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One of the greatest frustrations facing senior leaders and their sales and marketing organizations today is that their customers are treating their high-value solutions as commodities.

What they don’t realize is that they themselves are probably more to blame for this problem than any external force. Self-commoditization is the most significant threat to success in selling high‑value solutions, and your sales processes and behaviors are likely the largest contributing factor to that exposure.

If your sales organization’s proposal conversion rate is decreasing and the percentage of “no decisions” is increasing, your company may be commoditizing itself. Your sales process may be based on assumptions that are not only irrelevant in today’s selling environment, but are counterproductive and sabotaging your strategy.

The First Trap

Think about it this way, your customers are likely stressed in their current situations, and you (and your competitors) are suggesting more changes and presenting them with a great deal of data that they must sort through, comprehend, and connect to their unique business situation on their own. The first trap of self-commoditization is the tendency of salespeople to depend on their customers’ decision-making process, which is often insufficient.

Consider this, in the absence of a quality decision process, their decision will degenerate to the lowest common denominator — price. Feeding good information into a faulty decision process will always yield suboptimal results. To ensure that your customers have a quality decision process, simply put, you need to create it and make sure your salespeople are guiding your customers through it — just as a doctor, an attorney, or any other trusted advisor would do.

To build the optimal decision process, gather the best minds in your business. Include representation from all the critical functions in your business. Ask the group the following question: “Knowing what all of us know, if we were our customers, how would we go about deciding if we should make this purchase?” Your cross-functional and top-performing team should make a list of all of the questions that should be asked about the problem to be solved in your customers’ businesses and the questions your customers should be asking you and your competitors to discern the best solution for them. Pay close attention to the questions you know customers seldom think of asking. These questions, when positioned correctly, will expand your customers’ awareness of the issues your value will address, increase your credibility, and will ultimately set you apart from your competition.

Determining the True Value

The second, closely related trap of self-commoditization is our assumption that customers are able to quantify the financial impact or true value of the solution being offered. However, until you quantify that impact, you are dealing with a highly speculative issue.

Many times your customers do not have enough knowledge or a method to measure the value your solution will provide pre-sale, and worse, left on their own, may not be able to measure the value they have received from your solution post-sale. Many sellers will hedge on measurement, saying it’s hard to put the financial amount on the impact. Let me suggest that if you think it’s hard, imagine how hard it is for your customers to determine the financial impact on their own.

Financial impact is a critical decision component, and your customers will welcome your company’s guidance. To provide guidance, first we need to create a formula that is conceptually sound, and then engage the customer in providing the data to complete the calculation.

To develop a financial impact formula, again, gather your best minds and answer the following questions:

• What are the top value impacts of our solution?
• In the absence of each value element, what are the consequences your customers will be experiencing?
• What are the cross-functional impacts of those consequences on their businesses?
• What are the various performance metrics that are impacted by those consequences and who would be the most concerned about those metrics?

Blend the answers to those questions into a formula and diagnostic question flow that will allow your team to guide various individuals within the customer’s organization to “fill in the blanks.” If the customer believes the formula is sound, they will be compelled to enter their data and own the answer.

Finally, we must ensure that the numbers plugged into that formula are derived from the customer’s reality, not industry averages, past experiences with other customers, or other more questionable sources. We know we have successfully completed these steps when our customers are willing to defend the validity of the financial impact among their own colleagues.

Ensuring that your sales organization is equipped with a quality decision process that guides your customers to a tangible measurement of your unique value will be your strongest defense against commoditization and will ensure that your organization can avoid two of the major traps of self-commoditization.

MANA welcomes your comments on this article. Write to us at [email protected].