The other day, I pushed the button on my car’s remote control, and nothing happened. No matter how many times I pushed the button, the door didn’t unlock. I called the dealership and they told me that I needed new remote that would cost about $100 plus a $50 programming charge. They explained the benefits of having a factory remote and a professional, guaranteed programmer. Seemed a little high for such a little thing. So, I went to the internet and plugged, Pathfinder remote control into my search engine, and got over 104,000 results. I looked through about 5 or 6 of the results, read the specs and reviews, and narrowed my alternatives down to either factory or after-market units. One of the after-market companies offered a guaranteed remote control for my car at $35 including instructions for programming (which involved opening and closing a door and inserting and removing the key in the ignition five times). I clicked. Bought. Received my remote in 3 days. Programmed it in 2 minutes. And, lived happily ever after. No needs analysis. No proposal. No demo. No sales rep. Welcome to the internet, my friend!
It’s true that I picked a situation where the product could be considered to be a commodity. But, there is a reason for that. I believe that the internet has, in the minds of an increasing number of our prospects, commoditized many of our products. Let’s start with the definition of the problem: When a prospect views one or more products as equally capable of satisfying their need, the only differentiator is price. In “solution-based selling”, or “customer-focused sales” programs, such as SMART Selling, we are taught that sales require the partnership of sales rep and prospect to analyze the problems facing the prospect and develop a set of capabilities that the sales rep can provide which will solve the problems. The process of creating this solution develops the personal connection between buyer and seller. And, since research shows that “people buy from people they trust”, this personal connection is vital. Yet, with the high speed, impersonal internet, I can use Google or Bing to describe my problem (as I define it) and instantly get thousands of results that:
Help me identify the underlying causes of my problem,
Present me with possible solutions,
Discuss the relative merits of alternatives,
Present me with prices of products/services that have solved the problem for others,
Provide reviews of my alternatives by folks who have used them.
As a result, with the internet, the only reason I may have to interact with a sales person is to get a demonstration (if necessary) or obtain a formal quote or proposal for each of the products I have selected. I can even make a list of the specifications I have decided that I need, and send that off as an RFP. Good for me as a buyer. Bad for you as a sales rep. Unless you are the low-priced alternative, you lose. And, if you represent the low-priced alternative, your company is probably evaluating whether they really need a highly-paid sales force at all.
A Change in Cycles An analysis like this could make any professional sales rep feel like the only alternative is to change careers or find a tall building to test their ability to fly. But, hold on for a little bit. Perhaps what we have here is a change in entry point, but not necessarily in process. Let’s take a look at the typical Sell Cycle for a non-commodity product compared to that for a commodity or “semi-commodity
(Note: The items highlighted in red indicate when a sales rep typically begins interacting with the prospect in each sell cycle.)
Research Territory Research Market
Build Territory Plan Build Marketing Plan
Prospect Build Website
Generate Interest and Rapport
Discuss Issues and Problems
Determine Capabilities & Solutions
Develop Cost Effectiveness (Value)
Assess Authority to Purchase
Develop Plan with Authority
Survey Other Involved Parties
Demonstration (Proof of Concept) Demo/Webinar
There is a significant difference in the Sell Cycles. With the Commodity cycle, the entire process of problem definition and solution creation, along with value determination is performed by the prospect without the involvement of a sales representative. Is this really “Good for the buyer” as I said before? Maybe not.
Why Would I Ever Want to Talk to a Sales Rep?
Perhaps this would be a good time to think about why or when a prospect might benefit from talking with a sales rep. Since most prospects will do almost anything to avoid talking to one, the reasons have to be compelling. From the prospect’s point of view, could a sales rep:
Have more direct and varied experience solving problems like mine?
Be able to identify hidden underlying problems that may change requirements?
Provide insight into pitfalls that could be avoided?
Assist in strategies to convince others in my organization?
Transfer knowledge of significant trends that may affect current direction or thinking?
Educate me on the intricacies of a complex product?
Show me additional uses of the same product to enhance its cost effectiveness?
If you look at this list, and I’m sure you can add other items to it, you begin to see a few things.
1. We are not selling commodity products. There is kind of an inverted logic in this statement. If our products were truly commodities, we wouldn’t be needed. They would be available on the internet at the lowest price.
2. Although our prospects think they know more than we do, they may be missing some information. This potential lack of information increases their risk of buying the wrong product to address their needs.
3. Just because a prospect thinks a product is a commodity doesn’t mean it is. Remember, the buyer wants you to be a commodity so that you and your competitor will fight to get to be the lowest price alternative.
Based on this, it is my contention that, in the internet world, solution-based selling is not dead. But, it has been changed. The fundamental principles of putting prospect before product and problems before features are still valid. However, because of the change in entry point, we must be even more committed to living by those principles. We need to help our prospects see the benefit of involving us in addressing their needs. We have to get ourselves back into a leadership role.
Tips and Conclusion Here are some tips that should help:
1. Be prepared to be looked at as a commodity. Understand that when you receive a request for a demo or price quote, if you provide either without at least attempting to engage the prospect in a discussion of why they are looking at your product in the first place, you are playing roulette with your time and resources. You’re putting your money on a number and hoping for the best. Be accommodating, but firm. “I am really glad that you contacted us and want to see our product in action. In order to make sure that I show you the right things in it, could you help me understand what prompted you to look at us?” Or, if you are asked to show one particular set of things, “I’ll be happy to show you how that works. It would be really helpful to me to understand how you anticipate using that capability since their might be other options that are also available and even more effective.” Your objective is to engage them in a conversation that will move them back up the non-commodity Sell Cycle to where they should be.
2. Watch out for RFP’s. The majority RFP’s are generated one of two ways: (a) it is generated using significant input from one of your competitors, or (b) it is developed from internet research. It is not difficult to identify one that has been influenced by your competitor. As you read it, you will see specific features listed that are unique to that competitor. Likewise, it is easy to identify an internet research RFP. In it, you will see every conceivable feature listed as a Requirement – even if they are mutually exclusive or redundant. In this case, should you decide to respond, you will end up spending a lot of time trying to explain your response, and still end up with a confused prospect who will, most likely, defer any decision. In either case you are way behind and out of synch in the Sell Cycle. Your odds of winning are quite low. You can win, but it will take significant work and commitment on your part to do so. There is a detailed strategy I have taught sales reps to use when faced with an RFP. I will summarize the key points:
a) Determine if it is worth your time to respond (size, significance, etc). If not, go find another prospect.
b) If it is, contact the writer of the RFP and request a meeting to discuss some of the features that are requested. If they refuse, advise them that you would love to respond, but it is your company’s policy not to respond unless you can have a discussion to clarify some of the items in the RFP. If they still refuse, give serious consideration to not responding.
c) If you are successful in getting the opportunity to discuss the requirements, begin by complimenting them on their work, and then continue by asking what prompted the RFP – what challenges are they facing, etc. You will be moving them back in the Sell Cycle to where you can begin to reshape their solution to match your capabilities.
3. Guard your resources. When you come in at the entry point in the Commodity Sell Cycle, the prospect is going to be asking you for something – a demo, a price, or some other information. These are your resources and are as valuable as the money the prospect may choose to spend with you. If you are going to give something, get something in return. What do you want? Information. Ask them – What are the challenges that led them to investigate your product? How do they foresee your product being able to help address them? How are others in the organization involved? Again, your objective is to move them back up into the non-Commodity Sell Cycle so that you can work to develop a solution that recognizes and values your unique capabilities. Just listing them won’t do.
In conclusion, climb back off of the ledge. The world still needs professional, consultative, customer-focused sales people. But, like all professionals, we need to adapt to the changes in our paradigm. The internet has changed how people enter into the selling process. That doesn’t necessarily negate the solution-based SMART Selling process. It requires us to adapt our tactics to help our prospects get the best solution to their challenges — our product.