It is said that Henry Ford once coined the phrase, “Customers can have a car painted any color that he wants, so long as it’s black.” Whether or not he actually expressed himself that way is unclear, since the first Model-T wasn’t even produced in black. But the quote, which became a symbol for the industrial revolution’s momentum at the beginning of the 20th century, has also taken on another meaning related to the attitude and principles that business leaders followed during most of the 1900s. Value was created through effective manufacturing and production rather than effective customer orientation.
This product-oriented approach has changed drastically over time. With intensified competition, products – and services – are no longer in focus, even though product development, production and distribution are important parts of running a business. In recent decades, customer orientation has emerged as a strong trend, not only in sales and marketing but as an approach that creates a foundation for companies’ reason for existing. That increased focus on customer orientation is a strong trend is evident in the rapidly-growing volume of literature, courses and methods, as well as ProSales’ periodic sales director survey. The latter indicates that in recent years customer understanding and the identification of new ways to create customer value has repeatedly been placed at the top of the most important challenges identified.1
There is nothing more disruptive than the customer. | Tiffani Bova, Growth & Innovation Evangelist, Salesforce
The largest driver behind this trend is increased access to information, which makes customers better informed. For a sales organization, this means that one must create value beyond the products. If sales training focused previously on identifying problems, confirming problems and then communicating value, the focus today is more aptly on anticipating the customer’s problem and creating value through interaction with the customer. The difference can seem subtle, but in practice it is huge. A sales representative must be considerably better informed, be aware of things that the customer is not aware of, challenge the customer and her reasoning, and be more of a consultant or business developer than a sales rep (see the trend interdependency). When products and services are perceived as increasingly similar, it is no longer the product or service per se that creates unique value. Instead, it is the sales rep that determines the unique value and who thereby can defend her existence and justify a higher price. The consequences also become important for the organization, which must support and advise sales people, providing them with insights and knowledge that require analysis, time and resources.
According to Professor Neil Rackham, who in his studies observed approximately 1,100 buyers, the experience of value to the customer is created when the sales representative follows the following principles:2
- Help the customer move in her strategic direction.
- Help the customer to foresee future problems, not just see current ones.
- Create tailored solutions for the customer’s unique problem.
- Ensure that the customer’s voice is heard in her own organization.
- Propose new creative ideas about trends and perspective about the customer’s market.
Traditional sales people who acted solely as providers of product information actually created a negative customer experience. ProSales Institute has reached similar conclusions in its studies of individual B2B sales.3 Even studies like the challenger sale4 and insight selling5 build upon similar conclusions. The best sales people provide a different perspective of the world, they understand the customer’s business, love to debate and participate in constructive and developing conversations, and challenge the customer to move forward.
The consulting company Bain & Co also argues that a shift in focus toward increased customer orientation has occurred. In one of their studies, they make an analogy to the psychologist Abraham Maslow’s hierarchy of needs, which is referred to as a “value pyramid for B2B”.6 It shows how customers have shifted their perception about what creates value higher up in the pyramid. Among other conclusions, it is argued that product quality, price, and ethical considerations are comparable to basic needs today. They are necessary but are not experienced as value creating. Instead, one must sell the values that are about how the customer achieves growth, improves its reputation and experiences reduced apprehension. At the top of the value pyramid we find inspiring elements such as the ability to contribute to the customer’s vision of the future, anticipate changes in the market and inspire optimism about the future.
What determines customer value begins of course always from the customer’s perspective, and the example provided above won’t always be the winning concept. For some companies it can actually be inappropriate to move too high up on the scale. But the customer value orientation approach is nevertheless more relevant today than ever. And many companies need more than ever to review their strategy and how they can live up to increasingly customer-value-oriented sales.
1 ProSales Institute (2016). Sales Agenda 2016. Stockholm: ProSales Institute Sverige AB.
2 Ejenäs, M. (2014, 20 November). Would customers be willing to pay for your sales call [Blog post]. Downloaded 2018-10-22 from https://prosales.se/ news/customers-willing-pay-sales-call-neil-rackham-sales-conference/
3 Klingvall, M., Benzinger, Ö, Larsson-Broman, H. (2011). Jakten på Försäljningens DNA. Stockholm: ProSales Institute Sverige AB.
4 Dixon, Matthew, and Brent Adamson (2011), The Challenger Sale: Taking Control of the Customer Conversation, Knoxville, TN: CEB.
5 Schultz, Mike, and John E. Doerr. “Insight Selling: Surprising Research on What Sales Winners Do Differently”. Hoboken, NJ: John Wiley & Sons, 2014.
6 Almquist, E., Cleghorn, J, and Sherer, L., The B2B Dimensions of Value, Harvard Business Review, February 2018.