From Selling to Co-Creating Press Release
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1. Sales organizations are implementing new approaches like teamwork, job rotation, and customer workshops to better share knowledge internally and externally. 2. Co-creation of value propositions with customers and partners is becoming standard, requiring salespeople to proactively offer collaboration. 3. Knowledge and expertise are replacing products as the main competitive advantage, so knowledge management through information sharing is crucial.
From Selling to Co-Creating Press Release
- 1. Press Release March 6, 2014From Selling to Co-Creating New Trends, Practices and Tools to Upgrade your Sales Force knowledge and information related to project within a specific sector on a regular basis. In their view, the key is not only to capture and store the information but also to ensure the information is shared. TEAMWORK Teamwork has become a common approach in selling. One manufacturing organisa- tion started to actively encourage their sales people to participate in product innovation projects. These projects consist of a sales person, a technical advisor, and a marketing manager. Their goals are to create and sell new applications for their existing technology. These projects not only lead to innovations and mar- ket penetrations but also allow the sales people to network within the organisation and increase their overall knowledge. JOB ROTATION Another practice to facilitate knowledge management came from a sales manager in the logistical sector who introduced a system whereby all new sales people must also work part-time in its operations department for a limited period. CUSTOMER WORKSHOPS All these examples show how sales organisa- tions are implementing new ways to share and exchange as much information internally benefits are to be divided. We believe that co-creation of value proposi- tions together with customers and partner networks will become a standard way of selling in the future. While currently such initiatives are only triggered on demand of the customer in the future sales people will have to become more proactive in offering such forms of col- laboration. According to the interviewees, the act of co-creating new products with custom- ers can be part of a Unique Selling Point (USP) that can help to attract prospects and improve customer relationships. The process is complex, so suppliers will have to develop guidelines to manage the co-creation process. KNOWLEDGE AND CAPABILITY MANAGEMENT For many sales people the changes mentioned so far mean they have to acquire much more business knowledge and sector knowledge, thus their role is evolving towards manage- ment consultants. The competitive advantage of a sales force in the future is likely to be less defined by its products and more by its knowl- edge. Therefore, knowledge management is an increasingly important aspect of the sales function, playing a crucial part in developing a competitive advantage. The knowledge needed is no longer that from technical product brochures and descriptions. As one manager in a consulting organisa- tion referred to, knowledge management is about generating new insights based on sales people’s experiences and interactions with customers. This means that interaction be- tween customers and the sales force, becomes a mechanism through which new insights and knowledge is generated. The challenge for many sales managers will be to find ways to capture and replicate this knowledge. This raises the question: How can sales managers capture and share knowledge within their sales organisations? Through storing and sharing their information, through teamwork, through job rotations and through workshops with customers. INFORMATION SYS- TEMS AND KNOWLEDGE SHARING One business consulting organi- sation showed us its knowledge management system and ex- plained how they use it in combi- nation with a series of internal meetings to ensure best practices and information are shared. Its sys- tem is managed by dedicated people who make sure that after the completion of a project all the team members submit their information and key learning points from the project. While this information is valuable, the tool in itself is not enough to ensure that their senior consultants and part- ners have all the knowledge they need. For that reason they organise once every two months a full day event which they called “college days”, where they focus on learning about one specific topic. Twice a year they organise formal best practice exchange meetings. On top of that, they organise sector meetings to exchange as possible. However, sales people can also exchange knowledge with customers and part- ners. To that extent, the key account managers of a large system integrator organise, once a year, a workshop for each of their top cus- tomers which is called “Customer Experience Journey”. These are two-day workshops, which both the customer and the supplier’s teams attend. The aim is to exchange information about their goals and how they can help each other to achieve them. Interestingly, the focus is not only on how the supplier’s team can help the customer achieve their goals but also vice versa. According to them, these workshops are very useful and have produced many different solutions to help improve relationships. They also proved to be a valuable source of informa- tion to develop key account plans. These examples illustrate that sales manag- ers do not believe that learning and knowledge acquisition can be achieved through systems alone. Instead, it must include a culture process that values the exchange of best practices internally and externally with customers and partners. We believe that sales people will no longer be able to rely on the superiority of physical products and production facilities as a means to maintain a competitive advantage. Their true source of competitive advantage will be their knowledge and especially “know-how”. Organisations will need to define their co-cre- ation processes and identifying the knowledge required to engage in these processes. FUTURE TRENDS CURRENT TRENDS PAST TRENDS 25 WHAT IS THE NEW COMMERCIAL LOGIC? The approach to manage large sales forces that dominated the last decade of last century, emphasised maximising efficiency. Generalist sales representatives were deployed into ter- ritories and into functions often characterised as ‘hunting’ and ‘farming’. The primary function of the generalist sales person was to persuade, inform and assist the customers to complete their purchases. In today’s business environ- ment, activities such as order processing are better performed by lower cost channels, such as, self-service online portals and call centres. So, a key question to reflect on is what will be role of the sales force tomorrow? The speed of change in the market also makes sustainable innovations very difficult and to continue to add value for their customers organisations have to take higher levels of risk. Also, in todays’ environments conventional methods of market research take too long and cost too much to deliver insights that will lead to real innovations, those that customer will appreciate and buy. In business markets, cus- tomers often want to be involved in the design and development of the products and services that they need. This offers the opportunity for suppliers to design and develop new products together with their customers. Co-creation therefore means that suppliers are able to share innovation risk with their customers. As a result, organisations are redeploying their sales people to manage their key customers and to contribute to co-create new innovative value propositions. In doing so, they are effec- tively changing the logic of how organisations develop and commercialise their products and services. In the old commercial logic marketing would, through focus groups or other mar- ket research techniques, gather information about the needs and wants of their customers. These are then translated into new products or services, which after being produced are sold by the sales force. In the new commercial logic the sales force is used to manage key custom- ers and to co-create new products and services with them. After they are produced, marketing looks for ways to commercialise them further to a broader market. This is not about downplaying the importance that marketing will play in the future versus sales in B2B contexts. This evolution of the role of marketing is in line with recent debates about how to deploy marketing and sales to maximise their joint effectiveness. The evolu- tion in the marketplace is witnessing how deep business relationships are becoming the most important tool in a supplier’s commercial tool- set. Establishing these relationships is impor- tant not only from a commercial risk perspec- tive, but also because they are vital to provide the basis for product and service innovation. The sales force is the most appropriate resource to manage these relationships and to facilitate and sustain innovation processes. Marketing techniques such as campaign management are more appropriate to commercialise and distrib- ute these new innovations in the wider market. The same market forces that are driving sales forces to be replaced are also creating new opportunities for sales forces to add value. Globalisation, leading to fewer but bigger cus- tomers, means that suppliers are exposed to a much greater risk. Losing one large customer might have significant financial repercussions. As a result, organisations are actively rede- ploying their sales people to manage these accounts. The focus is gradually changing towards smaller but more effective sales teams whereby knowledge and expertise, not just tasks and activities, is the main principle for sales force design. 1 Gain market knowledge about customers wants and needs; 2 Design and produce new value propositions to meet these needs. 3 Contact customers and prospects to sell new value propositions. 1 Contact customers and prospects to co-create new value propositions. 2 Design and produce new value propositions to meet these needs. 3 Gain market knowledge about who else may have the same wants and needs for these value propositions. THE OLD COMMERCIAL LOGIC THE NEW COMMERCIAL LOGIC Implementing this new commercial logic will, for most organisations, require a lot of changes to their existing sales forces. So, let us have a closer look into the implications this has on the sales force concerning: • What type of sales people we will need in the future? • What type of sales processes we will have in the future • What type of sales organization design we will have in the future? • What type of sales management approach we will need to adopt in the future? 3534 1SELLING MORE ENHANCING CASH FLOWS BY SELLING MORE Selling more basically refers to finding ways to increase the share of wallet of the customer’s total spending on your product or service category. Knowing the customer’s share of wallet provides the supplier with an insight to evaluate the strength of the relationship with the customer. Increasing the share of a customer’s wallet is often a more cost effective way of boosting revenue than increasing market share. A supplier can increase its cash flows by: 1. SELLING MORE TO EXISTING USERS 2. SELLING MORE TO NEW USERS, 3. CROSS-SELLING OTHER PRODUCTS AND SERVICES, 4. INVITING THE CUSTOMER TO CO-CREATE THEIR VALUE PROPOSITION, 5. SELL A FULLY INTEGRATED SOLUTION. 1. SELLING MORE TO EXISTING USERS Selling more to current users means displacing one of your main competitors in the customer. HOW TO DISLODGE AN EXISTING SUPPLIER AND TAKE OVER THEIR REVENUES? To increase their share of wallet, sales people tend to rely on developing good and close relationships with their customers and on ensuring they are satisfied. While these tactics are effective at maintaining and securing existing business, they are less effective at winning more business and displacing the competition. Remember they too are developing relationships with the customer. To win more business you need to uncover who else the customer is working with, what your rank is relative to your competitors and why; review the reasons why your customer is also doing business with your competitors and see how you could address them, what the cost would be and what the potential financial gains are likely to be. We often see that sales people are reluctant to ask for this type of information from their customers. For customers, unless they perceive clear benefits of disclosing this info, they will be reluctant to do so. One of the ways to circumvent these difficulties is to include questions related to the competition in customer satisfaction surveys. These enquiries often have as its ultimate objective to improve the quality of service delivery, thus, the customer may reveal their expectations from suppliers. Increasing your share of wallet is desirable but not always possible. For instance, many large organisations have reduced their number of IT suppliers to a shortlist of four or five. The IT contracts are divided amongst these suppliers using a set of criteria based on the customer’s perception of the supplier’s core competencies. The aim for the customer is to keep each of their suppliers sufficiently happy by allocating enough work to each of them in order to maintain the level of service received. The other objective for the customer is not to become overly dependent on any one supplier. When suppliers are fighting amongst each other to get a larger part of the customer’s wallet, it often makes the customer’s task of managing suppliers very difficult. We have known of cases where trying to increase the share of wallet resulted in a supplier being removed from their customer’s short lists. It is, therefore, essential to understand the reasons why a customer also works with your competitors. If one of the reasons is intentionally to divide the work across several suppliers, this has to be taken into account in the business development strategy with that customer. Getting a bigger share of customer’s wallet! 119 Authors Régis Lemmens, Bill Donaldson, Javier Marcos / Paperback with flaps / Dimensions 21 x 21 cm / 256 Pages / ISBN 978-90-6369-351-0 / Price: € 34,- For a full set of high resolution images and further information, please contact: Lilian van Dongen Torman [email protected] BIS Publishers Het Sieraad Postjesweg 1 1057 DT Amsterdam T +31 (0)20 515 0230 www.bispublishers.nl This is a groundbreaking book that identifies the current and future trends in sales.It is based on 100+ interviews with senior sales executives and sales experts from the corporate industry and academia across central Europe, the UK and the USA. This research was supported by TiasNimbas Business School, Cranfield University and the Sales Management Association in the Netherlands. The book poses the question: What if there was a way that sales forces could help their organization to stay ahead of the competition and innovate? Many organizations featured in this book find ways to do just that. Would you like to know about their practices, methods and how they are preparing themselves for the future? Meet some of the companies that have moved from Selling to Co-Creating. Explore how they have been able to develop new, innovative and sometimes highly successful products and services by using their sales force strategically. Learn how their sales forces have built new collaborative relationships with their customers ahead of their competitors. To help you achieve your trans- formation from Selling to Co-Creating, the authors have included a visual framework, cases and tools to use in your own organization.