WHY SELL TO CUSTOMER’S OUTCOME?
When I am asked by clients to step in and help them address key existing accounts that appear to be in trouble, I find one consistent thread in virtually every instance—my client, the seller, did not sell to their customer’s outcome. Rather they focused on selling their own products and services (with their features, functions, etc.). When their customer is unhappy with the results, and is considering a change, invariably the sellers are perplexed. From the seller’s perspective their products and/or services are “performing as advertised.” What’s to be done? Unfortunately, there may not be much that can be done to save this customer since the actions should have been taken long before now.
Creating Value – Selling to the Customer’s Outcome
As I’ve stated before, selling is nothing more than creating the potential for value for the customer. Don’t waste their time pushing your products or services. Don’t try to convince them they have a problem they don’t believe they have. Simply seek to understand what the customer is trying to achieve – meaning the outcomes they want to obtain and how they will measure success for those outcomes. How they will measure success is ultimately how they will measure value. You create value by showing them you are capable and committed to providing more or better or faster or cheaper outcomes than their next best alternative.
As a result, the seller can then put a compelling value proposition in front of the customer. If it is truly compelling the result is typically bigger, better and faster deals. Isn’t that what every sales rep is looking for? However there is much more than simply winning a deal because most businesses want to keep and grow the accounts they have. In short, selling to the customer’s outcome is the first step in creating a long term business relationship.
Capturing Value – Negotiating the “Right Deal”
How does selling to an outcome help you when negotiating a deal – especially the “right deal?” First we need to define what the right deal is. The right deal is one that is good for you, the seller, in that it accomplished your short term business objectives as well as advances the company’s business strategy. The deal is also right for you when it is economically viable. The deal is right for the customer when it also achieves their short term business objectives, advances their business strategy and is economically viable. However, the third attribute of the “right deal” is that it contains all of the key items that will be necessary for you to deliver the value and outcome(s) the customer is looking to receive.
This will allow you to negotiate not simply items such as price, quantity, term, etc. but rather to negotiate how each will impact the customer’s outcome. This is a much more effective way to negotiate especially if you have been sent off to procurement to be “taken to the woodshed.” By negotiating the customer’s outcome and the impact on that outcome, you will have effectively neutralized the most common tactics employed by procurement and it will help you bring the business owner back into the conversation rather than leaving you isolated and dealing with procurement in a vacuum. Now that you have negotiated the “right deal” it sets you up for the most important part of the engagement – at least from the customer’s perspective.
Delivering Value – And Getting Credit for It
It should come as no surprise to any long term readers that I consider this to be the most important aspect to managing value. While many sellers consider selling, negotiating and booking the business the “show”, to customers they are simply a necessary evil. I know of zero key decision makers at customers who are measured and rewarded for issuing a PO. Rather they are measured and rewarded for delivering outcomes of a positive nature – and this is what they hire the selling organization to help them accomplish.
If we have done a good job of selling outcomes and negotiating the “right deal”, then the first key task after winning any deal is to have a formal kickoff meeting with the customer. The primary objectives of this kickoff meeting are as follows:
– Finalize the outcome(s) the customer wants to achieve
– Define how success will be measured (metrics of value)
– Determine when the customer wants to achieve the outcome(s)
– Establish interim milestones or outcomes along the way
– Put in place a formal communications protocol to report on progress
These are the basic elements of an account plan after the sale. Companies that execute effectively on selling outcomes (value), negotiating the “right deal” and delivering value after the sale (and getting credit or it) don’t need to worry about losing customers. In most cases they will be virtually “bullet proof” from competitive attacks and will enjoy a long term, mutually beneficial relationship.
I know today’s post was a lot to digest. In the coming weeks I will drill down on these concepts and detail further the business relationship.