Challenges and choices in sales 2019
Over the past four decades, I have had the privilege of working for some of the most professional and successful business-to-business sales and marketing companies. From 1970 to 2010, the dominant sales cycle model was based on the consultative sales process. However, today new sales processes are emerging to challenge the consultative status quo. Many companies are now experimenting with transactional and conceptual sales processes.
Here is a brief description of the three competing sales processes:
Transactional sales occur when a customer independently evaluates suppliers and their offerings, makes a choice, and places an order. Amazon exemplifies transactional sales.
Consultative selling involves the interaction of the buyer with several potential suppliers to select the supplier with the best product or service for their specific needs.
Conceptual sales are boundary-changing events. The buyer and seller meet to discuss an idea or concept that would help the buying company change a process to achieve better results. Outsourcing a process to a vendor is a typical example.
Why are companies evaluating and testing new sales processes?
Around the year 2000, the consultative sales process started to become less efficient because of two macro changes: severe limits on workplace time and the tremendous amount of information available on the internet. The consultative sales process requires multiple meetings between the buyer and the seller to: 1) build a credible and positive relationship, 2) probe the client’s specific needs, 3) deliver a well targeted proposal, and 4) discuss client concerns and finalize the sale.
The amount of time and coordination required by this process has become a barrier to effective and efficient outcomes. Buyers can now find suppliers and detailed product and service information in a few minutes on the internet and avoid lengthy meetings with sales representatives. The transactional sales process is efficient and is driving down the cost of product or service acquisitions.
The conceptual sales process is also influenced by the “need for speed.” In this sales process, a sales person calls on a client executive with a high-impact idea or concept that will change the client’s operation and improve their ability to achieve a specific and relevant goal. The challenges are: 1) having an idea that will change the client’s business outcomes, 2) getting a meeting with an executive, and 3) having the resources and ability to execute the idea quickly and produce the results as promised. Conceptual sales messages can turn an industry on its head overnight! As an example, a materials management company pointed out to large manufacturers that they purchase “C” parts with the same detailed purchasing procedures they use to purchase “A” parts. By simply outsourcing the purchasing of all “C” parts to the materials management company, a large manufacturer could save a quarter of a million dollars a year in purchasing activity cost.
Today companies are faced with challenging sales transitions
If you are like most business-to-business (B2B) companies today, you are predominately using the consultative sales process. How effective is this traditional method and should it be continued, enhanced, reduced, or replaced? Should we consider becoming more effective at transactional sales? And, what exactly is a conceptual sales message and could we execute one?
About your existing consultative sales force
Most B2B companies still have a large existing consultative sales force. These sales forces are making calls on existing accounts to increase customer loyalty, troubleshoot problems, justify pricing, and maintain sales volume. In short, they are making customer service calls. If the company expects their current consultative sales force to grow existing accounts and develop new ones, they are in for a disappointment.
Consultative sales people built quality relationships with buyers and the individuals who develop product specifications, such as engineers, not with executives who bring major changes and improvements to their organizations. In fairness to the existing sales force, they have not been expected to call on executives, trained to call higher, or provided their company’s conceptual sales message because most companies didn’t have one.
Transitions are never easy and transitions involving your “face to the customer” are often a life or death business event. Look at Macy’s or Toys R Us struggling to change their retail face from “engaging retail stores” to undifferentiated online offerings. Fortunately for B2B companies, the challenge is not as immediate or dramatic. However, look at how Grainger revolutionized the MRO and industrial supply business by providing complete and comprehensive product offerings and flawless delivery, thereby driving a great many small local providers out of business. It is important to note that a many of the now defunct local supply businesses relied on their quality client relationships to fend off the less personal approach of Grainger. Grainer’s transactional sales process dominated the market and eliminated many smaller consultative selling competitors.
Take a look at the brokerage industry for interesting sales model examples. Schwab — “a more modern way to invest” — stresses price per transaction and is a great example of the transactional sales model. Edward Jones focuses on “personalized attention” and represents the continuation of the consultative sales model. Franklin Templeton stresses its market “insights” and “global investment outlook” to highlight the core of its conceptual message. It will be interesting to see how they all fare in the years ahead and who may have to alter their sales strategies based on investor preferences and economic results. Note: quotes are from the respective companies' websites.
Your initial transition analysis
First: Which sales model are we using today? What are our sales strengths and weaknesses? What can’t we seem to get done?
Second: Which sales models do we want or need to use to be successful in the future?
Third: How far from that model are we today? How well does the new model fit our company’s capabilities?
Fourth: What do we need to do to make a successful transition?
A final recommendation
Gather selected members of your sales and marketing team, your most insightful employees, and a few external sales or marketing people who have experience with all three sales models, along with a few key customers, and have frank discussions on the four-point transition analysis above. Be patient, thorough, and test your conclusions in the market. Make 2019 a year of change and sales growth.
Chuck West is a marketing expert and former owner of West & Associates, a marketing and sales consulting firm in St. Paul, Minnesota, as well as the former program director the Sales, Sales Management, Advanced Management, and Leadership programs at the University of Wisconsin School of Business — Center for Professional and Executive Development.
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