Mastering the Complex Sale_9 docx

In the Design phase, we calculate thefinancial impact of the solution FoS.. The value of a solution and an appropriate investment to obtain it can be expressedwith a simple equation: Fin

determined financially In the Diagnose phase, we assigned

a cost to the customer’s current situation or cost of theproblem (CoP) In the Design phase, we calculate thefinancial impact of the solution (FoS)

This does not mean that it is time to talk about theprice of our solutions or to begin negotiating price with thecustomer Instead, we are going to quantify the financialimpact of the desired outcome, that is, what the customercan expect in terms of increased revenue and/or decreasedexpense We want to determine what it is worth to thecustomer to solve the problem The value of a solution and

an appropriate investment to obtain it can be expressedwith a simple equation:

Financial impact of the solutionðFoSÞ Cost of solutionðCoSÞ ¼ True value ðvalueÞWhen customers know the financial impact of a solu-tion, many of the price pressures that salespeople typicallyface disappear In fact, the actual cost of the solution beingoffered becomes far less important than how that cost com-pares to the value the customer stands to gain The ability

to analyze value in this way is a significant improvementover the typical side-by-side price comparison of solutionsthat tell customers nothing about how much value eachsolution will create and therefore, nothing about what arealistic investment could be to solve the problem

Investment Expectations: What Level of Investment

Is Appropriate to Solve the Problem?

Once the value parameters are set, the next solutionparameter is what level of investment makes businesssense for the customer This can also be expressed in asimple equation:

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Financial impact of the solutionðFoSÞ=Customer’s required ROIðreturn on investmentÞ

¼ Maximum investmentDefining investment expectations is a boon to both thecustomer and the sales professional The customer nowknows how much to realistically invest in a solution Thesales professional now knows whether the solution is finan-cially feasible for the customer If it is feasible, the engage-ment continues If not, the customer’s expectations must beadjusted or the customer is returned to the salesperson’sopportunity management system and it is time to move on

to a more qualified customer Also, setting investmentexpectations largely eliminates price negotiations and ob-jections about the price of your offerings You know ahead

of time that the investment required to purchase your tions is a match with the customer’s expectations

solu-Conventional salespeople tend to accept customerbudgets In doing so, however, they are opening them-selves up to three potential problems First, the fact that abudget exists suggests that they are arriving late, and thelater they arrive, the more difficult it is to establish accu-rate investment criteria Second, an existing budget is agood indication that the customer is already working with

a competitor, who is the likely source of the budget mates Third, because the budget is probably not an accu-rate reflection of the customer’s requirements, it is unlikely

esti-to support the proper level of investment

Timing: How Soon Does the Customer Need to See Results?

The next set of solution parameters is based on the timing

of the expected outcomes These are relatively simple toestablish and don’t require much explanation, but they

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are important After all, in today’s fast-changing world, asolution that arrives late can cause as much damage as onethat does not arrive at all.

The customer’s expectations as to the timing of the lution tell us when the solution must be in place and thetimetable by which it must be producing results Further,timing parameters have the added benefit of signaling thecustomer’s intentions for purchasing the solution, thusoffering valuable information to the sales professional andanother opportunity to influence the final decision

so-As in establishing our customers’ expectations aboutsolution outcomes, it is our job to ensure that their timingexpectations are clearly defined, mutually understood,reasonable, and attainable

Key ThoughtBudgets Are Not Cast in Stone

Conventional selling puts great emphasis on thecustomer’s budget Budgets are part of the corporateplanning process They represent management’s de-sire to forecast and assign resources for anticipatedneeds Conventional sales methods ignore the realitythat the corporate budget is largely irrelevant in thecomplex sale

Value-laden purchases are investments Corporateresources flow to the best investment, that is, theinvestment with the greatest potential return Whenmaking quality business decisions, budgets are alteredand created; they rarely impede an attractive invest-ment Our goal is to work with customers to createthe investment criteria on which the budget is even-tually based

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Decision Criteria: How Will the Customer Buy, Implement, and Measure the Results of the Solution?

During the Diagnose phase, the cast of characters withinthe customer company made four critical decisions:

1 They decided that the physical evidence of a lem or an unaddressed opportunity was compellingenough to quantify its impact

prob-2 They decided on the financial impact of their currentsituation

3 They decided that the financial impact is able

unaccept-4 They decided to pursue a solution capable of ing that impact

address-By this point in the Design phase, the cast of characters

in the customer company has made five critical decisions:

1 They have decided on realistic expectations for tion outcomes

solu-2 They have decided on a preferred approach to achievetheir expectations

3 They have decided on the value they should receive

4 They have decided what they will invest to receive thisvalue

5 They have decided when they want the solution inplace

Now, the customer must determine the decision ria for selecting a solution provider These criteria providethe customer with a clear set of parameters for scrutinizing

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competing solution offerings in terms of how well eachwill achieve the customer’s expectations.

The decision criteria have already been determined bythe nine decisions mentioned previously as well as theexceptional levels of clarity and alignment you have helpedyour customer achieve Thus, the customer is well situated

to restate the previously mentioned decisions as firm ria The customer knows what to ask, what to measure,and what to compare as various solution providers areconsidered

crite-For example, because the customer has determined theconsequences of his or her situation during the Diagnosephase, these consequences can now form the basis of theirselection criteria In other words, the customer adopts se-lection criteria that address and resolve each consequence

  The challenge of Era 3 is helping customers make high-quality decisions in their quest to solve complex prob-lems and capture complex opportunities By guidingyour customers through the six Design questions, youhave prepared them to find the best solutions and askvery precise questions that require very precise answers

of potential suppliers In doing so, you have implicitlyshown that you have the answers that they are lookingfor, and even better yet, you have set a very high stan-dard that your competitors must meet to win the salefor themselves Unless they are operating in Era 3 aswell, it is very likely they will not be able to match themutual understanding that you have achieved with cus-tomers Your competitors are in a no-win position:you represent clarity and credibility, and they representuncertainty Now, the only task left in the Design phase

is confirmation

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Avoiding the Three Traps of the Design Phase

There are three common traps that salespeople need torecognize and avoid in defining solution expectations:

PREMATUREPRESENTATIONWhen customers begin talking about expectations,there is always a temptation, often an irresistible one,for the salesperson to slip into presentation Customerssay they expect high reliability as a solution outcome,and suddenly the salesperson is delivering a speechabout the consistent and reliable performance of theoffering We need to be aware of this and avoid theurge to present during the Design phase

UNPAIDCONSULTINGUnpaid consulting starts when we cross the line be-tween defining parameters of a solution and designingsolutions When we start designing solutions, we are act-ing as consultants In past decades, this was not a mon-umental issue If you figured out the problem anddesigned a unique and competent solution for a cus-tomer, the sale was almost guaranteed and you were re-warded for your consulting effort

Today, however, there is an ever-increasing liferation of competitors, and once a solution isdesigned, the customer can easily shop it to the com-petition When that happens, we become unpaid con-sultants and our own worst enemies We’ve enabledour competitor, who did not make the investment indesigning the actual solution, to sell its solution at alower price We can avoid this trap in one of twoways: either by staying focused on the customer’s

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Confirmation and the Discussion Document

In the Prime Process, confirmation is driven by a discussiondocument Discussion documents are much like sketchesthat architects draw In designing a building, an architect

expectations for solution outcomes and not strayinginto the design of solutions, or by charging customersfor our design services

CREEPINGELEGANCEThe final pitfall occurs when customers become soenthusiastic about the potential value of solutions totheir problems that they expand the scope of the out-comes When customers drop into this ‘‘as long aswe’re going to do this, we might as well also do that’’mode of thinking, they tend to lose their sense of fiscalresponsibility, and conventional salespeople start tocount the extra commissions coming their way

The problem with allowing creeping elegance lies

in the very nature of the complex sale There is no gle decision maker in the sale, so if you allow one mem-ber of the cast of characters to unnecessarily expand thescope of a solution, you are risking the entire projectbecause it is highly probable that it will be sniped at byother members of the cast and could be shot down.Instead, you must ensure that the solution doesnot expand beyond reasonable financial parametersand help customers determine any additional costs orrisks they could incur if it does The rule to follow isthis: never allow an expectation that is not backed up

sin-by a specific problem and a cost that supports theadditional investment

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and the client first discuss the features that the clientwants in the design; the architect then draws a preliminarysketch based on those requirements Next, a process ofiteration ensues as the client and the architect refine andenhance the design and the sketches become more andmore complete You can’t actually construct a buildingfrom these drawings, but they do serve as a starting pointfor the blueprints.

The discussion document is very similar to the tect’s sketch Sales professionals are creating this livingdocument throughout the Prime Process Think of it as atool to clarify critical communications during the decisionprocess It should start as early as the first conversation andserve as a recap of that discussion You could send the doc-ument to your customer, requesting that he or she reviewyour notes and make any required revisions The discussiondocument should continue to grow and be revised as thedecision process proceeds

archi-By the Design phase, the discussion document shouldcontain all of the information that has been obtained dur-ing the Discovery and Diagnose phases Now that the solu-tion parameters have been determined, they should beadded to the discussion document and a final draft should

be prepared This final draft recaps the overall situation, itsfinancial impact, the customer’s expectations, and the solu-tion parameters on which the best solution will be deter-mined It sums up the entire sales engagement to this pointand puts into writing the findings, agreements, and under-standings reached with the customer

When a customer does not agree with an item in thediscussion document, you know that an impediment to asuccessful sale has surfaced Before you can move forwardwith the engagement, you need to trace each concern ordisconnect back to its source and resolve it to the cus-tomer’s satisfaction

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Conversely, when the customer does confirm the tents of the discussion document, it tells you two things:First, all of the requirements needed to create and deliverthe best solution have been addressed Second, it is nowthe right time to formally offer the customer that solu-tion It is time to move into the final phase of the PrimeProcess: Deliver.

con-Key ThoughtWhat’s Wrong with This Picture?

Salespeople tend to forget that there are always flicting objectives coexisting within organizations.When the design of a solution that is clearly in thebest interest of the organization is meeting resist-ance, you must first ask yourself, ‘‘What is wrongwith this picture?’’ When you identify what it is thatdoesn’t make sense, ask a second question, ‘‘Underwhat circumstances would this refusal to confirmmake sense?’’

con-Normally, the answers to these two questions leadyou to one or more members of the cast of characterswho believe that they will experience pain because ofthe solution You can neutralize that pain by recog-nizing it and addressing it in the solution, or bybuilding a consensus that it must be accepted for theoverall benefit of the organization

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Deliver the Value

Creating Competitor-Proof Customer Relationships

We frequently hear similar statements from executives

when they call on us to help them improve theirorganization’s sales and marketing performance Theyexpress concerns like: ‘‘We have the right solution andour team does a great job of communicating our value,but we struggle in the final phases of the sale We’regood at selling customers our value, but then we get beat

up on price We just can’t hold our ground during theclose and negotiations.’’

You no doubt recognize what’s right and what’s wrongwith these statements The statement of the problem—getting ‘‘beat up on price,’’ which is likely causing decliningsales and profit margins—is based on fact and represents avery real and serious situation However, the identification

of the causes of the problem—the inability of salespeople toclose and negotiate—is an opinion and, in reality, neither is

an actual cause of the problem

Closing and negotiation skills in the conventionalsense are rarely needed in the properly executed diagnos-tic sales engagement More accurately, you don’t need toworry about closing and negotiation during the eleventhhour if you follow the Prime Process These two mostonerous and often feared tasks in sales are simply nolonger necessary

This is a difficult idea for salespeople to grasp ‘‘What?

No objections? No negotiations?’’ Their incredulity is ameasure of how deeply the conventional selling mind-set isstill ingrained in the psyche of the salespeople and howradical a shift away from that mind-set the Prime Processcontinues to represent

The Prime Process nullifies the dependency on closingand negotiation skills because by the time the decision

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