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Chapter 2: Caught in the Traditional Sales Model
Overview
It's Not about Selling - It's about Managing Quality Decisions
Prospect, qualify, present, and close - these are the basic elements of the conventional sales process that most sales organizations and salespeople still follow today. The conventional sales process is the most widely used selling paradigm for good reason: It works. That is, it works if you have a simple sale.
In a simple sale, there is a single decision maker faced with an easily understood problem or opportunity and a just-as-easily understood solution. Your task as a sales professional in a simple sale includes finding that buyer, completing a needs analysis, presenting your offering, and convincing the potential customer that it is the best solution available. The conventional sales process is perfectly aligned to meet those requirements.
Think of the mass production, assembly line process Henry Ford invented to make automobiles at the beginning of the last century. It was a remarkable and historical advance that changed the very structure of manufacturing. But what would happen if you reproduced that first assembly line in a modern auto plant? It would be hopelessly outdated and inefficient in this era of robotics and computerized control systems. Most salespeople today face a similar dilemma. The environment in which they sell has evolved, but the selling process that most use has not kept pace and adapted to the new realities.
What happens when you apply the conventional sales process to a enterprise sale? Now you are dealing with multidimensional problems and correspondingly enterprise solutions that involve multiple decisions and multiple decision makers. Your customers are also wrestling with more diverse problems, and it becomes increasingly difficult for customers to understand and manage the scope, details, and ramifications of their problems and the characteristics of the solutions that will best resolve them. While customers grapple with these issues and before they have a deep understanding of the problems and optimal solutions, conventional salespeople are busy pitching their products and services.
When salespeople use the conventional sales process in a complicated situation, they are like major league pitchers hurling 90 mile per hour fastballs at batters who may be at the plate for the very first time or who hit only infrequently. What are the chances that such batters will connect? Likewise, in enterprise sales, customers don't get up to bat that often. Yet, salespeople continue to pitch reams of solution data at customers, leaving them to comprehend, sort, and connect all of that information on their own. Major league pitchers are trying to make the batter miss. Salespeople want the customer to connect. However, they are depending on their customers' ability to connect their problems to the proposed solutions. When customers strike out, salespeople lose. If your proposal conversion rate is less than 30 percent or if your cost of sales is otherwise unacceptable, chances are good you are striking out too many customers. You are trapped in the conventional sales paradigm.
When you follow the conventional sales process in a enterprise sale, you run head first into a series of traps that grows progressively more difficult to avoid and that makes a positive outcome for the sale less likely. This downward spiral starts with a fundamental and, as we soon see, erroneous assumption of the conventional sales paradigm - that your customers have a quality decision process with which to diagnose their problems and evaluate your solution. If that's actually the case, the sale should be straightforward. You develop a compelling proposal, answer the customer's final questions, and ask for the sale. The best solution in the marketplace wins. But what if the customer does not have a quality decision process in place?
The Assumption Trap
Conventional selling, on which many of today's most popular sales methodologies are based, depends on the ability of salespeople to determine the customer's decision process. These programs instruct sales professionals to find out what customers are looking for, what's important to them, what they need, and what criteria they will use to decide the purchase. That accomplished, they are directed to create a match between their solutions and customers' buying processes.
We ask salespeople if this accurately describes what they have been taught and are encouraged to do and, invariably, they say "yes". Then, we ask if they think that their customers have a high-quality decision process for evaluating their specific technology or innovative offering. Seldom is this true. The disconcerting realization: If our customers don't have a high-quality decision process, why are we trying to understand it and fit into it?
The problems resulting from deficiencies in a customer's decision process are further compounded by the tendency of the conventional selling approach to overlook the distinction between the customer's decision process and the customer's approval process. Customers always bring an approval process, they seldom bring a quality decision process. The failure to recognize the differences and treat them as one and the same leads to many Dry Runs.
Do your customers have a well-defined decision-making process in place that enables them to comprehend the value of your unique offering?
Can you separate the customer's decision process from their approval process?
You can get an accurate sense of the state of customer-driven decision making anytime and anywhere salespeople talk business together. How many times have you heard or perhaps said yourself: "My customers just don't get it"? The reality behind that statement of frustration is not too difficult to figure out: Customers don't "get it" for one of two reasons: You are either overestimating the value your solutions bring to the customer or overestimating the customer's ability to comprehend that value.
Assuming that the solution offered actually has value, the flawed logic behind the "Customer doesn't get it" complaint is that the salespeople who say it are, in essence, blaming customers for being unprepared to buy their solutions. They are implying that customers should somehow be ready to effectively analyze and evaluate products and services, such as capital equipment, that they may buy once a year or once every seven years or less. Or, even more illogically, they are assuming that their customers should have a high-quality decision process capable of evaluating leading-edge solutions, which they may never have considered before or which may be appearing in the marketplace for the first time. Technological leaders in all industries are especially vulnerable in the latter scenario. Their greatest challenge is what Geoffrey Moore calls "crossing the chasm" between the small group of visionary customers who immediately see the value of a new solution and customers in the mainstream marketplace who, through no fault of their own, truly don't yet get it. The bridge across the chasm is the quality decision process and a team of skilled professionals to guide the customer. [1]
Unless you think that salespeople are totally unreasonable, we should note that they get snared in this trap for two reasons. First, all of their training is based on the implicit assumption that the customer will bring the decision process to the table. That is the assumption trap. Second, the trap is compounded by the fact that sales professionals further assume that their customers have a much higher level of comprehension than they actually do.
The best salespeople walk into an opportunity at much higher levels of experience than their customers. They know the products and services they are bringing to market inside and out. In addition, they spend most of their time with customers. They see an entire industry, encounter a full range of operational practices, and often become experts in their customers' businesses. When we shadow experienced sales professionals, we often see them size up a customer's situation and needs, seemingly at a glance. But the advanced perspective and comprehension of sales professionals experienced in the enterprise sale stand in vivid contrast to the perspective of their potential customers. Unfortunately, even the best salespeople may make an unconscious leap of logic by assuming that their customers see the same things that they see and are, therefore, well prepared to understand their own problems and the value of the forthcoming solutions.
What is your customer's level of comprehension?
How well do customers understand their own problems?
How well do they understand your solutions?
We use the Decision Challenge graph to illustrate this basic and often overlooked reality (see Figure 2.1). The graph's horizontal axis represents the customer's position in their decision process. The progression ranges from 0 percent, at which point customers have no idea there is a problem, to midpoint, where they recognize a problem and are actively investigating solutions, to 100 percent, at which point the customer has made the purchase. The graph's vertical axis represents the customer's level of knowledge about the problem and knowledge of possible solutions. At zero, customers have no knowledge of the types of problems they may have or the problems you solve; at the top of the scale, they have complete, or perfect, knowledge of their problems and the solutions required to solve them. They know everything needed to make a well-informed, high-quality decision - what to look at and for, what to measure, what to compare, what to test, and so on. Finally, the field of the graph formed by these two axes represents the customer's overall comprehension.
The big question is: Where does your typical customer fall on this graph? More specifically, where does a current client of yours fall? For example, start with the assumption that a customer has entered the market and is actively seeking solutions, knows there is a problem, and has a budget in mind. We place the average customer at 60 percent on the decision axis. Business partners tend to find their customers' knowledge of their problems and possible solutions are less complete. Often, customers have some ideas about the nature of their problems, they may have read trade publications, spoken to colleagues, and, via the same process, heard a bit about the possible solutions, but they don't have any significant depth of knowledge. Thus, we place them at 40 percent on the knowledge axis. When we plot these points on the graph, this customer's area of comprehension fills just 24 percent of the field (see Figure 2.2). If you begin presenting solutions to this customer, he or she will understand only 24 percent of what you say.
In this example, if you attempt to communicate the value of your enterprise solution, your customer is not going to comprehend about three-quarters of what you say. More accurately, the customer's ability to connect your information to their business is greatly impaired, and they will find it neither useful nor particularly relevant. This miscommunication explains why we see low proposal-to-sales conversion ratios, long sales cycles, and extreme price pressure in enterprise sales. A customer who cannot comprehend a solution will probably not buy it, will certainly not buy it quickly, and won't be willing to pay a premium price for it. With a comprehension level that low, every solution looks the same.
How much of your solutions' added value falls inside your customers' area of comprehension?
How much of your company's competitive advantages and value adds fall inside your customers' area of comprehension?
What are the questions your customers do not realize they should be asking about their problems and your solutions?
The traps in the conventional sales process don't end with flawed assumptions. They are compounded by the primary element of the process itself.
[1]See Geoffrey A. Moore, Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers (Harper Business), for an in-depth exploration of the challenges inherent in the introduction of newly developed solutions into the marketplace at large.
The Presentation Trap
Today's enterprise sale environment can be characterized by an inordinate preoccupation, even obsession, with the presentation of solutions. Everything salespeople do before - the prospecting, contacting, and qualifying of potential customers - seems to be aimed at creating the opportunity to present their solutions. Everything after - the downhill run to the sale itself that includes overcoming objectives, negotiating, and closing - is designed to support and reiterate the presentation. Accordingly, sales organizations devote tremendous amounts of time and resources to creating compelling presentations and proposals.
The irony is that most of this effort is lost on customers. Presentations that are too early in enterprise decisions are largely a waste of time.
Conventional salespeople hate to hear this; the presentation is the key weapon in their sales arsenal. It is their security blanket, their comfort zone, and they loathe giving it up. "Wait a minute," they protest, "our presentations are aimed at educating customers. They will not buy what they don't understand."
Exactly right, customers will not buy what they don't understand. A presentation can lift the customer's level of comprehension. However, it is one of the least effective methods for accomplishing that goal because of three reasons:
A presentation, even one that includes advanced multimedia elements, is, in its essence, a lecture. The salesperson is the teacher and the customer is the student. The salesperson teaches by telling. The big problem with teaching by telling is that hardly anyone remembers what they hear. People retain only about 30 percent of what they hear. The use of visual aids (e.g., a PowerPoint slide show) boosts retention rates to 40 percent. But the generally accepted rule of thumb among learning experts is that more than half of even the most sophisticated presentation is lost. [2]
A typical sales presentation rarely devotes more than 10 to 20 percent of its focus to the customer and their current situation. Generally, 80 to 90 percent of a typical sales presentation is devoted to describing the salesperson's company, its solutions, and the future being sold. Therefore, while a presentation may raise the customer's comprehension level, that gain is usually centered on the solutions being offered. All too often, salespeople are dealing with customers who are not sure of the exact nature of their problems. Nevertheless, those salespeople are spending most of their time talking about solutions. As a result, while customers may be greatly impressed with the offering being presented, they still lack a compelling understanding of how it applies to their situation and they do not know why they should buy it.
Reality Check Is There a Balance between Timing and Content?What percentage of your sales presentation/proposal is devoted to describing your company and your solution?
What percentage of your sales presentation/proposal is devoted to describing your customer's business, situation, problem and objectives?
There is a third compelling reason that presentations are a waste of time in enterprise sales: Your competitors are following the same strategy; they are busy presenting, as well. Unless you have no competition, your customers will surely see them. They have meetings set up with you and one, two, or even more of your competitors. In each meeting, a sales team is presenting the best side of its solutions. Your team is telling the customers that they need the solutions that only your company offers, and your competitors are making the same arguments about their solutions. In every case, the presentations are heavily skewed toward the seller and the solutions.
Look at this from the customer's perspective. Based on what we said about the customer's area of comprehension, it is highly likely that two-thirds or more of the information that customers hear falls outside their area of comprehension. Further, what they do hear sounds very much the same. It all deals almost exclusively with solutions and is not connected to their unique situation.
How do customers then respond to competing conventional presentations? They concentrate their efforts on the information that falls inside their area of comprehension. Customers attempt to make the multidimensional understandable by weighing those elements that vendors' offerings have in common and eliminating those elements that do not fit neatly onto an over simplified comparison chart. When this happens, salespeople's ability to differentiate their offering from the competition is subverted, and price, the one common denominator of all offers, again raises its ugly head and is likely to become the deciding factor in the sale.
In the eyes of the customer, how different is the structure, format, and content of your sales presentation from your major competitors' sales presentations?
Customers may also respond by not responding. They listen politely as you "educate" them, thank you for your time, and promise to get back in touch when they are ready to make a decision. This is the setup for the Dry Run, as described in Chapter 1.
Finally, some customers may actively respond. They may ask you to justify the information you have presented or challenge the viability of your solution. This is the response set that every conventional salesperson is expecting. The customer objects and the sales professional goes to work overcoming those objections. It is a time-honored element of selling, and it contains the final, major trap of the conventional sales process.
[2]Bill Lucas, Power Up Your Mind: Learn Faster, Work Smarter (Nicholas Brealey), p. 126 for retention rules of thumb.
The Adversarial Trap
When salespeople start "overcoming objections," they are placing, by definition, themselves in conflict with their customers. At best, this sets the stage for polite disagreements and respectful differences of opinion. At worst, it turns the sales process into a battle in which the seller must somehow conquer the buyer to win the sale. You can hear this in the language that appears so often in sales training and in the conversations between salespeople and their managers. Words such as persist, insist, persuade, and convince all imply aggressive behavior.
This problem is inherent in the conventional sales process. Because it focuses solely on making the sale, any reluctance on the part of the customer translates into a direct threat to the salesperson's success.
The conflict between buyer and seller is exacerbated by the frustration that results from the miscommunication engendered by the conventional process. Salespeople are presenting professionally packaged data complete with executive summaries that their prospective customers find either unintelligible or unconnected to their situation. Confused and with no sound basis on which to evaluate the information, customers respond negatively. Conventional salespeople, who are overestimating their customers' level of comprehension, interpret this as an objection to be overcome and swing into action. "No," they say, "you don't get it. You do need our solution and here's why ..." Now the salespeople are arguing with their customers.
What happens next? If the customers don't shut down the presentation altogether, they may offer a second negative response. Another round of verbal sparring ensues. The customers' frustrations turn into exasperation. But now the sale is in doubt and the salespeople know that the customers need the solution, so they escalate their efforts. The downward spiral accelerates. Repeatedly, we have witnessed all of this occur in the most polite and respectful terms. No matter how civilized the exchange, the net result is that the salespeople and the customers have become adversaries. The sale has turned into a battle ... a battle in which customers always have the final say.
There are unfortunate exceptions, but, for the most part, salespeople using a conventional approach aren't purposely trying to beat up their customers. They are simply following the accepted dictates of a conventional sales process that generates statements such as:
Do you find yourself debating with customers?
Are your customers reacting defensively and/or challenging your recommendations?
How much of your time with customers is spent presenting, persuading, and convincing?
Whether they know it or not, every "qualified" prospect needs your products and services.
Persuasion is the key quality of successful selling.
If you are persistent and pursue the customer at regular intervals and with increasing intensity, you will eventually get a sale.
An objection is a signal that the customer wants to be convinced to buy.
The real selling doesn't start until the customer says no.
There is a kernel of truth in each of these statements, but they are also the source of many of the sales techniques that customers find most irritating. They turn selling into a game where someone, either seller or buyer, must lose.
We are not saying that the adversarial mind-set won't produce sales. It will. We call it "Sales, James Bond style." Every sales organization has a James or Jamie Bond on the payroll, and too many managers are looking to hire more of them. You can drop the Bond-style salesperson out of an airplane into any territory, any prospect, any product, any quota, and you know they will come back with the business.
There is a problem, however, with the Bond approach. There will be a lot of collateral damage. People are going to get hurt on both sides of the table. Many salespeople, and even managers, try to rationalize this away and depend on their service and support functions to repair the damage. But customer relationships are fragile, memory is long, and customers have options. The service person's saying "I'm sorry, you know how salespeople can be" may not cut it. Further, in the real world of business, where margins are tight and a few percentage points of additional cost turn a profitable order into a loss, the Bond style can quickly become a major liability. Promise what you can't profitably deliver or coerce customers to do something they aren't sure about and you either lose customers or rack up the red ink. With today's instant communications, negative perceptions spread very quickly, which can make new business acquisition more difficult.
Add It Up
We haven't yet exhausted the list of traps in the conventional selling process. There are others, large and small, that negatively impact key performance metrics, such as margins, proposal conversion ratios, sales cycle time, and forecasting accuracy. We discuss more of these in later chapters, but for now, all we need to realize is that the three traps previously described are the fundamental problems facing salespeople who try to impose a traditional sales process on multifaceted problems and solutions.
The first trap of conventional selling causes salespeople to depend on their customers' decision-making processes, which frequently is missing key elements. The belief that customers have a high-quality decision process leads to a second erroneous assumption: Customers' ability to understand their own problems and evaluate all the solutions available allows them to discern the true value of the salesperson's unique solutions.
These assumptions cause salespeople to fall into the second trap of conventional sales. Because they assume higher levels of comprehension and decision-making ability on the part of their customers than actually exist, salespeople focus the majority of their efforts on presentation. In doing so, they largely ignore the customers' world, the most significant source of credibility, differentiation, and decision criteria in any sale - thus creating a major disconnect between customers and solutions. The strategy to compete at the solutions level and the rush to present information heighten the blur between competing solutions. This reinforces customers' drive toward commoditization by validating their view that we are all the same.
Finally, the emphasis on sales presentations exacerbates the communication gap between buyer and seller, leading to frustration, misunderstandings, conflict, and adversarial relationships - all of which impede the salesperson's ability to create cooperative and trust-based relationships with customers. This schism is the major reason underlying the protective behaviors customers so often adopt when dealing with salespeople.
These problems are what manufacturing quality guru W. Edwards Deming defined as systemic problems. We can't solve them by disciplining individual salespeople who step over some arbitrary line. Instead, the process itself causes the problem. The only effective and enduring way to resolve these problems is to set aside the conflicting elements of the conventional selling process. And that is exactly what we propose in the following chapters.
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