What to Whom? And to What End?

As part of the 2024 update of Disruptive Selling I have developed a model for commercial best practices that brings together 65 elements that, if combined correctly, should result in commercial excellence. Each of them can be the beginning of a project to improve the way your business markets, sells and organises customer success. It is however - to use the terminology of my good friend ?? Rik Doclo ?? - not a Start-Anywhere, Exit-Anywhere Model.?

How tempting it may be to get started on a particular problem, any improvement of a commercial operating model should be preceded by a check-in on its congruence with a consistent overall strategy.?

Where frontrunner B2B companies have a solid strategy framework in place, many more traditional companies do not pay sufficient attention to strategy formulation and strategy application.?

To address this I tend to start any project with discussing five questions.?

Some are difficult to answer and some are really hard. None of them, however, are easy.?

Let’s start by listing each of them:?

1. What to sell??
2. To whom?
3. Through which Channels??
4. At what price?
5. To what end?

What to sell? ?

This is an excellent example of a really hard question to answer. It looks simple because at first sight the answer is your product or service.?

But the real answer lies in exactly where and how you will make your prospective customer’s lives and jobs easier, faster, cheaper or nicer and to formulate it in a way that triggers interest and attention in your target audiences’ minds.?

To put you on track I would like to quote Theodore Levitt: “people don’t want to buy a quarter-inch drill, they want a quarter-inch hole”.?

This is one the most essential elements of good commercial strategy. It will help you to create awareness with the right type of customers, it will allow you to develop an articulated market position and it will help you to develop storylines, content and customer journeys that make sense and will make you stand out.?

Carefully articulating your value proposition is the number one step that will influence all other components of your commercial strategy, so you should not hesitate to spend ample time on it and to regularly revisit the outcomes to meet evolving market trends and market needs.

To whom??

The second question brings us to Segmentation, Targeting and Positioning (STP) and sets us on the way of defining your ICP, your Ideal Client Profile.

The concepts and techniques of STP and of defining an ICP are fairly easy to master but essential to direct resources into the right direction.?

Going too large in targeting is costly because it will require a lot of time and effort to qualify leads and to get proposals out to meet very different customer ambitions. It will also prevent you from developing end-to-end processes for focussed sales, operations and customer care that will yield consistent revenue.?

Companies with a clear customer focus are systematically more successful than companies with no or weaker customer focus. We all remember the misery of the large automobile corporations that tried to make cars for every possible type of customer and we all see the success of car makers that focus on specific target audiences.?

GM's attempt to be everything to everyone with a plethora of brands culminated in a government bailout and bankruptcy restructuring in 2009. Tesla is a prime example of a company that has successfully focused on a specific customer segment and reaped significant rewards.

Through which Channels??

In the 1980s of the previous century there was only one dominant sales channel, the sales rep. Sales were either direct or via agents or distributors. Each neatly operating in their protected silo with clear written and unwritten rules to keep channel choices, customer access and distribution of value simple and separated.?

Today, customers and competitors operate a wide range of channels from buying direct, to buying from platforms, buying from agents, from exclusive and non exclusive distributors, through influencers, through procurement associations, through buyer groups, via social channels.?

Customers also communicate via different channels. McKinsey’s interesting study on Next-gen B2B sales mentions a remarkable growth of distinct channels that customers use during their decision journeys. From 5 channels (Email, In-person, Phone, Website and Procurement Portal) in 2016 to over 10 channels in 2021 with an increasing importance of apps, video, chat and procurement portals. In 2024 we can add AI and AI based applications to this list.?

Making channel choices requires balancing the complexity of managing seamless customer experience across all channels versus the simplicity of a single sales channel.?

Companies that manage omni-channel strategy well, report an EBIT growth of 13.5% versus a 1,8% EBIT growth for non-digital and omni-channel enabled peers.?

At what Price?

Pricing is an aspect that is addressed far too little in most B2B companies. Although it is on the table at commercial excellence frontrunners, pricing in many other companies is limited to applying discounts to win the deal.

As Olivier Dallemagne and Dominik Endler, PhD in their April 2024 article on Price Management on LinkedIn and Laurent-David Hostyn in his interesting talk at the We Are Sales conference of May 24, demonstrate, pricing is a powerful instrument that deserves careful reflection, development of a pricing framework and a link to strategic and tactical ambitions.?

Pricing is about linking price to value. But it is also about maximising income by asking a price that maximises the value conversion and applying concepts to manage the impact of discounts, early bird packages and rewarding the customer assistance in obtaining beta-customers, upfront cash, lifetime value commitments and product advocacy targets.?

Pricing should be on the table as part of the first things you address when moving into commercial excellence and it is closely linked to the other 5 components of commercial strategy as described in this article.?

A structured approach to pricing can bring a rapidly achievable EBIT increase of 2 to 4% and over time Smart Pricing Management may result in 8%+ EBIT difference versus companies that treat pricing intuitively and discretionary.?

To what End?

The last question is the hardest to answer. Again it seems easy but in reality is quite difficult and challenging to answer.?

Again life was easier in the past. The answer to what end would be “Growth”, “Market Dominance”, “Maximising Profits and Shareholder Returns”.?

Today the answers are much more complex. Growth at all cost, Market Dominance and focus on making as much money as possible are even regarded with a certain disdain.?

Planet, People and Profit are increasingly part of the Mission and Purpose statement and often the Planet and People part are the real End Goals where profit becomes a means rather than a goal.?

The challenge to answer the "To What End"-question is even more challenging for start-ups and scale-ups I had an interesting conversation on this with Koen Blanquart who very correctly observed that the strategy in these companies is often governed by the First-to-Market or First-to-Money dilemma.

As I work a lot with SME where the manager is often also the owner, answers to this question can be surprising and can have a huge impact on any other element of commercial strategy and execution. “Building a generational business” is a possibility. Increasingly the answer is however “Grow and prepare to sell so that I can move on to other things in life” or “Taking the stress out of chasing my own tail in serving the wrong customers for the wrong reasons”.?

Companies may deliberately accept lower growth rates and lower profits to allow operation in a lower stress and less competitive environment. This opens an interesting discussion on Degrowth that may trigger alarms with many traditional minded business leaders, who associate lack of growth with decline and oblivion. Personally I think the answer to this one depends on the industry, the competitive landscape, the targeted customers and the life choices of the people concerned. I have had the pleasure to work with some very successful businesses that do not put profit and growth first, but end up making a lot of profit and achieving surprising rates of growth by consistently focussing on other purposeful goals.??

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I hope that sharing these five components of the Disruptive Selling Strategy First Framework, will help you to develop, articulate and apply a great commercial strategy for your business.?

I am looking forward to your views on these five points and on the way that you approach commercial strategy.?

Stephane Maes Stephanie Porteman Magali Vercammen Deva Rangarajan Bert Paesbrugghe Rik Segers

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