An August 23, 2017 newswire summarized the findings of a survey done by Pegasystems with 250 global financial services companies. Some of the results:
- 79% agree financial institutions will move from product-based selling to focus more on personal relationships in the next 5 years.
- Only 31% deploy relationship-based sales models to any degree and only 1% fully leverage them.
- 29% are mired in product-based selling.
As with changing the direction of a battleship going full steam ahead, getting your organization to migrate to relationship and buyer outcome selling is not something that can happen overnight.
A Key to Customer-centric Organization
A common misconception is that becoming “customer-centric” is something to be done by Sales with support from Marketing.
Merely making someone responsible for “Sales Enablement” means paying lip service to an outcome that is difficult to achieve.
The major hurdle is overcoming the intense focus on products, a company-wide affliction that stifles attempts to put customers/buyers first.
Product sales are more about offerings, less about buyers and more likely to result in lower margins.
In coauthoring Rethinking The Sales Cycle (published by McGraw-Hill in 2010) we were unable to find a B2B vendor that could serve as a model for being customer-centric. Instead we had to use Apple as an example. It remains to be seen how the longer term will be, but the brilliance of Steve Jobs had a tremendous impact. Unlike virtually all competitors Apple has not sold computers. Other computer companies sell processing power, disk capacity, etc. that lead to commodity decisions.
CEO Steve Jobs had the remarkable ability to understand what the market wanted and then create offerings that people wanted to buy.
He was maniacal about dictating the design and functionality that would resonate. As an Apple customer since 1990 I’ve continually bought their desktops and laptops without considering alternatives that likely cost 50% less. Apple offers reliability, support and has become an integral part of my life via iPhones, iPads, iPods, etc.
Absent a genius like Jobs, it’s incumbent upon companies to learn their customers’ requirements.
Product-focused companies create offerings they think buyers will want and then ask Sales and Marketing to use “push” strategies to sell to their markets.
I hope you see how flawed this approach is.
Shifting to a “Pull” Strategy
As an alternative, vendors that create organizations that can listen to their customers and articulate needs to Product Development enjoy the advantage of creating offerings that people are more likely to want to buy. They can enjoy higher revenue due to “pull” of market demand.
The primary takeaway from the changes in buying behavior over the last 15 years that vendors should realize is that buyers want to exert more control in making buying decisions. They don’t want to be “sold” (manipulated by salespeople). Instead they want to be empowered to buy offerings that enable them to achieve desired business outcomes.
Organizations that want to be customer-centric can’t get away with a new coat of paint.
Teardowns are required to shift from inside-out views of markets to outside-in views where customer needs are the fuel that propels Product Development.
Significant Organizational Change
This requires significant organizational change, but vendors that are successful in this migration can enjoy a sustainable competitive advantage over their competitors that continue to use selling approaches that buyers have rendered obsolete.
Since the turn of the century we’ve never seen the runaway revenue growth of the 90’s that vendors enjoyed. I find it odd in light of all the DIY purported “buying activity” via the Internet and social networking. It is time to realize the difference between product evaluations done by mid to low level staff versus corporate initiatives to improve business results that will provide the necessary value to provide payback.
Vendors need to position themselves to proactively use top-down strategies to qualify opportunities. Vendors must provide sellers with business results that have been or can be achieved through the use of their offerings. When calling high, executives don’t want to learn all about a vendor’s offerings.To better align, sellers should discuss business outcomes and how offerings can be used to achieve them. Click & Tweet!
Executive would be more open to vendors that realized product pitches are relics of the past when sellers pushed products.