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Giving customers what they want: Growth and differentiation through outcome selling

B2B buyers today are knowledgeable and sophisticated: they need tailor-made solutions that address their unique needs.

Overview

It's hard to find a major B2B product company that doesn't offer some type of value-added solution to complement their standard product lines. However, most of the “solutions” are, at their core, simply pre-packaged offerings which are not specifically designed to target a customer’s true needs.

To truly distinguish themselves from competitors, deliver greater value to customers, and grow more profitably, B2B companies need to focus on understanding the unique and complex needs of their customers to design solutions that deliver a positive business impact. We call this approach “outcome selling”, and believe that it is the natural next step in the evolution of the traditional products business.

The business case for an outcomes-based sales approach is compelling. By creating a tailored solution focused on delivering the business objectives of customers, a vendor becomes less vulnerable to being commoditized and competing on price. An outcomes-based approach also enables product companies to create more strategic, longer-lasting partnerships with customers based on shared risk and reward.

Key Findings

In practice, an outcomes-based selling approach differs significantly from traditional solutions selling in four key ways.

  1. Having the right conversations with the right prospects. In outcomes selling, the sales team doesn't respond to RFPs or pursue candidates for opportunistic sales. Instead, its approach is much more strategic: it proactively seeks out specific target accounts that have significant partnering potential and are looking for outcomes that the company can help them achieve.

  2. Designing the right custom solution. While they include existing products and services, solutions focused on outcomes typically go far beyond simple bundles comprised of offerings in the current portfolio. Often, the most powerful solutions—ones that are truly unique and address customers’ major pain points—are those developed jointly with customers through in-depth conversations with executives who are most responsible for moving the business forward.

  3. Creating new commercial models. Outcomes-selling, presents opportunities for companies to devise new commercial structures. Price rarely forms part of the equation. It is replaced by true risk-and-reward arrangements, in which compensation is based on the extent to which the solution enables the customer to achieve its desired outcomes. Such arrangements create a powerful new value-based revenue stream and makes the company a true partner in the customer’s business.

  4. Building and delivering the solution. The process of developing and delivering an outcomes-based solution requires working across all areas of the company, recognizing and playing to the company’s strengths, and tapping into appropriate partners to access the key capabilities that the company lacks.

Recommendations

Evolving towards an outcomes-based selling model requires specific capabilities—some of which may already exist in a company, and others that may be completely new.

In our experience, companies looking to successfully adopt an outcomes-based approach typically require significant changes in four major capability areas:

  1. Enterprise Strategy & Management. Transforming to sell outcomes should be an initiative led by senior executives from both the business and the sales organization. Because outcomes selling is a fundamental shift in both what is sold and how it’s sold, it requires commitment from a wide set of parties to be successful.

  2. Go-to-Market Capabilities. A company must determine the specific type of clients it wants to pursue and should develop a common approach and tools that are supported by dedicated outcomes.

  3. Offering Development & Services Delivery. To craft custom solutions for the client, sales teams will need access to solution architects who have the right mix of technical and business skills—a unique skillset that is not typically available in many products-focused sales forces. In addition, a company will need new capabilities to handle the integration and implementation of new solutions at the client.

  4. Cross-Organization Enablement. The most fundamental requirements for successful outcomes selling are what we call cross-organization enabling capabilities.