A Radically New Selling Solution For Today's Hyper-Competition

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	• What the Customer Wants You to Know: How Everybody Needs to Think Differently About Sales Ram Charan Portfolio Hardcover, 2007 - 192 pages average customer review:based on 10 reviews view larger image
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highly recommended

Your customer wants strategic value not commodities

I really enjoyed this book on sales. It is a topic with forests of books in print. Many cover the same core principles, while others have found ways of putting swamp gas in print. This is one of those that has something good to say and does it concisely.

We have all heard and experienced the vastly increased competition, the compressed product life cycles, the adoption and dismissal of business strategy fads, and much more. Here Ram Charan introduces his idea about the Value Account Plan and not trying to compete on lower prices and thinner margins.

The idea is to get to know your customer intimately. You have to use everyone in your organization and gather everything anyone knows about your customers. What does their org chart and reporting structure look like? How do they make decisions? Who are the strategic decision makers? What are their key concerns? There is obviously much more to know and the point is to gather it all, put it together and the look at it to see your customer clearly. Where there are gaps, work to fill them in.

Once you really understand your customer, you can match and tailor your resources to provide value in ways that your customer does not yet expect or understand. You can match your expertise and products to help your customers accomplish their most strategic goals and make yourself a partner in their success instead of a purveyor of commodities at the lowest prices.

I think it is a terrific book and approach. But it means organizing your sales effort through the WHOLE company rather than just beating up on the account rep and his or her boss. Are you up for it?

Reviewed by Craig Matteson, Ann Arbor, MI

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A Radically New Selling Solution For Today's Hyper-Competition

Best selling author, Ram Charan, has trained his sights on the selling process in "What the Customer Wants You to Know." A process, according to Charan, that has dates back one hundred years and is in dire need of a makeover.

He begins with historical review of the selling process:
* The early 1900s - supplies were tight, suppliers held the cards, and salesmen were order takers.
* The 40s, 50s, 60s and continuing well into the 70s - the traditional, product oriented sales approach, where the salesperson was a presenter of information and the product was more important than the client.
* The 60s and 70s - the concept of needs-benefit selling developed. Salespeople worked to find client needs, then showed how their products or services filled those needs.
* The 70s until today - consultative selling in which the salesperson conducts a needs analysis, investing time to listen to the potential buyer and asking questions to uncover financial ability to buy as well as primary needs and wants, attitudes and concerns.

But today we have a different world, one in which we have a glut of supplies and suppliers and an Internet which corrects an imbalance of information making access easier and pricing more competitive. There is need for a radical change in the sales process, one that can free the supplier from today's commoditization and low prices.

The radical change Charan proposes and outlines in "What Your Customer Wants You to Know" is centered an intense focus on the prosperity of the customer; what the customer is focused on - accelerating growth and cash flow to fuel growth. Today, the measure of success should be measured by how well the customer is doing.

To accomplish this, Charan details Value Creation Selling, the Value Account Plan, and a Sales Apprenticeship program. Value Creation Selling focuses on what the selling organization must know, the capabilities and tools required, and how success should be tracked to make it effective. The Value Account Plan provides an organizational framework to insure information is communicated consistently and that the value proposition attached to each account is front and center. And the Apprenticeship Program provides a structure for successful implementation. Examples (Mead Westvaco, Anheuser-Busch, General Mills, Thomson Financial, and EDS) of successful adoption of are included.

Charan's plan while radical, leads to differentiation, better pricing, better margins and higher revenue growth. The program builds on what customers want us to know today - a desire to have suppliers help them accomplish their objectives by acting as partners, not as one-time transactors.

"What Your Customer Wants You To Know" is organized around the following eight headings:

* The problem with sales
* Fixing the broken sales process.
* How to become your customer's true partner.
* The Value Proposition Account Plan
* Developing the Value Creation Sales Force.
* Making the sale
* Sustaining the process: Top management's imperative.
* Taking Valuation Creation Selling to the Next level.

Charan's must read "What The Customer Wants You To Know" provides a much needed look at a new selling solution for the hyper-competition most companies are experiencing today. One that requires a new focus - on the customer's accelerating growth and cash flow to fuel growth.

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Yesterday's News

Ram Charan has authored some excellent books - this isn't one of them. It's basically a reminder of something fundamental that should have been undertaken long ago.

The basic message is that instead of focusing on your product and the customer's typical price fixation, get to understand the customer's situation - his problems, goals, and how you and your company can help improve their margins and revenue growth. To achieve this, one also should get to know one's customers' customers.

Follow-up to insure this is taking place is important - Charan suggests doing so in sales review meetings. The bad news, however, is that more and more products have become commodities - thus, price will remain the focus, no matter how much you'd like to do more for the customer.

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How Value Creation Can Transform the Selling Process

In all of his previous books (notably Execution co-authored with Larry Bossidy and then Know-How), Ram Charan focuses his attention on how to achieve and then sustain superior organizational performance. Another earlier work, What the CEO Wants You to Know, is an excellent companion for What the Customer Wants You to Know because it helps those in sales - as well as those who supervise them -- to understand the customer's business more broadly. In fact, the inspiration for the Customer book came from the CEO book. Charan explains in it why traditional sales approaches are unable to satisfy what customers want salespeople to know: How their business works and how they can make it work better. "The heart of the new approach to selling is an intense focus on the prosperity of your customers." Value Creation Selling (VCS) is the foundation of what Charan recommends.

He notes that VCS is "sweepingly different from how most companies sell today in these five ways: "First, you as a seller and your organization devote large amounts of time and energy - much more than you do today - to learning about your customers' businesses in great detail...Second, you use capabilities and tools that you've never used before to understand how your customers do business and how you can help them improve that business...Third, you're going to make it your business to know not only your customers but also your customers' customers...Fourth, you have to recognize that the execution of this new approach will require much longer cycle times to produce an order and generate revenue...Finally, top management in your company will have to reengineer its recognition and reward system to make sure that the organization as a whole is fostering the behaviors that will make the new sales approach effective."

In this volume, Charan examines these and other issues in great detail and with meticulous care. Having briefly identified the "what," he then devotes most of his attention to HOW. For example:

1. How to fix "the broken sales process"
2. How to become a customer's trusted partner
3. How to formulate the "Value Account Plan"
4. How to create a Vale Creation Sales Force
5. How to make the sale
6. How to sustain the VCS process
7. How to take VCS to the next level

Earlier I referred to Charan's somewhat more narrow focus as he explains why traditional sales approaches are unable to satisfy what customers want salespeople to know. That's true but it should be noted that Charan views the VCS process - if properly formulated and then effectively implemented - should directly or at least directly involve everyone within the given enterprise. In fact, because the VCS process is information-driven, he strongly recommends that external sources also be utilized to obtain the information needed about each customer and its business. Those sources include online and electronic business media as well as vendors and research analysts within the given marketplace. Thorough as always, Charan even suggests what kinds of questions should be asked to determine specific information needs and objectives.

Organic growth is at the top of every company's agenda. Many growth strategies do not get the right mileage because the sales function remains in the previous age. This book proposes value creation selling as a way to differentiate any business from its competitors. It enables the sales forces to break out from what Charan considers "commoditization hell." Here's a key point: When a customer sees that the selling company is creating value on a consistent basis better than anyone else's offering, the sales force has a better chance to sustain more profitable pricing.

Near the conclusion of the book he observes: "Transforming a sales force from transactional selling to one that creates value for the customer is a long journey...Every part of the company has to put the customer first...Virtually every company will have among its customers some who are progressive and fully understand the value of collaborating with their suppliers to the mutual benefit of both. Start there, and don't turn back...Above all, value creation selling will spur your company to come up with new ideas and innovations that will continually differentiate it in the highly competitive business environment of the twenty-first century. It is the pathway to a prosperous future."

Charan then offers an appendix that can help each reader to diagnose the state of value creation selling in her or his own company, once the VCS process is underway. He recommends that this self-audit of 15 key components be evaluated using a scale of 1 to 10 (from "definitely not" to "definitely yes") and that it be completed four times a year. This same self-audit can also be used to assess the company in relation to its competition.

After I read this book and then began to organize my thoughts about it before composing this review, it occurred to me that everything Charan recommends is also relevant to business development initiatives because prospects as well as current customers favor those who have obviously made a great effort to know how their business works and how they can make it work better. Granted, current customers are generally more inclined to share information than are prospective customers. Nonetheless, in my opinion, those in sales who do their homework gain a decisive competitive advantage because of their "an intense focus on the [prospect's] prosperity."

If you share my high regard for this book, I urge you to check out the aforementioned What the CEO Wants You to Know, Execution and Know-How as well as If Only We Knew What We Know co-authored by Carla O'Dell and C. Jackson Grayson, Patrick Lencioni's Silos, Politics and Turf Wars, and Creating New Wealth from IP Assets co-authored by Robert Shearer and other members of the National Knowledge & Intellectual Property Management Taskforce.

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