Book A Seat at the Table

To Customers, Value Counts

Many executives have low opinions of salespeople. They may see them as hustlers pushing products and services whether or not they provide value or help attain strategic goals. What salespeople care about – selling – is not what executives care about – value. To break this mold, become intrinsic to your customers’ strategic success so they see you not as a salesperson but as a businessperson who is “worthy of a seat at their table” and who adds value to their firm.

“The skills to sell and create demand for complex solutions are very different from those required to sell mature, core products and services.”

To make customers welcome you, enable them to realign their work with their bottom-line strategies, and develop solutions focused on their strategic goals. That means getting out of the products and services business (where you represent an expense) and into the investments business (where you offer “productivity and differentiation”). Companies achieve productivity, the uppermost need in every executive’s thinking, through differentiation. Learn your customers’ strategies, and match your products and services to them. To use this “big-picture” approach, demonstrate real knowledge about a client’s business and avoid nattering on about the traits of your products and services. This will give you several benefits:

• “Protect the core” – When executives view your offerings as vital solutions, they will not permit their procurement teams to narrow in on price as the most salient purchase factor. Thus, you can maintain sales of your basic line.
• “Gain access” – As a trusted counselor, you can talk to senior executives at every level.
• “Create demand” – This depends on promoting change. When you fully understand a customer’s strategy and can enhance it, you will become a trusted change agent.
• “Get the best of both worlds” – You will be able to sell innovative solutions and nurture steady demand for your “commodity products” as well.

“The new sales job requires more time spent calling on senior-level executives – not to sell a product, but to help the customer get better results.”

Selling is quickly becoming passé. A Wal-Mart study found that salespeople’s visits to the chain’s procurement professionals were not helpful. Therefore, it revised its policies and got rid of nearly half its procurement staff. Those remaining rely far more on buying over the Internet than on purchasing from salespeople. Procter & Gamble (P&G) successfully adapted to the new policy, substantially increasing its Wal-Mart sales. P&G reps stopped demonstrating products and started brainstorming with Wal-Mart executives about “where Wal-Mart wanted to be in the future and how P&G could help the company reach its goals.” Tom Muccio, P&G vice president of sales, worked hard to understand Wal-Mart’s strategy. He explains, “The cheapest price wasn’t where Wal-Mart executives saw the most value.” P&G upped its Wal-Mart sales from $350 million (1987) to $7.8 billion (2003) by knowing Wal-Mart’s strategy and adding value to it.

Stop Selling, Start Helping

To gain a seat at the table, focus on connecting with senior executives (the decision makers) and providing them with meaningful support. Don’t worry about influencing their purchasing decisions. Concentrate on having a positive impact on their operations. Create a value proposition that is connected to as many of their strategic priorities as possible. This may be a novel mind-set for many salespeople, but executives will welcome you enthusiastically if you can show them how to boost their ability to carry out their strategies. To learn if you are really helping your clients, conduct a self-assessment. For example, a survey showed MasterCard that its customers wanted strategic value from salespeople. Clients rated MasterCard salespeople poorly (4.1 on a one-to-ten scale) in this area, but the salespeople rated themselves at an unrealistic 9.9. Find out how you rate. E-mail your customers, colleagues, sales managers and senior executives to ask them to assess your pluses and minuses honestly.

Will the Customer “Hire” Your Product or Service?

Companies that purchase products and services, especially costly ones, are, in effect, hiring these solutions to solve various problems. Some solutions are “concurrent offerings,” like traditional products and services, and others are “divergent offerings,” or new solutions that involve major change. Those who sell divergent offerings must tailor their selling methods to the client’s needs. Executives often are willing to consider a new approach if the idea fits their strategic plans. Hold “moneymaking conversations” to learn how your clients earn their profits, based on current and anticipated revenues.

The “Master Strategic Plan Matrix”

Take what you know about your client, including high-quality research, and use it to create a matrix that will give you a clearer picture of that company’s strategic planning. This graphic depicts two opposite strategy categories. The first, “Red Ocean strategies,” concern the customer’s traditional, mature products and offer stability more than growth. The second, “Blue Ocean strategies,” relate to everything new and provide the most growth and differentiation.

“Everyone knows they should be calling on more senior executives, but few know exactly how to do it.”

Identifying your customers’ red- and blue-ocean strategies enables you to understand how and why they spend their money, for “differentiation (blue) or productivity (red),” or both. Try to discern which of their decisions involve immediate issues and which are focused on the longer term. Now, imagine a four-quadrant matrix comparing red- and blue-ocean strategies in light of both short- and long-term strategic planning. The top row is blue (new growth area); the bottom row is red (mature markets). The left column covers long-range concerns and the right column covers immediate short-range concerns. This matrix graphically illustrates how executives envision their operations and how they intend to keep their companies growing. Are they concerned with future profits, immediate marketing, long-range planning or urgent change? Executives routinely deliberate in an ongoing way in all four quadrants. Your job as an adviser and salesperson is to help them make better decisions in as many quadrants as possible.

“Sales success or failure is ultimately determined by what happens early in the selling cycle – not later.”

Your solutions are meaningful only when they connect to the client’s strategy, so the more quadrants you positively affect, the more value you offer. To make significant sales, you must build these vital links. If possible, focus on blue-ocean innovative strategies, because this is where customers will assume more risk. They are less likely to make major investments in traditional areas. However, if your product or service is strictly for mature, red-ocean markets, show how it will boost efficiency and allow the client to transfer additional resources to promising, new activities. Such strategic insight is crucial to consultative selling – the opposite of demonstrating advanced product features “like excited kindergartners in show-and-tell.”

Better Sales Calls

Before your sales call, use thorough research to create a Master Strategic Plan Matrix. That enables you to give customers grounded reasons to use your goods and services to make changes that link concretely to their basic aims. Call on senior executives, not mid-level managers. Do not make your initial visit a product presentation. Businesspeople may claim to like product presentations, but that approach will get you nowhere. Rather than focusing on product benefits, speak with the clients about their profit-driven needs for differentiation and productivity.

“When you have a seat, you are seen as an investment, not an expense.”

Customers speak much faster than most salespeople can write, so you should supplement your notes with an audio recording of your sales calls. You can review the tape later to make sure you don’t miss anything important. Plus, you can play it for your sales manager’s review. If the customer does not want the conversation recorded, draft a “summary document” of the sales call as soon as it’s done.

“When I’m in a meeting and our salesperson is being introduced by the customer as a ‘consultant’ or ‘adviser,’ I know this person is doing the job.” (Genentech Sales Director John T. Stuart)

During your sales call, avoid the classic “pain-based questioning model,” where salespeople try to diagnose and instantly fix an area of client concern. This works with mid-level managers, but not with senior executives who tend to focus more on planning for the future than on the aggravations of the present. Start with making a four-step “discovery call” on your customer:

1. “Approach” – Provide an overview of your firm that is no longer than two minutes.
2. “Questioning” – Spend substantial time (up to two hours) learning as much about the customer as you can.
3. “Summary” – Recap what the customer has told you.
4. “Progression” – Suggest subsequent moves you and the client can make together.

“There are plenty of senior executives and companies who need help – they just don’t know it yet.” (Johnson Controls Vice President James Dagley)

In the second or questioning phase, use the “FOCAS” method of asking “fact questions, objective questions, concern questions, anchor questions” and “solution questions.” This enables you to understand what the client’s company hopes to accomplish. Do not ask these questions sequentially; ask a question in one category and then another. Adjust the order of your questions based on your customer’s responses. This method depends on careful preparation and a good mix of questions that are attuned to the client. Keep the conversation centered on opportunities, not problems, so you can learn the customer’s goals and strategic intent. Treat each kind of question this way:

• Fact questions – These queries help you uncover data about the customer. Don’t ask too many and don’t make them too long or too tactical, or you will just irritate executives who do not get paid to educate you about their work. Example: “Could you give me a little more background on this division?”
• Objective questions – These probes spotlight the customer’s goals and strategic plans. Future-oriented senior executives like objective questions, which establish the way your product or service links to their differentiated goals. Focus on possibilities for the future. Example: “How do you see the organization needing to change over the next few years to retain its competitive edge?”
• Concern questions – Ask at least 12 or so strategy-filled questions to draw attention to the senior executive’s dilemmas. Make them as thought-provoking as possible. Example: “Could you share with me any of the more interesting challenges you are facing in the accomplishment of your core strategies?”
• Anchor questions – These questions explore the extent of the customer’s challenges. Design them to highlight the executive’s problems and call for a solution – your solution. Example: “How is that void in hiring quality people affecting your ability to make faster inroads into the new market?”
• Solution questions – These inquiries let the client see the value in your solutions. Do not use solution questions to begin the conversation or to test your ability to close the sale. Example: “How would it help you if we could free up valuable resources in that area?”

“A Case for Change”

For your next sales call, shoot for a group meeting with pertinent executives. Don’t make this call a capabilities presentation and don’t offer a proposal. Instead, develop the reasons the company should make a change incorporating your solution. Discuss the customer’s current situation and present your general recommendations for change in a document that includes these elements:

• “Situation summary” – Review the facts you learned during FOCAS questioning. Ask the executives if you have the facts right.
• “Goals and objectives” – List the leaders’ immediate and long-term goals to demonstrate your attentiveness, research and expertise.
• “Constraints, issues and challenges” – Create a page of bullet points that cover client needs.
• “Vision” – Depict a better future that matches the executives’ strategy.
• “Options” – Present no more than three options, one per page. Keep things general and don’t include pricing. Ask the customers what they think of each option. Your role is to illuminate the possibilities and show them how they can use your offerings to make changes that enable them to compete better.

“The less our salespeople talk about our products, the more products they sell.” (Experient former Executive Vice President David Peckinpaugh)

Do not attempt to close the sale at the end of this meeting. Ask the executives to discuss what you have presented. Request a date to come back for their “commitment or direction.” Following these suggestions will give you status with your customers. Instead of seeing you as a salesperson who creates an expense, they will view you as a counselor and businessperson who is also able to sell. Once they see that time spent with you is a worthwhile investment, they will seek you out. You’ve proven that you and your product can make a difference in their productivity and differentiation.