Microsoft Dynamics Sure Step 2010 : Solution selling concepts

10/2/2012 2:59:45 AM
Solution selling and driving due diligence are mutually dependent courses of action. While the former is a better process for the service providers' sales personnel, the latter is a better mechanism for the customers in their product selection process. So, when a service provider starts implementing solution selling, innately they are also assisting the customer and ensuring a thorough due diligence process, granted that there will always be the likelihood that the process will be skewed toward the product that the service provider is representing; however, if the process is conducted properly, the customer should be able to clearly determine the extent to which there is fit between their requirements and the solution, as well as what their future solution will look like.

Let's begin by looking at solution selling from the perspective of the solution provider or the seller of the solution.

Solution selling is a philosophy that can permeate the culture of the organization because it places the customer as the focal point. Solving the customer's business problems and achieving positive results are the key elements of this philosophy.

Solution selling provides a map with the steps for achieving the end goal of the selling organization. This includes the ability to identify and qualify opportunities, diagnose the customer's problems and pain, analyze the needs, develop the solution vision, and manage the process to a successful closure.

Solution selling can be seen as a methodology that provides a collection of tools, job aids, techniques, and procedures. When utilized correctly, the approach will result in higher customer satisfaction and increased sales productivity.

Solution selling also creates a Sales Management System that provides coaching skills for sales and executive management by instituting a high-performance sales culture in the selling organization. As such, it also provides an effective measurement tool for the overall sales performance.

Solution selling—buyer's perspective

So far we have looked at solution selling from the seller's viewpoint. Let's now look at solution selling from the perspective of the buyer. Three of the four areas noted above directly impact the customer as well.

The solution selling philosophy places the customer at the forefront. Any seller who is using this technique then automatically has the customer's interests in mind. This approach creates a trusted relationship between the buyer and the seller, and a more cohesive approach toward delivering the results expected of the solution.

The steps in the solution selling map include diagnosing problems, analyzing the needs, and developing the solution vision. These steps intrinsically help the customer with their due diligence in selecting the right solution to meet their needs.

Solution selling provides a methodology to deliver higher customer satisfaction. Using a consistent, time-tested process helps the sales teams use their prior experience in similar situations, which the customer can leverage for their own benefit.

In the next sections, we will discuss two key aspects of solution selling—building the trust between the buyer and the seller, and building the vision of the solution.

Building the trust

In general, a buying process is optimal when the buyer believes that the product or service that they are acquiring is the best solution to their problem, and they are getting it at the best possible price. As the magnitude of the purchase increases, so does the buyer's inclination to research the marketplace to seek out the right solution at the right price for their needs. Essentially, the length of the due diligence process for the buyer increases exponentially with the importance of their requirement. However, there is one more factor that can affect the buyer's due diligence process, and it is trust. Trust that the solution will meet their needs, trust in the seller that they are providing the best price, trust that the seller will deliver the promised solution, and trust that the seller has the wherewithal to support the solution should any problems arise after the delivery.

Trust is especially essential for business solutions. As we noted earlier, business solutions are mission critical, so intrinsically there is high risk associated with any kind of wrong steps or failure in the realization of the solution. It is then easy to understand the importance of having a trusting buyer-seller relationship.

More often than not, trust is something that needs to be earned. In the business solutions arena, an organization that has a methodical process in place will succeed more consistently. By showing the buyer that you have a well thought-out, repeatable process, you give them the comfort factor that you have experienced success with other customers, thereby building that trust. The solution selling process is one such process that allows you to inculcate the trust factor in your customer, by moving the dial away from "transactional selling" to "relationship selling".

When trust goes down, the decision making speed goes down, which makes the costs go up:

↓Trust = ↓Speed ↑Cost

When trust goes up, the speed of decision-making increases and correspondingly the costs go down:

↑Trust = ↑Speed ↓Cost

Covey goes on to talk about the impact of trust in the form of a tax or dividend. He incorporates trust into the traditional business formula, expanding it as follows:

(Strategy x Execution) Trust = Results

This discussion and these formulas imply that trust implications should be an important consideration for sales personnel. Beyond the ethical reasons, trust obviously also has an economic impact on the cost of sales for an organization. Covey sums up the impact of trust in the following words:

the ability to establish, grow, extend, and restore trust with all stakeholders customers, business partners, investors, and coworkers is the key leadership competency of the global economy.

We can see the impact of trust in our customer transactions as well. When a new seller approaches a customer with a solution, the buyer seeks proof that their solution has been successful, without which the buyer would turn toward a more established provider. Why is that? This is because the customers do not have the same level of trust in the new provider as they would with an established one. This is all the more important reason for the selling organizations to adopt solution selling as a philosophy. Solution selling is one of the best techniques available for the sellers to establish credibility and trust with their buyers, which, as we have seen, can positively impact their success ratio.

Building the vision

A key aspect of solution selling, and one of the most pervasive and permeating themes of solution selling, is the notion of the seller building a shared vision of the solution with the buyer. When the solution is truly articulated from the buyer's perspective, the perceived risk in the solution is much lower for the customer, thereby making it a lot easier for them to buy off on the solution.

The notion that people buy from people is commonplace for big ticket items such as business solutions. These are not transactions that you would expect somebody to make over the Internet or by some other "sight unseen" method. Customers will want to establish that the solution is credible, the team delivering the solution is trustworthy, and the organization supporting the solution will be around for the long haul. But let's assume that all things are equal or close enough that the differentiation is not obvious—for example, the competition also has a mature solution, as well as trustworthy and personable sales personnel. The key point in Bosworth's notion is that when the sellers can make the buyers feel that the solution is theirs and matches their vision, the buyers feel that they are in control of the process and they are empowered.

Bosworth's teaching ties the buyer's needs to the solution visioning process. As the customers move through their buying cycle, their concerns change over time. It is then important that the seller stays aligned with the customers, and advances the vision in lock-step with the buyer. When the buyer is able to clearly visualize and articulate the future outcomes of the seller's solution, the sale becomes less complicated, resulting in shorter sales cycles and higher close ratios.

In 1943, Albert Maslow wrote a classic paper on our hierarchy of needs, titled A Theory of Human Motivation. Maslow's hierarchy progressed from the lowest need level to the highest, as noted here.

  • Physiological needs: This is the first level and includes the basic human needs such as air, water, and food.

  • Safety needs: Personal and financial security, health, and well-being are characteristics of the second level.

  • Love and belonging needs: The third level involves social and emotional needs such as friendship, family, and intimacy.

  • Esteem needs: The fourth level is about the need to be respected, including self-esteem (respect of others) and self-respect (inner strength).

  • Self-actualization needs: This level pertains to an individual realizing their potential to the fullest.

One of the key points of this hierarchy is the progression of needs—from the first level, to the second, and so on. According to Maslow, if a human is unable to meet his/her basic needs such as food and shelter, they will be less inclined to pursue higher needs such as prestige and status. Some have criticized the hierarchy, but it has also become the basis of many subjects, and the hierarchy has been applied to many areas. For example, marketing has many teachings on understanding consumer buying behavior on the basis of the Maslow's needs hierarchy. Correlation is visible in business and sales management as well, including through fields such as transpersonal business studies.

Bosworth also used the Maslow's hierarchy as the basis to develop the buyer needs cycle in the perspective of solution selling. The next diagram depicts the progression of this needs cycle from latent need to solution vision:

  • At Level 0, the buyer has no need for the product or solution, and the seller recognizes that—for example, you would not look to sell a heat lamp in the Saharan region. This level is obviously outside the solution selling realm.

  • At Level 1, the seller sees a need in the marketplace but the buyer does not as yet recognize the need. So the latent need for the solution is in the mind of the seller, not the buyer. Or in other words, it is a latent pain for the buyer. Sellers functioning at this level do so by projecting their vision of the need for the solution on the buyer.

  • At Level 2, the buyer is cognizant of their need or pain, but they do not know of a solution for the problem. At this stage, as the need or pain is recognized but unsatisfied, there is potential for a solution sale between the buyer and the right seller. If the buyer believes that there is a potential solution, they will actively seek a solution and the need becomes an active need. However, if the buyer does not think that there is a solution to their problem, the need can become suppressed and go back to Level 1 as a latent need.

  • At Level 3, the buyer sees the vision of the solution. The buyer's needs have progressed from latent to active, to a point where they can foresee the solution that solves their issues. At this stage, the buyer is looking to buy the solution and has a well-developed vision that includes four components —who will be taking what action, when in time, via a capability of a seller's product or service.

A key point in this progression of the buyer's needs is that at Level 2, the buyer understands the potential for a solution, but those needs have not yet been acted upon by a seller and so they are "undeveloped needs". If, at this stage, the seller thrusts their vision on the buyer, a suboptimal situation arises with the buyer having to trust the seller to solve their problem. It is therefore very important for the seller to get the buyer to admit their pain at this stage, which is proof to the seller that the buyer views them as trustworthy and has the ability to provide the right solution.

Another key point is that for the opportunity to be considered as qualified, the buyer must agree to participate actively together to develop the solution vision. The buyer must either be able to articulate the requirements of the solution or agree to participate in the needs assessment process.

If sellers find themselves in a situation where the vision has already been created, and they are merely comparing their offering to that of the competition, they are in danger of becoming another check mark in the buyer's decision-making process. It is very likely that the buyer is already aligned with a competitor who helped them develop their requirements, and is just looking for additional proof points or pricing leverage, before completing the purchase with them.

When the buyer is able to see the specific solution capabilities to address their needs, they will be able to articulate the solution vision and act on their problem.

When to discuss feature/functionality or demo the solution

This habit is one of the core notions of solution selling: to patiently cultivate interest in the solution by first understanding the customer's problems that they are trying to solve. To develop a win-win relationship with your customer, you must understand what it means for them to win, or in other words, what a successful solution means to them. Follow the "principles of empathetic communication" by outlining the objectives in terms of the customer's needs and wants. This allows you to craft the solution vision in terms of the customer's objectives, facilitating an easier buy-in of your solution.

For solution selling, Michael Bosworth has a simple message: diagnose before you prescribe. Prescribing is when the seller leads with presentations on their company, product, or services. Instead of the focus being on the customer's organizational needs and benefits, the seller's message is "you need….". The problem here is in the understanding of the seller, who assumes that the buyer already is aware about what value their offerings are going to bring to him/her.

Being disciplined to listen first before talking is easier said than done, as in real life we are often impatient. When we know the answer, we find it hard to hold back or have empathy for the customer who does not know the information we know. Bosworth calls this seller impatience "premature elaboration", and he thinks that it is one of the primary reasons for killing a sale. Also, impatience is counterproductive to the solution seller's goal of building relationships between the buyer and the seller.

When sellers lead with feature-functionality, they play right into the hands of the competition. Remember that unless you operate in a very unique industry where you have a monopoly over the market, your competition is very likely to have a set of compelling features and functionality. Bosworth believes that the role of the product in a sale should be proof not in interest arousal, education, or need development. The product should be used to prove that the solution indeed matches the customer's vision.

This approach benefits the seller in many ways. Early product demos could result in the buyer feeling that he or she was being "sold to". If the customer has yet to detail out their requirements, discussing product features with the customer can come across as the seller trying to impose their solution on the buyer, not to mention that it feeds into the hands of the competition that comes afterwards and can put its own spin.

Showing the product early can also lead to the seller having to get into discussions on features that the customer didn't have any interest in. However, during the demo, questions can arise that require the sales team to defend their product—something that could have been avoided if the seller had already determined exactly which features the buyer was interested in, and focused the demo only on those solution components.

Another reason to wait to do full-fledged solution demo is that the customer could request a proof-of-concept after the solution vision has been developed. Also, the seller can avoid having to discuss any pricing questions that may come up during the demo. Until the customer buys into the solution vision, the seller should avoid any discussions of price. When the customer sees the solution vision and the value of the solution, pricing negotiations can be much smoother and you can avoid any unnecessary acrimony.

So, how do you prevent the urge to start with show-and-tell? The answer lies in solution selling, where you methodically diagnose the customer's requirements and, in concert with the buyer, you build the solution blueprint, which will of course be biased toward your solution. Also, in using this approach, you will develop a solution selling benefit statement, which is a composite statement of the features, advantages, and benefits of the solution.

A solution selling benefit statement tells the buyer that the seller's solution addresses the vision that was developed through active participation by both the buyer and the seller. As Bosworth puts it, the statement will indicate to the prospect: who will be doing what, when in time via a product or service. So, in effect, the seller has corroborated with the buyer that there is a level-3 need, meaning that the buyer has participated in the development of the solution vision. If the buyer is still at level 2 or before, and the need or pain is still undeveloped or latent, the best the seller can do is to develop an advantage statement. The advantage statement can list only the benefits from the eyes of the seller, as they still don't know the detailed pain points of the buyer. And that is the fundamental difference between an advantage statement and the benefit statement that results from the solution selling approach.

Staying aligned with the buyer

One of the essential techniques offered by solution selling is keeping the seller in strategic alignment with the buyer. To stay aligned, the seller must be able to understand the thought process of the buyer so as to be able to predict their behavior.

Based on his years of sales experience, Michael Bosworth was able to break down what a buyer goes through into a series of steps. As the buyer's needs go from latent need, to active need, to solution vision, Bosworth found that buyers have four primary concerns:

  • Is there a need?

  • Is it the right solution to meet the need?

  • What is the cost of the solution?

  • What is the risk associated with acquiring the solution?

The presence of a need initiates the buying cycle. The need must be in the foreground of the buyer's mind for him or her to initiate the cycle. However, a seller can adversely affect the sale by putting undue pressure on the buyer in this stage. To prevent that, the seller should get the buyer to acknowledge their need. Once the buyer acknowledges their pain, they progress to their next concern—cost.

Cost is a key concern for most buyers. However, it is important for the seller to recognize at what stage the buyer is. If it is early in the buying cycle, the seller is better off avoiding all cost discussions as they have yet to determine if there is a need associated with their solution. When the buyer achieves solution vision and is able to understand the value of the solution to their organization, cost implications change to price association, and the seller is in more favorable position to have this discussion.

In the typical marketplace, a buyer has many options; selecting the right solution from that mix is a pressing concern for the buyer. This is where value justification comes in. The sellers who have done their homework are prepared with business drivers for the solution, and can perform a Return on Investment (ROI) analysis for the customer to prove the value of the solution. Customer case studies can be used by the seller as additional proof points at this stage. Also, for the patient sellers, this is the stage at which they show their customers a full-fledged product demonstration to highlight how the features meet the customer's requirements.

The more important the initiative, the more risk rises to the top of the buyer's concerns at the later stages of the buying cycle. This includes the perceived risk of not having selected the best solution as well as obtaining the best price for the solution. Risk can also extend into solution support—the perceived risk of the service provider going out of business and not being able to support a solution in operation. Sellers should use sales methods and techniques that include risk management disciplines to identify, analyze, and respond to the perceived risks in a timely manner.

While analyzing these four concerns even further, Bosworth also found that they clearly fall into three phases in the buying cycle.

  • Phase 1: Determination of need

  • Phase 2: Evaluation of alternatives

  • Phase 3: Evaluation of risk

In the following screenshot, Bosworth depicts the four buyer concerns as they shift within the three buying cycle phases. This tool is used extensively in solution selling as a means of anticipating buyers' behavior, so that the seller can stay aligned to the expectations.

As seen in the screenshot, the buyer's primary concerns in the early stages of the buying cycle are need and cost. As the buyer moves towards the end of the cycle, risk and price take over as higher concerns, as the needs have been determined and a solution has been identified by that time.

For the seller, phase I is about helping the customer determine their needs, but with a bias towards the seller's solution. In phase II, the seller shows proof that their solution meets the customer's needs, in the form of product presentations, customer evidence, ROI analysis, and so on. Finally, in phase III, the seller seeks to mitigate any and all risk factors perceived by the buyer, and moves to close the sale. By acting as a "buying facilitator", the seller allows the buyer to perceive that they own the process, while also ensuring that their sales process is executed efficiently.

Vision processing—creation and reengineering

There are many sales tools and techniques available to help the seller guide the buyer through the development of the solution vision. For example, Bosworth espouses a technique called the 9-Block Vision Processing Model, where the seller moves the buyer from pain to vision through a series of questions that gradually build upon each other. As seen in the next diagram, sellers begin with Open questions—open-ended questions fashioned in a way to give the buyer a sense of control throughout the process. Open questions then lead to the Control questions that allow the seller to probe into specific subject matter areas. The final set of questions, the Confirm questions, lead to the summarization of the buyer's needs and pain, ensuring that the seller has a good understanding of the situation.

The Open, Control, and Confirm questions in the 9-Block Vision Processing Model are noted vertically. From left to right, the model leads the seller to Diagnose Reasons, Explore Impact, and Visualize Capabilities. In the left vertical block, the seller uses his/her Open, Control, and Confirm questions to diagnose the customer's latent pain and get them to admit the pain. In the middle vertical block, the seller determines the organizational interdependencies, and the impact they have on the issues. The seller is able to determine which issues are more critical, and who are the power players or influencers for the requirements. The last vertical block helps the seller crystallize the solution selling benefits and vision, by getting the buyer to take responsibility for solving their needs, preferably with a bias towards the seller's solution.

While much of our discussion to this point has been about creating the vision as the seller is starting anew with the buyer, it is important to understand that these techniques also apply to situations where the buyer already has an initial vision in mind. This is a key point, especially in the business solutions arena where it is becoming commonplace for a solution provider to get engaged at the Request for Proposal (RFP) or Request for Information (RFI) stage. At this stage, the customer may have already engaged with an independent third-party consulting group to come up with their initial requirements. It is also possible that they could have engaged with a competitor for this. Obviously the latter situation is not ideal, as the requirements are already fashioned with a bias towards the competitor's solution, and the seller needs to do some investigation to ascertain that it is indeed still fair competition at that point. Keep in mind that if the buyer is merely going through the exercise to show their management that they completed the requisite steps for their due diligence by analyzing "n" solutions, it may be better for the seller to not waste too much of their time. But if it is still open competition, then the seller can still use the same techniques offered here to "reengineer the vision".
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