Symptoms that Reveal When Value is Lacking
Reflect for a moment on your current sales pipeline. To what extent are you experiencing the following? The buyer knows a great deal about your products, services and the offerings of your competitors. Price appears to be the primary, or the only, decision criterion You seem to be drawn into providing consulting services for which you are not paid No matter how hard you work and no matter what “value-added services” you supply, the buyer doesn't seem to care.
Increasingly the final purchasing decision is made by a purchasing committee, department or consultant. An increasing number and/or large proportion of your opportunities are in response to RFPs. Even in long-standing relationships, the buyer invites in or entertains your competitors.
Increasingly the final purchasing decision is made by a purchasing committee, department or consultant. An increasing number and/or large proportion of your opportunities are in response to RFPs. Even in long-standing relationships, the buyer invites in or entertains your competitors.
You are losing an increasing number of good clients It is hard to maintain acceptable margins. Your largest customers demand prices that are so low that you decide to keep them just to keep volume high. These are just a few of the symptoms that most sellers face with increasing regularity. They are all indications—leading indicators—of sales efforts that lack sustainability because the buyer is getting nothing of value from the selling process.
Recently, a senior partner at one of the big four consulting firms that has turned to Huthwaite for help told us a story about a deal won last year. The opportunity came across his desk late in the year, just before the holiday season began. The response time was such that if the team was going to compete for the business they would have to burn the midnight oil during most of the Thanksgiving and Christmas season. Despite the fact that the opportunity was in their target market and capability sweet spot, the partner was reluctant to demand that everyone work through the holidays. So, he left it to the team. They decided to go for it and, low and behold, the firm won the business.
Just after the first of the year, the partner sat with the client at their first meeting following the awarding of the contract and asked why the client had chosen his team. The answer was quite disheartening. The client described how the evaluation committee had laid the five proposals side-by-side and began by evaluating the methodologies recommended by each consulting firm, certain that the differences would yield a clear winner. To the committee’s chagrin, every company was recommending essentially the same approach So, they turned to the client lists supplied in each submittal and looked for the firm with the broadest experience.
Unfortunately, this too was a wash. Each listed an equally impressive list of former clients (many, in fact, had the same companies on their respective client list). Needing to find some way to choose, the team then looked to the resumes of the consulting team being proposed by each firm. Here again, each member had nearly identical pedigrees. In fact, the client reported that he could have switched the names on many of the resumes without much impact.
In the end the evaluation committee simply selected the cheapest alternative. Here was a firm, winning business from its rivals based not on what the consultants hoped to be their differentiators, but on the client’s price-driven decision process. The partner was rightly concerned that such a result, if indicative of how the market was transforming, would not provide a sustainable set of future opportunities.
The lesson here is clear. If your customers are moving increasingly to price, your sellers are failing to use their expertise to create value in the selling process. Further, if your sellers continue to fail to create value by how they sell, and rely instead on what they sell, they will soon find themselves to be irrelevant to all but the transactional portion of your market.
Call to Action
If sellers continue to believe that the route to growing market share, sustaining high margins, achieving double digit topline growth, etc., is to follow the same approach that worked just a short decade ago, they will find themselves to be the dinosaurs of the 21st century marketplace.
Huthwaite’s research clearly shows that selling today demands strategies and tactics that deliver value creation. Only the seller, the sales process, and the sales organization can sustain buyer-side value creation. Otherwise, fire the sales team and seek to become the lowest cost provider in the market. There are no other choices.
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