Comparing solution selling vs product selling in the modern sales world

As a technology-based business with one of the most competitive segments in the sales market, Salesforce has found that one of its most critical areas for success is in delivering comprehensive solutions that give the customer the maximum value for their money. In fact, this is one of the core principles that have driven the company for over 30 years. Comparing solution selling vs product selling in the modern sales environment requires an understanding of how and why a Customer-Centric Sales Strategy can be more effective than a product-based sales strategy. In addition, it requires an understanding of what actually makes a Customer-Centric Sales Strategy more successful.

Today’s sales environment is characterized by one-time customers vs. repeat customers. It is estimated that 95% or more of sales are one-time-buyers. With this mindset, it is critical to focus on providing a solution that addresses the unique needs of these one-time buyers. This focus provides the additional benefit of letting the sales organization avoid chasing unproductive leads and non-profitable product returns. With a focus on selling to one-time buyers also comes a need to understand and execute a strategy that maximizes time spent on phone calls and appointments versus time spent on cold calls or appointments with prospects and other company representatives.

Salespeople in today’s sales world need to understand the value of defining and aligning sales strategies with specific business goals. Without clearly defined strategy, any sales activity becomes haphazard. This results in the disorganization of sales activities resulting in the lessened ability to close business and move products forward. In fact, a survey of executive recruiters revealed that half of all sales job openings requiring a vendor-driven mindset require that applicants demonstrate a functional understanding of their company’s core vendors.

Product or solution: When comparing selling product selling in the modern sales world, there is a distinct difference between what we call a cell versus a sale. In the vendor-driven selling model, the salesperson sells the product based on a promise to deliver a solution. In the customer-driven selling model, the salesperson sells the solution to the buyer. While this distinction may not be as clear, there is a crucial difference between delivering a solution versus delivering a product.

For example, on a vendor-driven selling team, someone may develop a marketing plan to sell products based on past experience, future trends, and an analysis of the competition. If those assumptions are wrong, the salesperson will simply follow the advice of the vendor and deliver an inferior product or bad service to the customer. On the customer-driven selling team, the salesperson should be motivated to find the most cost-effective and value-added solutions for the customers they serve.

Value of revenue: A simple comparison of selling a product selling in the modern sales environment would be to look at the gross profit margin gained by the vendors. If the vendor’s solution delivers less than 50% of what the customer wants, they are losing money. But if they manage to close a sale and get a customer to purchase a product that pays for itself in no time, they can easily earn a good profit. Thus, in the real world, vendors need to generate a larger share of their revenue from the sale of a product than they do from just selling the solution. When comparing solution selling vs product selling in the modern sales environment, it is important to recognize the profit margins and know exactly how much profit the vendor is actually earning.

Service or product: Once a decision has been made to buy a solution from a particular vendor, the sales and support teams of the two organizations must clearly define their roles and responsibilities when compared to each other. For example, in some cases, the vendor-driven selling team may focus on selling the solution as soon as possible, but the customer-driven team may want to work with the customer on various stages of the product lifecycle, depending on the client’s needs. Customer-driven selling may even require training on how to properly work with the business’s sales and service groups. Depending on the specific organization, some sales and support functions may be entirely or partially vendor driven.

Scalability: As mentioned above, there are many ways how a business can change its scalability requirements, depending on its needs. The best approach would be to consider the scalability of the product or solution offered by each vendor. If a business needs more functionality, it might want to choose a vendor who can provide those additional services or capabilities at a later date when the business’ needs become clearer. If the business wants to go lightweight, it might consider going with a simpler software that has fewer functions or features, instead of a bloated client-driven software offering. Depending on the scalability and functionality of the product or solutions, a business can compare Solution Selling Vs Product Selling in the modern sales environment.

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