In late November, we released the first five trends of our annual “10 Trends” blog post. Thanks for sharing those as extensively as you did! And thanks to the many readers who insisted we publish these 5 more quickly. Without much fanfare, let’s dive into the remainder of the list. As usual, we look forward to your thoughts and feedback.
6. Your customer becomes your biggest competition. More specifically, your customer’s ability to learn what their business needs are, and options to act on those needs. We call this the “1 in 3” problem and here’s why: customers that are now able to learn on their own (or with a consultant’s support) are also able to arrive at a requirement set without supplier input. For example, they dictate the uptime requirements, the performance thresholds, the expected SLAs, and other criteria. They winnow a list of potential suppliers down to the top 3 that best meet these performance thresholds. Then they call you in to present. Congrats you’re in the consideration set! And so what do you do? You highlight your performance against their criteria. “Well we see that you require 95% uptime, we can deliver 98%. And we see that you need 30,000 units output, but our innovative technology delivers 33,000.” To which the customer replies, “yes, we already know that, but we only need 95% uptime and 30,000 units output, and all the companies in consideration deliver that. So……let’s talk price.” In this world, consideration equals commoditization. There are two vitally important takeaways from this trend:
First, this underscores why the Insight Selling Method™ is so important. Insights which you can teach customers are differentiated, and have the ability revise the purchase criteria, mitigating the “1 in 3” problem. I’ve discussed this in trend #1 and my colleague Brent Adamson has explored this challenge extensively here (this is another must read once you’ve finished this blog post).
Second, this highlights how the customer has taken this new information advantage and used it (as they should) to their benefit. If they can rely on social networks and third party consultants to force us into a price war, they’d be foolish not to do that. We are losing this information game to customers. The best sellers, however, are taking this information disparity right back to customers. Our data shows us that the best reps are conducting deep opportunity/account due diligence with one specific goal: learn something about customers that the customers themselves haven’t realized. This isn’t information in the public filing statement, annual review, or company website. This is information that exists in the deep inner workings of customer organizations. Information that “Talkers” dish out. Information that purchase consultants divulge. [NOTE: This is NOT unethical information or insider secrets.] It is a much deeper understanding of what’s happening in the customer business that often requires outside intervention to even realize. When this context is combined with powerful insights, customers have little choice but to at least listen and learn from suppliers. And that mitigates the “1 in 3” challenge. Sellers who choose to arbitrarily “spray” insights at customers risk harming the relationship permanently, but those who properly tailor those insights in a meaningful and economically-grounded ways will beat the “1 in 3” problem.
7. Early sales stages get an overhaul. Keeping in line with our research underlying the importance of teaching insights to customers, the sales process must evolve. Most organizations have a sales process oriented to identification of needs and alignment of solutions to those needs. Typically stages 1 and 2 are some derivative of understands needs (or, recognize needs from the buyer perspective) and qualifies opportunity (or, evaluate options from the buyer perspective). The sales activities inherent in these stages walk salespeople directly into the “1 in 3” problem articulated in trend #6, above. Why? They are engineered to sniff out and sell into established demand. These are instances where the customer has identified a need and is determining options. Creating emerging demand is the correct goal. And that happens well before the traditional stages 1 and 2. This is often considered marketing’s domain – a place where sales need not go. But increasingly, the best sellers are actively teaching where customers are passively learning.
Therefore, sales stages that support teaching (from the sales perspective) and learning (from the buyer perspective) are required. Implications for rewriting the top of funnel activities are considerable and I won’t go into much detail with this blog post. [SEC members can check out our Demand Shaping Toolkit, which compiles the best of dozens of star reps’ thoughts on early stage engagement into a comprehensive tool.] But here’s one of the most important implications: you can’t simply expect sellers to teach as an incremental stage without rewriting the understand/recognize needs stage. Why not? If you don’t rewrite that stage, sellers will regress right back to selling into the “1 in 3” problem. It’ll reinforce sales based on established demand, and as my colleague Brent Adamson has coined, “put your salespeople on a train to RFP station.” Contrary to what many believe, this is why the Insight Selling Method™ approach can’t simply be “overlaid” on top of existing sales methods. It requires rewriting the DNA of the sales process, most notably in the early stages, with a series of trickle-down implications throughout the remainder of the sales process. Organizations that get this right, will have to burn many (not all, but many) of the long-standing bridges of traditional solution sales techniques.
8. Identification of where customers learn. For the past year, we’ve been sharing our most recent research entitled “Getting in Early.” One of the critical questions we ask our members is this – do you know where your customers learn? Not learning about a purchase, but passively learning about new ways to manage their business. The instinctive reaction is “of course” – that is, until you really think about it. Then an unsettled feeling takes over. If you’re like most heads of sales, you and your team, likely don’t know. It’s likely some mix of social media, other peer networks, consultants, salespeople and vendors, maybe professional conferences or trade shows. The reality is that customers are constantly learning. They don’t manage their business in a static manner; a significant part of any business stakeholder’s job is to find ways to improve their business whether they’re an end-user of products or a CXO. Now let’s just assume that you have a good understanding of where customers are indeed passively learning. Do you think your salespeople are actively teaching there? Understanding where your customers learn starts with simply asking them. In the first handful of conversations, you’ll learn a tremendous amount about the information sources they trust and engage, and the multitude of sources they tune out and consider noise. You don’t need to engage your market research team to do this, at least not initially. Just ask. Then ask yourself how much permission and opportunity you’re affording your sales force to be part of those conversations.
9. Big data exposes a significant talent gap. At CEB we are fortunate to have a strong cross-functional perspective on what the best companies do. Our IT practice has intensively studied the promise of big data, and recognized that it has been met with an equally large degree of paralysis and low ROI. As our CEO, Tom Monahan, said in a recent interview with Consulting Magazine, “Companies’ love affair with big data has proven fickle. It’s no coincidence that the organizations with the biggest IT and analytics budgets over the last five years are the ones that have gotten into the most trouble.” The amount of big data facing nearly any function – even sales – has placed a higher cognitive burden on all those who use and rely upon this data. This includes sales operations teams, managers, and even sales professionals. The problem is that few have the skills to understand what data truly suggests and how to take action on that data. I had an interesting conversation with a Head of Sales from a major electronics company earlier this year. His team sells into big box retailers (the CPG world will know this problem all too well, though it applies more broadly). He said that the influx of data his team was now able to share with their retail channel partners was absolutely overwhelming. Sales conversations had evolved into data dumps, where account managers basically handed over a giant report to retail partners. The partners expected this, the account managers accommodated. What was entirely lost was the story within the data, and the implications for the retailer – and ultimately the value prop of this electronics company. Data is not insight, nor is insight merely data. The best companies will invest in the proper capabilities for interpreting big data, making sense of the numbers, and providing clear action steps. This doesn’t mean all sales professionals or heads of sales ops will need these data interpretation skills, but it does mean that individuals with this skill set are either hired or this capability is outsourced. As sales analytics gains moment, this will become increasingly important for the sales management function.
10. Personal rep branding is embraced. Admittedly social selling has become all the rage, and having devoted a significant amount of time and energy to the topic through 2011 and early 2012, we’d like to think we helped accelerate this trend. While individual reps are starting to embody social selling, organizations are apprehensive to embrace the notion that reps can, and even should, have their own personal brand in their markets. Social media provides a hugely powerful platform for accessing customers as they learn. Companies like IBM have been lead-steerers for the rest of the sales community time and time again – and their work in the social selling space is no different. They’ve implemented an approach where messages are pre-built and scaled for use in social media by marketing teams, but individual reps broadcast these messages to the market in such a way that identity and personal brand still matter. This is just the start however. Organizations will invest in building rep competency for selling in through social media and other highly-networked channels. While not perfect, metrics such as Klout score (a measure of social media influence) will start to gain momentum in dashboards. In fact, organizations like Network Hardware Resale are using Klout scores and other metrics to allocate territory based on social media proximity. It’s a fascinating idea – one that is likely years off for many companies – but underscores the importance of sellers having access to customers as they learn, yet again.
This rounds out our 10 trends for 2013. Thanks for the engaging conversation, the Tweets, the linkbacks, and sharing your thoughts. We hope all our readers have a success close to the calendar year, and Happy Holidays.