The late Peter Drucker said “true marketing starts out with the customer, his demographics, his realities, his needs, his values. It does not ask ‘what do we want to sell?’ It asks ‘what does the customer want to buy?’ So, why have so few people figured out how to routinely and systematically uncover this fundamental insight? And why do few senior managers pay more than lip service to encouraging or requiring their sales forces to discover the answer?
One reason is that in the quest to create a “sales-driven culture,” companies push muscular sales tactics that often subordinate the importance of questions. “ABC—Always Be Closing,” or “Show the ROI!” or “Go for a trial close after showing our key features,” are part of sales-process DNA. Does anyone remember this recommendation--“When you get the customer to answer ‘yes’ to three consecutive questions, ask for the order.” ? One sales training tape I heard ignored asking questions altogether, offering this nugget: “If the customer voices an objection, give them a ‘yes . . .but.. . .” (I am not making this up—and I’m sure the phonic similarity to “headbutt” is not just a coincidence!) These superficial tactics fall short by not embedding strategic discovery into the sales process.
What is strategic discovery? It’s the process of learning how an organization plans to create, monetize, and deliver its value. Why is strategic discovery a vital competency for sales forces? Because compared to operational problem solving, strategic collaboration tightly connects enterprises in a value chain. Those tight connections increase a vendor’s value and reduce selling risks. Why? Because strategic initiatives are mission-critical and are often less ephemeral than operational initiatives. When a salesperson says “my solution enables your strategy,” she has a competitive advantage over the salesperson who says “my solution provides the highest ROI (and/or lowest Total Cost of Ownership).” I know from numerous sales engagements I’ve managed that “high ROI” alone provides a wobbly sales-value foundation. (See my recent blog, A Sales Team Needs More Than "High ROI" and "Low TCO" To Compete and related article The Right Sales Questions Will Get the Right Answers.)
Strategic discovery doesn’t have to be difficult, but the process makes many salespeople uncomfortable. Strategy questions must uncover business and financial challenges. They examine forces that are outside of anyone’s direct control. Part of the discussion includes blurry concepts like risks and trade-offs. Few strategic questions can be answered with a simple ‘yes’ or ‘no.” And strategic plans aren’t guided by ordained roadmaps or prescriptive methodologies.
So, what are the steps that a Sales-Discovery Black Belt should follow?
1. Begin with a foundation of mutual trust. As Jim Collins said in the bestseller Good to Great, “create an environment where the truth is heard.” Prospective customers don’t spontaneously open up and provide meaningful and honest answers to questions. And if you wait until the second meeting to start thinking about how to cultivate trust, it’s probably too late. Mutual transparency of goals and objectives must characterize the business relationship from the beginning. The best book I have read on this topic, Mahan Khalsa’s Let's Get Real or Let's Not Play, provides an approach that is as eloquent as it is sensible: “The decision to trust doesn’t start inside (your prospect)—it starts inside of you. Intent is a choice, and your choice will have consequences. You will communicate your intent whether you want to or not . . . Based on your intent, people will decide to trust you or not.”
2. Ask the right questions. Here are some of my favorite strategy questions, culled from a list of hundreds I’ve compiled over many years:
What are the key capabilities and resources required to execute strategy and achieve your goals?
In order to execute your business strategy, what are the key things you must do well?
What proprietary advantages must your company create for your strategy to be successful?
What are the most valuable outcomes your organization enables for your customers?
What are the major forces driving changes in your business?
What conditions have the most disruptive impact on your business now, and will have in the future?
What are the greatest opportunities for your company to change the basis of competition in your industry? How might these impact barriers to entry? Switching costs? Relationships in your value chain? Product differentiation?
How sustainable is your market position and the business model needed to achieve and support that position?
What are your options for growing your business in the future?
3. Identify capability gaps. Specific operational questions will uncover gaps between strategic imperatives and current capabilities. For example, the question “What are the major forces driving changes in your business?” might yield that global competition is a condition of growing importance. If the prospect company lacks operational capabilities to manage a worldwide supply chain, a strategically-significant impediment has been identified. From this finding, the essential work of sales takes place—enabling a client first to believe the facts about an issue—then to care, then to act. Operational questions are instrumental for crossing the belief threshold, so caring and acting are more likely because of the strategic ramifications of the capability gap.
4. Align the gaps with a recommended solution. This final step ensures that the recommended solution matches the client’s strategic imperative. A scenario from my sales past illustrates the importance of this step. Several years ago, one prospective client told me “Our goal is to get our organization 100% on bar coding by the end of next year.” Although I was pleased he believed in my product, I cringed at his remark, wondering how he would handle the Q&A from his management peers at his next planning meeting. The strategic goal was to improve cash flow by cutting order cycle time. Bar coding was one enabler. By establishing a foundation of trust described in Step 1, my commitment was to help my client achieve that outcome.
Achieving the right sales outcome--my client's success--required both my client and me to keep the strategic objective in focus.
Showing posts with label sales_questions. Show all posts
Showing posts with label sales_questions. Show all posts
Tuesday, January 6, 2009
Do You Know What Your Customers Are Really Buying From You?
How does an enterprise create sustainable value? Through listening to customers and innovating products and services they want to buy? Or by creating a product and hoping the world beats a path to its door (or website) to buy it?
The better answer—listening to customers and innovating products and services accordingly—plays well in PowerPoint presentations under the Why We’re Customer-centric banner, but many truly smart people still don’t get it.
An article, The Innovation Illusion, by Sergio Zyman, contains a compelling real-world example. “While Sony was busy making colorful new versions of personal, portable CD players, Apple was out there redefining portable entertainment. Sony should have introduced iPods, not Apple. So what was the domain of Sony is now Apple’s forever.”
If Sony can find solace about squandering an opportunity it created almost 30 years ago, it’s in the fact they have plenty of company. In February, Polaroid Corporation announced it would cease manufacturing virtually all of its instant film, closing three plants in the process. Polaroid’s explanation: “marketplace conditions,” which is business-speak for “so few people want to buy our products that we can’t afford to produce them.”
If you were born before 1980, you’ll recognize these other not-seen-lately products to add to the dustbin: water beds, dustbusters, cigarette vending machines, mimeograph machines, and multi-media all-in-one stereo systems. The list goes on. The all-important wall-mounted pencil sharpeners that used to adorn almost every school and workplace? Made obsolete by computers and mechanical pencils. Many of the companies that were dominant suppliers are no longer in business. Marketplace conditions also likely claimed the financial stability of the ecosystems of people and companies that produced these products—parts suppliers, retailers, resellers and distributors, and sales forces.
So why do some companies closely tied to blockbuster successes like Polaroid Film and the Sony Walkman lose momentum while other companies perpetuate through other offerings? A new book, Think Two Products Ahead, by Ben Mack, explains why, making a case for understanding customer need and building brand equity to support it. Mr. Mack supports his point by describing how in the late 1800’s, Wells Fargo transitioned from a delivery company to a financial services company by understanding that trust was what their customers were really buying. “Trust is the essence of the Wells Fargo brand, more than its physical banks, checks, or even its name. The name became a symbol of this trust, but without this trust, the company would have evaporated when the government took over Wells Fargo’s express business. It was the customers’ willingness to do business with Wells Fargo that allowed it to continue when the business suddenly had to switch product offerings. It was the business managers leveraging Wells Fargo’s common thread that facilitated the company finding new business opportunities.”
What creates the success-failure chasm between companies like Wells Fargo and Sony and Polaroid? Could it be in the questions they ask—or not? Did Wells Fargo survive through astute introspection? Were senior managers from Sony and Polaroid so enamored with their own revolutionary technologies that they failed to later ask the same questions that ironically might have helped create their own breakthroughs? These questions include:
What does our next customer want to buy?
What emerging forces will impact our business?
Are there new business models or technologies that should be adapted to deliver radical improvements in the value we provide?
What proprietary advantages must we exploit to sustain or improve our market position?
Are there shifts in market power or industry fragmentation that create new sales opportunities?
A historical comparison will prove that asking questions such as these—and taking action on the answers—have played an important role in every successful product or business venture. Curiosity has great innovative power.
The next time I nostalgically remember a product or company made newly-extinct by marketplace conditions, I’ll just say “We bought one of those! It worked so great at the time.” But I won’t need to guess about what happened.
The better answer—listening to customers and innovating products and services accordingly—plays well in PowerPoint presentations under the Why We’re Customer-centric banner, but many truly smart people still don’t get it.
An article, The Innovation Illusion, by Sergio Zyman, contains a compelling real-world example. “While Sony was busy making colorful new versions of personal, portable CD players, Apple was out there redefining portable entertainment. Sony should have introduced iPods, not Apple. So what was the domain of Sony is now Apple’s forever.”
If Sony can find solace about squandering an opportunity it created almost 30 years ago, it’s in the fact they have plenty of company. In February, Polaroid Corporation announced it would cease manufacturing virtually all of its instant film, closing three plants in the process. Polaroid’s explanation: “marketplace conditions,” which is business-speak for “so few people want to buy our products that we can’t afford to produce them.”
If you were born before 1980, you’ll recognize these other not-seen-lately products to add to the dustbin: water beds, dustbusters, cigarette vending machines, mimeograph machines, and multi-media all-in-one stereo systems. The list goes on. The all-important wall-mounted pencil sharpeners that used to adorn almost every school and workplace? Made obsolete by computers and mechanical pencils. Many of the companies that were dominant suppliers are no longer in business. Marketplace conditions also likely claimed the financial stability of the ecosystems of people and companies that produced these products—parts suppliers, retailers, resellers and distributors, and sales forces.
So why do some companies closely tied to blockbuster successes like Polaroid Film and the Sony Walkman lose momentum while other companies perpetuate through other offerings? A new book, Think Two Products Ahead, by Ben Mack, explains why, making a case for understanding customer need and building brand equity to support it. Mr. Mack supports his point by describing how in the late 1800’s, Wells Fargo transitioned from a delivery company to a financial services company by understanding that trust was what their customers were really buying. “Trust is the essence of the Wells Fargo brand, more than its physical banks, checks, or even its name. The name became a symbol of this trust, but without this trust, the company would have evaporated when the government took over Wells Fargo’s express business. It was the customers’ willingness to do business with Wells Fargo that allowed it to continue when the business suddenly had to switch product offerings. It was the business managers leveraging Wells Fargo’s common thread that facilitated the company finding new business opportunities.”
What creates the success-failure chasm between companies like Wells Fargo and Sony and Polaroid? Could it be in the questions they ask—or not? Did Wells Fargo survive through astute introspection? Were senior managers from Sony and Polaroid so enamored with their own revolutionary technologies that they failed to later ask the same questions that ironically might have helped create their own breakthroughs? These questions include:
What does our next customer want to buy?
What emerging forces will impact our business?
Are there new business models or technologies that should be adapted to deliver radical improvements in the value we provide?
What proprietary advantages must we exploit to sustain or improve our market position?
Are there shifts in market power or industry fragmentation that create new sales opportunities?
A historical comparison will prove that asking questions such as these—and taking action on the answers—have played an important role in every successful product or business venture. Curiosity has great innovative power.
The next time I nostalgically remember a product or company made newly-extinct by marketplace conditions, I’ll just say “We bought one of those! It worked so great at the time.” But I won’t need to guess about what happened.
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