C reating relevant, differentiated solutions and articulating compelling value propositions that

leverage enterprise-wide capabilities are fundamental to higher-order value creation. In this installment we capture how the best companies differentiate their products and solutions, elevate the value they create and articulate it in the market. This article builds on the value road map’s first two stages (Velocity, Vol. 11, No. 3/4, Summer/Fall 2009) where we explored leading practices for understanding customer value drivers (Step 1) and aligning capabilities with those drivers (Step 2). (See Figure 1 on Page 14.)

Step 3: developing and differentiating your products and solutions

Leading companies act on strategic customer and value chain insights to co-create relevant, differentiated solutions that leverage their enterprise capabilities and resources. As Jack Welch, retired chairman and chief executive officer of General Electric Co., put it, “An organization’s ability to learn and translate that learning into action rapidly is the ultimate competitive advantage.” Based on our research and experience working with the world’s top sales organizations,

we’ve identified seven capabilities and “next practices” that distinguish the great from good when it comes to developing and differentiating products and solutions.

Co-creation

Leading companies engage their “lighthouse” customers to elevate and accelerate innovation. While there are many challenges – such as culture and intellectual property – in co-creating solutions, the payback can be significant. As the vice president for global strategic accounts at a Summit Group client commented, “By working collaboratively (with our customers), we were able to identify and create solutions none of us would have identified on our own.” Leading this collaborative co-creation process, we engaged the best and brightest people our client and its customers had in their space to focus on elevating our client’s value proposition to its customers. The outcomes were:

Inter-company teams drove a set of joint •initiatives.

Real-time business alignment accelerated •new products’ time to market and strengthened relationships.

As our client said, “In 2009 we were able •to increase sales by $550 million without introducing any products.”

Our client is launching six solutions as a •direct result of this co-innovation process.

The value road map: Part 2

Developing and articulating the value you create

By Philip Styrlundchief executive officerthe Summit Group

Shakeel Bharmalpresident (canada)the Summit Group

and James RobertsonVice president of business developmentthe Summit Group

Leading companies act on strategic customer and value chain insights to co-create relevant, differentiated solutions that leverage their enterprise capabilities and resources.

V e l o c i t y ® • • 1 3 • • Q 2 2 0 1 0Copyright© 2010 StrategiC aCCount ManageMent aSSoCiation. all rightS reServed. reproduCtion or diStribution without expreSSed perMiSSion iS StriCtly prohibited.

The global strategic accounts VP was recently promoted to •a senior international leadership role.

Leveraging all your assets

Many companies continue struggling to navigate across their organization, break down silos and offer company-wide capabilities to customers. The ability

to leverage all your assets enables you to:

Elevate business relevance.•

Differentiate your solutions.•

Counter competition and commoditization.•

Increase solution richness and value.•

While there are numerous challenges, strategies and tactics to managing the mother ship, one notable practice is for marketing to provide sales teams with an updated inventory of the company’s offer enablers™, those capabilities beyond products and services that can be bundled to create highly relevant, differentiated solutions. Salespeople are often unaware of everything their company has to offer or where to find offerings. As one of our clients said, “We tend to show up smaller on the outside than we are on the inside.”

Using the voice of the customer to engage and align the organization

The competencies, knowledge and resources to create enterprise solutions reside across the company—at every level, in different geographies and in multiple functions. High-performing salespeople use the voice of the customer to build alignment, gain commitment and secure resources inside their organization. They accomplish this in many ways, notably by:

Bringing relevant colleagues into joint business alignment •and planning sessions with the customer.

Hosting collaborative “help sales sell” workshops that use •VOC to depoliticize the need to align and mobilize action.

Telling structured, creative, compelling stories that describe •customer priorities and business drivers, competitive threats, opportunity attractiveness, impact, feasibility and the action and resources required to win, all in a way tailored and relevant to the colleague from whom they need support.

Running live offer-development workshops where the “critical •crowd” wraps itself around major new business opportunities and works through a best-practice process in a war room environment. As for business impact, we’ve seen these live offer-development programs increase conversions, or win rates, from a pre-program 27 percent success rate to a 70 percent win rate for projects that went through this process. In the case of one high-tech client the average contract value increased more than 650 percent from a deal size of $81 million to $622 million.

Implementing a replicable solution development and bundling process

A common language and consistent approach enable agility, speed and, paradoxically, creativity. The distinguishing capability is to develop a replicable, efficient approach to tap into offer enablers and enterprise assets that are highly relevant to customer needs.

Figure 1. The value road map

Delivering the value proposition

Sustaining value

Capturing value

Articulating thevalue you create

Developing anddifferentiating your

products and solutions

Aligning yourcapabilities with the

customer value drivers

Understandingcustomer value drivers

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Step 7

V e l o c i t y ® • • 1 4 • • Q 2 2 0 1 0Copyright© 2010 StrategiC aCCount ManageMent aSSoCiation. all rightS reServed. reproduCtion or diStribution without expreSSed perMiSSion iS StriCtly prohibited.

Laser focus on business relevance and “fit”

Business relevance drives the value created. The greater the alignment and impact your solutions have on what the customer cares most about, the greater the value you can bring. World-class sales organizations and star sales coaches focus on “fit” throughout the solution development process by constantly considering the following:

Which products and services will •have the greatest impact on what the customer cares about?

What does our solution do for the •customer?

What value does our solution create?•

So what?•

Who cares about that?•

Does their position, title or function •change what they care about?

These questions pose important considerations as you begin crafting your message for the customer to directly target its stated issues, concerns, needs and initiatives. “What does our solution do?” describes in customer terms and with customer value in mind what the solution accomplishes. It is not enough to speak of a product’s new and improved features and functions. Instead the imperative is to describe the application and its impact in customer business terms.

Emphasize what distinguishes versus expected value

Through research-based analysis of customer decision criteria and competitor capabilities, leading companies develop an accurate picture of their relative competitive position. In a structured, replicable way they create, eliminate, elevate or reduce elements of their offer guided by relevant differentiation, impact, attractiveness and feasibility.

Focus on elevating the customer’s value proposition

Rather than focus solely on their

customers’ business, leading salespeople seek to elevate the value their customers extend to customers. By affecting why their customers’ customers choose to do business with their customers, they distinguish themselves and significantly increase their business relevance and value. The value created elevates their relationship toward co-producer status and accelerates growth. By

institutionalizing a replicable enterprise-wide approach to creating customer-centric, relevant solutions, companies are able to have substantial immediate and long-term impact on customer loyalty, profit and growth. Once the solution has been conceptualized and created, a message articulating the

“proof of value” must be developed and communicated, which leads us to the next step in the value road map.

Step 4: articulating the value you create

Many companies have successfully made the transition through the previous steps, having developed products and solutions that truly address higher-order customer business issues. Deere & Co. developed a landscapes division, John Deere Landscapes, to provide bundled solutions to independent landscape contractors, making their lives easier and businesses more profitable. These new solution bundles included landscaping machinery, supplies, materials and even project financing, all delivered through new retail channels. In the technology world the most publicized example of this

transition is IBM Corp. Its successful strategy to combine business consulting, hardware, software and implementation support is probably the biggest contributor to its continued survival in the highly contested technology space while so many peers have struggled.

We’ve found in our work that what is rarely considered in the planning stages of a solution bundle launch is the challenge of preparing the sales force and channel partners to clearly articulate a new product’s or solution’s value to customers. Countless times we have seen companies invest millions of dollars in market research, product development and marketing communication, then fail to sufficiently plan for or invest in the tools, training and time to enable sales success. By the time the product is ready for launch, management is so eager for the revenue to begin generating return on investment that the pressure is on to roll the product out to the marketplace often at the same time the product rolls out to the sales force.

Certainly every launch team makes an effort to communicate the product characteristics and benefits to sales colleagues and produce attractive marketing collateral. Rarely do we see enough time and detailed effort put in place to enable true success. As a result the expected – indeed, eagerly anticipated – revenue ramp-up is frequently delayed. This is a shame since the new solution’s excitement usually

What is rarely considered in the planning stages of a solution bundle launch is the challenge of preparing the sales force and channel partners to clearly articulate a new product’s or solution’s

value to customers.

V e l o c i t y ® • • 1 5 • • Q 2 2 0 1 0Copyright© 2010 StrategiC aCCount ManageMent aSSoCiation. all rightS reServed. reproduCtion or diStribution without expreSSed perMiSSion iS StriCtly prohibited.

energizes and unifies a company before launch. The lack of immediate success after launch starts an unnecessary cycle of blame and disappointment. However, there is hope. Many companies do get it right, usually because they have learned from past failure but sometimes because sales and lighthouse customers are involved early in the planning for product development and launch. We offer you some best practices covering three areas from several of our clients: sales training, sales communication tools and quantified proof points.

Preparing the force

The best of the best and those aspiring to be the best involve their sales leaders during the product launch phase and conduct an objective assessment of the current state of sales skills. Then they build a training program based on that assessment that is integrated with the product roll-out. This can take many forms, but the most comprehensive approach is a competency assessment of value selling skill dimensions, including business acumen, consultative relationship skills, value articulation skills, adaptability to change and ability to differentiate value

driven versus transactional customers. A holistic diagnostic can be conducted through online surveys and interviews of the sales organization and customers.

With a complete diagnostic, best-in-class organizations deliver intense, interactive two- to three-day programs that go beyond providing product knowledge and a theoretical background on value solution selling by incorporating realistic case-based customer scenarios and engaging role-plays. This allows sales professionals to put their skills and knowledge (both pre-existing and new) to the test as well as build confidence. Scenarios are written to reflect real-life customer situations and often require the sales professional to do pre-work to come prepared for several intense rounds of simulated customer meetings followed by coaching. At the end of the sessions the participants are required to deliver a solution-oriented customer presentation that can be judged for quality by a panel of executives from both within the company and lighthouse customers. An example of the modules from one such program is outlined in Figure 2.

After several months of in-field experience sales professionals can be

brought back in. This time they bring live deals they are currently working on, and through the course of a day they work with an integrated team of experts from within the company to build an action plan for taking that customer relationship to the next level and winning the business. This type of training format is much more “real” and has found tremendous success at leading companies across numerous industries, such as Xerox Corp., GlaxoSmithKline plc, Cisco Systems Inc. and Marriott International Inc. An executive at one of these companies commented, “Where we thought the business opportunity with a client was in the range of $7 million to $8 million, the revenue we actually achieved was closer to $30 million.”

Several other best practices relate to the culture and process change that surrounds the sales professional. Of these, the greatest effect we’ve seen is from the disciplined delivery of on-the-job sales coaching after the initial launch of the product or training. Studies by the Integrated Sales Executive Council of The Corporate Executive Board Co. have shown that people trained on a new product or sales approach without coaching retain only 13 percent of the new knowledge a month later. On the other hand, combining training and coaching increases the productivity impact to 88 percent.

Two of several critical coaching variables are “when to coach” and

“what to coach.” Research has shown that the greatest impact comes from coaching delivered in the field. It’s not about spending more time with sales representatives in formal coaching sessions. Instead star sales coaches focus existing time on mind-set and skill set coaching, both immediately before a customer call and just after. This way coaching can be tied to specific customer scenarios relevant to advancing the business while at the same time developing the sales professional. There is no need for complex coaching frameworks or forms to fill out. Rather the best companies keep coaching

Figure 2.

© The Summit Group

V e l o c i t y ® • • 1 6 • • Q 2 2 0 1 0Copyright© 2010 StrategiC aCCount ManageMent aSSoCiation. all rightS reServed. reproduCtion or diStribution without expreSSed perMiSSion iS StriCtly prohibited.

simple by using tools like Third Box ThinkingTM, which we described in the previous article. Working with the sales professional to think through what creates value for the customer’s customer, what the customer cares about and what your company can do that relevantly affects the customer is a simple, effective way to drive the coaching conversation.

Communication tools

To support the sales team’s success in representing the value created by the new solution, some best practices include preparing flexible, customizable communication tools. These can be

tailored based on the buying process stage the customer is in. For example, one of our clients in the supply chain industry prepared copy for e-mails and letters that could be sent by sales professionals to their key target clients. The rep would simply customize the message with a personal opening paragraph and paste in the prepared copy that delivered a value proposition in customer language. The best e-mails/letters use principles we described in our previous article, such as

“them-us-fit-proof”—what issues does the customer face, what capability do you have, how does it impact the customer’s issues, and of course what is the impact

other similar clients have seen?

Another instance of a sales communication tool is an interactive presentation builder. Many companies have fallen into the trap of creating a boilerplate sales presentation that sales professionals deliver as is to clients whose attention spans wane due to the lack of relevance to their specific issues. The better professionals build and add their own slides to customize to client needs. This is great; however, the result is a plethora of inconsistent quality and positioning delivered throughout the marketplace. An excellent compromise we have seen at leading companies is

the creation of an online presentation tool. Through an easy-to-use interface reps respond to questions about their clients’ business issues and needs. Once complete, the presentation builder creates a presentation leveraging pre-created slides customized to those issues and needs. This balances the need for consistent messaging around value creation with the desire for customers to see how the solution directly impacts their relevant business.

Clearly, providing tools to help salespeople

Figure 3.

Figure 4.

V e l o c i t y ® • • 1 7 • • Q 2 2 0 1 0Copyright© 2010 StrategiC aCCount ManageMent aSSoCiation. all rightS reServed. reproduCtion or diStribution without expreSSed perMiSSion iS StriCtly prohibited.

communicate value to their customers is critical, but many companies miss the importance of creating tools to help sales professionals communicate internally within their own company. An approach we call “structured storytelling” gives a simple framework for sales professionals to take what they learn from their customer discovery process and translate it into terms they can use to garner support from internal subject matter experts whom they engage in the customer interaction. Indeed our research with buying executives indicates that many customers believe that the problem with most salespeople is they do not have the ability to rally support on their behalf from internal stakeholders. A common refrain from buying executives is, “They talk a good talk with me, but then they are unable to pull things together within their own company.” Structured internal storytelling helps this.

Value demonstration

The most basic best practice for demonstrating how the solution creates value is to create a library of real case studies delivered in multiple formats the sales professional can draw on and share with customers. The case studies

should represent the target market’s industry range. These can be very effective, as can more in-depth white papers that communicate the same idea: where it has been done before and what the results were.

The next level of sophistication and sales empowerment comes in the form of ROI calculators. Companies such as Alinean Inc. specialize in building easy-to-use online calculators. Through a series of simple questions answered by either the customer or sales professional (or better, both), a report is generated that uses a combination of graphs and qualitative content to articulate the possible financial benefits customers can accrue should they implement the solution. One of our clients in the transportation industry created such a value calculator to help the company’s reps demonstrate how their new supply chain service could save their client time and money. (See figures 3 and 4 on Page 17.) Some combination of case studies, white papers and customized ROI calculations is a very effective way of enabling your sales team to articulate the value you create.

Through steps 3 and 4 hopefully you’ve gained insight about how leading

companies develop their offerings and articulate the value they’ve created to the marketplace. We look forward to continuing down the value road map in the next article, where we’ll discuss delivering your value proposition and capturing the value you’ve created.

James Robertson and Philip Styrlund will conduct sessions and workshops about effective virtual team leadership and coaching, leading strategic growth initiatives and leveraging and aligning enterprise capabilities at SAMA’s 46th Annual Conference in April in Chicago. Styrlund is chief executive officer of the global consultancy firm The Summit Group (www.summitvalue.com), which focuses on sales training and strategic account management/development. He can be reached at ps@summitvalue.com or (952) 891-8400. Shakeel Bharmal is president (Canada) at The Summit Group and can be reached at sb@summitvalue.com or (604) 218-1076. Robertson is vice president of business development for The Summit Group and can be reached at jr@summitvalue.com or (952) 221-4889.

Additional resources

For more information on this subject by these writers in SAMA’s library, the editors recommend: Philip Styrlund, Shakeel Bharmal and James Robertson, “The value road map: Part 1—taking value creation to the next level in an increasingly competitive marketplace,” Velocity®, Vol. 11, No. 3/4, Summer/Fall 2009, www.strategicaccounts.org; and Philip Styrlund, “On-demand webinar: creating business value,” Oct. 17, 2007, www.strategicaccounts.org.

do you REALLY know what your accounts are THINKING?

Introducing LoyaltyProTM 5.0Strategic Account Relationships and Plans based on FACTS

LoyaltyProTM is a Proprietary Web-based Customer Loyalty Surveying Tool of The Chapman Group

The Chapman Group 1.800.755.1905 www.ChapmanHQ.comV e l o c i t y ® • • 1 8 • • Q 2 2 0 1 0

Copyright© 2010 StrategiC aCCount ManageMent aSSoCiation. all rightS reServed. reproduCtion or diStribution without expreSSed perMiSSion iS StriCtly prohibited.