Wow, sales systems and their surrounding support systems have changed in the last 5 years, and on top of this, Consumption sales are becoming more popular. All these changes made me think it was time to take a re-learning trip down memory lane to re-discover the 4 core sales models and revamp the understanding of how they fit into today’s system landscape. Join me in this re-learning and do not be shy to leave a comment below on your own reflection.
There are 4 core types of sales models fitting different purposes and products. Historical different industries and businesses have a favorite model which they use but this seems to change in these years as more and more start using 2 or more to accelerate and expand their revenue from static to accelerated to continuous revenue streams
“But Jens, you must understand that our business is different and unique from most typical companies; we do stuff in our way” or “our industry is special” …. If this is your company’s normal reaction, read my blog post on the Top unique business model myth first.
Read on to identify which Sales model you are running, aka your customer buying journey, and a view of which system support is needed to make it work!
Self-service Core Sales model
Self-service sales are ideal for low-cost products and products that have a low customer acquisition cost. The buying journey is usually that the customer goes through most decision-making, signing up, and using the product on their own.
How to make the Self-service buying Journey work
Self-service sales model/buying Journey is accelerated by easy and immediate access to answers to their questions through a well-designed E-commerce website/Customer facing application where fx. a first-time visitor can quickly get basic information like your delivery and payment terms in context before making a purchase. You’ve got to make most info easily accessible in the fewest clicks possible.
If you want to keep the customer returning to buy, you should make your customer service experience as easy and streamlined as your Ecommerce website. People would stop doing business with a brand with self-service buying after only one bad customer service experience.
System support requirement for Self-service
There is as such no need for a CRM system, but a basic Customer Engagement system with a strong connection to a great eCommerce backend and frontend website/customer-facing app. Both the Customer engagement system and ECommerce system should have a deep integration to an omnichannel Marketing system. For people to be served best when having a problem or have details question an omnichannel Customer Service system is necessary.
To respond rapidly to your customer’s ever-changing need for answers you want to have a Conversational Agent (intelligent Chatbot) to serve up automated answers to questions directly from data related to the customer. It is all about making information readily available. Embedding such an intelligent Chatbot on your customer communication in-app, website, Social Media accounts, email, and SMS, making it as available as possible, will deliver the same quality answers no matter what channel the customer uses to post answers.
Transactional Core Sales model
In a Transactional Core Sales model, the “problem” is well defined, characterized, and understood by the buyer, and there is no need to create a lot of value or insight for the customer.
Transactional sales usually start through the marketing team, which collects qualified leads for the sales team to close the sale rapidly. The Sales team aims to have a sustainable, high-volume sales pipeline and an onboarding process that is as efficient as possible.
With this approach, the sales representative is not necessarily concerned with the long-term relationship with the customer.
The transactional sales way of selling seems to fade away to move into either Self Serv or Enterprise/Complex selling as
- The buyers use the internet and social media to research vendors and are moving away from wanting standard products into tailormade products for customers exact Pain/Value.
- The buyers see a flood of information and data online but often find little meaning in it, turning their confusion from simple old-school transactional sales into a Complex sale.
- Suppose you succeed in having a website that is clear of which “problem” your product solves and the world around you do not overwhelm your customer with other information. In that case, a good E-commerce website can turn the sales model into Self-serve mode or at least only light touch from a seller.
To be direct, if you are a seller that “just” provides the right license SKU that fits what the customer asks rather than understand the buying context and create additional customer value, then you are a “transactional salesperson.”
System support requirement for Transactional sales
System support requirement for Transactional sales is an old-school CRM where Marketing and Sales are strongly tied together in one system. If you find that you can make the sales without a CRM and “only” use for financial system (ERP) for light CRM and order tracking, you should be ready to transition from Transactional sales to Self-service sales.
Complex/Enterprise Core Sales model
When numerous stakeholders are involved in making a buying decision, it is usually a lengthy decision process that makes it complex. On top of an already complicated situation, the Customer stakeholders typically involve multiple people who gather information beforehand. Each of those has a unique perspective on the diverse needs to be addressed. The above behavior is always there when dealing with larger companies/enterprises. Therefore the “problem” is not well defined, characterized, and understood by the buying group, so there is a need for the seller to create a lot of value or insight for the customer buying group.
Two circumstances that can accelerate time spend to close the sales is if the customer already has built a Business case and/or has already approved a budget for the purchase (aka customer problem already defined).
The Complex Core Sales models follow a standard selling cycle that culminates in a signed contract. The sales teams are responsible for building sales pipeline, developing customer relationships, crafting value-based solutions, coordinating POC’s (proof of concepts), and negotiating legal terms to get a contractual agreement in place with the customer.
The key is the customer pays up front, and this signed contract marks the end of the intense engagement process with the client by the field sales team.
Enterprise/Complex Core Sales model revolves around nurturing customer stakeholder relationships. As Stakeholders multiply, there is a higher risk of a “no decision” than with other sales models. But it is usually worth the time and cost investments, as these are the customers that can guarantee the most stability and revenue for your business over the long term.
Customer Stakeholders typical involved in selling IT systems is a Business sponsor, Budget holder, IT approver, Commercial approver, legal approver, project members from procurement,
Knowing who at the customer can agree on a joint “close plan” and finding a coach within the customer to help navigate the process makes the likelihood of closing the sales bigger.
How to make the Enterprise sales buying Journey work
The level of care from your sales team will be instrumental in closing these long-term corporate customers. Your sales team is there to securing and retaining enterprise customers. They must give personal attention and provide tailored solutions for each customer.
The sales team needs to help the buyer to better understand the buying context and create value to facilitate the decision-making process. Complex selling implies:
- Creating a vision of the future solution – high value (aligning multiple stakeholders)
- Acknowledging that Customer themself doesn’t know the buying process
- Working with multiple levels of hierarchy (both internal & external)
- Onboarding and bringing in Consultants and sales experts in the right conversation.
To close a deal, all internal buyers need to be aligned on the issue and potential solution. The sales team must do everything to facilitate the buying process, starting by educating the internal buyer to help you bring your solution in front of the budget owner/decision-maker. A good sales process supports the internal buyer.
It works best if you do not focus on selling features and benefits but on the value, you can bring to the client.
Adopt a pro-active attitude, dare to have a point of view, and bring insight and perspective. Always use your questioning and listening skills. The challenger sales approach could be an approach to follow.
System support requirement for Enterprise sales
A legacy CRM system is not enough any longer. If you want to succeed in modern enterprise sales, you need a new Customer engagement system including AI forecasting capabilities with a strong tied into Business Analytics and even Marketing to do Account-based Marketing. The Customer engagement system needs to hold historical activities, milestones, etc. as the sales cycle can belong.
Knowing your customers’ organization like fx keeping up with job changes is a big task in enterprise sales. Using a Customer engagement system with deep integration to LinkedIn Sales navigator will make knowing the customer organization, its buying team, etc., and manageable task.
Team selling is necessary; you need to onboard and include consultants or experts, so a collaboration tool tied to your CRM is required. For example, I use Microsoft Teams; this is where I expect to be onboarding to the sales opportunity; we collaborate on documents, customer org charts, “how to win plan,” etc.
Consumption Core Sales model
The consumption Core Sales model is all about customers using the services. No revenue is recognized until services are consumed. you know you do consumption sales if the customer does not pay upfront. Not matter how a signed contract got “sold” (by self-service, Transactional, or enterprise sale) it only marks the start of the engagement process with the client to secure an ongoing usage of the product/service.
So, in short, securing a signature on a contract, although massively important and a requirement for most companies to even begin to test your services/Product, is just one of the first steps in the cycle.
if you are in IT and have products transitioning from SaaS-based solutions to consumption-based cloud platform solutions then there is a big shift in how you engaged with customers. The signing of the cloud contract is just the beginning. Helping companies adopt cloud technology usually takes 12-18 months. it is all about staying highly engaged–more like a consultant–which meant non-sales activities. On top of this normal sales activities like building pipelines, will become very “difficult.”, the standard sales cycle does not apply any longer. Selling will go from front-loaded to continuous. If you do not believe this is true, then read Is Sales changing due to “product as a service”?
How to make the Consumption sales buying Journey work
Metrics are critical and you will need to marry your Customer Relationship Management (CRM)/Customer engagement system with your billing system so you can look at both pipeline and actual spend. In the consumption model, you must look at engagement data, to determine where and when to focus your ongoing customer conversation/expansion strategies. You must be even more forward-looking, a quarter + 2, to determine if we’re delivering enough value.” Ensure your operations team is tightly partnered with your sales leaders. Operations should be part of your weekly forecast calls and be diligent in finding new ways to look at various metrics to help you understand which levers you can pull to grow the business.
Many companies in consumption-oriented models have opted to choose CSMs for the customer conversation focal point as they are usually more product-oriented or technical than using salespeople.
System support requirement for Consumption sales
After a successful full Enterprise Consumption sale to a customer, the ongoing sales should feel and be as easy as “transactional or self-service sales” as the big decision have been made and only purchase is left, so you need the same system support from both transactional, self-service and enterprise sale.
An agile BI system with the possibility to put automated action behind engagement data is necessary to drive actions when product engagement passes certain thresholds.
Make the right choice of System support to stay competitive
Although all core sales models require different system support to work there are some common grounds that need to be in place like:
-a “Customer Data Platform”/CDP. If a company has multiple siloed systems (which most companies have) containing data needed for the Sales model, these data need to be unified as a sole source of truths around a customer /company entity. This is primarily needed to have all the detail signals ready to go for Marketing to “attack” the right customer at the right time.
-a modern marketing engines with real-time marketing features enable you to engage customers in real-time with features such as event-based customer journeys that are needed. If the marketing engine could connect directly to your ” Customer Data Platform”/CDP you will find that your Marketing department will drive better-qualified leads towards your sales department.
Sales Process vs Sales Model
Even though sales processes and Sales Models are related they are not the same. The sales process is a consistent set of trackable steps that includes stages and gates, is used for forecasting, goes from beginning to end, and is typically tied to a CRM. Most important to understand is that you “system support” a Sales model, and tweak roles and responsibility of the needed “system support” with a Sales process.
In an inbound/inside sales process, sales organizations rely on online ads, SEO, and content marketing to attract potential buyers. Visitors become leads by completing website form pages to request more information, and inbound sales reps should then contact those leads to learn about their specific needs and begin the qualification process. First stage in their sales process should be Qualify.
In an outbound sales team’s process must hunt for their leads. Through a combination of cold-calling, cold-emailing, social media outreach, and networking, outbound sellers identify potential buyers and reach out to introduce their solution. The first stage in their sales process Prospect and Make Contact.
In a relationship-based sales process, revenue is driven entirely by existing clients, for relationship-based teams, the sales process shouldn’t end with the Closing stage. Make sure you’re staying on top of your clients’ needs by adding some post-sale stages like First Check-In and Upsell.
In a Team Sales process require collaboration, primarily seen in the Enterprise sales process; adding a Research stage after Qualify provides a fantastic opportunity for shared knowledge. Research is where your organization digs in deeper to learn about the specific operations and needs of the prospect in question; the Research should be shared with the seller Team.
In a channel sales process, a company sells its product through a partner network. Your job and process are to teach other people (Partners) how to sell your product. Channel Sales have different flavors like:
- Affiliate Partners
- Value Added Reseller (VAR)
- Independent Retailers
Hope you find some valuable information, please give a comment below on how you found above to fit into your worldview of sales and system support needed…. all and any comments and feedback are valuable for us all to learn together.
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