Death of New Products

Posted on December 17, 2012. Filed under: account management, Complex Sales, Funnel Audits, Lead Generation, Marketing, negotiation, Pipeline Measurement, Sales, Sales Coaching, Sales forecasting, Sales Funnel, Sales Goals, Sales Management, Sales Metrics, Sales pipeline, sales process, Sales Quota, Sales Strategies, sales training, Sales Velocity, strategic account management, Uncategorized, win win |

Death Valley

Death Valley

Is your selling approach killing sales of your company’s new products?

Years ago, Neil Rackham, author of SPIN Selling and Rethinking the Sales Force published a paper that showed how the sales forces of three well known companies were failing to meet sales expectations of each company’s newly launched products.

These products were not just new.  They were ground breaking technologies that the market would have been excited to have.

Rackham’s consulting and training company was involved in training each of the salesforces.  When sales did not meet early expectations his clients asked him to figure out what was going wrong.

Rackham is known best for his research based book SPIN Selling.  He researched 35,000 sales calls and used that to create the sales method SPIN.  In that research he and his team found a positive correlation between the number of questions asked and the success of the sales call.  The more questions asked the more likely the call succeeded.

They also found that product features were negatively correlated with call success.  In calls that failed salespeople described more than twice as many features of products and services they were selling as they did during the calls that succeeded.

For his three clients that were experiencing troubling results with their new products he and his team went on sales calls and observed the sellers in action.  Since the products were complex and required more questions to understand the complexity of the customer’s needs, they all expected to hear more questions being asked.

They discovered something entirely different.

Sellers were asking 40% fewer questions in selling these new products.  The average length of the sales calls were even longer than the length of sales calls for other products.  What were sellers doing on these calls?  Spending a lot more time describing features.  Oops.

In a non research world we’d call that data dumping, showing up and throwing up, or throw it on the wall to see what sticks.  Not exactly model behavior for fundamentally good selling.

This paper was published in the early 1990s.  Mistakes like this still happen today.  For example, while many of the exciting new technologies under the sales 2.0 era are shaking up sales effectiveness many of the products are sold by way of doing a ‘demo’.  A demo is often done over the web without either party traveling.  Demos focus on showing how products work.

One company with a pretty cool technology did a demo to me after I stopped by its booth at the Sales 2.0 conference in San Francisco.  The sales rep didn’t know what I did for a living.  She hadn’t prepared any questions for the call.  I gave her a bit of a hard time.  The ultimate insult would be for me to buy the technology and reinforce her weak selling behavior.

In another demo example a client of mine was paying a hefty finders type fee to its channel partners in Asia to set up demos of its software product.  Unfortunately my client’s sales and technical staff often showed up ready to do the demo and discovered that key people weren’t invited, or just as bad no clear reason for doing the demo was defined.  In these situations the  demo is a wasted, expensive selling resource.  On the other hand, when the right people attend the demo and a call to action is identified and agreed to upfront demos can be a key catalyst in moving sales forward.

There are a number of reasons why this stuff still happens.  Companies are excited about their new products and they forget that the customer still has to express a need for them.  Let’s hope that the new products have been through a research process that showed there really is a need for them.

When salespeople are trained in a new product they are mostly trained in features and functions.  They learn how it’s different from what it’s replacing.  They learn how to price it.  Usually the section on learning how to uncover customers’ needs get footnote attention.  I don’t know if the Veeps of Sales are assuming “Of course we’ve still got to ask questions and do discovery  duh!”  Their assumption is a sign of poor leadership.

On your next sales call leave the product in the car, or do the equivalent online – leave the demo in the demo file.  Ask some Stage 1 questions.  Find out who the PFA could be.  Seek an Advocate who has tremendous energy for change and is willing to take responsibility for it.  Ask some Stage 2 questions to see if the customer has explored the financial impact of the problem or situation.  And by all means do at least a little research to know business the customer is in.

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