by: Frank V. Cespedes and Tracy DeCicco
This article was originally published in Harvard Business Review on August 19th, 2019
Few people in sales would dispute the importance of bringing insights to customer conversations. One might call this the Jane Austen rule of selling: a seller in possession of a desired prospect must be in want of a relevant insight. Or as one executive says to sellers who call on him: “Your job isn’t to ask me what keeps me up at night. It’s to tell me what should be.”
Over the years, we’ve observed many salespeople who successfully make developing and delivering meaningful insights a core part of their approach. Their experience and our research indicate that, at a minimum, you need to do more than “tell people something they don’t know.” That approach can lead you to develop irrelevant factoids. Instead, we suggest crafting a strategy based on whom you’re talking to and where you are in the sales cycle.
Who Are You Talking To?
In general, as one salesperson told us, “the higher you go up the chain, the more industry insights matter.” If you’re talking to a C-Suite or Line-of-Business executive, insights are crucial; if you’re meeting with a mid-level IT Director, you’ll probably want to spend more time on product functionality and ask more questions.
Choosing the wrong approach can have negative consequences. This is supported by data by Gong.io, which recorded and analyzed sales meetings from thousands of deals made on web conferencing platforms. At meetings with an SVP-level buyer or higher, the data indicate a strong negative correlation between asking discovery questions and closing deals. Once you’ve asked a few questions, every additional question with a busy senior buyer decreases the odds of success. On average, successful meetings here involved about 4 questions while unsuccessful meetings averaged 8. For meetings at lower levels, however, successful sales calls averaged 11 to 14 questions. When developing your strategy, keep in mind that lower-level managers are gatekeepers; their job is to vet vendors and their products. Senior-level managers, on the other hand, focus on business issues, which makes them more receptive to insights.
Here’s an example. Eric sells data-analytic tools for an IT firm. He called on a large U.S. retailer shortly after a winter storm had shut down its largest distribution center, which represented about 25% of inventory shipped to its stores. In conversations with Eric, lower-level managers framed the issue as a logistics problem, so Eric explained to them how his firm’s tools could provide data to help optimize flows and reduce delivery costs while the distribution center was being repaired.
But at subsequent meetings with more senior executives, Eric went beyond logistics costs and framed the issues and solution differently. Since the chain was also in the early stages of implementing an omni-channel bricks-and-clicks strategy, Eric brought examples illustrating how markdowns and out-of-stocks have a bigger impact on margins than logistics costs; why it’s important to make pricing and other elements of the in-store and online customer experience as seamless as possible; and how other stores have utilized data-analytic tools to do this. Senior executives approved the sale and at a scope wider than a purchase for logistics software.
Where Are You in the Sales Cycle?
In an early meeting with a senior buyer or influencer, it’s typically important to demonstrate that you can articulate how your product relates to key trends, opportunities, challenges, or evolving best practices in that market. You can do this by indicating who you know (people and companies using your product to drive business value and financial benefits) or what you know (your firm’s viewpoint about industry trends and the so-what implications), or both.
“Senior executives,” a senior partner in the consulting practice at a Big 4 firm notes, “are typically impressed when informed about the reality in their market, how it applies to their strategic goals, and how we can help execute required initiatives in their company with their people.” If she were selling to a retailer, she told us, she’d look beyond the common-held belief that retail is in a massive decline.
For example, U.S. spending in retail stores has increased every year since 2009; an average of 48 million square feet of retail space has been built (not shuttered) annually since 2010; chains operating more than 50 locations opened about 4,000 more stores than they closed in 2017; and analysis suggests that the biggest cause of mall closings has been newer shopping centers in that area, not ecommerce.
Industry examples can be useful, too. Since adopting products and services usually requires customers to make changes to a wider usage system, they’re usually hesitant to buy. Here, examples can provide what researchers call “social proof”: the fact that people are more likely to act when they know others have. As one salesperson emphasizes, “Start with something that demonstrates you understand how people make decisions in that sector. At this stage, it’s typically not competitors you should worry about; it’s the status-quo because 60% of all buying ‘decisions’ are to postpone a decision. So in initial meetings, I look for an industry issue or example they need to know about to make a decision.”
At later stages, senior leaders have different needs. As the senior partner in the Big Four accounting firm said, “The selling difference then is typically how we can uniquely frame and implement a solution for their organization.” Why? Senior buyers often need to justify a significant purchase to others in their organization, and they typically do so by addressing a market challenge or opportunity. Moreover, in many service, software, and professional services categories, ROI is inherently “experiential value”— that is, the buyer doesn’t really know the nature or magnitude of the value until they experience it in post-sale usage. At this stage, they want to know how you’ll follow through at the implementation stage. In fact, a classic study found that across industries the top criterion senior executives use to judge the salespeople they meet is the salesperson’s ability to marshal the selling firm’s resources.
Providing insights is indeed a foundation and difference maker in many buyer-seller interactions. But, as always in sales, influence is bestowed by the buyer as well as earned by the seller.