This month’s Alexander Insights feature article is on how to best Coordinate the Selling Team when attempting to sell complex services and solutions to complex clients in complex environments. One of the key players I recommend having on your selling team is the business development specialist--the talented professional that gets the qualified first appointment with the appropriate prospect executive.

From my experience, this is a very important role that many services businesses fail to fill, leaving it to the services seller to handle. In most situations, this is a mistake. The skills of business development and rainmaking are different. Asking the same person to do both is inefficient and demoralizing. Yes, I know a really good BD person is both hard to find and (potentially) expensive, but don’t pass up the probable ROI.

Here is how to do it right:

1. Aggressively recruit. Go after the very best.
2. Make expectations crystal-clear. Provide an approved list of the people you want appointments with within your top prospects.
3. Pay only--but handsomely--for results. For example, pay $2,000 for each appointment set and an additional $10,000 when that appointment leads to business. If you have the right list, this is well worth the money.

I’m quite interested in your success with business development specialists, so please drop me a note and share your experiences.

Tags: professional services, selling services

Over the last couple decades of helping senior executives get serious about selling services, I’ve observed a few patterns that help me predict the success of this important transition. Organizations that show early success (one year or less) do three things. How many does your organization do?

1. Fund the services business appropriately. Duh! Sounds so ridiculously simple. However, over the years I’ve seen big companies that truly need to be able to sell services to survive, balk at spending chump change to give services a decent shot a survival. The same execs who wouldn’t blink at dropping $10 million on a new plant, hem and haw at spending $100K to start a new strategic business. Go figure.

Lesson: If you won’t pay, then don’t play.

2. Have dedicated services sellers. I don’t know how many times I’ve heard CEOs say something like this: “Don’t worry. We have a great sales team. They can sell anything, including services. We’ll just give them a good incentive and we’ll watch the sales roll in.” When I hear this, I cringe. I know at least a full year of building profitable services will be lost and the whole transition is in jeopardy. If you want to know more about how big a challenge it is and what it takes to be successful in getting sales to sell service, I dedicate an entire chapter in my book, Seriously Selling Services, on this topic.

Lesson: Relying on your product sellers to sell services is a dumb thing to do.

3. Sell services first. I know this may be blasphemy, but customers don’t see much difference between your products and those of your best competitor. Customers make their buying decisions based on the services that surround your products. Their confidence in your products is based on their assurance that your services and support will provide them what they need. Therefore, if you have more and better services, you have the key to getting sales and stomping your competition.

Lesson: Push your services, and your products will be pulled along with them.

Want to learn more about an organization that is doing it right? Read the Wesco services success story below.


Hunker down...cut sail...throttle back. Accepted advice to follow during an ocean storm or in the midst of tough economic periods.

However, while competitors have followed this conservative prescription of idling their vessel during these rough business seas, Billy Gamble, CEO of Wesco, has charted a different course: one path over the waves and straight into the gale.

Bucking conservative conventional wisdom, Billy decided to make some aggressive, strategic actions in order to secure the future of the business. Fourteen months ago, while competitors were waiting for the wind, Wesco decided to start a new business, ramping up a for-profit services organization while its customers—golf courses and municipalities—were cutting back spending dramatically.

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From left to right: Billy Gamble, CEO, Mike Lynch, Director of Performance Services, and Frank Pitman, Performance Services Manager, all smiling at the year-end services results.

“Sure it was a risk to move ahead,” declared Billy, “but it would have been an even bigger risk not to start then. I see services as the key competitive differentiator in this industry, so the faster we build services capabilities, the better off we will be. We have a long way to go, but I’m extremely satisfied with our performance. I will continue to emphasize and fund this strategic part of our business, stagnant economy or not.”

You have to love this “damn the torpedoes!” kind of approach. I’m pleased to have played a small role in this success story. I’ll report back down the road to let you know how it is going.


Amy Burgert, Performance Services Manager, dealing with a favorite customer.

Tags: selling services

As mentioned before in this blog, it is important to stay the course. Things may get worse before they get better; overall sales volume may dip before it goes up. People will complain and look for every possible reason why this selling services thing is a terrible idea. You will need to stick to your guns as people test how serious you are. It is hard to do, but again, firing your number one box seller, Ace Flanagan, when he refuses to try and sell services sends a powerful message.

The other critical fact is that understanding and articulating the invisible is much more challenging than discussing feeds and speeds, features and functions. What you think, what you say, and what you do are different when selling services.

A few people adapt quickly and intuitively, most people, over time, can be adequate at selling intangibles given enough training, tools, and reinforcement, but another group will never quite get it. Not because they are bad people or don’t try, but because they are wired differently. From a sales management perspective, this is a very big deal.

Even if you follow all of this advice exactly as outlined, and I hope you do, about one in three product salespeople will not be successful in selling services. (Hey, it’s not their fault—they were hired to sell boxes.) You should understand this from the beginning and be prepared to help them find new jobs inside or outside the company.

Conclusion

So there you have it—the Five Steps to Selling Services Success. Getting the sales force to effectively sell services is critical to long-term success in seriously selling services. Sadly, the common approaches most executives take to bring about this change just don’t work. To be effective, all aspects of the sales performance system musty be changed, coupled with solid training, backed by strong reinforcement, and supported by a leadership team willing to make some tough calls to make sure that the change sticks.

It takes at least a year to yield meaningful results and often three years to make them effective. Yet, do not despair. Future blog entries will outline the steps to kick-start selling services by getting everyone who touches the customer involved in the selling services process.

Tags: selling services

Very strong training, as outlined in Step Three in the Five Steps to Selling Services Success, is a vital catalyst, and is a mandatory start for changing selling behavior. Remember, though, for almost all of your sellers, this is a very big change, and training won't do it alone. Behavior change takes time and support, so be prepared to invest some time and money into it. Instead of thinking a single two- or three-day training event, craft a learning system with ongoing reinforcement over at least a year.

For example, back up the core sales training with a reinforcement workshop within 90 days to let people share successes and practice new skills in a safe environment. Make sure that the date is announced during the core training, and that expectations for the reinforcement workshop are laid out for all participants. Just letting them know that they are to report on the usage of what they will be learning is a powerful motivator. An even more powerful incentive to get them to do what you ask of them is that they don’t want to look stupid to their peers. This will greatly improve the odds ofthem paying attention and taking the training seriously. If you can’t do a face-to-face reinforcement workshop, at least have a reinforcement video teleconference with the same objectives. Though obviously not as powerful as a face-to-face event, a couple hours of a well-facilitated session will still send a strong signal and advance the selling services cause. If you don’t have video capabilities, then an old-fashioned Webinar can do the trick.

Also, make an electronic classroom available to allow for “ask the expert” dialogue and the further sharing of war stories. Participants may not want to “look dumb” to their management, but if trust was developed with the facilitator during the initial training, sellers will be more open to shoot straight and thus get the help they need to improve.

Consider investing money in providing in-field coaching. You are asking salespeople to perform much differently than they have in the past, and providing one-on-one modeling with real customers and coaching afterward are powerful motivators to personal change. In organizations where sales managers are responsible for hands-on coaching of their people and spend most of their time working with their sales reps, it makes sense to extend their skill set to coaching their people on selling services.

Note, however, that there are a couple of challenges to this approach. First, product sales managers within your company may not be much good at selling services either! Unless they have a different background than their sellers, they probably don’t have the right knowledge, skills, and mindsets to coach the selling of services. Before sending them out to coach sellers on how to sell services, they will need to acquire not only the core training provided to the sales force, but additional training in how to coach. Again, this is another investment, but one that will pay off in the long run.

A second consideration is that in some companies “sales management” spends very little time actively managing salespeople. In these companies, sales managers are often the company’s best sellers and have revenue targets of their own. These individuals are key to the company making its numbers. In these situations it is unrealistic to expect that they will be able to provide the reinforcement requirements outlined above. Not that they are lazy or evil, these folks have big bogies to make if they are to be successful, and that trumps people development every time. For example, I have a long-term client that has built his organization’s success by having a very entrepreneurial approach to selling. The sales managers are the top sellers, and it is in the best interest of the company that they spend a minimum of 90% of their time in front of their customers. They contract me to do in-field coaching of their new hires to help accelerate their learning curve and speed their success. If your company follows this model then you should also look for outside expertise to do the one-on-one, in the trenches, customer-facing sales coaching needed to accelerate selling services performance.

GIST: Behavioral change is difficult, and no matter how good the training is, you won’t get the results you want without strong reinforcement.

Tags: selling services, training

Step Three in the Five Steps to Seriously Selling Services involves training. But, not any run-of-the-mill sales training. To be successful you need to invest in quality, services-specific sales training tailored to the issues and uniqueness of your situation. Generic, off-the-shelf packages have their place. SPIN Selling, Professional Selling Skills, and Strategic Selling are all good basic primers for box sellers, but they don’t cut the mustard when selling the invisible. The mindset, approach, knowledge, skills, and tools are different when selling services. Therefore, you need to put everybody through high-quality, services-specific sales training. Find services experts with training competence and tailor a program specific to the needs of your organization. Make certain that the following components are part of the curriculum: why sell services, how to sell intangibles, selling how customers want to buy, building trust, qualifying great services business, developing services power maps, selling services to the “C” level, compressing sales cycle time, and so forth. To keep things interesting and fun, incorporate lots of opportunity for participation, including custom role-plays built around specific scenarios that the sellers must address. It is important to get your product sellers both competent in their selling services capabilities and confident enough that they will try it with customers and prospects.

An important part of any good training is providing usable tools and teaching participants how to use them. Appropriate tools for selling services include feature-benefit profiles for all of your key services offerings, qualifying checklists, case studies of customers espousing the value of using your services, ROI calculators, and sales call planners.

To maximize buy-in to a probably skeptical group, when I develop selling services training I like to involve the top product salespeople, the Ace Flanagans, in the development of the course. I use one-on-one interviews to understand their thinking. I also conduct focus groups with my client’s best and average box sellers to understand their issues and challenges. I always interview sales management to learn their perspectives and their issues. Their participation will not only improve content quality, but also help gain needed credibility for the training. Even better, when possible I conduct interviews of key people within my client’s key customers to learn their issues, expectations, wants, and needs regarding services, and then I build this into the training. This is an extremely powerful way to drive change, as it is fairly easy to dismiss your own views as biased, but it is difficult not to pay attention when your best customers say they want to buy services!

Tags: selling services, training

Step Two: Align the System with the Strategy

Adjust your sales performance management system (objectives, tools, rewards, consequences, and feedback) to align with your new services selling strategy.

A. Fitting performance specifications. First, make it crystal clear that selling services is now an important focus of the company and an important required responsibility of the sales force. These expectations should be translated into quantifiable services sales goals (how much, what type, when) and should be in place and outlined in all sellers’ quotas and in their performance plan.

B. Adequate resources. You must have the necessary knowledge, skills, and tools supported by quick and easy access to your knowledge management system and internal experts. Most of this is best introduced through training, as discussed below.

C. Minimal interference. In all probability, you have just added more responsibility and more work to your sellers, but have not taken away any of their product sales quotas. To give your sellers the time to learn and practice how to sell services in the field, you need to minimize or eliminate secondary expectations. For example, for the first six months, ask the marketing department to eliminate all requests of the sales force, minimize the amount of time you expect sellers to take executives around to visit customers— unless those visits include services sales coaching by the executive—try to hold off involving your salespeople in task forces, and reduce required paperwork and all the other things that keep them out of the field selling services along with products. Minimizing interference will not only free up time for your sellers to learn how to better sell services, it also will take away excuses for non-performance.

D. Appropriate consequences. First, add a carrot—link the achievement of services targets to lucrative incentives. You can scale back later. In an attempt to get the attention of your sales force, make sure you are paying a higher percentage of bonus on services compared to products. In addition, tack on some highly visible bonuses (five-day cruise for two, twin Harleys, country club memberships—whatever gets their interest) to generate some excitement when your box sellers make good services sales. Your best sellers like to compete among themselves, and this is a highly visible way to do it. If you really want to generate maximum interest in selling services, make sure the spouses are aware of the incentive program. They can apply pressure that sales management can never match. Second, add a stick—put negative consequences in place if services selling goals are not met (no trip to the Bahamas for the services slackers, no product bonuses if services sales goals are not achieved). Punishment is a strong word, but necessary nonetheless. If your top product seller, Ace Flanagan, does poorly at selling services, put him on probation and let him know that job security requires services sales maturity. You will be sending a strong signal.

E. Quality feedback. The faster you get reliable performance feedback to people, the more likely they will self-direct their behavior to meet expectations and gain the positive incentives. Ideally, your sellers should be able to access their performance-to-goal anywhere, anytime. And, of course, management attention, encouragement, and coaching will increase the probability of repeatable, sustainable performance. Start every sales meeting with the selling services review of performance to demonstrate its importance and generate motivation.

The above process seems logical, doesn’t it? These are classic, proven steps of how to change people performance. Yet I rarely see organizations that address all of these points from the start. Most executives will set services targets and provide solid incentives, then expect/hope/demand that selling behavior changes. It will not. The gap is too large, and the change is too scary. Without meaningful ramifications for not selling services, you are wasting your time. The result will be dismal (if any) increases in services sales and a year of frustration for management.

The important thing to remember here is to do all of these steps, or don’t do them at all. But often management is very reluctant to put negative consequences in place around not selling services. (Maybe all the sellers will revolt!) Even if they put the negative consequences in place, it takes a steel-backed sales executive to keep the top-producing product seller (and his or her spouse) from making the trip to Rio for not selling enough services. (Maybe he will quit!) Finally, most product sellers, no matter how effective they are in that role, find it hard to transition to selling the invisible.

GIST: Getting the sales force to attempt to sell services is only effective when:

• Objectives and metrics requiring them to sell services are a part of the selling package.


• Lucrative incentives are in place for selling services.


• There are meaningful negative consequences if their selling services objectives are not met.


• Management actually enforces the significant negative consequences if selling services objectives are not met.


• If you put a gun to their head, the sellers could effectively sell services on their own.

Tags: selling services

If you want to change selling behavior--in this case, selling services and not giving them away--you must address all the factors that impact seller motivation.



Step One: Remove Excuses

Most salespeople weaned on selling products say that selling services:

• Lengthens the sales cycle, thus jeopardizing their 30- and 90-day numbers.

• Raises the overall price, thus making the deal more susceptible to competitors.

• Lowers their income potential because, compared to the price of products, services are small change, and time spent on services takes away more valuable time spent on products.

• In addition, most product salespeople will not say it, but they feel that selling services challenges their abilities, as it is much different than selling products and, actually, a little scary.

Since none of these stated reasons are not correct, is it any wonder why services and solutions sales performance is so poor? Let’s review each of these assumptions from the viewpoint of serious services sellers—those who truly understand it:

• Lengthens the selling cycle, thus jeopardizing their 30- and 90-day numbers. False. Top sellers understand that services are a vital part of the customer’s value proposition and need to be sold with the product at the time of the product sale. Furthermore, when selling complex solutions, selling some services up-front (e.g., an assessment or audit) can actually compress the overall solution selling cycle.

• Raises the overall price, thus making the deal more susceptible to competitors.

True and False. Of course the overall dollar amount increases when more offerings are provided. However, properly done, the value potential of a true solution increases dramatically. As your organization performs services, credibility and trust rise, lowering the possibilities of competitive inroads.

• Lowers their income potential because, compared to the price of products, services are small change. Really False. When your selling arsenal only includes products, you are quickly viewed as a commodity seller, where price becomes the customer’s hammer and you become the nail. Your percentage of wins goes down, and you are totally susceptible to competitors who know how to sell services and solutions. When you sell solutions, both your deal size and your win rate increase.

• Challenges their abilities, as it is much different than selling products and, actually, a little scary. True. Selling services and solutions effectively is different, more difficult, and initially frustrating to those used to transaction selling. Top sellers understand this, accept it, and do whatever it takes to improve their capabilities; it is as much an attitude as it is a set of skills.

Whether product sellers actually believe these points or just use them as company-acceptable excuses, they must be addressed head-on. So find the figures that demonstrate that services can be sold. Use respected companies that successfully sell lots of services as proof, compare your results with what your competitors have done, and present research showing that customers value services and want to buy them. This information is readily available, so use it.

Furthermore, several of the remaining steps also address these excuses and reinforce the message that, when properly done, selling services is good for everyone. In the next blog entry we’ll delve into Step Two. In the meantime if you want all the details on services selling success, please feel free to buy a copy of Seriously Selling Services from this site, or from Amazon.com

Tags: selling services

Here’s the scenario: Senior management has bought into seriously selling services and wants to get moving on it. When advised by a services expert that selling services is “way different” from selling products and requires special actions to succeed, they respond that they have a good sales force, and a good sales force can sell anything—just tell them what to do and back it up with solid incentives. They decide to kick off this initiative at the annual sales conference. See if this situation strikes a chord:

The Big Boss strides toward the podium and gazes out upon the entire sales force huddled in the banquet hall, awaiting word on the new launch. The Big Boss soberly rolls into the presentation, banging the drum of doom about lackluster performance, the challenges of the marketplace, and the potential wrath of stockholders if things continue as is. The figures formulated by the consulting firm hired to build this case spell out the problems (in PowerPoint, naturally) in cold, hard figures. The message is clear: Sell more, better and faster—
change or die.

But just as quickly, the atmosphere changes. The Big Boss dramatically stops the presentation and smiles broadly at the audience. Then, on cue and as if choreographed by a TV producer (it probably was), the balloons drop and the band begins playing something like “Back in the High Life Again.” (Note that if the meeting is in Las Vegas, live animals come on stage.) Next, animated slides (yes, more PowerPoint) proclaim the dawn of a new era, the Golden Age of “Total Value Solutions” (or something like that—they all sound the
same, don’t they?). TVS, as it is quickly dubbed, will be the touchstone, the compass, the blueprint for trekking the treacherous path from the abyss and leading the company back to its former greatness and beyond. As the four-color glossy listing the new expectations of the sales force and the new compensation program is passed out to everyone in the hall, sellers are asked to stand up and swear their personal allegiance to the “Six Selling Steps to TVS.”

On the outside, the salespeople smile broadly, nod their heads, and quickly start using new TVS catch words, enthusiastically applauding the visionary leadership at the front of the room. Ace Flanagan, the company’s top product seller starts a standing ovation.

On the inside, the salespeople are quickly doing two things. First, they do the math on the new compensation program. Their rough calculations show that even the big percentage spiff on selling services is small potatoes when looking at total compensation. Yes, it would be nice to make a few extra bucks, but it is probably not
worth the effort. Second, they are weighing the seriousness of what is being said. If you meet your product quota, no one will slap your wrist for not making your services number, will they? This is a product company, right? Besides, this looks like just another Program-of-the-Month. The salespeople decide to talk the talk and wave the flag when asked, but keep a low profile and do business as usual. “This too shall pass” becomes their unspoken mantra.

Fast-Forward
As the year goes by, an obviously frustrated senior management continues to beat the drum of TVS, but sales of services hardly improve at all. Extra bonuses are promised, threats are made, but at year-end nothing much has changed, and the promise of selling services is lost. The grandiose launch has been a total failure. Furthermore, senior management has lost some credibility, while the product-is-everything culture has been solidified even more. What was supposed to be a game-changing venture ended up being the Flavor-of-the-Season that sales accurately anticipated.

What went wrong? In a perfect world, all of us in business would behave altruistically, taking care of the customer first, the company second, and finally, our own needs. The business case for seriously selling services is strong. But in reality, that’s not the way it works. Although everyone may cross their heart, swear allegiance, and drink the Kool-Aid at the global kickoff, it will take much more than that to change selling behavior.

Salespeople, indeed all of us, behave in ways within some ethical boundary that maximize personal gain as easily as possible with a minimum of hassle and stress. This is not a question of values, but a fact of life. I know, I know, there are cultural and situational factors that impact the degree to which altruism is practiced, but it is a reality nonetheless.

For example, in organizations that primarily reward sellers on gross sales, sellers are highly motivated to do whatever it takes to sell the product at the possible expense of everything else. So would you if your desired lifestyle depended on it. If they don’t sell services, oh well. If they give away services, big deal. Getting the product sale is the prime consideration. Why should they change? For the good of the services organization?Forget it. For the good of the company? No way!

GIST: If you want to change selling behavior (in this case, selling services and not giving them away), you must address all the factors that impact seller motivation.

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One-day Workshop

October 25, 2010

San Diego, CA

2010 Service Industry Summit

Technical experts who achieve trusted advisor status with their customers provide your organization with a distinct competitive advantage. Their value to your organization is immense. Yet, on average, only about five percent of technical talent enjoys this special relationship.

This one-day, highly interactive workshop teaches the critical concepts, practices, methods, and tools required to effectively lead and manage your technical talent. Implementing what is taught will help you increase the number of your trusted advisors and improve the competencies of all your people to add more value for your customers and more value to your organization.



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Who Should Attend?

Any executive or manager who has responsibility for technical talent who interact with your customers and all others looking for ways to improve profitable growth.

What You Will Learn

• The benefits gained from increasing your number of trusted advisors.

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• The six trust builders.

• The 10 commandments of trust-based consulting.

• The 12 success levers.

• The four trusted advisor capabilities.

• The six business development roles.

• Core relationship skills.

• Why everyone who touches the customer needs to sell.

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• Influencing the senior executive.

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• Steps to increasing your people’s business acumen.

• Special issues in managing knowledge workers.

• How to assess your technical force.

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Tags: managing technical talent, professional services, selling services, training

Managing the transition to seriously selling services has an immense upside for most companies. New, profitable revenue streams, more sales of products, higher levels of customer satisfaction, and competitive differentiation are all probable outcomes of a well-executed shift to services. Know that the path to services success is clear and the obstacles are well-known.

As with any significant change, strong leadership is a critical success component. A services leadership framework exists, and executives willing to listen to the voice of those who already have made the journey will enjoy major rewards in a relatively short period of time. For most organizations, the time for seriously selling services is now!

If you'd like to know more or would like to see how I can assist your organization in seriously selling services, please contact me at alex@alxeanderstrategists.com or call me at 239-671-0740.

Here are some proven best practices of executives that have successfully guided the transition to seriously selling services:

1. Create a sense of urgency. When people are reluctant to do something, they will come up with every excuse imaginable to put it off. Change is time-sensitive, and prolonged hesitation only makes things more difficult. Leadership is needed to trumpet the cause and build the emotional momentum needed to break the status quo and get things rolling. To demonstrate urgency and show your seriousness, initially host highly visible weekly updates on progress. Personally call and write people to ask how it is going. Put this at the top of your to-do list each day. Publicly publish selling services success performance so that everyone can see progress. To emphasize the criticality, publish results versus targets not only quarterly, but monthly, weekly, even daily. Break it down by division, geography, even by salesperson in order to build the necessary momentum of change. Remember that when you are challenging the status quo, fast is better than slow.

2. Tie executive compensation to seriously selling services success. Make seriously selling services a core objective tied to compensation for the entire executive team. Yes, you “get it,” but your executive colleagues may not. These are the same people who achieved their success and power through the very system you are trying to alter dramatically. Remember that it is rare for the ruling class to support the revolutionaries, so the case for change must be seen as the only choice for organizational survival. Everyone will be watching for the slightest wavering at the top to justify stalling or just plain non-compliance, and the best way to prevent this is a one-for-all-and-all-for-one approach to compensation based upon hard numbers and firm time frames.

3. Make heroes out of those who attempt the change. As I’ll discuss in greater detail later, this is a scary change for many people, and you want to look for every opportunity to reinforce their new, seriously selling services behavior, even when the results aren’t as good as you like. Make it a point of singling out those who are doing what you request of them at your weekly feedback sessions. Send them notes and copy everyone, publish their success in internal newsletters and magazines, and give them small incentives to keep them going. Early on, it is the little things that matter.

4. Give zero tolerance for slackers. Here is the scenario: It is year end, and overall you have made good progress with selling services. However, your top seller, Ace Flanagan, has blown the doors off his product quota, doubling his target and selling twice as much product as anyone else. However, Ace didn’t come close to reaching his services quota, ending up at 28%. Your vice president of sales doesn’t want to rock the boat and risk losing Ace, so he suggests business as usual, paying Ace full commission and bonuses.

What a great opportunity! After telling your vice president of sales thanks but no thanks, you have a one-on-one sit down with Ace. First you thank him for his product sales contribution, but then quickly state your major disappointment in his services performance. You confirm that this is the new strategy, it is vital to the company, and that everyone is expected to contribute. You are sorry, but he will not get any bonus, he and his wife will not be going to Bora-Bora as part of the President’s Circle, and if he misses his quota next year, he will be fired.

5. Stay the course. There is a good probability that 90 to 120 days into the transition to seriously selling services that performance will actually go down. If you are doing the right things, giving lots of training, involving people in the process, and allowing for the inevitable lost water-cooler time, overall sales could well drop. Anticipated services sales may not materialize as people try to figure out how to do it, and product sales will drop due to lost time out of the field and the lowered productivity that comes with the deer-in-headlights stare when people are passively aggressive.

Don’t panic! If you give up now you will never get services off the ground and you most likely will never regain your level of past product sales. Suck it up, stand tall, damn the torpedoes, full speed ahead!

Tags: differentiation, selling services

I’ve seen a group of top management review, discuss, and approve tens of millions of dollars for new plants all within a single 30-minute meeting. I’ve also seen this same group of executives agonize over the course of several meetings and several months over spending $60,000 to launch a pilot services project that would validate the services assumptions and business model that all agree is vital to long-term business success. Amazing when you first think about it, but remember the backgrounds of these executives. They have grown up in products and have been successful because of their knowledge learned running product companies. They have the experience and the insights to make competent, correct product decisions quickly and confidently. However, as pointed out, services are a different business, and as any of us would do when faced with something out of our expertise, the tendency is to cautiously go slow and keep a very tight rein on funding.

Yes, you should look for low-hanging fruit that doesn’t take large investments, and target quick wins to help pay your costs. If there are doubts about the value of services within your organization, then conducting a pilot is a low-investment, low-risk way to confirm your services assumption and demonstrate its value.

Please resist the temptation to cautiously cut corners in hope that magically a new business will sprout and bloom without adequate fertilizer, water, and grooming. Don’t do it. Anything in life worth having requires a commitment of time, money, focus, and sweat. Remember, you are creating a new business! If your senior management group is not willing to invest to build a services capability the right way, then save your energy for better times. As Lou Gerstner, past chairman and CEO of IBM, said in his book, Who Says Elephants Can’t Dance:

In building services, there’s no such thing as a toe in the water. When you take this plunge, it’s full-body immersion…I’ve said repeatedly that this is the kind of capability you can’t simply acquire (though our competitors keep trying). The bet you’re really making is on your own commitment to invest both the years and the capital, then build the experience and discipline it takes to succeed.

GIST: In for a penny, in for a pound.

Hopefully, I’ve made my point. There are many obstacles that can cause a selling services initiative to stumble, and like any meaningful change, it takes stalwart executive support to make it successful.

If you have any serious hesitation now, don’t launch the selling services initiative—you will do more harm than good. Remember: In for a penny, in for a pound.

Tags: selling services

As in any business, if you don’t get the strategy right, it is darn near impossible to get the marketing right, the selling right, or anything else right—stuff rolls downhill.

My research in the technology industry confirms this criticality and expands it to the realities of being embedded inside a product company. A key differentiator that separates top-performing services organizations within product companies from everybody else is their ability to better align their strategy with the mission and focus of the parent organization. Of course this makes perfect sense, but doing so is a constant challenge.

The repercussions of non-alignment can be quite severe, as there is nothing worse than doing things really well that shouldn’t be done in the first place. For example, maximizing utilization rates can be an important target of a mature, free-standing professional services organization (PSO), but if the appropriate strategy of a PSO is primarily that of supporting the parent company by helping to sell products, the goals may be in conflict to the overall detriment of the company. As the quality folks say, “optimizing one group [the PSO in this case] while sub-optimizing the organization.”

Strategic alignment means determining which of three possible strategic roles of services best supports the overall business mission. Take a look at it from your perspective. Which phrase best describes your company today?

1. Product-enablement. The purpose of the services organization is to make sure that the product works as intended.

2. Product-enhancement. Along with product enablement, the services organization is expanded to contribute to profitable revenue by providing additional value-adding services that impact customer functionality, process effectiveness, and efficiency.

3. Services-led. The company pushes services and pulls products.

Number one, product enablement, is pretty straightforward. The role of services is to support the product, help get the business in pre-sales, help keep the business through successful installation (or implementation or commissioning or start up), and troubleshoot, where needed. Products have been, are, and will be the dominant focus. Enough said.

Number three, services-led, is also easy to understand, as the organization pushes the benefits of services and services-led solutions first, and then pulls along their products. Here we emphasize development of new and unique services offerings, encourage the sales folks (and everyone) to sell services, and manage utilization.

Number two, product enhancement, is the tricky one, being betwixt and between, neither fish nor fowl. In this strategy, senior management wants to have its cake and eat it too. This is a philosophy I admire! However, this is not easy to do. Let me give you an example of the pressure this strategy puts on the services organization. This is a summary of what I often hear from services vice presidents far too often that really exemplifies this challenge:

On Monday I had my review with the CEO, and she assured me that my mission was to support the company by profitably growing services revenue while keeping our customers happy. This was just what I wanted to hear! On Tuesday the vice president of sales stopped by, really concerned about services pricing and the need to ‘value-price’ (code word ‘deep discount’) services to help land strategic business. I laid out my best defense—my mandate to drive business, the need for the sales force to really sell value—but in the end I lost the discussion as I knew I would. Sales trumps services every time. My profit margins just took a hit. Bummer.

Then on Wednesday morning I was called into a crisis meeting and ordered by the CEO (the same person I talked with Monday) to board a Boeing to Boston with my best technical experts to fix the problems at Galactic Enterprises and not to come back until the client was satisfied. Never mind that my people were committed to other projects, and of course, it wasn’t billable; it was for the ‘good of the company.’ Forget about what was said, this is a product company first. I just have to live with it and try and make my numbers any way I can.

Running a product-enablement business requires constant vigilance toward efficiency. Hence, the entire services organization is focused on keeping things lean and low cost. Implementing a product-enhancement strategy requires a focus on effectiveness—balancing the requirements of profitable growth with the necessity of helping to sell products on one hand, and keeping customers satisfied on the other hand. Constant negotiations with sales and other executives are required to deliver on the duality of expectations. Running services in a services-led organization requires emphasis on innovation, as the services component is recognized as the greatest potential value contributor. Emphasis is on the creation of unique services that differentiate the organization from the competition. Marketing and selling push services and pull along the products.

Obviously, each philosophy requires different capabilities and mindsets to optimize performance. So being absolutely, positively sure of the strategic role of your services organization is vital to running it appropriately.

Tags: selling services

My services research confirms the critical importance of understanding and addressing the product company culture. I asked this question, which produced the following data:

What was (or is) the single most significant challenge your organization faced (or is facing) in building and selling services?

58% Culture Change

8% Acquiring Capabilities

7% Selling

6% Marketing

5% Senior Management Commitment

4% Obtaining Funding

4% Intra-Service Conflict

2% Project Management

1%

As you see, culture change dwarfs all the other obstacles that must be dealt with for a product company to be successful in building and selling services.

Seriously selling services requires a serious change in thinking about the business. Services now must be viewed as an equal offering of the organization, a true value-adder, the potential differentiator in the marketplace, and an important contributor to profitable revenue. Executives now must view products as customers have for a long time—as commodities that take a secondary role in a total solutions package. Services management and services employees must now vie for the respect that they may not have held before. This is not an easy transition to make, as it flies directly in the face of the tried and true.

Furthermore, certain departments are more threatened than others, as different internal groups, possibly product marketing or engineering, for example, feel that making services more important makes them less important. Transitioning to a more services-friendly, services-are-good-for-our-business mindset confronts internal tradition, established ways of thinking, and embedded power that will work together to try and squelch the selling of services.

Often it is true that the very things that made you successful yesterday are the same things that hinder your success today. Bringing about this services business mind shift is a leadership challenge of the highest order.

GIST: Set the compass heading to north, then stay the course, constantly bringing back the needle in the face of high seas, stiff winds, and changing currents.

Tags: differentiation, selling services

As already noted, big-time change targeted at making major improvements in organization performance is tough. Yet, making the transition to seriously selling services is often on a more difficult order of magnitude. Two factors drive this:

• The Invisible Factor. The first factor is the extreme difference between products and services. Products are tangible; they can be seen, felt, and easily quantified. However, services are intangible; they are invisible to the producer, the seller, and the customer. Evert Gummesson, a services researcher, probably said it the most eloquently: “Services are something that can be bought and sold but can’t be dropped on your foot.” The challenge of dealing with the added complexity of intangibility alone raises the bar.

This distinction has a fundamental impact on how one produces, markets, sells, delivers, services, and measures the performance of services offerings and the success of the services organization itself. What may have worked extremely well in managing a traditional product company often will be ineffective in running the services component. Hence, different characteristics and competencies in people must be sought, different management support systems must be created, and different metrics to reward performance and guide the enterprise must be developed. For example, even if all the recommendations in my book are followed, an estimated one-third of your product sellers will never be successful selling services! This is a significant management challenge.

• The Culture Fights Back Factor. The second critical factor is the significance of dealing with organization culture. Any manager who has been around for a few years understands the power of the company culture to resist change, even change that is necessary for survival. The culture will do whatever it can to maintain the status quo. Aggressively selling services in a product-thinking, product-acting business is a full frontal attack on the existing culture, and the defensive mechanisms of the organization will resist any way it can.

The fundamental problem is that, in most cases, the people running the show got there by being exceptionally good at making, marketing, and selling products. Products are their expertise, and this expertise got them promoted. Their past successes built around products helped create, develop, and nurture the culture—a culture that lives, breathes, and reinforces products-related success while shunning other alternatives to business. In this setting, services were regarded as necessary evils that were tolerated because they were a requirement in supporting products. Service was traditionally a cost center, and services were things negotiated and often given away either to make a sale or to keep a customer happy.

Seriously selling services requires a serious change in thinking about the business. Services now must be viewed as an equal offering of the organization, a true value-adder, the potential differentiator in the marketplace, and an important contributor to profitable revenue. Executives now must view products as customers have for a long time—as commodities that take a secondary role in a total solutions package. Services management and services employees must now vie for the respect that they may not have held before. This is not an easy transition to make, as it flies directly in the face of the tried and true.

Tags: differentiation, selling services

Ponder Point: If it were easy, everybody would be doing it.

Let’s face it, for most product companies, getting serious about aggressively building, marketing, and selling services is a big deal—a major change. The troubling truth of the matter is that about three out of four major change efforts fail to achieve and sustain the desired objectives (Alexander, 2004). My own experience in advising organizations confirms this, and your personal experiences probably do as well. Think back over the last few years during times when you experienced the launching of initiatives (e.g., implementing an ERP or CRM system, adapting Six Sigma, going “Lean”). How many of these efforts have brought about the lasting value intended at the time of announcement?

And anyone who has participated in an organizational change effort knows the tension that develops and the resistance that naturally occurs when the people of the organization are asked to behave in new and different ways. Productivity immediately drops as water-cooler conversations (both face-to-face and electronic) speculating on the impact and political ramifications of the change and the always-present “what’s going to happen to me?” take a priority over the mundane tasks of meeting customer requirements. In addition to the obvious loss of focus and efficiency, other multiple “costs of resistance” take their toll, touching everything from loss of key employees to lowered corporate credibility to stifled innovation.

Would you like to stop giving away or discounting services? Would you like to increase your revenues of both services and products? Would you like to build trust-based relationships that create loyal, profitable customers?

Join Us for:

Selling Services: Tools and Techniques for Top Performance
A two-day, hands-on workshop for everyone tasked with selling services.

August 12-13, 2010
Denver, Colorado

You’ll learn how to sell more services easier and faster from James “Alex” Alexander, a recognized services expert, a master at sales effectiveness, and a top-notch instructor. The course is peppered with lessons learned from star services sellers, best practices in selling services, and proven models and tools that work.

Participants will be actively involved in exercises, discussions, demonstrations, and role play, all linked to selling services success. You will leave the session with enhanced persuasion skills, effective selling tools, and the energy and confidence to accelerate your personal success.

LEARN MORE

Who Should Attend?

This workshop is for anyone accountable for selling services. Dedicated services sellers desiring to be more effective, product sellers wanting to win more business, account managers with sales targets, sales and services managers tasked with growth and customer satisfaction, and executives striving to differentiate their business through stellar sales capabilities. If selling services is a part of your job, you will benefit from this course.

How You Will Benefit
The workshop is designed with one goal in mind: to help you and your organization sell more profitable services easier and faster.

Brief Overview of Workshop Topics
Includes 15 Hands-on Tools and Take-Aways!

• The 7 business reasons why you need to sell services
• The technology assimilation gap
• The business development process
• The challenges of selling the invisible
• The biggest seller mistakes
• Buyer’s Reality: What’s diffèrent about buying services?
• The 10 Commandments of Selling Services
• The changing expectations of customer-facing personnel
• 5 reasons why using technical talent is such a good thing
• Choosing which of the six levels of selling expectations is right for each customer-facing group
• How to coordinate services selling efforts to avoid hassle, bad blood, and potential chaos
• Compressing sales cycle time
• How to sell to executives
• The six secrets of the super sellers
• Qualifying great business
• Why a fast no is better than a slow yes
• Using the Six Trust Builders to accelerate trust
• The four trusted advisor competencies
• Core relationship skills
• The 10 persuasion steps
• The 10 step process to selling services success
• The buying process
• Key events
• The committing process
• Profitably managing key accounts

LEARN MORE

100% Satisfaction Guarantee

Tags: selling services, training, workshop

Business consultants like to talk about adjacency strategy (Zook, 2004), the strategy of building upon an organization’s core competencies in one market to transport those capabilities to an adjacent, but different market space. For example, a company with specialized battery technology designed for the automotive industry could potentially attempt to build upon that battery expertise to develop and sell to the marine market. The same possibilities hold true with services. For example, an energy utilization assessment developed for the automotive industry could be adapted for the marine market. Taking advantage of your past experience and expertise can crack new markets and expand profitable revenue.

GIST: Services adjacency strategy can be a powerful component of any growth blueprint.

To summarize, services have proven themselves to be able to contribute significant value to many, many product companies through profitable growth of both products and services. Properly executed, strong services capabilities can increase customer satisfaction and generate customer loyalty. In addition, for some companies, having the right portfolio of services helps smooth the entry into new markets. Finally, in some cases, having an arsenal of new or better services can create competitive differentiation.

Tags: selling services

Depending on the maturity of your industry, your competitor’s strategy, and your competitor’s dealings with distribution, services can differentiate you in a really big way. The more complex your products, the more they cost the customer; and the more mission critical they are to your customer’s business, the more the value-packing promise of services. Leading services researchers note from their studies that more and more companies in tough competitive markets are looking at services to yield competitive advantage (Brown, Gustafsson and Witell, 2009). If your competitors don’t have full portfolios of strong service offerings or if they don’t know how to sell them, this is a huge opportunity for you if you embrace the challenge.

Give your customers what they need, want, and will pay for while locking out everyone else.

GIST: Services are the drivers of market dominance.

Tags: differentiation, selling services

Sadly, sometimes products are positioned to the customer with these words coming out of the salesperson’s mouth: “Our products don’t break. You don’t need any additional services,” or “It is so easy to implement our software. Just read the manual and you can do it, no worries.” This is all a bunch of baloney, especially if you are dealing with a fairly complex situation, an important customer process,
and/or the customer has little if any familiarity with the implementation.

Rare is the product that will not need some type of service in its life cycle, whether a tailored implementation, ongoing maintenance, software updates, refurbishing, and on and on. Not positioning this reality of life with the customer upfront is negligent selling.

Services appropriately sold up front greatly improves the probability that:
• The product will work the way it is supposed to work the first time.
• Greater functionality of the product will be utilized.
• Irritated customers ringing the bell of the fire engine, escalating their concerns up your organization ladder, will be greatly minimized.

GIST: Selling services upfront saves your organization, time, hassle, and money over the long term.

Tags: selling services

Here is a bit of blasphemy: Most customers view your products as commodities! Regardless of how truly unique or elegant or innovative your products are from your perspective, in most all buying situations, customers see no meaningful difference in the top two or three products in any category, across all industries, across all geographies.

Yes, I understand this may not be 100% factual, but from the perception of the customer it is true. Hence, the old adage comes into play: Perception is reality. Kind of a sobering thought.

Once customers have determined their short list of the two or three potential products or bundles of products that they will seriously consider buying, they almost always cast their product ballot based on what they believe are the best services that surround the product—services that will best ensure the product works as promised, keeps working, and does so with a minimum of hassle and added expense. It is important to note that, in many cases, they will pay a premium for your offering if they understand the higher value your services bring to them. In essence, they vote with their pocketbook.

Furthermore, if your salespeople were strategic and sold an assessment early in the buying process—before needs were clear and products were specified—the probability of you getting the product business later on is greatly improved, giving you the chance to shape the final recommendations early while building relationships with people key to the final purchase.

Tags: selling services