salesmakeover - how to create a solution driven sales culture? isbn978 91-980067-9-7

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JENS EDGREN SALESMAKE-OVERHow to develop a solution driven sales

culture and boost your sales

The author has previously published ”How to sell the answer to a problem!”, 2008.

Lindgren & Partners and Sales Makeover are registered trademarks which belongs to Brainstation AB.

Copyright Brainstation AB

ISBN: 978-91-980067-2-8

PrINTINg: ElandersgrAPhIC DESIgN: Kredema

ILLuSTrATIoNS: Kicki Edgren Nyborg, Kredema

BrAINSTATIoN PuBLIShErSFredrikslundsvägen 2

168 34 BrommaSweden

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tHanks to

Camilla,my wonderful wife who has supported me all the way

Ulf Paulssonon a cold February day, you helped me put names to the different sales cultures

Gunnar strömbergYou help me with examples of how the supply-driven sales culture can develop

Jim PalmqvistFor putting ideas into practice

Johan HellströmA motivator and challenger

Lennart GrenYou helped test the theory about the service-driven sales cultures in practice, 19 January 2009.

François BriesA constant inspiration

Pontus Björnsson, Mads Fischer and thomas neubaerFor putting into practice the theory on the talent-driven sales culture

Ronny nygrenWho helped create a readable book with the right language

kicki Edgren nyborgFor your ideas and work with this book

Thanks also to Mikael Jälefors, Robert Carstens, anders Gustavsson, Bo strömqvist,Michael Hakenäs, susanne nilsson ,tommy Borell and Mattias Lundberg who have helped with opinions and corrections

And I’d like to thank all of my customers and friends for listening!

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Foreword ............................................................................................. 6

Chapter 1 A warning to all readers! ................................................ 8

Chapter 2 The perfect sales culture doesn’t exist .....................12

Chapter 3 An introduction to the theory behind

Sales Makeover .............................................................18

Chapter 4 The technology-driven sales organisation .............. 30

Chapter 5 The talent-driven sales organisation ........................ 56

Chapter 6 The service-driven sales organisation .......................77

Chapter 7 The supply-driven sales organisation .....................102

Chapter 8 Selling through partners ...........................................125

Chapter 9 The solution-driven sales organisation ..................135

Chapter 10 Doing a Sales Makeover ...........................................146

Chapter 11 Developing the technology-driven sales

organisation to become solution-oriented ............162

Chapter 12 Developing the talent-driven sales

organisation to become solution-oriented ............ 173

Chapter 13 Developing the service-driven sales


Chapter 14 Developing the supply-driven sales


Chapter 15 The art of changing a sales culture ........................206

Chapter 16 References ...................................................................210

Contents

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This is a book about how you can maximise a sales organisation’s results regardless of the economic situation and create more satisfied customers. It’s also a book about how you create permanent changes with simple means and avoid unnecessary mistakes. I wish someone else had written it a long time ago. Then I could have read it and avoided making a load of mistakes. They say that you learn more from your mistakes than from your successes. So I felt that after all those lessons it was time to try to draw my own conclusions. At least to try to structure my thoughts about what I should do to succeed better in my efforts to develop sales organisations to sell more and have more satisfied customers.

I got into sales purely by chance. I actually had an idea of becoming a management trainer and perhaps even a manager myself. After uni-versity, my career got a flying start. After twelve months I was the sec-ond best sales person in the sales force for the company where I worked. The next year I got the offer I had dreamed of: to go back to western Sweden and become sales manager. My new work colleagues weren’t all that happy that a rookie from Stockholm was going to come and tell them how they should sell. I didn’t think about it too much, just pushed hard as usual. I was full of enthusiasm for my new job and wanted to try all my ideas at once. After three months rushing between the two major cities in Sweden, Stockholm and gothenburg, the managing director put his hand on my shoulder, looked me deep in the eyes and said: ”Jens! I think it’s time for you to go back to Stockholm and stay there.” he kept his hand on my shoulder a long time. It took a while before the message got through. I had failed in my first attempt to change a sales force.

I could do completely mad things in customer meetings, just to see where the boundaries were. once I ended up in a meeting with a ma-jor transport company. The deal which my colleague håkan was trying to make was stuck fast. The customer thought that the quote looked good but too comprehensive. They wanted to wait for the project until they had time and energy. I tore the quote out of the managing directors hand and ripped it up. The customer and håkan stared at

Foreword

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me, shocked. I looked the customer in the eye and said: ”Now I know what you don’t want to do. Tell me what you do want to do!” We sold a small project then and there.

While searching for exciting sales methodologies, I found a course folder from ”Solution Selling®”. I flicked through it. I understood nothing. Boxes, matrices and scripts. It was like greek to me. But I rang up Michael Bosworth, the founder of the concept, in the uSA. he invited me to take part as a guest in a Solution Selling® workshop in San Diego. By the end of the first day I was shocked at the logic in the methodology. When the course was over I felt almost like I’d undergone a religious experience. This was the concept I was looking for. I believed that the Solution Selling® concept was the solution to all sales problems. You just had to implement the methodology for sales to take off. I waved away any objections. At the start of 2008, we were heavily criticised. Did the method give results? My first reaction was defence. I was so convinced that the methodology was unassailable. But gradually I began to think about my own experience of change and leadership. Could it be that different sales cultures worked in different ways? Could it be the customers’ behaviour which steered the sales people’s behaviour? Could it depend on whether the product being sold was a new or standard product? Did the product’s maturity have something to do with it?

I began to put names to different sales cultures and tried out how they should work to be most effective. I thought a lot about the mistakes I had made in change projects and started to document the character-istics of the different cultures and which types of customers they are most effective with. Then I came to the crux. how should the different sales cultures develop to be maximally effective? how can you know when they need to change their behaviour?

If I had known how difficult it would be and how long it would take to write this book, it would probably have stayed as a notebook full of ideas. The book that you’re reading now isn’t likely to end up on the list of my kids’ favourite books. But I hope that you find something to interest and inspire you. happy reading!

Ekerö, 21st august 2010Jens Edgren

Foreword

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Warning! This book deals with how you can maximise sales results and create the most satisfied customer regardless of the economic situ-ation. You will be introduced to theories and their significance in how sales organisations are organised and led which may affect you for a long time to come. Don’t count on a few easy tips on magical sales tricks or new theories in personal leadership. If you and your team are to succeed where others have failed, you must be prepared to plan and carry out dramatic changes to your sales organisation. read this at your own risk.

I’ll show you why most companies (the book’s examples are of companies selling high technology products but the theories are applicable to all types of company and organisation) are hit by totally unnecessary sales blockages – and what should be done differently.

It’s again a time where many companies change sales strategy (from supplying) to ”selling solutions”. Can you take your old product, exist-ing sales force, pretty tired supply organisation (after five years’ eco-nomic boom), and make them into a solution-oriented offer? Will it succeed? Probably not – because the customers are used to buying hardware, software, it consultancy or whatever they bought earlier. here’s a retrospective to give one view. I want to show you a few exam-ples of situations where changes in the market forced major changes in sales organisations.

The economic situation worsens, sales forecasts crumble away, deals take longer and longer. This situation characterised the start of the recession in 1999. For certain it companies it was also the start of a catastrophe: Many it consultants lost 40 percent of their work in just a few weeks. Dependent as they were on Ericsson, Nokia and a few

Introduction to Sales Makeover

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Introduction to Sales Makeover

other major customers, they were hard hit when these companies were themselves forced into downsizing and essentially cancelled all devel-opment projects.

Innovation companies like Icon Medialab, Spray Razorfish and Dynarc have been history for a long time. Even very profitable companies saw their market falter. I worked with several of these companies as a sales developer. Few people in management saw the warning sig-nals in time. When the figures dropped significantly, sales efforts were increased. only to realise that all the customers who had previously been queuing up for the product were busy trying to survive. A deal that previously took a couple of weeks to win now had a sales process that took six months. Accuracy dropped and sales costs increased. The catastrophe was a fact. Everyone understood that the sales strategy needed to change, but to what? how do you get sales people who lived well by taking orders to start selling and prospecting? My answer then as now is: You can’t. I’ll explain why later in this book.

When the economic situation turned, in around 2003, the compa-nies which had survived the baptism of fire had slimmed sales organi-sations. one of the biggest telecommunications companies in Europe had reduced its sales force from 800 people to 400. only those sales people who performed best got to stay. When the market demand turned around, each sales person had a huge customer list. Success was assured: a halved budget, 100-200 customers on the list and they start to order! In such a situation, you just have to hang onto the train. Because all the sales people had reached their budget objectives by the second quarter, their working days became shorter and shorter. hungry competitors gobbled up many of the ignored customers. I will show you how this scenario, pleasant at the time, can create major problems at a later stage.

Now we’re into the second decade of the 2000s. redundancies are staring us in the face. Most it consultants are reporting a significantly reduced occupation level. Some of the stock-exchange quoted compa-nies we are in contact with tell us of a reduction of between 20 and 40 percent in just a few weeks. The scenario from 1999 is being repeated.

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Why must the same situation be repeated again and again? Do we never learn? unfortunately, it seems like today’s management groups haven’t understood the expression ”tunnel vision”. have you ever driv-en a car really fast, perhaps upwards of 200 kilometres an hour? The road narrows, your field of vision becomes concentrated, your nerves are on edge. You’re filled by a strong sense of intensity and elation. The phenomenon is called tunnel vision. If a sales organisation suc-ceeds too well and becomes too successful, it’s also affected by tunnel vision. The whole sales strategy and the sales organisation are focused on the same objective. The company increases speed still further, with more sales people, more consultants, new offices and invests in more countries. Let’s assume that the road bends, an animal runs out – the economic situation falters, competitors launch new products. We’re forced to slam on the brakes. It’s only then that we see how fast we were going. To suddenly change sales strategy is like going into four wheel drift at 100 kilometres an hour. The only question is how bad it’s going to be. In the uSA this is called ”damage control”. Let me give you an example. An it consultancy company’s profitability is controlled by two factors: the number of charged hours and the charge per hour. The more consultants, the more hours. When the occupation level falls, follow-up of charging, which is normally done every month, changes to every week and then to every day. Severe pressure is put on the sales people. Customer visits and quotes are followed up in the same way. Are there better results from more strict follow-up? No, because the big problem is that the customers have reduced their purchase of their ”raw material” – the consultants. They have dropped projects and re-prioritised. These are initiatives driven by the management’s cost cutting (cost killing if it’s really bad). If the sales people made a thousand customer visits a week, nothing would change. Perhaps the company can take a few percentage points of market share from lazier colleagues. That’s all. Soon both the sales people and it consultants will have to leave their well-paid work.

The problem isn’t selling the it consultants’ hours. The problem is only selling them.

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The focus must be shifted to value-added services. The customers buy a value, not just consultancy hours. of course it’s just as wrong to fail to meet the market’s desire for skilled resources.

What am I saying with this introduction? We must adapt the sales organisation and the sales strategy to the market situation. Are you surprised? Probably not, but be patient, because I’ll be offering you a reference framework for how you can drive at 200 kilometres an hour even when the road bends.

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The perfect sales culture doesn’t exist!Many studies have been done which show the characteristics of the best sales people. Investigations always come up with the characteristics that quick-footed product sales people possess: goal oriented, energetic and convincing. All too many sales managers have accepted the results and begun to value their own sales organisations according to the same stereotyped standards. I have had hundreds of conversations with sales managers who, compared to the ”ideal image” feel that their sales peo-ple are passive and product oriented: really low achievers. Despite this, many of these low achieving sales forces are very successful. one of the reasons is that the sales organisations have adapted themselves to their customers’ purchasing behaviour and purchasing motives. In-vestigations of the ”perfect sales person” never look at this. I therefore argue that the clever sales person’s characteristics should be compared with the customers’ purchasing behaviour in the relevant industry and environment. There’s no ”one size fits all”, a type of sales person and sales organisation who is always the best performer. The same sales behaviour will be effective or ineffective depending on the customers’ purchasing behaviour and the product’s degree of maturity.

The sales culture often lacks dynamismMost companies have a single-minded view of how sales should be driven. They are too bad at letting the sales culture change with the maturity of the market and the product. The result is low sales ef-ficiency over time.

What affects the sales culture most is the period at which the com-pany was most successful. The way in which the sales people worked then lasts a long time. In construction companies who rode on an eco-

The four sales organisations

2The four sales organisations

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New managers bring their view of how sales should be run.The new sales manager’s view is also built on an inheritance from when he or she was most successful (in his or her previous job), which is often the motive for why he or she has got the new job. For exam-ple, managers with a background from a company selling photocopiers value the number of customer visits as the most important thing, while managers from consumer oriented telecommunications companies fo-cus on the number of mobile phone subscriptions, and managers in consultancy organisations on the profitability of the consultancy team.

nomic boom, the sales culture is replaced with a project culture, in other companies which were started in a cellar by talent-driven sales people, those who run ten kilometres every morning and train on clos-ing techniques in the shower, the closure is the holy of holies. I was in contact with a company which sold alarm installations. Their sales people had a fixed salary of around 30% and a variable share of 70% or higher. The sales culture was driven by short sales cycles and quick money. This is an example of an ideal which managements praise. It affects the sales culture immensely. If you want to know quickly what drives the sales people in your company, you can study the salary sys-tem. If the sales people have fixed salaries, the sales culture is probably service or supply-driven. If they have a high share of commission, the sales culture is talent-driven and ”closers” are praised. Because salary systems are difficult to alter, they ”cement” a sales culture which may have outlived its usefulness. Despite most companies selling several different types of products and solutions, they are managed in the same way. An example of this was an it consultancy company which sold both consultancy hours and complex solutions.

These products had completely different sales processes and buy-ers. Despite that, the sales people were rewarded for quick closure, which had the effect that the solution deals were never prioritised.

To avoid the sales culture becoming a dinosaur, the management must continuously reassess the reward system and actively guide the development of the sales culture.

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When new sales managers are recruited to take over established sales teams, the culture shock is more evident. unfortunately the new sales managers rarely spend sufficient

time learning the market position and the customers’ purchasing behaviour. The problems arise when the new sales manager wants sales to increase as a result of a higher activity level in terms of sales activities (which are always too low) and begins to measure the num-ber of customer visits and submitted quotes. What isn’t measured is whether the sales people meet the right people and have sales meet-ings which lead forwards. Moreover, companies which often answer requests for quotations have a great deal of difficulty in assessing the value of the sales time expended. A snowball has a greater chance of surviving in an oven than 80 per cent of the quotes which are submit-ted. It can therefore be completely counter-productive to measure, for example, the number of quotes. The results of the increased activity don’t materialise.

What happens instead? The old sales people complain to the man-agement who are forced to choose between the sales people and the new sales manager. The result is unfortunately that the new sales man-ager gets the sack after a year. New sales managers would do best, then, to try to understand the sales culture and how it has been created before they try to get the sales force to take the next development step.

1 2 3 4

Sales evolution curve

Mar

ket s

ize

Crossing the chasm

CHASM

1 2 3 4 65

CHASM

technology-driven talent-driven service-driven supply-driven

“Many management groupshave solved sales manage-ment by praising ideals, consciously or uncon-sciously. By highlighting and giving public attention to top performers, a stan-dard is set for the rest ofthe organisation”

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The sales culture is created by the customersThe customers’ expectations and purchasing behaviour create the sales cultures. The sales people are quick to adapt themselves to their customers’ wishes and few sales people guide the customers’ behav-iour. This means that the customers’ knowledge and view of the prod-uct will determine if and how they want to buy. If the product is new, it’s the technology interest that drives the buyers. The sales people get technical questions from the customers and a technology-driven sales culture is created. When the customer’s management is driven by maximum economic yield, a talent-driven sales culture is formed. The talents can translate the possibilities of the technology into value to the customer. When the product matures and becomes standard, the buyers take command and place the orders. They know what they want. The customers’ demands for service form the service-driven sales organisation. When the product is late in its life cycle, the cus-tomers want to buy it as a service. This purchasing behaviour creates the supply-driven sales culture.

It’s therefore the customers’ purchasing behaviour that decides which sales behaviour is most effective. But as the product matures, the customers’ purchasing behaviour changes and the sales people must go with it if they are not to lose sales and effectiveness.

The different sales organisations1. The technology-driven sales organisationThis sales organisation works best when new technologies and prod-ucts are to be launched on a market. Customers who are interested in new technology don’t buy the product: They start a development project together with the supplier. The sales people aren’t driven by selling, but by a genuine technology interest. They love to find new and exciting applications for the product.

2. The talent-driven sales organisationThe talent-driven sales organisation works best when a technology is established. The market consists of visionaries: Managers who want to knock out the competition with the help of new ideas. The sales people are driven by personal satisfaction. The result is in focus. The talents

The FouR SAleS CulTuReS:

– Technology-driven– Talent-driven

– Service-driven– Supply-driven

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work extremely hard and have a high activity level. The sales people have developed their talent for selling ideas. They help the customer to understand how they can develop their business with the new product. When the deal has been landed the sales people leave their organisa-tion to deliver as best it can. New deals are waiting around the corner.

3. The service-driven sales organisationThe service-driven sales organisation is characterised by the fact that the sales people have very strong personal relationships with their cus-tomers. There are often contacts at a lower level in the organisation such as: purchasing, production and IT. The customers are platform buyers and have a cost ceiling to implement system solutions. The sales person sees it as their job to personally solve all of the customer’s prob-lems. Sales is not idea-creating here, but rather reactive. The customer knows what they need. The organisation is best off in a growth market when the customers’ demand for the market leading products is great.

4. The supply-driven sales organisationThe supply-driven sales organisation focuses on delivering the de-manded products or services, often specific projects. The sales people, if there are people so designated, expend a lot of time on coordinating internal resources and on the ongoing delivery questions. Personal re-lationships with the customer are not central. Deals often involve ma-jor projects, sometimes driven by the purchasing organisation, often with the aim of achieving savings targets set by the company manage-ment. The organisation is best off when it wins many procurements with long-term projects which build on standard deliveries.

Myth and reality about the solution-driven sales organisationIt’s a myth that it’s possible to create a solution-driven sales organisa-tion that works in exactly the same way in all phases of the market’s development. The customers’ priorities will shift and therefore their need for “solutions” will too.

The reality is that all sales cultures, regardless of their driving force, can act in a solution-oriented way. how this happens will vary. The management can measure and reward solution-driven selling and in

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this way get the sales force to go into “turbo gear”. It’s worth the ef-fort. You’ll notice that the sales people stay longer in their jobs if they get greater appreciation from their customers. The customers will stay longer too, and will give more honest feedback when something goes wrong. You can read more about how sales management systems can support a solution-driven sales culture in Chapter 9.

sUMMaRy

– The sales culture is most often an inheritance from a previously suc-cessful period

– Managers from companies with clear sales cultures take their recipe to their new jobs

– Sales management drives a behaviour which was successful in a pre-vious situation but which perhaps is not suitable for the current mar-ket position

– The formation of the sales organisation rarely takes place with the customers’ purchasing behaviour as its starting point

– Four types of sales culture can be defined: technology-driven, talent-driven, service-driven and supply-driven

– All types of sales cultures can act in a solution-oriented way with the right management system

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An introduction to the theory behind SalesMakeover

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This chapter gives an introduction to the theory behind Sales Make-over. geoffrey Moore’s book “Crossing the Chasm” has created a foundation for understanding how customers’ purchasing behaviour changes after a product has matured. he has also laid down a frame-work for how sales strategies can drive the market forwards and how they can be adapted to different market situations. The theory creates the basis for how the different sales cultures are formed, and when they lose their momentum. After the introduction, which you can skip if you have already read the book, you will understand the importance of understanding the signals of the different customer groups, particu-larly when they are undergoing change. Then the sales force can ride the development wave and maximise their sales because they drive the market, instead of being driven by it.*

The answer to why some succeed and others don’tMy first meeting with the book “Crossing the Chasm”1, was via an e-learning course, an early PowerPoint course with stilted quotations from the book, delivered in a computer inspired voice. hardly the best way to learn, but in 1998 it was a glimpse of future e-learning. I be-came interested in how different customers adopt new technology as they become more experienced and the products become standard-ised. geoffrey Moore showed why some technologies survive and why certain companies cope with keeping up with the market’s develop-ment while others disappear or get bought out.

The soundtrack of “Crossing the Chasm” is now stored on my Ap-ple iPhone 3gs. As you read this it probably doesn’t mean much to

* A company can, of course, have products and services in all maturity phases simultaneously.

“The Apple iPhone is a symbol for how technologi-

cal development creates the first customer group in a bell-shaped curve which symbolises the market’s

acceptance of new technol-ogy”

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The technology-driven sales organisation

you. But in 2008/2009, the Apple iPhone became the symbol for a new type of mobile telephone where the ring function was only one of many applications. Surfing, viewing images and films, endless music and new games were only the touch of a button away. The iPhone became a symbol for how technological development creates the first customer group in the “Crossing the Chasm” curve – the innovators who buy new technology from a passionate interest in technology.

About “Crossing the Chasm”A brief backgroundDuring his time as a consultant with the American company regis MacKenna, geoffrey Moore carried out research into how new tech-nology was accepted by the market. The company supported custom-ers during new launches and worked as strategy consultants for risk capitalist companies around Silicon Valley in the uSA. Since the book was written in 1984, many technology waves have swept through so-ciety. The most significant is the Internet. Geoffrey Moore has writ-ten more books, including “Inside the tornado”2, where he develops theories about how companies can take and retain the leadership of a market in development.

Crossing the ChasmThe theory around how a market accepts new technology was devel-oped during the 1950s in the uSA. A link was discovered between the willingness of different customer groups to take risks and the time it took for them to accept the new technology. Five main groups were identified: innovators, early adopters, early majority, late majority and laggards.

The different groups can be illustrated with a bell-shaped curve:1. Innovators = technology enthusiasts (3–5 per cent)They like new technology due to its new technical functions. They are convinced that the technology can give us a better quality of life. They are fascinated by the new technical possibilities. Nearly all organisa-tions have space for a “technology nerd”. We need them to test and

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solve problems. Whenever you have a technology problem, he’s there (because it’s most often a man) behind you with shining eyes. “May I?”

From a market perspective there are two disadvantages with selling to technology enthusiasts:

– They constitute only 3-5 per cent of a market– They rarely have any moneyThese disadvantages are offset by the fact that they have influence

in the organisation over the choice of technology. If they don’t like the technology, it’s dead. If they give the “thumbs up”, they have opened the door to the rest of the market.

2. Early adopters = visionaries (12–15 per cent)They are the real revolutionaries in industry. They have an unerring ability to see how new business concepts can be developed with the new technology. They want nothing more than to knock out their com-petitors. Sometimes they are so early that the technology isn’t fully developed – the idea can’t be put into practice until much later. So they start development projects instead of buying a finished product. The visionaries are very important for suppliers because they can come up with sufficient money to develop what they want. Their contribution creates the conditions for entrepreneurial companies. Because the vi-sionary is eager to stand in the spotlight, publicity is created around advances, which speeds up the development of the market still further.

Market maturity

Rela

tive

mar

ket s

hare

1 2 3 4 5

technology adoption cycle, taC

“Visionaries are the realrevolutionaries in industry.

They have an unerring ability to see how new business

concepts can be developed with the new technology”

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There is a disadvantage with selling to visionaries: they have such specific wishes that nobody else would dream of bothering with them. This implies severe strain on the suppliers’ development departments. The suppliers are sooner or later forced to find customers who purchase standard product and services in order to survive and get a return on their high development costs.

Technology enthusiasts and visionaries constitute the key to the rest of the market.

They awaken interest in the pragmatics who in their turn open the door to the majority of customers, who buy standard solutions. The purchasing motive develops and changes after the pragmatics take over.

3. Early majority = pragmatics (34 per cent)They don’t love technology for technology’s sake: They believe in evo-lution, not revolution. They are therefore careful to create the right conditions for their business through introducing effective business sys-tems. They are neutral to the technology and look for strong references and proven results before they take decisions on making changes. The pragmatics are most often responsible for the organisation’s most criti-cal systems. They know that these systems are sensitive and are careful not to force development.

When they finally decide to buy, they choose the market leader for two reasons:

– Everyone else is building their products around the market lead-er, which means the biggest opportunities to get support. Perhaps the market leader’s product isn’t the best but it will be the most stable.

– The market leader is building their market position together with other market leading third party suppliers. This secures future needs for development.

The pragmatics take their decisions based on roI, return on In-vestment. They perhaps don’t have responsibility for results, but they are in the management or have a direct relationship to those people who are. Therefore their infrastructure decisions will be a direct conse-quence of the operation’s business needs.

”Conservative customers re-present a major unexploited potential for those suppliers who choose to focus on them. however, other rules of the game apply to create satisfied customers: the product must be simplified to a level where it works entirely without disruptions”

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4. Late majority = conservatives (34 per cent)These customers are essentially doubtful as to whether the new tech-nology can provide any value at all.

They wait a long time to make the technology shift which their pragmatic colleagues have done long since. Their needs are rarely filled, because they don’t want to pay extra for the ser-vices to create the best solution. This just confirms their negative view of the new technology.

however, this group represents a major unexploited potential for those suppliers who choose to focus on them. Other rules of the game apply to create satisfied customers: the product must be simplified to a level where it works entirely without disruptions. Conservative cus-tomers are happy to buy the most advanced microchips, provided they are built into a BMW’s electronic system. I call these customers platform buyers.

5. Laggards = sceptics (12–18 per cent)These eternal critics of new technology constitute a major challenge for a sales force. The key to winning them over is not to sell to them (which is nearly impossible) but to sell around them. When everyone around them is working with the new technology, they will join in!These five profiles create the technology adoption curve (TAC).

Market strategy for new launches according to Crossing the ChasmThe market strategy is built up in the following way:1. Create interest among the technology enthusiasts by getting them to

try the products and introducing yourself to the visionaries2. When you have the visionaries’ interest, create good references

which you can use to win the pragmatics3. Earn the most money from the pragmatics by creating volumes,

becoming market leader and setting the standard4. Create an economic lever through the large volumes, develop the

product’s stability and drop the prices so that you can attract the conservative customers

“I see”Visionaries see with

their eyes closed,pragmatics do it

with their eyes open.

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5. Leave the sceptics. They will take on the technology shift when the next one is on the way

“The Chasm”Despite the logic in the strategy, it was shown not to work particularly often. Especially when the company had won the visionary buyers’ hearts and set course for the pragmatic buyers. The process got stuck here. The problem was that the two groups, despite coming after each other in the life cycle, have completely different values: So different that communication between them is nearly impossible.

Visionaries Pragmatics Intuitive Analytical Support revolution Support evolution Stand out from the crowd Stay with the group Set their own rules Consult with their colleagues Take risks Manage risks Are motivated by future opportunities Are motivated by solving current problems Look for limits Carry out what is possible

A metaphor which describes how differently the groups think is how they use the words “I see”. Visionaries see with their eyes closed. Prag-matics do it with their eyes open. Pragmatics don’t rely on the vision-aries in the same way that most people wouldn’t rely on a pilot who navigated with the help of “the Force” (from Star Wars) 3.

The idea of the chasm is simple. When new technology is intro-duced, it is accepted with a welcome from the early market which is made up of technology enthusiasts and visionaries. Sales soon take off. When the early market is drained, sales fall off. If the product can get a foothold with the pragmatics, it can get over the chasm and lay the basis for a technology shift. unfortunately there are few products which make it over the chasm. This is often caused by the risk capital-ists’ exaggerated expectations of quick results. When product sales fall,

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they become nervous and develop new variants. The new versions of the product attract a few new technology enthusiasts and visionaries to commit to it, but the product is still sold on its characteristics, not on the customer value which the pragmatics are interested in. Devel-opment of the product drives up the costs for development and takes significant resources from the sales and marketing organisations which creates further limitations in communication with the pragmatics.

The art of crossing the chasmWhen the visionary sees that a new product can solve 80 per cent of his problem, he says: “Fine, let’s develop the missing 20 per cent to-gether”. The pragmatic waits to buy until the product solves 100 per cent of his problem. “It must be completely finished and have refer-ences”. The pragmatics want the “whole product”.

Theodore Levitt 4 from harvard Business School launched the idea of the whole product, which was later developed by Bill Davidow in the book “Marketing high Technology” 5. The whole product is de-fined as: “The least amount of products and services required for the selected customer to achieve their goal with the purchase.” With this definition it became clear that many high-tech companies were stuck at the chasm for an unnecessarily long time because they didn’t fully develop their product. But many people missed one of the most im-portant points in the definition: “the selected customer”. Most people don’t want to put all their eggs in one basket and invest in a narrow customer group. They work on many segments and branches simulta-neously.

Before each new development, all of these important target groups are visited, their needs analysed and a mix of needs taken into account in the new product release. Now the product is definitely more com-plete but unfortunately it gives a little more to everyone. This other words, no customer group gets 100 per cent of its requirements ful-filled. The selected customer’s requirement list has not been fully an-swered. It’s this that the pragmatics require before they buy.

After having analysed a number of successful examples, geoffrey Moore 6 came to the conclusion that the only safe way to cross the chasm

“The whole product is de-fined as: ‘The least amount of products and services required for the selected customer to achieve their goal with the purchase.’ With this definition it be-came clear that many high tech companies were stuck at the chasm for an unnec-essarily long time because they didn’t fully develop their product” 5

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was to put all the eggs in one basket. To invest in a target group and to establish a bridgehead, before the next market segment was cultivated.

how to choose the pragmatic customerA company in the uSA, “Documentum”, drew up criteria before a customer-adapted development of the “whole product”. They suc-ceeded very well in making a breakthrough and expanding their sales to new markets.1 Is the selected customer economically strong and available for our

sales force?2. Is there a compelling reason for them to buy a “solution”?3. Can we today, with the help of our partners, deliver a whole product

which matches their expectations of the “solution”?4. Are there any established competitors who can prevent us from cre-

ating the sales opportunity?5. Can this segment create a lever for the next segment?

Apple, a supplier who crossed the chasm with desktop publishingMany of us have an Apple product. Their breakthrough came when they created the “desktop publishing” segment. Today we take it for granted that we can design and print attractive material from our computers without having to lay documents and photos on a drawing board and cut and paste together finished pages that we then send to a printer’s. This became the Macintosh computer’s bridgehead. Ask anyone in advertising: The chances are 99.9 per cent that they love their Mac. When Mac broke through the chasm, they could solve all of the advertising agencies’ needs. Computers and programs developed by partners (such as Adobe) and printers (hP) could supply the whole product.

A new view of the Technology Adoption Cycle (TAC)This view of “the whole product” meant that the life cycle for new technology, the TAC, had to be further developed. how could a com-pany harvest the fruits, when the chasm had been crossed, from the

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pragmatics and then the conservatives? how could development and market strategies be developed? how could a company win, rather than its competitors? how can a company build up and maintain its partners?

The TAC was developed to include six purchase groups:1. The Early MarketA time of development when technology enthusiasts and visionaries fight to be the first who jumps aboard the new technology (paradigm shift).

2. The ChasmA time of desperation when the early market’s interest is reduced, but when the main market has not yet been awakened. Customers are not yet convinced that the technology is mature.

3. The Bowling AlleyA period when the supplier focuses on individual market niches, whose success opens doors to similar applications for other customers. The decision makers are high up in the customer’s organisation: The “roI buyers”. The focus is on the organisation’s value for the new technol-ogy. The aim of the bowling alley is that the first skittle knocks down the next and the next knocks down yet more. The skittles are the mar-ket segments which are won. They help to win new markets.

4. The TornadoA period when most buyers exchange the old technology for the new. A paradigm shift has taken place. The buyers are now project manag-ers and function managers. We call these platform buyers. They have a budget given them by the company management.

The platform buyers act as a group and prefer to buy market lead-ing products and services from stable suppliers. The focus is on intro-ducing a standardised technology platform.

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– The early Market– The Chasm– The Bowling Alley– The Tornado– Main Street– The end of life

SIX GROUPS IN THE TAC

Crossing the chasm

1 2 3 4 65

CHASM

“Inside the tornado” Geoffrey Moore 7

5. Main StreetThe new technology’s potential is developed. Variants for different seg-ment shares are created and new services are created. The focus is on user friendliness.

6. The End of LifeWhen the product is no longer developed or supported, or can no longer be integrated with new technologies, the product dies and is replaced with other more vigorous technologies.

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sUMMaRy

The conclusion of the “Crossing the Chasm” theory is that the busi-ness strategy must be changed as the market moves along the technol-ogy adoption curve.1. The forces that control the bowling alley (early pragmatics) are cus-tomer centred. See Chapter 5 on the talent-driven sales force.2. The tornado market pulls in the other direction, towards a mass-market strategy, in order to develop a joint infrastructure. See Chapter 6 on the service-driven sales organisation.3. on Main Street, the forces push back towards a customer oriented approach in order to give individual market segments higher value. (cf. Microsoft’s different Office packages for large businesses, small busi-nesses, students and home users). The focus can shift from the product to a service with the same functions (“SaaS”, software as a service). See Chapter 7 on the supply-driven sales organisation.4. The suppliers must know where their customer groups are posi-tioned in the adoption curve.5. To be able to quickly adapt their strategy to the next market seg-ment will determine whether the company survives.

To understand these stages and to dare to meet them without preju-dice is perhaps one of the biggest challenges in the development of a sales strategy. Now you can move on and learn about the five sales cul-tures: technology-driven, talent-driven, service-driven, supply-driven and finally a form which can meet the customer oriented needs of all market segments – solution-driven.

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My comments on Crossing the ChasmMy main lesson from Geoffrey Moore’s theories is that a sales method which is successful in one stage doesn’t work at all in the next. Looking after your customers seems even to be counter-productive for growth in the tornado market. an example of this was when one of our customers became market leader and could begin to charge a lot for their product. When the product then matured, the platform buyers woke up. they wanted a simpler standard product and quicker implementation. the competitors launched new products at 30 per cent of the price but with fewer func-tions. our customer didn’t just lose market share at breakneck speed, but also self-confidence. Despite the fact that they worked hard to adapt to the customers’ needs, most customers didn’t seem to want to pay for the service. after a lot of thought, my customer realised that the market had matured and now consisted of platform buyers. they succeeded in reversing the trend by accepting the new market situation and successfully launched a series of products which were directly aimed at platform buyers. simpler, cheaper and standardised. this is an example of how a company can reverse a difficult situation with the help of the theory in Crossing the Chasm.

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Jens Edgren, born 1964, started his career in the selling and training industry after extensive studies in marketing, organizational psychol-ogy and management. Both in the university of Växjö, Eckerd College in Florida, uS and at handelshögskolan in gothenburg, Sweden. he has been a sales man, sales manager, product manager, project manager and MD since he graduated 1989. Jens and his team have had assignments for Microsoft, oracle, Visma, Schneider, Tieto, Philips and as a guest teacher at universities in Sweden. he has four children, lives in Stockholm, Sweden. Jens is especially interested in paragliding, climbing and diving.

Jens started writing the book Sales Makeover already 2008 because many companies were looking for a way to continue the development of their sales organisations. Some of these companies were clients of Jens training organisation. Despite the sales training programs they suffered from the recessions. They were look-ing for ways to create a more stable sales situation and had a wish to be more strategic to their customers. Jens wanted the Sales Makeover concept to fill a gap between traditional sales trainings and highflying management theories, difficult to apply in every day life.

“It took me one year to write the book, one year to make it readable and one year to publish it. Sometimes I felt like trying to climb Mount Everest without any clear route. Now I feel that it was good to have time to practice the theories in my trainings. Also to get valuable feedback from friends and clients. So you could say that the book developed a great deal underway. For me a professional in sales and sales management it feels so good to provide my piece of the puzzle to the world of sales theories.”

SAleS MAkeover – how to develop a solution driven sales culture and boost your sales

Warning! This book deals with how you can maximise sales results and create the most satisfied customers regardless of the economic situation. You will be intro-duced to theories and their significance in how sales organisations are organised and led which may affect you for a long time to come. Don’t count on a few easy tips on magical sales tricks or new theories in personal leadership. If you and your team are to succeed where others have failed, you must be prepared to plan and carry out dramatic changes to your sales organisation. Read this at your own risk.

This book will show you why most companies are hit by totally unnecessary sales blockages – and what should be done differently.

Solution driven sales organisations are more profitable, creates higher customer values and attracts the best salespeople. But how to do it? This book will give you a practical guide to develop your sales organisation to become solution driven. You will find check-lists for when you need to act, what to do and what pitfalls to avoid.

Sales Makeover is based upon more than twenty years of research, practice and execution of sales development.

Jens Edgren has since 1989 helpt companies to become solution driven and improve sales. Jens and his team have worked as consultants to many noted companies in Europe. Jens Edgren has trained over thousands of salesmen and managers in solution driven sales methology.

Jens Edgren has previously published the book “How to sell the answer to a problem” (2008).