Customer Centric Business

Modern Selling, the world has changed but businesses have not kept up.  Generally not anyway: customers have changed, what we know about customers has changed and yet most businesses are using sales techniques from the last century.

Modern Selling. The World Has Changed: Have Businesses Kept Up?  This was the title given to a lunchtime event in Brisbane, hosted by Oracle who wanted to provide value for their clients and contacts and also showcase their Sales Performance Module. I was in invited to be the guest, subject-matter-expert speaker.

We decided to run the session as a mini workshop divided into four key chunks of content and open discussion.

1. Our Customers Have Changed
2. What We Know About Customers Has Changed
3. Leading Sales Teams Is Complex
4. Businesses Are Systems That Deliver Value

 

Our Customers Have Changed

Background of sales and marketing

Before we covered how our customers have changed we discussed the origins for sales and marketing. Back in the late 1770’s when the industrial revolution was starting up producers were challenged with how to move the volume of product they produced. This was the genesis of sales and marketing as we know it, and for the last 250 years we have really only been iterating. There has been no true innovation in sales, even though over the last ten years our customers have completely changed how they behave and how the buy.

How customers have changed

We discussed these key four ways in how customer have changed:

1. Customers are very ‘sales resistant’ these days. Anything that looks like, smells like, feels like a sell job – resistance rises significantly.
2. And this corresponds with what a lot of people are calling a ‘self-service revolution’ – customers want to do it themselves. Do the research and purchase themselves.
3. Customers are more informed than ever in history. Not only about products and services, but also informed about other customer reviews and alternatives available to them.
4. Rising expectations – because some businesses have really nailed the customer experience, our expectations as customers have risen to the point where the experience a lot of organisations provide is not good enough. We expect things to be quicker, smoother and no hassle.

Then the open discussion added that:

• Business customers are far more looking for a relationship, rather than a transaction
• Customers tend to be more impatient these days
• Customers are looking for complete transparency
• Want access to a full range of channels – so they can access services on their choice
• Are less likely to buy a product these days, but are far more influenced by the overall experience

 

This last point is critical. Most sales activity today is still based on features and benefits selling, providing information to influencer a buyer. Rather than engaging with people to provide an experience that adds value for them.

 

 

What We Know About Customers Has Changed

What we know about how our customers buy has also changed a lot in the last ten years.

As humans – Customers buy emotionally, then use rationale to justify the decision.

Michael Lindstrom, Buyology (2008-2009) was one of the first published research projects to demonstrate the significant connection between emotions and decision-making. These research projects were literally putting people inside MRI machines and monitoring brain activity under all sorts of conditions that related the brands the customers were connected to and why.

These findings have been reaffirmed in many studies, articles and books since. For example Daniel Levitin in The Organized Mind (2014, Random House) reiterates many of these findings and adds:

• “Economic decisions produce activity in the emotional regions of the brain” (page 276)
• He also refers to the load effect, where “consumers make poorer choices with more information…maximum number of parameters that can be assessed is around ten, …optimal number is closer to five…more information is not always better…”( pages 310-311)

Therefore we need to keep information relevant for that customer – do not overload and present the information in an orderly manner.

Simon Sinek’s Start With Why and the Golden Circle have had profound effects on how we consider what we do…Sinek adds here:

“…the tangible features are simply to help direct the choice of product that best fits our needs. In these cases, the decisions happened in the perfect inside-out order. Those decisions started with WHY – the emotional component of the decision – and then the rational components allowed the buyer to verbalise or rationalise the reasons for their decision.” Simon Sinek Start With Why, 2009, page 59.

 

Customers buy emotionally, then use rationale to justify the decision.

The open discussion then focused on how customers buy and the fact that instead of trying to be “liked” by a customer we really need to find common beliefs we can share. Additionally, it seems that most people really want to change the world in some way (perhaps we are all now aware of our why), in a way that is specific for them and their world. To truly engage with people we need to understand their beliefs, assumptions and what it is they are trying to achieve.

 

Leading Sales Teams Is Complex

Background

There are plenty of moving parts in sales. Additionally, sales is still predominantly managed as a single function, whereas its success is interdependent with multiple teams, including; marketing, service, product, social-media, public relations, even the leadership team behaviours.

In many ways it is one of the least studied management disciplines.

If you want to be a marketing manager, product manager, or CFO and project manager – you have a play book to follow. Not really so with sales. There are some academics, such as Jobber and Lancaster in the UK who have studied sales management, but what they provide is a framework. And again success depends on how you apply the framework. Likewise, there are very few university level courses on sales management.

And yet it is one of the most critical domains that determines the success of the business.

The Wheel of Leading Sales Teams

I use the Wheel of Leading Sales Teams to put a structure around this important function.

Considering this model, here is an overview:

• The process is only sequential on the first implementation.
• Your customer strategy is at the centre and this is a translation of your business strategy into what it means for the types of customers you need.
• Then we develop sales tactics to deliver on the customer strategy, we recruit people with the aptitude, potential and passion to deliver the sales tactics.
• We then onboard them, and continually develop their skills.
• Our recognition and remuneration needs to match our sales tactics, and matched to the behaviours needed for the business and the sales person to be successful.
• ‘Organisation’ is about how we align the resources we have to maximise the results – do we have appointment setters, in-side / outside sales people..? How do we reduce the admin work and increase the customer facing efforts..?
• Coaching is a key part of the role of the sales leader which directly links to motivation

This approach is based on systems thinking, and each of these functions need to be in balance across the wheel.

The problems sales leaders see are often reflected across the wheel.

For example, if you have the team organised as Account Managers and they are regularly visiting existing customers, but your remuneration model is one that is better suited to “hunter” type roles, then you will see problems in the motivation and productivity area. Managers often then try to fix these perceived problems with motivation and productivity, but unless they address the root cause problem, they will make the problem much worse.

The open discussion focused on how most sales teams chase deals, rather than having a deliberate Customer Strategy in place. Even though personas might be used they really can only compliment a well developed Customer Strategy.

Using a persona only leads to finding profiles with generic needs and pain points which doesn’t match how people make decisions, nor does it represent the optimal value back to the business.

Similarly, there was discussion about how sales teams are often driven by financial plans and budgets which places a focus on the numbers, rather than the people they are trying to engage with.

 

Businesses Are Systems That Deliver Value

Businesses are systems that deliver value – or not – for their customers. The level of value delivered, the consistency of that value combined then with the experiential value, determines the long term success, failure or mediocrity of the organisation.

We have seen that the way customers behave and buy in the last ten or so years has completely changed from the previous centuries. Yet, sales practice has only seen some minor iterations during the same period.

We know that leading sales teams is complex, and yet we typically fail to apply systems thinking or deeper customer analysis (not just what they tell us, as this is only the rationale excuse for decisions) to develop meaningful customer strategies for the organisation and well thought out flows for customer engagement.

The role of the leader is to design the optimal activity to be delivered, implement, coach and finetune the design over time.

The framework I use for this is the Architecture for Customer Engagement.

The Architecture for Customer Engagement

 

The initial stage

The initial stage for this is defining your customer strategy. Knowing the specific groups of customers that get the value you deliver, then having value propositions for those customers (not products or services). These are your awesome customers. You want your customer portfolio to be full of profitable promoters.

There are two types of Adoption to consider.

Firstly, using the Diffusion of Innovations (Rogers 1964-2005), consider what stage your awesome customers are in, and therefore is your challenge to find them, or somehow break through the noise to be heard.

Secondly, you should always start a relationship the way you want it to be, forever. So, how do you want your customers to use your product/service, do you want them to be advocates of what you do..? If so, this will affect the design of your engagement flow. Start the engagement the way you want to be, forever.

Also the initial stage requires the business to determine its values and ethics, what are the behaviours that demonstrate what you stand for. Don’t dilute these important attributes by allowing anyone to apply their own beliefs and values. Don’t put leaders and frontline people in a situation of an ethical dilemma that they have to resolve themselves. Determine the values and ethics your organisation stands for, then lay the foundation for congruence across the whole flow of engagement with the customers.

The Second Stage

The second stage is about defining the buying or decision-making process your awesome customer goes through. Then align the flow of information and activities in a coordinated and congruent way that engages your customer from the beginning through to opening the relationship with profitable promoters.

The whole process is an action learning cycle. Implement, measure, monitor, learn and finetune.

 

Conclusions

Sales and marketing efforts have really only iterated over the last 250 years. It seems we are still trying to solve the same problems from the industrial age. However, how our customers behave has completely changed in the last ten years. Additionally, we now know that a most of the old sales paradigms are based on false assumptions. We now know that customers buy emotionally and then justify their decisions rationally.

We need to design our flow of engagement with customer to be values based and congruent with how they behave.

This then is now the role of leaders to manage this transition and build teams of people that can genuinely add value for customers, to create a profitable portfolio of customers.

For more tips on customer engagement I suggest you have a look at the following articles:

• Profit by Design looks at how we can make organisations more successful by focusing on the composition of the customer portfolio.
• Leading sales teams – have a look at: coaching for performance, and competition needs to be external not internal.
• For helps with sales: the top four tips for B2B sales, and a discussion on the problems with sales today.