Solution Selling… and Attributes of Solution Selling ... · Solution Selling Solution Selling The...
Transcript of Solution Selling… and Attributes of Solution Selling ... · Solution Selling Solution Selling The...
Solution Selling…
and Attributes of Solution Selling Executives
Peter Schaefer, New Direction Partners
PRINTING United
October 23, 2019
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• Today’s Environment
• What is Solution Selling?
• Attributes of Solution Selling Executives
• Where do we Find Them?
• Summary
Agenda
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• Over last 10 years (and likely over the next 20) Printers need to have two
focuses…
✓Be Efficient; and
✓Grow.
Don’t Forget, because…
Today’s Environment
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• Over last 10 years (and likely over the next 20) Printers need to have two
focuses…
✓Be Efficient; and
✓Grow.
Don’t Forget, because…
Today’s Environment
“In a maturing to aging market if you don’t grow,
you will run out of business to be more efficient”.
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• Ways to be more Efficient:
✓ Technology, workflow, automation, flexible labor, quality, outsource, etc.
• Ways to Grow:
✓ Quality, price, manage salesforce, innovation/differentiation, new
markets, acquisitions, new products and services.
Today’s Environment
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• Slower market growth (if any)
• Price competition:
✓ excess capacity;
✓ consolidating customer base; and
✓ print aggregators.
• Rising costs:
✓ healthcare;
✓ wages; and
✓ utilities.
Why is Organic Growth Important?
The Printing World is “Different” Today
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The Role of the Sales Executive is Changing
• Buyers’ motives, practices and behaviors are changing.
• Competition is different:
✓ Social media; and
✓ Email.
Realities of Today
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Customers are Different
• Individual customers have different needs.
• One size does not fit all.
• Specific customer strategies are required.
Realities of Today
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Develop a Product Focused Strategy or a
Customer Focused Strategy
How Do You Grow Organically?
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Customer / Product Focus
- Customer Focus +
-P
rod
uct
Fo
cu
s
+
FAILURE
Attributes –
Views Customer Profitability,
Customer Concentration, Solution
Provider, Sales / Customer
Orientation, High Cost of
Switching, Succeeds via Progress
up the Customer Learning Curve
Attributes –
Views Product
Profitability,
Manufacturing
Orientation,
Succeeds via
Progress up
the Product
Learning Curve
SUCCESS
SUCCESS
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StrategyProvide whatever customer wants, outsource, transfer
risk from customer.
Structure Strong sales and marketing organization.
Pricing
Measure customer profitability but not every order,
Defend, but if successful, cost of switching provides
room.
SystemsCustomer service teams, customer reporting,
customized web interfaces, fulfillment.
Style (Culture)Customer focus orientation, sales service
empowerment, “Can do”, listens to customers.
RisksCustomer and/or sales exec concentration, customer
only wants discounts, forever rising expectations.
Customer Focus
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StrategyMake and deliver a product or service better than any
competitor.
Structure Strong manufacturing and most likely IT departments.
PricingMeasure product and order profitability, may low price
for plant fill for non-core products.
SystemsDrives efficiency and functionality, measure product
activity, standard cost systems.
StyleManufacturing / process orientation, usually low cost
producer.
RisksPotential product obsolescence, low cost of switching
unless system hook.
Product Focus
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What is Solution Selling?
Solution selling is a sales methodology. Rather than just
promoting an existing product, the salesperson focuses
on the customer’s problems and addresses the issue
with appropriate offerings (products and services). The
problem resolution is what constitutes a “solution.”
Source: Wikipedia
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• Solution Selling Doesn’t Guarantee Success
• Being Different Drives Success
• Most Solution Selling is Different
What is Solution Selling?
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• Customer focused strategy
• Understanding customer requirements and pain points (problems)
• Consultative selling…selling a solution rather than a product
• FOR CUSTOMERS: Solutions decrease costs, increase productivity and/or
grow revenues
• FOR THE SUPPLIER: Solutions generate Recurring Revenues where it isn’t
all about the Price!
What is Solution Selling?
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Sample Target Markets/Key Business Processes
Target Markets Key Business Processes
Higher EducationNew Student Recruitment/
Fundraising
Pharmaceutical Packaging
Real Estate Open House Brochures
Automotive Service Notifications
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• Service notice mailings for Toyota
• Developed solution, including personalization
• Established measurements (revenue growth) and tracked results
• Improved process by including promotions with time constraints
• Established Joint Venture with Toyota (nice payment to DME)
• Added other solutions and sold Joint Venture to Toyota (really nice payment to
DME)
Automotive (Service Notifications Example) - DME
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• Specializes in 1:1 custom communications for the insurance, healthcare and
non-profit industries
• Provides fully integrated marketing services across all media channels:
✓ Variable digital/inkjet
✓ Personalized websites
✓ Interactive videos
• Demonstrates key metrics for customers:
✓ 12% response rate
✓ 62% more quotes
✓ 31:1x revenue to cost ratio
✓ 8:1x ROI
• Result is loyal customers that send more and more campaigns
• 16% 5-year CAGR (all organic); 34% unadjusted EBITDA margin!
Example of a True Omnichannel Provider
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• Target market
• SWOT Analysis - current state, including pain points
• Understand key business processes
• Develop solutions
• Marketing objectives and plans
• Target accounts & penetration
✓ Initial account selection is critical
✓ Target high profile customer
✓ Leverage off the initial success(es)
• Measurement (current state vs. desired state) & Tracking (ROI)
Market Attack Plan
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Solution Selling Process
Source: Patrick Morrissey, EFI
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Pre-sale prospecting, qualifying
prospects from a sale's
perspective .
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Business recommendations /
value proposition
development. The
deliberations.
2Gaining entry. Meeting with the
right person for the right reason. 7
Co-developing the solution.
The time for give and take.
3Discovery. Understanding the
company’s situation.8
Value proposition. Matching
the need to your solution.
4Critical factor: What keeps the
customer up at night? 9
Proof of concept. Managing
the objections.
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Managing the political
landscape. Sourcing the
decision makers.
10Defending value proposition.
Blocking and tackling.
11 Implement. Initiating the job.
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Let’s Compare Solution Selling to Transactional Selling
What is Solution Selling?
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Transactional Selling
Transaction Selling
The Salesperson adds Value by
Matching the Needs Between the
Customer and Supplier
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• Find prospects with a need
• Develop relationship with prospect
• Take orders for a desired product or service at an acceptable price
• Revenues are increased by making more sales calls and by taking more orders
• Size of an order is expanded by cross-selling and or offering discounts for larger volumes
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Transactional Selling
Transaction Selling
The Salesperson adds Value by
Matching the Needs Between the
Customer and Supplier
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• Transactions are usually documented through purchase orders and
invoices with shipping and schedules paramount to control
• Procurement officers control the process and are motivated by schedules
and price
• In summary, the sales team should focus on managing delivery and
maximizing price
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Transaction Selling
The Salesperson adds Value by
Matching the Needs Between the
Customer and Supplier
Transactional Selling
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Transactional Selling
Transaction Selling
The Salesperson adds Value by
Matching the Needs Between the
Customer and Supplier
Compensation Plan
• Draw against commission based on sales
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Solution Selling
Solution Selling
The Salesperson adds Value by
Understanding the Problems Faced
by a Customer and by Creating a
Vision of Potential Solutions
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• Dialogue concerning customer problems
• Questioning and listening are paramount
• Purchasing decision is managed through a proposal, contract negotiation and solution delivery
• Size of order is managed by adjusting scope and measuring complexity
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Solution Selling
Solution Selling
The Salesperson adds Value by
Understanding the Problems Faced
by a Customer and by Creating a
Vision of Potential Solutions
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• Most conversation occurs with key decision makers
• Any price discussions occur with discussion of scope and complexity
• In summary, the sales team should focus on understanding the customer’s business and how it can make the customer more successful
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Solution Selling
The Salesperson adds Value by
Understanding the Problems Faced
by a Customer and by Creating a
Vision of Potential Solutions
Solution Selling
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Solution Selling
Solution Selling
The Salesperson adds Value by
Understanding the Problems Faced
by a Customer and by Creating a
Vision of Potential Solutions
Compensation Plan
• Solution Selling Team, the “Hunters” – Salary Plus Bonus
• Introducing Sales Executives, the “Farmers”
✓ One-time commission on Year 1 sales
✓ Reduce commission rate on ongoing sales
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Do you have this sales professional in your building?
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Solution Selling Requirements
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Attributes of a Solution Selling Executive
Strong communication skills
Asks relevant questions
Can sell to a large decision-making team
Presents well
Good listener
Strong persuasive ability to create interest
Strong C-level communicator with
ability to write concise proposalsAbility to sell value without price
being sole focus
Exudes confidence in ability to achieve
objectives & solve problemsStrong closer
Understanding and comfort
discussing ROIUnderstands technology
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• Owners
• General Managers
• Progressive CFO’s
• MBA Types
• Sales Managers
• Solution Selling Executives from Other Industries
✓ Telecommunications
✓ Software
✓ Consulting
Who Are They?
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• Firm has clear and widely communicated definition of Solution Sales and
metric is measured monthly
• Salesforce is comprised of clearly identified “Hunters” bringing in new Solution
Sales and clearly identified “Farmers” who are maintaining sales
• Firm takes advantage of current sales executives’ account relationship for
entrée
• Owners / senior executives are involved in Solution Selling
• 40% plus of sales are Solution Sales
What Does Success Look Like?
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• Be different
• Be customer focused
• Recognize that each customer is different
• Identify and address your customer’s pain
• Look outside of your salesforce for solution selling executives
• Use your salesforce for introductions & farming
Summary
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Questions?
Peter Schaefer, New Direction Partners
P.O. Box 496
Valley Forge, PA 19481-0496
Tel: (610) 935-1000
Email: [email protected]
Peter Schaefer
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Peter Schaefer is a Partner with New Direction Partners. Peter is an
experienced dealmaker with twenty years of investment banking and valuation
experience. He has closed more than one hundred transactions in virtually
every segment of the printing and packaging industries as well as the sale of
a $75 million helicopter company and a $10 million bread manufacturer.
In addition, Peter has performed hundreds of valuations for ESOPs, estate
and gift tax planning and strategic planning purposes.
Other recent transactions have included the sale of Midnight Oil to Oak Hill Partners, Popular Ink to
Highlander Partners, Classic Graphics to Imagine! Print Solutions, the divestiture of Transcontinental’s
Rastar division to Sun Litho, the sale of Meisel to R.R. Donnelley, the sale of Vectra Corporation to
Taylor Corporation, the sale of Express Label to Cenveo, the purchase of Journal Communications’ IPC
Print Services by Walsworth Publishing, and the purchase of National Graphic Supply by Pitman.
Prior to New Direction Partners, Peter worked for fifteen years at Compass Capital Partners having
served most recently as its President. Prior to that, he worked in the investment banking departments of
KPMG Peat Marwick and Coopers & Lybrand. He received a BS in Economics and Political Science
from Trinity College and an MBA from Villanova University. He is a Candidate Member of the American
Society of Appraisers and is a member of the printing industry’s prestigious NAPL Soderstrom and PIA
Ben Franklin Societies and has served on several Advisory Boards within the printing/packaging
industries. Peter is married to Kathleen and they have six children.