Solution Selling Defined
One of the greatest attributes of marketing is the creation of words and phrases that sound great and instill a feeling of virtue and professionalism, yet are undefined and often meaningless. Solution Sales is one of my favorites. Ask a professional sales person to define a solution sale and he or she will define it either by exclusion, “it is not a commodity sale which is based on price”, or define it recursively, “it is when you are providing the complete solution” (obviously a solution is a solution; just as A=A) or by adjectives, qualitative or relativistic descriptions such as;
Complex
Network
Encompasses both product and services.
Difficult
Long sales cycle
Etc.
You see the problem! No one seems to be able to define a solution sale. For example, how complex does it need to be to qualify as a solution sale? It is interesting to note, that we have entire libraries of books and training classes on solution selling, yet can’t define it. This is not to say that those books and training classes are worthless, quite the contrary, as a sales management quack (oops, I mean consultant) I even teach this stuff. But it really bothers me that it is undefined…..Until now.
So here is the definition of a solution sale. “A solution sale is when the sales person has greater domain knowledge than the buyer.”
This has some profound implications. It implies the following:
1. Any sale can be a solution sale or a commodity sale based on the circumstances.
2. The type of sale, whether solution or commodity, is a sales tactic that can be determined by the sales person.
Ok you are probably scratching your head about all this. Let’s look at an example.
A 200 ohm ¼ watt resistor. Most people would say that this would be a commodity sale, since it is a commodity product. It is cheap, there are many suppliers and can be picked up off-the-shelf. Certainly to an electrical engineer designing a circuit, he knows exactly what is required. To him, it is a commodity sale, because he possess the greater domain knowledge, having designed the circuit. Now let’s consider someone holding a wire. They have a problem. Everytime they plug this wire into a device, it smokes and damages the device. They are not an electrical engineer, do not know about resistors, voltage and current. What do they need? A resistor! This is a solution sale, because the domain knowledge rests with the sales person. Ok this is a silly and possibly nonsensical example, at least to us engineers (yes I was an engineer), but it illustrates the point that the type of sale is not determined by the product or service but by the circumstances and the strategy of the sales person.
Consider a manufacturing automation sales person. He is selling automation to the engineering manager of manufacturer whose strategy is to be the lowested priced player in the market, runs on razor thin margins and whose business success depends on highspeed automated manufacturing. This conversation is likely to be very focused on specifications, features and price. Basically a commodity sale. Later this same sales person visits the manufacturing engineering manager of a pharmaceutical company that has product gross margins of 94% and whose business success depends on research and marketing. This conversation is likely to be completely different, with the sales person possessing more manufacturing automation domain knowledge than the customer. Hence a solution sale.
So a sale cannot be categorized as solution or commodity aprior. While the circumstances initially define the sale type, the sales person may elect to change the sale type in order to improve their selling position. To shift a commodity sale to a solution sale, the sales person needs to expand the scope of the conversation and deliverable to the point where they posses greater domain knowledge than the prospect. This is particularly effective when you are in a price competitive situation and cannot be the lowest priced player.
Conversely, if you are the lowest priced supplier, you might want to “commoditize” a solution sales situation if you are competitively weaker, by convincing the prospect to reduce the scope of the domain to the point where your competitor is no longer the domain expert.
OK, I hope I have convinced you that there is a definition for Solution Sales. Now throw it out the window. If a solution is the resolution to a problem, then any sale is a solution sale. Your tactics simply depend on how you and the prospect mutually agree to define the problem.
October 15th, 2007 at 11:28
A couple of observations:
1) Solution sales require that you are able to predict or at least observe the problems that people are attempting to solve so that you can offer the appropriate solution with your commodity product. In order have some degree of leverage, you must be able to package the domain expertise in a way that enables the supplier to solve the problem(s) repetitively without having to deploy more salespersons.
2) They can be combined by layering the solution on top of the commodity offering (such as Home Depot offering classes in laying tile versus ACE Hardware)
October 17th, 2007 at 16:02
Let me add my two pennies (British) to this blog. I have learnt that that a sales is a solution sales if the customer views it as such. It really does not matter an iota if the salesman thinks it’s a solution sale or a commodity sale. It’s the customer who defines it on an emotional level very early in the interaction.
If your customers perception is that it’s a commodity, don’t sell a solution and vice versa. Let your competitors try and change his mind and run aground. I believe the secret is to understand what the value is of the sexy gizzmo you are trying to sell and sell it as a commodity or as a solution based on what your customers perception is. A car is a commodity now-a-days. But they ain’t simple or cheap.
March 13th, 2008 at 12:52
To me solution based selling revolves around your relationship with the client. Even if you have a system based solution if all you present is a commodity… I can sell you XYZ product for X dollars you will never be truly successful.
The basis for solution selling as I teach it to my team involves getting to know your client, understand their issues and then making intelligent recommendations based on experience and data. If you do a good job of this price will become less of an issue. The real trick is getting them to understand Why you cost a bit more and how a slightly higher initial outlay will save them money over time because of increased reliability, reduced maintenance cost, etc…
June 9th, 2008 at 15:59
This has to be the best definition of “solution selling” I’ve seen. Of course, someone advertising for a person with “solution selling skills” who also says no industry knowledge is necessary would probably disagree, but I think they’re into buzzwords and not solutions
July 15th, 2009 at 03:31
Hi - Just stumbled across you site and have enjoyed looking through it. I’ll be coming back soon for another look. Keep up the great work.