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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
"The sales book of the decade" --Selling Power magazine Value Capture Selling is the first book to directly address one of the most destructive shortcomings in sales organizations today. Author JC Larreche's approach is so innovative that Selling Power magazine named it "The sales book of the decade." For years, sales professionals have focused on creating value for their customers--the first phase in selling. However, in today's fast-moving world of business, that is just not enough. Under increased financial pressure, businesses today are being pushed to move to an emphasis on the second phase of selling: the capture of corporate value. However, as all-too-many business leaders are finding out to their great dismay, sales professionals have not been trained in the techniques for the capture of corporate value, and they are at the mercy of very well-trained and tough professional buyers. Value Capture Selling is the first book to address this gap. It is specifically designed to provide sales professionals--both veteran and new alike--with a complete roadmap for making the transition from value selling to value-capture selling, including: * Why the creation of corporate value--short, medium, and long term--is essential for the firm and its internal and external partners * How to master the key drivers of corporate value: profitability, market share, and customer satisfaction * How to prepare for value capture * How to frame strategies and tactics for value capture * How to close deals for higher corporate value capture Value-capture selling is the current challenge for corporations and sales professionals everywhere--making the transition from a revenue objective to a focus on corporate value. This requires a fundamental shift from a strong belief that bigger is better to a new creed that richer is better. It is what JC Larreche, professor emeritus at INSEAD and an expert on sustainable value creation, calls the 3rd Sales Transformation. In a future marked by escalating financial pressures, the significance of value capture will only grow, and in Value Capture Selling, JC Larreche provides sales professionals everywhere with the tools they need to become masters at this new art! Praise for Value Capture Selling: "Most sales forces focus only on revenue, not value capture. Larreche's book can help you make the necessary transition. If you are in Sales, read it because the data revolution is increasing scrutiny from Finance and others in your firm about how selling efforts build or destroy enterprise value. And if you are a C-Suite executive, read it carefully, because selling affects core elements of value creation." --Frank Cespedes, Harvard Business School, author of Aligning Strategy and Sales and Sales Management That Works "Value Capture Selling is a very compelling and complete work that illustrates well the challenges of the transition from product value to corporate value--both for the customer and for the supplier. JC Larreche lays out a powerful framework for any sales professional anywhere to win in this new world of selling!" --Laurent Beraza, Director - UK, Germany, France - Microsoft Solutions Support Sales "Value Capture Selling gives us the powerful insights required to capture more value for our company while keeping the customer at the center--right where they belong." --Anna Campagna, Sr. Director Global Sales, HEINEKEN
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Seitenzahl: 387
Veröffentlichungsjahr: 2023
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Table of Contents
COVER
TABLE OF CONTENTS
PRAISE FOR ACADEMICS, AUTHORS AND PRACTITIONERS
TITLE PAGE
COPYRIGHT
PREFACE
CHAPTER 1: THE ADVENT OF VALUE CAPTURE
SELLING AS PUSH
THE THREE SALES TRANSFORMATIONS
HOP ON THE BUS OF CHANGE AND BECOME A VALUE‐CAPTURE CHAMPION
THE FIRST STEP ON THE BUS OF CHANGE
THE STRUCTURE OF THE BOOK
NOTES
FURTHER SOURCES
CHAPTER 2: THE CREATION OF CUSTOMER VALUE
FROM PRODUCT SELLING TO CUSTOMER VALUE
THE 1ST SALES TRANSFORMATION
THE 2ND SALES TRANSFORMATION
CUSTOMER CENTRICITY HELPS WIN THE 2ND SALES TRANSFORMATION
BUT THE CREATION OF CUSTOMER VALUE IS ONLY ONE SIDE OF THE STORY
NOTES
FURTHER SOURCES
CHAPTER 3: THE CREATION OF CORPORATE VALUE
GENERAL ELECTRIC'S BIG SHIFT
THE SOURCES OF VALUE DESTRUCTION
CHANGING THE YARDSTICK FOR CORPORATE SUCCESS
BUSINESS TRANSFORMATION FOR CORPORATE‐VALUE CREATION
THE DRIVERS OF CORPORATE‐VALUE CREATION
NOTES
FURTHER SOURCES
CHAPTER 4: MASTERING MULTIPLE OBJECTIVES
MOVING FROM THE FIRST SELLING PHASE TO THE SECOND SELLING PHASE
REVENUE MANAGEMENT SYSTEMS AND THE VALUE‐CAPTURE CULTURE
NEGOTIATING ACCORDING TO INCENTIVES
HARNESSING THE THREE DRIVERS OF CORPORATE‐VALUE CREATION
UPGRADING THE ROLE OF SALES PROS
NOTES
CHAPTER 5: STEERING CUSTOMER SATISFACTION
CUSTOMER SATISFACTION AND CORPORATE VALUE
MEASURING CUSTOMER SATISFACTION
NOTES
FURTHER SOURCES
CHAPTER 6: THE LEADERSHIP ATTITUDE
WHY SHOULD YOU BE A LEADER?
WHAT IS LEADERSHIP?
YOUR PERSONAL GROWTH AS A LEADER
EGO AND LEADERSHIP
YOUR CORPORATE‐VALUE CAPTURE MISSION
NOTES
FURTHER SOURCES
CHAPTER 7: PREPARATION FOR VALUE CAPTURE
THE ART OF PREPARATION
THE NEGOTIATION SETTING
PRIMARY PREPARATION
DO YOU KNOW YOUR BATNA?
THE BATNA FRONTIER FOR VALUE CAPTURE
NOTES
FURTHER SOURCES
CHAPTER 8: VALUE‐CAPTURE STRATEGY
THE BUYER'S BATNA
DO YOU KNOW ZOPA?
VISUALIZING YOUR ZOPA FOR VALUE CAPTURE
ANTICIPATING THE BUYER'S BATNA FRONTIER
EXPLORING THE ZOPA SPACE
SHADOW COACHING
NOTES
CHAPTER 9: VALUE‐CAPTURE TACTICS
THE NEGOTIATION SETTING
THE NEGOTIATION PATHWAY
ACTIVE LISTENING
BODY LANGUAGE
PUTTING ALL THIS INTO ACTION
NOTES
CHAPTER 10: VALUE‐CAPTURE CLOSURE
ALWAYS BE CLOSING
CLOSING THE TWO SELLING PHASES
BRIDGING THE GAP
THE CLOSURE MAP
MANAGING RISK AT CLOSURE
TOM CLOSING
MOVING ON
NOTES
FURTHER SOURCE
CHAPTER 11: WIN AND LEARN, LEARN TO WIN
WIN AND LEARN
CELEBRATING WINS
LEARNING TO WIN
WINNING AND LEARNING TRAPS
MAKE YOURSELF LUCKY
NOTES
FURTHER SOURCES
EPILOGUE
THANK YOU, DEAR READER
ACKNOWLEDGEMENTS
ABOUT THE AUTHOR
INDEX
END USER LICENSE AGREEMENT
List of Tables
Chapter 2
Table 2.1 Example of market segmentation guidelines for sales.
Chapter 3
Table 3.1 General Electric: revenues vs corporate value ($ billions).
Table 3.2 Tesla vs GM: revenues ($ billions).
Table 3.3 Tesla vs GM : market capitalization ($ billions).
Chapter 4
Table 4.1 Optimizing a revenue objective.
Table 4.2 Optimizing a profitability objective.
Table 4.3 Example of a corporate‐value incentive scheme.
Table 4.4 Example of bonus alignment with corporate‐value outcomes.
Chapter 6
Table 6.1 Mental agility for value capture.
Chapter 7
Table 7.1 Commercial guidelines for the E150 model.
Table 7.2 Tom's preparation for a 10,000 units contract ($).
Chapter 8
Table 8.1 Tom's target considering Sue's expected BATNA for 10,000 units ($)...
Chapter 9
Table 9.1 Diana's logic for her opening offer ($).
Table 9.2 Tom and Sue's negotiation summary.
Chapter 10
Table 10.1 Ann's probabilistic choices ($).
Table 10.2 Paul's probabilistic choices ($).
Table 10.3 Tom's closure options ($).
List of Illustrations
Chapter 1
Figure 1.1 The central role of sales in corporate‐value creation.
Chapter 2
Figure 2.1 The customer‐value universe.
Chapter 7
Figure 7.1 The home seller's BATNA.
Figure 7.2 The sales pro's BATNA.
Figure 7.3 The sales pro's BATNA frontier.
Chapter 8
Figure 8.1 The home buyer's BATNA.
Figure 8.2 The home negotiation ZOPA.
Figure 8.3 The sales negotiation ZOPA.
Figure 8.4 The three positive outcomes.
Figure 8.5 The buyer's BATNA frontier.
Figure 8.6 The space for agreement.
Figure 8.7 Corporate value and the estimated ZOPA.
Chapter 9
Figure 9.1 The negotiation pathway.
Chapter 10
Figure 10.1 Are you in the BLUE or RED space?
Figure 10.2 The closure map.
Figure 10.3 The negotiation posture.
Chapter 11
Figure 11.1 Buyer's BATNA, expected vs. real.
Figure 11.2 Tom's dashboard for the MARINTEK agreement.
Guide
Cover Page
Praise For Academics, Authors and Practitioners
Title Page
Copyright
Preface
Table of Contents
Begin Reading
Epilogue
Thank You, Dear Reader
Acknowledgements
About the Author
Index
Wiley End User License Agreement
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PRAISE FOR ACADEMICS, AUTHORS AND PRACTITIONERS
Value Capture Selling is a very compelling and complete work that illustrates well the challenges of the transition from product value to corporate value—both for the customer and for the supplier. JC Larreche lays out a powerful framework for any sales professional anywhere to win in this new world of selling!
Laurent Beraza, Director – UK, Germany, France – Microsoft Solutions Support Sales
I know from years of personal experience that sales organizations, sales leaders, and salespeople are always looking for something new to gain a competitive edge and win. In this book, JC Larreche provides a compelling and powerful new approach for creating—and capturing—corporate value.
Jeb Blount, CEO of Sales Gravy and author of Sales EQ
How do we transform the sales function by keeping the customer at the center while creating value for our company? It's a big question that finds powerfully insightful answers in this new book, Value Capture Selling. Here, sales and marketing expert Larreche takes us on a reflective and inspiring journey—a journey that is as pleasant and inviting as a walk in the park on a beautiful spring day.
Anna Campagna, Sr. Director Global Sales, HEINEKEN
Most sales forces focus only on revenue, not value capture. JC Larreche's book can help you make the necessary transition. If you are in Sales, read it because the data revolution is increasing scrutiny from Finance and others in your firm about how selling efforts build or destroy enterprise value. And if you are a C‐Suite executive, read it carefully, because selling affects core elements of value creation. Strategy, growth, or attempts to increase the stock price without attention to Larreche's observations about this fact are limited or, worse, going down the wrong path.
Frank Cespedes, Harvard Business School, author of Aligning Strategy and Sales and Sales Management That Works
There has been a major shift in sales objectives from delivering revenues to the creation of corporate value. Value Capture Selling is the first book to embrace this shift, and I am thrilled that JC Larreche has written this modern and innovative guide to sales. I fully agree with this approach, and I am certain any sales pro will benefit by applying the valuable lessons within.
Philippe Chiappinelli, VP Sales & Partners Europe, Etiya
With Value Capture Selling, JC Larreche has created a powerful offer for readers. This book doesn't contain only theory, but it is also an interactive book that asks you to think, “What would I have done in this same situation?” By the end, you will be taken through a real sales negotiation experience, putting theory into practice and elevating your negotiation skills to the next level, where you will be ready to create incredible new success stories!
Enrico D'Aiuto, Senior Vice President Head of Global Sales & Marketing, Biotest AG
Value Capture Selling is a highly practical and forward‐looking book that is a must‐read for sales professionals and organizations worldwide. Larreche's book challenges traditional sales techniques and provides new approaches for achieving more with less.
Dr. Haisen Ding, Founder and CEO, World Executive Group and World Brand Lab
I am thrilled to endorse Value Capture Selling, a comprehensive and insightful guide that redefines the art of successful business relationships in today's competitive landscape. The book skillfully highlights the importance of commercial roles while providing a clear roadmap for creating value for customers and partners alike. It's an essential read for every sales professional looking to foster meaningful, collaborative partnerships—today and long into the future.
Dominique Ferrier, Global Accounts Director, FMCG co.
Larreche brings a wealth of expertise in sales and marketing to this insightful book. By focusing on the importance of value creation for both the customer and the corporation, this book revolutionizes the sales approach. Value Capture Selling offers profound insights and actionable advice that will equip you with the tools and strategies needed to drive sales growth, delight your clients, and thrive in the dynamic world of sales. This book is a must‐read for anyone seeking to master the art of selling and create lasting customer relationships.
Dr. Marshall Goldsmith, Thinkers50 #1 Executive Coach and New York Times bestselling author of The Earned Life, Triggers, and What Got You Here Won’t Get You There
Value Capture Selling shows how to navigate the ever‐changing sales landscape with greater insight into the model of value selling that's traditionally focused on customer centricity. The author provides a novel approach that leads salespeople to a more effective negotiation position that satisfies customer needs while creating corporate value for your business. A must‐read for anyone who wants to win more sales and achieve higher profits.
Gerhard Gschwandtner, Founder and Publisher, Selling Power
Selling with the emphasis on corporate value requires more business acumen and a stronger leadership attitude from sales professionals—that is, an upgrading of their function. In Value Capture Selling, JC Larreche provides sales professionals in every industry the knowledge they need to excel in this exciting new world. I highly recommend this book!
Omar Haddadeen, Inside Sales Analyst, BOMBARDIER
Larreche’s timely book, Value Capture Selling, offers a profound, necessary understanding of the third sales transformation and related strategies to improve sales performance by focusing on corporate value creation. From leveraging the drivers of corporate‐value creation to applying good value‐capture tactics and closing, the reader receives a must‐have roadmap and toolkit. I particularly appreciated the final section, Make Yourself Lucky, because if sales is a struggle for everyone, it is less so for those who understand it, and know how to enjoy, learn, perform, and be lucky as rightfully recognized by Larreche!
Joël Le Bon, Professor of Marketing & Sales, Johns Hopkins University, Carey Business School
This book provides the key for sales pros in any industry, anywhere in the world, to succeed by mastering the art and science of corporate value creation. It's an essential tool for sales success in today's fast‐changing markets.
Mark Levy, The Big Sexy Idea Guy
Creating value for your company and your clients is the true definition of a win‐win deal. However, many forget the corporate value part of that equation. Value Capture Selling helps focus your sellers not just on selling well, but on how to sell in ways that positively impact the health and growth of your organization. A must read!
Gráinne Maycock, Chief Revenue Officer, Acolad Group
Value Capture Selling is a great book containing many good answers for all executives seeing corporate value maximization as the next must‐win‐battle. This requires a total alignment around the strategy and accordingly, a full transformation of the organization, starting from sales.
Tolga Pekel, Group Vice President Corporate Strategy, Bekaert
This book provides sales professionals with powerful new tools to help them understand and implement value‐capture selling, thereby ensuring that they contribute to the corporate value of their firm. A definite must‐read for every sales professional!
Dominique Rouzies, Professor HEC Paris and Academic Dean, BMI Executive Institute
Value Capture Selling is an excellent reference for any sales professional who would like to improve their ability to create and capture value for their firm. I absolutely love the short but sweet chapter on leadership—it leaves a lasting impression! The ever‐more‐relevant concepts of BATNA and ZOPA are brilliantly demonstrated, and the emphasis on preparation is rightly hammered home! I especially loved following the story of Tom the sales pro—it felt like listening to a story of my colleague!
Manish Kumar Singh, Global Head of Marketing, Customer Services & Solutions, IGT Systems, Philips Healthcare
I recommend Value Capture Selling to any sales leader or professional who wishes to better understand how the science of sales has evolved in these increasingly complex and dynamic times, especially within the corporate environment. In this book, JC Larreche provides an insightful strategic perspective on the dichotomy between marketing and sales, while focusing on the essential skills and competencies needed by the new generation of sales professionals.
Giulia Stefani, Director of Global Sales Training & Education, SH&A, Medtronic plc
Just as Larreche's book, The Momentum Effect, inspired me to change my approach to doing business, his latest book—Value Capture Selling—offers a powerful approach to business and sales transformation. The book provides readers with an immensely practical view of how the work of sales pros is changing and what needs to be done to continue to be successful in today's fast‐ changing business environment.
Fabio Villanova, Sr. Director Commercial Europe, Thermo Fisher Scientific
Reading JC Larreche's latest book is like taking a walk with him and learning about a new universe that expands beyond the traditional definition of a ‘salesperson.’ It's a place where you will have an unlimited opportunity to innovate independently—regardless of what kind of business you are in. This is one book I will always keep on my desk!
Alessandra Vizza, Business Director EMEA, NSA & India, Corning Reactor Technologies
Professor JC Larreche has firmly captured the spirit of how today's selling model is shifting to corporate value creation. In today's digital e‐commerce world, clients look to sales professionals to help them drive market share, profitability and client satisfaction when it comes to a more complex sale. As Revenue Enablement practitioners, it is upon us to ensure our programs are driven towards capturing value at the point of sale, which helps make our reps trusted advisors to our clients.
Russ Walker, SVP Revenue Enablement, Datasite
In Value Capture Selling, Larreche has given sales pros the keys to a more successful, influential and fulfilling occupation—this is truly a redefinition of the modern sales role. If sellers understand and follow the principles in this book, they will show greater leadership and confidence over their role in business performance. It's not an easy road. Doing Value Capture Selling effectively requires rethinking your depth of business acumen, the way you engage with customers and your market, and the emotional energy you bring to the job. Yet, it makes you as a sales pro an indispensable part of what must take place for the organization to create both short and long‐term value.
Spencer Wixon, President and CEO, The Brooks Group
VALUE CAPTURE SELLING
HOW TO WIN THE 3RD SALES TRANSFORMATION
JC LARRECHE
This edition first published 2024
Jean‐Claude Larreche © 2024
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The right of Jean‐Claude Larreche to be identified as the author of this work has been asserted in accordance with law.
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PREFACE
I have a secret to confess to you...
It took me a long time to be genuinely interested in the world of sales.
Let me explain.
My early background was in computers—first, hardware and then software. I was able to write computer code in a dozen languages. But at some point, the field of marketing caught my eye, and I made the journey to Stanford University in California to do a doctorate in the School of Business. I didn't forget my first love, though, and I continued to pursue my interest in computer science there. I was fortunate to take several classes from John McCarthy, the father of artificial intelligence.
After these great years at Stanford, I started my career as a marketing professor at INSEAD, the renowned international business school in France, where I had earlier obtained an MBA. Not long after that, I was brought in as a consultant by marketing departments, executive committees, and CEOs at a number of multinational corporations.
One of the things I noticed during these engagements was that consistently, the first step taken by a newly appointed marketing director was to ask for a bigger budget. This was necessary “to be more effective,” they would say. I wondered why the first reaction of these new marketing directors was not instead to try to be resourceful and find ways to do more with less.
I felt there had to be a better way.
Armed with my background in both computer science and marketing, and working with my friend and associate, Hubert Gatignon, I developed a learning simulator called MARKSTRAT (short for marketing strategy). With the MARKSTRAT simulator, I wanted to help students and professionals be more effective at creating value in competitive markets, while providing them with a risk‐free platform to test their decisions on concepts such as product portfolios, market segmentation, and brand positioning.
The more I worked in the field of marketing, the more I was convinced that customer centricity was the best way to develop sustainable corporate performance. While I was certain this was the case, it was hard to prove because so many factors influence corporate performance. Short‐term successes may be followed by long‐term failures, or vice versa. I therefore decided to investigate the performance of the 1,000 largest firms quoted on the New York Stock Exchange over a 20‐year period.
The key result of my research was a real eye‐opener: the corporations that spent less on marketing (as a percentage of revenues) were the ones that achieved the highest level of corporate‐value creation over this very long period. This sounded amazing to me, but it was the actual demonstration that “achieving more with less” was not just a vision but was being practised by some of the world's leading corporations—about 20 percent of the sample in my research.
Those organizations created more value because they did not need to push sales of their products and services so hard—they were already better targeted to their clients' real needs. And as a result, they enjoyed easier client acquisition, higher customer loyalty and retention, and stronger engagement, including word of mouth and unsolicited advocacy—leading to natural and inexpensive organic growth.
I called this phenomenon the Momentum Effect, and the book I wrote about it provided readers with a proven approach for developing sustainable corporate‐value growth through customer centricity.
That was all well and good for marketing organizations, but how and why did I get so excited about sales?
Over all these years as an academic and consultant in the areas of marketing and strategy, I often met with sales managers and sales professionals. More specifically, I designed and delivered executive training programmes for multinational corporations in a variety of industries in North America, Europe, and Asia. These corporations included such household names as General Electric, Reckitt, Novartis, Exxon Chemicals, Oracle, Heineken, and many others.
During these training programmes, I was frequently astounded by the leadership qualities these sales executives possessed because they often far outweighed those of their marketing colleagues. No offence to any marketers out there who have other great qualities, but this observation tormented me until I developed a few insights over time.
My conclusion was this: the conversations that sales professionals had with their clients taught them vital and practical lessons about human psychology. And as they progressed up the corporate ladder—accepting greater managerial responsibilities—they were forced to further fine‐tune their tenacity, insights, and leadership. Their skills were forged in a context where, in most cases, only the truly talented survive in the long term.
However, it also became apparent that despite their power and influence, sales pros had budgets that were generally much smaller than those of their marketing counterparts. Yet this lack of financial resources was in fact an advantage. It encouraged them to tap into their own inner resources, develop street smarts, and find new ways to reach their sales targets. Necessity is the mother of invention, as they say, and sales professionals are often forced to invent new ways to succeed with limited cash.
I loved having discussions with the top‐of‐the‐top sales professionals—those individuals who collected armfuls of awards, enjoyed tremendous standards of living, thanks to their ample bonuses, hated having to fill out the admin forms, complained openly about bureaucracy and red tape, and loathed wasting their time watching management presentations.
What surprised me most was their consistent refusal to be promoted. But it all made sense when they explained it to me clearly from their perspective: “Why accept a reduced income and the pains of managing others in exchange for the stability and comfort of an office job?” These high achievers had strong personalities, and I was happy to observe how they could (most of the time) get away with their personal idiosyncrasies because management realized how valuable they were for the company.
I also enjoyed meeting the sales professionals who were willing to share with me their challenges and anxieties. At the top of the list was the financial uncertainty when the variable was an important component of the total outcome, linked to the need to make payments on a hefty mortgage and/or fund their children's education. Another frequent concern was a feeling that the task of selling was becoming more difficult over time—a steadily increasing number of demanding clients, more templates to fill out, greater acceleration of change, less internal support and cooperation, and less time to reflect and recharge.
I became fascinated by the world of sales because of these encounters where I could observe the everyday reality of the sales professional's life on the front line. It was in these discussions with sales pros who were, on the one side, facing clients, and, on the other, interacting with the internal resources of the company, that I could really observe the ultimate pains and gains of the level of customer centricity I had advocated for so long.
More recently, as I continued to interact with global corporations, I began to observe an interesting phenomenon emerging within them: the increasing recognition of sales as a strategic function. In some cases, this occurred when the heads of sales at some of the most progressive of these organizations were elevated to the executive committee, such as was the case at Hubspot, Microsoft, or Dell.
At the same time, the pressure increased in many firms to focus on the creation of corporate value. While the front end of the selling process, customer‐value creation, will always remain crucial, this pressure gives more importance and urgency to value‐capture selling, where the sales pros have to ensure that they contribute to the corporate value of their firm. This is the subject of this book and where I have built on my personal expertise in marketing and strategy to bring additional power to the existing skills of sales professionals.
Long story short, I am now much more than just interested in sales, I am a committed advocate. And I wrote this book to provide you, today's sales professional, with a new set of powerful tools to help you achieve even greater levels of personal success at value‐capture selling, along with the success of your business.
JC Larreche
CHAPTER 1THE ADVENT OF VALUE CAPTURE
I'll never forget my first meeting with Tom Werner.
Tom was a sales pro who worked for ELTRON, an electronics equipment firm selling to businesses in a variety of sectors. Before that, he had worked for a well‐known manufacturer of soft drinks. He was 41 years old and an accomplished salesperson who had accumulated numerous sales awards and acquired and served hundreds of clients over the long course of his career in different industries. Tom had been with his current company for more than eight years—he was very loyal, and he loved his job and his clients. So much so that he repeatedly refused promotions to the position of district manager. He made a lot of money for his company, and he knew it.
Everything was perfect in Tom's world. That is, until he and the other sales pros in the organization were told by management that there was going to be a new emphasis on “corporate‐value creation,” and that the sales‐incentive system would be changed to reflect this.
Tom had no financial skills whatsoever, and he was understandably anxious about the new emphasis on corporate‐value creation and how this unknown factor might negatively affect his compensation. He and his wife Lola—a financial analyst for a major bank—had one kid in college and another two years away. Tom did not usually lack self‐confidence. He knew that he had consistently been a top performer but wondered if he would be able to remain at the top and maintain his income, of which traditional sales incentives were an important component. Tom didn't know what he didn't know.
But Tom wasn't alone—other sales pros I have met wondered how they would be affected by their companies' shift to corporate‐value creation. But not everyone saw it as a potential negative.
Maggie Murphy worked for the same soft drinks company that Tom used to work for—selling to key accounts and other retail outlets. At 32 years old, she was younger than Tom, and a college graduate with a degree in business. She chose a career in sales while many of her friends aspired to management positions. Maggie absolutely loved selling and the opportunity it provided to interact with a variety of clients in different organizations. She had done it for eight years and she was with her second employer.
The new CEO of Maggie's company announced a new strategy with top priorities on customer centricity and corporate‐value creation. This new strategy involved a different emphasis in the sales process that the new CEO called revenue management, and which involved more attention to financial issues. While some of her colleagues found the changes difficult and threatening, Maggie enjoyed the opportunity to have new challenges in her work and to potentially benefit from her college studies.
Her husband, Mark, a computer engineer, whom she met at college, shared her enthusiasm. Maggie expected that she would be able to better demonstrate her capabilities in this new environment, providing a welcome boost to her career.
These two contrasting stories of Tom and Maggie illustrate what I call the 3rd sales transformation, which stems from the increased emphasis companies place on corporate‐value creation. This transformation is happening right now, globally, and it's beginning to separate the winners from the losers.
The sales function indeed faces major challenges that in many companies have already resulted—and will continue to result—in a reduction in the number of sales professionals and an upgrade of the role of those who win their way through. In 2011, Selling Power magazine predicted that by 2020, the number of salespeople in the United States would plummet from 18 million to less than 3 million. And while I'm sure many sales pros rolled their eyes when they heard of Selling Power's prediction, according to Statista, as of 2020, there were about 4.2 million employed salespeople in the United States.
So, what's going on here?
The most obvious and talked about challenge is digitalization of many sales tasks—replacing some and enhancing others. While most of today's largest corporations have been in a frenzy to digitally transform themselves, many of the changes made have not yet had a significant impact on their sales organizations. A study conducted by management consulting firm Roland Berger, in partnership with Google, revealed that, “although 60 percent of survey respondents are aware of the importance of a digital sales channel for their future business success, only 42 percent have a strategy in place to expand their digital footprint, while 33 percent don't even offer customers the option of ordering products online.”
This situation must change, and sales professionals can expect their familiar role to be disrupted as organizations eventually race to catch up with the competition on the digitalization front. Many sales pros have already found themselves in this uncomfortable place.
But there have been other challenges for sales pros. The COVID‐19 pandemic, which began its global spread in late 2019 and dramatically impacted the world for several years, led to different work models for both customers and sellers. The usual face‐to‐face meetings, lunches, and golf outings where sales pros built strong relationships with their customers were drastically reduced almost overnight, with Zoom and other virtual meetings taking their place. Businesses were closed, business systems disrupted, employees laid off, and incomes reduced or zeroed out altogether. Sales professionals had to find new ways to communicate and build connections and trust with their customers. Some did and some didn't.
My aim in writing this book is to give you the ammunition you need to be not just a survivor in the aftermath of this 3rd sales transformation, but also a winner—upgrading your role in your company in the process. But what is this 3rd sales transformation? I'll give you the answer to that question after we take a brief look at how we got here in the first place.
SELLING AS PUSH
When management became a recognized profession—with business books filled with advice to managers, and business schools training new generations of leaders—selling your products and services directly to prospective customers was described as the “push” element of marketing, while drawing prospective customers to your products and services through communications was described as the “pull” element of marketing.
At its most basic, the mission of sales is to convince a prospect to buy a product or service. This has always been true and will certainly always remain true. What has changed significantly over time is the sophistication of the approach used to reach that goal.
The initial emphasis of selling was naturally on describing the key advantages of a product. In a competitive situation, this meant emphasizing the different and superior features of one's product compared to alternatives. So, if you were a car manufacturer, you might create advertisements that tout your model's safety record, or if you leased copiers to businesses, your salespeople might emphasize the fact that your products go longer without breakdowns requiring service and leading to reduced efficiency.
Superior and differentiated features such as these were often described as the product's competitive advantage or as the product's unique selling proposition (USP), a concept originally invented in advertising. This USP was promoted by sales pros to show the superiority of the product and to obtain the sale without compromising the price. A price reduction was kept as the last resort to convince a hesitant buyer.
This approach was very effective then and is still practiced today, especially in situations of limited competition or when buyers are nonprofessional or naïve. In this approach, the objective of selling is to achieve a successful transaction, and the connection with a specific client comprises a succession of transactions. However, as the world became more competitive and professional buyers more sophisticated, new selling approaches started to be adopted by leading firms.
THE THREE SALES TRANSFORMATIONS
Over the last couple of decades, selling has thus progressively evolved as a more and more professional and glamorous function. In many corporations, the sales function has finally achieved the strategic status that it deserves and that it was long deprived of.
This advent of sales as a strategic function is a formidable evolution compared to the antiquated top‐management view of sales as the lowest level of the commercial operation or the description of sales as the push element of marketing.
Sales has indeed benefited from numerous successive changes over the last decades, and with almost every company you walk into, you can hear about the different stages in the evolution of its sales function. After my own analysis of the way in which sales progressed to achieve its current strategic status in leading corporations, I have identified three major stages—what I call sales transformations—that have each had a major impact in upgrading the performance and the recognition of the sales function:
The 1st sales transformation:
Improving sales performance at the client interface
The 2nd sales transformation:
Improving sales performance through stronger cooperation with marketing
The 3rd sales transformation:
Improving sales performance by focusing on corporate‐value creation
I describe these transformations in greater detail in Chapters 2 and 3, but let's take a quick look at what they are and how they contribute to the performance of the sales function.
The 1st sales transformation.
As competitive pressures in the global business environment increased in the 1980s and 1990s, there was a shift from seller power to buyer power. This shift forced a major change in how sales professionals approached selling. No longer could sales pros simply push their products and services directly to prospective customers—they had to make the effort to first understand the client's needs and insights and then respond to them.
The more advanced kinds of selling that came out of this 1st sales transformation included solution selling, relationship selling, and consultative selling. We'll discuss these in greater detail in Chapter 2.
Salespeople who embraced these new sales approaches at the sales‐client interface gained numerous benefits, including increased performance, more‐balanced seller‐buyer relationships, more‐stable win‐win transactions, and much more. In addition, as more sales professionals were trained in these techniques, the job itself became more highly professionalized.
The 2nd sales transformation.
The focus of the 2nd sales transformation is
inside
the company, improving the interface between the marketing and sales organizations. The work these organizations do is complementary—when they're aligned in their goals and working together, they have the potential to dramatically improve business performance. However, in many organizations, marketing and sales are in conflict—their cultures are different, their priorities are different, their incentives are different, and they do not collaborate well.
When sales and marketing organizations successfully complete the 2nd sales transformation, they are aligned in their goals and performance increases. Sales pros learn how to manage the interface with marketing to their advantage and to the advantage of the organization as a whole.
The 3rd sales transformation.
While both the 1st and 2nd sales transformations focus on the creation of
customer value
—the customer's perceived worth of a product or service—the 3rd sales transformation is the result of new business strategies that focus on the creation of
corporate value
. Creating corporate value clearly lies at the heart of any healthy organization. Creating corporate value in a business protects jobs, enables investment in everything from marketing and innovation to production and sales, and supports profitable growth.
The 1st sales transformation reinforced the relationship with clients and the 2nd sales transformation with marketing. The 3rd transformation concerns a new relationship and a new alignment of sales with strategy. It confers on sales a greater responsibility to contribute to the corporate‐value generation of the firm. It also places sales in a unique central position between clients, marketing, and strategy, while upgrading the role of the sales function (Figure 1.1).
This new strategic emphasis on corporate‐value creation implies a greater focus by sales on capturing a higher share of the customer value created. This involves the enhancement of value‐capture selling, which is the essence of the 3rd sales transformation and the subject of this book.
Figure 1.1 The central role of sales in corporate‐value creation.
Value‐capture selling is not a replacement for value‐creation selling. In the first phase of selling, sales pros must demonstrate the value of an offer to their customers and prospects while gaining their interest. This is value‐creation selling and it will always be crucial. As we will see in Chapter 2, the 1st and 2nd sales transformations improved the performance of this first selling phase by focusing on the creation of perceived customer value. In the second selling phase, sales pros have to reach agreement on the terms of the offer, most often with professional buyers who have been well trained in negotiation techniques. This is value‐capture selling—when sales pros are given the mission to generate corporate value for their firms.
Do you believe that the term value capture is too aggressive? Would you prefer that your customers not know you are engaged in value capture?
It is fair that you ask yourself these questions. Sales pros have to build and maintain a strong, ongoing relationship with their customers, and this requires a soft approach. The emphasized, positive, and visible mission of sales pros in this relationship is the creation of customer value.
The reality on the other side of the fence is that professional buyers are trained in procurement techniques designed to capture a higher share of the value created by their suppliers. Suppliers and sales pros have emphasized customer‐value creation for so long that they have been late to reinforce their value‐capture capabilities to face stronger procurement tactics. It is thus time that sales professionals become more qualified in value‐capture selling.
This obviously does not mean that the value‐capture flag has to be raised every time you meet with customers! Customer‐value creation must remain the objective of the first phase of selling. Only if there is customer‐value creation can there be a sale, and value to be shared between buyer and seller. But in the second phase of selling, as on the procurement side, the sales focus must be on capturing a share of the value created.
To somewhat conceal this focus on value capture and appear less aggressive, some firms have adopted the term revenue management. This means that instead of just blindly focusing on maximizing revenues, one manages what type of revenue is created, especially within a wide range of products, to maximize profitability. This expression has been imported from the hospitality and airline sectors where continuous price adjustments based on data analytics aim to maximize the corporate value created.
Revenue management is a sophisticated form of value capture, usually associated with data analytics applications that give sales pros guidance on the optimal mix of products that provide the best profitability in a given situation. Revenue management software applications also provide valuable support to salespeople, helping them increase the corporate value obtained from a customer contract. But internally, it gives the impression that data analytics and management are sufficient to face the pressures of professional buyers, and it lacks the essence of value‐capture selling.
The real challenge is for sales professionals to acquire the value‐capture spirit and develop the new skills and behaviour that will increase their performance when negotiating with professional buyers trained at the same game. This is why I have decided to focus this book on the reality of value‐capture selling, which goes beyond revenue management and is required to win in this 3rd sales transformation. It's taking the next step—making the shift from bigger is better to richer is better.
The 3rd sales transformation has resulted in new challenges and opportunities for sales management and organization of the sales force. This includes digital substitution and support, restructuring, updated evaluation criteria and incentive systems, specific additional training, and more. The 3rd sales transformation also has major implications for sales pros, including the upgrading of the sales function, richer information for action, broader perspective, more‐complex objectives, more‐sophisticated negotiations, and others.
The main focus of this book is on the individual sales pro, and what it takes to capture value and win in this 3rd sales transformation. I only mention the implications on sales management and organization of the sales force in passing—developing them fully would completely fill the pages of another book.1
HOP ON THE BUS OF CHANGE AND BECOME A VALUE‐CAPTURE CHAMPION
It's clear that the world is changing and that corporations are a big part of that change. If your firm is already placing a new or reinforced strategic focus on the creation of corporate value, this will imply many changes throughout the organization.
For such a strategic realignment, it is likely that the chief executive officer (CEO) is personally driving the “bus of change.” The most‐innovative employees will quickly and enthusiastically jump aboard this bus to embrace and support the new initiatives. They'll get the best seats and might even have the opportunity to sit up front and help direct the driver.
Other team members might wait to see if the bus has any chance of succeeding before they get on board. Yet others will resist the initiative altogether and do their best to slow down the bus of change or simply refuse to board it.
In his classic business book, Good to Great, Jim Collins talks about the critical importance of getting the right people on the bus:
