Knowing they need their front line sales force to develop relationships with executives to gain access to bigger budgets and differentiate themselves from the 5 other players who can do similar things, many B2B companies are retooling their sales and marketing organizations to be more consultative in their selling approach. This is generally accompanied by another major objective to round out the product portfolio to offer more valuable stuff to these executives they want to build relationships with.
So, how are companies doing with this?
Not so well.
The Sales Leadership Council (a Corporate Executive Board service) in 2006 found that most consultative selling efforts were increasing the cost of sale at a greater rate than sales were growing. In fact, more than 20% of their clients were actually losing money due to their consultative sales effort – so much for expanding margins.
To me, this really comes into view when I speak with executives who are on the receiving end of these so called solution sales calls. We’ve known for ever that executives avoid spending time with sales people like my two year old avoids having his hair washed. Most executives admit they are meeting with a few more sales people than in the past, but their experience isn’t that pleasant.
One CIO told me that the message left on his voice mail from one rep was exactly the issues he was dealing with so he agreed to take the meeting. However, when the sales person showed up, he just walked through a product pitch that was poorly disguised as something created just for him. Normally, he was have text messaged his assistant to interrupt the meeting with an “emergency”, but he kept investing time with this guy believing there would be a pay off… but there never was. “My expectations were raised to the point where I could actually talk about my problems and have a real conversation, but at the end of the day, I felt tricked. At least the guys who want to give me a product demo are honest.”
Let that sink in.
Here a company thinks it’s improving its access and setting itself up for future growth, but in reality, most of the sales people are annoying executives, making them feel duped.
Why is this happening?
I know a lot of you will think it’s the general nature of sales people to be dishonest, or lazy. That might be true for the lower performing 20% of the sales force, but that’s not the majority. No, the real problem lies with content… specifically really knowing what information will be genuine and valuable for a given executive at a given time. This knowledge is hard to share, but its incredibly valuable to your customers because they don’t know it either and will accept it from a sales person who can deliver it sincerely.
How is it the fault of the sales organization when solutions or marketing people who have never sat down with a CIO, provide sales people with the material? In most cases, the level of real practical knowledge about a particular targeted stakeholder is so low, it is laughable. Here is an actual example.
One of our customers (who will remain nameless) had developed an infrastructure assessment product. It basically helped data center directors determine what their current state technical environment was, what its future state could look like, and the costs to get from where they are to where they want to be – Nothing wrong with that product. However, the marketing team was directed to create “C-level” messaging (for something that would never be bought by a C-level, or even a V-level) and materials. The result – “If a company is experiencing margin pressures, the sales team should talk about the infrastructure assessment offering with a CFO because this information will help the data center reduce costs”.
In “Lala Land” I am sure there are tons of CFO’s waiting with baited breath to talk about data center assessments. I realize that to an IT vendor, the CIO’s budget is the entire universe. What they don’t realize is that IT spending only accounts for between 1% and 5% of corporation’s total revenues. There are probably 1,000,000 different and more valuable conversations to have with a CFO who can save more money renegotiating the toilet paper contract than he could save with a report. So, how seriously would a sales person be if he were to heed the advice of what he was trained to do?
To develop relationships, you have to offer value. To offer value to executives, you better bring your “A” game. Unfortunately, most of the efforts we see within B2B companies is preparing their sales force to be hated C-Rate consultants.
The bottom line here is that if you are going to pursue a business strategy requiring elevated access to higher level people, you better make sure you really understand their issues and that you have a legitimate reason to be calling on that level. Tremendous returns await companies who are authentic, genuine, and provide actionable information to executives. Before setting out on a solution selling endeavor, you should ask yourself if the people leading it have ever had a conversation about the subject matter with the targeted executive before. Imagine all of the back end investment to enable a sales force (training, marketing, technology, hiring, management oversight, etc) and how all of these decisions are likely being led by people who have never met the customer segment you are targeting before.