Nobody sells products or components anymore. These days, everybody says they sell “solutions.” Stockbrokers, for example, now tell you they are in the business of helping their customers achieve their personal financial goals. Brokers no longer just sell you stocks or bonds; these things are now just a means to an end. A progressive financial services sales professional will first get to know a client’s personal situation, including their risk tolerance and performance goals, and then start actually selling specific products. The goal is to build a long-term consultative relationship, one with measurable benefits that the customer understands and values.
Successful industrial salespeople have been talking about a similar “solutions approach” for years. But what does this mean? Just as a good financial consultant must first understand his client’s personal financial objectives, an industrial sales professional must also understand the business goals of their targeted customers. To do this, he must first determine the primary business drivers of the prospective customer.
Assessing a company’s primary business drivers can be very difficult, for any of several possible reasons:
- Gaining more than a superficial understanding of a company’s key business needs requires establishing long-term relationships with well-informed company insiders
- Potential customers are often reluctant to discuss their business problems and needs with “salesmen.”
- Companies often lapse into the old-fashioned purchasing manager mentality of hiding important information from vendors in order to “keep them honest.”
In order to gather an understanding of a customer’s key business drivers, we recommend dividing them into categories and then digging into each category individually. Broadly defined, any customer’s key business drivers will fit into one of three categories:
- Revenue Enhancement– includes increasing capacity or throughput, adding or expanding product lines, shortening time to market and production cycle times, etc.
- Cost Reduction– includes reducing direct labor costs, total headcount, material costs, scrap/waste, capital expenditures, setup and changeover costs, and a number of other specific cost items.
- Compliance (safety, regulatory)– includes reducing reportable incidents, minimizing environmental disruption, streamlining quality or conformance related management and reporting processes, etc.
Once you understand the relative importance of each category of business driver to a particular customer, you can then dig into the specific initiatives that customer might undertake to reach its business goals. Developing truly insightful, meaningful and actionable customer intelligence requires significant time and investment, but can be extremely valuable. Armed with strong customer intelligence, you can tailor your sales and marketing presentations to hit the each individual customer’s hot buttons.
Some examples of how we have seen our clients use customer intelligence to provide a competitive advantage in the selling process include:
- Showing a customer how their “solution” can increase throughput during times of peak demand, thus postponing the need to find scarce capital investment dollars for a plant expansion.
- Focusing on how to help a customer reduce the infrastructure needed to perform a specific function, thereby freeing up scarce human resources for other tasks in the wake of headcount reductions.
- Helping a power plant customer to realize that by investing in a process to reduce emissions, they could not only reduce their cost of compliance but even make money by selling emission allowances on the open market.
The value of understanding customer drivers and taking a solutions approach is that it allows you to become intimately involved with the customer to create a strategic supplier relationship. By knowing the customer’s current business drivers, sales professionals can anticipate upcoming needs and get a head start on major sales opportunities. Establishing intimate customer relationships and developing meaningful intelligence on key customer business drivers often enables a supplier to circumvent competitive bidding processes. Rather than simply responding to requests for proposals, today’s solution sellers can proactively propose project ideas to their key customers.
Today’s progressive sales professionals know that they need to eschew the short-term benefits of a quick sale in order to gain the long-term advantages of larger projects that involve strategic alliances or strategic supplier relationships. Understanding the key drivers of customers’ businesses is the basis for establishing sustainable competitive advantage.