IT vendors are struggling to combat margin pressures that result from an increasing perception of commoditization in the market place.  Many have concluded the most logical way to address this is to sell higher in the organization and become “trusted advisers” to more senior executives.  (We’ll address the trusted adviser problem in future articles, but for now read about the rise of the c-rate consultant). 

However, the feedback we receive from G2000 IT executives paints a different picture.  Consider that:

·         IT executives consider  fewer than 5% of their vendors to be  strategic.

·         The typical CIO does not meet with sales people.

·         New efforts are in place to shield IT executives from vendor sales people.

·         The overwhelming majority of IT executives (defined as the CIO or a direct report to a CIO) find sales people annoying and wasteful of their time.

As vendor sales organizations struggle to change their go-to-market strategies to address these realities they run into many internal challenges, which are best summarized by the following question:

"Are you mounting a solution selling engine on a product selling chassis?"

As companies look to build a more value-added approach to their clients (we call this concept the value engine, and you can link to our framework for it here), they need to look inwardly and determine if elements of their end-to-end go-to-market model are still influenced by the old product-centric thinking of the late-1980’s to mid-1990’s.   We’ve found this problem to be so prevalent that we’ve developed the a list of principles to help guide an organization to being customer-, and thus value-oriented.

“The 7 Irrefutable Laws of Customer Centricity”  

1)  Customer buy solutions to their business problems, they do not buy products 

In this scenario, your sales people must operate like consultants by helping their prospects determine the root causes of their business issues and providing a vision for solving those root causes.  Additionally they must translate your capabilities so that your customers can understand the role your company will play in helping solve their problem.

      2)  Higher level initiatives consume lower level ones 

Given the hierarchical nature of businesses, this layered concept is both critical and frequently overlooked.  To effectively have a conversation about business problems, your sales teams must be able to follow cascading business drivers from the CEO down to the level of person in the organization with whom you are speaking.

      3)  Only a customer can call it a solution  

This is one of my favorite quotes from Mike Bosworth, the author of “Solution Selling” and is also related to the concept of “the whole product” introduced by Geoffrey Moore in “Cross the Chasm”.  Moore outlines a variety of steps that a customer must perform (regardless of whether the vendor is providing a product or not) for a client to solve his stated problem.  Bosworth’s view suggests that vendors cannot create packaged “solutions” for their clients because ultimately the customer is going to decide if what is being proposed is in fact a solution to his problem.    

      4)  People buy from people 

At the end of the day, your customers are taking a risk in working with you.  Stakes are high, and careers can be on the line.  Increasingly, the companies that win are the ones that address these “softer” elements of the sale.  For example, according to IT research company META Group, 35% of all outsourcing contracts are decided by how “comfortable” the buyers feel with the vendors they select.  This trend is increasing.  As a result, your sales teams must know both the business drivers and problems at an organizational level and how those translate into the roles and responsibilities of key individuals AND have empathy for their point of view, personal goals, and related challenges that may not map neatly to organizational problems.  

     5)  “You get delegated to people you talk like.” 

One of the most common buzzwords you will hear if you speak with enough CEO’s or VP’s of Sales is “We’ve got to sell higher in the organization.”   It’s hard to argue with the logic that higher-level people have more budget authority, so therefore we should be calling on them.  If one of your sales people actually gets an appointment with a CFO, what specifically is she going to talk about?  The second “our best-practice architecture allows for complete scalability” is uttered, the meeting is over and your sales person will be back talking to people you have been speaking to for years.  Thus, if your sales people lack the ability, vocabulary, or content (or all three) to have a relevant and timely conversation at the executive’s level of business understanding, they are not going to be able to get or maintain the higher level access on whichyour go-to-market strategy is predicated. 

      6)  Value is in the eye of the beholder. 

One common topic we hear from many executives is their frustration over why people are not buying more of their products.  They have invested a lot of money building a competitively differentiated product, have validated it with excellent marketing, so why can’t their sales people sell it?  We’ve found time and time again that the things vendors find important are afterthoughts or irrelevant to customers.  If you focus and train your sales teams to emphasis attributes of your offerings that your customers don’t really care about, then your company isn’t really communicating value.

      7)  Value is communicated over a period of time. 

If you are selling complex offerings, there is a lot of information for your customers to digest.  Sales must keep in mind that customers are solving a problem, and the vendor is there to help them address that problem.  They need to acquire a lot of knowledge before they can feel comfortable moving forward.  We like to think about value as a bank.  Each time you interact with a client you have the  opportunity to make a value deposit.  At the end of the buying cycle the vendor who has the most value in their account will usually win the business.  The issue is delivering what your customer perceives as value rather than what you think is valuable. 

 

Conclusion: 

 Think of this as a diagnostic checklist to assess the heath of all parts of your value engine.  In future articles we will explore each of the Seven Irrefutable Laws of Customer Centricity and provide you with some common problems they have helped our clients uncover, including organizational issues, messaging, branding, pricing, measurement, marketing programs, collateral development, sales force distribution and coverage models, and partner strategies.  

For more information, visit www.blueprintmarketing.com

Or contact scott.santucci@blueprintmarketing.com

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