Selling a solution is all about understanding the customer’s problem before you provide them with an answer.
It requires you to have in-depth knowledge of the customer’s problems, both in terms of IT and their business operationally and strategically. Yet despite being in the technology game, many of our IT contacts don’t know, or understand the business problems which generate the demand for the “technology” they are providing in the first place.
So what does it mean to sell a solution?
First, you need to recognise that technology selling involves a balance of transactional and solution elements. Transactional selling means providing competitive quotations for the client’s “bill of materials”, while meeting their delivery expectations. Solution selling, on the other hand, is about offering alternative propositions for the customers’ problems from those they have pre-determined.
My experience working in and with business partners over the last 25 years indicates that the Pareto 80:20 principle traditionally applies: 80 per cent of gross profit (GP) comes from transactional sales, while the remainder is generated from solutions-oriented business. In contrast, in my regular CIO discussions, they put more value on sales people and technology partners who offer alternative options to their IT department’s diagnosed solutions.
History indicates selling solutions produces increased customer creditability, leads to more opportunities, gets you in earlier with customers than your competitors, and provides higher margins and longer-term customer retention. All these aspects are vital for building a long-term sales territory.
Here are 5 key components to selling solutions:
1. Closing too fast can leave “money on the table”
Racing off to get the best discounted price and providing fastest availability often means we miss half the opportunity or requirements. Control the speed of your sale: Sometimes getting to the order quickly is vital because the competition is hovering. Equally, it’s important to occasionally take a step back and ask questions, not just automatically carry out the customer’s request. For example, a good question to ask is: “Why do you need this new files server, switch or 30 new security licences?” Answers like: “Because they are out of date, too old or past their use by date” may well be valid, but you need to ensure there’s not a bigger picture you should be addressing. Question the business reasons for the requirement, and you may find other issues emerging such as:
- The business is acquiring another business and needs upgraded capacity.
- The board is concerned about our industry reputation based on feedback from investor community, which is affecting its share price.
- CIO needs to reduce IT operating costs. Newer, self-service technology can reduce IT people overheads, allowing diversion of their skills to higher value projects with greater business returns.
These reasons increase the importance of the technology decision and can offer a means for you to explore larger-scale options which solve the customer’s current and future needs.
So before you race off to quote on a product, ask some naive questions about why your customer needs that new server or storage array, and what it will be used for. If the answer you get doesn’t make sense, be suspicious, explore further and maybe you’ll uncover an opportunity to offer a solution – and not just be a supplier.
And don’t be afraid to ask: “If there was better way, another alternative or option, would this be helpful?” Sales staff are always trying to differentiate themselves and their company from their competitors. Often, we pitch the value of our business or vendor brands as the difference. This is at the exclusion of the difference we can offer with our own skills, perception, experience and ideas.
2. Look for ways to add value, outside of IT supply
Sales people have more exposure to a variety of IT projects in a year than the majority of IT personnel will have over their whole career. In addition, sales people visit more IT departments a quarter than IT people work for in their lifetime. This experience gives them a wider perspective on what works well and what doesn’t when it come to IP projects.
Sometimes, part of the solution is how to do it, and not just what’s needed. For instance, think like an external consultant when selling solutions. The IT department may have higher technology knowledge than you, but you understand the technology supply process and how to deal with people. Don’t underestimate the financial value of these skills to the final IT project outcome.
Meet the project people, offer them your experience to position your value-add. Procurement won’t necessarily see this as valuable – their job is eliminating differences in suppliers to have the same conditions, services and pricing. But selling solutions means increasing your contact base from the traditional transactional arenas, such as procurement or operations, and touching more strategic decision-makers.
Guess who in IT knows all the real problems IT experiences? The client’s helpdesk manager. Why not buy them a coffee and have a chat?
3. The unknown
Warren Buffet, one of the richest people in the world, said understanding compound interest was the secret to his success. My experience has taught me that “compounding business costs” are the secret to selling solutions over just products. Often, IT searches for the least expensive option to fix their technological dilemmas. This is logical given they only have a 12 months budget, 80 per cent of which is used to operate their technology and 20 per cent to improve it. Enquiring what would happen if a customer doesn’t fix its technology issues helps IT and the business units understand the ongoing costs of problems, which can often be larger than first thought.
Be warned through, this is not about FUD (fear, uncertainty and doubt). It’s about rationally determining how the business will be affected over the longer term.
Imagine you have a leaky pipe in your house. It’s annoying when you’re trying to sleep, but plumbers are so expensive. The cost of the lost water is negligible; your lost sleep is annoying but hardly worth $550 to fix. You band-aid the issue with “tape”. Problem solved! Six months later, your wall and carpet has damp rot, the room smells and you have a major problem. Your costs are now far greater than the plumber’s estimate and you still have to pay them for the original problem.
This is an example of compounding costs. Exposing these through questions and discussion highlights the value of spending the right amount today to avoid urgent disasters tomorrow.
Again, use your experience with other IT departments to identify when to question those compounding costs. If the answer, or even the question, is a concern for your customer, it’s an opportunity to offer a solution. If not, then you can always just take the order.