In The Three Value Conversations, Erik Peterson, Tim Riesterer, Conrad Smith, and Cheryl Geoffrion present an alternative sales technique. Instead of pushing their products or services, salespeople should have value conversations with their prospects to engage them more effectively. They must do their research, understand their buyers’ business needs, and present solutions that speak to the buyers’ values and interests. For the conversations to be successful, salespeople must differentiate themselves from the competition, justify their solutions, and emphasize the value for themselves and their customers.
The Three Value Conversations
Most selling occurs during casual conversations in places like elevators or parking lots. Great conversations with customers should sound casual, yet be well planned and practiced. They should include the following three elements:
The right message, which is relevant to the customer.
The right tools, which are effective vehicles for delivering the message.
The right skills, which impart comfort and confidence when delivering the message.
There are three types of customer conversations, each of which has specific objectives and outcomes:
The differentiation conversation, which creates value.
The justification conversation, which elevates the value to the right decision maker.
The maximization conversation, which captures the value and maximizes opportunities.
Mastering these customer conversations will help salespeople create more opportunities and move deals through faster with fewer concessions.
CREATE VALUE: THE DIFFERENTIATION CONVERSATION
Create a Buying Vision
A salesperson’s biggest enemy is the status quo and the safety (though not necessarily satisfaction) it offers the buyer. To overcome this challenge, a salesperson must convince the buyer that the status quo is unsustainable and there is a clear need for change. He or she must shake up the status quo and help the client establish a buying vision. One survey revealed that nearly three-fourths of executives stated they award business to whomever helps them establish their buying visions. They want salespeople to not only help them see the need for change, but to clarify the solution. An effective way to accomplish this is by using the concept of loss aversion, which theorizes that change is motivated more by the fear of loss than the anticipation of gain. Rather than telling a buyer how much the company will benefit, the seller will more effectively motivate the buyer by convincing him or her that adhering to the status quo is unsafe for business and means the company is losing out, thereby creating a sense of urgency.
Speak to Situations, Not Dispositions
Business buying decisions generally involve multiple buyers or influencers. Customizing a conversation with each of these individuals would be challenging. However, early-stage conversations are more about the company’s situation than about individual buyers’ dispositions. It is essential that a salesperson understand this concept, referred to asfundamental attribution error, to keep from overestimating the influence of a particular buyer.
The real power in affecting behavioral change comes in being able to connect with a person on a situational level. The salesperson must intimately understand, and develop a profile for, the buyer’s status quo, by answering some key questions:
*How are prospects currently addressing challenges that the seller’s products of services can help resolve?
*Why does the company think what it is currently doing is working for them?
*With its current approach to solving problems, has the company missed any challenges, threats, or opportunities?
*Where are the missing pieces of the company’s current approach to solving its own problems?
The seller can use this profile to help the buyer realize that his or her approach is not working and that the seller’s product or service is needed to change the status quo.
Unconsidered Needs Drive Unexpected Opportunity
The discovery process is a sales approach that has been used for more than 30 years; the seller asks the potential buyer a series of questions designed to find the customer’s pain points. However, because every salesperson seems to use this approach, it does not add value to the selling process.
Today’s seller must find the buyer’s unconsidered needs. Most buyers know what their companies’ problems are before salespeople have differentiation conversations with them. An effective seller needs to uncover the needs the buyer is unaware of. To do this, the conversation needs to be fresh and different, digging beneath the obvious. Sellers must deliver the insights buyers need by telling them some things that they did not already know, and telling them about problems they did not know they had–problems the sellers can solve in ways the competition cannot.
To initiate this conversation, sellers must ask themselves:
*What are potential buyers doing now that may be harmful to their businesses?
*What evidence can the sellers present to show buyers that their current assumptions are obstacles to their businesses?
*What facts and statistics can be presented to confirm this evidence?
*How can sellers present this information to buyers in the form of an engaging story?
Uncovering a buyer’s unconsidered needs will differentiate the seller from the competitors, who still use the same discovery process.
Keep Claims Limited and Focused
Salespeople naturally want to offer their prospects choices; however, offering too many choices is counterproductive and results in choice overload. Including an option that was not part of the purchasing criteria often influences a buyer to reject a seller’s offering; the buyer may view any additional feature as weak or irrelevant.
Likewise, when presenting claims about the solution being offered, the fewer the better. Three claims about a solution’s benefits enables the prospect to process the message and instills more confidence in the seller. Any more calls into question the validity of the information being presented. Salespeople tend to want to include too much information in presentations. Limiting the discussion to three relevant, focused points helps the prospect remember the information and have a positive perception of the seller.
Finding those three key points is a matter of categorizing and prioritizing the offering to determine:
*If the product or service is truly unique to the seller’s company.
*If the product or service is one that the competition has, but the seller’s company’s is better.
*If the competition has basically the same product or service.
Starting with the truly unique offerings, the seller must identify which solution can be connected to the prospect’s unconsidered needs.
Whiteboard Conversations Versus PowerPoint Presentations
How the conversation is delivered is as important as its content. Most people only remember 10 percent of what is said in a meeting, just two days after the meeting. Visuals can increase that retention to 65 percent. For example, drawing concepts on a whiteboard helps the client, or prospective client, engage in the presentation, find the information and the speaker to be more credible and trustworthy, understand the information more clearly and enjoy the presentation more fully, and better recall the information after the meeting.
There are three critical components to the whiteboard approach:
1. Context. The visual must demonstrate the deficiencies in the buyer’s status quo, setting the context of urgency to change.
2. Contrast. To increase the perceived value of the offering, the drawing must clearly contrast the buyer’s status quo with the solution being offered.
3. Concrete. The decision-making side of the buyer’s brain must see the specific need and the opportunity for a resolution. Clear, simple graphics will help convey this message in a concrete manner.
ELEVATE VALUE: THE JUSTIFICATION CONVERSATION
Overcoming a Fear of Heights
Executive decision makers want to have conversations about business issues. Salespeople are usually trained to have product and services conversations. To reach higher-level decision makers, therefore, salespeople must do three things:
Increase their competence in discussing business and financial issues.
Increase their confidence in meeting with upper-level business executives.
Increase the quality of their stories to be more compelling.
If a salesperson is fearful of going over a current contact’s head to meet with a higher-level executive, he or she should involve the current contact in helping to secure the meeting. Many higher-level meetings are actually facilitated by someone else in the organization.
Developing Customer Insight
Upper-level executives are crunched for time, so a salesperson must be able to convince them that the discussion will be valuable and not just a rehash of product knowledge. The conversation must be focused on the buyer’s perspective, creating a “buying vision for business change.” The salesperson must have an understanding of the business situation, including the external factors and the business initiatives affecting it.
Most external factors affect the particular industry as a whole, so they should be easy to research. The key is to address an external factor before the potential buyer has been able to find a solution to it. If the salesperson is able to present a possible solution, the executive will welcome him or her into a conversation.
Business initiatives can be responses to external factors or triggered by internal issues. These initiatives involve the organization’s priorities and vision for its future. A salesperson would be wise to attach his or her solution to a business initiative, particularly one that the executive is personally involved in moving forward.
Financial Statements and ROI
The research involved in discovering external factors and business initiatives includes reading financial statements in annual reports and earnings statements. Income, expenses, and sales trends are usually revealed in these documents. Trends that show up on these reports will help a salesperson identify changes in the business that might be relevant to his or her solution. It is best to look at three-year trends, of both the business and the entire industry, to gain a complete picture and to be able to put the trends into context.
Once the salesperson has completed the research and analysis, he or she can make a better case in conversation with the higher-level executive. The salesperson can identify specifically how the solution will have a positive impact on the financial growth of the company, either by increasing revenue or reducing expenses. The seller must identify the return on investment (ROI) for the executive buyer, rather than presuming he or she will compute it. The seller can then demonstrate how the solution will contribute to real and effective business change.
Even if the salesperson has done the research and prepared an engaging conversation relevant to the executive’s needs, the greatest challenge will be to secure the meeting. Without an inside contact, a seller can turn to the executive’s assistant, who is often the first point of contact The assistant often serves as a gatekeeper, trying to both keep people out and get the right people in. The assistant can also offer the salesperson insight into what is most important to the executive.
Executives are always searching for new ways to improve their businesses. The salesperson must be able to present a business solution, not just push a product or service. The solution should be clearly presented, tied to the external factors or business initiatives, and be one the executive has not thought of or cannot produce internally.
Meetings are usually broken down as follows:
*During the first five minutes, the salesperson must grab the executive’s interest.
*In the next 15 to 30 minutes, the salesperson conducts an engaging conversation and asks deeper questions.
*In the final few minutes, the executive may decide to bring more key people into the conversation.
The meeting needs to end with a commitment for the next step, whether that is a follow-up meeting or a plan to move the effort forward.
CAPTURE VALUE: THE MAXIMIZATION CONVERSATION
No Last-Minute Saves
When a salesperson can develop a customer conversation so that his or her products or services are differentiated from the competition and shake up the prospect’s status quo, the shape of the conversation will change. The seller will be able to take more control of the conversation, garner more respect from the buyer, and increase his or her status in the relationship. However, there will still be instances when the customer controls the conversation and make demands of the seller’s time or resources. When this occurs, the salesperson can give in or use negotiation skills.
Learning to negotiate requires some counterintuitive skills. By its very nature, negotiation involves tension; there is a gap between what the customer wants and what the salesperson wants. A skilled negotiator is able to use the tension to generate more creative and profitable outcomes.
The Conversation Before the Conversation
Negotiation begins in the seller’s own mind, with inner dialogue about how the conversation with the customer will go. This conversation before the conversation is the first step to getting the customer conversation right. It is not simply an attempt to get psyched up for the meeting; rather, it involves the seller understanding and believing the story her or she will tell, being prepared, and being confident. The seller must trust in his or her preparation and win the negotiation in his or her own mind before having the conversation with the buyer.
Late-stage negotiating tactics are no longer relevant in the business-to-business selling process. Instead, successful salespeople know what they want from their customers, and win critical moments throughout the selling process. They can capture maximum value through the entire process by achieving pivotal agreements, rather than waiting until the end of the process to strike one grand bargain. Salespeople must identify the pivotal agreements early in the sales process and prepare to secure them at the appropriate time. Pivotal agreements must be specific, will create tension, will improve the final result.
Ask for More
Potential customers may not easily consent to the seller’s pivotal agreements, which will usually cause tension. However, salespeople must continue to set high targets–that is, stretch and ask for more. Some salespeople can be uncomfortable asking for more, since it is traditionally believed that the customer has all the power. However, they must be confident enough to embrace the tension caused by setting higher targets; asking for more helps to demonstrate their conviction.
Dealing with Price Pressure
Buyers will often say their only focus is price, particularly a price that beats their competitions’. While this is rarely true, a conversation about price does need to take place. Rather than sidestepping the price conversation, a seller should acknowledge and defer–that is, he or she should validate the buyer’s concern by acknowledging the price issue, and get the buyer to agree to defer the conversation about price until later in the process.
Once the seller has gained agreement, he or she can focus on the value conversation, mapping the value directly to the buyer’s needs. In this conversation, the seller must “listen to learn” rather than “listen to sell,” focusing the attention on the customer and gaining valuable insight into the customer’s needs and priorities. Listening to learn is another tactic that will differentiate the salesperson from his or her competition.
Price concessions must be planned before the conversation to prevent the salesperson from making the common and costly mistake of conceding too much. In addition, the salesperson must be prepared to ask back, to only give something away or make a concession if he or she gets something back in return.
The Last Mile
Salespeople can act as trusted advisors to their customers. Buyers will react positively to sellers who tell them what they should want if it is based on research and understanding of the customers’ business needs. Salespeople must increase their confidence, go into the conversations with the proper mind-set, approach prospects as peers, and convey the true value of what they have to offer.
FEATURES OF THE BOOK
Estimated Reading Time: 4-5 hours, 256 pages
The Three Value Conversations by Erik Peterson, Tim Riesterer, Conrad Smith, and Cheryl Geoffrion outlines the three types of conversations salespeople need to have with their customers in order to differentiate themselves from their competition. The authors provide specific strategies for each type of conversation, including securing the conversation, conducting the conversation, negotiating, and dealing with tension and customer demands. The book is relevant to salespeople and managers who want to reach their customers, connect with executives, present their value, and negotiate more effectively. It book should be read from start to finish, as one chapter leads into the next