Does Customer-Centric Selling Really Pay Off?

OK, class, once more, but this time with feeling: "People love to buy and hate to be sold."

How many times and in how many ways have you heard this? That's a question. But the real question is: "Does it matter?" That is, are sellers paying any more attention to where their buyers are coming from today than they did 100 years ago? And, if so, are they realizing any benefit in improved results?

What does it mean to sell in a customer-centric way? Encarta defines "customer" as a person or company who buys goods or services and "centric" as at or constituting the middle of something. What many companies call customer-centric, then, is the notion of "putting our customer at the center of our universe."

So what does the data say? Are sales reps and their companies getting it? Or are they still primarily chasing deals—wherever they may be in the universe?

One indicator of this would be their ability (and willingness) to accurately target prospects. When we look at companies that report being "world class" in their ability to accurately target prospects, CSO Insights' latest survey finds that their quota attainment is 81.7 percent versus 55.7 percent for everyone else. Twenty-six percentage points higher and nearly fifty percent better performance! Clearly, this reflects a true break-out. Or it would, if there were more of them. But these super accurate targeters comprise less than 2 percent of our survey population.

It would appear there is, in fact, real benefit from clearly targeting accounts/prospects that are a good fit versus anyone who'll fog a mirror, but is that being customer-centric?

Consider again the data from CSO Insights' Sales Performance Optimization survey. Firms that rated themselves World Class in their ability to clearly understand the buyer's needs scored 66.4 percent versus 59 percent for the others. And companies that excel at creating a solution aligned with the customer's need came in at 63.8 percent vs. 58.7 percent for everyone else. It would be interesting to see what the numbers would be for companies rating themselves "world class" in all these areas, but, alas, there are too few examples to be statistically reliable.

These numbers average a more down-to-earth 10 percent better performance but still suggest there may be some benefit to actually listening to customers.

Quality of dialogue
Chad Quinn began Ecosystems (www.ecosystems.us), a company that "delivers a collaborative platform for composing customer-centric business cases" in 1999 with the hypothesis that the ultimate differentiator was "the quality of the dialogue with a prospect." That's not a bad qualifier in considering the notion of customer-centricity. Think about that for a moment: the quality of the dialogue.

Quinn tells the story of an office supply provider that has a national division focused on selling to Fortune 1,000 clients. The goal of this division is to secure multi-year agreements with large organizations like Bank of America that consolidate their purchasing of office supplies through one national contract.

The challenge becomes differentiating its company and its offerings in a commodity-based market from equally viable competitors (e.g., Office Max, Office Depot, Corporate Express). How do you sell value in a historically price-elastic sector like office supplies? Particularly when you are all delivering the exact same-end products (my Post-it Notes are your Post-it Notes)?

And, while we're at it, how do we actually measure "quality of dialogue?"

Those of us who were around for the whole quality movement are familiar with the watch phrase: Don't give me a program; give me a process. That is, launching a program with a terrific sloganeering title (e.g., Customers 1st! or Our Customers Are in the Middle of Everything!) replete with coffee mugs and T-shirts tends to fizzle. A process requires definition of roles, procedures, reinforcement and measurement.

Working with Ecosystems, the national account division's business development team deployed a customer-value program. This program helps companies (i.e., the office supply provider's customers) identify and track key performance indicators (KPIs) around an efficient cost-effective office supply program.

The magic sauce here is the joint-venture nature of the discussion to consider and define what the relevant KPIs are for each client. Whether the metric is inventory turns, supplies as a percentage of general and administrative expense, cost of a purchase order or number of orders placed electronically, the heart of the approach is figuring out what matters to the national account team's buyer or buyers.

Once these value drivers are defined and a system has been put in place to monitor them, a database of empirical research and best practices can benchmark their program against peers and receive actionable insights on how to improve. This raises the level of conversation the Fortune 1,000 companies have with the supplier and differentiates the business development team as trusted advisors within their accounts.

Does it pay off? Early indicators are good, and the business development team is enthusiastic.

Whether you call it the buyer's "concept," how the buyer defines "value," "pain," "business driver" or something else, your ability to accelerate the buyer's ability to get the job done in an ever-improving way can only be helpful. Whether you do this by being operationally excellent, customer intimate or wildly innovative is up to you. Whether your customers feel that your approach is reasonable, honors them and is worth investing their time and money with you is up to them.

So consider this as the adage for modern sales: "People don't care how much you know 'til they know how much you care."

Class dismissed.