It’s another Monday morning meeting with your customer. This time, you sharpen your pitch. You put all the use-cases and customer success stories on the table. Your customer doesn’t even flinch. Because you’ve done business together in the past, she kindly tells you that your product is a commodity and she’ll only sign up if you can significantly discount your price. Does this story ring a bell?
Sales professionals across most industries are finding it harder to add value to their customers. The traditional commercial logic that saw the company define their strategies and products, develop products in their labs and have sales develop the value propositions around those products are quickly fading away, causing products to be commoditized. Product innovation that is based on traditional market research is becoming too risky and not fast enough to create a long-lasting competitive advantage in the market.
With over $900 billion invested in Sales in the U.S alone, sales is a very expensive, yet necessary function that drives growth. Yet for years we’ve been witnessing trends that indicate that the effectiveness of sales forces has been on the decline. Is the market changing? Of course! Is the customer changing? Heck, yes! Are sales professionals changing? Likely not fast enough.
Let’s put it in the context of Fred, who just joined ACME Corp. as a senior sales rep. During his first two weeks, Fred undergoes a training boot camp where he’ll be getting a good overview of the company’s products. He’ll learn the sales plays and value proposition of each product so he can uncover his customer’s needs. He’ll learn about the competitive landscape and what tactics have worked when facing competitors. This training is perfect for an old commercial model. Fred will spend the next few weeks developing his list of “targets” who he will engage in discovering their needs, match their needs to products and articulate the value of his offering. The real value will be created when Fred’s customers use or consume his product. In a classical sense, Fred is handing over a product that his customers can use to “get the job done”, but as soon as the deal is signed, Fred is off to the next customer.
On the other hand, Annie, also a veteran sales rep, takes a co-creation approach with her customers. Instead of telling them what they need, she engages with them to figure it out together. She partners with her customers to co-design and co-develop the right solution to the problems they co-discover, and brings her organization’s know-how to merge capabilities and products that create value.
The difference in capabilities between Fred and Annie are vast. Fred is a strong consultative seller and is seen as a problem solver. Annie goes beyond problem solving and is seen as a business consultant by her customer.
It is important to recognize that there really isn’t a one-size-fits-all model. As consumers and their expectations, evolve at a much faster pace; leaving them in a sea of messaging, value propositions and the complexity of more choices than ever, there are still products that are going to continue to be sold through a traditional model, although all indications are that they will continue to become commoditized as competitive pressures increase.
As we move from “one-and-done” products into connected services, businesses must steadily adapt their offerings to these changes in value creation. It is therefore important to identify and in some cases even bifurcate the role of sales in the era of value-based selling vs. value co-creation and build new capabilities that enable sales to become trusted business consultants (arguably, maybe the role will not be called “sales” in the future). As customers decreasingly become passive consumers of offerings – but active contributors to value creation, we need to think about how to evolve the skills and capabilities of sellers to foster a reciprocal relationship in which both parties “help each other and help each other help each other”.