As director of Clarkson University’s undergraduate industrial distribution program for eight years, I often heard from alumni on the importance of adding a “Solution Selling” course to the curriculum. We did, and the offering was a hit with students and was a differentiator for those who interviewed for sales positions with companies that use a variation of the technique. Strategic account management is a great fit for individuals preparing for careers in technical sales. The concept makes sense on many levels, and solution selling has been an effective approach for many firms. However, there is much room for improvement based on reports I get from the trenches and what research has shown.
Solution selling is a structured dialogue model for consultative, diagnostic conversations with customers. In marketing, this approach is intended in “pull” environments where the sale is not just about a product. The customer requires “client” treatment, and the supplier’s representative must possess a myriad of knowledge, skills and abilities—especially a solid foundation in the technological landscape of the industry, not just a product focus—to be effective.
Newcomers to an industry require a solid foundation in engineering concepts, and veterans have learned from the ground up. Solution selling techniques are not overly complicated to learn; fortunately, some companies have the internal capabilities to show their sales force any number of x-step models to become effective solution sellers. If not, there are plenty of consultants and firms that specialize in training who can provide profound knowledge.
The Design for Six Sigma Methodology
So why are so few firms using it? A study presented at the 45th International Congress and Convention Association in 2006 found that only 22 percent of sales-focused organizations used a formal client needs assessment approach as a part of their business operations. I propose that “solution selling” is not what companies need to be doing for their customers. Rather, the firm needs to solve its internal and external technical selling “capability gap” to achieve a strategic advantage that will enhance the long-term competitive advantage in the global economy that drives commerce today, even if the current markets are right outside the front door. With a robust methodology, backed by proven qualitative and quantitative tools, companies can become opportunistic, providing consistently superior client management in the role of strategic partner.
Such a methodology has been around for nearly 20 years. It was developed in telecommunications, and it is built on a foundation of metrics, measures and measurement. It’s called Six Sigma, and it was an outgrowth of Motorola’s organizational imperative to succeed as a U.S.-based company in an industry that had been taken over by the Japanese, who had been incredibly successful using quality-based principles and systems to become the world leaders in communication devices. What Motorola was able to do to stem the tide is exactly what progressive distributors can undertake to completely satisfy customer needs the first time, every time!
The Design for Six Sigma (DFSS) methodology is the best approach to strategic account management, something that transcends solution selling. The five stages—Define, Measure, Analyze, Design and Verify—constitute a robust, iterative and customer-centric process. Strategically, you want to find the “best” customers to convert into client status. Traditionally, DFSS has been the domain of product manufacturers who are driven by the 3.4 defects per million opportunities.
However, the philosophy can become a value-added differentiator for sales-focused companies that want to be rewarded for their key asset—information! A decision to engage in DFSS as the cornerstone of “solution selling” should not be taken lightly. As a matter of fact, the methodology should only be applied with customers who can be long-term (and profitable) partners. The goal is to select one or two key accounts and develop proficiency with a DFFS approach. One thing to remember is that the primary objective is to build a sustainable relationship, which works well given the iteratively interactive nature of the Six Sigma methodology.
The Voice of the Customer (VOC) assessment begins the client engagement process. Communication, collaboration and cooperation are the keys to establishing a sales system that consistently satisfies customer needs completely. The VOC is intended to help both parties understand each other—both customer opportunities and supplier capabilities. During this stage, the goal is to translate the customer environment into specific opportunities by establishing the critical-to-quality variables (CTQs) that will ultimately become specifications for systems that can be delivered. For example, the VOC for a company looking to expand its capacity to better serve its customers will break down the capacity discussion to specific system requirements based on outcomes that are strategic objectives.
As you move through the Measure stage with the customer, the focus becomes prioritizing the requirements to establish system tradeoffs, since you can do a few things well or many poorly. The CTQs can be evaluated using a technique called Quality Function Deployment (QFD). Though most of a distributor’s product line is already engineered, there are opportunities to integrate products into systems. Many material handling manufacturers are capable of customizing some or all of their product line, and the distributor can act as the design intermediary. QFD provides a structured approach to aligning the system requirements with the capabilities of the value chain by comparing the specifications with technical requirements and finding the key connections, which will validate the CTQs. The resulting metrics become the “contract”—critical, measurable and achievable.
In the Analyze stage, the objective is to take the prioritized CTQs and develop alternative ways to meet the systems requirements. The Fishbone Diagram is a less-structured tool than QFD but extremely effective for the third stage. For each of the critical system variables, representatives from the supplier and customer play a game of “five whys” within four categories: manpower, material, machinery and method. The goal here is to consider the potential, impossible, probable and ultimately, possible combination of arrangement of system solutions based on the key QFD variables in terms of “musts,” “wants” and “like to’s.”
At the Design stage, the previously identified solution is broken down into primary variables. Before the physical components come together in the final design, another DFSS tool that works well is the “Design Failure Modes and Effects Analysis” (DFMEA). It is a probability-based method used to determine the potentially weak aspects of the proposed design and then identify alternatives.
Finally, Verify is where the initial transaction becomes the potential partnership. How well did the first-pass process go? If the Voice of the Customer begins DFSS, it’s the control chart that brings activities to a satisfactory conclusion. A control chart that establishes its capable limits inside the specification standards becomes the “voice of the process.” Customers become clients when systems are optimized based on the ability to deliver on CTQs. Suppliers delight clients when the working pieces fit together seamlessly.
Material handling opportunities are driving increasingly complex technical solutions. The potential reward for performing flawlessly is as significant as the consequences of failing. A progressive distributor will demonstrate true strategic sales capability by employing a DFSS-like approach to its customer account management, employing its associated list of qualitative and quantitative tools. If only 22 percent of companies are currently using systematic methods in their selling activities, there is plenty of opportunity for those who want to join in.
|Meet the Author
Mike Ensby is an instructor at Clarkson University, located in Potsdam, New York, and on the Web at www.clarkson.edu.