Week 46 – Strategy – Chapter 12
The model we’ve discussed last week is clear, now the question is: How can you as a sales organization be successful in the various business fields? In other words: What strategy is best for a pinpoint approach to your customer, bearing in mind that each field requires individual solutions?
How should your sales organization be structured to have the best possible chances of success? With this question in mind, I would like to return to the model introduced last week and offer some additional thoughts concerning the best individual strategy.
Selling on a Simple Model
In the bottom left-hand corner you see the strategy entitled “Lowest Price.” But remember: A good price alone is not enough. Let’s say Aldi has the best prices for every product in a given food category. If a different provider offered butter or milk consistently at a cheaper price, Aldi would go out of business.
In this business field only the price counts, because the customer knows what he wants and is quick to switch suppliers according to his needs. Closeness is not an important factor. In this division you find all manner of calls for tender, which the customer sends out to a large number of potential suppliers.
Do you wish to be successful in this field? Then you can stop reading right now, since the recipe for success here has nothing to do with sales but everything to do with efficient organization. Do you plan to keep reading? Then you might be interested in knowing how customers can be moved from this category to another. I’ll get to that in a bit.
At the top left-hand corner you see the strategy “Best Relationship.” Here it’s about serving clients who are willing to pay more because they expect emotional recognition from it; in other words, things like well-being, closeness, and brand loyalty. Put another way, what counts here is the best customer relationship. In B2B sales, this field is coming under increasing pressure. Salespeople fall more and more into the trap of the professional buyer, who feigns closeness, when in fact, it’s really a question of price.
If you’re looking to succeed in this category, your motto should be: Business is between people. The focus is preferences, fears, and desires. Those who offer the best price, on the other hand, are spared the effort of seeking the best customer relationship.
On the bottom right you find the quintessentially disliked sales professional: aggressive, ruthless, and lacking any genuine interest in the customer. Here the strategy is to bring about a decision with every customer contact. This field is also where you encounter fraudulent financial transactions, namely those in which the salesperson creates unnecessary pressure in order to push poorly informed customers toward decisions.
In B2B sales this category pertains to markets in which the customer is badly informed, but has no interest in closer relations. This is partly due to the fact that here purchasing decisions are always made anew, and this amid fierce competition and low switching costs. This would include energy and telecoms providers.
Sales organizations that focus on this category should make sure they do not disclose too much know-how about the product and its effects to the customer. Otherwise, the customer can easily shift into the “Lowest Price” category.
The top right-hand corner is the consulting field, corresponding to the strategy “Best Solution.” Here you meet customers with little know-how and a great need for closeness, who seek a solution. They require a modification, guidance, a complex product or a service, but are not able to define them beyond a certain point. Or they can name the problem or a desired effect, but cannot define the requisite quality of a product or service.
But be careful: In this category do not present the customer with a rushed or cost-free solution, because then there is the danger that the customer will move from an “I have no idea” mode to a “Now I know what I want” mode. This would mean a shift to the left in the model, at which point the strategy would have to be recast as “Best Solution.”
As you can see, some approaches in the four categories complement each other, while others are mutually exclusive. You can combine contiguous strategies very effectively. As a sales organization, for example, you can offer both the “Best Relationship” and the “Best Solution.”
The combination “Best Relationship” and “Force Through” does not work, however. You will know the reason for this from personal relationships: Is it possible to have a good relationship and at the same time force your objectives through at every turn? Certainly not. Nor does the other diagonal combination “Best Solution” and “Lowest Price” lead you anywhere—except perhaps into bankruptcy.