Professional Development

Training Fish to Fly? Seven Tips to Convert a Product Sales Force to Solutions Selling

June 2001—Has your company caught the solutions bug? Virtually all ITSMA member companies with a product heritage are pushing hard to pump up services revenues by selling "solutions." The reasons are well known: decreasing product margins, client interest in business solutions rather than the latest box, a desire for deeper client relationships, and the like. In today's world, a product without a strong services component is like a professional services consultant without a 2x2 matrix.

Although many companies have demonstrated success in designing and marketing integrated product/service solutions and accounting departments have added spreadsheet space for presumed new services revenues, the sales force typically fails to get fully behind the new program. Pity poor management: Changing veteran product-oriented sales representatives into solutions-oriented problem solvers often seems like teaching fish to fly.

How difficult is the solutions transition? One major IT research house estimates that companies can realistically expect to convert only about 10% of their sales forces from product-focused selling to solutions/consultative selling. But this percentage is overly pessimistic. The transition for many organizations will indeed be difficult, but the conversion rate could be as high as 50% or 60%, given the proper motivation, direction, and resources.

Even this best-case scenario of watching "only" half your sales force drown is grim news indeed. However, the success stories in the market suggest that the transition can and often must be made. Lou Gerstner's IBM is one of the most frequently discussed product-to-services examples. IBM Global Services now accounts for some 40% of total revenue, and the product-centered divisions in the firm are moving aggressively and successfully toward a solutions approach.

Unisys represents another important turnaround story, moving from less than 30% of total revenues generated by services in the early 1990s to more than 70% today. Household names such as Microsoft, Hewlett-Packard, Compaq, Nortel Networks, and Ericsson—companies that have staked their claims in the IT space through product innovation—are now all searching for the services elixir as well. Even Sun Microsystems, whose CEO, Scott McNealy, once said that service is what companies do when they can't sell product, now has a thriving services business.

ITSMA's experience, combined with extensive benchmarking and best-practice research, highlights the fact that companies must treat the transition issue holistically, with a comprehensive, multiyear plan for sales force transformation. Chances for success are minimal with the episodic, knee-jerk approach most companies adopt.

Organizational issues are certainly important. For example, ITSMA research shows that companies with multiple sales channels for services (e.g., combined product and services sales, telesales, dedicated services sales, and partner sales) are generally more successful than companies that rely on only one or two channels.

Success ultimately comes down to the individual sales reps, however. To increase the odds of success, the following seven guidelines should be part of any sales force transformation plan.

• Don't simply make demands—provide the right skills. Provide sales training that is carefully tailored to your solutions-selling issues and your sales force's needs. Remember, you're trying to change behaviors and attitudes—anyone who has teenagers can appreciate how difficult that is! Sales reps ITSMA recently surveyed indicated that they do want more training. They identified three training priorities: knowing their clients' businesses, better understanding their companies' offerings, and better understanding their companies' full capabilities. If economically feasible, classroom training is still the most effective approach. No e-learning tool can replicate the intensity and emotive levels that quality face-to-face training can attain.

• Provide value proposition support. Training should address the number-one barrier to selling services and solutions, according to the ITSMA sales force survey: articulating the business value to clients. Make sure that the reps understand and can explain the solutions value proposition that your marketing staff have so brilliantly developed.

• Have the right processes in place. The second biggest barrier to reps selling services, according to ITSMA research, is working with the other members of the sales team. Solutions selling typically requires much more organizational coordination than product selling. Of course this is not always constructive. A recent article in a national business magazine described a situation in which one of our member companies sent 16 people on a single sales call! Make sure that your selling processes are effective to you and acceptable to your clients.

• Provide success stories. If Tiger Woods were to start wearing his golf hat backward when he putts, you can bet that most other professional golfers and nearly all amateurs would start doing the same thing. It's the same with your sales force. If some of your top dogs are seen as being successful in selling solutions—and being financially rewarded for doing so—you'll see the rest of the sales force begin to beat the solutions drum.

• Incent the product sales force with a very juicy carrot. The carrot is typically in the form of commissions. The first step is simply to pay equal commissions for services sales. But consider giving higher commissions for services and combined product/services sales to back up your strategic priority on services sales. Make your sales staff's eyes bulge at the size of the commission they can achieve if they successfully sell integrated solutions.

• Threaten them with a stick of Bunyanesque proportions. A simple stick just isn't big enough. Make selling services a life-or-death issue—at least financially—for your reps. Unless you make selling services a mandatory part of their quota, they won't take it seriously. As we all know, selling product is often considerably easier than selling services. People don't willingly move out of their comfort zone; you have to give them a large nudge.

• Provide continuous support and measurement. Even game show contestants get lifelines, 50-50% breaks, and audience support. What are you doing to support your sales force? Do you have an effective coaching program in place? What sales tools have you developed? Are the tools being used? When are they used? How are they used? Can the sales force see that each tool can be used to deepen a client relationship or close a sale?

You won't convert everyone on the sales force. In fact, it's okay to allow some of the salespeople to fail. Establish metrics to assess performance, use them, and then act swiftly on the results. Some member companies are quick in pushing out ineffective salespeople; others struggle with letting anyone at all go. But taking a sales force through this process is not for the weak of heart. Expect high casualties.

If you keep these seven tips in mind as you rebuild your selling capability, you'll have a much higher probability of finding the Holy Grail of solutions selling: higher total revenues per account, higher client satisfaction, and higher total margins. Just remember to buckle up before takeoff—it's a long, difficult, and bumpy ride!

—Steve Hurley

For more information on sales force transformation, contact Steve Hurley, ITSMA vice president of learning and development, at +1-781-862-8500, ext. 34 or shurley@itsma.com.

About ITSMA
ITSMA specializes in helping companies market and sell services and solutions more effectively. As a membership organization, we provide research, consulting, and training to the world's leading technology, communications, and professional services providers to generate increased demand, strengthen customer relationships, and improve brand differentiation. ITSMA is based near Boston, and has offices in London and Tokyo. Learn more at www.itsma.com.