Some say that solution selling is a dying concept or less relevant than it used to be. I think it is still an important part of the sales process, but its effectiveness relies on having a strong financial acumen and access to a robust financial solutions capability.
Over the years I have attended several annual IT sales kickoff events. I have also participated in hundreds of other sales events including QBR’s, sales training and education programs, and analyst events hosted by the likes of IDC, Gartner, and others. The concept of “solution selling” has seemed to survive the test of time.
It is almost always mentioned or referred to in one form or another. Whether it’s part of the keynote speech on the main stage or included in individual breakout sessions or part of the sales training curriculum. Apparently, solution selling continues to be a relevant part of most sales strategy discussions.
What is Solutions Selling?
The concept of “solution selling” is not a new phenomenon. According to Wikipedia, solution selling has its roots in the early 1980s with companies like Wang Laboratories and Xerox Corporation, and it is highly likely that solution selling was used as an individual account strategy even before the framework became highly publicized and popular.
Solution selling is defined as a sales methodology that focuses on solving a particular customer problem. It is a consultative sales process that uses a combination of products and services to solve the customer’s unique set of requirements. It requires an account team to identify and build relationships with key stakeholders (decision makers, influencers, etc.), and requires a much deeper understanding of the customer’s business, and it requires broader understanding of the competitive market and the overall economic environment.
Due shrinking budgets and the changing competitive landscape, the concept of solution selling has evolved to include a growing emphasis on the financial aspect of the sale. This requires being able to back up buying decisions by showing the value of the solution in quantifiable business terms. Understanding why, what, and how customers want to buy is extremely important. The integrated technology and financial sale can be the key to winning or losing a deal.
The Role of the Financial Engineer
A key player in the solution selling process is the financial solutions manager or financial engineer (FE). The FE typically plays a complementary role to the systems engineer (SE) by proactively working with the customer and the account team help translate the technical solution into financial/commercial terms. The FE is the trusted advisor to sales and the customer with the responsibility to produce and present the value proposition through creative financial solutions and quantitative financial analysis. Financial engineering conversations can occur at many levels within the customer’s organization but they are particularly effective at the executive or C-level.
Benefits of Financial Engineering
- Helps provide the basis for the “total solution sale” including products, services, and financial solutions
- Less pressure on price
- Protects margins
- Can help accelerate sales cycles by providing a strong business case to help overcome financial objections
- Helps customer determine most cost effective way to acquire the solution
- Which could lead to increased deal sizes, and
- Can be the key to winning or losing the deal
Does Solution Selling Work?
Absolutely, if executed correctly and if it’s integrated with a strong financial selling capability. The concept of solution selling has become more widely adopted. Your competition and your customers have developed sophisticated tools and processes for analyzing proposals. Whether or not you win a particular deal will be based on your ability to show real or quantitative value as well as being able to convince your customers in your ability to execute. There are a lot of moving pieces to the puzzle. The customer is usually in a state of flux and the market is constantly changing. A successful sales team must be flexible, predictive, and adapt to changes quickly.
The challenge many IT companies face is that they are very good with the technical sale but struggle with the financial aspect of the sale. This is where companies like Technology Finance Partners can help.
Technology Finance Partners specializes in financial sales execution, which is based on the fundamental premise of a fully integrated technology & financial sale.