The first book to explicitly discuss the distinction between the features of a product and its benefits to customers was Tips and Pointers for Underwear Dealers and Their Salesmen, published by the Cooper Underwear Company in 1923. “Men buying union suits are influenced by comfort, fit, durability, color and weight,” it advises. “We have, in other chapters, covered the subject of stouts, slims and regulars. We have also referred to the collarette, non-ravel sleeve, the elastic cuff, left dress, and sloping shoulders of extra width. In all, there are sixteen different parts of a union suit. Each one contains a feature which might be discussed with the customer.”²¹ Among the benefits listed are agreeability in contact, the comfort of elasticity, the warmth, fit, long life, and effect on vital organs. If you are selling, buying, or wearing a union suit, this is clearly important information.
The approaches, strategies, tactics, and philosophies of selling did not change substantially from the early 1920s to the late 1950s. Perhaps the most important reason for this period of stability (or stagnation, depending on your viewpoint) was the nation’s economy. As you can see in Figure 1-3, the real U.S. gross domestic product did not grow significantly from 1900 through the years just before World War II. War spending drove up the economy, but it fell again after the war and did not grow substantially again until 1960, when the post-war economic recovery was in full swing and the baby boomer generation began entering the workforce. The forty years from 1960 to 2000 were decades of unprecedented growth and prosperity, despite some minor glitches along the way. The explosive growth of the economy had numerous effects, including the rise of the modern corporation, the globalization of markets, and tremendous growth in consumer spending.
This era also saw the shift from a predominantly industrial economy to a predominantly service economy in the United States as labor costs increased and manufacturers either located offshore or succumbed to foreign competition for the production of goods. Last, and significantly, it also saw the birth of the information age and the meteoric rise and fall of the dot-coms. Perhaps the most important developments during this period, at least from a selling standpoint, were the increasing sophistication of buyers and the growing complexity of buying organizations; these transformations set the stage for the death of selling.
FIGURE 1-3. U.S. Real Gross Domestic Product: 1900–2000. The meteoric growth of the U.S. economy since World War II has led to significant changes in the nature of B2B selling.
Strong, who had worked as a psychologist for the U.S. Army during World War I, reported in 1922 that “psychological tests given to approximately two million men in the army showed that the average man did about as well as an average fourteen-year-old school child, and that he had not finished the seventh grade in school. On the basis of these tests—and they were so numerous as to be fairly representative—one-half of the men in the United States are thus of fourteen-year-old intelligence or less, and of an education limited by seventh-grade standards. Consequently, talking to a prospect in terms of his interests and in a way that he can understand may mean getting down pretty low in many cases.”²² In contrast, by 2001, 84 percent of all American adults ages 25 and over had completed high school and 26 percent had completed a bachelor’s degree or higher.²³ B2B customers in the latter half of the twentieth century have been considerably better educated and, in many cases, know the products or services being sold nearly as well as the people selling them, which means that the seller’s knowledge advantage has diminished substantially. Moreover, because they are exposed to products and services from so many competing companies, buyers often know more about the range of competing products available to them than do the people trying to sell a particular product.
Partly because of the increasing sophistication of buyers but also the increasing complexity of business organizations, Harvard University’s Theodore Levitt concluded, in a 1960 essay published in Harvard Business Review, “It should be obvious that building an effective customer-oriented company involves far more than good intentions or promotional tricks; it involves profound matters of human organization and leadership.” He also said, “The organization must learn to think of itself not as producing goods or services but as buying customers, as doing the things that will make people want to do business with it.”²⁴ In subsequent essays, Levitt wrote about the globalization of markets, the industrialization of service, the marketing of intangible products, exploitation of the product life cycle, and innovative imitation.
Although numerous other authors have addressed these subjects, Theodore Levitt is our poster boy for modern thinking about marketing and selling. More than anyone else, he offered innovative ideas about the importance of being customer oriented and building competitive advantage through marketing. He also wrote about the role of the seller’s behavior in building and sustaining customer relationships, a subject we will return to later. Levitt recognized the paradigm shift that was happening in the way business organizations operate and in how marketers and sellers need to approach them, and his writings presaged a number of later developments, particularly in selling or marketing to complex organizations.
In 1970, Mack Hanan, James Cribbin, and Herman Heiser published a slim book called Consultative Selling, which gave a name to an approach to selling that reflected the new reality of selling in the B2B, high-economic-growth environment (although, as we noted earlier, W. F. Hypes made the same argument about cooperating with customers in 1908). As the authors said in their introduction,
Midway through the 1960s, the selling environment began to change. Since the end of the Second World War, few significant innovations in selling had taken place, or were really required, in what was largely a seller’s market. Then, in a short period of time, many of the old assumptions became unworkable. As the cost of each sales call rose steadily, suppliers were compelled to redefine the essential characteristics of a “good customer.” In turn, customers reclassified their supplier relationships and created new definitions of the “good salesman.” Lists of alternate suppliers were drawn up in most major purchasing categories, and salesmen frequently found that no matter how they tried to “sell harder,” they were hemmed in by an unofficial quota system that acted as a ceiling on their performance. Many companies exhorted their salesmen to “sell smarter” instead of just harder, but few salesmen could be sure of exactly what they meant.²⁵
The consultative seller is not a salesperson, in the traditional sense, but a business planner, manager, and advisor. According to Hanan, “Consultative Selling replaces the traditional adversarial buyer-seller relationship with a win-win partnership in profit management.”²⁶ So the seller’s goal is to help customers improve their profits by improving their business. To do this, the seller must understand the customer’s business and must have the customer’s best interests in mind. “It means,” Hanan says, “that you stop selling products and services and start selling the impact they can make on customer businesses.”²⁷ Of course, to be accepted as a consultant to a customer organization, the salesperson must develop expert knowledge that customers value, must be able to take a broader business view of customers’ situations, and must be creative problem solvers. Developing solutions, rather than selling products, becomes one of the principal ways the salesperson adds value and builds customer relationships and loyalty. This sometimes means that consultative salespeople must advise against purchasing something that customers don’t need or is not right for them, even if the salespeople lose the commission, and this conflict-of-interest minefield is one that many salespeople don’t negotiate successfully. Nonetheless, this is the concept.
Hanan argues that consultative selling enables sellers to avoid purchasing department gatekeepers: “Vendors sell price-performance benefits to purchasing agents. Consultative sales representatives sell up. They form partnerships with business function managers whose processes they improve. They also partner with line-of-business managers whose sales they improve. These are their first levels of partnership. At the second level, they partner with purchasing, forming a relationship that permits both partners to work with function managers and line managers in a triad of mutual interests.”²⁸ As we will see in Chapter 2, however, avoiding these “gatekeepers” may be harmful rather than helpful. Partnerships that involve purchasing are increasingly essential in B2B selling today. Clients sometimes ask us how to avoid the purchasing function, and our response is that if you want long-term relationships with customers, you had better learn to partner with purchasing directors. But more on this later.
Since Hanan et al first described consultative selling, numerous others have jumped on the bandwagon. Today, a search on google.com for “consultative selling” yields over 85,000 hits. Moreover, the concept has become diffused as more followers have redefined the concept and tried to put their own stamp on it. In its original incarnation, consultative selling had these characteristics:
1. Sellers considered buyers to be clients rather than customers. This distinction implied a professional relationship rather than a buyer-seller or vendor relationship. It also signaled a shift from a transactional relationship to a consultative relationship.
2. Sellers provided a broad range of services in addition to products. The purpose was to increase clients’ profits by improving their performance.
3. Sellers provided solutions and were more concerned with profitable client relationships than with volume or quantity of sales.
4. Sellers were businesspeople first and used business planning to maximize their own business as well as their clients’ business. They thought long term rather than short term and took the broad view of their clients’ needs.
5. Sellers were thought partners with their clients and strived to provide innovative answers to clients’ questions, problems, and needs.
Not surprisingly, the notion of consultative selling coincided with the rise of management and professional consulting generally. Although some of the great consulting firms, such as McKinsey & Company, began much earlier than the 1960s (McKinsey was founded in 1926), in the decades following World War II the consulting profession and the number of consulting firms grew tremendously. It was inevitable that someone would “reinvent” selling as consulting, but this development also reflects the customer-oriented philosophy articulated by Theodore Levitt and others in the 1960s. It also highlights the gradual movement of selling from “pusher of products” to professional problem solver, and the selling profession is slowly adopting the ethos and practices of professional consulting (more on this in Chapter 2).
In 1985, Robert B. Miller and Stephen E. Heiman published Strategic Selling, which explicitly addressed what they termed the complex sale. Much of their book presents familiar ideas in selling: Analyze your account and do account planning, profile the ideal customer, use a sales funnel, know what results customers want to see, sell to the right people, and so on. Norval Hawkins and Edward Strong were writing about these concepts in the 1920s. However, Miller and Heiman were among the first to describe how sellers needed to approach the new, complex organizations of the late twentieth century. “A Complex Sale,” they said, “is one in which several people must give their approval before the sale can take place.”²⁹ To be effective, they argued, you have to know who will make the buying decision and how they will make it. “In the Complex Sale, there are four critical buying roles. We call the people who play these roles Buying Influences, or, more simply, Buyers.”³⁰ They go on to discuss economic buyers, user buyers, technical buyers, and coaches, along with what each of these types of buying influences looks for and is most interested in. The notion of analyzing complex buying decisions in complex customer organizations was an important development in the concept of selling, perhaps one of the few since 1922.
Subsequently, few late-twentieth-century authors have contributed substantially new ideas on the practice of selling. The exception is Neil Rackham in SPIN Selling (1988). Like Miller and Heiman, he also focused on the “fast-moving and complex environment of today’s major sale.”³¹ Rackham observed that sophisticated buyers react negatively to traditional closing techniques, and he advocated a questioning process designed to make buyers’ needs explicit. His prescription for sales calls was to get down to business quickly, concentrate on asking questions and listening, and not talk about solutions too soon. He also felt that the traditional socializing at the beginning of a sales call was unwise: “The last thing a buyer wants is to tell the tenth seller of the day all about his last game of golf. The more senior the people you’re selling to, the more they feel their time is at a premium, and the more impatience you’re likely to generate if you dwell on nonbusiness areas. . . . Many buyers become suspicious of people who begin by raising areas of personal interest. They feel that the seller’s motives aren’t genuine and that it’s an attempt to manipulate them.”³² Rackham’s disdain for the vacuous socializing of some salespeople and his rejection of the traditional sales pitch made him one of the most iconoclastic advocates for a new approach to selling, especially when compared to many recent books on selling and articles in Selling Power magazine, among others, which show little insight into the B2B selling environment today.
The scores of books on selling published after Rackham have not really introduced anything new, although claims of breakthrough strategies abound. Ironically, the most recent advances in sales thinking have come not from the world of sales but from David H. Maister, a former Harvard Business School professor who was not writing about selling per se but rather about professional services firms and how they are managed. In a series of essays published between 1982 and 1993, he explored how professionals build business and manage their firms. Of particular interest is “How Clients Choose,” which appeared in The American Lawyer in 1991. In this essay, he describes what it feels like to be a buyer and what buyers look for. Maister concludes, “Unless their skills are truly unique, unmatched by any competitor, professionals are never hired because of their technical capabilities. Excellent capabilities are essential to get you into the final set to be considered, but it is other things that get you hired.”³³
Like Rackham, Maister believes that questions are a professional’s most important tool. Furthermore, recalling that William Miller, Edward K. Strong, and other early writers on selling advised salespeople to polish their canvass and push objections aside quickly, Maister’s attitude sets up a very different conception of selling that applies not only to professional services firms but to B2B companies in all industries. Speaking as a client, he says:
“If I interrupt you, deal with my question. I want to see how you handle yourself when I ask a question, not judge how practiced you are at your standard spiel.”
“I want you to prove that you can listen, by picking up on my comments, adapting, in real time, what you say to what I’ve just said. Involve me. Ask what I think. I know someone’s listening to me when they show the ability to depart from their prepared scripts and base their subsequent comments on what I’ve just said.”
“When I challenge you with an objection, hear it out, don’t interrupt. Don’t tell me I shouldn’t be concerned about that: I’ve just told you I am concerned. Acknowledge what I said as a valid concern.”³⁴
Although Maister’s ideas are focused on professionals, his perspective on working with clients challenges the traditional approach to selling. Gone are the days of preparing a canvass, giving high-pressure sales pitches, handling objections, and using “proven” closing techniques. The traditional approach to selling, still practiced by some companies and salespeople who haven’t gotten the message, is dying a certain death, especially in the B2B world. Today’s buyers are too sophisticated for slick sales techniques and are suspicious when they see them. However, what’s causing the death of selling is not simply the greater complexity of buying organizations, the increasing sophistication of buyers, and the explosive growth of Web-based information, but something that is having a much more profound effect on how B2B purchasing is done—the rise of supply chain management and the growing professionalizing of the purchasing function. When the supply chain management revolution is finished, the Willy Lomans of the world will truly have perished (see Figure 1-4).
Willy was a salesman. . . . He’s a man way out there in the blue, riding on a smile and a shoeshine. And when they start not smiling back—that’s an earthquake. And then you get yourself a couple of spots on your hat, and you’re finished.—Charley, Death of a Salesman, Requiem, by Arthur Miller
1. We argue in this chapter that B2B selling has changed significantly since William Miller wrote The Art of Canvassing in 1897. What changes have you seen in your business and industry? How has selling changed? How have your customers changed? Looking forward, what changes do you foresee in the coming years?
2. Salespeople in the last twenty years have been expected to be more consultative, ask more questions, be better listeners, and become more professional in their approach to clients (rather than customers). Have your salespeople made this transformation? Are they effective in the selling environment of the twenty-first century?
FIGURE 1-4. Arthur Miller’s Death of a Salesman. This haunting image symbolizes the passing of an era. In today’s B2B selling, a shoeshine and a smile won’t get you very far. (Photo courtesy of Laurie Schendel Lane, Laurie Lane Studios. Used with permission.)