In a world of increasing product commoditisation so many organisations now seem to be turning to service as a key differentiator so that they can justify a price premium and safeguard their profit margin.
The challenge of course is to make sure that your service is truly a differentiator and to find ways of demonstrating the superior value it delivers to the hard-nosed procurement professional who is negotiating with you across the table and refuses to acknowledge the long-term value your service differentiation can bring.
There are a number of strategies that I have seen organisations adopt to meet this challenge.
1) Segment your customer base
Savvy sellers recognise those customers who just want the lowest price, and those who are more interested in having a value-led conversation. So they adopt different approaches for these different customer types. Neil Rackham makes the same recommendation in his book: Rethinking the Sales force. Interestingly, in Huthwaite’s Creating and Capturing Value survey we did not see ‘Segmentation of the customer base into transactional/consultative’ emerge as a major value-creating behaviour. Where segmentation does seem to be important is when you are selling a product that can be easily commoditised.
You may also want to consider the maturity of the procurement department that you are working with. Although it may not seem that way to most sellers there are procurement departments out there who want to have value-focused conversations rather than price-focused conversations. The challenge then is that you need to be able to demonstrate the value of your added service offering to the procurement department. In the survey ‘assessing the value of the contract delivered’ during Implementation did emerge as an important value-creating behaviour. Yet many organisations struggle to get the measures in place to assess this value effectively, if at all.
2) Getting sales comfortable with selling service
Many sellers that we see are comfortable with selling a product and happy to talk product specifications with end users, yet don’t seem to know how to articulate the value of their service offering. This may be because the service offer is less tangible, and requires them to focus more on the whole experience that they are offering the customer, rather than what their product can do.
3) A team approach to selling
The biggest value a customer service department can add is through their technical knowledge and expertise. We have witnessed this through our behavioural research into service, where giving advice/explanation consistently emerges as a highly significant behaviour. So the savvy organisation is bringing the technical experts into the bidding process so that they can work with the sellers on designing a highly customised solution to meet the customer’s needs. This is what many organisations are now calling solution selling or consultative selling.
4) Selling during Implementation
As well as getting involved during the bid process service people also have a role to play in spotting opportunities during Implementation. The lesson from the procurement research is that organisations need to get in early to sell the next contract, which means starting as soon as a contract is signed. This is when sales and service can work together to spot the opportunities and start building the needs and identifying the appropriate solution for the next contract.
You can download Huthwaite’s research report, ‘Beyond the sales team’, which examines the findings from a survey into the shifting buyer/seller relationship, at www.huthwaite.co.uk/