Outlook Point of View, November 2008
Anne Bøe is a senior executive in the Accenture Customer Relationship Management service line, based in Oslo.
Vegard Kolbjørnsrud is a senior manager in Accenture Strategy, based in Oslo.
Petter Knudsen is a manager in Accenture Strategy, based in Oslo.
For sales organizations in most industries, the ability to sell comprehensive business solutions to customers, rather than just individual products and services, has become a strategic imperative to achieve high performance. The best sales teams today are aiming high: they seek to become trusted advisors to their customers' senior management and strengthen C-level relationships by developing value propositions that proactively address customers' strategic business priorities.
The typical sales organization rarely has the structures, incentives and training to shape deals in that way—to proactively focus on business value creation in a way that is relevant to their customers’ top management. Many sales teams are primarily reactive, built to respond to RFPs and RFIs (customer requests for proposals and information). Such an approach limits a company’s opportunities to express its true differentiators, and it often lets the customer’s procurement function set the terms of the discussion.
Structurally, selling large and complex deals involves a kind of deal-making cooperation among different parties of an organization—one that is difficult to accommodate with a company's existing structures and incentive strategies. The training required for effective solution selling is different, as well; it must focus not only on functions and features but on how to articulate the actual business value created by a suite of products.
We have found that a more comprehensive approach—something Accenture calls "deal shaping"—is needed to help sales organizations thrive in this challenging selling environment. Involving sales methods, dedicated teams and distinctive training opportunities, the deal-shaping approach enables a sales force to proactively develop, sell and close deals based on compelling value propositions relevant to the C-suite.
Deal shaping keeps a sales organization focused on long-term goals: not just selling one deal but on establishing trusted relationships with customers that can build loyalty and lead to growth in the volume of business.
What is Deal Shaping?
Deal shaping is a process with four steps that apply to all environments in which a sales team is proposing comprehensive solutions based on the business value to be created for a customer.
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Understanding the customer: Developing a customer profile, based on close knowledge of the customer's industry, history and current business challenges and opportunities.
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Developing the value proposition: Working as a team to develop compelling statements of the value to be created, linked to the customer's business needs. Workshops are a common way to bring multi-disciplinary teams together to focus on matching the company's products and services with a customer's situations.
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Identifying and quantifying the business value: Identifying the impact of the value proposition on the customer’s financials, business processes, organization and customer experience, and quantifying that value where possible with individual metrics or even a detailed business case.
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Developing the sales presentation: Communicating the value proposition to the customer’s executives using a structured communications methodology that includes creating a storyline, developing a presentation and rehearsing it.
To support the sales team along this entire four-step process, deal shaping brings together a variety of assets and resources:
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Methods based on leading sales practices: Templates, plans and job aids structured to support each step of the deal-shaping process, helping a sales team to develop, substantiate and communicate customer value propositions.
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Hands-on deal-shaping team: A dedicated, cross-disciplinary team that works with major sales cases, bringing collective knowledge and experience together for actual client situations.
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Skill building: Training sessions that enhance skills—both generally and in ways that help the sales force to excel in shaping deals driven by business value.
The multi-disciplinary team that works on deal shaping is an important key to overall success. Such a team ideally brings together multiple perspectives and skill sets, including analytics, market understanding, problem-solving capabilities, industry background and close knowledge of the customer's history and current situation.
The deal-shaping team is typically jointly staffed by the client and Accenture in the early stages when deal-shaping capabilities are established. Training is a critical component, but it's really the hands-on interaction that shapes the new behaviors needed to be successful at creating management-level value propositions and selling solutions.
Deal Shaping in Action
HP Norway—the Norwegian unit of HP, the world's largest technology company—has successfully used the deal-shaping approach to strengthen its pipeline of large deals. The company's merger with Compaq in 2002 broadened HP's product and service portfolio and helped the company become the largest IT infrastructure provider both worldwide and in Norway. At the same time, HP was increasingly being invited to C-level meetings with customers to discuss how technology-based business solutions could help improve their customers' competitive position. While certainly a welcome development, the increased scrutiny by customers' senior management posed a new challenge to the HP sales force: developing skills in identifying and communicating the business value of its solutions in terms appropriate to the C-suite.
Working with Accenture, HP Norway has developed deal-shaping capabilities that allow the company to compete more effectively for larger deals and build long-term, value-oriented business relationships with their customers. Through a mixture of process reengineering, training and hands-on sales work, the deal-shaping program for HP Norway resulted in the mastery of skills and behaviors that drive high performance.
Since the completion of the deal-shaping transformation program, HP has extended the process and methodology to its operations in other Nordic countries and across Europe.
According to Eivind Roald, country manager for HP Norway, "Since we started our deal-shaping program in 2003, we have successfully landed several large technology deals. Through this period, we have increased sales from the program by more than 40 percent. We have totally changed our position from being seen only as a 'box-pusher' to be a technology partner for our customers.”
Another company that has successfully adopted deal shaping is Telenor Business Norway, the Norwegian business services division of telecommunications operator Telenor. Faced with decreasing prices, commoditization pressure and reduced customer satisfaction in the business segment, Telenor needed to transform its sales force into an organization capable of proactively identifying compelling value propositions and communicating these to its customers’ senior executives.
A joint deal-shaping team was created with professionals from both Telenor and Accenture. This team worked with Telenor's key account managers, supporting the sales team and applying the deal-shaping process on 12 concrete sales cases over the course of nine months. Training sessions were also held, and the team created a Telenor-specific deal-shaping handbook with real case examples, sample methods and process descriptions.
Telenor has advanced toward high performance in several key ways thanks to deal shaping. Customers have responded positively to the value propositions presented to them. One Telenor customer chose to cancel a planned RFP and entered directly into exclusive negotiations with Telenor, resulting in a new, five-year contract.
Telenor has now made deal shaping a permanent part of its large-account sales effort and has established deal shaping as a dedicated organizational unit. According to Tor Harald Strømsnes, sales director of corporate customers for Telenor Business Norway, "Deal shaping is the most important strategic move Telenor has made to shift from being a commodity supplier to become a part of our largest customers’ strategic agenda.”
Shaping Deals for High Performance
Deal shaping helps a sales force proactively develop and present customers with compelling value propositions. It moves a sales organization beyond the constraints of the typical RFP process, helping them forge long-term relationships with customers by demonstrating a deep and intimate knowledge of the customer's needs and opportunities. Deal shaping supports a company's quest for high performance, offering competitive differentiation over extended economic cycles and even through successive leadership changes by key customers.
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