Does American-style selling work in Scandinavia? Petri Parvinen, Ph.D. Professor of Sales Management Aalto School of Economics, Finland Lecturer • Petri Parvinen, Ph.D. – TSE, LSE, SSE, TKK, HSE, Stanford – Professor of Sales Management @ Aalto School of Economics – Research interests: e-selling, sales psychology, human-to-computer interaction, social psychology of commerce, business model/industry transformation – Founder or founding investor: 12 companies, 2 bankruptcies – Approx. 200 consulting projects across industries 2 • Innovation selling • Interaction psychology online • Channel optimization • Value-based selling 3 Front yard vs. back yard --------------- Petri Parvinen Sales Reputation? Reputation ranking of 380 professions (2010): 1. Surgeon 2. Specialized Medical Doctor 3. Medical Doctor 4. Firefighter 5. Medical Director 6. Neurologist 7. Opthalmologist 8. Midwife 9. Dentist 10. Nurse ~300. Paper mill worker, weaver, clerk, warehouse worker 306. Key Account Manager 360. Salesperson 371. Car sales representative 373. Product representative 379. Phone sales representative 380. Door-to-door salesperson 365 (2008) TV chat host Petri Parvinen Case TeliaSonera • In order to further improve corporate spirit and market orientation within the organization, TeliaSonera requires strong and motivating leadership, which will focus on growth, re-organizing, and creating value, according to recent company press release What "mental" aspects are repeated in best salespersons? (Pöntiskoski & Parvinen 2010) 1. Fast exchange, e.g. Instant start, feeling good does not interfere 2. Salesperson thinks about the sales meeting in advance Reaction in the actual situation is fast 3. Salesperson is ready to sacrifice his persona for results in the work 4. Salesperson knows the limit on how many customers he can manage with high quality and without delay 5. Problems are not being mulled over, but taken up in familiar way 6. Ability to excite and become inspired 7. Anticipation 8. Personal ambition 9. Spontaneous self-organization to roles 10.Unselfish and automatic helping, when colleague is having difficult time Case: Stockmann • Hullut Päivät ("Crazy days") – Annual shopping carnival that combines the efforts of management and employees – Self-taught, now copied • How it is done? – – – – – – – Value proposition Instructions and trainings Competition between teams and units Measurements Open communication Partners are involved to the spirit of the event Successes are celebrated • Bosses are embarrassed WHAT DOES THE EMPIRICAL EVIDENCE SAY? SUSTAINABLE, ADAPTED SELLING LINKED TO CUSTOMER VALUE/BENEFIT WORKS 12 WHAT CORRELATES TO PROFITABLE GROWTH? (Aalto University ”State of Sales”: Aspara & Parvinen 2007, Parvinen & Töytäri 2010) • • • • • • • • • • • • • Marketing spirit: belief, will to win, coaching It’s not about star sellers, it’s about educating the layman Funnel : its management and metrics If the market is small, go for blue ocean Network self-esteem and network activity pays off The more touching points, the better Channel-specificity Renew salesperson competence base to fit sales strategy Focusing sales efforts into new business Checking customer reactions personally after automatic deal CRM and customer intelligence pay off Personnel rotation pays off Defining ”add-on sales” and rewarding for it pays off The commercial pioneer wins! • Sales and marketing are ever more irreplaceable, because the world of business is growing increasingly ruthless: 1960s car retailing insurance FMCG paper industry 1990s utilities pharmaceuticals software forest industry 14 Now? prof. services healthcare infrastructure government wood industry pharmacies printing books Market orientation surpassed by customer management Slater & Narver, 1998, Blocker et. al. 2011 Customer orientation Market orientation Customer management Expressed wants Latent needs Engagement Adjustment Reactive style Proactive Value-based Temporal focus Short-term Long-term Lifecycle Objective Customer satisfaction Customer value Customer value appropriation Learning type Adaptive Generative (Emotionally) intelligent Learning process Key accounts Focus groups Concept testing Lead-users Laddering Experimentation Grand tour Selective partnering White-boarding Strategic orientation Adaptive selling has strong empirical backup Business “Win the deal" Expert sales Sales based on being a buddy High value added to customer Low value added to customer Directing sales Customer relationship “Deepen the friendship” Consultative sales © Mercuri International Think Big - Case: Pori Jazz • Almost bankcrupt six times • Always aimed to multiply its size – – – – – Old factory real estate ”takeover” Infrastructure plan to lure investment Local media and public opinion to ”confiscate” old brewery Logistics center into sports and event arena with tram track New strategy for the entire city as a postmodern city of culture • Very modern business thinking and organization – 8 employees around the year, 3500 during the festival – direct economic impact 20Meur 17 ’Enforce Business Model Evolution’ Projects Solutions Products Services Four Basic Business models • • • • Project business (Cash flow only when agreed) – Parties engage in an economic exchance typically for a longer period of time under inclarity as to what will actually happen in detail and typically under the expectation that the exchange will end sooner or later. Product business (I’d like one in exchange for €) – Well-defined outputs with limited clearly defined agreements Continuous servicizing (Cash flows unless otherwise agreed) – Partnership or networking production structure, where parties need each other to be able to function and thus exchange can, in principle, go on indefinitely. Solution selling – Buyers do not need to know what components the solution to their problem consists of and sellers get more money than from selling the individual components 20 Successful selling under each biz model • • • • Project business (Cash flow only when agreed) – Relationship management and marketing skills, Selecting the right customers, Setting limits to what is done, Understanding customer value creation processes, Reliability of sales and distribution Product business (I’d like one in exchange for €) – Quality and completeneness of productization, Understanding buyer behaviors, Capacity of sales and distribution, Active, aggressive and driven sales people, Partnering and alliances to satisfy customer needs Continuous servicizing (Cash flows unless otherwise agreed) – Create constant need, Trustworthiness, Investment capability, Deepening/exploitatiton, Intimacy management, Lifetime cycle management Solution selling – New angles, latent needs, uniqueness, coordination, repeatability and reuse 21 Ekokem • Customer lenses determine business model in waste business – – – – Politician Service Corporation Service Infrastructure department Product Government Project • Anybody lazy? = solution = +20% margin Nokia Siemens Networks Nokia Siemens Networks Business models influence saleswork! 1. 2. 3. 4. 5. Competence requirements for salespeople Nature of practical sales activities Principles of organizing sales Entire organizations Profitability 25 Trust-based selling is on the rise (Clark 2011) FINNISH VALUES = UNIMITABLE COMPETITIVE ADVANTAGE? • Honesty • Integrity • Reliability • Consistency • Modesty • Sticking to knitting • Attention to detail • Perseverance • Calmity • Prudence • Effort • Authenticity 1910s personality courtesy initiative “tact” (also hygiene) 1920s analyzing customer patterns of argumentation tailoring selling points objection handling personal relationships 1930s salesmanship = seller value benefits of service/knowledge delivered by completed sale UNDERSTANDING CUSTOMER VALUE IS GOOD CUSTOMER SERVICE THINK FOR YOU CUSTOMER. USE YOUR PROFESSIONAL SKILLS. I CARE. REASON WITH SIMPLE NUMBERS. AIM FOR A SUSTAINABLE OUTCOME. BE A GOOD WORKER. Sociability vs. social skills in selling (cf. Keltikangas-Järvinen 2010) • Both are needed, but social skills are more important • Social skills can be taught to any temperament, yet certain skills learned better by certain temperaments – Temperament can not be taught • Sociability > social skills = problem – But best if both are high • Very sociable people can seldom be harnessed well for the goals of an organization • The repertoire of situation-specific skills is key in successful selling – Withdrawal vs. negotiation vs. plea-bargaining vs. pushing vs. strict rules • 21st century people resemble 60s narcicists! • Detachment becoming increasingly important to learn atypical skills – Behavioral ”modes” emerge – Uniforms, avatars, double lives 29 SUMMARY Petri Parvinen [email protected] +358 50 312 0905 Make sure everyone understands the cash flow logic in each business unit 1. Sell more! (new customers, upselling and crossselling) 2. Make sure current cashflows don’t reduce or die! 3. Change the cost/revenue ratio! 4. Bring cash flows home faster! 5. Balance cashflow volatility (= reduce risk)! MINI CASH FLOW STRATEGY WEIGHT% PREVIOUS 12mnths Sell more! Maintain existing cash flows! Change cost/ revenue ratio! Bring cash flows home faster! Balance cashflow volatility and reduce risk 33 WEIGHT% NEXT 12 mnths WHAT?