Sales Compensation in a World of Solutions

Sales Comp in a World of SolutionsMany companies today know that customers are looking for more value. Haven’t you found that selling a simple product or service just doesn’t feel like “enough” anymore? Are you wondering how to adjust your strategy to increase your future success? With technology becoming increasingly complex, your customers need additional help understanding how things fit together.

As a case in point, Performensation uses video conferencing, on a daily basis, to communicate with our global clients. Our strategic focus is: to deliver effective, custom fit, performance and compensation solutions that are unique to our clients, culture and business strategy. Sadly, we are not experts in video conferencing systems but we rely on this technology to deliver our solutions. Our desire is to quickly connect with our clients, and get down to business without any technical issues. Ideally, we would like someone else to be an expert in video conferencing so we can do what we do best.

A solution provider often combines products and services from other vendors, and packages them together with their own value added service, to create the perfect fit for their client. This is something that we know a lot about, given that it has been our business model over the past 7 years. Now the question arises: “How does a business transform their sales force when they move from a business that sells ‘things’ to a business that sells ‘solutions’?”

“Solution Selling” has been a buzzword for the last decade, so it is nothing new. And, evolution to solution selling for a sales force is a normal growing phase for a developing company. However, evolving to a solution selling model is not easy. The sales force needs to learn new skill sets, and the company culture and business strategy needs to align to facilitate the change.

1. The sales force needs to learn new skill sets.
Selling products and services require the salesperson to identify the customers’ immediate need, and then satisfy that need with an off-the-shelf item that they have on hand. Solution selling is about value. The salesperson needs to explore beyond the immediate need and solve the root cause of the problem. For example, a customer may approach the sales person and ask for a new web camera for their computer because the image is unclear. But their actual desire is to have an easy-to-use, reliable video conferencing system that delivers high quality images and sound so they can interact with clients in Australia. A salesperson trained in solutions sales will know how to find the core issue that the customer needs solved.

2. The company culture and business strategy needs to align to facilitate change.
A company that is changing to a solution sales strategy must evolve their culture and business strategy to enable collaboration and partnerships with many vendors. Customers will have diverse needs and desires that must be met using everything the marketplace has to offer. Many vendors today do their best to specialize their products and/or services to focus on a specific niche where they can minimize business costs and maximize profits. This means that a solution sales oriented company that limits themselves to only a few vendors will not be able to provide the best solution for their customers and therefore will limit their growth potential.

3. The sales force needs to be incentivised in new ways.
In many situations, companies that are moving from a product and services sale to a solutions strategy will have an incentive structure that needs to be updated. With their new strategy, the sales cycle may have changed from as short as a few days to over a year. There will be new measures for success, and customers will have new expectations on the value provided by the company. Sales people in this environment will require a specialized skill set and have a greater impact upon the company’s long term success; retaining them will become paramount.

As you may have surmised, evolving to a solutions sales model will not be effective by “tweaking” your current sales model. A successful transition involves a comprehensive approach on how the company executes the new strategy and how they enable and reward their talent.   When a company arrives at this level of growth, they will have already demonstrated a strong product offering. At this point, it is crucial to implement your new business plan and include the steps we’ve discussed in your process. Launching this next phase of growth is not only important, but it is essential to the long term profitability of your business.