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Design Thinking In Sales

Enabling proactive engagements between buyer and seller.

 

Ian H Smith

I have updated this blog post to add a point about the en masse move by tech firms to hire Sales Enablement Directors/VPs. OK, so there's nothing wrong with Sales Enablement conceptually, but in practice, what bothers me is this becoming an exercise in mechanical process enforcement.

If the core driver for Sales Enablement is increasing sales effectiveness, then defining your best practices and implementing them consistently across different geographic regions makes (common) sense. However, what's really needed is Sales Coaching and Mentoring - underpinned by a Sales Method: as proposed here - Design Thinking in Sales.

A Fundamental Shift

For new, high-value tech or services value propositions, you cannot rely on the buyside defining the purchase process alone. There has to be a proactive intervention from the sellside. New and complex products and services require a significant input from the sellside to the buyside, and cannot be defined by the buyside alone, from afar.

When engaging in the high-value, high-touch sell, waiting for the RFP simply implies that you are selling a commodity - albeit it may be a high-priced commodity, but if it's a high-value solution, buyside-only definitions are inappropriate. Sellers who simply wait for and respond to a mechanical procurement process, through creating wordy proposals in response to a Request For Proposal (RFP) document are engaging in competitive lottery. If the seller has influenced a 'pre-wired' RFP, then this is simply corruption and inherently destroys the principles of an arm's length procurement.

Selling via a response to a RFP is not selling - it's telling.

In this blog post I talk about:

  • Comparing Demand Creation Selling v. Demand Fulfilling Selling.
  • Applying Design Thinking to a Mutual Value Discovery process.
  • Enabling ROI Modelling with Interactive Decisioning Tools.
  • Shifting Sales Forecasting: From Seller to Buyer.

For the high-value, high-touch sell, it is all-to-often the norm to see people, in what should be 'hunting' sales roles, competing for business through the comfort of 'farming' and 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 a specific class of suppliers. This is a risky place to be for innovators and challengers!

The assumption with RFP-led procurements is that, in specifying the requirements for a given solution, the buyer knows all, and the seller simply responds in a mechanical, procedural 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. This is for low-value products and services - even if the price tag is high.

Of course, value and price are very different things, but they get conflated when it comes to new business development in knowledge-intensive tech and services environments. Given the constant pressure of commoditisation within tech industries , it is time to separate the high-value from the high-price business development and sales role.

Let's be clear about 'hunters' v. 'farmers - and where the former, not the latter is needed in selling a high-value challenger solution. 

Apply Two Rules

Knowledge-intensive firms in advertising & digital agencies, aerospace & defence, high tech manufacturing, IT services & software and management consulting should operate by answering two questions:

  1. How do I win early adopter customers (clients) when I don’t have your product or service fully built - since it is either inherent conceptual or at a very early stage of life?
  2. How do I engage new customers with an established, well-defined product or service, where I do not have a clear or obvious product or service feature as a differentiator?

The answer to these two questions is: (1) apply Demand Creation Selling (the 'hunter'); and, (2) apply Demand Fulfilment Selling (the 'farmer'). This blog post is focused on the former: 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, ahead of a commodity-style procurement contest that might follow.

This means avoiding the RFP-based procurement completely (in unregulated commercial markets) and at least at a phase one Proof-of-Concept stage in regulated markets, such as government or utilities). 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 clearly differentiate. In these situations, even a high-cost deal may require an experienced Account Manager to manage the process.

Firstly, an Account Manager can make sure the buyside firm identifies and qualifies all relevant Request For Proposals (RFPs) - and their precursors, the Request for Information (RFI), or similar - e.g. the Pre-Qualification Questionnaire (PQQ). Secondly, the Account Manager (sometimes with a 'Bid Manager') can determine the response, often coordinating colleagues in what is a highly-prescriptive procurement-led process. This leads to identifying any issues that supports either engaging-in or declining to bid. This is not the role of a 'hunter' sales professional.

The RFP response is wholly unsuitable for buying and selling digital 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 with the RFP-based procurement, this means that the buyer decides who wins, 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.

There are many areas of the knowledge-intensive tech industrIes where innovation is low and where expert decision-makers are bypassed. This is where the RFP and a narrow, sometimes biased and IT-centric view of investment is made: e.g. Customer Relationship Management (CRM) or Enterprise Resource Planning (ERP) systems being two notorious examples here. If you compared the capabilities of leading CRM or ERP systems today with those of ten years ago, you would be hard-pressed to see the difference.

For digital innovators, who are delivering something more transformational than a packaged IT system implementation, there is a better way! It's based on the principles of Design Thinking - and it's called Demand Creation Selling.

Start Demand Creation Selling

For new digital innovations and high-value tech 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 known, but often, not well-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 digital innovations and high-value solutions here, the first challenge is always lead generation: how can the buyside create opportunities with target early adopter customers, who will become highly-referenceable success stories for future sales - and avoiding the RFP-style procurement? This question 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. This also asks the question: as a sales method what needs to underpin Demand Creation Selling as an effective, structured process?

When hiring, coaching and mentoring sales professionals in the art and science of Demand Creation Selling, 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 - but only enhanced in each sales professional - through coaching and mentoring.

So, what is the basic DNA of a Demand Creation Selling-oriented sales professional? The answer is: the ability to generate receptivity, rapport and trust with senior executives. As with early adopter customers, 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 (3), 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.

Early adopter customers, as buyers of new innovations and high-value solutions, need to embrace Design Thinking. This means they must have the potential for a high NFC Score and be inherently inquisitive and open to new ideas.

Mutual Value Discovery only works with buyers who are inherently, true early adopter customers. 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 the key 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.

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.

 

Another key point here is agility. Wherever possible, Demand Creation Selling works best when the Basis of Decision is set-out as a series of iterative decisions: smaller, lower in risk - but flow through a journey towards what is, accumulatively, a very big, strategic commitment.

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 smaller, iterative decisions as Minimum Viable Propositions (MVP2s), but where each step has a clear set of financials to support decisioning at each stage of commitment from the buyer.

Unlike established, mature 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 ("EBOD1') and an Emotional Basis of Decision ('EBOD2') - with/without each Minimum Viable Proposition phase.

Shift Sales Forecasting: From Seller to Buyer

When you shift from Demand Fulfilment Selling to Demand Creation Selling you enable the buyer to determine the Deal Value and Close Date - and you can use Interactive Decisioning Tools to make this work in reality. In turn, this allows the Sales Forecast to be completed or at least validated by the buyer, where Deal Value and Close Date become qualified through ROI Modelling in one or more Mutual Value Discovery interactions.

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, integrated with a Customer Relationship Management (CRM) system - e.g. Salesforce. Interactive Decisioning Tools can be published on 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 added inside your customisable CRM system - as an integrated CRM solution that, in the Salesforce example, includes 'Community User' extensions for buyer, in addition to 'Full User' subscription for the seller. This is part of a new solution called XCELD.

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 digital innovations.

Conclusion

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; Interactive Decisioning Tools; and, Sales Forecasting (that you can rely upon).

Design Thinking is the DNA of the early adopter buyer of new innovations: inquisitiveness, empathy, cooperation, experimentalism and optimism. Read more about Design Thinking.

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.

Sales Forecasting at last becomes reliable - by shifting it from seller to buyer - and by using Interactive Decisioning Tools and ROI Models to validate Deal Value and Close Date.

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