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If Your Selling Isn't Creating Customer Value, It Is Destroying Customer Value

by Michael Webb | * Comments (2)
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Pfizer, the worlds largest pharmaceutical maker, recently (December 2006) announced that it was laying off 2000 of its 10,000 person sales force. According to Charles Green (author of "Trust-Based Selling," and co-author of "The Trusted Advisor"), a reason for this is that the productivity of the sales force has plumeted, and the reason for that is the low level of trust between the pharmaceutical representative and the physician. You can read his blog entry at Pfizer, Doctors, Sales, and Trust.

The problem, which is common throughout industry, is that the "sales organization is managed as a revenue engine to sellers, rather than as trusted advisors to [the customer]."

It is true that a company must generate revenue, and that the sales force plays a key role in doing it. However, factories used to be run with a "convenience for us" mentality too, and that proved to be wasteful. Now days, factories are working hard to "lean" their facilities, meaning: get rid of the waste. How do they determine what is wasteful? By what the customer will pay for, of course.

 

Leaning the sales process = creating value for customers = building trust

People are paying for what you offer long before they buy. Customers pay you with their actions: their attention, their response, their information, and their time. If you aren't getting these things, it is because they don't see enough value in your marketing promotions and offers.

It is time for most companies to take a hard look at their sales and marketing.

  • When marketers are accountable for gross volume and not getting just the right customers to respond, is it any wonder customers turn off to their promotions?
  • When the sales process is left up to sales people alone, is it any wonder they try to succeed by hook or by crook (causing customers to worry about both)?
  • When senior executives continue to manage marketing and selling as separate functions focused on their cash needs, without worrying about value and helpfullness to customers, is it any wonder things don't get better?

The fact is this: The value of your company most certainly extends to the way you help customers buy.

In a free economy, business is won by finding win/win solutions. We're not talking about altruism here. It is simple hard nosed business. There aren't many sellers markets left. You have to take the customer's perspective into account because that is the only way you can get their attention, their time, and their trust. In other words, it is just about the only route to getting their money.

Maybe examples like Pfizer's will help more executives see how pervasive this problem is, so they can begin working on solving it.

Michael J Webb
December 6, 2006

2 Responses to “If Your Selling Isn't Creating Customer Value, It Is Destroying Customer Value”

  1. Is the Way You Sell Valuable?

    When Pfizer lays off 2000 (20%) of their sales force because said sales team's efforts flopped, there's a disconnect in the value their sales process is delivering. The biggest reason, according to Charles Green is the low level of trust between doctor...

  2. Michael, I think you're exactly right in saying, "in a free economy, business is won by finding win/win solutions. We're not talking about altruism here. It is simple hard nosed business."

    I find that many companies nod their heads at that statement, but then go on to misunderstand your next point, that "you have to take the customer's perspective into account because that is the only way you can get their attention, their time, and their trust."

    Here's why.

    Too many selling organizations have been unconsciously coopted by the view that the entire point of business is to earn profit and gain sustainable competitive advantage. They therefore convince themselves that the purpose of "customer focus" and "understanding customer needs" is simply to increase their profitability.

    The problem is, if your entire world view is based on your own bottom line and "sustainable competitive advantage," then the customer is inevitably cast in the role of poker chip. This view turns customers into objects. It treats them as means to one's own end, rather than as ends in themselves.

    This view is aided and abetted by sales organizations (and business in general) who put too much emphasis on short-term detailed metrics linked to extrinsic rewards. The messag again is to get the deal at the cost of the relatoinship; measure the worth of a customer only in the seller's terms; and treat customers like objects.

    A client once said to me before I gave a lecture on The Trusted Advisor: "Trusted advisor, eh? Sounds pretty good to me. Anything that gives me increased share of wallet, I'm all for it."

    There's your problem. Many listeners out there interpret "customer focus" as the customer focus of a vulture.

    To really make it work, you have to embrace a paradox: that in order to be profitable and successful, you have to give up those as final goals. You have to see your own success as a byproduct of helping your customers, not as the reason for helping them. If you can separate actions at the customer-event level from results, and instead have some faith that in the long run, at the relationship and multi-client level it all comes back to you--then you can benefit from the paradox.

    There's nothing wrong with measuring short term performance; what's wrong is letting that force you into short-term management. The best quarterly results come from multi-year plans. The best transactions come from focusing relationships. The highest profit comes from helping your customers--period.

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