BIMM 12-14 - B2B Mktg - 14 Solution Selling (Students' Copy)

7/29/2019 BIMM 12-14 - B2B Mktg - 14 Solution Selling (Students' Copy)

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Girish Ketkar Session 14B2B Marketing @ BIMM 2012-14 Semester 1

Solution Selling

Session 14


Agenda

Product perspective vs. solution perspective

SPIN methodology

Value pricing of solutions

Differentiated solution selling


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Reading

Business Marketing Management: B2B(Hutt, Speh)

Chapter 10: Managing Services for Business Markets

Marketing as Strategy(Nirmalya Kumar)

Chapter 3: From Selling Products to Providing Solutions


What Is Solution Selling?


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What Is a Solution?

The answer to a problem-- Cambridge Dictionary

An action or process of solving a problem-- Merriam-Webster Dictionary

A means of solving a problem or dealing with a

difficult situation

The correct answer to a puzzle Products or services designed to meet a particular need

-- Oxford Dictionary


What Is a Solution?

Integrated combination of products and services

offered to a client to address the clients specific

business problem


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Solution Selling

Consultative, value-based sales approach

Key steps

Identifying customer needs / pain areas

Formulating a solution that the customer will value

Ascertaining the value

Communicating the value to the customer

Product sellers Trusted advisors


Example

Read

Delivering Superior Customer Value: The Tata Steel

Experience

Chapter 7: Analyzing Business Markets

in Marketing Management: A South Asian Perspectiveby Kotler, Keller, Koshy, Jha


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Product Perspective vs. Solution Perspective


Solution selling vs. Non-solution selling

Source: Is Your Company Ready for One-to-One Marketing?, Harvard Business Review, Jan-Feb99

Component Solution Selling Non-Solution Selling

Web site Building credibility as

industry expert

Product descriptions

Customer Collateral White papers and case

studies

Product spec sheets,

product brochures

Sales Presentations Short, focusing on

capability and philosophy

Lengthy product overviews

Selling Style Ask questions and listen Pitch and present

Proposals Unique and custom Boilerplate

Sales Cycle Length Longer Shorter


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More Examples

Gamesa bags order from PSU for 56 wind turbines-- The Hindu: Business Line (20 Nov 2012)

-- Gamesa website


Some More Examples

Educomp bags Rs.209 crores ICT@Schools Project

from Government of Assam-- Educomp website

IDFC Alternatives to invest Rs 100 cr in Manipal

Servicecorp-- The Hindu: Business Line (27 Nov 2012)

(In this news item, focus on what MSFM is being repositioned as.)


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Two More Examples

Alfa Laval wins SEK 50 million brewery order inIndonesia

-- Alfa Laval website

L&T Wins over Rs. 2000 Crore Order from ONGC

Mangalore Petrochemicals Ltd. (OMPL)-- L&T website


SPIN Methodology


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SPIN Methodology

Set of questions to understand customer needs/pains, and

potential benefits to the customer if the needs are

fulfilled


SPIN Questions

Situation Questions

To collect facts and background information about the customerS

Problem Questions

To discover problems, difficulties, dissatisfactions experienced bythe customer

P

Implication Questions To ascertain the effects of problems, difficulties, dissatisfactions

To help the customer understand a problem's seriousnessI

Need-payoff Questions

To establish the benefits that your solution could offerN


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Value Pricing of Solutions


Value

Enhance customer revenues

e.g. Passenger sales audit service for airlines

Decrease customer risks

e.g. Oricas mining services division

Reduce customer costs

e.g. Specialty resins supplier and painting contractors


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Pricing based on customers perception of value(benefits) of the solution

Ascertain the value / Quantify the benefits

Agree on value-sharing rule

e.g. 75% (customer) : 25% (supplier)

Price = % of value

Useful input: Results of Needs-payoff questions inSPIN methodology



Components-based pricing

Output-based pricing

Efforts-based pricing

Benefits-based pricing

Outcome-based pricing

Success-based pricing


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Differentiated Solution Selling


Differentiated Solutions: Two Key Variables

Source: "Solutions Selling - Is the Pain Worth the Gain, McKinsey Marketing Solutions, Apr03

In our work, we discovered that products and

solutions are most critically differentiated by the

degree of customization a solutions provider

can deliver, and the degree of integration across

multiple products and services.

Solutions Selling Is the Pain Worth the Gain

McKinsey Marketing Solutions, Apr03


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Differentiated Solutions: Two Key Variables



Solution Selling: CSFs


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Value propositions Sales Approach

Pricing

Organizational alignment

Value delivery




Value propositions

Create distinctive solutions value propositions using

customer business metrics

not product price/performance metrics


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Sales Approach Radically change

the selling approach and,

if necessary, the sales talent



Pricing

Price solutions based on

total business value delivered,

not component features


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Organizational alignment Align the entire organization, not just sales, with the

solutions opportunity



Value delivery

Maintain control of all aspects of implementation to

ensure end-to-end value delivery


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What We Covered Today

What is solution selling Solution

Solution selling

Product perspective vs. solution perspective

Solution selling vs. non-solution selling

SPIN methodology


What We Covered Today (Contd.)

Value pricing of solutions

What is value?

Value sharing

Transformation in pricing mindset

Differentiated solution selling

Two key variables

Solution selling: CSFs

Documents

BIMM 12-14 - B2B Mktg - 14 Solution Selling (Students' Copy)