mastering the complex sale

Masteringthe

Complex SaleHOW TO COMPETE

AND WIN WHEN THE STAKES

ARE HIGH!

JEFF THULL

JOHN WILEY & SONS, INC.

thul_a01ffirs.qxd 3/20/03 8:19 AM Page iii

Praise for Mastering the Complex SaleJeff s approach to creating and keeping win-win customer relation-

ships has been nothing short of life transforming. Today we only investin companies that agree to adopt the Prime philosophy and process.

Richard Koffler, CEO, Koffler Ventures LLC

Thulls insight into business think vs. sales think will bring youexceptional credibility. Mastering the Complex Sale is a must-read fortodays competitive landscape in the financial services arena.

Jeff Nicholson, Managing Director & Market Executive, Harris Nesbitt

Weve ingrained the Prime Process in our culture around the globeand its clearly a sustainable competitive advantage. I write this en-dorsement with some reluctance as I dont want my competitors tohave this advantage. In 30 years of reading books and attending sem-inars to continue my professional growth, there are only a handfulthat I can say made a difference. Jeff Thulls Mastering the ComplexSale is one of them.

Jim Clauser, President and COO, IBA Technology GroupBelgium

We have found the Prime Process invaluable. It provides a blue-print superior to all other methodologies we have tried. We particu-larly like the high integrity approach. Mastering the Complex Sale is amust-read for everyone selling capital equipment or supportingsomeone who does.

Ken Anderson, Senior Vice President, Instron

Jeff s approach to the complex sale is both accurate and insightful,and for any sales organization that embraces and puts Mastering theComplex Sale into practice, the models and strategies of the PrimeProcess will bring them a tremendous business advantage.

Stan Luboda, Vice President, Americas, Cognex

Approaching the complex sale as a decision process, not a sales pro-cess, takes customer focus, win-win, and mutual respect to a newlevel. The Prime Process is clearly the way to do business.

Robert Priest-Heck, COO, Key3 Media Events, producers of COMDEX NetWorld+Interop

If youre tired of being the unpaid consultant and engaging incountless dry runs, Thulls Mastering the Complex Sale shows youhow to cut through the clutter and cut to the chase. This book gives

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you everything you need for transition from conventional to complexsales. A real adventure!

Per Lofving, Group Vice President, Thomas Publishing

Jeff Thull presents a philosophical approach to the sales process re-quired to master high-dollar complex sales situations that is unlikeany other that I have seen.

Bob Brockman, Chairman and CEO, Universal Computer Systems, Inc.

Mastering the Complex Sale is the most enlightened approach you willfind to address the complexities of todays business world, clearly abalanced approach to business and personal success.

Tom Gegax, Author, Winning in the Game of Life,Co-Founder Tires Plus, CEO, Gegax Consulting andKeynotes

Mastering the Complex Sale will open your eyes to the ways of todaysmarket, giving you a new perspective of the sales cycle and the op-portunities available to those willing to embrace change.

David J. Fasbender, Sr. Vice PresidentSales & Marketing, Smead Manufacturing Co.

Jeff Thull has done a brilliant job of capturing a straightforwardand immensely lucrative way for you to get a handle on complex sales.He takes you to the heart of creating measurable value for your cus-tomers, resulting in increased margins and customer loyalty.

Charles W. Morris, V. P. Specialty Chemicals andResins, Georgia-Pacific

A roadmap for graduating from messenger of information to mentorof customers, Mastering the Complex Sale will be devoured by salesprofessionalspeople who seek not only career success but personalfulfillment from their high calling.

Carl T. Holst-Knudsen, President, Thomas Publishing

In todays tough technology climate the stakes are high for everyopportunity. Mastering the Complex Sale is a blueprint for understand-ing how to increase your customers awareness of their business is-sues by managing the decision process, a winning formula thatshould be utilized on every sales call. Its not only thought provokingbut right on the mark. This is the future of high-stakes selling.

Michael W. Liacko, Sr. Vice President CorporateSales, Key3 Media Events

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Masteringthe

Complex SaleHOW TO COMPETE

AND WIN WHEN THE STAKES

ARE HIGH!

JEFF THULL

JOHN WILEY & SONS, INC.

thul_a01ffirs.qxd 3/20/03 8:19 AM Page iii

Copyright 2003 by Jeff Thull. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted inany form or by any means, electronic, mechanical, photocopying, recording, scanning, orotherwise, except as permitted under Section 107 or 108 of the 1976 United States CopyrightAct, without either the prior written permission of the Publisher, or authorization throughpayment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 750-4470, or on the web atwww.copyright.com. Requests to the Publisher for permission should be addressed to thePermissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030,(201) 748-6011, fax (201) 748-6008, e-mail: [email protected].

Limit of Liability/Disclaimer of Warranty: W hile the publisher and author have used theirbest efforts in preparing this book, they make no representations or warranties with respect tothe accuracy or completeness of the contents of this book and specif ically disclaim any impliedwarranties of merchantability or f itness for a particular purpose. No warranty may be createdor extended by sales representatives or written sales materials. The advice and strategiescontained herein may not be suitable for your situation. The publisher is not engaged inrendering professional services, and you should consult a professional where appropriate.Neither the publisher nor author shall be liable for any loss of profit or any other commercialdamages, including but not limited to special, incidental, consequential, or other damages.

For general information on our other products and services please contact our CustomerCare Department within the United States at (800) 762-2974, outside the United States at(317) 572-3993 or fax (317) 572-4002.

Wiley also publishes its books in a variety of electronic formats. Some content that appearsin print may not be available in electronic books. For more information about Wileyproducts, v isit our Web site at www.wiley.com.

Mastering the Complex Sale, Diagnostic Selling, Diagnostic Business Development,and Prime Resource Group, are registered trademarks of Prime Resource Group, Inc.Diagnostic Marketing, Diagnostic Map, Mastering Executive Relationships, KeyThoughts, and Multiple Decisions/Mutual Understandings, are trademarks of PrimeResource Group, Inc.

For more information about Prime Resource Group, visit our Web site atwww.primeresource.com or contact Customer Support within the U.S. at (800) 876-0378,outside the United States at (763) 473-7529 or e-mail [email protected].

Library of Congress Cataloging-in-Publication Data:

Thull, Jeff, 1949Mastering the complex sale : how to compete and win when the stakes

are high! / Jeff Thull.p. cm.

Includes bibliographical references and index.ISBN 0-471-43151-6 (cloth : paper)

1. SellingHandbooks, manuals, etc. 2. RelationshipmarketingHandbooks, manuals, etc. I. Title.

HF5438.25.T525 2003658.85dc21

2002153141

Printed in the United States of America.

10 9 8 7 6 5 4 3 2 1

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vForeword

Are your sales strategies, processes, and skills stuck inthe wrong era?The businesses we sell to, the problems we solve, and

the solutions we offer have evolved tremendously in thepast 50 years. This raises a few questions: Can you, as asalesperson, a manager, or an organization, effectivelycompete in todays market? The fact is, a high percentageof salespeople and the organizations they work for haventkept pace with this evolution.

Were living and working in a time Ive come to referto as the third era of selling. Understanding the historyof this evolution is an important factor to moving forwardinto Era 3. So let me step back with you for a moment.

Several years ago, I was asked to teach a course inInstructional Design, at the University of Minnesota, as itrelates to Sales Training. As the instructor, you areobligedin any introductory courseto work a shortHistory of This Discipline speech into the first classsession. As I surveyed what literature there was on thesubject, I found that sales, unlike most other functionsin the modern corporation, didnt really have much of ahistory. At least, nobody studied and wrote about sellingin the same way that they studied and wrote aboutMarketing, Logistics, Quality, Operations, or GeneralManagement. Even Purchasing has a longer academicpedigree than Sales.

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vi FOREWORD

I figured that the best way to find a window on thehistory of selling was to look at the evolution of sales train-ing. I would study the skills salespeople were taught to findclues about what their role was seen to be. Feeling like anarcheologist, I went to a couple of libraries and checked outall the material I could find that addressed the question,How can I be more successful in sales? It turned out to bequite a load of stuff: training manuals, articles, recordings(LP records from the 50s, up through cassettes and CDs oftoday), brochures, and lots of books. I was surprised to findthat they all sorted into three main piles, piles representingwhat Ive come to call Era 1, Era 2, and Era 3 of selling.

Era 1

The earliest material in the Era 1 pile dated from the early1950s. A reviewer today would characterize the titles of someof the books in that pile as somewhere between nave and ap-palling: The Customer Who Cant Say No!, Sizzlemanship!!, andthe ever-popular, 1001 Power Closes!!! But the skills justunder the surface were both subtle and sophisticated. Thiswas the era of the sales script (Just tell me where to go andwhat to say when I get there.). The agenda was purely thesellers agenda, and the sellers agenda was to get the cus-tomer to do what he (and in some few cases, she) wanted thecustomer to do. The role of the Era 1 salesperson was that ofpersuader. The training focused almost exclusively on threeareas: presenting, handling objections, and of course, closing.The skills were grounded in stimulus-response and compli-ance theories. Look at closing techniques, for example. Ifyou strip away the exclamation marks, Era 1 techniques arebased on the proven psychology of scaled commitments, reciprocation, compliant behavior of similar others, cues oflegitimate authority, and cues of scarcity and friendship.

Era 1 still thrives in a few niches today (telemarketingand the used-car lot come to mind), but as an approach it

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Foreword vii

has thankfully run out of gas. Why? Basically, customerscaught onto the Win/Lose scam and developed defensemechanisms that salespeople even today (regardless of theirorientation) have to cope with. Era 1 was replaced by anemphasis on a new set of skills, and by a newand more en-lightenedpoint of view about the role of the salesperson.

Era 2

The Era 2 alternative started emerging in the early and mid-dle 1970s, with Larry Wilson and his Counselor Approachand Mac Hanan with his Consultative Approach being twoof the earliest proponents. The emphasis on presenting,closing, and handling objections characteristic of Era 1 is re-placed in Era 2 with a focus on questioning, listening, trust,and building a relationship with the customer. You wontfind any reference to listening in any Era 1 materialbe-cause listening had absolutely no relevance to the Era 1 job.The questioning techniques of Era 2 were aimed at develop-ing an understanding of the customers needs (defined as thedifference between what the customer has and what the cus-tomer wants), and the job of the salesperson was to under-stand and then close that gap with his or her product, thesolution. The Era 2 approach has come to be known asneeds-satisfaction selling, and the role of the Era 2 sales-person is that of problem solver.

Because it was grounded in a Win/Win rather than aWin/Lose point of view, Era 2 has enjoyed a longer runthan Era 1 did. In fact, Era 2 remains the basis for muchof the training that salespeople experience even today. Butas the marketplace advanced, Era 2 needed to be supple-mented (rather than replaced) for two reasons:

1. At the business level of the complex sale, mosteverybody is using an Era 2 to some degree. Early inEra 2, when most salespeople were still using Era 1

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viii FOREWORD

techniques, a salesperson could create differentia-tionand get the businesssimply by taking theneeds-satisfaction approach. As more and more sales-people thought of questioning, listening, and solvingcustomer problems as part of their job, the approachitself no longer provided any differentiation.

2. Customers, for the most part, arent as experienced asthey need to be. Needs-satisfaction selling is based onthe assumption that the customer can accurately iden-tify and describe their problem. Whether this assump-tion was ever really valid is open to debate. But as thecomplexity of business problems and the technology ofsolutions have developed over the past ten or so years,its clearly questionable today.

So Era 2 skills continue to be necessary; theyre just nolonger sufficient.

Era 3

Era 3 took shape more slowly than Era 2 did, and it repre-sents a convergence of two main influences, both of whichcould be described under the general rubric of businessacumen. If the role of the salesperson in Era 1 was that ofa persuader, and in Era 2, that of a problem solver, the emerg-ing role of the salesperson in Era 3 could be described asbeing a business person, specifically a source of business ad-vantage. The thought of sales as a source of advantage is apretty radical notion. Traditionally, the sales function isviewed by the rest of the organization as a kind of place-ment officer for the warehouse. Marketing is the brains,and Sales is the mouth and the feet.

As a source of advantage, the Era 3 salesperson is chal-lenged to think from very different and complementary per-spectives, both at the same time. One point of view is that ofthe consultant, being a source of business advantage tothe customer. When operating from this point of view, the

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Foreword ix

salesperson must think like a business person and apply hisor her business acumen and understanding of the customersbusiness processes and priorities to creating a solution that(to paraphrase Peter Senge) the customer would truly value,but has never experienced and would never think to ask for.Clearly beyond needs-satisfaction selling.

The other point of view is that of the strategisttheflipside of business acumen. He or she must think like abusiness person, from the point of view of their own com-pany. In Era 1 and Era 2, the salesperson was concernedonly with revenue. Margins and cost of sales were some-body elses problem. That paradigm never did work verywell, even in the 1990s. Today, its a formula for Chapter11. So Era 3 salespeople are concerned not just with rev-enues, but also with cost of sales: shortening the sales cycle,ruthlessly qualifying opportunities, and walking away fromunprofitable business. In short, as a business person/consultant, Era 3 salespeople are sources of advantage totheir customers, while as a business person/strategist,they are a source of advantage to their own firm. Two per-spectives, one head, same time.

The Eras and Mastering the Complex Sale

At this point, you may be asking yourself what, if anything,this excursion down the Memory Lane of sales has to dowith Jeff Thull and Mastering the Complex Sale. When I firstmet Jeff, upwards of five years ago, I thought Id seen prettymuch everything to be seen on the subject of selling. Themore Ive gotten to know and work with Jeff and Prime Re-source Group, the more I realize how wrong I was.

The key challenge for the customer in Era 3 is twofold: First of all, the customer frequently does not have thehigh quality decision processes required to understand thecomplex problems they are experiencing. They also lack theextension of that decision process to understand the unique-ness of the complex solutions available to address those

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x FOREWORD

problems. Secondly, they require guidance and support inmanaging the organizational changes that are required toimplement todays complex business solutions. To be a truesource of business advantage, Era 3 sales professionals mustaddress both of these challenges and the Prime Process pro-vides an integrated approach that will do just that.

Jeff s philosophy of sales and the process he has devel-oped, represent a genuinely and uniquely Era 3 point ofview. I describe Jeff s approach as genuinely Era 3 in thatthe process, while totally respectful of the customer,doesnt assume that the customer has the complete pictureor all the answers. The process is one of mutual engage-ment, understanding the scope and cost of the issues, andjointly creating a solution. The job of the salesperson is tomanage the customers decision process towards a decisionthat represents the best outcome for both parties.

His approach is uniquely Era 3 in that it encompassesboth Era 3 roles or perspectives at once. You can point toother programs that focus exclusively on the strategistside of Era 3, and others that focus exclusively on the con-sultant side. Jeff s is the only approach that representsboth at the same time: No unpaid consulting, Going forthe no, and Always be leaving (the strategist), and TheDecision Challenge, The Bridge for Change, and TheCost of the Problem (the consultant). The common threadis thinking like a business person, not a salesperson.

Bottom line, the stance and the point of view aboutselling youll find in this book isnt really about selling atall. Its about how mature, intelligent, and ethical humanbeings would interact with each other to assure eachothers success. And thats what makes this book really rad-ical, refreshing, and required. Enjoy the ride!

JOHN SULLIVAN, PHDLearning Partners, Inc.

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xi

Acknowledgments

Looking back on 30-plus years of business, which includes21 years since founding Prime Resource Group, I un-doubtedly have many individuals to thank for their contri-butions and support. I first thank my partner in 33 years ofmarriage and five businesses, Pat Thull. I realize the con-cept of being partners in marriage and in business intriguesmany and is unimaginable to others. I can describe our part-nership only as as good as it gets. Pat has been an integraland driving force behind the growth of our organizationand the development of the Prime Process. She is a studentof the process and a master of the complex sale. She hasbrought in and served multiple clients in her role as vicepresident of sales and marketing and now COO of PrimeResource Group. Her editorial contribution has had a sig-nificant impact on the clarity of this book.

I thank my parents, who instilled an attitude of accom-plishment and continually encouraged and supported myearliest entrepreneurial pursuits. My father provided a rolemodel that I found reflected repeatedly in many successfulsales professionals I have met. He sold industrial buildinggranite for 35 years and sold to executives of some of themost admired corporations in America and through some ofthe most well-known architects in this country. I have a

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xii ACKNOWLEDGMENTS

vivid memory of taking a business trip with him when I was12 years old. I witnessed the respect he had for his clientsand the reciprocal respect they showed him. I was immedi-ately struck with the greatness of his profession. I am mostgrateful that my dad lived to see the beginnings of Diagnos-tic Selling and the success of Prime Resource Group.

The list of clients and associates that have contributedto the evolution of this process is long, starting with my firstsales manager, Al Miller, and my first business mentor, BobNew. Two valued clients were Ken Bozevich and LovellBaker, 3M managers, who took a calculated risk on a radi-cal new sales program and a young consultant some 20 yearsago. I thank Al Eggert, Ben Michelson, and Dave Madsen, of3M HIS, who built and supported one of the most successfulimplementations of the Prime Process. I am grateful also toPeter Muldowney, Terry Slattery, Bob Groening, GerhardMeese, Don Beveridge, Bill Graham, Nido Quebien, RobCastien, Bob Brockman, Richard Brooks, Per Lofving, IlanShanon, Charlie Morris, Robin Wolfson, and John Willig.

The early development of this material began with thecreation of our Diagnostic Selling program and was as-sisted by a gifted editor and writer, Tom Watson. JohnSullivan, PhD, and Judy Robinson, PhD, have providedinvaluable support with their expertise in instructionaldesign and curriculum development to capture the Diag-nostic Business Development Process and turn it into areplicable process that has been embraced across multipleindustries and cultures.

We began this project knowing I would need seriousadult supervision to keep on track and sift throughmountains of information, research, and experiences to dis-till a topic as broad as Mastering the Complex Sale into asingle book. We thank Ted and Donna Kinni for doing just

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Acknowledgments xiii

that. Their expert assistance in crafting our story has beenimpressive and enjoyable.

And thanks to the entire team at John Wiley & Sons,Matt Holt, our editor, and the great publicity support fromCelia Rocks and Dottie DeHart.

A special thank you goes to Jennifer, Jessica, andBrian.

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xv

Contents

Introduction xvii

1 The World in Which We Sell 1Converging Forces of Rapid Commoditizationand Increasing Complexity

2 Trapped in the Conventional Sales Paradigm 21Its Not about SellingIts about ManagingQuality Decisions

3 A Proven Approach to Complex Sales 39Youre Either Part of Your System orSomebody Elses

4 Discover the Prime Customer 75Optimum Engagement Strategies

5 Diagnose the Complex Problem 99The Optimal Source of Differentiation

6 Designing the Complex Solution 125Prevent Unpaid Consulting

7 Delivering on the Prime Promise 145Keeping Close to the Customer and Aheadof the Competition

8 Prime Performance Leadership 161Leading Professionals in the Complex Sale

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xvi CONTENTS

9 Prime Corporate Strategies 185Translating Market Strategy into Sales Results

10 A Complex Sales Future 199You Can Watch It Happen to You or You CanMake It Happen for You

Notes 211

Index 215

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xvii

Introduction

Todays turbulent marketplace creates constant competi-tive movement, fluctuating threats, and lucrative oppor-tunities. To acquire, expand, and retain long-term profitablecustomer relationships, companies and individuals cannotrely on a conventional approach to sales. Increased complex-ity, escalating customer requirements, rapid commoditiza-tion, and relentless competitive forces are all putting intensepressure on sales and marketing, demanding superior strate-gies and precise execution. Sales success requires an inte-grated process that enables you to respond within limitedwindows of opportunity.

To compete and win more sales in the world of com-plex sales, sales and marketing professionals need a way towork smarter. They need a new business paradigm that isspecifically designed for the complex sales arena, one thatoffers a system and the skills and the mental disciplineneeded to execute it. That smarter way to sell is the subjectof this bookcalled Diagnostic Business Development, orthe Prime Process.

A smarter way to sell should transform the conventionalsales pitch that customers must endure into a high qualitydecision-making process that customers value. The PrimeProcess equips salespeople with a way to help customers

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xviii INTRODUCTION

discover, diagnose, design, and deliver the best possible so-lution to their problems.

A smarter way to sell should transform salespeoplefrom predators into valued business partners in the cus-tomers mind. The Prime Process positions salespeople asprofessionals who bring credibility, integrity, and depend-ability to the business engagement. They are a source ofbusiness advantage to their customers.

A smarter way to sell should transform the sales pro-cess from premature presentations, pleas for customer con-sideration, to a process of mutual confirmation. The PrimeProcess builds mutual understanding step by step, thus en-suring that both sales professionals and their customersmost efficiently use their resources.

A smarter way to sell should transform the conven-tional solutions-based, seller-first approach to sales into adiagnostic-based, customer-centric approach. The PrimeProcess enables salespeople to differentiate themselves fromtheir competitors in the most effective way of allby stand-ing squarely on the customers side of the engagement.

In fact, a smarter way to sell is to stop selling in theconventional sense. Instead, we need to think in terms ofbusiness development, that is, developing our customersbusiness.

We need to get beyond selling to managing decisions. Allgood salespeople have a sales process, all customers have abuying process, and they typically have conflicting objec-tives. We need to set aside conventional processes and re-place them with a collaborative decision process, providedby the sales professional.

We need to get beyond problem solving to managing change.Providing quality solutions to customer problems no longerassures a successful sale and certainly does not guarantee asuccessful implementation of that solution. Change, along

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Introduction xix

with all the attendant risks involved, is the key issue cus-tomers face. We need to help them understand and navigatethe change required to assure a successful implementationof our solutions.

We need to get beyond meeting needs to managing expecta-tions. Just because we see a need does not mean that our cus-tomers see it or understand it as clearly as we do. We needto evolve and expand our customers understanding of theirneeds and their expectations about solutions.

We need to get beyond transactions to managing relation-ships. In the rush to close deals, we too often forget thehuman factor and squander the long-term opportunity. Weneed to address the hopes, fears, and aspirations of our cus-tomers and create mutually beneficial relationships.

Finally, we need to get beyond reacting to managing clearcommunications. Too often, we react to customers in rote

Beyond Selling to Business Development

Skills

Systems

Disciplines

ManagingDecisions

ManagingRelationships

ManagingChange

ManagingExpectations

ManagingCommunications

CUSTOMER

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xx INTRODUCTION

patterns, without asking for clarification or thinking deeper.As a result, we sound just like every other salesperson. Weneed to achieve the kind of true communication that fosterscrystal-clear and mutual understanding of our customersproblems and the best solutions we can recommend.

Among the byproducts of this fundamental reframingof the methodology of the complex sale are solutions to someof todays toughest sales challenges. The Prime Process:

Gives salespeople a proven, repeatable method for gain-ing access to and managing multiple decision makers atthe highest levels of power and influence in the cus-tomers organization.

Helps salespeople to set themselves apart from thecompetition early and often in the selling process.

Offers a way to get on the winning track in the salesprocess and to dramatically reduce the sales cycle time.

Eliminates the trap of unpaid consulting. Equips salespeople to identify untapped sources of op-

portunity and develop new business instead of chasingthe usual suspects along with the rest of the crowd.

Provides a common process and language with whichthe entire sales, marketing, and support team canpresent a unified voice to the customer and effectivelyDiagnose, Design, and Deliver optimal solutions.

What this book promises its readers is a pragmaticexploration of the complex sales world and an optimal ap-proach to mastering and winning the complex sale. Wereconfident we can deliver on that promise because of thesuccess our clients have achieved through Diagnostic Busi-ness Development.

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1The World in Which We Sell

Converging Forces of Rapid Commoditization andIncreasing Complexity

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3Survival in todays sophisticated marketplace requires usto overcome two opposing forces: (1) increasing complex-ity and (2) rapid commoditization, the pressure from buyersto devalue the differences between goods and services andreduce their decision to the lowest common denominatorthe selling price (see Figure 1.1). Lets be direct: The worldin which we sell is being pulled apart by these two opposingforces. Even our most complex solutions are at the mercy ofcommoditization as our customers, swimming in a haze ofconfusion and performance pressure, grapple with tough de-cisions impacting their responsibilities. The net effect is adeadly spiral of shrinking profit margins.

Seeking competitive differentiation through increas-ing uniqueness and complexity is a deadly double-edgedsword. These competitive advantages rapidly erode as they

FIGURE 1.1 The Converging Forces of the Market

Technology

Processes

Globalization

Consolidation

Regulations

Products

Services

Knowledge

Solutions

The Converging Forces of the Market

CommoditizationIncreasing Complexity


4 THE WORLD IN WHICH WE SELL

surpass the customers level of comprehension. As this oc-curs, the overwhelming tendency of the customer is to treatall solutions the sameas a commodity.

With a true commodity, price and total transactioncost are the driving forces in the marketplace. As commodi-tization occurs, sales skills become less and less effectiveand transactional efficiency becomes the critical edge. Theprofessional salesforce itself soon becomes a luxury that istoo expensive to maintain. If your company has chosen toembrace commoditization as a dedicated strategy, it isorsoon will bepursuing the lowest transactional cost it canachieve, and a book on sales process and skills will not be ofmuch value.

When there is increasing complexity, sophistication, in-novation, and value realized are the driving forces in themarketplace. To survive, a company is required to recruitand equip sales professionals who are capable of understand-ing the complex situations their customers face, configuringthe complex solutions offered by their companies, and man-aging the complex relationships that are required to bringthem both together. In short, the ability to create value forcustomers and capture value for companies is the key. Thus,the good news is that the future of the sales profession is se-cure in the complex environment. The bad news is that asyour company brings increasingly complex offerings to themarketplace, your customers are being left confused. Theyare less and less able to understand the situations they faceand evaluate these complex solutions, which tends to limittheir decision-making criteria to the simplest elements ofyour offering, the lowest common denominatorsprice andspecifications. If complexity accurately characterizes yourselling environment, this book is for you.

We see the impact of the complexity challenge everyday. My colleagues and I spend thousands of hours eachyear teaching and coaching salespeople internationally. We


The World in Which We Sell 5

meet the cream of the crop, the people who sell complexand costly solutions in a wide range of industries, including,but not limited to, professional and financial services, soft-ware, medical devices and equipment, IT solutions, indus-trial chemicals, and manufacturing systems. The value ofthe individual sales they undertake ranges from tens ofthousands of dollars to tens of millions of dollars. Thesesales professionals are highly educated, very sophisticated,and definitely street-smart. And they are well paid. Theyare levels above the stereotypic image of salespeople that isimprinted on the public imagination.

Even though these professionals are masters of theircrafts, we hear them express their frustration about theoutcome of their efforts on a regular basis. The most com-mon lament we hear is one that weve labeled the Dry Run.The generic version goes like this:

A prospective customer contacts your company with a prob-lem that your solutions are expressly designed to address. Asalesperson or team is assigned the account. The customer isqualified, appointments are set, and your sales team inter-views the customers team to determine what they want,what their requirements are, and what they plan to invest.A well-crafted, multimedia presentation is created, a com-plete solution within the customers budget is proposed, andall the customers likely questions are answered. Everyoneon the customers side of the table smiles and nods at the con-clusion of the formal proposal. Everything makes good busi-ness sense. Your solution fills the customers needs. Youbelieve the sale is in the bag, but the decision to move for-ward never comes. The result after weeks, months, and,sometimes, years of work: no sale. The customer doesnt buyfrom your company and often doesnt buy from your com-petitors. The worst-case scenario ends in what we refer to asunpaid consulting. The customer takes your solution de-sign, shops it down the street, and does the work themselves



or buys from a competitor. Many times, the customer simplydoesnt take action on a solution that it needs and can afford.This, with a twist here and there, is the Dry Run. Sure,its great practice and its great experience, but this isnt atraining exercise. This is the real world of selling, and, inthis world, its your job to bring in the business.

Whats going on in this story? The sales team is doingeverything it has been taught, but the result is not what isexpected. In fact, our experiences with more than 10,000salespeople each year suggest that, in the complex environ-ment, the outcome of the conventional sales process isincreasingly random and unpredictable. We have alreadyhinted at some of the reasons behind this dilemma, but totruly understand the situation, we examine the nature ofthe complex sale itself.

The Mother of All Procurements

Complex sales are primarily business-to-business andbusiness-to-government transactions. They involve multi-ple people, with multiple perspectives, often multiple com-panies, and frequently cross multiple cultural and countryborders. The complex sales cycle can run from days toyears. Undertaking this level of sale requires significantinvestment in time and resources.

The $200 billion defense contract that LockheedMartin won in 2001 may well be the largest complex sale inhistory. Granted, few companies will ever compete for asale of this magnitude. However, even though this is an ex-treme example of a complex sale, it does share commoncharacteristics with all complex sales.

This contract grew out of the U.S. Defense Depart-ments Joint Strike Fighter ( JSF) program, which was


The Mother of All Procurements 7

conceived in the early 1990s. The Pentagon decided to re-place the aging fighter fleets in all branches of the nationsmilitary with a next-generation jet that could be built on astandardized product platform and that combined the fea-tures of a stealth aircraft with state-of-the-art supersoniccapabilities. In 1995, the United Kingdom jumped into theproject when it decided that the fighters in the RoyalAir Force and Navy also needed replacing and that the JSFprogram would be the most economical way to accomplishthat task. Today, at least six other countries, includingthe Netherlands, Italy, Denmark, Norway, Canada, andTurkey, are considering participation.

The contract to design and manufacture jets for theJSF program was so large that it caused a fundamental recon-figuration in the aerospace industry. In fact, the winner ofthe contract would become the nations only fighter jet man-ufacturer. Now-retired Lockheed aeronautics executiveJames Micky Blackwell called it the mother of all pro-curements and suggested that the JSF program would even-tually be worth $1 trillion to whichever company won it.1 In1996, when the Pentagon announced that Lockheed Martinand Boeing had each won a $660 million prototype develop-ment contract and would be the only companies allowed tocompete for the programs final contract, one competitor,McDonnell Douglas Corporation, sold itself to Boeing.Northrop Grumman, another spurned competitor, tried tomerge with Lockheed Martin; after the government blockedthat deal, Northrop Grumman declared it would no longercompete as a prime contractor in the military aerospacemarket and joined the Lockheed team as a partner.

In October 2001, the final contract, the largest singledefense deal ever, was awarded to Lockheed. It called forthe eventual delivery of more than 3,000 aircraft to theU.S. military alone, and the Congressional Budget Officevalued it at $219 billion over 25 years. That seems to be the



tip of the iceberg: The company will easily export another3,000 planes, and the life of the contract could extend intothe middle of this century. Revenue generated by this salemay not hit the trillion-dollar mark that Micky Blackwelltargeted, but based on sales of past generations of fighterjets, industry analysts think that it could easily reach three-quarters of that figure.

Weve already mentioned the first two characteristicsthat all complex sales share with the JSF contract. Complexsales involve large financial investments and long sales cy-cles. Case in point: JSFs several hundred billion dollar pricetag and the years that it took to award the final contract.

Another common characteristic of the complex sale isthat it requires multiple decisions at multiple levels in thecustomers organization. It frequently involves multiple or-ganizations working with the customer. In the purchase ofmany products and services, the buying decision is clear andentails little risk. The customer clearly understands theproblem, clearly understands the solution, and can easily sortthrough the pros and cons of each alternative. There really isnot much that can go wrong that would not be anticipated.

In the complex sale, there is no single buying decision orsingle decision maker. The buying process is actually a longchain of interrelated decisions, impacting multiple depart-ments and multiple disciplines that can ripple throughout acustomers organization. In the JSF program, this chain ofdecisions stretched beyond the horizon. It included a hugenumber of decisions with serious implications for the future,such as the decision to pursue a single platform fighter thatcan be modified for vastly different uses and the decision toaward the entire contract to a single prime contractor.

The difficulty of coping with the long decision chain iscompounded by another common characteristic of the com-plex sale: multiple decision makers. Shelves of books are


The Mother of All Procurements 9

devoted to helping salespeople find and close the decisionmaker, that one person who can make the decision to buy onthe spot. In the case of a commodity sale, there often is justsuch a persona purchasing agent or a department headwith a budget or senior executive who can simply sign a deal.

In the complex sale, however, the search for this mythi-cal buyer is fruitless. There is no single decision maker;often, even the CEO cannot make a unilateral decision andmust defer to the board of directors. Certainly, there is al-ways a person who can say yes when everyone else saysno, and, conversely, there is always someone who can say nowhen everyone else says yes. Today, the majority of deci-sions, quality decisions, are the result of a consensus-building effortan effort that the best of sales professionalsorchestrates. Therefore, the complex sale has multiple deci-sion makers, each seeing the issues of the transaction fromhis or her own perspective and each operating in the contextof his or her job responsibilities and their own self-interest.The decision makers in a complex sale may be spreadthroughout an organization and represent different func-tions and frequently will have conflicting objectives. Theycan be spread throughout the world, as in the case of a multi-national corporation, buying products and services that willbe used throughout its organization. They may also repre-sent multiple organizations, as in the JSF contract, where thedifferent sectors of the military, the executive branch, andthe Congress were all involved in the sale, as well as the gov-ernments and military forces of other nations.

The complex sale, however, is not a run-of-the-milltransaction. The customers situation is often a rarely en-countered or a unique occurrence. The advent of e-commercebrought about just such a situation. Suddenly, an entirely newdistribution channel became available to corporations, insti-tutions, and governments. Many organizations floundered as



they tried in vain to understand this new world. Shouldthey go online or not? What would happen if they did? Whatwould happen if they didnt?

Organizations that did make a decision to expand on-line were faced with a second set of critical decisions. Thesolutions themselves were based on newly developed tech-nology, and customers had few guidelines for judging be-tween them. The results, as anyone who watched the riseand subsequent fall of the e-commerce revolution knows,were widely varied. But one thing is certain: For each suc-cessful online expansion, there were hundreds of equallyspectacular failures.

If you examine the JSF program, you find thatthe Pentagon invested years in exploring and defining theproblems of its existing fighter fleets. It determined thetwo companies most likely to create the best solutions tothose problems and paid them $1.32 billion to develop pro-totypes. Only then did they make a final decision.

A final characteristic of the complex sale and majorconsideration for sales success is that customers requireoutside assistance or outside expertise to guide themthrough complex decisions. They cannot do this by them-selves. You should begin to consider this question: To whatdegree do you and your team provide this expertise? Tohelp organize your thoughts, consider that your customersneed this expertise in one or more of three major areas.

First, they may require outside expertise to help Diag-nose the situation. They may not have the ability to define theproblem they are experiencing or the opportunity they aremissing. In many cases, they may not even recognize there isa problem. So consider: To what degree do you and your teamassist the customer in completing a more thorough Diagnosis?

Second, even if your customers could accurately diag-nose their situations, they may not be able to Design the

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Driving Forces of Commoditization 11

optimal solution. They may not know what options exist,how they would interact, how they might integrate intotheir current systems, and other such considerations. Towhat extent do you and your team enable customers to de-sign comprehensive solutions?

Finally, even if your customers could Diagnose theirproblems completely and Design optimal solutions, theymay not have the ability to implement the solutions and De-liver the expected results to their organizations. To whatdegree do you and your team provide implementation sup-port to assure that the maximum impact of your solutionsis achieved?

In summary, the characteristics of complex sales in-volve long sales cycles. They require multiple decisions thatare made by multiple people at multiple levels of power andinfluence, each of whom approaches the transaction fromhis or her own perspective. Finally, they involve compli-cated situations and sophisticated and expensive solutionsthat are difficult for the customer to understand, evaluate,and implement.

In addition to the elements of the complex sale itself,the two environmental forces that we introduced at the be-ginning of this chaptercommoditization and increasingcomplexityalso have a direct effect on sales success. Toround out the portrait of the world in which we sell, wetake a closer look at each.

Driving Forces of Commoditization

Commoditization is a big word for a phenomenon that sales-people face every day, that is, the pressure from the cus-tomer to devalue the differences between their goods andservices and reduce their decision to the lowest common

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denominatorthe selling price. The pressure to treat allentries in a category of products and services as identical isdriven, in some instances, by very real forces and, in others,by emotional needs. In either case, the pressure exists andsales professionals must deal with it.

Technology is one of the real forces driving com-moditization. A good example of how emerging technol-ogy can commoditize a product is the personal computerand development of electronic commerce. Before the In-ternet, enterprise-level personal computer (PC) sales wereconsidered complex sales and all the major computer man-ufacturers had large sales organizations dedicated to thattask. Today, a large portion of those sales positions havebeen eliminated. PC makers still maintain salesforces fortheir high-volume customers, but buying a number of PCsfor a company can also be accomplished in a self-service,commodity-based transaction.

Even a short visit to a Web site such as Dell.com makesthe point abundantly clear. Dell Computer Corporationhas played a leading role in the commoditization of the PCand has profited handsomely from its work. The companywas founded on a direct-to-the-customer model that elimi-nated the external sales and distribution chains that otherPC manufacturers depended on. When e-commerce tech-nology appeared, Dell was the first to move online. Startingin 1996, Dell customers who wanted a self-serve transac-tion could research, configure, and price their PCs, associ-ated hardware, and off-the-shelf software on the companysWeb site. Today, they can do the same at two or three ofDells major competitors. They can compare prices andmake their purchases without ever speaking to a sales-person. What was once solely considered a complex product(and sale) has been transformed by experience, knowledge,and technology into a product (and sale) that can just aseasily be treated as a commodity.

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Driving Forces of Commoditization 13

Dell has successfully created the best of all worlds. Forthe customers who can determine their own needs, config-ure the computer they want, and set up and use the com-puter without assistance, Dell has provided the lowest costof manufacturing in the industry and has enabled its cus-tomer to order a computer with little or no sales support.On the other end of the spectrum, for the customer look-ing to set up an elaborate network of PCs or for a complexe-commerce business, Dell has assembled a team that canprovide high-level support in Diagnosing, Designing, and De-livering sophisticated solutions.

The second real force driving commoditization is thelack of differentiation between competing products in themarketplace. The growing similarity between the productsand services that compete in specific market niches is not afigment of our imaginations.

To return for a moment to the personal computer,corporate buyers often see little difference between onecompanys PCs and the products of its major competitors.Who can blame them? Perhaps the shape and color of thecomputer is different; so is the name on the box. But, themain components of the computerthe processors, mem-ory, disk drives, and motherboardsare often identical.Therefore, many buyers make this purchase decision basedon price.

The similarity between competing products and ser-vices is a function of industry response times. Unless theyare protected by law (as in the case of new prescriptiondrugs), the length of time that the inventors of new prod-ucts and services enjoy the advantage of being first intothe market is getting shorter and shorter. Competitors seea successful or improved product and quickly match it.Therefore, one important reason for the increasing diffi-culty in differentiating products and services is that, in ac-tuality, they are increasingly similar.

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Another reason it is getting tougher to differentiateproducts and services is that customers dont want to differ-entiate them. The more complex products and services are,the more difficult it is for customers to compare and evalu-ate them. Analyzing and deciding between long lists ofnonidentical features is hard. Simply comparing the pur-chase prices is much easier. Customers, by the way, are thethird driving force of commoditization.

Customers are always trying to level the playing field.They attempt to reduce complex sales to their lowest com-mon denominators for good reasons. The most obvious is fi-nancial. When customers are able to convince vendors thattheir offerings are essentially the same, they exert tremen-dous downward pressure on the price. For instance, if Gen-eral Electrics jet engines are the same price as Rolls Roycesjet engines and the customer cant or wont see any differ-ence between the two, what must those vendors do to winthe sale? Unfortunately, the easiest answer, and the one thattakes the least skill to execute, is to cut the price, which iswhy so much margin erosion occurs at the point of sale.

An example of the extreme impact this can have on abusiness involves a client who came to us after their businesshad taken a devastating hit. This company had developed amanufacturing technology that became a standard in thechip manufacturing industry. They produced a piece of capi-tal equipment, sold about 300 units per year, and enjoyed avery large market share. The situation was too good to betrue, and a competitor entered the marketplace offering thesame thing for 32 percent less. The original manufacturerdid not initiate the diagnostic process we describe and, facedwith the threat of losing customers, lowered prices in re-sponse. Their average selling price dropped by 30 percentduring the following year, resulting in a reduction of $24million in margins. The irony of the story is the upstart com-petitor, who made the claims, sold only 15 units, a 5 percent

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Driving Forces of Complexity 15

market share. The manufacturers inability to respond in amore productive manner nearly destroyed their business.

Customers also try to oversimplify complex transac-tions for emotional reasons. Often they are in denial aboutthe extent of their problems. Think in personal terms: Ifyour stomach burns and you chew an off-the-shelf antacid,your problem must be temporary and is easily solved. If yougo to your doctor, who discovers you have an ulcer, yourproblem jumps to an entirely different level.

Fear drives customers to oversimplify transactions.Our customers are professionals, and it is difficult for pro-fessionals to admit that they dont understand problemsand/or solutions. We need to take into account that ourcustomers may be concerned about appearing less thancompetent in front of us and in front of their bosses. So, in-stead of asking questions when they dont understand some-thing, they may simply nod and reduce the transaction towhat they do understandthe purchase price.

Finally, there is the emotional issue of control. We re-gret the negative stereotype of a professional salespersonthat exists in many customers minds. Customers are fear-ful that by acknowledging complexity and admitting theirown lack of understanding, they lose control of the transac-tion and open themselves to manipulative sales techniques.The simpler the customers can make a sale, the less theymust depend on salespeople to help them. This is their wayto maintain control of the transaction and protect them-selves from unprofessional sales tactics.

Driving Forces of Complexity

The portrait of the world in which we sell is almost com-plete. We have examined the nature of the complex sale and

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the environmental pressures that are forcing them intocommodity-like transactions. The last element in the pictureis an equal and opposing pressure that, in essence, is forcingadditional complexity into already-complex transactions.Simply put, environmental forces are adding more complex-ity to the mix. We are seeing complexity piled on complexity.

Many of the driving forces of complexity are emergingfrom the changing nature of business itself. The structureof our organizations is becoming more complex. In manycases, decentralized organizational structures have replacedthe fixed, hierarchical infrastructures on which traditionalcompanies were built. In other cases, consolidations are hav-ing the opposite effect and have taken decisions away fromthe technical, clinical, and operational levels to professionalmanagers who frequently take a vital but limited financialview to their decisions. In addition, the speed with whichthese transformations are occurring is unprecedented. Theresult is increasing difficulty in understanding and navigat-ing our way through a customers business. Identifying thepowers of decision and influence in todays corporatelabyrinths isnt easy either. With increasing frequency, thecustomers themselves cannot define their decision process.

The trend toward globalization is exacerbating thegrowing complexity of organizational structure. We areoften selling into decentralized companies that span theglobe and encompass dozens of different languages and cul-tures. Where in the world are the decision makers? is nota rhetorical question in an increasing number of situations.

The restructuring of organizations has extended backdown the supply chain. Customers are consolidating, fewercompanies are controlling higher percentages of demand,and fewer competitors are controlling higher percentagesof supply. Its an environment where the winner takes asubstantial share, if not all, of the marketplace.

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Driving Forces of Complexity 17

At the same time that our customers are demandingcommodity-based pricing from us, they are demandingmore complex relationships with us. They are drastically re-ducing their supply bases and asking the remaining vendorsto take a more active role in their business process. Theywant those of us who are left to become business partnersand open our organizations to them. They are also asking usto add value at much deeper levels than we have tradition-ally delivered to their organizations.

The customers desire to build tighter bonds withfewer vendors is adding complexity to the sales process.Buying decisions include more considerations and moreplayers, and those players are often located at higher levelsin the organization. This is on top of the multiple decisionsand multiple decision makers that already characterizecomplex transactions.

There is an even more sobering consideration here: Ifyour customers are tightening up their supply chain, therewill be fewer opportunities in the long run. One lost sale inthis environment could easily translate to the long-termloss of the customer. We saw an extreme example of whatthat can mean in the case of the Pentagons contract for theJoint Strike Fighter. The companies that did not win thatsale had to either abandon that business or accept support-ing roles working for the winner. How many customers canyou afford to lose on a long-term basis?

Increasing levels of complexity can also be found inthe situations and problems our customers face and in thesolutions that we offer them. We tend not to see the worldthrough our customers eyes, but when we do, we find thatthey face many problems. Their business environments aremore competitive than ever, technological advances areradically altering their industries and markets, and theirmargins for error are always shrinking. The increased

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complexity of the environment translates directly to in-creased complexity in their problems.

The solutions that we design to address those prob-lems are correspondingly complex. Products and servicesmust be designed to transcend geographical borders andconnect and integrate decentralized structures. Our solu-tions need to incorporate complex technical innovationsand address the needs created by technological change. Inaddition, our margins for error are always shrinking. Thecomplex solution and the situation it is designed to addressare ever changing and increasingly complex.

Finally, complexity is driven by competition. To stay ontop of our markets, we often find ourselves trapped in inno-vation races with our competitors; in doing so, we can actu-ally outrun the needs of our customers. Harvard BusinessSchool professor Clayton Christensen calls this performanceoversupply and describes the phenomenon in his book, The In-novators Dilemma: In their efforts to stay ahead by develop-ing competitively superior products, many companies dontrealize the speed at which they are moving up-market, over-satisfying the needs of their original customers as they racethe competition toward higher-performance, higher-marginmarkets.2

Ironically, when the complexity that we add to ourproducts and services exceeds the needs of our customers,they respond by ignoring the features they do not need andby treating our offerings as if they were commodities.Heres how Christensen traces the process: When theperformance of two or more competing products has im-proved beyond what the market demands, customers can nolonger base their choice on which is the higher performingproduct. The basis of product choice often evolves fromfunctionality to reliability, then to convenience, and, ulti-mately, to price.3 Here is yet another example of techno-logical innovation driving commoditization.

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Getting Back to the Dry Run 19

There are two points to all of this: First, if you are al-ready involved in complex sales, you can expect them to getmore complex. Second, if you are not selling a simple com-modity but have a relatively simple sale at this time, you maywell end up with a full-blown complex sale in the near future.

Getting Back to the Dry Run

Now that we have a complete picture of the world in whichwe sell, we can turn back to the Dry Run. In every variationof that scenario, sales professionals are doing everythingthey have been taught, they are offering high quality, cost-effective solutions, and yet their conversion rate of propos-als to sales is in free fall. Why?

The answer is that the nature of the complex sale andthe opposing environmental forces of commoditization andcomplexity are making it extraordinarily difficult not justfor sales professionals to bring in revenues, but for cus-tomers to fully understand the problems and opportunitiesthat they face. The complex sale and the forces that affect itare impairing our customers ability to make rational pur-chasing decisions. Ultimately, that is why the salespeople inthe Dry Run did not win the sale. Their customers were un-able to make a high-quality decision.

We are not saying the customers are incompetent, al-though many frustrated salespeople level that charge. Thevast majority of customers are fully capable of understand-ing complex transactions. The problem is they dont have aprocess that can help them interconnect the key elementsof their business to bring the required perspectives to-gether to enable them to make sense of these transactions.That is the underlying thesis of this book and the key in-sight that allows us to get inside the complex sale: Customers

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do not have the depth of experience and knowledge in each of nu-merous complex subjects that allows them to form high-qualitydecision-making processes, which are specific to the requirementsof each and every purchase of complex goods and services. In com-plex decisions, one size does not fit all.

The often ignored reality of the complex sales environ-ment is that our customers need help. They need help un-derstanding the problems that they face. They need helpdesigning the optimal solutions to those problems, and theyneed help implementing those solutions. The next logicalquestion is: What can we, as sales professionals, do about it?The obvious answer is to provide the help our customersneed. But, unfortunately, that isnt the strategy taken by themajority of the leaders of sales organizations.

By and large, traditional sales leaders are focused onsales numbers, not the reasons behind them. They under-stand numbers very well and, like everybody else, theyknow that selling is a numbers game. So, the answer that weusually hear can be summarized in two words: Sell harder.They try to solve the problem by pumping up the system.They command their troops to make more cold calls, setmore appointments, give more presentations, overcomemore objections, and, thus, close more sales. If the com-panys conversion rate on proposals is 10 percent, they willsimply write and present more proposals.

Weve already described one problem with the sellharder solution. In todays environment, the number ofpotential sales is not infinite. At some point, you run outof viable opportunities and are forced to start chasing moreand more marginal prospects. The other, more fundamen-tal problem with selling harder to win the complex sale isthat it fits the popular definition of insanity: You are doingthe same thing repeatedly and expecting a different result.In the next chapter, we show you why that is so.

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2Trapped in the Conventional

Sales Paradigm

Its Not about SellingIts aboutManaging Quality Decisions

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23

Prospect, qualify, present, and closethese are the basicelements of the conventional sales process that mostsales organizations and salespeople still follow today. Theconventional sales process is the most widely used sellingparadigm for good reason: It works. That is, it works if youhave a simple sale.

In a simple sale, there is a single decision maker facedwith an easily understood problem or opportunity and ajust-as-easily understood solution. Your task as a sales pro-fessional in a simple sale includes finding that buyer, com-pleting a needs analysis, presenting your offering, andconvincing the potential customer that it is the best solu-tion available. The conventional sales process is perfectlyaligned to meet those requirements.

Think of the mass production, assembly line processHenry Ford invented to make automobiles at the beginningof the last century. It was a remarkable and historical ad-vance that changed the very structure of manufacturing.But what would happen if you reproduced that first assem-bly line in a modern auto plant? It would be hopelesslyoutdated and inefficient in this era of robotics and comput-erized control systems. Most salespeople today face a simi-lar dilemma. The environment in which they sell hasevolved, but the selling process that most use has not keptpace and adapted to the new realities.

What happens when you apply the conventional salesprocess to a complex sale? Now you are dealing with com-plex problems and correspondingly complex solutions thatinvolve multiple decisions and multiple decision makers.Your customers are also wrestling with more complex prob-lems, and it becomes increasingly difficult for customers to

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24 TRAPPED IN THE CONVENTIONAL SALES PARADIGM

understand and manage the scope, details, and ramifica-tions of their problems and the characteristics of the solu-tions that will best resolve them. While customers grapplewith these issues and before they have a deep understandingof the problems and optimal solutions, conventional sales-people are busy pitching their products and services.

When salespeople use the conventional sales process ina complex situation, they are like major league pitchers hurl-ing 90 mile per hour fastballs at batters who may be at theplate for the very first time or who hit only infrequently.What are the chances that such batters will connect? Like-wise, in complex sales, customers dont get up to bat thatoften. Yet, salespeople continue to pitch reams of solutiondata at customers, leaving them to comprehend, sort, andconnect all of that information on their own. Major leaguepitchers are trying to make the batter miss. Salespeoplewant the customer to connect. However, they are dependingon their customers ability to connect their problems to theproposed solutions. When customers strike out, salespeoplelose. If your proposal conversion rate is less than 30 percentor if your cost of sales is otherwise unacceptable, chances aregood you are striking out too many customers. You aretrapped in the conventional sales paradigm.

When you follow the conventional sales process in acomplex sale, you run head first into a series of traps thatgrows progressively more difficult to avoid and that makes apositive outcome for the sale less likely. This downward spi-ral starts with a fundamental and, as we soon see, erroneousassumption of the conventional sales paradigmthat yourcustomers have a quality decision process with which to di-agnose their problems and evaluate your solution. If thatsactually the case, the sale should be straightforward. Youdevelop a compelling proposal, answer the customers finalquestions, and ask for the sale. The best solution in the

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The Assumption Trap 25

marketplace wins. But what if the customer does not have aquality decision process in place?

The Assumption Trap

Conventional selling, on which many of todays most popularsales methodologies are based, depends on the ability of sales-people to determine the customers decision process. Theseprograms instruct sales professionals to find out what cus-tomers are looking for, whats important to them, what theyneed, and what criteria they will use to decide the purchase.That accomplished, they are directed to create a match be-tween their solutions and customers buying processes.

We regularly ask the participants in our Mastering theComplex Sale seminars to raise their hands if this accu-rately describes what they have been taught and are encour-aged to do and, invariably, the room is full of hands heldhigh. Then, we ask the participants to keep their hands up ifthey think that their customers have a high-quality decisionprocess for evaluating their specific technology or complexoffering. Seldom is a single hand left in the air. The discon-certing realization flashes from face to face: If our customersdont have a high-quality decision process, why are we tryingto understand it and fit into it?

The problems resulting from deficiencies in a cus-tomers decision process are further compounded by thetendency of the conventional selling approach to overlookthe distinction between the customers decision process andthe customers approval process. Customers always bring anapproval process, they seldom bring a quality decision pro-cess. The failure to recognize the differences and treat themas one and the same leads to many Dry Runs.

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You can get an accurate sense of the state of customer-driven decision making anytime and anywhere salespeopletalk business together. How many times have you heard orperhaps said yourself: My customers just dont get it?The reality behind that statement of frustration is not toodifficult to figure out: Customers dont get it for one oftwo reasons: You are either overestimating the value yoursolutions bring to the customer or overestimating the cus-tomers ability to comprehend that value.

Assuming that the solution offered actually has value,the flawed logic behind the Customer doesnt get it com-plaint is that the salespeople who say it are, in essence, blam-ing customers for being unprepared to buy their solutions.They are implying that customers should somehow be readyto effectively analyze and evaluate products and services,such as capital equipment, that they may buy once a year oronce every seven years or less. Or, even more illogically,they are assuming that their customers should have a high-quality decision process capable of evaluating leading-edgesolutions, which they may never have considered before orwhich may be appearing in the marketplace for the firsttime. Technological leaders in all industries are especiallyvulnerable in the latter scenario. Their greatest challenge iswhat Geoffrey Moore calls crossing the chasm between

Reality CheckIs There a Quality Decision Process?

Do your customers have a well-defined decision-making process in place that enables them to compre-hend the value of your unique offering?Can you separate the customers decision process fromtheir approval process?

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the small group of visionary customers who immediatelysee the value of a new solution and customers in the main-stream marketplace who, through no fault of their own,truly dont yet get it. The bridge across the chasm is thequality decision process and a team of skilled professionalsto guide the customer.1

Unless you think that salespeople are totally un-reasonable, we should note that they get snared in this trapfor two reasons. First, all of their training is based on theimplicit assumption that the customer will bring the deci-sion process to the table. That is the assumption trap.Second, the trap is compounded by the fact that sales pro-fessionals further assume that their customers have a muchhigher level of comprehension than they actually do.

The best salespeople walk into an opportunity at muchhigher levels of experience than their customers. Theyknow the products and services they are bringing to marketinside and out. In addition, they spend most of their timewith customers. They see an entire industry, encounter afull range of operational practices, and often become ex-perts in their customers businesses. When we shadow ex-perienced sales professionals, we often see them size up acustomers situation and needs, seemingly at a glance. Butthe advanced perspective and comprehension of sales pro-fessionals experienced in the complex sale stand in vividcontrast to the perspective of their potential customers.

Reality CheckWhat Is the Level of Comprehension?

What is your customers level of comprehension?How well do customers understand their own problems?How well do they understand your solutions?

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Unfortunately, even the best salespeople may make an un-conscious leap of logic by assuming that their customers seethe same things that they see and are, therefore, well pre-pared to understand their own problems and the value ofthe forthcoming solutions.

We use the Decision Challenge graph to illustrate thisbasic and often overlooked reality (see Figure 2.1). Thegraphs horizontal axis represents the customers positionin their decision process. The progression ranges from 0percent, at which point customers have no idea there is aproblem, to midpoint, where they recognize a problem andare actively investigating solutions, to 100 percent, atwhich point the customer has made the purchase. Thegraphs vertical axis represents the customers level ofknowledge about the problem and knowledge of possible so-lutions. At zero, customers have no knowledge of the typesof problems they may have or the problems you solve; at thetop of the scale, they have complete, or perfect, knowledge

FIGURE 2.1 The Decision Challenge

The Decision Challenge

Quality Decision Process

Decision Progression 100%0%

Kn

ow

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P roble

m/ S

olu

tion

100%

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of their problems and the solutions required to solve them.They know everything needed to make a well-informed,high-quality decisionwhat to look at and for, what tomeasure, what to compare, what to test, and so on. Finally,the field of the graph formed by these two axes representsthe customers overall comprehension.

The big question is: Where does your typical cus-tomer fall on this graph? More specifically, where does acurrent client of yours fall? When we conduct this exercisein seminars, we get averages that represent customers in awide variety of industries. For example, start with the as-sumption that a customer has entered the market and is ac-tively seeking solutions, knows there is a problem, and hasa budget in mind. We place the average customer at 60 per-cent on the decision axis. Our clients tend to find theircustomers knowledge of their problems and possible solu-tions are less complete. Often, customers have some ideasabout the nature of their problems, they may have read

FIGURE 2.2 The Decision ChallengeA Typical Customer

The Decision Challenge

Quality Decision Process

Decision Progression 100%0%

Kn

ow

led

ge

P roble

m/ S

olu

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100%

?

? ?

?

????

? ?

Area ofComprehension

24%

6

4

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trade publications, spoken to colleagues, and, via the sameprocess, heard a bit about the possible solutions, but theydont have any significant depth of knowledge. Thus, weplace them at 40 percent on the knowledge axis. When weplot these points on the graph, this customers area of com-prehension fills just 24 percent of the field (see Figure 2.2on page 29). If you begin presenting solutions to this cus-tomer, he or she will understand only 24 percent of whatyou say.

In this example, if you attempt to communicate thevalue of your complex solution, your customer is not going tocomprehend about three-quarters of what you say. More ac-curately, the customers ability to connect your informationto their business is greatly impaired, and they will find itneither useful nor particularly relevant. This miscommuni-cation explains why we see low proposal-to-sales conversionratios, long sales cycles, and extreme price pressure in com-plex sales. A customer who cannot comprehend a solutionwill probably not buy it, will certainly not buy it quickly, and

Reality CheckAre You Exceeding Your Customers

Level of Comprehension?

How much of your solutions added value falls insideyour customers area of comprehension?How much of your companys competitive advantagesand value adds fall inside your customers area ofcomprehension?What are the questions your customers do not realizethey should be asking about their problems and yoursolutions?

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The Presentation Trap 31

wont be willing to pay a premium price for it. With a com-prehension level that low, every solution looks the same.

The traps in the conventional sales process dont endwith flawed assumptions. They are compounded by the pri-mary element of the process itself.

The Presentation Trap

Todays complex sale environment can be characterized by an inordinate preoccupation, even obsession, with thepresentation of solutions. Everything salespeople do be-forethe prospecting, contacting, and qualifying of po-tential customersseems to be aimed at creating theopportunity to present their solutions. Everything afterthe downhill run to the sale itself that includes over-coming objectives, negotiating, and closingis designed tosupport and reiterate the presentation. Accordingly, salesorganizations devote tremendous amounts of time and re-sources to creating compelling presentations and proposals.

The irony is that most of this effort is lost on cus-tomers. Presentations that are too early in complex decisions arelargely a waste of time.

Conventional salespeople hate to hear this; the presen-tation is the key weapon in their sales arsenal. It is their se-curity blanket, their comfort zone, and they loathe giving itup. Wait a minute, they protest, our presentations areaimed at educating customers. They will not buy what theydont understand.

Exactly right, customers will not buy what they dont understand. A presentation can lift the customerslevel of comprehension. However, it is one of the least ef-fective methods for accomplishing that goal because ofthree reasons:

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1. A presentation, even one that includes advanced multi-media elements, is, in its essence, a lecture. The sales-person is the teacher and the customer is the student.The salesperson teaches by telling. The big problemwith teaching by telling is that hardly anyone remem-bers what they hear. People retain only about 30 per-cent of what they hear. The use of visual aids (e.g., aPowerPoint slide show) boosts retention rates to 40percent. But the generally accepted rule of thumbamong learning experts is that more than half of eventhe most sophisticated presentation is lost.2

2. A typical sales presentation rarely devotes more than10 to 20 percent of its focus to the customer and theircurrent situation. Generally, 80 to 90 percent of a typ-ical sales presentation is devoted to describing thesalespersons company, its solutions, and the futurebeing sold. Therefore, while a presentation may raisethe customers comprehension level, that gain is usu-ally centered on the solutions being offered. All toooften, salespeople are dealing with customers who arenot sure of the exact nature of their problems. Never-theless, those salespeople are spending most of theirtime talking about solutions. As a result, while cus-tomers may be greatly impressed with the offering

Reality CheckIs There a Balance between Timing and Content?

What percentage of your sales presentation/proposal isdevoted to describing your company and your solution?What percentage of your sales presentation/proposalis devoted to describing your customers business, sit-uation, problem and objectives?

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The Presentation Trap 33

being presented, they still lack a compelling under-standing of how it applies to their situation and they donot know why they should buy it.

3. There is a third compelling reason that presentationsare a waste of time in complex sales: Your competitorsare following the same strategy; they are busy present-ing, as well. Unless you have no competition, your cus-tomers will surely see them. They have meetings setup with you and one, two, or even more of your com-petitors. In each meeting, a sales team is presentingthe best side of its solutions. Your team is telling thecustomers that they need the solutions that only yourcompany offers, and your competitors are making thesame arguments about their solutions. In every case,the presentations are heavily skewed toward the sellerand the solutions.

Look at this from the customers perspective. Based onwhat we said about the customers area of comprehension, itis highly likely that two-thirds or more of the informationthat customers hear falls outside their area of comprehen-sion. Further, what they do hear sounds very much the same.It all deals almost exclusively with solutions and is not con-nected to their unique situation.

How do customers then respond to competing conven-tional presentations? They concentrate their efforts on the

Reality CheckAre You Really That Different?

In the eyes of the customer, how different is the struc-ture, format, and content of your sales presentationfrom your major competitors sales presentations?

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information that falls inside their area of comprehension.Customers attempt to make the complex understandable byweighing those elements that vendors offerings have incommon and eliminating those elements that do not fitneatly onto an over simplified comparison chart. Whenthis happens, salespeoples ability to differentiate their of-fering from the competition is subverted, and price, the onecommon denominator of all offers, again raises its uglyhead and is likely to become the deciding factor in the sale.

Customers may also respond by not responding. Theylisten politely as you educate them, thank you for yourtime, and promise to get back in touch when they are readyto make a decision. This is the setup for the Dry Run, as de-scribed in Chapter 1.

Finally, some customers may actively respond. Theymay ask you to justify the information you have presentedor challenge the viability of your solution. This is the re-sponse set that every conventional salesperson is expecting.The customer objects and the sales professional goes towork overcoming those objections. It is a time-honored ele-ment of selling, and it contains the final, major trap of theconventional sales process.

The Adversarial Trap

When salespeople start overcoming objections, they areplacing, by definition, themselves in conflict with theircustomers. At best, this sets the stage for polite disagree-ments and respectful differences of opinion. At worst, itturns the sales process into a battle in which the seller mustsomehow conquer the buyer to win the sale. You can hearthis in the language that appears so often in sales training

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The Adversarial Trap 35

and in the conversations between salespeople and theirmanagers. Words such as persist, insist, persuade, and convinceall imply aggressive behavior.

This problem is inherent in the conventional sales pro-cess. Because it focuses solely on making the sale, any reluc-tance on the part of the customer translates into a directthreat to the salespersons success.

The conflict between buyer and seller is exacerbatedby the frustration that results from the miscommunicationengendered by the conventional process. Salespeople arepresenting professionally packaged data complete with ex-ecutive summaries that their prospective customers findeither unintelligible or unconnected to their situation.Confused and with no sound basis on which to evaluate theinformation, customers respond negatively. Conventionalsalespeople, who are overestimating their customers levelof comprehension, interpret this as an objection to be over-come and swing into action. No, they say, you dont getit. You do need our solution and heres why . . . Now thesalespeople are arguing with their customers.

What happens next? If the customers dont shut downthe presentation altogether, they may offer a second nega-tive response. Another round of verbal sparring ensues.The customers frustrations turn into exasperation. Butnow the sale is in doubt and the salespeople know that thecustomers need the solution, so they escalate their efforts.The downward spiral accelerates. Repeatedly, we have wit-nessed all of this occur in the most polite and respectfulterms. No matter how civilized the exchange, the net resultis that the salespeople and the customers have become ad-versaries. The sale has turned into a battle . . . a battle inwhich customers always have the final say.

There are unfortunate exceptions, but, for the mostpart, salespeople using a conventional approach arent

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purposely trying to beat up their customers. They are sim-ply following the accepted dictates of a conventional salesprocess that generates statements such as:

Whether they know it or not, every qualifiedprospect needs your products and services.

Persuasion is the key quality of successful selling. If you are persistent and pursue the customer at regu-

lar intervals and with increasing intensity, you willeventually get a sale.

An objection is a signal that the customer wants to beconvinced to buy.

The real selling doesnt start until the customer says no.

There is a kernel of truth in each of these statements,but they are also the source of many of the sales tech-niques that customers find most irritating. They turnselling into a game where someone, either seller or buyer,must lose.

We are not saying that the adversarial mind-set wontproduce sales. It will. We call it Sales, James Bond style.Every sales organization has a James or Jamie Bond on thepayroll, and too many managers are looking to hire more ofthem. You can drop the Bond-style salesperson out of an

Reality CheckAre You Challenging or Collaborating?

Do you find yourself debating with customers?Are your customers reacting defensively and/or chal-lenging your recommendations?How much of your time with customers is spent pre-senting, persuading, and convincing?

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Add It Up 37

airplane into any territory, any prospect, any product, anyquota, and you know they will come back with the business.

There is a problem, however, with the Bond approach.There will be a lot of collateral damage. People are going toget hurt on both sides of the table. Many salespeople, andeven managers, try to rationalize this away and depend ontheir service and support functions to repair the damage. Butcustomer relationships are fragile,

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