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Does American-style selling work in Scandinavia?
Petri Parvinen, Ph.D.Professor of Sales ManagementAalto School of Economics, Finland
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Lecturer
• Petri Parvinen, Ph.D.
– TSE, LSE, SSE, TKK, HSE, Stanford
– Professor of Sales Management @ Aalto School of Economics
– Research interests: e-selling, sales psychology, human-to-computer interaction, social psychology of commerce, business model/industry transformation
– Founder or founding investor: 12 companies, 2 bankruptcies
– Approx. 200 consulting projects across industries
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• Innovation selling• Interaction psychology
online• Channel optimization• Value-based selling
Front yard vs. back yard
Petri Parvinen
- - - - - - - - - - - - - - -- - - - - - - - - - - - - - -
Sales Reputation?Reputation ranking of 380 professions (2010):1. Surgeon2. Specialized Medical Doctor3. Medical Doctor4. Firefighter5. Medical Director6. Neurologist7. Opthalmologist8. Midwife9. Dentist10. Nurse
360. Salesperson371. Car sales representative373. Product representative379. Phone sales representative380. Door-to-door salesperson
~300. Paper mill worker, weaver, clerk, warehouse worker
306. Key Account Manager
365 (2008) TV chat host
Petri Parvinen
Case TeliaSonera
• In order to further improve corporate spirit and market orientation within the organization, TeliaSonera requires strong and motivating leadership, which will focus on growth, re-organizing, and creating value, according to recent company press release
What "mental" aspects are repeated in best salespersons? (Pöntiskoski & Parvinen 2010)
1. Fast exchange, e.g. Instant start, feeling good does not interfere
2. Salesperson thinks about the sales meeting in advance Reaction in the actual situation is fast
3. Salesperson is ready to sacrifice his persona for results in the work
4. Salesperson knows the limit on how many customers he can manage with high quality and without delay
5. Problems are not being mulled over, but taken up in familiar way
6. Ability to excite and become inspired
7. Anticipation
8. Personal ambition
9. Spontaneous self-organization to roles
10.Unselfish and automatic helping, when colleague is having difficult time
• Hullut Päivät ("Crazy days")– Annual shopping carnival that combines the efforts of management
and employees– Self-taught, now copied
• How it is done?– Value proposition– Instructions and trainings– Competition between teams and units– Measurements– Open communication– Partners are involved to the spirit of the event– Successes are celebrated
• Bosses are embarrassed
Case: Stockmann
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WHAT DOES THE EMPIRICAL EVIDENCE SAY?
SUSTAINABLE, ADAPTED SELLING LINKED TO CUSTOMER VALUE/BENEFIT WORKS
WHAT CORRELATES TO PROFITABLE GROWTH? (Aalto University ”State of Sales”: Aspara & Parvinen 2007, Parvinen & Töytäri 2010)
• Marketing spirit: belief, will to win, coaching• It’s not about star sellers, it’s about educating the layman• Funnel : its management and metrics• If the market is small, go for blue ocean• Network self-esteem and network activity pays off• The more touching points, the better• Channel-specificity• Renew salesperson competence base to fit sales strategy• Focusing sales efforts into new business• Checking customer reactions personally after automatic deal• CRM and customer intelligence pay off• Personnel rotation pays off• Defining ”add-on sales” and rewarding for it pays off
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The commercial pioneer wins!
• Sales and marketing are ever more irreplaceable, because the world of business is growing increasingly ruthless:
1960s 1990s Now?
car retailing utilities prof. services
insurance pharmaceuticals healthcare
FMCG software infrastructure
paper industry forest industry government
wood industry
pharmacies
printing
books
Market orientation surpassed by customer management
Customer orientation Market orientation Customer management
Strategic orientation
Expressed wants Latent needs Engagement
Adjustment style
Reactive Proactive Value-based
Temporal focus
Short-term Long-term Lifecycle
Objective Customer satisfaction Customer value Customer value appropriation
Learning type
Adaptive Generative (Emotionally) intelligent
Learning process
Key accountsFocus groupsConcept testing
Lead-usersExperimentationSelective partnering
LadderingGrand tourWhite-boarding
Slater & Narver, 1998, Blocker et. al. 2011Slater & Narver, 1998, Blocker et. al. 2011
Adaptive selling has strong empirical backup
Hig
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alu
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valu
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Business“Win the deal"
Customer relationship “Deepen the friendship”
Expert sales
Sales based onbeing a buddy
Consultativesales
Directingsales
© Mercuri International© Mercuri International
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Think Big - Case: Pori Jazz
• Almost bankcrupt six times
• Always aimed to multiply its size– Old factory real estate ”takeover”– Infrastructure plan to lure investment– Local media and public opinion to ”confiscate” old brewery– Logistics center into sports and event arena with tram track– New strategy for the entire city as a postmodern city of culture
• Very modern business thinking and organization– 8 employees around the year, 3500 during the festival– direct economic impact 20Meur
’Enforce Business Model Evolution’
ProjectsProjects
ProductsProducts
ServicesServices
SolutionsSolutions
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Four Basic Business models• Project business (Cash flow only when agreed)
– Parties engage in an economic exchance typically for a longer period of time under inclarity as to what will actually happen in detail and typically under the expectation that the exchange will end sooner or later.
• Product business (I’d like one in exchange for €)– Well-defined outputs with limited clearly defined agreements
• Continuous servicizing (Cash flows unless otherwise agreed)– Partnership or networking production structure, where parties need each
other to be able to function and thus exchange can, in principle, go on indefinitely.
• Solution selling– Buyers do not need to know what components the solution to their
problem consists of and sellers get more money than from selling the individual components
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Successful selling under each biz model
• Project business (Cash flow only when agreed)– Relationship management and marketing skills, Selecting the right
customers, Setting limits to what is done, Understanding customer value creation processes, Reliability of sales and distribution
• Product business (I’d like one in exchange for €)– Quality and completeneness of productization, Understanding buyer
behaviors, Capacity of sales and distribution, Active, aggressive and driven sales people, Partnering and alliances to satisfy customer needs
• Continuous servicizing (Cash flows unless otherwise agreed)– Create constant need, Trustworthiness, Investment capability,
Deepening/exploitatiton, Intimacy management, Lifetime cycle management
• Solution selling– New angles, latent needs, uniqueness, coordination, repeatability and
reuse
Ekokem
• Customer lenses determine business model in waste business– Politician Service– Corporation Service– Infrastructure department Product– Government Project
• Anybody lazy? = solution = +20% margin
Nokia Siemens Networks
Nokia Siemens Networks
Business models influence saleswork!
1. Competence requirements for salespeople
2. Nature of practical sales activities
3. Principles of organizing sales
4. Entire organizations
5. Profitability
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Trust-based selling is on the rise (Clark 2011)
FINNISH VALUES = UNIMITABLE COMPETITIVE ADVANTAGE?
• Honesty
• Integrity
• Reliability
• Consistency
• Modesty
• Sticking to knitting
• Attention to detail
• Perseverance
• Calmity
• Prudence
• Effort
• Authenticity
1910s
personality
courtesy
initiative
“tact” (also hygiene)
1920s
analyzing customer
patterns of argumentation
tailoring selling points
objection handling
personal relationships
1930ssalesmanship =
seller valuebenefits of service/knowledge
delivered by completed sale
UNDERSTANDING CUSTOMER VALUE IS GOOD CUSTOMER SERVICE
THINK FOR YOU CUSTOMER.USE YOUR PROFESSIONAL SKILLS.
I CARE.REASON WITH SIMPLE NUMBERS.
AIM FOR A SUSTAINABLE OUTCOME.BE A GOOD WORKER.
Sociability vs. social skills in selling (cf. Keltikangas-Järvinen 2010)
• Both are needed, but social skills are more important• Social skills can be taught to any temperament, yet certain skills learned
better by certain temperaments– Temperament can not be taught
• Sociability > social skills = problem– But best if both are high
• Very sociable people can seldom be harnessed well for the goals of an organization
• The repertoire of situation-specific skills is key in successful selling– Withdrawal vs. negotiation vs. plea-bargaining vs. pushing vs. strict rules
• 21st century people resemble 60s narcicists!• Detachment becoming increasingly important to learn atypical skills
– Behavioral ”modes” emerge– Uniforms, avatars, double lives
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SUMMARY
Make sure everyone understands the cash flow logic in each business unit
1. Sell more! (new customers, upselling and cross-selling)
2. Make sure current cashflows don’t reduce or die!
3. Change the cost/revenue ratio!
4. Bring cash flows home faster!
5. Balance cashflow volatility (= reduce risk)!
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MINI CASH FLOW STRATEGY
WEIGHT% PREVIOUS 12mnths
WEIGHT% NEXT 12 mnths
WHAT?
Sell more!
Maintain existing cash flows!
Change cost/ revenue ratio!
Bring cash flows home faster!
Balance cashflow volatility and reduce risk
