The paradigm shift in selling focus
By Rod Griffith
April 24, 2014
The Technology Selling Years
My first job out of college in the early 1980s was with an information technology manufacturer and systems integrator. We resold IBM Series 1 computer systems along with our own peripherals, focusing on industrial and manufacturing markets. In those days, the sales focus was very simple: explain and sell the technology by focusing on its technical features and benefits. We called it “moving iron” in those days. And we moved a lot of iron. In fact, most everyone did. The computer industry was booming, margins on the hardware were huge, and customers were lining up to place orders. We were too young (or perhaps just too busy) to realize it wasn’t going to last forever.
This was long before the Web, of course, so customers were hungry for information and education on new technologies that could help them solve critical business and productivity issues. Technology innovations were happening at a rapid rate—and with each new product or version release, performance speeds and features would constantly leapfrog amongst offerings from competing vendors. One day, you could have the leading product on the market. But the next day, your competitor has released a product that performs three times faster—at 20% of the cost.
The Solution Selling Years
By the end of the 1980s, I was working for a major computer and IT systems manufacturer. It was clear to us that focusing on selling the computer technology and its features/benefits was not going to work anymore. While technical innovations were still occurring, the differences between competitive products were less distinctive. Besides, when a computer could perform a function that took 1/100th of a second, what did it matter that the new version could perform that same function in 1/500th of a second? It still looked instantaneous to the human eye. The leapfrog in performance was still there—but the benefit to the customer wasn’t as clear and obvious.
Customers just weren’t as interested in the technical specifications (“speeds and feeds”) anymore. They wanted complete, turnkey solutions with obvious business benefits—not just technology. We quickly began to retrain our sales force to focus on Solution Selling by identifying the customer’s most pressing problems and challenges, and then proposing the ideal solution to those challenges. This enforced the need to partner with software developers and other technology companies in order to provide a complete solution. It also represented a huge growth opportunity for the Services organization (which grew significantly during the next decade).
Welcome to the Strategic Value Selling Years
The Solution Selling approach has been dominant over the past 15 years in most all technology industries. But some key factors are causing a new paradigm shift:
- The changing decision-maker profile: More and more business organizations and executives are taking key roles in the decision to purchase technology solutions. In fact, IDC estimates that by 2016, 80% of new IT investments will directly involve Line of Business (LOB) executives, with LOBs taking the lead decision-maker role in half or more of those investments.
- The informed technology-savvy customer: With access to a massive array of information, reports, testimonials, articles and benchmark data—all available at one’s fingertips—today’s decision makers are able to become far more educated, informed and tech savvy before they ever have a need or desire to interact with a sales person. This means that today’s traditional lead generation efforts are often delivering leads to the sales force that are premature, and the sales people end up unable to gain the customer’s mindshare. (Look for a future blog article here on this topic.)
- The differentiation challenge: Today’s technology solutions are more difficult to differentiate quickly and effectively. Upgrades in technology rarely create the performance leapfrogs and huge customer benefit improvements they once did. They tend to be subtle or incremental, and not so easy to communicate in simple, brief language.
- Vendor/supplier consolidation: In an effort to reduce costs, companies are looking to simplify their supply chain through a process of vendor/supplier consolidation. Their goal is to reduce their vendor/supplier lists to only those vendors who provide strategic value and insight as trusted partners and advisors—not just product or service vendors. And, having competitive products or solutions sometimes is not enough in today’s market. To be maintained as an approved vendor, you have to show strategic value and insight that helps the company accelerate its ability to reach their strategic business goals.
The new selling approach model is thus Strategic Value Selling . The industry may eventually give it different nomenclature (“Insight Selling”, “Relationship Selling”, etc.) – but the net effect is the same. Customers are looking to build stronger, deeper collaboration with a smaller, more tightly-held team of supplier partners who provide strategic value and insight—insight that will, in turn, better allow them to become a more strategic trusted partner to their own customers.
Today’s marketers have to help their company understand and transition to this new paradigm in selling focus. I’ll discuss some of the steps you can begin to take to ready your organization for this new paradigm shift in an upcoming blog article.