Seven Irrefutable Laws of Customer-Centricity

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B2B 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.

However, the feedback we receive from G2000 executives (the people these vendors are trying to sell to) paints a different picture.

Consider that:

* Executives consider fewer than 5% of their vendors to be strategic.
* The typical CXO 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 while addressing 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, 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 a set 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

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 the problem. Additionally they must translate your capabilities so that your customers can understand the role your company will play in helping them. A key implication of this point is that it is no longer suitable to align to a customer “buying” process, but rather to facilitate their problem solving process. In most organizations, a buying process (called a sourcing strategy from a customer’s point of view) requires the prerequisite of a business case. Without all of the upfront work to define the problem, assess requirements, and create a solution vision – there is no funding available for buying process to begin.

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 “Crossing the Chasm”. Moore outlines a variety of elements that a customer must consider (regardless of whether the vendor is providing that product or not) for a client to solve his stated problem. Bosworth’s view suggests that vendors cannot promote 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. Thus, the successful sales person is one who can collaborate with a customer on a solution vision that is equally shared by both buyer and seller. (because “vision” is such a nebulous term, I wrote a defintion http://www.customerthink.com/blog/quest_vision_structure_ahead_rfp)

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 which may not map neatly to organizational problems.

5) “You gotta speaka da language.”

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 underlings you have been speaking to for years. Thus, if your sales people lack the ability, vocabulary, or content to have a valuable conversation (timely, relevant, and in context) at the executive’s level of business understanding, they are not going to be able to get or maintain the higher level access on which your 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; and 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 solve it. Customers need a lot of knowledge before they can feel comfortable moving forward. Because people can only deal with a limited amount of information at a time, customers go through a series of milestones as they try to solve a problem. The earlier your sales people engage in this process, the greater opportunity they will have to differentiate your company from competitors and influence their solution vision. By determining what the customers’ milestones are in their PROBLEM SOLVING PROCESS and providing resources to aide in their decision-making process, you can create and maintain influence over the entire lifecycle – rather that just at sporadic points.

I know the temptation is to take this list and try to apply it to sales people. However, the true purpose of this list is to help the rest of the organization better understand how to align to the “solution selling engine” the sales department is trying to build. Customer-centricity required a whole company approach, not some band-aides on the front like. The more aligned the whole company is to creating value to customers, the greater the competitive advantage you will have in this brave new world.

Scott Santucci
As a principal analyst at Forrester Research, Scott Santucci has deep knowledge and hands-on experience working cross-functionally with product, marketing, and sales teams to develop innovative and effective integrated programs designed to improve the entire revenue cycle.

2 COMMENTS

  1. Hi Scott

    Interesting post. I think the move towards solution selling is long overdue, but as a recent paper shows, it is nowhere near enough. Customers don’t just want solutions to their problems, they want solutions PLUS a whole bundle of relational processes that support them in deciding what they need in the first place, that help them customise the solution just right for themselves, that help them get the solution up and running and that provide support long after the solution has been implemented, perhaÜps even after any warranty has exprired. This is all part of the move towards the service dominant logic view of marketing.

    Sadly, far to many vendors have only moved to solution selling because out and out product selling has stopped working. But many of the vendors still don’t really care about their customers, still don’t really want to support customers after the ‘sale’ is over and still want paying for everything they do after the sale, rather than supporting customers as customers expect.

    Having just finished a year-long stint as Interim Head of CRM for an automotive bank, I can honestly say that not a single vendor who contacted me during this time was capable of, or interested in providing this sort of Solution PLUS type of approach. And as King Customer, not a single one of them successfully passed through the bank’s doors as a result.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  2. Graham – I think you are spot on and the move to solution selling is a bigger debate.

    Issue 1: What is solution selling?

    To me, it means identify a common problem shared by many, helping that customer figure out a best-practices based way to them to solving (including: how to get funding, how to staff it, governance, etc), regardless if that vendor has something to sell for all of those piece parts.

    This approach requires deep thinking, and in most cases what I see are really just packaging efforts. For example, a multi billion dollar software firm this year committed to Wall Street it would change its GTM model to be more of a targeted account, solution selling model to help stimulate growth. What they did was create 16 “solution bundles” of their 1200 products. To me, this is just redefining the products, not really working on solutions with customers.

    Issue 2: What is customer-centered?

    To me, it means finding out what problems your customers have, what their informational challenges are, and building the right mix of resources to met them. If that means creating more flexible relationships, so be it. If it means having more customization in product, so be it. Work backwards from what your customers will value, and then figure out the best way to provide that cost-effectively.

    In practice though, customer-centered really just means “lets find a combination of words to throw at them so it sounds like we know what they care about”.

    Issue 3: What is a relationship?

    Graham, I tell you, if I hear “we want our sales people to be trusted advisors” one more time; I might have to jump off a bridge. It takes a tremendous amount of investment to architect an ongoing “trusted advisor” relationship. In most cases, that level of relationship is not even warranted for what’s being sold. We’ve actually identified 4 relationship type profiles and associated go-to-market models. (I am going to write a blog entry on this, so I’ll link it here). Corporate Executive Board’s Sales Leadership Council is studying sales models. They too have found most solution-selling programs are really just raising the cost of sales, rather than contributing to any real growth.

    These are some of the reasons which led us to create these 7 rules to begin with. Frankly, what is going on is that companies are not strategically responding to the changing market conditions and just haphazardly reacting. No real thought is given to what the go-to-market model should look like and as such, you get the result of shoddy planning – poor results.

    Scott Santucci

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