Session 14

Solution Selling

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

Agenda

Product perspective vs. solution perspective SPIN methodology Value pricing of solutions Differentiated solution selling

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

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

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

What Is Solution Selling?

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

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

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

What Is a Solution?

Integrated combination of products and services offered to a client to address the clients specific business problem

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

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

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

Example

Read
Delivering Superior Customer Value: The Tata Steel Experience
Chapter 7: Analyzing Business Markets in Marketing Management: A South Asian Perspective by Kotler, Keller, Koshy, Jha

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

Product Perspective vs. Solution Perspective

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

Solution selling vs. Non-solution selling

Component Web site Customer Collateral Sales Presentations Selling Style Proposals Sales Cycle Length Solution Selling Building credibility as industry expert White papers and case studies Short, focusing on capability and philosophy Ask questions and listen Unique and custom Longer Non-Solution Selling Product descriptions Product spec sheets, product brochures Lengthy product overviews Pitch and present Boilerplate Shorter

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

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

More Examples

Gamesa bags order from PSU for 56 wind turbines

-- The Hindu: Business Line (20 Nov 2012)

-- Gamesa website

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

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.)

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

Two More Examples

Alfa Laval wins SEK 50 million brewery order in Indonesia

-- Alfa Laval website

L&T Wins over Rs. 2000 Crore Order from ONGC Mangalore Petrochemicals Ltd. (OMPL)
-- L&T website

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

SPIN Methodology

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

SPIN Methodology

Set of questions to understand

customer needs/pains, and potential benefits to the customer if the needs are fulfilled

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

SPIN Questions

S P I N
Girish Ketkar

Situation Questions
To collect facts and background information about the customer

Problem Questions
To discover problems, difficulties, dissatisfactions experienced by the customer

Implication Questions
To ascertain the effects of problems, difficulties, dissatisfactions To help the customer understand a problem's seriousness

Need-payoff Questions
To establish the benefits that your solution could offer
B2B Marketing @ BIMM 2012-14 Semester 1 Session 14

Value Pricing of Solutions

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

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

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

Value Pricing of Solutions

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 in SPIN methodology

B2B Marketing @ BIMM 2012-14 Semester 1 Session 14

Girish Ketkar

Value Pricing of Solutions

Benefits-based pricing Outcome-based pricing Success-based pricing

Components-based pricing Output-based pricing Efforts-based pricing

B2B Marketing @ BIMM 2012-14 Semester 1 Session 14

Girish Ketkar

10

Differentiated Solution Selling

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

Differentiated Solutions: Two Key Variables

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

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

11

Differentiated Solutions: Two Key Variables

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

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

Solution Selling: CSFs

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

12

Solution Selling: CSFs

Value propositions Sales Approach Pricing Organizational alignment Value delivery

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

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

Solution Selling: CSFs

Value propositions
Create distinctive solutions value propositions using
customer business metrics not product price/performance metrics

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

13

Solution Selling: CSFs

Sales Approach
Radically change
the selling approach and, if necessary, the sales talent

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

Solution Selling: CSFs

Pricing
Price solutions based on
total business value delivered, not component features

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

14

Solution Selling: CSFs

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

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

Solution Selling: CSFs

Value delivery
Maintain control of all aspects of implementation to ensure end-to-end value delivery

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

15

What We Covered Today

What is solution selling

Solution Solution selling Product perspective vs. solution perspective Solution selling vs. non-solution selling

SPIN methodology

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

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

Girish Ketkar

B2B Marketing @ BIMM 2012-14 Semester 1

Session 14

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