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The Difference Between Selling Product and Selling Solution
Posted on May 1st 2012
Is there a difference between selling a product and selling a solution? Over recent years all sorts of marketing and sales people have transformed their pitches. Products were out, and solutions were in. Great news. Something different to talk about, and an escape from the pressure on features and price.
Customers liked it. There’s an implication in the wordsuggesting results guaranteed. Not just tools (products) but expertise, services and risk management.
In all too many cases the words changed, but everything else stayed the same. Without corresponding transformations in the sales and delivery models any evolution from product to solution will be an illusion. The customer experience won’t change, except for increased disappointment.
The lines between products and solutions are easily blurred, and misunderstood, so maybe a short review of the history of selling will be useful? Understanding how we got from there to here makes it easier to understand the ramifications for both sales and delivery processes. And points to the very real changes which need to be made for a business to really evolve from product to solution.
There was a time when there weren’t enough products to go around. In fact, right from the beginning of the Industrial Revolution up until the new millennium, factories were flat out trying to keep up with the explosion in demand for just about anything. Sales people were employed to present products to potential buyers. That’s all they had to do. Catch the buyers attention, present the product, and ask for the order. If any punter didn’t buy, so what. There was always another just around the corner.
Typically sales professionals were paid only a commission on what they sold. Sales Managers allocated territories and measured activity rates. They developed the concept of a sales funnel in which prospects were captured and forced through a series of arguments to a purchase decision. The model was really simple. Making 100 calls to get 20 prospects to listen to a pitch, would result in 10 proposals and 5 sales.
Sales teams would operate in isolation from the main business. Their job was to get orders. The factory would deliver. Whether the product would, or would not, meet the expectations of the buyer was irrelevant.– or Caveat Emptor – says the law.
That was how most of what we know as the principles of selling emerged. The sales super hero who didn’t take no for an answer, battered down doors, cold called like a machine, talked fast, told jokes, hit and run, became the role model.
Much of that thinking survives even now, despite a fundamental shift in the power of the customer, which drove the evolution from product to solution.
Through the latter half of the 20th Century things started to change. Mass production techniques increased the supply of product. Globalisation allowed new suppliers from emerging economies. Customers grew to have choices, and learn a great deal more of what they were about to buy. The world went from a shortage of products to a glut in the space of 20 years. Competition exploded, and the pressure on features and price grew with it.
In response, the marketing people came up with the idea of solutions. With these, the customer wouldn’t have to worry whether the product was right – the solution would ensure satisfaction.
Customers liked the idea, a lot, and so did the sales people. But not many understood. The sales and delivery model needed to change if the promise of a solution was to be delivered. All too often the businesses didn’t stop to understand they needed to change philosophy as well as the marketing words.
The solution assumes responsibility for the result. That’s what customers expect. And its what some companies delivered. They developed a new model in which the sales guy took time to understand what the customer wanted and organise his resources to provide it. Instead of sales operating in isolation from the rest of the business it became the first step in a seamless process, from marketing through manufacturing, distribution, delivery, implementation, to customer service. The sales role transitioned from unwelcome interference to trusted advisor. The sales funnel transitioned to prospect pipeline. Sales processes ensured cost of sale wouldn’t be wasted on prospects who weren’t going to buy.
Companies which understood the change in the balance of power from vendor to customer, and reacted with a new focus on customer satisfaction have survived and flourished, while product companies, which didn’t, haven’t, even if they did change the words they used.