“Buyers are stratifying their suppliers into a caste system, increasingly delineating strategic vendors from commodity providers.” To prevent being relegated to a commodity provider, fighting it out on undifferentiated offerings and discounts, a new set of sales and marketing best practices are emerging. ~Scott Santucci
An outcome is an end result. It is consequence of your actions or your lack of actions. Outcome-based selling is an approach designed to identify, and then incorporate a prospect’s needs, dreams and fears into a solution that benefits both the buyer and seller.
Great salespeople achieve results, not only for their company in the way of sales, but also for their clients in the way of improved performance. This improved performance is the ‘outcome’ that they sell: ‘Salespeople don’t sell product or services; they sell outcomes’. Buyers are more empowered, skeptical and frugal, changing the way they assess and purchase solutions.
Focusing on the buyer’s problems, patterns, path, and proof, the new 4Ps, help sales and marketing teams understand what is needed. Thereby, sellers can gain substantial benefits including:
- Sit at the table to help drive business strategy.
- High value sales with more reliable growth.
- Maximized client satisfaction for improved up-sell/cross-sell and references.
Likewise, buyers also get significant benefits as well, which is what makes outcome (value) selling successful, including:
- Unbiased insight to help diagnose and illuminate issues.
- Assistance in setting priorities and building solution roadmaps.
- Business case justification.
- Measurable performance improvements.
According to Forrester’s Scott Santucci, this shift to the ‘value-outcome’ requires that sales professionals and marketers move from the legacy 4Ps of sales and marketing; product, place, promotion, price, and move to a new mantra; problem, pattern, path, proof. The 4-Ps of ‘outcome-selling’ includes:
- Problem: What are the customer’s problems?
- Pattern: How will your solution solve their problems?
- Path: How will it be purchased and can you help facilitate the decision cycle?
- Proof: What is the quantified value the solution will deliver?
The recommended course to elevate sales and marketing to ‘outcome-selling’ includes:
- Diagnose Buyers Issues and Needs: Buyers may need help on properly identifying and diagnosing issues & opportunities.
- Build a Value Framework and Financial Justification System: Buyers may need help in understanding the “cost of doing nothing” and the potential value of making a change.
- Exploit Competitor Weaknesses and Prove Superior Value: Buyers demand that they get the best deal on every purchase.
In the article “The Big O – Outcome Selling” by Tom Piscello writes: Buyers are more empowered, skeptical, and frugal than ever before, which provides a greater than ever challenge to sales professionals and shakes the very foundations of traditional selling models. At the ‘Forrester Technology Sales Enablement Forum’, Forrester introduced an umbrella term to describe these practices: ‘Outcome-selling’ and it’s defined as “a go-to-market approach where you design your value communications system to optimize the value your customers realize.”
On the surface, this may not seem like a big shift for many companies, but when you think about the current way most sell and market, it is no less than dramatic. The good news is that many B2B marketers have recognized the issues with the product selling approach and have advanced to solution or strategic selling, where sales and marketing tries to uncover buyer pain points, an inquiry of “what keeps the buyer up at night”, and map solutions that can help quiet the indicated ailment.
However for sellers, solution or strategic selling focuses stakeholders on remedying the immediate pain, but often fails to deliver a cure by not focusing on the outcome: the tangible value the buyer may or may not receive as a result of the solution. Do buyers think solution selling is working? When asked, buyers categorized over 41% of sales professionals as — “listening for keywords and then quickly diving into prepared pitches, without truly understanding the true business outcome that the buyer is seeking”…
In the article “Outcome Selling Takes Customer Centric Selling to the Next Level” by Janet Gregory writes: Customers don’t want your stuff, they want outcomes! The optimal approach is alignment to the customer’s problem solving lifecycle. The time when the customer is becoming aware, concerned, and assessing the problem puts sales and product portfolio consideration into the right conversation.
Outcome selling is the next step beyond customer-centric selling. To be successful at outcome selling; sales, marketing and product management must all be well grounded in customer-centric selling. This is major shift away from the tradition, outdated 4 P’s (circa 1950): product, place, promotion, price. It is a transformation into 4 new P’s of outcome selling: problem, pattern, path, proof…
“As your customer, your value(seller) is not in what you want to sell to me; it’s in what you can help me accomplish.”
In the blog “Outcome Based Selling – Next Generation Sales Success” by Aspire! Group writes: The most successful sales people share a number of common skills, behaviors and methods. The problem is that many people are looking for the silver bullet, the one thing that will make the customer stop in their tracks and buy from you and no one else. There is no silver bullet…just a lump of sliver that you need to work into a bullet for each unique executive engagement you have with a prospective customer. Each engagement will be unique with unique points of differentiation.
Evidence from various engagements actually show this approach can be significantly faster in the “buying cycle”. The reality is most sales start very late in the buying cycle resulting in demand reaction, highly competitive sales. In this economic climate, sales success requires a new thought process on selling. An outcome-based approach that is not about what you are selling, but about partnering to help customers achieve their desired outcome…
In the article “IBM’s New Way of Selling IT” by Wayne Kernochan writes: IBM aims to change its approach from meeting customers’ demands for functionality to providing solutions that achieve a desired outcome. In other words, the metric for success is less TCO (total cost of ownership) or speeds and feeds, and more helping clients realize specific goals, e.g., 5 percent reductions in operating margin or 8 percent increases in revenues year-over-year. IBM says that it perceives the outcome-driven sell as eventually their main engagement strategy with customers and prospects; whatever the final sale, IBM leads with promising an outcome.
This is not necessarily a radical departure from traditional vendor approaches; after all, it is pretty similar to selling services with an SLA (service-level agreement), but it does have a couple of interesting implications. In the first place, “outcome” is more future-oriented than “functionality” and therefore more potentially risky for any vendor. It takes an uncommon degree of confidence to commit to a customer that a particular product or service will indeed provide a specific improvement in, e.g., book-to-bill speed a year from now.
One way of looking at the outcome-led sell seems to summarize its advantages: The question for prospective customers, in many cases, moves from “Does IBM [or any vendor] have the right solution at the right price point for me?” to “What type of IBM solution can I use most effectively to deliver on my company’s long-term strategy?”…
In the article “4 Ways Salespeople Can Better Manage Outcomes and Achieve Results for Their Clients” by S. Anthony Iannarino writes: Sales has changed. It has shifted dramatically in ways that make it unrecognizable to some and impossible for others. We no longer sell products. We no longer sell solutions. We now sell business results and performance acceleration.
Understanding this shift isn’t difficult. Taking responsibility and acting according to this shift is as complicated and difficult as any modern business problem. Instead of ensuring that your product was delivered on time, you now have to ensure that the client achieved the result that you promised when you sold the product.
Instead of ensuring your solution worked as promised, you now have to ensure that the solution produced the result it was intended to; be it greater profitability, lower costs, greater competitiveness, or any number of business outcomes: “This is not your father’s Chevy!” The key here is not only to get your team and their team engaged in whatever needs done to get the outcome, but to get them in early and often. Successful salespeople manage these outcomes for their clients and their companies, ensuring that they achieve the results and the outcome that they sold.
Outcome selling; moving from buying things to buying results or outcome, is an important development in the buy-sell relationship. The concept is not new, as expressed in the quote attributed to the president of a well-known manufacturer of tools, “Our customers want holes, not drills.” What is new is the practical application and methods for achieving it.
The move to an outcome-selling or outcome-sourcing in an outcome-economy encompasses dramatic changes in the core elements of the way business is done. It requires a whole new way of thinking on the part of both buyer and seller; from buying and selling things to buying and selling outcomes.
If you focus too much on your “solutions,” you’ll either lose the sale or fight an uphill battle. This isn’t to say that there aren’t plenty of lower-level functionaries who think of business almost solely in terms of problems. But they’re not the decision-makers. From the perspective of a real decision-maker, all products (even when re-labeled as “solutions”) are basically the same.
You may think that customers should care that your “solution” has superior features. They don’t. Customers — decision-makers, that is — don’t have the time, energy or inclination to learn enough about your product category to understand why those features make your solution better.
Decision-makers want results and they want ’ you’ to take responsibility for those results. In today’s crazed business world, the only reason that a real decision maker will talk to you about those results is that they want to outsource a function that your firm is, hopefully, capable of performing.
In fact, if your customer contact ‘does’ appear to care about product feature/functions, and wants to get into a long discussion of ‘problems’ and ‘solutions’, you’re not talking to a decision-maker; you’re talking to a speed-bump…
From customers: “The salesperson clearly shows they understand my business issues and can clearly articulate to me how to solve them. We do not care about what you do; we care about how you make us successful.” – And, how often does that happen? 13% of the time!