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4.0 out of 5 stars A Sales-Force Led Approach to Helping Customers Succeed,
This review is from: What the Customer Wants You to Know: How Everybody Needs to Think Differently About Sales (Hardcover)Peter Drucker first described the importance of helping customers be more successful in serving their customers as a strategic issue. As such, most students of business leadership and management have favored analyzing what you as a supplier can do to help customers succeed, adding new capabilities that fit those customer needs, and focusing on customers where you can add the most value. More recently, Michael Porter has developed quite a reputation for spelling out some of the sources of potential advantage to pass along to customers in serving their customers.
The principles behind this book have been employed for over a century by many consumer products companies (such as Procter & Gamble) who knew that retailers wouldn't succeed if consumers and users didn't gain demonstrable advantages from their offerings. Industrial products companies have often been slower to adopt that perspective. Why? Many times their customers felt like they knew more than any supplier and didn't want to be bothered to hear suggestions.
Ram Charan argues that customers are more open than ever to letting you propose and implement valuable improvements to their operations that accelerate sales, increase profit margins, reduce capital needs, and lock out their competitors. He offers no proof for that proposition other than a few case examples of companies that have implemented his approach. My own experience is that it is difficult to get customers to tell you enough about their needs to propose what they actually need. My clients tell the same story.
Curiously, he ignores the whole question of learning more about customers' needs to serve customers to set a corporate vision and strategy. Indeed, his approach seems to assume that you stick with the same customers. Now, in most industries there are more unserved potential customers than actual customers for a given company so I don't know why he assumed that.
In most companies that take such strategic stances, the data gathering and strategy setting occur at the senior level. Then, the sales process is adjusted to reflect the new realities.
Mr. Charan, by contrast, feels that the senior people can train the sales people to find out what customer needs are in serving their customers and to coordinate responses to meet those needs. My own sense is that it depends on the capacity of the salespeople and the relationships they have with their customers.
But if you are convinced that salespeople should drive your strategy, this book is a pretty good resource for spelling that out and telling you what to do. The book combines a fable with case histories and process suggestions.
The book is completely silent on the following subjects:
1. How to use the sales force to check out what can be done to make customers more successful by making their customers' customers more successful.
2. How to select the customers where you can have the greatest advantage over competitors in serving with this approach.
3. Using feedback from customers to direct development activities.
In a sense, it's as though Mr. Charan tried to write the equivalent of The Balanced Scorecard and The Strategy-Focused Organization . . . but by putting sales people at the center. I think the title was mainly chosen to follow along with his book about CEOs, rather than reflecting the topic suggested by the title.
Unless you are committed to this approach, you can skip this book.
5.0 out of 5 stars How Value Creation Can Transform the Selling Process,
This review is from: What the Customer Wants You to Know: How Everybody Needs to Think Differently About Sales (Hardcover)In all of his previous books (notably Execution co-authored with Larry Bossidy and then Know-How), Ram Charan focuses his attention on how to achieve and then sustain superior organizational performance. Another earlier work, What the CEO Wants You to Know, is an excellent companion for What the Customer Wants You to Know because it helps those in sales - as well as those who supervise them -- to understand the customer's business more broadly. In fact, the inspiration for the Customer book came from the CEO book. Charan explains in it why traditional sales approaches are unable to satisfy what customers want salespeople to know: How their business works and how they can make it work better. "The heart of the new approach to selling is an intense focus on the prosperity of your customers." Value Creation Selling (VCS) is the foundation of what Charan recommends.
He notes that VCS is "sweepingly different from how most companies sell today in these five ways: "First, you as a seller and your organization devote large amounts of time and energy - much more than you do today - to learning about your customers' businesses in great detail...Second, you use capabilities and tools that you've never used before to understand how your customers do business and how you can help them improve that business...Third, you're going to make it your business to know not only your customers but also your customers' customers...Fourth, you have to recognize that the execution of this new approach will require much longer cycle times to produce an order and generate revenue...Finally, top management in your company will have to reengineer its recognition and reward system to make sure that the organization as a whole is fostering the behaviors that will make the new sales approach effective."
In this volume, Charan examines these and other issues in great detail and with meticulous care. Having briefly identified the "what," he then devotes most of his attention to HOW. For example:
1. How to fix "the broken sales process"
2. How to become a customer's trusted partner
3. How to formulate the "Value Account Plan"
4. How to create a Vale Creation Sales Force
5. How to make the sale
6. How to sustain the VCS process
7. How to take VCS to the next level
Earlier I referred to Charan's somewhat more narrow focus as he explains why traditional sales approaches are unable to satisfy what customers want salespeople to know. That's true but it should be noted that Charan views the VCS process - if properly formulated and then effectively implemented - should directly or at least directly involve everyone within the given enterprise. In fact, because the VCS process is information-driven, he strongly recommends that external sources also be utilized to obtain the information needed about each customer and its business. Those sources include online and electronic business media as well as vendors and research analysts within the given marketplace. Thorough as always, Charan even suggests what kinds of questions should be asked to determine specific information needs and objectives.
Organic growth is at the top of every company's agenda. Many growth strategies do not get the right mileage because the sales function remains in the previous age. This book proposes value creation selling as a way to differentiate any business from its competitors. It enables the sales forces to break out from what Charan considers "commoditization hell." Here's a key point: When a customer sees that the selling company is creating value on a consistent basis better than anyone else's offering, the sales force has a better chance to sustain more profitable pricing.
Near the conclusion of the book he observes: "Transforming a sales force from transactional selling to one that creates value for the customer is a long journey...Every part of the company has to put the customer first...Virtually every company will have among its customers some who are progressive and fully understand the value of collaborating with their suppliers to the mutual benefit of both. Start there, and don't turn back...Above all, value creation selling will spur your company to come up with new ideas and innovations that will continually differentiate it in the highly competitive business environment of the twenty-first century. It is the pathway to a prosperous future."
Charan then offers an appendix that can help each reader to diagnose the state of value creation selling in her or his own company, once the VCS process is underway. He recommends that this self-audit of 15 key components be evaluated using a scale of 1 to 10 (from "definitely not" to "definitely yes") and that it be completed four times a year. This same self-audit can also be used to assess the company in relation to its competition.
After I read this book and then began to organize my thoughts about it before composing this review, it occurred to me that everything Charan recommends is also relevant to business development initiatives because prospects as well as current customers favor those who have obviously made a great effort to know how their business works and how they can make it work better. Granted, current customers are generally more inclined to share information than are prospective customers. Nonetheless, in my opinion, those in sales who do their homework gain a decisive competitive advantage because of their "an intense focus on the [prospect's] prosperity."
If you share my high regard for this book, I urge you to check out the aforementioned What the CEO Wants You to Know, Execution and Know-How as well as If Only We Knew What We Know co-authored by Carla O'Dell and C. Jackson Grayson, Patrick Lencioni's Silos, Politics and Turf Wars, and Creating New Wealth from IP Assets co-authored by Robert Shearer and other members of the National Knowledge & Intellectual Property Management Taskforce.
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What the Customer Wants You to Know: How Everybody Needs to Think Differently About Sales by Ram Charan (Hardcover - Dec 25 2007)
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