The Fourth Industrial Revolution & The Changing Sale Environment
The capability and influence of digital technologies is accelerating. The scope of this change is so sweeping that many are calling it the Fourth Industrial Revolution. Klaus Schwab, the Executive Chairman of the World Economic Forum, coined this term in 2015. He explains:
“[The Fourth Industrial Revolution] is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.”
Today, businesses are trying to keep pace.
However, keeping pace with exponential growth is difficult. While today’s technologies are powerful and far-reaching, businesses struggle to adopt them in a meaningful way. The reason: realizing the potential of emergent technologies means first initiating a digital transformation. In fact, a Harvard Business Review study of 734 businesses found that only 13 percent of respondents consider their digital transformation efforts to be effective.
This challenge is familiar to sales professionals who must position the connected, holistic, and digital solutions underpinning this digital transformation. “A world of customer experiences, data-based services, and asset performance through analytics, meanwhile, requires new forms of collaboration,” remarks Schwab.
Responding to this reality means that sales professionals must understand that positioning digitally transformative solutions is challenging because they are:
Digital solutions are dynamic, not static. As a result, the solution is often configurable to different needs. This characteristic is both a benefit and a challenge. The solution might be appropriate for many customers; however, the value proposition changes based on the set of needs.
Some digital solutions are intangible and therefore abstract. Articulating abstract concepts requires forethought, clarity, and simple language. Without a strategy for conveying the value of digital capabilities, multiple people can have vastly different understandings of the same technology. Defining what is abstract requires a new set of skills that were not as relevant in the last ten years.
Digital technologies pervade all industries. Therefore, solutions involved in a digital transformation will touch nearly every person in the business. Sales professionals must account for this far-reaching impact when positioning solutions. Asking a customer to adopt a new solution means asking them to adopt some degree of organizational change. As the Harvard Business Review study explains, 85 percent of respondents said that “having a combination of the right technology, processes, and culture in place was very important” in managing a digital transformation.
How to Sell Complex Digital Solutions
In the next sections, we look at how sales professionals can approach these three challenges and position digital solutions that compel the customer to buy. Adopting these skills leads to what researchers at MIT Sloan Management call the “digital advantage,” the ability to capitalize on the business benefits of new technology.
Selling to the Customer’s Full Potential Capabilities
Gordon Moore, the former CEO of Intel, famously noted the number of transistors in circuits doubles every two years. This observation became known as Moore’s Law. This idea is relevant to sales professionals because it illustrates the non-linear path of change. Digital solutions are becoming exponentially more complex and sophisticated every year. Therefore, sales professionals must adapt at a similar pace. Like Moore’s Law, the buyer’s journey is not a simple, unchanging course; it is dynamic and increasingly complex.
Sales professionals must go even deeper and broader in their questioning strategies. It is not enough to understand the customer’s present needs and challenges. Positioning digital solutions also requires an understanding of future needs, which are unknown until the sales professional and customer surface them together in a dialogue. Customers also need to be clear on the potential risks that lie ahead, as well as potential efficiencies that can be gained. Often, the initial need is a glimpse through the keyhole, and the sales professional must help the customer open the door. Doing so reveals unrealized competitive advantages gained through an increased speed to market.
Connected digital solutions can be transformative in nature; therefore, the sales professional is not only advocating business benefits, but they are advocating a business model.
Access Hidden Dialogues
Sales professionals need to seek inclusion into the separate, buyer-side conversations that unfold outside of the normal customer/sales professional dialogue. Accessing this hidden dialogue is critical in reducing the information asymmetry that often prevents a sale. Sales professionals need to understand and shape the customer’s thinking.
What makes the hidden dialogue so useful is that it presents an unfiltered view of the customer’s thoughts. These internal discussions lay bare the anxieties and hesitations that keep the status quo so firmly in place. By understanding the nature of the customer’s concerns and where they reside across the spectrum of decision-makers, sales professionals are better positioned to compel the group.
To access the hidden dialogue, sales professionals must identify the buying factors, which are the set of facts, influences, and circumstances that all contribute to the decision to buy or not buy. These factors are dynamic and interrelated. They evolve and change as the customer progresses through the buying journey. Sales professionals must understand the key factors, which are:
- The Case for Change: The case for change revolves around a targeted issue — a problem or opportunity that is severe enough to warrant change. The sales professional must help the customer compare their options, identify the best solution, and evaluate value vs. risk.
- Stakeholder Dynamics: Sales professionals need to identify those who will champion change and the power structure in which they operate. They must understand the differing needs among stakeholders and how to align each person.
- The Decision Process: Projects stall because new stakeholders emerge, requirements change, and projects get reprioritized. Effective sales professionals manage this process.
Sales professionals need more than a range of skills. They need the ability to identify when and where they need to employ each of those skills. Agility is a crucial competitive advantage because it allows the sales professional to address the customer’s evolving needs at every turn in the buying process.
Agility is a powerful skill for another reason: it helps the sales professional drive success for the customer after the sale. Research from the BCG Global Innovation Survey shows that nearly half of global innovation executives believe that development times are too long. The result: generating a return on investments in innovation is the biggest obstacle companies face. An agile sales professional understands not only how to position the solution, but also how to implement the solution. The same body of research shows that fast innovators get new products to market quickly and generate sales earlier.
Agile sales professionals help customers achieve this speed to market by acknowledging that a “closed” deal never truly closes. The sales professional must work to provide continuous value for the customer. A selling opportunity is not a transaction — it is the potential for an ongoing relationship. It is more important than ever for sales professionals to uncover the customer’s market advantage because simple, sometimes inexpensive solutions threaten the sales professional at every turn.
Gain Access Early
Gaining early access to the buying journey is critical because research from PwC shows that 63 percent of operational leaders state that understanding what customers value is a major challenge. Moreover, only one-quarter of respondents “feel very confident that their operations are designed to give their customers value and a distinctive experience, now or even three years from now.”
Gaining early access to the buyer’s process does more than help sales professionals follow the buyer’s journey — it helps them incite it. With this approach, the sales professional can seize on one of the two major factors that trigger the buyer’s journey: a pain point or an opportunity.
Sales professionals can gain access early by floating insights that speak to their acumen. Additionally, sales professionals can underscore ways in which they have helped similar businesses succeed.
A customer experiences a pain point when they encounter factors challenging their strategy. For example, a new competitor enters the market, market share diminishes, or broad economic conditions deteriorate. Customers act when factors like these threaten their objectives, culture, and goals.
Opportunities arise when new markets open, regulations loosen or tighten, or margins become more favorable. While the opportunity might be clear, the way to capitalize on it might not be. This is where the sales professional can be helpful.
Articulating a New Value Proposition
Customers need to understand how the solution’s abstract capabilities offer concrete value to their business. Therefore, sales professionals need a new way to articulate the complexities of the solution in a way that is compelling to the customer. They also need the ability to adjust their value proposition so that the same solution can address different business needs across numerous customers.
These challenges compound as time and resources continue to shrink. In the drive to compete, businesses seek fast solutions. Achieving speed, however, is difficult as organizations become more matrixed, and decisions become distributed. Moreover, customers are increasingly skeptical of data and even the sales professional. For example, one study published in Judgment and Decision Making shows that customers are more skeptical of negotiating with a person than they are with a computer program. Many customers walked away from deals that were financially favorable because they were sensitive to seller-centric behaviors.
This skepticism leads to a buying process that demands more from the sales professional. Rising to this challenge means getting better at three key capabilities:
Sell to Logic and Emotion
Buyers often insist that facts and analytics are driving the decision. In truth, we are all subject to biases that subconsciously push us in various directions. We are emotional beings. Effective sales professionals understand the push/pull relationship of logic and emotion, which both influence the sale. Addressing the customer’s fears of financial and reputational loss begins by normalizing risk. Sales professionals can do so by discussing risk openly and clarifying that risk is present even in the decision to not move forward with a solution. Managing the customer’s emotions becomes increasingly important when numerous stakeholders are involved. Sales professionals must identify the buyers who feel most threatened by change. They must help them recognize the urgency around the issue.
Appealing to logic is equally important when compelling stakeholders. Here, it is useful to rely on the data that underpins the value of the solution. However, as digital solutions become more complex, sales professionals must remember that it is easy for the buyers to get lost in the minutia. Expressing data clearly means:
- Choosing data points that don’t require a complex foundation of preexisting knowledge
- Using an effective medium to convey the data, like a clean visual
- Breaking up material into pieces so that the buyer can more effectively absorb the content
Become a Trusted Advisor
Given the numerous capabilities of digital solutions today, it is tempting to share a list of product features with the customer. This approach, however, undermines one of the most important things a sales professional can do: become a trusted advisor. Unlike an ordinary solution provider, a trusted advisor is an expert the buyer seeks during a period of change. A trusted advisor does more than transact business — they help diagnose the problem and are viewed as a source of guidance.
Inhabiting this role requires the sales professional to assert a point of view because they must navigate and, ultimately, reshape the customer’s thinking. They must widen the customer’s purview, revealing the full scope of risks and opportunities. They can do so by making observations specific without reliance on jargon. Reflection questions are also effective. Reflection questions encourage the customer to think more deeply about the topic and fully consider the sales professional’s viewpoint. “How does this solution fit into your business model?” and, “What hesitations do you have with regard to this solution?” are both examples of reflection questions.
The role of a trusted advisor is coveted by sales professionals because it is a precursor for uptiering. With so many stakeholders involved, sales professionals must engage decision makers at all levels of the business. However, reaching those at the top of the organization is difficult without internal support. When a sales professional becomes a trusted advisor, people in the buying organization become more comfortable with permitting accesses to the executive ranks.
The role of a trusted advisor cannot be claimed; it must be earned. Reaching this point means:
- Knowing when to ask questions and when to leverage insights
- Shaping opportunities rather than waiting for specs to be handed down
- Being truly customer-centric and delivering workable solutions that add value
- Clearly articulating the case for change in the customer’s language
Sell With a Team
Complex solutions require the power of team selling. Often, the team requires at least one subject matter expert (SME). This person is invaluable when the customer has granular-level questions about the solution. However, a technical expert is unlikely to have the selling background common to the rest of the team. Therefore, sales professionals should allow for extra preparation time. During the preparation, the SME needs to become familiar with hand-offs in the meeting, which help manage the amount of time each person talks.
It is important to remember that expertise alone is not enough. Though it’s true that an SME is needed for their in-depth knowledge, sales professionals must also consider how effectively an SME will communicate with the customer. Finally, in a sales meeting, the sales professional will be the leader and point person, with the SME acting in a supporting role. This dynamic may be a reversal of the organizational chart. Therefore, sales professionals need to discuss when and how the SME will contribute to the sales meeting.
Strategizing the Pursuit of Complex Opportunities
Digital transformations, like the buying journey, follow many routes. Decision-makers move forward, backward, and sideways. The curving path twists and turns as decision-makers work to arrive at a consensus. They must agree on a common definition for success, but as companies become more siloed, it is increasingly difficult for customers to agree on the nature of the problem and the best solution. This process is iterative because the customer’s initial definition of value rarely matches their final one.
Given the changing shape of needs, it is not surprising that over the past five years, sales productivity has fallen from 41 percent to 36 percent, according to research from Accenture.
Developing a strategy for approaching complex opportunities is critical to success. Sales professionals need a smarter way to bring the customer through the buying process. They need a strategy consisting of four parts:
The first step in figuring out how to win is to understand where you stand. To do so, sales professionals must gauge their strengths, vulnerabilities, and gaps. They must know where they can add value above and beyond competitors, where they’re lacking, and what areas represent incomplete knowledge. A thorough assessment prevents assumptions that lead to lost opportunities. By facing these realities early, sales professionals can adjust their plan in advance rather than on the spot.
Knowing your strengths and weaknesses is one thing; advancing your position is another. Doing so gives shape to an action plan that allows sales professionals to react to customer changes and strengthen the case for change. Sales professionals need a strategy as much as customers do. A strategy helps make better decisions and builds the confidence that comes with being prepared.
Strategy is nothing without execution. Strong execution comes from preparation. Too often, sales professionals take the strategic plan and reach out to the customer. In their enthusiasm to meet with the customer, they move ahead without proper preparation. Without preparation, sales professionals risk losing credibility. To make the most of the moment with the customer, sales professionals cannot leave it to chance.
To advance the sale, every engagement must add value to the customer. Engaging with the customer requires dialogue and questioning skills. Sales professionals must also seek feedback from the customer. Their responses inform sales professionals before entering a second round of assessing, strategizing, preparing, and engaging. The information gained from even the shortest conversation is often more powerful than any research.
A strategic plan is important because missed opportunities to sell complex solutions are expensive. Preparation, execution, and follow-up all demand an enormous amount of time and command significant costs. Making these investments pay off means approaching the sale as a partnership opportunity. Consider research from Gallup, which reported that “B2Bs win by building relationships, not selling on price.” Researchers learned that nearly one-quarter of accounts that had “high engagement scores” with sellers grew by 20 percent or more in the following year.
The key to building a relationship is focusing on mutually beneficial outcomes. This sense of shared goals must emerge from the sales professional’s words and actions from the first conversation through the negotiation. Additionally, sales professionals must:
- Continually qualify the deal to ensure it is a viable piece of business
- Drive momentum and consensus by aligning and realigning decision-makers
- Motivate action that combats the status quo without appearing as forceful
In total, these steps serve to build consensus among the stakeholders. The sales professional’s persuasiveness builds with each decision-maker they can bring to their side. The reason: allies beget allies. Internal support for a buying decision will always drive more momentum than external advocators.
An intentional process equips sales professionals to close faster, retain priority relationships, and reduce acquisition costs associated with moving customers through the pipeline.