What is the typical sales model, and why does it need to change” to what?
Most people won’t know too much about the history of selling, and that includes a lot of sales people. Why would they bother to find out? Everybody knows selling is simple, right? Find a prospect, pitch the benefits and the price, ask for the order, and when that doesn’t work, do it again. That’s the typical sales model.
Well, that is the way most sales people think of their job, and its certainly the way the beancounters they work for think it happens. Sales people who aren’t successful fail because they don’t have what it takes, or don’t work hard enough. That’s the accepted wisdom about selling, and it hasn’t evolved since the early days of the Industrial Revolution.
But this is wrong, and getting more wrong everyday as customers get smarter and better informed.
Building a product and sending out sales people to knock on doors, without a detailed understanding of customer influences used to work, but doesn’t anymore.
We’ve recently been involved in a business development project which offers an ideal case study. It shows how those who don’t really understand sales can cause themselves, and others, a lot of heartache when assuming they do.
This was a research and development project, funded by the government, and resourced by some of the top research organisations – scientists and engineers. More than £1 million investment by the public purse in developing a technology which doesn’t exist elsewhere sounds pretty exciting. Even more so, when the target is a medical device for use with neurological diseases. This has to be a very big market – global – with plenty of money.
The project was the brainchild of a young, hotshot engineer, newly equipped with his PHd in biomechanics. Apparently he’d found a way of diagnosing a neurological disease by analysing handwriting. The product would be a hardware device, attached to a computer, with software to analyse the handwriting of those thought to be suffering from the disease. Every neurologist would want one. There are 40,000 in Europe and many, many more in the rest of the developed world. A unit price of £5000, plus ongoing maintenance fees, made a very attractive business plan. The project proposal included a plan for turning the investment in research into a commercial success for the SMEs involved in the consortium.
The marketing, sales and distribution – sales operations – would be simple. Once the device had completed clinical trials a sales team would take over and sell the product and services direct to neurologists in hospitals. Target customers would be easy to find – every large hospital has a Neurology department. The sales pitch would be simple – this is a unique device and will help you achieve a more accurate diagnosis for patients. All the sales team would need to do would be make appointments, explain the benefits, and ask for the order.
Simple. Who wouldn’t want a piece of this particular opportunity?
Well, actually we didn’t. Much to the displeasure of the hotshot. His entire business concept was under threat when we decided his plan wasn’t going to work. He’d rather continue fooling himself, and his business partners, than recognise the limitations of his plan. He didn’t agree with us, of course. He knew how to sell the new product and wouldn’t be needing our help anyway.
Why didn’t we want anything to do with it?
We did, in the beginning.
It all sounded very exciting, until we started to develop the sales strategy. Who would pay how much for this product and why? That’s when it got complicated.
No amount of marketing, no number of cold calls, no quantity of sales presentations, would ever get this product sold, at any price. Calling on neurologists, showing them this shiny new toy and asking for the order would be a disaster.
Why, you may well ask?
Clinicians in hospitals don’t buy stuff. They’ll obviously decide what they want, but have to ask the administrators to buy it for them. Those administrators want to know what’s the business case. What will the neurologist do differently, enabled by the new tool? How much will it save? How much will it improve patient care? How does this requirement compare with all the other spend requests from all the other clinicians, in terms of cost benefit?
It turns out nothing about the patient care will change. There will be no savings, and no improvements in healthcare provided. And no administrator is going to spend on that.
Even worse. Even though there’s no business case for this product, there is a whole slew of competition, from new ideas in development. These are closer to market ready, provided by highly credible organisations with established reputations in the sector, and available to the user at zero cost, or close to it.
The hotshot engineer thinks he knows all about selling – like a lot of people who really understand very little about the noble art. But he’s going to find out how not to do it, the hard way – knocking on doors, showing people his product, explaining the features and benefits, and asking for the order.
Because he’ll be selling the wrong product to the wrong people with wrong ideas about why they should buy it.
Why doesn’t the traditional approach to selling and sales management work so well any more? What can the modern sales professional do to stay relevant in today’s customer driven markets? Check out our eBook Reengineering Sales Management for ideas on how to embrace the new order of customer driven buyer/seller relationships.
