If you are just out of a Business school, the odds are high that you would be aware of the difference between ‘Transactional selling’ and ‘Strategic selling’. The former is a traditional sales approach wherein the salesperson approaches a prospect, presents a demo of the product, extols its virtues, negotiates, gets the contract signed and walks away, perhaps never to show up again while shoving the post-sales part on to the customer service department or retention team. And if the customer is not interested in the first place, the salesperson moves on to the next prospect, happily relegating the uncultivated, dormant customer forever to the ‘Cold’ customer category. Salespeople from this school are mere order-takers. On the other hand, strategic selling – the lynchpin of Ram Charan’s latest book – underlines ‘value creation’ for customers as the basis of sales than mere pricing.
The idea of creating long-term value for customers doesn’t sound astoundingly novel. The same idea has been bandied about by many Harvard professors and numerous other authors. Some of the elaborations on Value Account Selling in the book may give you a déjà vu feeling.
The beauty of this book is the author’s presentation and approach towards the engineering and execution of ‘Value Creation Selling’ in an organization. And, that is what precisely sets it apart from other books of the same genre. Ram Charan, in his inimitable style, breaks down the whole Value Creation agenda into eight chapters; enriches each chapter with examples from real-life organizations while using a fictitious company called ‘Sturgis Corporation’ as a prop; addresses the roadblocks that organizations implementing VCS are confronted with and finally, provides tools to execute and sustain such efforts.
In the world of ever-increasing opportunities coupled with the proliferation of suppliers, Ram Charan calls upon the top honchos to embark on an organization-wide ‘sales’ transformation. The new order, according to Ram, doesn’t have to be a bailiwick of sales only. Instead, Value Creation Selling (VCS) initiative would entail dovetailing of the various silos in the organization with Sales department to achieve the ultimate differentiator. Ram opines that such an initiative might take long to take root, but once it is deeply ingrained it really can enable the organization to command premiums and contribute profitably towards the topline.
Ram emphasizes that sales persons have to act like trusted partners with their customers and help them improve their business in terms of cost reduction and accelerated revenue growth. To accomplish that sales function has to break away from silo mentality and engage people from other functions to shape Value-creating solutions for customers. Ram is also in favor of those in the vanguard acquainting themselves of various concepts of Finance. This may sound exaggerated, but is, in fact, indispensable to VCS. Unless sales people understand what really matters to their customers, i.e. inventory turnover, cost reduction, ROI, sustainable revenue growth, etc., VCS would only end up as a high-falutin’ initiative with no ends to achieve.
Ram lays down five pieces of puzzles that a salesperson must crack. Basically, these five must-knows go into the foundations of an insight-based selling approach, a step ahead of the usual transaction- or solutions-based approach that we are all used to:
a) Competitive dynamics, b) Customer’s customers and competitors, c) Decision-making chain, d) Company culture and e) Goals and priorities.
Finally, ‘What the customer wants you to know’ will lend a different perspective to your thought-process if you are actively involved in sales. It definitely serves the purpose of a how-to guide on VCS implementation and its challenges. I recommend reading this book since it’s hard to come across such good books written exclusively about sales domain.