairly obvious and expect your sales team to go way beyond selling to basic needs. Sadly, the reality suggests that’s often not the case. A recent survey of B2B managers and executives with procurement responsibilities, across a range of industries, showed 73% of buyers say salespeople are not able to translate business data to insights, and 72% of buyers report salespeople do not demonstrate an understanding of core business roles and key organisational stakeholders. That’s almost three out of four salespeople failing to demonstrate sufficient acumen and skill and, as a result, failing to uncover all the value they could potentially deliver. In this article we look at how to equip your sales team with the skills and tactics to maximise the value you deliver to every customer.
One of our clients is a global chemicals manufacturer. We work with their commodity chemicals division; whose sales are unusual in two ways.
Firstly, the product is an absolute commodity, basic chemical formulations that anyone could, in theory, produce and which cannot be patented. 98% sulphuric acid in water is exactly that, 98% H2SO4, 2% H2O. For the same reason there’s no issue of variable quality, it just is what it is. The product in and of itself has absolutely no differentiation whatsoever.
Secondly, the parent company is an industrial giant, with huge overheads and liabilities, and therefore has to charge premium prices to give them the margins necessary to sustain the business. And they do, they sell a commodity product to major customers in huge volumes at far higher prices than their competitors. How? We worked with their sales leadership and sales team to uncover what is was that their customers valued enough to justify premium pricing, we discovered where the real value came from. This is what we found.
Whilst pricing is entirely product based, the company provide a range of services around the delivery and use of their products too. Whilst these services aren’t charged for, they are highly valued by the customers and are not provided by the competing suppliers. It’s these add-ons that provide the value that justifies a price premium. It’s these add-ons that the sales team are trained to identify and build needs for. Broadly these value-adds fell into three categories:
- Physical - Things like remote monitoring of stock and automatic re-ordering and the option for deliveries by road or rail as the customer preferred
- Knowledge - Advice of how to store, use and dispose of the products and the by-products of production. The products are potentially toxic, and any incident could have huge health, safety or environmental impact. It was hugely important to the customer that the products are handled properly – and our client helped make that happen. For free, or more accurately, for a product price premium
- Brand - This was the hardest to define but was a significant factor. Customers like buying from such a large and well-known company. They value the status of dealing with such a well-respected company and the relationships they have with the individuals they dealt with.
So what does this mean for your business?
Firstly, you need an accurate picture of how close to being a commodity your products or services are. We all like to think we have genuine competitive differentiation, but do we really?
Try this. Get your sales and marketing teams together and brainstorm all the reasons why a customer should buy from you. Try and come up with as many as possible, 10 flipchart pages with reasons is the record. Now ask the team to cross out every reason that any of your competitors can satisfy. What do you predict you will be left with? Our prediction is nothing. Almost every time we run this exercise we find every single reason the sales team came up could be delivered by someone else, most sales teams fully understand how to sell their solution generically but have no idea what truly differentiates them from their competition. If you do have reasons for buying only you can satisfy, that’s your differentiation. Question one, do you know what your genuine competitive differentiation is and do your sales people know how to uncover and develop needs for it?
It’s now probably easier than ever to gain an accurate picture of what’s going on in your market place and what your competitors’ offerings look like. Make sure you know, and remember, it’s an ever-changing world, monitoring competitor activity should be on-going.
Next there’s the question of what you can do physically to add value to your solutions. What do your customers and prospects want over and above the solution itself? Do you know? How do you find out?
The obvious way is to ask them. It’s easy and simple to set up a customer satisfaction survey or, better still, get your salespeople to have that conversation directly with the customers. It can be quite scary, asking a customer “How could we do better?” but you might be pleasantly surprised. It’s in the customer’s best interest to get the most out of their relationship with you and their demands might not be that difficult to meet. One client of mine, a global telecoms provider, did just that. They initiated a global key account programme and, after bringing together the sales team from around the world for initial training, they then invited each customer to come to a workshop and tell us what they wanted from the relationship. It was a revelation. For one customer it was about job security, for another it was about eliminating office politics. Both things the customers valued, and my client could help with, at no cost to themselves. We could add value and consolidate our position just by changing how we worked with them. But most revealing of all was our meeting with the CIO of the world’s largest pharmaceutical company who told us “Thank you for inviting me, it’s the first time I’ve ever been asked what I want from a supplier relationship”. This is one of the most important buyers of IT on the planet. He must have been courted by the highest-level representatives of every leading IT company in the world, and no-one had once asked him want he wanted from the relationship. Do you know what your customers want from their relationship with you? Do you know what additional value you could deliver at minimal or no cost to you? Are your salespeople confident and well-equipped enough to find out?
Then there is the question of knowledge. Yes, the internet means everyone has access to everything these days, but do your customers have the time or the inclination to keep up to date with what’s going on in your sector?
The chances are they don’t, and then there’s your own confidential developments that are not yet in the public domain, but you are willing to share with a customer. Of course, if there’s a major change like Brexit or you have a significant new solution in the pipeline you will plan to discuss this with your customers, but what about the smaller stuff? Do you monitor your markets, and those of your customers, looking for compelling events that could trigger the buying process? In the learning and development space there’s a lot of talk now about ‘insight selling’, creating new insights for the customer that lead to new needs and new demand for your solutions. Within the SPIN® Selling methodology we use future-oriented Problem Questions, ”Do you have any concerns that might lead to…?” and disruptive Implication Questions, “Have you considered what impact that might have on…?” to create insights, but there has to be a reason for asking them. You have to have a compelling event, a change to the status quo, that is likely to impact on your customer in order to start the conversation. If you get it right, and the event will affect the customer, they will be grateful and, as you are the first to raise it with them, most likely to associate you with the solution. If you get it wrong, and the event won’t have an impact, you’ve demonstrated concern for your customer’s business and have a legitimate excuse for making contact. You never know, it’s amazing how many successful sales begin with “I’m glad you called…” As long as you don’t overdo it, no-one wants calls about impending doom every week, it can only help you deepen your relationships. Furthermore, if the event has a direct impact on how your solution is used, it justifies direct contact with your end-users, even if orders come through procurement. Your meeting isn’t a sales call, it’s a market/solution update. But end-users ultimately have the needs your solutions address, adding value for them is what drives the buying process, even if it is handed to the buying department to be fulfilled.
Finally, there’s the value in your brand. Your marketing team have worked hard to create, protect and develop it but it’s more than a logo, colour scheme, website and strapline. Your brand is an experience and nowhere is that more widely manifest than within the sales team.
Your team has the ability to reinforce and enhance your brand experience but equally they can undermine and even destroy it. Think about Apple, the products look stunning and the brand experience is reinforced with the quality of the packaging, even the box feels high quality. While you’ll never get huge discounts on the current models there are always deals to be had. So why do most people swallow the extra cost and buy directly from Apple? Because of the experience they get when they enter the Apple store. Apple store employees are selected on criteria like ‘affability’ and ‘self-directedness’, they don’t need to be tech-savvy, that can be taught. And it works, Apple stores globally generate more money per square metre of floor space than any other US retailer, twice as much as Tiffany, who are number two on the list.
What about your sales team, do they give every prospect and customer an experience that adds value to both parties and enhances your brand? Every time? In B2B selling the days when customer satisfaction was a key metric are long gone, customer delight is now the measure. Before your next seller goes off to a sales meeting ask them this; “What value are you planning to give the customer and what value are you planning to bring back to us?” If they can’t answer that don’t let them go.
Opportunities to exceed customer expectations can be created easily if you know where to look and how to set those expectations realistically. Let’s take an example; the customer asks, “When will it be delivered?”, you know delivery takes 2-3 weeks and three weeks is an acceptable lead-time for your solution, so that’s what you tell them, “It will be with you in 2-3 weeks”. But the customer is an optimist, and excited about receiving their new solution, so the only number they hear is “two weeks”. So, when you deliver half way into week three, in their mind, you’re late. If your reply to the questions had been “It will be with you within three weeks” the only number the customer can hear is “three weeks” so when you deliver half way into the third week, you’re early. Customer expectations are exceeded, and it’s cost you nothing. Under-promise and over-deliver is another old axiom in B2B selling and, providing the under-promise is within the bounds of acceptable, will serve you well. Have you worked through your selling process and identified the points at which customers have specific questions about your solution? Are your sellers rehearsed at answering those questions in a way that allows you to set, and exceed, their expectations?
Customer delight is only one element of your brand experience. There’s the quality of any collateral you use. Is it of the highest affordable quality? If not, invest more in it. Is your customer experience consistent at every touchpoint? Do your website, social media, physical collateral and business cards all use the same imagery, fonts and colour-ways? If not, they should. Fortunately, all these things are manageable and, if necessary, easily put right. The thing you have least control of is the behaviour of your salespeople when they are with the customer.
What can you do to ensure your sales team is an asset not a liability?
The most important thing is to have a consistent sales methodology and sales language, particularly if more than one person is involved in the sales process. There is no universal ‘dictionary of selling’ and different methodologies can have different, and in some cases contradictory, definitions of commonly used sales terms.
For example, here at Huthwaite we define a Benefit statement differently to some other methodologies. We, of course, think our definition is better, and our clients tend to agree with us, but that’s not the point. The important thing is when two sellers are talking about the benefits a particular prospect is looking for, they mean the same thing. There must be a common understanding if vital information is to be shared and used effectively. If you are in a team sale you must have common language to share things like; each individual’s role in the buying decision, where they are in the buying process, their needs, decision criteria and what value they see in your solution.
Whilst the common language helps you share important information, it’s the common sales methodology that creates a consistent customer experience. If you’ve made good progress early in the sale by being consultative and customer-centric, then whoever enters the sale later must be consultative and customer-centric too. The customer has responded well to it so far so why change?
A common sales methodology also provides your sales people with an understanding of what behaviour is expected of them. It’s easy to tell your sales team to be consultative and customer-centric but, as with the terminology, everyone can have their own interpretation of what that looks like. Unless you equip your team with the ‘what-to’ of behaving in the required manner you are leaving consistency to chance.
All you have to do now is make sure the sellers stick to what you’ve given them, which is not always as easy as you might think. Salespeople are, inherently, independent and self-confident so may not take kindly to being told how to behave. Of course you can check by going on joint sales calls with them but that’s not always practical. That’s where your sales process comes in. It’s another way of creating consistency and a common expectation of how to behave and it can also reveal to what extent your methodology is being used in the field. At Huthwaite we use call planners that enable sellers to prepare using the SPIN® methodology and hence make them more likely to use it. We also have a note taking and post-meeting review tool which enables a manager to get a good picture of if, and how well, SPIN® has been deployed.
That’s it. Your solution has some value, what is does has more and what it enables has most. By understanding what your solutions enables your customers to achieve and what they want from their relationship with you, and by equipping your sales team with a consistent sales methodology, language and process to uncover and develop that value, you can ensure you deliver maximum customer value every time.
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