A Genetic Cure for Ailing B2B Sales

By Robert White December 2014

On the radio today the medics were describing a major breakthrough in the treatment of cancer. Instead of searching for conventional drugs which are expensive in time and money, they’re genetically modifying the patient’s own cells to go hunt down and kill the cancer cells. Early trials are indicating a better than 80% success rate.

This is not 'thinking outside the box' – this is a new box.

I think B2B Sales needs a 'new box’. Why? Because, despite billions spent on sales training, the same issues continue to recur:

• Though our strategy is sound – we are disappointed with the rate of profit growth and ROI
• Sales cycles are longer and deals are, on average, smaller than anticipated
• Renewal margins are being squeezed and bids ending in ‘no customer action’ are increasing
• Although we set out our ‘value’ the customer always defaults to ‘price’
• More deals are being discounted, discounts are getting bigger and Sales forecasts are more volatile
• The percentage of sales teams that don’t cover their costs is rising and a small percentage of the sales team delivers most of the revenue.

Our customers come to the market to increase their profits by having us solve their problems. They hesitate to buy because they cannot clearly see how to convert the ‘cost’ of our solution in to ‘additional profit’ for themselves – and we’re doing a poor job of helping them deal with this uncertainty.

Uncertainty sometimes slows or defeats the customer’s ability to make decisions. Here’s why:

• Customers usually have no quality way to make complex value based decisions and can’t place a financial value on what we are selling.
• They may not fully understand the organizational ‘Change’ required to convert ‘cost’ into ‘net profit’ – this leads to fear of ‘Change’ because ‘Change’ done badly can lose you money and sometimes your job.
• They may have no way of knowing if they are succeeding – until they have or have not.
• They believe that they understand Price. We don’t help them to understand Customer Value (additional net profit to them) and so commercial negotiations default to Price and hence commoditization.
• Most solution sellers can quantify less than 10% of their Customer Value. (source Lucidus ltd)

These things don’t go away because we are not properly addressing our customers’ fundamental needs and concerns and this drives us around the loop of continuing to seek solutions within the confines (and comfort?) of our current ’box’.

There are only two reasons for this:

• We have insufficient net customer profit to sell and/or;
• Our sales teams are unable to show customers the additional net profit that will flow from their solutions.

Very often, the sales team is blamed for poor sales when, in fact, the true problem lies in a lack of ‘value’ definition, tools and skills – and it’s someone else’s job to provide these.

The solution to this state of affairs requires a radical change of thinking not just for Sales but for the whole of our organisations – hence the need for a 'new box’.

I believe we need to re-equip our Sales Teams with these capabilities:

• Remove customer ‘uncertainty’ by making Customer Value (Net profit delivered to, and agreed by, our Customers) clear and easily understood by both our Sales Teams and customers.
• Equip our sales teams with the ability to provide potential customers with:
  • The means to place a monetary value (net profit) on what we are selling
  • The means to have our customers understand, challenge, change and own the net profit figure
  • The means to have our customers understand the extent of ‘Change’ required and associated financial implications
  • The ability, and therefore confidence, to change safely i.e. show them how to change if needed
  • The means to track progress (value delivered and at risk) and to foresee and rectify problems

In so doing we give our potential customers a quality way to make complex buying decisions based on the net profit they will receive not the price they will pay.

It is possible to achieve these things and early results are showing that they can deliver a step change in Sales performance (triple digit profit growth across a number of sectors). But be in no doubt, this is a radical change and requires strong, clear and sustained leadership to bring it about.

“Change before you have to” Jack Welch

Robert White