If you are a sales person in an electronics company. At a recent trade exhibition you met a supplier that was willing to supply your company with a product on an exclusive basis (i.e. Available to your company only) that you could offer in your marketplace. The product in question has already been successfully developed and tested and – as yet – is not being sold on the market. You know from speaking to your customers that there is a demand for such a product and it would clearly plug a gap in your company’s product portfolio, and give your company significant competitive advantage. You approach the product management division with your idea and, to your surprise, they are very unenthusiastic and reject your idea, stating “We always develop our own products in-house in this department – it would cost the company far too much to set up the processes to buy in a product from outside”. A. Outline the possible range of reasons for the product management division’s rejection of your idea. B. What might you do or argue to persuade or otherwise ensure that your idea is adopted? C. State which of your options in (b) would be your preferred approach, and why
Answers
Explanation:
When we talk with companies about the biggest challenges they face in growing revenues, we hear a consistent complaint: Senior leaders have great confidence in their ability to develop innovations but not in their ability to commercialize them. Our research suggests that this gap results from a lack of formal processes and effective talent-management strategies. It’s a big problem, because it limits the return companies reap from their R&D spending. To put it simply, companies that have invested millions to dream up new-to-the-world innovations need to become more adept at selling them to customers.
To understand why that’s so difficult, we combed the academic literature, conducted numerous one-on-one interviews with senior sales leaders, and led several studies of our own. We found that successful companies recognize that the sales process for new products requires different allocations of time and must overcome different objections and barriers by comparison with the traditional approach. We also found that people who excel at selling new products have traits and behaviors different from those of people who successfully sell existing product lines—and that the best companies develop organizations and cultures to support salespeople in rising to the challenge.
A New Sales Process
To better understand what makes the sales process for new products different, we surveyed 500 salespeople at B2B companies across a wide variety of industries, from technology to financial services to industrial products. We wanted to understand how they spend their time during the process and how the challenges they face vary as it unfolds.
Demands on time.
We found that selling new products requires greater intensity and consumes much more attention. On average, salespeople spend 35% more time meeting with customers throughout the sales cycle than they do when selling established goods and services. Since much of that time is spent educating customers on how the product will change their current business practices, these meetings are typically conducted in person, with 32% more time spent in face-to-face meetings. And because committing to a completely new product requires broader consensus within a targeted company, salespeople spend 30% more time meeting with customers’ cross-functional teams. Given that time is a salesperson’s most precious resource, that’s a costly investment.