We recently read and discussed an article from McKinsey & Company entitled “What’s wrong with solutions selling – and how to put it right.” It’s a great analysis of the role a company can play, and the investments it can make, in order to make its sales team more effective.
The authors make the case (paraphrased) that those companies with a sales model focused on high-volume, transactional activity out-perform those that focus instead on ‘Solutions Selling’ unless the Solutions Selling organization makes similar investments in sales infrastructure to enable high volume and efficiency. It’s a great synopsis of what it really takes to enable sales success.
But in discussing it with some entrepreneurial colleagues, we all felt the article failed to effectively expound on a subtle mention in it’s very first sentence. Specifically, the analysis was of companies facing the commoditization of its products and services.
In other words, an implied headwind these companies were facing was struggling to differentiate their products and services from competitors. The underlying premise then is that some of the companies were striving to differentiate the solution they were selling by bundling various products and services in unique ways (Solution Selling), while others instead focused on selling efficiency. This selling efficiency may be a proxy for cost reduction, thus allowing these companies to more effectively compete on price for their ‘commoditized’ products.
While this idea warrants even greater analysis, it wasn’t where the discussion turned amongst my colleagues and me. Instead, the discussion turned to how selling non-commoditized, truly unique and innovative solutions differs from selling commoditized products and services.
We concluded that with commoditized products and services, a key attribute of the entire model is the customer’s understanding of the impact the product has on their business. As such, the salesperson does not need to focus as much attention and effort on education as she needs to be a guide or facilitator for the customer in navigating the transaction process with her own company; the vendor. In this light, the McKinsey article makes perfect sense. The more the vendor can streamline the process for both the salesperson and the customer, the easier it will be to buy, and the more time the salesperson can spend on things like relationship building.
However, when selling truly innovative solutions we believe this focus won’t work. The reason is that by sheer definition, if the solution being sold is truly innovative, the customer will unlikely understand how the solution will impact their business, or how it can be implemented in the context of their own processes and procedures.
For example, if my company is selling delivery vans (vehicles), I invariably compete with a host of other vendors. I might try to pivot to a ‘Solution Sales’ model where I bundle things like maintenance and roadside assistance to differentiate my offer. But likely my competition will do the same almost instantly, and we have commodities, being left to compete on price. Even if our features vary such as fuel economy, that can be addressed with a simple discount on the vehicles, yielding a similar total cost of ownership over the life of the vehicle.
But now consider my company offering fully electric, autonomous vans. First, the purchasing agent at the customer may be at a loss as to how to compare this solution to others when the fuel economy results in a cost per mile of $0 for fuel. But if they are OK with simply entering $0 in that variable of their algorithm, where do they consider the need for electrical outlets to recharge the vehicles. Or even more challenging, the lack of need for drivers. Consider the impact of not needing drivers if the customer business includes unionized workers, and our autonomous vehicles will result in the ability to lay-off all drivers.
The examples go on and on, but the point is that when the product or solution is truly innovative, it disrupts current operating models for the customer. That’s the point of innovation; they are disruptive in hopefully positive ways. When disruption happens, the entire sales process needs to change, as does the role (and skills) of the salesperson.
When selling truly innovative solutions, a high volume, transactional model often fails. That’s because these high-volume enterprises with deep sales enablement capabilities don’t possess the ability to dynamically adjust on a customer-by-customer basis to meet the unique needs of the customer in the buying process. For example, perhaps we first need to convince the HR department of the ensuing changes in wake of the impact on unionized employees before they will support the purchase of our autonomous vehicles. And HR’s support is crucial as the resulting expense reduction in the wake of not needing drivers may be the primary rationale for the move to autonomous vehicles. This in turn requires unique marketing collateral and presentations. Similarly, we may need to address with the facility management department the need for additional high-voltage circuits to charge the vehicles. This may require unique marketing collateral defining the electrical specifications.
When selling truly innovative solutions, the role of the salesperson is to understand, navigate, and manage the customer’s buying process more than facilitating the customer’s navigation of the vendor’s selling process. When selling something truly innovative, the customer won’t likely have a defined buying process yet, as they will for a commoditized product. This means the salesperson needs to have rich understanding of the customer’s business even more than understanding the product the vendor is selling.
Yes, infrastructure for sales enablement is still important. However, configuration of that infrastructure is likely to be far less mature until the time that the solution begins being commoditized. Consider FAQs that sales enablement infrastructure such as bots might render. The real-time tools to provide an answer to a question a potential customer might ask can be valuable. But if we don’t know what questions customers routinely ask around our innovative solution, how would we configure that tool? Similarly, we may not yet have a complete library of marketing collateral.
As such, the salesperson needs to be much more comfortable ‘thinking on their feet,’ collecting more information to inform the response, and then working with their own company (vendor) to develop the response and then deliver it to the customer. This is a very different skill set to the salesperson who needs to be measured on transactional speed and efficiency.
As the bill came, we concluded it’s absolutely crucial that business leaders honestly and accurately consider where their product or solution fits on the scale of commodity to innovation before building a sales model, and investing in the supporting infrastructure for that model if they are to be successful. We all lamented with brief mentions of various companies who believed their solutions were innovative, when the market didn’t see them as such, and the entrepreneurs who hired really skilled and successful sales people from large, transactional-focused sales companies who failed miserably in bringing truly innovative solutions to market. As we walked away from the table, the unanimous conclusion was that this is an often-times overlooked consideration of business leaders, thinking “sales is sales.”
So how truly innovative is your solution, and have you aligned your sales model to support that?