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Selling Value: It’s No Longer Enough

Selling value is great, but it isn’t the solution it used to be.  The world – and customers — have changed around static solutions, and now we need to rethink the whole idea of selling value.  Selling Value can no longer be the responsibility of any single corporate function.  It needs to become a company-wide culture.  Specifically, we need value-focused culture, or simply Value Culture.

There are four reasons why selling value is no longer good enough.

Sales Have Lost the Handle on Full Value

For many years, companies have delivered sales training to sales organizations, and salespeople have improved how they sell. The sales training industry has established “world class sales” is something that exists inside of the sales silo. Now, we have extensive research on what “World class sales performance” looks like…but only viewed within the arena of sales, sales ops, and sales enablement.

The business world has shifted around the sales performance industry, though.  For the past few decades, though, companies have splintered their customer interface into many specialized roles:

Sales (hunters), account management (farmers), business development, inside sales, technical sales, demo specialists, sales development (appointment setters), installation, customer success, tech support, customer support, operations, finance, underwriting…

Salespeople don’t contact — much less have credibility with – all of the customer personas these specialist roles work with constantly.  “Sophisticated” companies train their specialists to deliver a great “customer experience”: customer interactions which promote the brand promise— or at least, eliminate weak links in the customer arc.  That’s not remotely what’s needed. Customer experience training doesn’t equip anyone to discover any of the value gaps from their unique vantage point.

Any company not training every customer-facing role to uncover potential value is failing to leverage potential competitive advantages.

Selling Value Has Come To Mean Less and Less

Even for Selling organizations who haven’t splintered, selling value has become less and less effective.

Customers have splintered and siloed themselves as well.  Your product or service touches more customer specialties than it used to…even if it didn’t become more sophisticated and capable.  Dividing your total value proposition into narrower and narrower customer slivers can reduce the total value your salespeople sell.  Every specialty your sales people fail to bring into the buying decision represents less value offered.  Selling value doesn’t have the same impact it used to.

Sales organizations need to navigate more complex customer organizations.  Meeting this challenge means raising the level of business acumen in your selling organization to find more “value leverage points”.  Sellers need to combine business acumen with customer acumen to find those leverage points in each organization they encounter.

Value Selling Seldom Leads to Value-Based Pricing…

 Frankly, I’m not very impressed with many current “value selling” methodologies.  Average sales training teaches reps to apply benefits to each single persona. The best value selling methodologies only teach reps to sell beyond benefits, to customer outcomes…which is value. I haven’t run across any (OK, anyone else’s) value selling methodology which influences a customer to build their own cost impact statement of those outcomes.

Current value selling helps win sales, but is only short putt away from selling at a profitable price. I love winning a deal as much as the next guy, but I’ve help P&L responsibility: what’s the point of winning a barely-profitable deal?  Your company lives on profits:  a profit stream – not a revenue stream – is what funds innovation, investment, all of your fixed costs…and yes, commission checks.

Pricing is Profit.

If your value selling initiative doesn’t draw a clear, bright line to selling at a value-based price, you’re dropping out of the race with the lead…in the home stretch.

Hoarding Value Insights Cripples Your Company

Value uncovered by the sales organization …used to win sales…even at a value-based price…can represent a few open loops in a company.  An organization-wide value culture closes these loops.

Value insights gathered via value discovery need to inform many other organizations in your company:

  • Marketing. First, content can be tightly focused on the value your company is uniquely positioned to offer.  Clicks and opens relating to those value points are worth infinitely more than those on more generic click-bait content.  Leads that germinate from outcome-based content are gold.  Crap content generates crap leads.  Second, you have persona-focused value insights which can drive tightly targeted, highly relevant sales support content. Collaterals that focus on specific “buying journey sticking points” are deal-movers.
  • Product Management and product training. Product training that describes persona-specific outcomes is the gold standard that few organizations practice.  Roadmaps and product strategies informed by a rich database of value insights are also far too uncommon.
  • Innovation. The virtual call center, a staple of today’s world, was invented at a cost of zero (OK, we had to develop a few new powerpoint slides), simply by combining two products together.  The key to this innovation was a value insight.  When product developers have a deep well of value insights to draw from, inventions and innovation are radically improved.

Your World has Changed. How Will You Respond?

To combat these evolving challenges, you must establish a value-oriented corporate culture.  Culture crosses silo boundaries, countering the unintended consequences of specialization.  There are techniques, tools and technologies that can help.

If this resonated, or spurred some thoughts, like, comment or share. If you’d like to talk further, contact me.

To your success!

Best Practices Management Marketing Personal Development Sales

Five Reasons Your Salespeople Aren’t Good In the C-Suite

If your well-trained salespeople are having trouble getting into the C-suite, you aren’t alone.  It’s pretty common. There are a couple main reasons, some of which are easier to correct than others.

I’ve been in the sales training game for almost a decade, and have engaged with a a lot of sales forces in a lot of industries. Through my past experience as an executive, bolstered by my work selling to them, I’ve observed a couple of major problems.

Problem 1: The “Salesperson Doesn’t Add Value” Loop

This is a problem wider than just C-suite selling.  The sales profession has hurt themselves.  CSO Insights published a research note which describes what they call the apathy loop(contact me if you’d like a copy). The basic idea is this:

  • When sellers act unremarkably, customers no longer consult them (currently B2B buyers prefer company salespeople 9thout of 10 information resources…ouch!).
  • Sellers self-inform using one or more of the 8 better information sources and self-diagnose their solution.
  • They then distribute a requirements document and ask sellers for proposals/bids/etc.
  • The request traps most sales teams into a response every bit as standardized and unremarkable as the customer expected in the first place.

Sellers need to add value–go beyond customer expectation– to break out of the apathy loop. Challenger salespeople shake up a customer’s thought process by challenging (hence the name) assumptions and thought processes – generally by “telling”.  Insight sellers might ask questions or tell stories.  Perspective sellers build credibility, then offer business insights. These insights might take the form of:

  1. Enlarging – or shifting– the customer’s conception of their situation and/or problem.
  2. Altering – ideally expanding — outcomes that a client envisions and desires.
  3. Helping a group improve the quality or efficiency of decision-making. This kind of perspective is useful, but doesn’t move an executive’s needle – today’s topic.

A lot of training programs “yada yada” business acumen:  they tell sales people to “just use yours” to provide perspective. Has everyone in one of your selling roles really mastered the business acumen to provide insights?

It’s pretty hard to provide insights into something you don’t understand.

Some of the highest end sales forces in the world buy their sales people MBAs.  You can build a lot of business acumen for a lot less…why are you choosing none at all?

Problem 2: Executives Only Want to Talk About Executive-Level Topics

Top executives organize their companies.  That is, they define and arrange organizational silos, then direct how work flows between them. If an operation or process lives inside a silo, execs don’t generally want to hear about it. Instead, executives summarily refer functional-level subjects down into the silo (and place the offender on their “time-waster list”).

The work of getting executive time is often the work of making your topic relevant to them.  While sellers should show the same respect for every persona’s time, the stakes are higher for executive meetings.

Only approach an executive on a topic/issue they will value.

If you don’t have anything, wait until you do.  If your people can’t tell the difference, they need more business acumen.

Of course, your training and enablement included techniques and practice for talking to executives (it did, right?).   Now, did you feed them executive-worthy issues…or the business acumen to find topics for themselves?  Or, did you simply tell your sales people to “get out of your comfort zone.”?  How did you coach actual conversations? Did you get out of your comfort zone in training and enabling them?

Problem 3:  Customers often buy in silos.

Another reality: your customer reinforces the apathy loop via their own org chart. Organizational silos shape buying processes by simply existing. Companies tend to self-examine their needs through a silo filter. Requirements, RFIs, RFPs, etc. often signal how narrowly your customer is thinking through their own problem.  The easy – almost automatic — reaction is to follow the customer’s self-limiting thought process.

Remember the customer who called your salesperson in after internally developing their own requirements? Have you explicitly trained your reps to ask:

  • Who had input into the proposal?
  • What other functions and silos were consulted? How heavily was/will their input be weighted?
  • What functions/silos weren’t consulted…and why not?

If you haven’t trained reps to ask these questions, do you think they formulate and ask these questions on their own?

If your solution positively impacts more than one customer silo, you need to make sure you uncover every possible ally.  Remember, cross-silo benefits are often a valid reason to engage with an executive.

Problem 4:  Perhaps your selling activity is siloed too.

Maybe you’re unconsciously reinforcing the apathy loop yourself.

Your sales methodology is just as effective across silos as within, but I haven’t seen a single trainer encourage thinking outside of the box…well…silo. Ask yourself: what explicit skills, analytics, or tools did I give my people to carry their methodology across silos to hunt for value gaps?  If you didn’t train and coach them to apply methodology outside of the comfort zone, you’ve reinforced a discomfort zone…and strengthened the apathy loop.

Business acumen provides a foundation.  Sales people rely on their business acumen to talk comfortably about bigger business issues across organizations.

Articulating different ways your product or solution could impact functions and roles across a target company requires a different kind of product training.  I know of some great tools to help sellers understand the networks of value their product/service can have at a customer.

Problem 5:  You’re Rewarding Mediocrity

You may have also erected another barrier to your own success:  your compensation plan.  Do you have a compensation plan and discounting review processthat incentivizes sellers to get outside of the apathy loop and discover value? Or, do comp plan and discounting process reward commoditization equally? Humans– buyers and sellers — take the easiest route to an end.  If sellers can, they will make discounted sales by sticking inside of the apathy loop: meeting expectations, acting unremarkably and not differentiating themselves or their offer. Ability to manipulate your discounting/price exception system is all that’s required.

Sales People Want to Be Great.  Let’s Help Them

I am happy to talk about how to help close all of these gaps.  Contact me if you’d like to discuss further.  As always, like and share with your networks if you think they might find value.

To your success!

Leadership Marketing Personal Development Sales

How Economics Betrays Business Leaders Every Day

I hear even highly-respected consultants and business leaders express dangerous misconceptions about price and discounting. I suspect it’s because so many people took basic economics to heart without digging deeper into the underlying assumptions or learning the true role of pricing. No thanks to economics, we often mis-

apply the supply/demand relationship we learned in our introductory Econ courses. You could not make a bigger mistake.

The demand curve is a foundational concept in economics. The law of demand states that lower prices incentivize higher demand (in units). The principle is correct, but only under artificial conditions. Rather, my decades of work in pricing and value have driven a conclusion that most businesses grossly mis-apply supply/demand analysis in the real world.

I’ve met multiple sales people, sales leaders and CEOs who rationalize indiscriminate discounting. Presumably, they are relying on a misunderstanding of the demand curve. This is far more than mere misinterpretation of the law of demand; it kills businesses.

Let’s review: the demand curve represents aggregated behavior of for a commodity: as price falls, additional customers appear, willing to pay the lower price.

Does dropping your price really help win that deal?

The demand curve correctly states assumes that value for your offer is different for each individual. Prospective customers compare any given price against perceived value. As price drops, demand increases when a customer who formerly perceived inadequate value now perceives a positive value from purchasing. Unfortunately, when you capture a sale from that marginal user who perceives borderline value, you simultaneously just trained all of your higher-value users to expect discounts.

While the perceived value of a product or service can – and is – often individual, it isn’t fixed. Value is a perception, and perceptions change. Perceptions of desirability of an outcome, adequacy of substitutes, and environmental/extraneous considerations change constantly. In fact, this is why the sales profession exists.

Drop your price without knowing your value? Stop it!

The demand curve assumes that your product or services is a “fungible” commodity: all units of the same product or service are identical replacements for each other.. That is, it assumes that you have no differentiation. This is ridiculous. For instance compare the price of a one ounce pure gold bar from a no-name mint vs. a one ounce Krugerrand. The demand function you learned in school ignores differentiating features, branding, distribution, availability, support/service, durability, etc. This was done so that the math works more easily. While there is some great advanced economics work that incorporates differentiation, you probably never learned about it. Pity.

Another way that the real world differs from economic models: Customers don’t have perfect information. When your customers don’t know about all alternatives, don’t fully understand value-in-use, or all the ways that your offer provides value to them and their company, they don’t make “economically efficient” decisions. Imagine a prospect who hasn’t figured out that ROI for a contemplated purchase is over 500%. Discounting isn’t the missing selling behavior…it just creates a discount-accustomed buyer. Or worse, makes them question any value which they had placed in the service. Worst of all, there was no reason to discount, and that every dollar of price drop came out of the seller’s profit line.

For these reasons, you should shift a marginal customer who perceives inadequate value to tip in your favor. This avoids the collateral damage to your existing customers willing to pay your existing price.

Your price isn’t just the effect, it’s the cause.

Your price isn’t just a cost figure a customer weighs against your offer’s value. Because of the confusing plethora of differentiation in the real world, consumers use price as an indicator of value. Your price declares your value — or your lack of it. Imagine: you are the incoming CEO of a company that outgrew its peers for decades at a price premium and without discounting before you entered the job. When you encourage sellers to start discounting to “win” deals, what do you think you’re doing to the brand?

My work on value and price

Bottom line: discounting to gain sales is only a smart choice if you, your marketing group, your customer service people, your product group, and your sellers are all powerless to grow customer perceptions of value. I help under-powered clients.

When I work with clients, we usually find that their offers are priced well below the customer’s true value. This doesn’t necessarily mean we raise prices, but almost always helps them see that discounting is merely shipping profit dollars out the door to their customers.

Don’t be “that guy”. Or “that woman”.

The only kind of value there is: customer-perceived value. It’s impossible to have value that the customer hasn’t validated yet…you don’t have value; just a value proposition. Customer-focused conversations and interactions which get your prospects to validate value is the difference.

I’m happy to help you on your journey to understand how you can capture the value your company earns in the form of pricing power. Comment below or reach out to me directly to discuss in more detail.

To your success!

Best Practices Management Personal Development Sales

You Can’t Test Your Way to (Sales) Performance

In the sales performance space, there is a growing disconnect between performance focus and learning focus.

If my email and voice mails are any indicator, there is an explosion in learning technology options crowding into the sales enablement world. An important part of my business is learning about these powerful tools for knowledge dissemination, especially as they apply to sales forces.

Learning and training tools are more accessible, more available, more efficient and more effective than ever before. There has never been a better time to be involved in the adult learning industry. However, adult learning is the least interesting part of my business. My true business is achieving lasting results for my clients.

There are two big differences between a learning focus and a results focus:

  1. Improving sales performance requires far more than knowledge acquisition.
  2. Knowledge acquisition isn’t the weak link in the chain.

My own company, The Miller Heiman Group, is innovating in many areas including improving the learning portion of the “sales performance improvement” chain. The chain metaphor fits: knowledge transfer without behavior change achieves little of lasting commercial value. If all my firm became known for was innovation in learning, we would fail our clients. “Watch this space” for exciting innovative performance management tools, though.

Sales performance improvement is far more than “training…poof!”

A great instructor can teach all of the techniques of a golf swing—grip, stance, backswing, body motion, hand action, hip turn, follow-through, etc. – in a couple of hours. That couple of hours won’t land anyone on the pro tour, though. That’s even if the student scored 100% on a post-training assessment; confirming that they acquired every atom of the instruction.

Similarly, sales performance is about adopting new selling behaviors; working to turn them into “muscle memory”. Teach those behaviors and test for comprehension all you want, but without coaching and guided practice, little or no performance change will result.

Alarmingly, many learning professionals claim that “training effectiveness” should be measured by testing for effective knowledge acquisition. The trap: testing for knowledge acquisition is easy via (electronically-administered) tests. This is a classic application of John Tukey’s quote “Far better an approximate answer to the right question than a precise answer to the wrong question…”. Testing for comprehension is so much “the wrong question” it verges on criminal: sales training comprehension alone won’t deliver the results sales leaders need. Sales training simply isn’t that kind of simple “know it = do it” material.

The pitfall to “teach-and-test only”:

Knowledge acquisition isn’t the weak link in the chain.

Training events are easy… compared to getting your sales teams to consistently adopt sales methodology behaviors. Behavior adoption requires observation and effective coaching over an extended period. Think about the time to train you to swing a golf club vs. the time it takes to achieve proficiency — then excellence. Also, think of the difference that great coaching can make in ramp-up time.

Sure, training and testing have their place. Training introduces and describes desired behaviors. Testing confirms understanding. Knowledge and understanding are important steps along the adoption path. It’s difficult to coach effectively without a clearly communicated set standards and expectations.  Thus, there is a chain of events –with training and testing for comprehension as one link.

In my experience, a training event ends where the most powerful work starts. That’s where behavior coaching begins, where new habits are formed, and where lasting results are embedded…where a performance initiative becomes consequential.

The “weak” link in the chain is building new habits with your people. I call it the weak link not because of a lack of coaching tools, or ineffective ones. Rather, weak refers to the reality that people and organizations generally struggle with change. Unsurprisingly, changing behaviors is the most common failure point in a sales performance initiative. Organizationally, behavior change requires that you plan, communicate, involve, lead, and commit. Individually, sales leaders need to develop, observe, diagnose, coach, and persist. Once behaviors are instilled, the methodology becomes sustainable. I use the chain metaphor because if a coaching/sustainment piece is missing, the whole initiative risks missing on the desired outcome – and the investment has limited return.

A stronger chain

To achieve strong results, put together all of these elements:

  1. Great sales methodologies…yes, and teach them effectively. I’m aligned with the most successful B2B methodologies in the world, and can tell you why. My company is now a leader in learning innovation, and I’m proud align myself with them.
  2. Great coaching and training tools that help front-line sales managers (one key point of differentiation between success and disappointment) become effective behavior coaches. My clients can access a full set of rich coaching and sustainment tools, plus my commitment to integrate those tools into working solutions that result in meaningful outcomes.
  3. A great execution and change plan individualized for your organization. Just buying “butts in seats” from any training company — no matter how good their material is — runs the risk of assuming away this critical component. This link in the chain doesn’t come from a training company.

Understand: testing for material mastery is not a predictor of outcomes. Not even remotely.

The overwhelming differentiator in successful sales performance initiatives is effective behavior change, not behavior description. Make sure you have a clear change management path before you decide to “train your people”. Be sure you understand how your learners will be coached into becoming performers.

I’ve seen some e-learning tools claiming to perform automated coaching – verifying behavior change. Now that’s a cool concept, and I’m eager to see those technologies mature. In the meantime, feel free to contact me if you’d like to discuss behavior change and organizational change management that works. For you, your organization, and your aspirations.

To your success!