Solution selling

Report
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
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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)
•
•
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•
•
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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
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–
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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
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•
•
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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
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•
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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
–
–
–
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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?
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Honesty
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Integrity
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Reliability
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Consistency
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Modesty
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Sticking to knitting
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Attention to detail
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Perseverance
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Calmity
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Prudence
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Effort
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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
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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?

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