Many organisations today need a new sales approach. Why? First, because products and services are increasingly considered commodities, making price the main factor for differentiation. Competing on price is rarely a desirable market strategy for sales and commercial managers. Second, a new sales approach is needed because sales people are finding it increasingly difficult to add value to their customers. Most organisations still believe that value is created by the products and services customers buy. However, the definition of value has transformed, and the role of the customer in value creation has changed fundamentally. These evolutions result in classic sales practices becoming largely irrelevant or ineffective.
We need to ask ourselves, what is value from a customer perspective? We argue that value is the perception of benefits that is derived from the attributes of the supplier, the attributes of the product/service they offer, the customer’s subjective appraisal of the interaction, and the customer’s experience with the usage process. Thus, value is predominantly created when the customer uses or consumes a product or service, not just intrinsic to these products or services. Products are merely vehicles to deliver a service that helps the customer, as professor Clayton Christensen puts it, to “get the job done”. Therefore, the role of sales people is to help their customers to “get their jobs done” and to provide them with an integrated and positive purchasing and usage experience. Sales people co-create value with their customers by getting involved in their customer’s jobs to be done. Thus, what are the principles of value co-creation that sales people need to know?
Principle 1: Focus on ends instead of means
In the co-creation approach, the customer ultimately defines the value of a supplier’s goods and services. The customer perceives and assesses the value based on their total experience dealing with the supplier and by using their goods and services to perform the job they need to do. By this notion, value is created when using the supplier’s goods and services. For sales people to add value to their customer, they must engage from initial contact through to the moment where the customers achieve their desired ends. Thus, there is not such a thing as ‘deal closed’! On the contrary, the co-creation approach implies helping the customer achieve its ends, using your products and services as means.
Principle 2: Turn your customer into an active partner
In the sales approach, suppliers tend to view customers as adversaries, who need to be persuaded to buy their offer. Consultative selling and solution selling methods helped introduce the notion that in order to influence customers you have to learn about their problems and needs through discussion and by asking meaningful questions. Some label this a form of co-creation. However, it reduces the role of the customer in the process to that of an informant. The customer is often ‘sold to’ (ok, tactfully) as opposed to ‘sold with’. In the co-creation approach suppliers and customers become partners, engaged in a long-term relationship sustained by continuous dialogue focused on creating value.
Principle 3: Develop value propositions based on organisational capabilities
In the sales approach, the sales person’s objective is to sell their products and services. They employ sales methods to identify the customer needs and link these to the features of their offering. In this context, solutions consist of different combinations of (standard) products and services. In the co-creation approach, the sales person does not present the organisation’s value proposition but instead presents its capabilities. From there, both the seller and the customer investigate how these capabilities could help the customer to improve its performance or to deliver its mission better. The focus is on how to share know-how and capabilities to jointly develop solutions.
Principle 4: Focus on learning through dialogues and building relationships.
In the traditional selling, it is believed that the more a sales person visits her/his customers the more chances to sell; that frequent sales calls help ensuring the supplier does not miss any opportunity. Through these interactions, the customer learns about the sales person’s products and services and the sales person learns about the customer’s problems and needs. The seller establishes a pre-defined agenda often choosing to ask questions related her/his products/services. In the co-creation approach, interactions are part of dialogues centred on the issues connected to the job the customer wants to do. The topics are not pre-selected but emerging, not driven by the seller, but by joint dialogue. In this dialogue even the respective organisational practices and beliefs are questioned and creatively challenged.
Overall the co-creation model requires fundamental shifts in the conception of traditional sales approaches as the figure indicates. This swift however, is essential if suppliers are to genuinely co-create value with their customers.
Dr. Regis Lemmens is the founder of Sales Cubes, a consulting firm which helps sales organisations to innovate and co-create value with their customers.
Dr. Javier Marcos Cuevas is a senior Lecturer in Sales Performance and the Director of the KAM Best Practice Club at Cranfield School of Management.
This article is based on their recently published book From Selling to Co-creating: New trends, Practices and Tools to Upgrade Your Sales Force