What’s Your Product? Selling Using Customer Norms
By Jim Buell
The bottom line? Businesses run on numbers. Why is it, then, that when many companies market their products and services to businesses they usually offer up only one meaningful number – their price? Oh, product specifications include numbers and, to build credibility, companies talk about the number of years of experience they have. These numbers may be meaningful to your customer, but are they significant? Is it any wonder that price too often becomes the most important factor in so many B2B buying decisions?
Then why don’t we talk to our customers about what they value? Take my fictional friend Randall Runner. He conducts a training course for NFL running backs. In fact he has a unique system that is absolutely proven to improve running backs’ results. Yet he doesn’t get many sales. Here’s his pitch:
“I have twenty years experience working with running backs and I operate training centers all over the world. Each training center is staffed with experienced running backs
who follow my training method. When I was in the NFL I led the league in rushing yards. Since then I’ve patented my shoulders down rushing approach which helps runners get more lift when they hit the line. This displaces defensive backs, pushing them off balance and rendering them unable to effectively wrap their arms around the runner’s legs.”
All this great experience and yet, Randall is unable to sell his training to many NFL teams. Let’s look at another path Randall may take to sell his services.
“Coach, your team averages 4.3 yards per carry. Running backs using my new running style average 5.7 yards per carry within six weeks of completing my program. Would you like me to help get your top running backs closer to my normal results?”
Which approach do you find more compelling? Most decision makers find the second approach to be the persuasive one. Why not? It addresses a key need (increasing running back productivity) and uses data that is significant to the decision maker. Finally, the second approach introduces a normal result, or “norm” to quantify the result the customer could expect by buying the product or service presented.
I worked with an organization where this approach turned out to be, literally, a million dollar idea. Selling B2B consumables through distributors our growth rate had slowed to a crawl. One wizened distributor GM told me he didn’t want to talk about what was in the cases we sold because, whether I wanted to admit it or not, we had a commodity that offered limited difference between competitiveproduct. The GM only wanted to turn product. We developed a program to help increase turns by consolidating the distributors’ inventory – of course to our brand. After validating our solution we were able to approach our distributors as follows: “Your turn rate for our category is 5.7 times each year. People who adopt our approach average 8.5 turns per year without any loss of volume. Increasing your turns to our normal level would free up $53 K. Would you like to work with us toward realizing our normal result?”
This effort required no new product development expense nor did we reduce our margins through expensive promotions. We simply understood how our customers made money, developed a solution to help them and only discussed how we could help them using numbers that were important to them. Our reward? $1.3 M in new business from this single effort!
All senior level decision makers either use norms to manage their business or can quickly grasp the importance of key norms you may introduce. Which of your customers’ norms can you affect? Can you produce a “gold standard” norm (e.g., the best in the industry)? If you can, your selling cycle will accelerate rapidly and your ability to defend your business against competitive threats will be dramatically improved.
Yes, it’s important to know your product/service. But it is critical to know how your product/service improves your customers’ business and be able to discuss this improvement using metrics they value.
Oak Hill Business Partners’ Growth Management Services will work with your management team to devise and execute an overall strategy for growing your organization. Whether it’s a refined marketing strategy or improved communications with your target audience, we have the expertise to support you so you can focus more effort on your core expertise. For more information, Contact Us today.
Jim Buell is a Strategic Partner of Oak Hill Business Partners, helping companies build their brand by developing compelling customer focused solutions.