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Sales Method

Demand Creation Selling for digital innovations.

Demand Creation Selling is a method. Sales professionals who engage in the high-value, high-touch sell know how hard it is for a product or service to be truly differentiated. Usually, the reality is this: it's not what you sell, it's how you sell it. And what determines the how is the sales method.

For new innovations, often incomplete or even conceptual, you cannot rely on the buyside defining the purchase process alone. There has to be a proactive intervention from the sellside. This applies equally to external and internal would-be customers alike - regardless of whether you are a startup venture, or a spinout venture, formed (or to be formed) out of an existing enterprise.

For the high-value, high-touch sell, it is the norm to see sales professionals competing for business through responding to Request for Proposal (RFP) documents, issued by buyers from afar. This is usually with no input from the seller or where the RFP is 'wired' to a particular supplier, or clearly favours a specific class of suppliers. This is a risky place to be for the sellside!

The assumption here is that, in specifying the requirements for a given solution, the buyer knows all, and the seller simply responds in a mechanical, arm's length way. This is Demand Fulfilment Selling: the solution is well-understood, and the buyer knows all - but clearly, this approach is wholly inappropriate for new, innovative products and services.

Apply Two Rules

Business innovators should operate with two rules from day one:

#1. You are not your customer. However passionate you are about your product or service, always remember that customers are the only people who can validate your Value Proposition.

#2. Customers are the best investors. Whilst financial investors (VCs, et al) may be an inevitable part of the mix in your venture, large medium or small customers are always the best investors.

So, what follows these rules are big questions: 

How do you win early adopter customers when you don’t have your product or service fully built - or maybe, not even available in an alpha or beta state?

How do you win new customers to an established product or service, where you do not have a clear or obvious product or service feature as a differentiator?

The answer to these questions is Demand Creation Selling.

This means applying a sales method that enables you to win customers in advance of completing (or even creating) your new Value Proposition, or engaging new customers in considering your established Value Proposition, ahead of a commodity-style procurement contest. This is the opposite of Demand Fulfilment Selling, and is explained further below.

Stop Demand Fulfilment Selling

Demand Fulfilment Selling has its place: for mature products and services that are well-defined and well-understood by the buyer and where the seller cannot differentiate - even by the way in which they engage with the buyer. In these situations, even a high-cost deal may require an experienced Account Manager to manage the process: firstly, make sure they identify all relevant Request For Proposals (RFPs) - and their precursors, the Request for Information (RFI), or similar - e.g. the Pre-Qualification Questionnaire (PQQ). Secondly, to manage the bid response, often coordinating colleagues and early, in what is a highly-prescriptive procurement-led process, identifying any issues that might suggest declining to bid. But this is not appropriate for high-value or new innovations.

The RFP response is wholly unsuitable for buying and selling innovation. Even where regulatory rules mandate formal, 'open' procurement processes (such as government), the RFP assumes buyer knows all and that all requirements can be prescribed in published words and diagrams, inviting prospective suppliers to submit a written response against a deadline. Often this means that the buyer decides, based on a kind of scoring system, with 'weighting' applied to each response to a question or statement created by the buyer. It's mechanical and prevents the seller from challenging or enhancing the buyer's Basis of Decision - which is inherently key to any new innovation.

In Demand Fulfilment Selling it is difficult for the seller to add value, above and beyond, the perceptions and understanding of the buyer, from afar. In the RFP-driven response, tech firms are really selling a commodity solution: products and/or services that are well-defined, undifferentiated, and serving a well-defined buyer's need or problem. In these situations, it does not require highly-paid sales professionals, but the hiring and deployment of Account Managers, supported by bid managers and pre-sales tech staff.

Start Demand Creation Selling

For new innovations and high-value solutions, the buyer does not know all. Despite the power of online information, the seller of such solutions invariably needs to educate the buyer, in order to achieve a true, in-depth understanding of the potential fit of a new, initially unknown solution to a defined problem. This is Demand Creation Selling: the proactive, early intervention of the seller with the prospective early adopter buyer.

Since we are focusing on selling new innovations and high-value solutions here, the first challenge is always lead generation: how can we create opportunities with target early adopter buyers who will become highly-referenceable success stories for future sales? This goes right to the heart of defining who represents and what defines the right type of sales professional in a successful proactive Demand Creation Selling mode. It also asks the question: what is the right sales method to underpin Demand Creation Selling as a structured process?

When hiring or coaching sales professionals in the art and science of Demand Creation Selling, hiring managers should pay more attention to generic human attributes and worry less about the candidate's specific industry segment background. For innovators, this classic mistake of focusing on a narrow niche industry background is particularly evident with financial services and government markets. Yes, these industries have their own cultures, language and styles: but these things can be rapidly learned - but the basic DNA of Demand Creation Selling cannot be created - only enhanced in each sales professional.

So, what is the basic DNA of a Demand Creation Selling sales professional? The answer is: the ability to generate receptivity, rapport and trust with senior executives. As with early adopter buyers, it is also essential that candidates for the seller role possess characteristics consistent with people who are likely to generate a high Need For Cognition (NFC) Score: a topic expanded upon below.

From a process perspective, Demand Creation Selling has three, easy-to-remember steps: PiercePoint; ProofPoint; and, DecisionPoint. Let's define each of these steps as a sales method:

#1. PiercePoint
Creating a compelling message that resonates with an empowered, but hard-to-reach decision-maker. This is simply a focus on effective lead generation from a cold start: make the Value Proposition stand out in words and pictures.

#2. ProofPoint
Having aroused the interest of an empowered decision-maker with a PiercePoint message, the ProofPoint becomes the validation of claims made. This is where Mutual Value Discovery and Interactive Decisioning Tools come into play.

#3. DecisionPoint
When engaging a buyer in Mutual Value Discovery workshops, with meaningful Interactive Decisioning Tools, the seller achieves sufficient rapport, receptivity and trust to understand the path, people and politics towards a timely win.

Whilst the PiercePoint message is all about creating communications that resonate with hard-to-reach, empowered buyers, the ProofPoint validation of such as message must be built on a solid foundation of buyer-seller interactions and conversations. This is where a Mutual Value Discovery and a set of Interactive Decisioning Tools become key to ultimate success: winning timely business at the DecisionPoint.

Engage in Mutual Value Discovery

As the name implies, Mutual Value Discovery is all about bringing buyers and sellers together in open communications: the antithesis of the arm's length procurement process, which is driven by responses to the RFP. Easy to say, hard to do. This requires both buyer and seller to embrace Design Thinking: as the term implies - act and think like a designer.

What matters here is the psychographic profile of would-be customers and their empowered decision-makers. This requires a focus on the Need For Cognition (NFC). The NFC Scale is an assessment instrument that quantitatively measures "the tendency for an individual to engage in and enjoy thinking." (Cacioppo & Petty, 1982, p. 116).

The seller of new innovations and high-value solutions must recognise the early adopter customer: buyers who would exhibit a high NFC Score. If you are selling into government, this is especially challenging and for two reasons: (a) regulatory rules insist on formal procurements being applied; and, (b) the culture of public sector decision-makers is highly risk-averse and often exhibit a low NFC Score. This may equally apply to risk-averse decision-makers and cultures within large commercial enterprises too.

So, the PiercePoint marketing activities must enable filtering here: eliciting responses from early adopters, based on their true personal behaviours and inquisitive character.

Early adopters, as buyers of new innovations and high-value solutions need to embrace Design Thinking: having the potential for a high NFC Score and being inherently inquisitive and open to new ideas.

Mutual Value Discovery only works with buyers who are inherently, true early adopters. This means Design Thinking has to be at the centre of the human characteristics of both buyer and seller. Design Thinking is a state of mind, where a high NFC Score is likely. This translates into human characteristics and behaviours that enable innovation - inquisitiveness, empathy, cooperation, experimentalism and optimism.

So, how can you recognise target buyer who likely have a high NFS Score, from afar?

The answer lies in creating PiercePoint messages that will draw out a response, and therefore interaction, with a target buyer who exhibits a high NFC Score. In practice, this means creating social media and email marketing communications that invite would-be buyers into a problem-solving situation: a game, a puzzle, a questionnaire, a ROI Calculator, and so forth.

But the key point here is buyer self-interest - always making this stimulating and useful for the target decision-maker - regardless of whether they engage in the ProofPoint validation as a subsequent Mutual Value Discovery, or not.

Create Minimum Viable Propositions

Even if the target customer has a regulatory obligation or unbending corporate policy to apply formal procurement processes, the Mutual Value Discovery is, at the very least, a great way to open up a buyer's mind to something new.

In many cases, engaging in a Mutual Value Discovery will eliminate competition altogether: especially if the Value Proposition is 'modularised'. This means that even if the problem being solved is large the corresponding solution should be broken down into the equivalent of a series of Minimum Viable Propositions.

A Minimum Viable Proposition - as in a Minimum Viable Product - is simply is a product/service with just enough features to validate commitment to its continued development. In practical terms, this means that the Value Proposition becomes a series of Minimum Viable Propositions, delivered in a sequence of steps, and enabling the buyer to make a set of smaller decisions, faster.

At the heart of each Minimum Viable Proposition should be a commitment to an Agile approach to engagement in each step of the Mutual Value Discovery work: creating measurable value outcomes from each small step - typically, a Sprint of say 1-2 weeks duration in terms of solution development and/or implementation. This means translating each Sprint into a set of financial advantages, using ROI Modelling to achieve tangible numbers to ease decisioning at each stage of buyer commitment.

Enable ROI Modelling

If you create a powerful PiercePoint and identify would-be early adopter customers who exhibit strong Design Thinking behaviours, then you will find that an open, collaborative approach to the buyer-seller engagement will follow. In turn, this should lead to a solid quantification of Deal Value and Close Date for a win in a ProofPoint, executed via Mutual Value Discovery sessions.

By applying a rigorous ROI Model and quantifying Deal Value, and the Cost of Delay or Cost of Doing Nothing, you have, at least, achieved a strong ProofPoint. Now you need to focus hard on the third principle of Demand Creation Selling: the DecisionPoint.

Through building sufficient rapport, receptivity and trust in a Mutual Value Discovery engagement with a would-be buyer, you will learn how to navigate the path, people and politics of the buyer organisation – because the decision-maker will guide you to this DecisionPoint. Why? Because they will win as much as you, from creating and quantifying value co-creation.

The Mutual Value Discovery should set-out to provide the buyer with a clear business case for acquiring the Value Proposition, phased as a series of Minimum Viable Propositions, but where each step has a clear set of financials to support decisioning at each stage of commitment from the buyer.

Unlike established products and services, the buyer does not know all and you will have to educate them in how your new solution solves a particular problem that ranks high on their list of Compelling Needs. This must be based on a Return on Investment (ROI) Model, as a solid foundation for converting a PiercePoint claim into a ProofPoint validation. Crucially, it must have a strong argument set against the Cost of Delay and the Cost of Doing Nothing.

The ROI Model should be built on an initial analysis of Current State ('as is'), in order to explore and calculate Future State ('to be') advantages. This becomes a quantification or scoring of both an Economic Basis of Decision and an Emotional Basis of Decision - with/without each Minimum Viable Proposition phase.

Utilise Interactive Decisioning Tools

Of course, a timely deal with an early adopter customer is crucial, as is the need to achieve the right gross margin from the Deal Value. By calculating and agreeing the ROI with the early adopter customer, a quantified Deal Value makes it easy for the buyer to justify investment and counter discounting. Equally, a Cost of Delay and/or Cost of Doing Nothing counters deal slippage at the DecisionPoint for the seller.

ROI Modelling comes to life when the comparisons of Current State ('as is') with one or more Future State ('to be') scenarios is communicated via stimulating tools and dashboards. At its most basic level, an Excel spreadsheet or Google Sheet may be considered an Interactive Decisioning Tool, where buyer and seller can work through a quantification of business value, and agree the metrics for the Economic Basis of Decision and Emotional Basis of Decision.

A more advanced form of Interactive Decisioning Tools is applying a set of Web-based ROI Calculators, published on either a public Website for generic use as PiercePoint communications, and/or, as a private Microsite for more confidential ProofPoint engagements. Tools where spreadsheet-like functionality is blended with strong features for collaboration, can also enable what-if ROI Modelling, and facilitate collaboration between buyer and seller.

The ultimate approach with Interactive Decisioning Tools is to embed the ROI Model and Calculators inside Salesforce as an integrated CRM solution that includes 'Community User' extensions for buyer, in addition to 'Full User' subscription for the seller.

This is where sales forecasting becomes truly collaborative: the Deal Value (Amount) and Close Date generated by the ROI Calculator in Mutual Value Discovery sessions is only entered into the CRM system when the buyer validates and approves the numbers. This will have a dramatic effect on the reliability of sales forecasting, in addition to enabling buyers and sellers to determine win-win outcomes with new tech innovations.

Summary

The Demand Creation Selling method enables sellers to better educate buyers - and, in turn, enables buyers to build better cases for investing in new innovations. Underpinning all of this is: Design Thinking; Mutual Value Discovery; and, Interactive Decisioning Tools.

Design Thinking is the DNA of the early adopter buyer of tech innovations: inquisitiveness, empathy, cooperation, experimentalism and optimism. 

Mutual Value Discovery requires buyers to exhibit behaviours consistent with a high Need For Cognition (NFS) Score: individuals who engage in and enjoy thinking and problem-solving.

Interactive Decisioning Tools are simply spreadsheet, Web or CRM technologies that enable buyer-validated sales forecasting: underpinned by Design Thinking and Mutual Value Discovery.

Coaching and Mentoring

Demand Creation Selling is available as a series of highly-tailored Coaching and Mentoring Workshops led by Ian Smith, the founder of Being Guided. Contact us for more information.

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