Selling Solutions

The first person who came up with the idea of selling “solutions” hit on a great idea. Rather than sell their products they would sell what their clients needed. Unfortunately it may now be cliche. “What was once a meaningful buyer-defined term that meant “the answer to my specific problem” is now generic jargon that sellers have co-opted to mean “the bundle of products and services that I want to sell”” (Grove, Sellers, Ettenson, Knowles 2018, page 1).

A collaboration of  B2B business leaders, academics, and consultants argue that a better approach is needed. They outline major changes in the B2B (business to business) environment. They note technological changes (new ways of creating products and better information), rising quality making it hard to differentiate on reliability, and a change in buyer’s focus from cost (cheap) to providing value. This last one makes sense for buyers: one wants something that works well for your specific firm. If things don’t fit together well in a firm then this can be a lot more costly than any savings from a slightly cheaper component.

To embrace the changing environment they authors argue that B2B firms need to organize around customer outcomes. The end of the process isn’t shipping the “solution” and getting paid. Instead it is about ensuring that customers gain the benefits promised. Changing the suppliers processes to ensure that the customer gains the outcomes that are desired.

The most fascinating element for me is the implications for metrics. In a traditional reporting system one would check if sales had been made, check revenue against costs, make sure the invoices had been paid etc… The new approach envisaged is quite different. “Under an outcomes-based approach, suppliers need to rethink their metrics of success and help customers assess the value their products and services generate. In some settings, quality will no longer be internally defined (measured, say, in manufacturing error rates) but instead gauged by how well a product meets the customer’s expectations for quantitative and qualitative business impact” (Grove, Sellers, Ettenson, Knowles 2018, page 6).

It is a significant change in thinking but a very interesting one.

Read: Hannah Grove, Kevin Sellers, Richard Ettenson, Jonathan Knowles (2018) Selling Solutions Isn’t Enough: B2B companies need to focus on helping each customer achieve better outcomes, MIT Sloan Management Review, August 1st, https://sloanreview.mit.edu/article/selling-solutions-isnt-enough/