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Point of view selling

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Forum Corporation
Forum Corporation

The document discusses the concept of "point of view selling" which involves starting customer relationships by developing compelling ideas and thought leadership to address their business challenges rather than just pitching solutions. It involves four stages: 1) developing a point of view based on insights into customer opportunities/problems, 2) provoking interest in that point of view, 3) identifying other opportunities, and 4) delivering solutions and realizing value. Companies that have successfully used this approach include IBM and GE Healthcare.

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point of view Point of View Selling: Using thought leadership to sell to senior executives Authored by Michael Collins, Vice President and Executive Consultant, The Forum Corporation The business challenges faced by executives today Today’s solutions providers are borrowing a successful are more varied and complex than ever before. As they approach from management consulting firms seeking to emerge from the economic downturn, many companies are sell higher in the organization. We call this approach point looking to realize top-line revenue growth without taking of view. It involves four stages of starting and growing a on fixed costs. How can we cut product launch-time to get client relationship: new products on shelves faster? How can we build and expand hospitals that deliver world-class health care at a reasonable cost? How can we integrate our field, web, and LEAD WITH telesales channels to increase charge-card adoption and A POINT OF VIEW usage? Often, there are no clear-cut answers for the customer executive. The best response to a complex challenge might involve a myriad of things: process changes, outsourcing, technology, new marketing campaigns, JOINTLY people development and training, and so on. Implementing IDENTIFY MUTUALLY BENEFICIAL EVALUATE OTHER CUSTOMER/SUPPLIER any of these things would require investments of time, OPPORTUNITIES RELATIONSHIP POTENTIAL SOLUTIONS money, and resources. Wanting to avoid making big bets— and risking costly mistakes—the executive needs proof that one course of action makes the most sense before proceeding with it. In markets and selling environments such as today’s, the DELIVER solutions provider has a tremendous opportunity to serve SOLUTIONS AND REALIZE the customer by leading with ideas and providing thought VALUE leadership throughout the selling process. Customers value the ideas that a solutions provider brings to the table to the extent that these ideas address significant One way to think about point of view selling is to consider opportunities or problems they face. As the solutions the customer’s purchasing-decision process. (See provider moves higher in the customer organization, the the model at the top left of the following page.) Senior importance of compelling ideas becomes even greater. executives focus on the “why” question first: Why is this The challenge for sellers is significant. Senior executives idea relevant to our business? To what extent are the idea are looking for more than just “your answer.” They and the solution(s) going to impact our performance? Is are focused on the impact you can bring—not on the this a $50 million opportunity or a $50 opportunity? features and functions of the solution. In carpentry terms, The second key question is “how?” The buying executive, customers are interested in the hole, not in the drill. who has been persuaded that this is a significant idea, In addition, busy executives may not want to spend now needs to know the various alternatives that her meeting time simply answering questions about their company should consider if it is to realize improvement. business. Their calendars are tight: Why should they spend She needs to believe that her organization can implement their time educating you? the alternatives. For instance, she needs to know whether
point of view the “right” answer might involve process change, The point of view selling approach guides the customer technology implementation, outsourcing, or training—or through considering the three questions of the purchase- some combination of these. decision process by managing three stages of engagement with the customer: WHY? HOW? WHO? To what extent is What are the Who can best this idea relevant to possible deliver the my business? solutions? right solution? DEVELOP PROVOKE CATALYZE A POINT INTEREST DECISIONS OF VIEW Entry point for an Entry point for idea-based approach traditional selling „„ Develop a Point of View. Salespeople, and others Having explored the alternatives that answer the “how” assigned by the selling organization, generate insight question, the executive is now ready to decide “who” can for the customer on how to capture new business deliver the right solution. Can the internal resources of value or manage a looming risk by combining their the executive’s company act on the opportunity, or must knowledge of a customer’s business and industry with the executive turn to an outside partner, and, if so, which their own organization’s capabilities and experience. partner? By introducing new information and/or a new When engaging a senior executive, your job is to begin framework for thinking about how to directly affect with the “why” question, persuading him or her with one or more of the customer’s business value drivers, education and dialogue that your point of view is worth the customer learns something that he or she may not pursuing. By first guiding the customer’s thinking about have been aware of or may not have fully understood. the value of the opportunity and concrete ways to pursue „„ Provoke Interest. Salespeople meet with a senior- it, you establish a very early and highly influential position level decision maker to succinctly and compellingly in the eventual purchase decision. This dramatically present their point of view on new value capture. They increases your chances of winning the deal when the educate their customer and guide her to consider customer is ready to decide on “who” can deliver the right the significance of the point of view. If the customer solution. agrees the point of view represents significant new Getting in early and guiding the customer’s decision is value, the salesperson suggests a method to validate more critical than ever. With the proliferation of information the idea within the customer’s business before offering on the Internet today, customers do a significant amount a specific solution. of research and due diligence on their own. A recent study „„ Catalyze Decisions. The implementation of a point by the Corporate Executive Board looked at customers’ of view can be complex and may require significant purchasing-decision timelines. CEB’s findings showed customer investment and effort. And since the solution that, on average, customers had moved 57 percent of the to a point of view often involves elements the customer way through the timeline before they made first contact may not be deeply familiar with, the salesperson with their supplier.1 can and should help the customer navigate such In doing due diligence research, customers are a complex decision. Prior to presenting a detailed determining their business case and their needs—that proposal for a solution, the skillful salesperson is, they are answering the “why” and “how” questions leverages his or her position as an expert advisor to themselves. Vendors are left to compete on little more than guide the customer in developing a framework for price, often in an arm’s-length RFP process. decision making—involving the right stakeholders, considering viable alternatives, and selecting decision Customer Purchase-Decision Timeline criteria. By jointly creating a decision framework with Customer Due Customer’s First Customer the customer the salesperson enables the customer, to Diligence Begins Contact with Supplier Purchase Decision more confidently evaluate and act on the point of view. 0% 57% 100% 2
point of view Points of view can derive from a number of sources: In 2001, GE Healthcare created its Performance Solutions group to sell consulting services wrapped around the company’s traditional Your Client hardware offerings, such as MRI equipment. Experience The company took this action in order to increase margins in the face of price pressure from government as well as managed health-care organizations.4 The Performance Solutions group took a point of view Product selling approach to starting new customer conversations, Marketing Management for example, with COOs of newly built hospitals in the Sources United Arab Emirates, who wrestle with bed-utilization of rates as low as 20 percent. The typical strategy for Ideas combating this problem involves throwing money at it by making brick-and-mortar and technology investments. In engaging the COOs, the Performance Solutions team led with a new idea: low bed-utilization rates are a result of failing to focus on underlying clinical and administrative Industry Analyst R&D processes that deliver outstanding care and so drive Reports patient satisfaction and loyalty. To address this issue, GE Healthcare often starts by delivering process improvement solutions (using Six Sigma and other methodologies)— Note that, in some organizations, a separate internal unit before addressing core hospital technology solutions. takes responsibility for gathering ideas and developing U.A.E. hospitals, such as Sheikh Khalifa Medical Centre in points of view. Other organizations take a collaborative Abu Dhabi, reported improvements in room utilization and approach, across functional units, to articulate ideas and productivity as a result of taking GE’s approach.5 solutions. Point of View Selling Works for the Customer Let’s look at a couple of companies that have put and for the Solution Provider point of view selling into practice: In the 1990s, IBM transformed its go-to- For the Customer For the Solution Provider market approach from selling hardware „„ Provides insight into „„ Helps me to sell higher in to selling services that “pulled through” hardware over my most important the organization the course of the customer engagement. This sales problems—or presents „„ Helps me gain customer transformation, which began in the tenure of Lou Gerstner, new opportunities I had insight and build turned around the performance and perception of IBM. not thought of customer intimacy Once a money-losing dinosaur, it was now the world’s „„ Introduces a “thinking „„ Positions me as a largest provider of computer software, services, and partner” to whom I can business partner and hardware.2 turn for advice—not trusted advisor—not just another vendor trying to An example of IBM’s point of view selling approach can a vendor sell me something be seen in its go-to-market strategy for solutions focused „„ Enables me to price on radio-frequency identification (RFID) technology. Rather „„ Reduces my risks products and services at as I choose an than leading sales conversations with a description of favorable price points; implementation partner RFID’s features and benefits, IBM’s Global Business minimizes the time I Services group starts with a customer problem or spend in “RFP mode” opportunity. For example, in Europe, Global Business Services cites the challenges and costs of counterfeit Point of view selling promises to significantly differentiate shipping containers to wholesale distributors. The those who learn to apply it from their competitors. It can problem results in significant lost revenue and excessive position them as trusted customer advisors and generate maintenance costs; an RFID-based solution might be an larger, more profitable deals. It is suitable for most approach to solving it.3 Now that is a story a distributor commercial sales organizations in all kinds of companies company COO might be interested in exploring—as around the world, from very young industries to the most opposed to discussing the RFID technology itself. mature ones, from hot innovators to so-called commodities Interestingly, hardware sales per rep at IBM have doubled suppliers. Point of view selling is a game-changer. since the early 1990s, when hardware was the company’s primary offering in the market. 3
point of view Endnotes 1. Corporate Executive Board, Executive Guidance for 2012: Drive Growth by Challenging Customers, Arlington, VA, 2012, Page 2 2. Louis V. Gerstner, Jr. Who Says Elephants Can’t Dance? Inside IBM’s Historic Turnaround. (Collins, 2002) 3. “Container Centralen: Fighting counterfeiting—and transforming an industry in the process.” IBM case study (http://tinyurl.com/63s7rlv) 4. Ranjay Gulati. “Silo Busting: How to Execute on the Promise of Customer Focus” (Harvard Business Review, May 2007) 5. Sheikh Khalifa Medical Centre in Abu Dhabi, U.A.E. GE Healthcare customer testimonial (http://tinyurl.com/6gztso2) Further Reading: The Basis Group. “Thought Leadership Is the New Sales Pitch” (http://tinyurl.com/6etb6px) Forum is a recognized global leader in linking learning to strategic business objectives. Our learning solutions help organizations effectively execute their business strategies by focusing on their most important asset: their people. We provide clients with practical and research-based advice and tailored programs that mobilize employees, accelerate business-initiative implementation, and improve agility. Forum’s 40-year legacy as a pioneer and thought leader continues with the release of our latest book, Strategic Speed (Harvard Business Press). For more information, visit www.forum.com. © 2012 The Forum Corporation 4

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Point of view selling

  • 1. point of view Point of View Selling: Using thought leadership to sell to senior executives Authored by Michael Collins, Vice President and Executive Consultant, The Forum Corporation The business challenges faced by executives today Today’s solutions providers are borrowing a successful are more varied and complex than ever before. As they approach from management consulting firms seeking to emerge from the economic downturn, many companies are sell higher in the organization. We call this approach point looking to realize top-line revenue growth without taking of view. It involves four stages of starting and growing a on fixed costs. How can we cut product launch-time to get client relationship: new products on shelves faster? How can we build and expand hospitals that deliver world-class health care at a reasonable cost? How can we integrate our field, web, and LEAD WITH telesales channels to increase charge-card adoption and A POINT OF VIEW usage? Often, there are no clear-cut answers for the customer executive. The best response to a complex challenge might involve a myriad of things: process changes, outsourcing, technology, new marketing campaigns, JOINTLY people development and training, and so on. Implementing IDENTIFY MUTUALLY BENEFICIAL EVALUATE OTHER CUSTOMER/SUPPLIER any of these things would require investments of time, OPPORTUNITIES RELATIONSHIP POTENTIAL SOLUTIONS money, and resources. Wanting to avoid making big bets— and risking costly mistakes—the executive needs proof that one course of action makes the most sense before proceeding with it. In markets and selling environments such as today’s, the DELIVER solutions provider has a tremendous opportunity to serve SOLUTIONS AND REALIZE the customer by leading with ideas and providing thought VALUE leadership throughout the selling process. Customers value the ideas that a solutions provider brings to the table to the extent that these ideas address significant One way to think about point of view selling is to consider opportunities or problems they face. As the solutions the customer’s purchasing-decision process. (See provider moves higher in the customer organization, the the model at the top left of the following page.) Senior importance of compelling ideas becomes even greater. executives focus on the “why” question first: Why is this The challenge for sellers is significant. Senior executives idea relevant to our business? To what extent are the idea are looking for more than just “your answer.” They and the solution(s) going to impact our performance? Is are focused on the impact you can bring—not on the this a $50 million opportunity or a $50 opportunity? features and functions of the solution. In carpentry terms, The second key question is “how?” The buying executive, customers are interested in the hole, not in the drill. who has been persuaded that this is a significant idea, In addition, busy executives may not want to spend now needs to know the various alternatives that her meeting time simply answering questions about their company should consider if it is to realize improvement. business. Their calendars are tight: Why should they spend She needs to believe that her organization can implement their time educating you? the alternatives. For instance, she needs to know whether
  • 2. point of view the “right” answer might involve process change, The point of view selling approach guides the customer technology implementation, outsourcing, or training—or through considering the three questions of the purchase- some combination of these. decision process by managing three stages of engagement with the customer: WHY? HOW? WHO? To what extent is What are the Who can best this idea relevant to possible deliver the my business? solutions? right solution? DEVELOP PROVOKE CATALYZE A POINT INTEREST DECISIONS OF VIEW Entry point for an Entry point for idea-based approach traditional selling „„ Develop a Point of View. Salespeople, and others Having explored the alternatives that answer the “how” assigned by the selling organization, generate insight question, the executive is now ready to decide “who” can for the customer on how to capture new business deliver the right solution. Can the internal resources of value or manage a looming risk by combining their the executive’s company act on the opportunity, or must knowledge of a customer’s business and industry with the executive turn to an outside partner, and, if so, which their own organization’s capabilities and experience. partner? By introducing new information and/or a new When engaging a senior executive, your job is to begin framework for thinking about how to directly affect with the “why” question, persuading him or her with one or more of the customer’s business value drivers, education and dialogue that your point of view is worth the customer learns something that he or she may not pursuing. By first guiding the customer’s thinking about have been aware of or may not have fully understood. the value of the opportunity and concrete ways to pursue „„ Provoke Interest. Salespeople meet with a senior- it, you establish a very early and highly influential position level decision maker to succinctly and compellingly in the eventual purchase decision. This dramatically present their point of view on new value capture. They increases your chances of winning the deal when the educate their customer and guide her to consider customer is ready to decide on “who” can deliver the right the significance of the point of view. If the customer solution. agrees the point of view represents significant new Getting in early and guiding the customer’s decision is value, the salesperson suggests a method to validate more critical than ever. With the proliferation of information the idea within the customer’s business before offering on the Internet today, customers do a significant amount a specific solution. of research and due diligence on their own. A recent study „„ Catalyze Decisions. The implementation of a point by the Corporate Executive Board looked at customers’ of view can be complex and may require significant purchasing-decision timelines. CEB’s findings showed customer investment and effort. And since the solution that, on average, customers had moved 57 percent of the to a point of view often involves elements the customer way through the timeline before they made first contact may not be deeply familiar with, the salesperson with their supplier.1 can and should help the customer navigate such In doing due diligence research, customers are a complex decision. Prior to presenting a detailed determining their business case and their needs—that proposal for a solution, the skillful salesperson is, they are answering the “why” and “how” questions leverages his or her position as an expert advisor to themselves. Vendors are left to compete on little more than guide the customer in developing a framework for price, often in an arm’s-length RFP process. decision making—involving the right stakeholders, considering viable alternatives, and selecting decision Customer Purchase-Decision Timeline criteria. By jointly creating a decision framework with Customer Due Customer’s First Customer the customer the salesperson enables the customer, to Diligence Begins Contact with Supplier Purchase Decision more confidently evaluate and act on the point of view. 0% 57% 100% 2
  • 3. point of view Points of view can derive from a number of sources: In 2001, GE Healthcare created its Performance Solutions group to sell consulting services wrapped around the company’s traditional Your Client hardware offerings, such as MRI equipment. Experience The company took this action in order to increase margins in the face of price pressure from government as well as managed health-care organizations.4 The Performance Solutions group took a point of view Product selling approach to starting new customer conversations, Marketing Management for example, with COOs of newly built hospitals in the Sources United Arab Emirates, who wrestle with bed-utilization of rates as low as 20 percent. The typical strategy for Ideas combating this problem involves throwing money at it by making brick-and-mortar and technology investments. In engaging the COOs, the Performance Solutions team led with a new idea: low bed-utilization rates are a result of failing to focus on underlying clinical and administrative Industry Analyst R&D processes that deliver outstanding care and so drive Reports patient satisfaction and loyalty. To address this issue, GE Healthcare often starts by delivering process improvement solutions (using Six Sigma and other methodologies)— Note that, in some organizations, a separate internal unit before addressing core hospital technology solutions. takes responsibility for gathering ideas and developing U.A.E. hospitals, such as Sheikh Khalifa Medical Centre in points of view. Other organizations take a collaborative Abu Dhabi, reported improvements in room utilization and approach, across functional units, to articulate ideas and productivity as a result of taking GE’s approach.5 solutions. Point of View Selling Works for the Customer Let’s look at a couple of companies that have put and for the Solution Provider point of view selling into practice: In the 1990s, IBM transformed its go-to- For the Customer For the Solution Provider market approach from selling hardware „„ Provides insight into „„ Helps me to sell higher in to selling services that “pulled through” hardware over my most important the organization the course of the customer engagement. This sales problems—or presents „„ Helps me gain customer transformation, which began in the tenure of Lou Gerstner, new opportunities I had insight and build turned around the performance and perception of IBM. not thought of customer intimacy Once a money-losing dinosaur, it was now the world’s „„ Introduces a “thinking „„ Positions me as a largest provider of computer software, services, and partner” to whom I can business partner and hardware.2 turn for advice—not trusted advisor—not just another vendor trying to An example of IBM’s point of view selling approach can a vendor sell me something be seen in its go-to-market strategy for solutions focused „„ Enables me to price on radio-frequency identification (RFID) technology. Rather „„ Reduces my risks products and services at as I choose an than leading sales conversations with a description of favorable price points; implementation partner RFID’s features and benefits, IBM’s Global Business minimizes the time I Services group starts with a customer problem or spend in “RFP mode” opportunity. For example, in Europe, Global Business Services cites the challenges and costs of counterfeit Point of view selling promises to significantly differentiate shipping containers to wholesale distributors. The those who learn to apply it from their competitors. It can problem results in significant lost revenue and excessive position them as trusted customer advisors and generate maintenance costs; an RFID-based solution might be an larger, more profitable deals. It is suitable for most approach to solving it.3 Now that is a story a distributor commercial sales organizations in all kinds of companies company COO might be interested in exploring—as around the world, from very young industries to the most opposed to discussing the RFID technology itself. mature ones, from hot innovators to so-called commodities Interestingly, hardware sales per rep at IBM have doubled suppliers. Point of view selling is a game-changer. since the early 1990s, when hardware was the company’s primary offering in the market. 3
  • 4. point of view Endnotes 1. Corporate Executive Board, Executive Guidance for 2012: Drive Growth by Challenging Customers, Arlington, VA, 2012, Page 2 2. Louis V. Gerstner, Jr. Who Says Elephants Can’t Dance? Inside IBM’s Historic Turnaround. (Collins, 2002) 3. “Container Centralen: Fighting counterfeiting—and transforming an industry in the process.” IBM case study (http://tinyurl.com/63s7rlv) 4. Ranjay Gulati. “Silo Busting: How to Execute on the Promise of Customer Focus” (Harvard Business Review, May 2007) 5. Sheikh Khalifa Medical Centre in Abu Dhabi, U.A.E. GE Healthcare customer testimonial (http://tinyurl.com/6gztso2) Further Reading: The Basis Group. “Thought Leadership Is the New Sales Pitch” (http://tinyurl.com/6etb6px) Forum is a recognized global leader in linking learning to strategic business objectives. Our learning solutions help organizations effectively execute their business strategies by focusing on their most important asset: their people. We provide clients with practical and research-based advice and tailored programs that mobilize employees, accelerate business-initiative implementation, and improve agility. Forum’s 40-year legacy as a pioneer and thought leader continues with the release of our latest book, Strategic Speed (Harvard Business Press). For more information, visit www.forum.com. © 2012 The Forum Corporation 4