Sales Models - Transaction & Solution Selling

The first step in adopting an appropriate sales model is to identify who will be doing the selling and how innovative is the product/service offering.  A business model should embrace the entire life cycle of the product/service offering and identify who is doing the selling: 

• Spell out the targeted customer industries and even identify key influential  targeted customers
• Customer preferred/appropriate sales/support/service channels
• Go-To-Market Plan
• Launch
• Mid-Life plans

Having an innovative product/service means that the prospective customer will not be looking for these capabilities since they did not currently exist in the marketplace.  If the product/service is innovative you have no choice but to adopt a sales model that is "solution oriented" since much missionary work is needed and to overcome the marketplace barriers: lack of "Awareness", "Consideration", and "Hit" or predisposition to buy your product/service.  

The second step in adopting an appropriate sales model is to gain agreement as to what role the sales professionals will need to play in the selling process.  Sales roles range from that of:

• "Transaction Oriented" - Merely providing information when the customer makes inquiries and simple qualifying  and closing activities.  At this level the qualifying activities consist of testing to see that there is an established need and product/service fit, that a budget is in place, timing or event driving the decision, and comfort in doing business with you.  Therefore many decisions have already been made to arrive at this point in the customer's buying cycle,
• "Solution Oriented" - Complex sale scenario where the sale professional's role is perceived as an integral part of the customer's internal planning/operations staff and he/she develops a vision in the mind of the customer to enhance the customer's business through the application of the sales professional company's capabilities

Prism Business Development - Transaction & Solution Sales Models

In reality the "transaction oriented" sales model is a subset of the "solution oriented" model because once the vision is created the normal procurement process happens and the sales professional needs to be able provide information, confirm (need/fit, budget, timing and comfort in buying from us), propose and close.  Please note that the "solution oriented" sales model therefore is an expansion of the "transaction oriented" model to include activities to "create the market" and after the sale to see that the "customer derives the promised business/personal benefits".  Oftentimes the "solution oriented" sales professional is referred to as a "eagle" sales professional.

Another factor to keep in mind is that in general 80% of the opportunities are "latent" where the prospective customers have not perceived they have a solvable business/personal problem and therefore are not "looking" for the sales professional company's capabilities.  Therefore, merely responding to customer inquiries ("transaction oriented" Steps 4-6) means that you are only addressing the 20% (low hanging fruit) share of the market and missing 80% of the market potential requiring a "solution oriented" (Steps 1-7) sales model.  In addition, you are not solving business problems and missing the opportunity of being perceived as delivering high-customer-value. 

Leads that come in from marketing promotion efforts typically solicit responses from prospects that are already "looking" or "considering" a specific solution.  This implies that the prospect is already at Step 4 in their decision making process.  Quite often this means that a competitor has performed Steps 1 - 3 and the prospective customer already has a solution vision in mind that that specifies the competitor's unique/advantage capabilities.  If this is the case the sales professional must re-engineer the solution vision (direct the discussion to back up to Step 2) or consider not investing time in the opportunity.  If you adopt the "solution oriented" model you are in effect helping the prospective customer write a Request For Proposals (RFP) that has requirements specifying your unique/advanced capabilities.

A solution oriented sales professional must have a higher degree of business acumen and a high degree of creativity to perceive how to make use of capabilities to positively impact customer business operations.  There are specific activities the "solution oriented" sales professional must engage in order to create a "buying vision" in the eyes of the prospective customer.  Left to their own devices the "solution oriented or eagle" sales professional will research customer management critical business issues, develop business cases, value propositions/value analysis, competitive analysis and sales team evaluation plans etc. If we expand marketing's role to include sales channel enablement we can avoid a great deal of duplication of sales professional efforts by providing this information for targeted industries.  In addition, marketing can provide targeted customer industry information, prospective customer information and prospective customer competitor information from industry sources like D&B/Hoovers etc. 

By adopting a "solution oriented" sales model and extending marketing's responsibility to provide the necessary solution oriented sales tools, in effect streamlines operations, speeds time to market, increases deal size/margins and reduces cost of sales.  In addition, you shift from a product/service oriented company to a company servicing a targeted industry/community by delivering the highest customer value... and position to become the industry leader.

If you are a new business you must articulate your business model and sales model to the new sales professional and sales management team to get them all on the same page and using the same yardsticks for territory planning, accounting planning, opportunity management, pipeline management, and sales model execution.

Last but not least, if you employ a "solution oriented" sales model early in the product/service offering life cycle it will allow you to validate markets, get strategic customer alliances and obtain a deep appreciation as to customer business/personal value prior to investing in the program.  In addition, your business model will be validated as it relates to customer preferred packaging, pricing and sales/support/service channels.  The result will be a highly focused organization that is capable of forecasting more accurately and garnering the major share of the market.

Prism Business Development provides consulting services to optimize its client's play in the marketplace.