Selling in a Downturn Economy - A summary

Summarized by Satoshi Takano

In a Downturn, Provoke Your Customers

Harvard Business Review

Written by Philip Lay, Todd Hewlin, and Geoffrey Moore

The companies you serve are slashing their budgets – but you can still make a sale

Do you hear your

customers telling you…

“No budget.”

“No budget.”

“CUTS Across-the-board.”

“No budget.”

“CUTS Across-the-board.”

“We’ll do with what we got.”

Or, you may soon hear

this…

Or worst case…

“I’m no longer the sole

decision maker.”

So, what do I

do?

things.

“1. You MUST find a way to reach the customer’s resource owners and motivate them to allocate the necessary funds.”

“1. You MUST find a way to reach the customer’s resource owners and motivate them to allocate the necessary funds.”

“And 2, persuade them that your solutions are not just nice but essential.”

This is called,

“Provocation-based Selling.”

This is called,

“Provocation-based Selling.”

“And it goes beyond the conventional consultativeor solution-sellingapproach.”

“Product or solution-based selling pushes features, functionality, and benefits in a generic manner.”

“Product or solution-based selling pushes features, functionality, and benefits in a generic manner.”

… while provocation-based selling helps customer see their competitive challenges in a new light that makes addressing specific painful problems …

Unmistakably URGENT.

So, how do I

learn to become

Provocative?

So, how do I

learn to become

Provocative?

(Without the customer becoming defensive?)

Identify a critical issue1

Identify a critical issue

Formulate your provocation

1

2

Identify a critical issue

Formulate your provocation

Lodge your provocation

1

2

3

Identify a critical issue1

“Identify key issues that matters so

deeply that even in a downturn the

money will be found to fix it.”

Once identified, subject those

issues to 3 sets of questions.

Would it meet the CEO’s “keeps me up at

night” threshold? That is, does this problem

seriously jeopardize the organization’s ability

to compete?

1

Is it being ignored, neglected, or ineffectively

addressed by existing processes, systems or

services?

2

Are you a credible source of advice on the

issue?

3

Here’s some advice…

Here’s some advice…

“Observe what the security analysts have said

about the target company or industry.

If analysts have an issue, you can assume that investors are pressuring management to

resolve it.”

Formulate your provocation2

“Develop an original point of view

about it. Otherwise no senior

executive will give you time.”

One way to do this is to go

to…

Our customers and industry

analysts.

Then compare the target

customer situation with their

peers.

Then compare the target

customer situation with their

peers.

(AKA - Gain extremely deep understanding of the industry-level issues)

Lodge your provocation3

Here’s a caveat… do this

carefully.

Here’s a caveat… do this

carefully.

(Provocation should not be seen as an invitation to behave disrespectfully)

So, here is one way to

approach it…

“We’ve worked with companies in your

peer group and have seen how the

leading players are experiencing this

painful problem.”

“We think it’s possible that your

company is at risk in this area as well.”

“We think it’s possible that your

company is at risk in this area as well.”

Your statements should clarify the challenge and demonstrate

knowledge of the customer’s current approach to it.

Then follow up and say…


“We believe that if you can’t stem the

bleeding, you risk losing up to 4% of

your market share within the next six to

12 months.”


“We believe that if you can’t stem the

bleeding, you risk losing up to 4% of

your market share within the next six to

12 months.”

The goal here is to disturb the equilibrium and status quo – without

putting him or her on the defensive.

Proving your point involves some

detective work

Once your report is completed, construct the sales proposal in 3 phases…


1. What your company can deliver

right away – most often primarily services.



right away – most often primarily services.


within the year – usually a customized, solution-oriented adaptation of the offering.

Finally…

Finally…

3. Everything else the customer wants or will need over

time to fully address the problem. (If these additional elements cannot wait, you must look for a partner – even if that means working alongside a competitor. Your ability to bring the components will earn you the status of a trusted advisor.)

1. Gain access to senior executives, typically with

P&L responsibilities – can reallocate resources to create the budget for the offering.



2. Find their acquaintance, and ask for referral to

present to the executive.

(can also be through seminars to rigorously find a referral.)



2. Find their acquaintance, and ask for referral to

present to the executive.

(can also be through seminars to rigorously find a referral.)

And oh, ya…

Social networks ain’t so bad either…

Here’s the key…

“During an economic downturn, the more you make your customer see something that they never knew existed, the process picks up speed, and you WIN.”

“During an economic downturn, the more you make your customer see something that they never knew existed, the process picks up speed, and you WIN.”

AKA - The budget gets reallocated to your project.

“While, in an economic downturn, most solution-selling strategies tend to lose momentum at each phase of the Sales Cycle.”

Here’s a simple way to differentiate

Here’s a simple way to differentiate

Solution Sellingvs.

Provocation-Based Selling

Solution Selling Provocation-Based Selling


Competes for vendor preference within

an existing budget



an existing budget

Compels project investment outside an

existing budget



an existing budget


existing budget

Aligns with the prevailing point of view



an existing budget


existing budget

Aligns with the prevailing point of view Challenges the prevailing point of view



an existing budget


existing budget


Addresses acknowledged pain points



an existing budget


existing budget


Addresses acknowledged pain points Addresses unacknowledged angst



an existing budget


existing budget



Targets tactical problems



an existing budget


existing budget



Targets tactical problems Targets strategic problems



an existing budget


existing budget




Begins with technical proof and then

builds a business case



an existing budget


existing budget






Begins with the business case and then

provides technical proof



an existing budget


existing budget








Starts as an IT of line-of-business

dialogue



an existing budget


existing budget









dialogue

Starts as an executive level dialogue



an existing budget


existing budget









dialogue


Asks questions to identify needs



an existing budget


existing budget









dialogue


Asks questions to identify needs Uses an insightful hypothesis to

provoke a response



an existing budget


existing budget









dialogue



provoke a response

Responds to issues described by the

customer



an existing budget


existing budget









dialogue



provoke a response

Responds to issues described by the

customer

Is proactive and leading, forcing issues

out

“These differences don’t imply the death of solution selling, which is still the right approach when the customer understands the challenges to be faced….

“These differences don’t imply the death of solution selling, which is still the right approach when the customer understands the challenges to be faced….

…and has the budget in place.”

“While provocation-based selling is most effective when the customer’s problem is unacknowledged or poorly understood, the budget doesn’t exist, and the customer’s main question is….

“How can we change our approach to this problem, because we haven’t yet managed to deal with it effectively?”

In Summary…

“In a severe downturn, provocation-based selling may be the only way to move past the ‘buy nothing’ mantra emanating from customer organizations.”

Thank You

[email protected]

Selling in a Downturn Economy - A summary

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