Today's post is by Jason Jordan, a founding partner of Vantage Point Performance, a global sales management training and development firm, and co-author of Cracking the Sales Management Code. Jordan is a recognized thought leader in the domain of B2B sales and teaches sales and sales management at the University of Virginia’s Darden Graduate School of Business.
The role of a salesperson has always been fundamentally the same – to create value for customers.
The nature of that “value” has changed over time – from a distribution channel in the 1800s, to a source of information in the 1900s, to a problem-solver in the 2000s. And, no matter how the profession of selling develops in the 21st century, a salesperson’s role will always be to provide some unique value for their customer – or else the buyer will find another vendor with which to transact at a lower cost.
Communicators of Value?
Therefore, it was no surprise to find that salespeople in our various studies of world-class sales forces were creating tremendous value for their customers. What did strike us, though, was the sales forces’ diligence in communicating value to their customers. No, they were not communicating the value of their products and services to their customers – that task has been largely overtaken by the Internet. These world-class salespeople were extremely adept at communicating their own value as a seller.
Lest you think these were sales forces populated by braggarts and blowhards, they were, in fact, salespeople who were able to express – in concrete financial terms – the value they had created for their customers. They were essentially business consultants who were able to uncover opportunities, bring them to life, then measure and (most importantly) report the customer’s realized return on investment. They created real monetary improvements for the customer and were not afraid to point this out.
Three Conversations of Varying Impact
Many salespeople mistakenly assume that prospects will connect the dots – from buying their company’s products to realizing future financial returns. They say things like, “This product has been proven to save money for all of our customers who use it.” However, prospects are not experts at taking a generic claim and applying it to their specific situation. All they hear is, “The product you are selling has saved money for some other people.”
Better salespeople will actually do the math for the prospect and make a more tactile statement, such as, “Based on your historical usage, switching to our product will save your organization $213,432 each year in reduced rework.” In this instance, the prospect hears, “There’s a chance that, if I trust this salesperson, I might actually save two hundred grand and beat my cost projections for the year.” A better sales approach indeed.
But the top-tier sales forces we studied had conversations like this: “Last year, we projected that using our products would save you $213,432. But, in fact, we saved you $343,238, according to your plant managers whom we recently interviewed.” In this case, the customer has no choice but to appreciate what the salesperson has done – created value that would not have been realized without the salesperson’s help.
Which of these three salespeople would gain your loyalty?
One Process Worth $1 Billion
It is important to note the sales forces we studied were not staffed with CPAs and PhDs – their salespeople were math mortals like the rest of us. However, sales leadership had equipped their sellers with sophisticated processes and tools that helped them calculate and communicate the financial returns their customers were receiving. They eliminated the chance that the first two conversations could take place in the field, implementing systems to ensure that the third conversation was standard practice.
One of the sales forces went so far as to trademark a sales process that helped them demonstrate the impact on their manufacturing customers’ bottom lines. Salespeople use a computer application to calculate the value created for their customers through reduced maintenance costs, increased productivity, and other means. They work with local plant managers to identify the specific sources of improvement and to quantify the economic impact of the changes. They then document the impact and obtain sign-off from the plant managers as proof that the value was realized.
The vice president of strategic accounts described the system’s impact on customer relationships in this way: “Too often, customers simply do not remember all the good things that you do. Through this process we have documented over a billion dollars’ worth of savings for our customers. It is fun to go into a customer and say, ‘You bought $200,000 last year from us, but we saved you $85,000 in your plant.’ That takes the sting off of a 3 percent or 4 percent price increase – or a competitive offer that might be a few points better than ours. It allows us to clearly convey to the customer, in terms the customer understands, what we are doing for them.”
The Takeaway for Sales Leaders
The lesson from our studies of world-class sales forces is this: it is not enough to promise or even to create value for your customers. You must demonstrate to the customer that your salespeople are creating explicit economic value that demands their patronage and loyalty. It’s one thing to say you offer value. It’s slightly more convincing to quantify the value you offer. Yet the most powerful sales pitch you will ever make is to point backward in time and prove that you actually delivered as you said you would.