The True Meaning of B2B Sales in the Solutions Marketing context

Hi readers,

My understanding of Solutions Sales in a B2B business has been enhanced considerably after my MBA program where I had taken Solutions Marketing as one of my key electives.

Based on my experience in B2B solution sales of 18 years and contemporary coursework in Solutions Marketing taught by Prof. Stephen Hurley, I am sharing what I believe is the essence of B2B sales in a Solutions marketing context.

B2B sales, as I was taught, and which I have practiced  is heavily dependent on an ROI analysis. The numbers used in the ROI analysis are the customer’s numbers, gathered through effective questioning.

(NOTE-2 key skills MUST HAVEs for a successful solutions sales professional- Financial analysis capability AND Interviewing /researching skills)
I taught my B2B sales people to look for ways of contributing to the prosperity of their customers’ business in five key areas: (1) sales, (2) employee or process productivity, (3) profits, (4) competitive advantage, and (5) cost control…If a B2B salesperson is talking about anything other than those five issues they are probably wasting their time and their customer’s time.

(NOTE- Keeping a focus on issues that are top priority for your client is key to success, otherwise there is the real danger to scatter your thoughts and energy all over the place and end up delivering nothing to your client, and certainly losing your incentives!!)

The five elements, mentioned above are interesting because they’re a map of what most companies think are important — and therefore provide hooks for B2B selling. 

I claim that there are only important two (2) goals inside every company: 1) increasing sales revenue and 2) decreasing cost of sales.  

To illustrate this point, let’s look at the five elements mentioned earlier

  1. Sales.  Nobody wants to decrease their sales, so this element is simply a restatement of the goal to increase sales revenue.
  2. Employee/Process Productivity.   Increased productivity decreases the cost of doing business, thereby decreasing the cost of sales.  If you increase productivity somewhere in a company in such a way that it increases the cost of sales, you’re decreasing profitability, which is stupid.
  3. Profits.  Increased revenue and decreased profitability means more profit, by definition.
  4. Competitive Advantage.  Any one can beat a competitor by giving away more value for less money; the trick is to grow at the competitor’s expense and still remain profitable.  Therefore, competitive advantage consists entirely of increasing revenues while either decreasing the cost of sales or keeping them stable.  Even product development (like building a better mousetrap) is actually just a way to increase revenues by making more sales.
  5. Cost Control.  You’d have to be an imbecile to control costs in one part of company in a way that ends up increasing the cost of sales and/or decreasing revenue.  Therefore, the only meaningful cost control consists of decreasing the cost of sales.

To repeat, there are only two (2) things important in a company: 1) increasing sales revenue and 2) decreasing cost of sales.

Therefore, if your B2B offering, through a solutions sales proposal,  focuses on helping your customer do either of those two things, you’ve got something that’s worth buying.

And if your product does both of those things, you’ve got a real winner.

So, in order to help you succeed in your product driven solutions sales efforts, you need to brush up your solutions marketing skills!!

3 Strategies for Successful Pricing during a Downtown

Hi readers,

Since 2008, its been a struggle across the globe for leading brands- those providing cutting edge services and great products are on their edge trying to figure out strategies that will not only help them tide over this global recession and depressed demand, but also enable them to make decent profits.

Not an easy as it sounds.

The US markets have been sputtering at below par GDP for over 4 years, the Nigerian market, largely unaffected by global money markets has managed to delightfully buck the trend and has grown at over 5%, and growth in India currently stands at 5.5%, well much higher than that in the US, much lower than that seen in China, BUT well below its real potential.

Those who wish ( or wished ) to invest in India are cagey at best, or have already given up on the India story “fairy tale”perpetrated by the Indian Government and their spin doctors!

Business leader after another has painted an abysmal picture of the Indian economy and would rather take their investment plans overseas than sit on piles of cash here, with no returns.

So what are the facts-

The current economic climate might be the worst some managers have yet seen. With customers so jittery, the stakes for getting pricing right are high, and managers may be unprepared to avoid common pitfalls of pricing in tough times.

Based on my assessment of strategies used by successful businesses in past economic downturns, I have put together 3 generic strategic directions that the enterprise may want to consider before formulating and deploying a strategy that works in this downturn

  • Understand how price-sensitive customers will behave – and act on that knowledge more quickly than competitors.

A recession, is an opportunity to learn faster about changing customer behavior and gain advantage through this insight. You look not only at the taillights of the car in front but the car in front of him (and in front of him). By paying attention to your customers’ customers (and their customers), you can identify problems before your business crashes into some unforeseen pricing reality.

Essentially it entails that you need to develop client/consumer insights beyond your nose. This requires first class grip on analytics ( big data need of the hour!!), practicing DILO (Day in the life of) and spending more time with trade channel partners, with THEIR clients and comprehending their needs.

  • Consider the longer-term strategy before changing prices.

“The great danger is you take sensible short-term decisions that screw up your long term brand value,” says Cram.

What this means is this- dont get pressured into taking decisions on impulse- if the board or the CEO (under pressure from the board) starts breathing down your neck, action AND NOT reaction may be the best strategy. You need to understand that in times of crisis and pressure, anger and reactions are normal- problem is, that if it starts to impact the board and the CEOs behavior, some where down the line, the reaction needs to stop; better it starts with YOU and you put your head down to really think hard and think through and then put your well thought case to your CEO or the board. You will be better served when you are seen as a sane voice in a room full of senior executives gone insane with pressure!!

AND dont forget- your logic and a long term perspective has to be the underlying theme for your pricing strategy.

  • Be sympathetic to cash-strapped customers – and take care not to start a destructive price war by accident.

Make sure your price cuts don’t appear to be panicked reactions to falling sales. Your rivals will be watching you closely, and you don’t want to start a price war. If that’s a possibility, it’s better to promise to match competitors’ prices. And if it’s your competition that’s slashing process, think carefully before following suit. Your rival’s decision,  might be ”the idiot decision of one manager who is going to get fired.”

I could not agree more on this. Panic an knee jerk reaction to a competitors pricing policy is NOT the answer for ensuring long term sustainability of the business, the top line and the bottom line.