Generic Industry Knowledge Won’t Pass the “Smell Test” with Customer Executives


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If you are a B2B sales professional who aspires to achieve trusted advisor status with your customer, gaining industry insight is a critical success factor.

But a surface layer of generic industry knowledge won’t be nearly enough to establish relevance with a sophisticated decision-maker who is looking to gain competitive advantage in the marketplace.

It won’t pass the “smell test” that buy-side executives deploy to screen the business acumen of sales professionals.

A Veneer of Industry Knowledge

A veneer of industry knowledge may impress your internal colleagues and sales managers, but it won’t move the needle with your customer executives. You won’t last five minutes eyeball to eyeball with a performance-driven business executive who is strategizing to win market share from industry challengers.

And, don’t even think about asking customer executives to describe their industry; your credibility will suffer. That shows no preparation and understanding on your part.

I haven’t met a business executive who doesn’t feel strongly that their company is unique. Most of them spend the majority of time devising strategies to differentiate their companies in a competitive marketplace. The worst thing you can do as a B2B sales professional is to lump them into some generic, simplistic vertical industry “bucket” of knowledge.

Go Deep and Narrow to Gain Insights

Instead of skimming the surface of your customer’s vertical industry, reallocate your time to understanding the specific business priorities and key performance metrics of your customer and their top competitor in the industry. If your customer is a private company, select two of their top publicly-traded competitors and go deep.

By narrowing and deepening your focus you will build more practical, useful insights that can provide business value to your customer executives. These strategy setters are in a fight to win in the competitive marketplace, so you’ve got to demonstrate knowledge, understanding and insight into their “battlefield”.

If your research hasn’t uncovered at least three specific business initiatives or performance metrics that differentiate your customer from their top competitor, you aren’t ready to engage your executive sponsors. You’ve got more homework to do.

Let me give you a couple of examples of going deep and narrow to gain customer industry insights and achieve executive relevancy.

Pharmaceutical Industry: Pfizer versus Merck

Acknowledging that its R&D efforts haven’t paid off, Pfizer recently reported (in its Q4FY’10 earnings conference call) that it would reduce previously planned R&D spending in 2012 by 23.5%. Pfizer’s new CEO said, “This is a fundamental change in culture. We have to fix this innovative core.” The new strategic direction involves a network of partnerships that will help Pfizer leverage its investments in discovery and early-stage drug development.

By contrast, Merck recently announced (in its Q4FY’10 earnings conference call) its decision to strategically increase R&D investments in 2011 and beyond. They have prioritized their pipeline and plan to focus mostly internal R&D resources on a narrower group of therapeutic areas.

Here are two companies, operating in the same industry, but planning to executive very different strategies in 2011 and beyond. These are significant implications for your executive engagement planning.

Financial Services Industry: JPMorgan Chase versus HSBC

Executives from JPMorgan Chase held their annual Investor Day presentation last month. The CEOs of their six lines of business described an aggressive global growth strategy (think “revenue” growth as in net interest income and fee income).

Three of the businesses (Investment Banking, Asset Management, and Treasury & Security Services) are planning major future investments in their Global Corporate Banking initiative. The target for Return on Equity (ROE), JPM’s preferred performance metric, has been maintained or raised in these lines of business.

By contrast, HSBC announced its quarterly financial results earlier this month. ROE target ranges were lowered by 300 basis points and the business strategy focus is primarily on cost reduction, not revenue growth. HSBC’s CEO said during the earnings conference call, “The cost ratio (otherwise known as the overhead efficiency ratio) is unacceptable to me” and HSBC needs to “re-engineer the business to remove inefficiencies”.

Again, here are two top-tier financial institutions, operating in the same industry, but planning to execute very different business strategies in 2011 and beyond.

Gain Industry Knowledge One Company at a Time

An “industry” is nothing more than the sum of its competitors. For a B2B sales professional preparing for a customer executive engagement event, the best way to gain essential industry knowledge is to focus deep and narrow on the target customer and its top competitor.

Having spent a career as a buy-side executive, I can assure you that your executive customers will appreciate (and value) the preparation, perspective and insights you will bring to the discussion table. You’ll gain credibility with your executive sponsor that you understand their primary industry dynamics. And, you’ll earn the opportunity to articulate how you can add business value and help your customer gain competitive advantage.

Avoid the generic industry knowledge trap and you’ll pass the customer executive “smell test”.

Republished with author's permission from original post.

Jack Dean
As co-founder of FASTpartners LLC, Jack brings extensive technology buying experience as a Fortune500 Chief Financial Officer to the B2B technology sales training industry.He has facilitated client-sponsored business acumen training for 15,000 B2B technology sellers representing 150 global technology companies.Participants in Jack’s business acumen training have produced directly-attributed revenue of over $1 billion (in the 3 months after training) and training engagement ROIs averaging 500%.


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