The good salesperson focuses on solutions, not just prices, writes NICK SHANAGHER
There is a story about when Sam Walton crunched some numbers and found that Wal-Mart did more business with Procter & Gamble (P&G) than the country of Japan did. His response was to insist that P&G invested in a team to support his company. P&G agreed.
This story is relevant to wholesaling today because the suspicion that lingers is that big manufacturers always put their best sales teams on the multiples’ grocery accounts, and leave the wholesale channel with the average and the rookies. At top-level industry get-togethers, a better sales relationship is near the top of the wholesalers’ wish list.
The wish list may be correct but the proposition could be slightly off the mark, new research by consultant CEB suggests. The findings are brilliantly presented in a book, The Challenger Sale, which unlike generalist business books, such as Drive by Dan Pink, details exactly what makes a successful sale today.
Matthew Dixon, who co-authored the book with Brent Adamson, worked with CEB’s customer base – billion dollar-plus business-to-business companies – to analyse their operations after the market crash in 2008, when a lot of business simply stopped. What the sales directors wanted to find out was what the one in five successful salespeople were doing right so they could teach the others.
The fact that he was not searching for a new category of salesperson – the challenger – makes Dixon’s evidence more compelling. Understanding the findings helps to explain what comes after selling solutions and his ideas have been enthusiastically endorsed by Neil Rackham, the author of SPIN selling.
The strategy of asking customers what keeps them up at night and then providing a solution is increasingly less effective. There are three problems, says Dixon. First, every salesperson uses the technique. Second, if customers don’t know what they need, no amount of questioning will get the solution to spring forward.
Third, it is really hard for salespeople to customise what they are selling to what customers have said.
What works better is when salespeople turn up with a set of insights that help them to explain the opportunity that the customer should value – an opportunity for which they have a unique solution.
This is the challenger sale and a brilliant example from company WW Grainger is included in the book.
But is this the solution that wholesalers are searching for?
“The reality is that what a salesperson does runs the gamut from transactional sales that are purely price-based to solution sales, such as partnerships,” says Dixon. “When companies think about what they do, there is an important question: do we just sell a product or do we actually sell a solution?”
This analysis of sales requirements may provide a better understanding of what type of relationships wholesalers want with their manufacturer suppliers (and also when they sell to retailers and foodservice outlets).
If it is price, then you need people who will work long hours and stick to a process. But if you want to do more than just sell a product to put on the shelf, if you want to sell a service to help your customers manage their businesses and to think about logistics or category management, and if you want this to extend over multiple years, then you need to disrupt the way the customers currently do things, says Dixon.
“If what you are talking about is a disruptive solution – stop buying from these guys, start buying from us, except don’t just buy product from us but let’s partner for three years, where we also help you with category management and all these sorts of things – it’s a big risky partnership to strike with a supplier, so they are immediately thinking about how hard it is going to be
to do that.
“You’ve got to make them feel like that although it’s painful, it is much less painful than doing what they’re doing right now, which is just costing them time, costing them money, and costing them customers, market share or whatever it is. “The customer’s got to go through that calculus and that’s why challengers win because they create that tension and they can help disrupt customers’ current mindsets about how they manage their businesses.”
Think about it a different way. You have a customer who is chasing a penny off. If you provide this, help them out, get them the discounts they need and extend promotions beyond the expiry day, what do you get? You get a good relationship.
“But the reality is that a relationship built only on responsiveness and being a nice guy is only as good as the next cheapest competitor who comes along offering to sell a crate of whatever at a penny less,” says Dixon.
“The real thing that generates loyalty is the ability of salespeople to come in and deliver unique insight that helps the customer think differently. Every time you sit down with these people, they teach you new things about how to manage your business more efficiently, how to make money, how to grab market share, and how to engage customers in different ways. “Think about that as worth more than the penny off the crate that you might get from the next guy who is not teaching you anything, just offering you a cheaper crate of goods.”