In this blog post I talk about how you can increase sales effectiveness in the high-value, high-touch sell, and by introducing two things - underpinned by technology.
Problem #1. The High-Risk RFP Sell
There's a lot wrong with the Request for Proposal (RFP)-based buyer-seller engagement: not least the assumption that the buyer knows all, and overall, the innovation and other qualities of the seller are lost in this mechanical approach to procurement. However, it is not easy for a seller to change a buyer's approach to acquiring high-value products and services, but there is a better way for buyer-seller interactions, even with this constraint in play, due to buyside regulatory or policy constraints.
In many highly-regulated markets and industries, such as the public sector, the RFP-based procurement is unavoidable. However, for new, high-value products and services, even in regulated markets, you cannot rely on the buyer defining the purchase process alone. There has to be an early, proactive intervention from the seller - even if the RFP is unavoidable at a later stage. High-value, innovative products and services require key inputs from the seller, and cannot be defined by the buyer alone, from afar.
Sellers who simply wait for and respond to a mechanical procurement process, creating wordy Proposals or expensive 'pitches' in response to a RFP document, are engaging in a competitive lottery. If the seller has tried to influence a 'pre-wired' RFP, then this may be constrained by the buyside trying to enforce the principles of an open, arm's length procurement and 'level playing field' of treating (or seen to be treating) all sellside respondents equally. Even if the RFP competition is on a level playing field, for the seller, it is usually a high risk, arm's length 'do-or-die' situation.
Selling solely via a response to a RFP is not selling - it's telling. And there is a better way - and this is achieved through applying Design Thinking In Sales, as explained further below.
Problem #2. Inaccurate Sales Forecasting
Despite the pervasive implementation of Customer Relationship Management (CRM) systems, such as Salesforce Sales Cloud, why are managers still suffering at the hands of poor sales forecasts? The answer is simple: sales people submit sales forecasts that managers want to see, which is not always what the buyer agrees with.
There are two values that really matter in sales forecasting: (a) Deal Value; and, (b) Close Date. If these two values are correctly entered and updated in a timely manner within a CRM system, then there's no sales forecasting problem. However, in the real world, this is, all too often, where fundamental errors in sales forecasting are found.
So, the big question here is this: what can managers do to fix this pervasive, challenging problem of inaccurate sales forecasting? The answer is a combination of: human change - switching sales forecasting from seller to buyer; and technology - creating extensions to CRM systems that facilitate buyer-enabled sales forecasting.
As expanded upon below, Design Thinking becomes the foundation for enabling sellers to engage buyers in a more interactive, open way - versus arm's length responses to RFPs. Further on in this blog post, I talk about how XCELD Interactive Decisioning Tools helps to enhance the investment in Salesforce Sales Cloud Customer Relationship Management (CRM) systems.
Solution #1. Design Thinking In Sales
Knowledge-intensive firms, operating in any industry, should execute new business development by first, categorising whether they are creating or fulfilling demand. This leads to defining two distinct approaches - but where only one applies to the innovative, high-value, high-touch sell:
I. How do I win early adopter customers (clients) when either (i) I am not seeing RFPs asking for what I am selling; or, (ii) due to regulatory or corporate policies, my target customer mandates responses to RFPs? The answer is: apply Demand Creation Selling.
II. How do I engage new customers (clients) with an established, well-defined product or service, when I do not have a clear product or service feature to offer as a meaningful differentiator? The answer is: apply Demand Fulfilment Selling.
For innovators, who are delivering something more innovative or transformational, there is a better way: this is Demand Creation Selling, based on the key principles of Design Thinking. This means that opportunity creation becomes an early, proactive intervention by the seller to the buyer - not simply waiting for a buyside procurement to be initiated. This requires a way to 'open doors' to the empowered buyer, and break the 'hermetic seal' that surrounds these executive decision-makers. It means applying curiosity.
In an interesting Harvard Business Review article, The Business Case for Curiosity, the author Francesco Gino talks about curiosity as the root of many breakthrough discoveries over a long timeline. She goes on to say that curiosity, when triggered, inspires trust in new innovations. As someone who started life as a designer and became a sales professional, I can relate to this point about curiosity and how this applies to both design and sales.
So, what is the basic DNA of a Demand Creation Selling-oriented sales professional? The answer is: the ability to generate receptivity and rapport, which, in turn, can generate trust with senior buyside executives - all underpinned by an inherent curiosity. As with early adopter customers (clients), it is also essential that candidates for the seller role possess characteristics consistent with people who are likely to generate (and positively respond to) curiosity.
You can read more about the first principles in Design Thinking, Applied. Simply put, Design Thinking is a human-oriented approach to solving problems. In building out Demand Creation Selling, I have adopted the ideas from the Hasso Plattner Institute of Design at Stanford University (d.school). At the Stanford d.school, Design Thinking is expressed as five steps in the innovation process: Empathize; Define; Ideate; Prototype; and, Test - applied iteratively.
As illustrated below, the five steps for Design Thinking flow iteratively throughout the proactive buying and selling cycle that defines Demand Creation Selling. From a process perspective, Demand Creation Selling has three (3), easy-to-remember 'Points': PiercePoint; ProofPoint; and, DecisionPoint.
Let's define each of these directional phases of the buying and selling cycle, each moving through the iterative Design Thinking steps:
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.
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.
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 becomes key to reinforcing a compelling case for timely purchases: a solid ProofPoint validation underpinning success at the DecisionPoint.
Solution #2. Interactive Decision Tools
As an inherent part of proactive intervention which empowered buyers, Design Thinking requires sellers to show buyers why and how a Mutual Value Discovery is just that: something that is truly mutual and, regardless of whether there is a purchasing outcome, or not, there must be value created for both parties at this stage.
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 the Deal Value and Close Date for a win in a ProofPoint - and executed via Mutual Value Discovery sessions - online or in-person.
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. You have given the buyer a strong case for justifying both of these key values: how much to spend, when to spend it - and the consequences of not doing so, from the buyer's (not just the seller's) perspective.
This where XCELD Interactive Decisioning Tools apply: built including one or more ROI Calculators, implemented with Salesforce Sales Cloud instances. To engage buyers as CRM user, the CRM technology is extended through apply Web Forms that readily integrate with Salesforce, but do not require each prospective buyer to become a licensed user of the seller's Salesforce Sales Cloud instance.
The ROI Model and related ROI Calculator(s) should be built (as Web Forms) on an initial analysis of Current State ('As Is'), in order to explore and calculate Future State ('To Be') advantages, as a consequence of the buyer acquiring the product or service in question. This becomes a quantification of both an Economic Basis of Decision and an Emotional Basis of Decision.
When you shift from Demand Fulfilment Selling to Demand Creation Selling you enable the buyer to determine the Deal Value and Close Date - and this is where. 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 to forecast an accurate Close Date, as is the need to achieve the right number (e.g. including say, the 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, and counters unreliable Close Date forecasting.
With XCELD this is where sales forecasting becomes truly collaborative: the Deal Value and Close Date generated by the ROI Calculator in Mutual Value Discovery sessions is only entered into the Salesforce Sales Cloud CRM system when the buyer validates and approves the values, via the extended Web Forms interface. This will have a dramatic, meaningful effect on the reliability of sales forecasting, in addition to enabling buyers and sellers to determine win-win outcomes and business cases for new digital and other high-value innovations.
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 (built as Web Forms on the Salesforce Lightning Platform). This results in sales forecasting that you can rely upon - shifting the process and ultimate validation from seller to buyer.
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.
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