Monthly Archives: April 2012

I don’t lose any sale on price. Price is the very last differentiator, after all of the other possible competitive differentiators between our solution and our competitors’ solutions have been discounted by our customer. It is much better to compete by creating another differentiator. This is a lesson that I learned very early in my British Telecom sales career, because BT was never cheaper on anything than the competition. This meant that going head-to-head on a sale with exactly the same technology and service proposition was a waste of time – either something had to be found to justify the price premium, some other solution had to be offered or the sale was qualified out.

Lots of different things can be used to justify a higher price. A good one with BT was the risk factor – my customers enjoyed telling me that “BT was big enough to sue” (meaning that BT had to correct problems with products to avoid the damage to its reputation of ending up in court). This could sometimes justify a 5% price premium on its own. Risk, and its other side, trust, is an often-forgotten but extremely important part of the sales process in solution selling. Once a prospect has determined that our solution meets their needs and is affordable, their thoughts turn to risk, both internal and external – do I trust this company to deliver, is my job at risk if this fails to deliver the promised benefits, do I believe what this salesman is telling me, how can I reduce the risks? Reducing perceived risk is a big competitive advantage.

Other sources of competitive advantage – for the salesman, rather than the company – include the support provided to help the customer make their decision, changing the commercial structure of the sale to better fit the prospects’ finances, customer service, or adding things into the solution that are of value to the customer but of little cost to us. A previous manager of mine closed a very big deal by offering a number of days specialist support for free for each year of the contract – having worked out the proportion of time that his specialist teams should be spending in the account anyway, given its contribution to revenues! And of course those specialists would be looking for more new opportunities – a win-win.

The most frequent reason salespeople give for losing a sale is price. The real answer is that they were out-competed by another salesperson.


I once had a salesman work for me who was a really hard worker. His outbound call statistics were excellent, he knew the product inside out and was very likeable. However, his sales performance did not reflect his hard work.

He had an unfortunate, very flat, emotionless speaking voice. It didn’t matter if he was talking about his children, his football team, a sale he closed or the weather, his delivery pace and tone didn’t vary. He could have been reading everything from a script. He could, as the saying goes, bore for England. He lacked something called Emotional Intelligence.

Emotional intelligence is the ability to control and use emotion. Emotion is primal, people respond much more strongly to that than words. It’s why enthusiasm is infectious.

Despite lots of training to get him to express some emotion he never got there, so reluctantly I had to let him go – a tough decision as he was so likeable. Some people just don’t have that skill.

I became aware of the need for emotion in selling in my very first sales job, one summer holiday at university. Bored with the technical jobs on offer, I answered an ad in a paper and ended up being trained to sell encyclopaedias. Out of 100 there on the first day only two of us finished the week-long ‘training’ and I was the only person to turn up on the first day.

I stood it for a week and sold not one encyclopaedia. However, our most successful salesperson who sold at least one every night was a small, round bouncy and bubbly American girl who was irrepressibly enthusiastic. I watched her charm her way in everywhere with amazement.

I went on to be a six-week success at selling double glazing instead, using what I’d learned about emotion to mine a rich seam of people who hated double glazing salesmen. I use emotion regularly in selling, it’s another part of the skills in body language.

John Wanamaker famously remarked “Half of the money I spend on advertising is wasted; the trouble is, I don’t know which half”. The success rate of product innovation is at least equally poor – but a lot more costly. When product development costs can run into millions, late-stage failures are very expensive.

According to a paper called “3,000 Raw Ideas = 1 Commercial Success!” by Stevens and Burley, published in Research Technology Management in 1997, the low success rate of new products means that roughly 50% of the resources allocated to product development and introduction is wasted, either through cancellation or failing to achieve adequate returns.  For every four products that enter development, only one makes it to market. Even after launch, one in three products fails. Fifteen years later, this has not improved – estimates of new product introduction failure rates vary from 70% to 95%. Even the best practitioners that rigorously manage innovation practices have success rates of only 50%.

There are lots of reasons for these failures but a key one is the market proposition. The market proposition is how the product is positioned in the market – who it is sold to, how it is differentiated from the competition, how it is priced and supported, the selection of channels, how those channels are managed and rewarded, and finally the tools provided to support sales. The sales proposition is where the rubber hits the road – where the business finds out if all of that strategising, market analysis, product development and investment will result in a success or failure. If the proposition is wrong, it doesn’t matter how good the sales team or channel is, sales will be very hard to find.

The business world has changed rapidly over the past thirty years since the personal computer became a tool of business rather than a hobby. Globalisation, supply chain fragmentation, increasing regulation, the rise of global networks like the internet and social services like Facebook have all changed the way that business works. However, product development practices have not kept pace. There are new strategic concepts that help explain the new world such as disruptive innovation and network theory, but they are often difficult to use as predictive tools for product strategy.

I wasn’t always a salesman. My career started in science, so there is an analytical approach to my selling. I have always been attracted to complex solution sales and, perhaps perversely, enjoy the challenge of working out how to sell the newest products. It has been a rather strange sales career!  Along the way I saw many external influences which influenced what I could sell successfully and how I could sell it, and I was determined to understand what I was seeing so that I could use it to my advantage. Having realised that many sales fail not because the product itself is wrong, but because the market proposition is fatally flawed, I set out to find out why this happens and work out how to prevent it. This blog is about what I found on the journey and how it can be used to reduce the cost of product failure, improve products and increase the chances of sales success.