Differentiate to Create a Better Outcome
March 17, 2011 by Vanessa
Remember in the early dark days when sales training courses focused on overcoming ‘objections’ and the mode was ‘never met an objection I didn’t like’? Back then I was part of an organization that focused on creating business results for our customers. Industry marketing was closely tied to sales, training….and customers. We had a very active customer advisory board, and as a result our go-to-market strategy matched their needs. We also had robust industry sales councils made up of a cross section of salespeople to guide our training efforts.
This training allowed sales to experience a day-in-the-life of their customers. What was it like to be in their shoes, and what was getting in their way of making a profit? In a relevant and interactive way sales learned how to advise their prospects on what would improve their business results.
Prior to these industry trainings, salespeople knew the products and their feeds and speeds. Through these courses sales became knowledgeable about their business challenges and how our offerings could resolve. This took time to understand and practice, and required lots of involvement with the experts. We provided 2 ½ day case study based training including tours of the paper mill or food warehouse to understand at a very practical level how things worked. We developed glossaries, specific success stories, and provided subject matter experts to share the nuances and context of ‘why’ it mattered to their customer. And how for example, using our offerings, they could improve inventory turns, or create less waste when making paper.
I am not saying it was nirvana, but we were getting there. We were gaining traction in new and profitable markets. It was expensive and time consuming, but was worth it. Customers noticed the salespeople’s ability to have the appropriate business level conversations, and sales people were able to call higher and feel more comfortable in that new realm. Just as the momentum was building, we had a tech crash. Budgets were slashed and the focus on industry all but disappeared. We lost the gains we had made.
Why am I mentioning this example?
Because it takes leadership, time and a sustained commitment across many organizations, to make this shift real. Customers are demanding this level of knowledge or risk not being part of the conversation where the deals happen. Forrester’s client summed it up nicely:
“We do not care about what you do; we care about how you make us successful.”
Forrester found that only 20% of the conversations were aligned to the goals and agenda of the buyer, while 80% are focused on products and the vendor. And according to IDC, only 1/3 of the buyers are satisfied with the quality and value of the information from sales reps. It is very difficult to be an active part of your customer’s success if you are only talking about you and your stuff. But it does take leadership and focus to make this evolution occur.
‘Outcome Selling’, as described by Scott Santucci, Forrester, is the embodiment of this transition. It starts when a company rationalizes and aligns its portfolio to produce measurable business results for their target customers. By design, downstream, the company’s messaging and tools for sales and customers are simplified and more concrete. This simplification enables sales to internalize and convey the messages more effectively as a part of their selling efforts. Also, this change necessitates a systemic and cross-functional approach including sales, marketing, services, and training organizations — all organizations that touch sales. To net it out, Santucci says:
“Outcome selling is a go-to-market approach where you design your value communications system to optimize the value your customers realize.”
As an example, at the Forrester Forum the Allant Group discussed how they embraced the Outcome-based approach. Their strategy was to focus their product development and selling/marketing efforts on the CMO role, show how their software provided measurable benefits to the CMO and drive growth through their strategic account team. Given this alignment, the company was able to provide the type of products CMOs need together with the messaging and tools to effectively sell to the target CMO. As a result, they were able to close multi-million dollar deals in significantly less time than in the past.
At a time when many other companies experienced a precipitous downturn, Allant Group achieved increases in 5 critical areas between 2007 and 2010, average YOY performance increases, without increasing headcount:
- 22% average annual revenue growth
- 45% average annual profitability increase
- 32% average annual contract sold
- 33% average annual pipeline increase
- 52% average annual top 10 account revenue
Key learnings for the Allant Group were:
- Systemic thinking: Selling is a system, based upon the customer’s requirements and buying cycle. It’s a cross-organizational issue, and therefore requires a cross-organizational solution.
- Transparency: The more transparent your approach, the more the client will react positively.
- Adoption: Their largest miscalculation was that they severely misjudged the organization’s ‘muscle memory’. They learned to secure buy-in from the top down to get rid of the obstacles.
The Allant Group, from initial strategy to sales execution, focused on producing measureable outcomes for their customers, which in turn produced similarly impressive results for their company. The result of their systemic approach was to simplify and align their offerings. This portfolio rationalization created easier to understand messages and, of course, tools. Consequently sales were equipped to have the conversations their customers’ require to create better business outcomes.
The analysts: Forrester, IDC and SiriusDecisions — and customers — are in agreement what makes a meeting valuable, and according to Santucci:
“The salesperson clearly shows they understand my business issues and can clearly articulate to me how to solve them.”
And how often does that happen? 13% of the time!