solution selling… and attributes of solution selling ... · solution selling solution selling the...

Solution Selling…

and Attributes of Solution Selling Executives

Peter Schaefer, New Direction Partners

PRINTING United

October 23, 2019

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• Today’s Environment

• What is Solution Selling?

• Attributes of Solution Selling Executives

• Where do we Find Them?

• Summary

Agenda

© New Direction Partners, LLC 2019

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• Over last 10 years (and likely over the next 20) Printers need to have two

focuses…

✓Be Efficient; and

✓Grow.

Don’t Forget, because…

Today’s Environment


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• Over last 10 years (and likely over the next 20) Printers need to have two

focuses…

✓Be Efficient; and

✓Grow.

Don’t Forget, because…


“In a maturing to aging market if you don’t grow,

you will run out of business to be more efficient”.


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• Ways to be more Efficient:

✓ Technology, workflow, automation, flexible labor, quality, outsource, etc.

• Ways to Grow:

✓ Quality, price, manage salesforce, innovation/differentiation, new

markets, acquisitions, new products and services.



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• Slower market growth (if any)

• Price competition:

✓ excess capacity;

✓ consolidating customer base; and

✓ print aggregators.

• Rising costs:

✓ healthcare;

✓ wages; and

✓ utilities.

Why is Organic Growth Important?

The Printing World is “Different” Today


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The Role of the Sales Executive is Changing

• Buyers’ motives, practices and behaviors are changing.

• Competition is different:

✓ Social media; and

✓ Email.

Realities of Today


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Customers are Different

• Individual customers have different needs.

• One size does not fit all.

• Specific customer strategies are required.

Realities of Today


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Develop a Product Focused Strategy or a

Customer Focused Strategy

How Do You Grow Organically?


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Customer / Product Focus

- Customer Focus +

-P

rod

uct

Fo

cu

s

+

FAILURE

Attributes –

Views Customer Profitability,

Customer Concentration, Solution

Provider, Sales / Customer

Orientation, High Cost of

Switching, Succeeds via Progress

up the Customer Learning Curve

Attributes –

Views Product

Profitability,

Manufacturing

Orientation,

Succeeds via

Progress up

the Product

Learning Curve

SUCCESS

SUCCESS


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StrategyProvide whatever customer wants, outsource, transfer

risk from customer.

Structure Strong sales and marketing organization.

Pricing

Measure customer profitability but not every order,

Defend, but if successful, cost of switching provides

room.

SystemsCustomer service teams, customer reporting,

customized web interfaces, fulfillment.

Style (Culture)Customer focus orientation, sales service

empowerment, “Can do”, listens to customers.

RisksCustomer and/or sales exec concentration, customer

only wants discounts, forever rising expectations.

Customer Focus


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StrategyMake and deliver a product or service better than any

competitor.

Structure Strong manufacturing and most likely IT departments.

PricingMeasure product and order profitability, may low price

for plant fill for non-core products.

SystemsDrives efficiency and functionality, measure product

activity, standard cost systems.

StyleManufacturing / process orientation, usually low cost

producer.

RisksPotential product obsolescence, low cost of switching

unless system hook.

Product Focus


What is Solution Selling?

Solution selling is a sales methodology. Rather than just

promoting an existing product, the salesperson focuses

on the customer’s problems and addresses the issue

with appropriate offerings (products and services). The

problem resolution is what constitutes a “solution.”

Source: Wikipedia


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• Solution Selling Doesn’t Guarantee Success

• Being Different Drives Success

• Most Solution Selling is Different



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• Customer focused strategy

• Understanding customer requirements and pain points (problems)

• Consultative selling…selling a solution rather than a product

• FOR CUSTOMERS: Solutions decrease costs, increase productivity and/or

grow revenues

• FOR THE SUPPLIER: Solutions generate Recurring Revenues where it isn’t

all about the Price!



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Sample Target Markets/Key Business Processes

Target Markets Key Business Processes

Higher EducationNew Student Recruitment/

Fundraising

Pharmaceutical Packaging

Real Estate Open House Brochures

Automotive Service Notifications


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• Service notice mailings for Toyota

• Developed solution, including personalization

• Established measurements (revenue growth) and tracked results

• Improved process by including promotions with time constraints

• Established Joint Venture with Toyota (nice payment to DME)

• Added other solutions and sold Joint Venture to Toyota (really nice payment to

DME)

Automotive (Service Notifications Example) - DME


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• Specializes in 1:1 custom communications for the insurance, healthcare and

non-profit industries

• Provides fully integrated marketing services across all media channels:

✓ Variable digital/inkjet

✓ Personalized websites

✓ Interactive videos

• Demonstrates key metrics for customers:

✓ 12% response rate

✓ 62% more quotes

✓ 31:1x revenue to cost ratio

✓ 8:1x ROI

• Result is loyal customers that send more and more campaigns

• 16% 5-year CAGR (all organic); 34% unadjusted EBITDA margin!

Example of a True Omnichannel Provider


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• Target market

• SWOT Analysis - current state, including pain points

• Understand key business processes

• Develop solutions

• Marketing objectives and plans

• Target accounts & penetration

✓ Initial account selection is critical

✓ Target high profile customer

✓ Leverage off the initial success(es)

• Measurement (current state vs. desired state) & Tracking (ROI)

Market Attack Plan


Solution Selling Process

Source: Patrick Morrissey, EFI


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Pre-sale prospecting, qualifying

prospects from a sale's

perspective .

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Business recommendations /

value proposition

development. The

deliberations.

2Gaining entry. Meeting with the

right person for the right reason. 7

Co-developing the solution.

The time for give and take.

3Discovery. Understanding the

company’s situation.8

Value proposition. Matching

the need to your solution.

4Critical factor: What keeps the

customer up at night? 9

Proof of concept. Managing

the objections.

5

Managing the political

landscape. Sourcing the

decision makers.

10Defending value proposition.

Blocking and tackling.

11 Implement. Initiating the job.

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Let’s Compare Solution Selling to Transactional Selling




Transactional Selling

Transaction Selling

The Salesperson adds Value by

Matching the Needs Between the

Customer and Supplier

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• Find prospects with a need

• Develop relationship with prospect

• Take orders for a desired product or service at an acceptable price

• Revenues are increased by making more sales calls and by taking more orders

• Size of an order is expanded by cross-selling and or offering discounts for larger volumes



Transaction Selling




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• Transactions are usually documented through purchase orders and

invoices with shipping and schedules paramount to control

• Procurement officers control the process and are motivated by schedules

and price

• In summary, the sales team should focus on managing delivery and

maximizing price


Transaction Selling







Transaction Selling




Compensation Plan

• Draw against commission based on sales


Solution Selling

Solution Selling


Understanding the Problems Faced

by a Customer and by Creating a

Vision of Potential Solutions

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• Dialogue concerning customer problems

• Questioning and listening are paramount

• Purchasing decision is managed through a proposal, contract negotiation and solution delivery

• Size of order is managed by adjusting scope and measuring complexity


Solution Selling

Solution Selling





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• Most conversation occurs with key decision makers

• Any price discussions occur with discussion of scope and complexity

• In summary, the sales team should focus on understanding the customer’s business and how it can make the customer more successful


Solution Selling





Solution Selling


Solution Selling

Solution Selling





Compensation Plan

• Solution Selling Team, the “Hunters” – Salary Plus Bonus

• Introducing Sales Executives, the “Farmers”

✓ One-time commission on Year 1 sales

✓ Reduce commission rate on ongoing sales

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Do you have this sales professional in your building?


Solution Selling Requirements


Attributes of a Solution Selling Executive

Strong communication skills

Asks relevant questions

Can sell to a large decision-making team

Presents well

Good listener

Strong persuasive ability to create interest

Strong C-level communicator with

ability to write concise proposalsAbility to sell value without price

being sole focus

Exudes confidence in ability to achieve

objectives & solve problemsStrong closer

Understanding and comfort

discussing ROIUnderstands technology

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• Owners

• General Managers

• Progressive CFO’s

• MBA Types

• Sales Managers

• Solution Selling Executives from Other Industries

✓ Telecommunications

✓ Software

✓ Consulting

Who Are They?


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• Firm has clear and widely communicated definition of Solution Sales and

metric is measured monthly

• Salesforce is comprised of clearly identified “Hunters” bringing in new Solution

Sales and clearly identified “Farmers” who are maintaining sales

• Firm takes advantage of current sales executives’ account relationship for

entrée

• Owners / senior executives are involved in Solution Selling

• 40% plus of sales are Solution Sales

What Does Success Look Like?


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• Be different

• Be customer focused

• Recognize that each customer is different

• Identify and address your customer’s pain

• Look outside of your salesforce for solution selling executives

• Use your salesforce for introductions & farming

Summary


Questions?

Peter Schaefer, New Direction Partners

P.O. Box 496

Valley Forge, PA 19481-0496

Tel: (610) 935-1000

Email: [email protected]

Peter Schaefer

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Peter Schaefer is a Partner with New Direction Partners. Peter is an

experienced dealmaker with twenty years of investment banking and valuation

experience. He has closed more than one hundred transactions in virtually

every segment of the printing and packaging industries as well as the sale of

a $75 million helicopter company and a $10 million bread manufacturer.

In addition, Peter has performed hundreds of valuations for ESOPs, estate

and gift tax planning and strategic planning purposes.

Other recent transactions have included the sale of Midnight Oil to Oak Hill Partners, Popular Ink to

Highlander Partners, Classic Graphics to Imagine! Print Solutions, the divestiture of Transcontinental’s

Rastar division to Sun Litho, the sale of Meisel to R.R. Donnelley, the sale of Vectra Corporation to

Taylor Corporation, the sale of Express Label to Cenveo, the purchase of Journal Communications’ IPC

Print Services by Walsworth Publishing, and the purchase of National Graphic Supply by Pitman.

Prior to New Direction Partners, Peter worked for fifteen years at Compass Capital Partners having

served most recently as its President. Prior to that, he worked in the investment banking departments of

KPMG Peat Marwick and Coopers & Lybrand. He received a BS in Economics and Political Science

from Trinity College and an MBA from Villanova University. He is a Candidate Member of the American

Society of Appraisers and is a member of the printing industry’s prestigious NAPL Soderstrom and PIA

Ben Franklin Societies and has served on several Advisory Boards within the printing/packaging

industries. Peter is married to Kathleen and they have six children.

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