Chapter Two Principles

Two Principles

The New Solution Selling was developed in response to today’s highly competitive global economy and draws on years of research and selling experiences. The principles covered in this chapter are the foundation of Solution Selling. After reading this chapter, please begin to apply the principles immediately. You don’t have to wait to finish the entire book before you start.

SOLUTION SELLING PRINCIPLES

A partial list of Solution Selling’s underlying principles include:

• No pain, no change.
• Pain flows throughout the entire organization.
• Diagnose before you prescribe.
• There are three levels of buyer need.
• There are two types of opportunities—Looking and Not Looking.
• Get there first, set the requirements, and make yourself Column A.
• You can’t sell to someone who can’t buy.
• Buyers’ concerns shift over time.
• Pain x Power x Vision x Value x Control = Sale

Solution Selling Principle No Pain, No Change

The foundation principle of Solution Selling is: No pain, no change. We define pain as a problem, a critical business issue, or a potential missed opportunity. If a person or a company doesn’t have a problem, critical business issue, or pending missed opportunity, why should he change? We use the word pain in Solution Selling to emphasize the concept. We don’t encourage salespeople to use this term with buyers.

I believe this concept holds true for virtually everything sold today. I remember making this statement in a Solution Selling workshop and being challenged by one of the attendees. She asked, “How can that be? What are the so-called pains associated with luxury items?” Unknowingly, she began to answer her own question with her next statement: “After all, people buy luxury items because they want to, not because they have to.” I simply looked at her and asked, “Have you ever wanted something so much that not having it was painful?” In other words, the desire to have, to achieve, or to experience something may itself become the pain or the reason that will cause you to change the way you’re currently doing things.

Pain gives people a reason to change. Pain causes people to take action, to change a negative situation, or to act on their wants and desires for a better situation. People and companies don’t typically do things or buy things without a compelling reason. When pain is admitted and the value of the resolution of the pain is quantified, it provides buyers with a compelling reason to act.

Solution Selling Principle Pain Flows Throughout the Entire Organization

How dependent are football, hockey, and basketball teams on their players to be in sync in order to perform well? Everyone knows that team sports require players to be in sync in order to play well and win championships. Companies and organizations are no different. Simply put, people within functional groups are dependent on each other. This concept—interdependence—is the structure upon which companies are built. Although the level of interdependence within companies may vary, it’s always there.

Interdependence has a great deal to do with selling, particularly for solutions that are implemented throughout a company. In today’s world of complex decision making, more than ever we need to understand the problems and challenges of our prospective buyers more holistically. Only then can we address the root causes of problems and provide solutions rather than simply treat the symptoms.

One individual’s problems link to other people within the same organization. In selling, it’s important not only to identify and quantify the pain of the individual whom you’re talking to but also to link that problem to others. The enabling solution means greater value for the customer and a companywide selling opportunity for salespeople.

In Chapter Four, I graphically map these links into a sales aid called a Pain Chain. The Pain Chain illustrates problems and their reasons and how they are manifested throughout an organization.

Solution Selling Principle Diagnose Before You Prescribe

When you diagnose before you prescribe, you have an understanding of the customer’s problem before you discuss the solution. The reverse of this, prescribe before you diagnose, means that you will be proposing a solution without understanding the problem. Even if your prescription turns out to be correct, the customer may feel uncomfortable and bring the sale to a halt. This principle is described in more detail in Chapter Seven.

Solution Selling Principle Three Levels of Need

There are three levels of need, and you’ll find people, buyers, and organizations at all three levels. The key is for salespeople, and anyone else involved with buyers, to be aware of this and adjust their approaches accordingly. The approaches differ, depending on the level of need at which you find people (see Figure 2.1).

Figure 2.1: Three Levels of Buyer Need

Level 1: Latent Pain Buyers who are not looking and not actively trying to solve a problem are in latent pain. There are two primary reasons for buyers being at this level of need: ignorance or rationalization. Ignorance means they’re unaware of the problem, and rationalization means they know about the problem, but they may not believe a solution exists or they may have failed at previous attempts to solve the problem. Buyers at this level frequently rationalize the potential solutions as too expensive, complicated, or risky. Whether because of ignorance or rationalization, buyers at this level of need are living with problems that in most cases can be solved.

Key salesperson action at this level is to help the buyer become aware of and admit his or her problems. I often tell salespeople that if buyers aren’t aware they have problems that the salesperson’s products or services can solve, selling the problem is the first thing they have to do.

Level 2: Admitted Pain The buyer is willing to discuss problems, difficulties, or dissatisfaction with the existing situation. The buyer admits the problem but doesn’t know how to solve it. At this level, buyers tell us their problems but aren’t taking action. An example of this is e-business. People know they should be doing something in this area, but they’re still on the sidelines. Why? They don’t have a clear vision of what to do or how to get started.

Salespeople at this level should fully diagnose the problem and create a vision of a solution that buyers can see themselves implementing.

Level 3: Vision of a Solution The buyer accepts responsibility for solving his or her problems and can visualize what is needed to address them. This is the action stage.

Key salesperson actions at this level are to support the buyer’s vision if you created that vision or to reengineer the buyer’s vision if you didn’t. The biggest mistake salespeople make with buyers at this level is to assume they have a good chance of winning because the buyers are in a ready-to-buy frame of mind.

In summary, you’ll find buyers at all three levels. In the first level of latent pain, your job as the salesperson is to make buyers aware that a problem exists. In the second level, admitted pain, your job is to confirm the pain that they’re having and lead them to a vision of a solution. At the third level, vision of a solution, the approach is to develop or re-create a vision of what the buyer will be able to do differently after implementing your capabilities.

Solution Selling Principle Looking and Not Looking

If you look at Figure 2.2, you’ll see that potential opportunities are divided into two primary categories: Looking and Not Looking. Looking means the buyer has made a commitment to buy something. The buyer has defined his or her requirements and is engaging salespeople in an evaluation process. What percentage is actively looking to buy? The answer varies, but in most cases only 5 or 10 percent are actually looking. That means that over 90 percent of the potential customers are Not Looking. Why is this? Is it because that 90 percent have no problems? No. Either through ignorance or rationalization, these potential buyers are living with their problems; their pain is latent. The greatest opportunities lie with these people who have problems but who are not actively engaged in looking for a solution. Why does the Not Looking category of buyers provide such great potential? The answer lies in the next principle.

Figure 2.2: Looking and Not Looking

Solution Selling Principle Get There First, Set the Requirements, and Make Yourself Column A

The main goal in this competitive world of selling is to win the business and help our customers. The probability of winning is much greater when you get there first, set the requirements, and put yourself in the most favored position, Column A. Look at Figure 2.3.

Figure 2.3: Make Yourself Column A

The chart illustrates how organizations typically evaluate and buy things. Most companies and individuals, either consciously or unconsciously, use some type of evaluation matrix to help them decide. People rank competing companies into first, second, or third choice, and so on. The key task is for the salesperson to control Column A because of the high probability of winning the business. When a salesperson sells in the latent (Not Looking) area, that salesperson has an excellent opportunity to set or define the buyer’s buying requirements—and claim the Column A position. If the salesperson does a good job during this definition phase, the buyer’s vision (buying requirements) becomes aligned with the salesperson’s products and services and becomes the buyer’s first choice.

Experience has proven that salespeople who become Column A stand an overwhelming chance of winning the sale. Our experience and research indicate that companies that find opportunities in latent pain, bring them to the active state of evaluation, and become Column A win more than 90 percent of the time.

The question many salespeople ask is, “Can I still win if I didn’t define the problems, create the vision, and put myself in Column A?” The answer is yes, but the odds of winning are lower. There are some very specific things you must do to increase the odds of winning. I’ll cover those topics in Part Three, “Engaging in Active Opportunities.”

Solution Selling Principle You Can t Sell to Someone Who Can t Buy

You can’t sell to someone who can’t buy; however, you can spend a great deal of time, money, and effort with people who can’t make a purchasing decision—and a lot of salespeople do. You can take people to lunch and engage in a lot of social activities in an attempt to influence them, but sooner or later you need to interact with people who have real power. These are people with the influence to get what they want or the absolute authority to make a buying decision. If the person you’re dealing with doesn’t have power, then he or she must provide you with access to someone who does.

I encourage sales and telesales people to target and call on people as high up in an organization as possible. It’s better to start high and be delegated down than to be warned not to go over someone’s head and get trapped inside an organization.

Many salespeople complain they have difficulty calling on and getting access to powerful people, and there are several reasons for this. For one, young salespeople typically have little experience calling on executive or high-level personnel, and they’re understandably uncomfortable. Another reason is that many salespeople can’t talk about the business of the person they’re calling on. They lack situational knowledge. Instead, these salespeople target and call on lower-level people, who tell them what they want to hear and most likely let them buy lunch.

Solution Selling Principle Buyers Concerns Shift over Time

As buyers progress through their buying process, their concerns change. Their statements and actions provide feedback on where they are in the process. Ultimately, the more salespeople understand what is important to buyers as they move from one buying phase to another, the better positioned salespeople will be to respond appropriately to the buyers. Figure 2.4 illustrates this.

Figure 2.4: Buyers’ Concerns Shift over Time

For example, at the beginning of the buying process, buyers are typically concerned with needs and cost—we call this Phase I (or the determining needs phase). However, once their needs are defined and budgets are established, their concern shifts to evaluating alternatives that can meet their needs and budget. This is Phase II. Toward the end of their buying process, after they’ve evaluated alternatives in Phase II, buyer concerns shift to risk and the cost of making a commitment. We call this Phase III (or evaluating risk). The buyers’ shifting concerns and the level of those concerns define their particular buying phase. The more salespeople are aware of the psychological buying model and the buying phases, the better aligned they are with their buyers.

Take the example of first-time home buyers. Let’s look at a young couple, Bob and Mary, and how their shared concerns shift over time as they progress through their buying process.

Buying Phase I: Define Needs Bob and Mary have recognized a pain: they’re tired of paying rent when their money could go toward owning a house.

In Phase I, Bob and Mary have to go through needs analysis. Their list of needs includes a number of vital requirements: three bedrooms, safe neighborhood, less than a forty-minute commute to and from work, two-car garage, convenient to shopping, good schools, and so on. Their annual household pretax income is $110,000, so they establish a budget figure for the price of a house as well as a monthly mortgage payment. Once these criteria have been established, they move to Phase II of their buying process, where they compare and evaluate their alternatives.

Buying Phase II: Evaluate Alternatives In Phase II, Bob and Mary are considering which house best matches their list of requirements and fits within their budget. It’s normal buying behavior to evaluate alternatives, compare, and shop around. After all, smart buyers must make sure they’re buying the right product or service, or in our couple’s case, the right house.

It’s a difficult time for our first-time home buyers. They have lots of choices with many homes meeting the majority of their needs. They get very excited while shopping because they’re seeing all the possibilities. It’s an emotional time, and it’s very easy to lose sight of the budget that they originally set. We often hear people in Phase II say, “Yes, we have a budget, but we’re going to get what we need even if we have to pay a little more.” This sounds good to the salesperson at the time, but watch out—Phase III is coming. No matter what buyers tell you in Phase II about how price is not the most important factor, it almost always is in Phase III. It’s part of the psychological buying process that buyers go through. (See Phase III in Figure 2.4.) In Phase II, buyers need to decide whether choice A, B, or C is the right one. It’s important that the salesperson (in this example, a real estate agent) stay in alignment with the buyers (Bob and Mary). Let the buyers compare in Phase II and be prepared for vision reengineering, if necessary. Vision reengineering is described in detail in Chapter Seven.

At the end of Phase II, buyers tend to change their behavior: they start to become concerned about risk. Their body language and actions can indicate that they are entering the third buying phase.

Buying Phase III: Evaluate Risk What are the consequences of taking action? What happens after Bob and Mary buy the new house? What is their greatest concern? Risk. They begin questioning their own decision. They may ask questions such as: Will the warranties be honored? If we’re unhappy during inspection or something goes wrong and it needs fixing, will we incur legal costs? How expensive could those legal costs be? Can we afford them? How secure are our jobs? Can we afford this house if something happens to either of us?

Risk causes people to slow down their decision-making process and maybe not make a decision at all. It’s in this phase that salespeople lose deals without knowing why. The salesperson may have been winning the opportunity up to this point, but because he or she doesn’t understand the risk phase and is not in alignment, he or she says and does the wrong things and loses the sale.

What about the price? Earlier our couple said it’s important, but they were going to get what they wanted even if they had to pay a little more. What has happened to that perspective? Why are they trying to negotiate a better deal at the last minute? The answer is they have to, because they’re in Phase III of their buying model, where risk and price are their major concerns.

The point of this example is that no matter what you sell, your buyers go through buying phases and their concerns shift as they go through them. It’s important for salespeople to first recognize where buyers are and then align their selling activities with what is important to the buyers at the particular phase they’re in.

Solution Selling Principle Formula for Sales Success

The formula for sales success is Pain x Power x Vision x Value x Control = Sale. Each element of the formula should be monitored as a part of the sales process. Because it’s a formula, if you have a zero in any variable on the left, you get a zero or no sale on the right.

• Pain. Has the buyer admitted pain?
• Power. Does the buyer have the influence and authority to make a buying decision?
• Vision. Does the buyer share the salesperson’s vision of a solution?
• Value. Is there compelling value in the proposed solution? Does the buyer concur?
• Control. Is the salesperson able to exert elements of control over the buying process?

The sales formula can provide you with a quick way to qualify opportunities, measure the opportunities’ probability of success, and help manage sales pipelines to meet revenue forecasts.