JOURNAL Issue 06
STARTUP BRITAIN – CHAMPIONING ENTERPRISE By Lara Morgan
THE CHANGING ROLE OF THE PROCUREMENT PROFESSION AND HOW TO DEVISE A WINNING ENGAGEMENT STRATEGY By Tony Hughes, CEO, Huthwaite International
THE ART OF MODERN SELLING By Dr. Janet Curran
BOOSTING THE HEALTH OF CUSTOMER SERVICE DELIVERY AT MEDTRONIC
The Journal Issue 06
FOREWORD By Tony Hughes, CEO, Huthwaite International
It seems that almost every month sees the introduction of a new communications device. The laptop, the iPhone and more recently the tablet are transforming the way we access information. In this rapidly-changing world of information delivery, it’s no surprise that people’s expectations of how training should be delivered are also undergoing radical reappraisal. Instant access to so much knowledge means that training is increasingly perceived solely in terms of short-term, almost sound bite delivery. Conversely, too much unfocused information can prove a hindrance rather than an aid to effective learning. In order to get the best out of a knowledge-based learning programme, a more longterm interaction between a trainer and a trainee is required. However, significant value can be gleaned from embracing new technology for training purposes. New media including face-to-face, virtual classrooms and other web-based tools are helping tutors to gain insights into performance improvement. In a sales environment, these techniques 02 The Journal
remain central to the development of new skills and behaviours. In addition, companies are augmenting traditional training delivery with new e-learning technologies including webinars, group discussions, individual learning, roleplays and live coaching – heralding a new era in flexible training delivery. It’s important to consider that virtual training alone will not always be the appropriate business learning solution. A blended programme which combines a face-to-face approach with virtual training will provide the ideal flexibility and cost-effectiveness that many of today’s businesses and employees are looking for. The good news is that the range of training tools, techniques and delivery methods now emerging in an increasingly virtual world are ideally designed to deliver the behavioural skills needed to stay ahead of the competition and meet this challenge head-on. On the subject of development, we are delighted to present you with a diverse selection of articles that all have one thing in common – insight, which can help your business and
sales force to become even more effective. In this issue, guest writer Lara Morgan provides us with a fascinating introduction to the work of StartUp Britain, and Mobile Money Network give us an insight into the evolution of consumer buying behaviour. Also Dr. Janet Curran talks to us about ‘The Art of Modern Selling’. We’ll also be revisiting the important topic of ‘Sales Through Service’ – this time focusing on the legal sector and how to create real, tangible value. In addition, we discuss the changing role of the procurement profession, and how supporting and partnering with this profession creates a host of mutual benefits. I hope that this issue of the Huthwaite Journal finds you well and prospering, and that you’ll find an abundance of news, insight and information to arm and inspire you over the coming months. As ever, if you’d like to share a topic of interest with us and the wider business community then please don’t hesitate to get in touch. I’d be delighted to hear from you.
Above left: Tony Hughes, CEO, Huthwaite International
STARTUP BRITAIN – CHAMPIONING ENTERPRISE By Lara Morgan
SALES – WHOSE RESPONSIBILITY? CREATING SALES THROUGH SERVICE IN THE LEGAL SECTOR By Kate Fleming
THE CHANGING ROLE OF THE PROCUREMENT PROFESSION AND HOW TO DEVISE A WINNING ENGAGEMENT STRATEGY By Tony Hughes
06–07 BOOSTING THE HEALTH OF CUSTOMER SERVICE DELIVERY AT MEDTRONIC
08–09 THE ART OF MODERN SELLING By Dr. Janet Curran
12–13 THE EVOLUTION OF CONSUMER BUYING BEHAVIOUR Insight from Mobile Money Network
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The Journal Issue 06
STARTUP BRITAIN – CHAMPIONING ENTERPRISE By Lara Morgan from StartUp Britain
Entrepreneurs are the lifeblood of the UK economy, and are in the limelight as the government is championing this group as one of the key drivers for reviving our economy. StartUp Britain is a campaign launched in 2011 by eight entrepreneurs, for entrepreneurs. It exists to celebrate, inspire and accelerate enterprise in the UK by providing the best support and advice for start-up companies. The campaign has the full backing of the Prime Minister, the Chancellor and HM Government, along with a number of participating organisations that have also pledged their support for the initiative.
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StartUp Britain provides the advice and guidance that start-up companies need to succeed in these challenging times. At its core is a passion for promoting entrepreneurship and its benefits to our economy, a desire to highlight the myriad of help that’s available to those who wish to start or grow a business, as well as offering support where they see demand and acting as a voice for small businesses to government. The creation of the campaign is a response from the private sector to the government’s call for an ‘enterprise-led’ recovery. The aim is to engage with over 1 million people in the next three years and to take them one step closer to starting or growing a business.
Entrepreneurs are calling for the creation of entrepreneurial apprentices and the development of more enterprise courses in schools, as they believe these will be the biggest measures which will help to grow their sector. StartUp Britain provides support for every school in England to run its own business through the Enterprise Champions Programme. In addition, it’s working to create enterprise societies in every university and most further education colleges to equip students with the ambition and skills for enterprise. At the centre of the StartUp Britain campaign is a unique web portal, www.startupbritain.org, which
points the way to a wide range of the best existing resources available for business owners. Lara Morgan, one of the co-founders of StartUp Britain, has also set up www.companyshortcuts.com, where she shares simple business principles for companies both at start-up and in the accelerated growth stage. It provides practical solutions to issues that restrict ambitious companies. BUILDING STRONGER BUSINESSES FOR THE FUTURE
When it comes to building stronger businesses for the future, StartUp Britain’s two key areas of focus are the importance of a sound financial strategy and maximising the sales engine of start-up
companies. Here’s why we believe these are so vital. THE IMPORTANCE OF A SOUND FINANCIAL STRATEGY
With recent Bank of England figures showing that lending by banks to small and mediumsized businesses fell by £5bn in the three months from February to May, StartUp Britain launched various free events throughout London aimed towards the nation’s budding business talent in a bid to help them battle through the minefield of early stage investment. Access to finance has been identified as one of the biggest single barriers to growth, with only a quarter of UK startups considering themselves strong at accessing even basic external finance, and four out of five financial decision makers have no formal training in financial matters. StartUp Britain co-founder, Emma Jones, said: “When starting out, most businesses only need small amounts of capital, and crowd-funding sites are playing an increasingly influential role in this. And then there are all the incentives for ‘angel investors’ when it comes to growth capital. We wanted to host events that presented all the options and opportunities to small businesses and brought together entrepreneurs who are at the same stage of funding development.” ‘Three Year Glitch’, a report by small business accounting software firm and founding sponsor of StartUp Britain, Intuit, suggests that the earlier businesses take up good financial habits, the more likely they are to survive the crucial first three years. A poll of 500 business founders and owners revealed 40% had experienced cash flow problems, 31% said they had found problems getting paid and 23% said they had experienced difficulty managing finances at some point.
“We need more new and emerging businesses to get proper access to the funding they need to grow. We hope these events will provide some help and inspiration – as well as access to both traditional and alternative financial backing,” Emma added. From experts in venture capital to crowd-funding, StartUp Britain has brought together people whose business it is to provide start-up and growth funding and both accelerate and incubate small companies through mentoring and advice. THE IMPORTANCE OF MAXIMISING THE SALES ENGINE OF A START-UP COMPANY
Lara Morgan is most widely known for building her own international business, Pacific Direct, over the course of seventeen years before selling a majority-share 99% holding of the company for £20 million in 2008. Lara is passionate about high growth business support and motivating business owners. She also understands the importance of sales in start- ups, and offers her experience and expertise in the sales industry. “Business leaders often talk about all the activities they are juggling during the working day and yet complain about the difficulties and challenges of growth. Simply put, companies need to maximise out the sales hours where they can reach and promote to clients in any and all of the sales hours of every day – as a result, surely they will sell more? “It’s not a simple solution to say ‘sell more’. It will take focus, planning, organisation, a relentless determination, some sense of humour, perhaps a better rewards scheme, better targeting, and most often higher levels of leadership and internal training effort and momentum for all those involved in the sales offer.
Infectious belief in the product and the company you represent are also important, but so is understanding the customer’s decision-making chain and the individual needs and objectives of both the person you sell to as an individual, but also the company you are offering that product to. “Persistence pays, but you must also focus on those most likely to deliver best profit for least effort. Your messages must be original, memorable and value-engaging from the outset. You have to define a step strategy for the way your products should be sold and then preach it and live to constantly improve it. Hire more sales people, but they had better be hunters. You should share successful results to help keep momentum, and you must relentlessly build an accurate picture of your customer demands and the service level improvements you need to make to stay ahead. It is also vital to build an understanding that the customer pays the wages. “Do not become so distant that you forget to listen directly to the customer yourself. Involve them in innovation and development. You must be the expert in your field and go beyond client expectations, not so far as to waste profit, and be aware on an international scale that the challenges get even harder, but by no means impossible.” David Freedman, Sales Director of Huthwaite International, echoes some of the key points in Lara Morgan’s manifesto for change. “Unsurprisingly, we’d urge anyone to pay heed about one of StartUp Britain’s key messages, that of a commitment to internal training in sales excellence. But just as important is Lara’s emphasis on getting to understand the customer’s needs. Rarely is a corporate buying decision made quickly and by one single, decisive person.”
Visit www.companyshortcuts. com and www.startupbritain. org for information and advice on building sales momentum.
“The skilled seller really needs to work out how to influence the influencers – each of whom will have their own set of problems that need solving, and their own priorities and preferences as to the solution and solution provider. Increasingly, too, the opportunity to build value and hence build business with the customer occurs at every single touch point you have with their organisation. Knowing how to move from an essentially servicebased conversation to a realistic new business opportunity, for example, will be one of the attributes that distinguishes the entrepreneurial approach of the companies at the heart of StartUp Britain.” David Freedman, Sales Director, Huthwaite International
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The Journal Issue 06
BOOSTING THE HEALTH OF CUSTOMER SERVICE DELIVERY AT MEDTRONIC For more than 60 years Medtronic has been a global leader in pushing the boundaries of medical technology in changing the way the world tackles chronic disease, providing treatments and therapies for such problems as nervous disorders, cranial and spinal conditions, and diabetes. However, Medtronic had come under increased pressure as new competitors entered the market and hospitals came under closer scrutiny to ensure best return on any medical investment. The company responded with its ‘One Medtronic’ initiative, designed to make sure that customers and prospects across global markets get a consistent high-quality response at every touch point. In reappraising how it managed customer relationships, Medtronic recognised the need to drive behaviour change throughout the business, and selected Huthwaite International for its flexible research-based methodology, which puts sales at the heart of the organisation. Huthwaite became the preferred supplier to the
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Medtronic Sales and Marketing Academy and, five years on, continues to play a central role in developing tailored improvement programmes designed to meet the needs of different parts of the business. Consistent customer service Huthwaite’s delivery of successful skills improvement programmes has enabled Medtronic to achieve greater consistency company-wide between sales and service teams. Across markets, Huthwaite has provided common programmes in local languages, working with management to adapt the training where necessary to reflect individual markets and their challenges. As part of the ‘One Medtronic’ philosophy, customers would benefit from a seamless high-quality customer experience through closer alignment between the sales team making the initial deal, and service functions that subsequently manage the ongoing relationship. Huthwaite Business Development Consultant, Claire Cologne, comments: “Consistency between sales and customer service within
each country and between different departments, some of whom deal with end users as well as hospitals and medical staff, was important in helping to achieve Medtronic’s goal. Within customer service itself, it was also crucial to ensure a common approach between business unit staff and the specialist product support team.” In addition to dealing directly with customers, much of the service team’s work involved dealing with queries on behalf of their sales colleagues. The key issue here was not just about speaking the same language as sales, but also in aligning their behavioural skills. This would enable the service team to have conversations with a wide variety of internal and external customers, resulting in better outcomes for Medtronic and its customers. “Our behaviour-based methodology has met this challenge in providing flexible programmes which can be adapted to improve internal and external interactions in both B2B and B2C environments,” confirms Cologne. “Within Medtronic, this has proved highly effective
in building on a customer service environment in a business dedicated to saving and prolonging lives.” A closer look In the area of customer service, a bespoke company-wide solution was developed, which was capable of further adaptation to meet local customer needs. Initially, Huthwaite benchmarked existing performance levels by analysing customer service calls. This was followed by a consultation with customer service managers across Europe to help determine their needs and to design customised materials, including roleplays which accurately mirrored the daily challenges facing their local teams. The programmes, backed up by ongoing coaching, have since been rolled out across Europe on a phased basis, timed to fit within each country’s broader development programme. The UK offers a typical example of how this is driving demonstrable improvement in service quality. A series of two-day courses was implemented across the UK
and Ireland customer service and product support teams, in which advisors recorded themselves in scenario calls, provided feedback to each other using a dedicated best practice framework and then re-recorded the calls using newly-learned skills. This adopted Huthwaite’s proven CARE (Clarification, Agreement, Responsiveness, Emotion) model, using behaviours proven to help advisors deliver an excellent customer experience. In order to reflect the day-to-day environment of the Medtronic service team, one of the key elements worked on during the programme has centred on how people in different roles react when things go wrong. “In looking at how to deal with customers in such conversations, advisors often face the challenge of not being able to provide a satisfactory or immediate solution in a high-pressure situation,” confirms Cologne. “The CARE approach has helped here by exploring how to avoid responding negatively and encouraging participants to look more proactively at what they can do to achieve a positive outcome.” “Staff feedback to the training has been extremely positive, giving them the confidence to have structured conversations with customers,” says Amanda Burnett, Business and Customer Service Director at Medtronic. “It provides an enjoyable delivery format with a good mix of listening, writing and roleplays and encourages everyone to give positive and stretching feedback. “Most importantly, it helps demonstrate the relevant and important role customer service plays within current and future buying decisions. It is exactly what we need to support our team in delivering an exceptional customer experience.”
Coaching and performance measurement One of the keys to the success of the training initiative has been the inclusion of follow-up coaching support. “Simply sending people on a one-off training course does not deliver the long-lasting performance improvement we are looking for,” confirms Burnett. Post-course coaching has formed an integral part of the improvement programme from day one and coaches are now targeted to achieve a minimum number of sessions with each advisor every quarter. Huthwaite has worked closely with Medtronic to construct and deliver a coaching course for team leaders which incorporated a behavioural framework specifically designed to enable coaches to measure performance and give feedback. This common performance measure helps to achieve consistency and a ‘One Medtronic’ approach. Huthwaite’s own analysis already points to significant improvements in those behaviours recognised as key to achieving good customer service outcomes. Using the behavioural framework post-training, nearly 60% of ‘explaining the process’ behaviours were identified as good or outstanding compared to less than 40% pre-training. Similarly, the number of behaviours assessed as good in ‘delivering solutions’ increased from 24% to almost 80%. The German experience The latest roll-out to Medtronic’s customer care team in Germany provides an excellent example of how the flexibility of the Huthwaite approach has enabled the programmes to be adapted to the particular requirements of the local market.
“In up-skilling our customer service staff, we had two key objectives,” says Sandra Hildebrandt, Director of Customer Care and Supply Chain.“First, with many of our treatments, we have direct contact with end-patients and it is especially important that our front-line staff have the right skills to manage what are frequently highly-stressful situations. “At the same time, we are working with health service professionals under pressure to cut budgets and improve efficiencies. This means our service staff have to understand the increased importance of creating ‘magic moments’, and their greater role in the sales process by helping to identify customer needs, and passing this on to their sales colleagues.”
throughout the process. “The team took time to understand our very particular requirements and has continued to work closely with us in refining and adapting each programme as our understanding of what works best has evolved.” Development doesn’t stop there. Within the Medtronic Sales and Marketing Academy, customer-facing teams can also access a followon programme, Customer Service: Medtronic Selling Skills Awareness, which provides an ideal next step in increasing understanding and involvement in identifying and progressing sales opportunities. Burnett has been impressed with the results to date and plans to extend the training.
The success of the training and follow-up reinforcement and coaching is already delivering positive results. “The new behavioural skills are taking much of the stress out of patient calls,” confirms Hildebrandt.
“Improved questioning techniques are also helping us understand the needs of practitioners and patients better and so adding value to all our customer relationships.” The department undertakes an annual internal customer survey in which the sales team reports on how well customer service staff are performing. “I have no doubt that, thanks to these tailored Huthwaite programmes, we will see a measurable improvement in the quality of our service delivery.” Best practice solution Burnett has been impressed with the level of support provided by Huthwaite
AMANDA BURNETT Business & Customer Services Director
“In helping us move to a ‘One Medtronic’ environment, I believe that we now have a best practice training methodology which is easily adapted to work equally well for all customerfacing teams, in the UK and across the rest of Medtronic’s international network.” Amanda Burnett
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The Journal Issue 06
THE ART OF MODERN SELLING By Dr. Janet Curran, Head of Thought Leadership, Huthwaite International
An academic with a PhD in Retail Marketing, Dr. Curran joined Huthwaite International seven years ago as a consultant on research and training programmes. During this time, she has played a key part in many of Huthwaite’s major research projects – covering topics such as customer service and how the rise of procurement has changed the sales environment. In her new role at Huthwaite as Head of Thought Leadership, Dr. Curran has recently conducted research which highlights that the skills required to become a successful salesperson are evolving and changing. She discusses key themes from her groundbreaking research below.
and take-up of new products and services is accelerating at a seemingly exponential rate. To illustrate this point, it took AOL nine years to hit one million users, Facebook nine months and, recently, Draw Something just nine days. And how many of us have even heard of Draw Something?
The changing world of sales We live in a changing world. A world where the rate of change
And what skills and attributes do they need to be successful in the 21st century?
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We’re also living in a world where the customer is becoming increasingly savvy and knowledgeable, and the rise of the professional purchaser is presenting a challenge to the sales profession. A challenge to which they seem ill-equipped to respond. In light of these developments, what does the future look like for the salesperson of today?
The growing importance of commercial acumen First and foremost, the sales environment of today demands a need for salespeople to have all-round business knowledge and financial acumen. These skills are seen by the business and sales leaders of today as crucial in enabling salespeople to negotiate long-term deals with customers – deals which support the financial objectives of the customer’s business, as well as delivering a profitable margin to the supplier. In this incidence, it boils down to knowing which negotiable issues are most relevant to the customer’s business and therefore offer the most opportunity for leverage. This knowledge can only come when a seller fully understands the customer’s business.
Understanding your audience and their world Our research also revealed the growing importance of the procurement profession – suggesting that talking in the financial language of procurement and translating the value of your business’s USP into financial terms has become an essential skill for salespeople.
“We’re also living in a world where the customer is becoming increasingly savvy and knowledgeable, and the rise of the professional purchaser is presenting a challenge to the sales profession.”
In addition to partnering with procurement, salespeople need to understand the industry sectors they’re selling in to – picking up on market trends before the consumer and using this insight to raise awareness and knowledge of potential problems that could develop in the future. Given that we’re living in a world of rapid change, customers are likely to find that staying abreast of these changes is a challenge in itself – so salespeople can add value to their offering by providing the help and support that customers need. Partnering with marketing Of course, we’re not the only sales researchers who are talking about the importance of delivering market insights to a customer and reframing their perspective. What’s more interesting to consider is the behavioural strategies that can be most effectively deployed to achieve this. And this is where Huthwaite’s long pedigree of behavioural research comes into its own. Perhaps now is the time to consider how to deploy SPIN® behaviours in a way that measures the quality and impact of a SPIN® question, as well as the quantity. Whilst we have examples of individual salespeople whose knowledge of niche market sectors means they’re able to deliver these market insights, we’re also aware of how critical the marketing function is in providing timely information to sellers at the point of the sales call. For example, our recent research into the healthcare sector has also made us aware that many organisations are still experiencing issues between marketing and sales. Perhaps this stems from the prevailing culture in our academic marketing departments that views marketing as a cut above the sales function,
in the same way that sales views itself as a cut above customer service. Yet the successful organisations of the future rely on the cross-connections between these separate functions in order to deliver a full customer experience that’s not only valued, but differentiates itself within the marketplace. The power of social Increasingly, a core feature of every business’s success centres around the recruitment and development of a social business community. Strategically, after building this community via social networking, it’s vital to provide members with content that’s interesting, insightful, easy to digest and worthy of sharing. It’s also worth noting that there isn’t a one-size-fits-all rule when it comes to how individuals digest content online – which is why leveraging content across multiple social media channels is crucial, in order to attract the widest possible audience. Only then will businesses begin to build the kind of community that fosters relationships and attracts new customers in the long term. Over the last couple of years, the rate, method and tools of communication have changed dramatically. Since exploding onto the digital scene in 2006, Twitter has gained over 300 million users, generating over 300 million tweets per day. To this end, having an active and engaging Twitter account can help individuals and organisations to build a better relationship and level of engagement with customers and prospects – embedding your business into their world. Similarly, establishing a strong presence on LinkedIn is a proven and accepted method of business networking. A well-optimised personal or business page can showcase your unique selling points and will rank highly in the website’s internal search function – ultimately driving business awareness.
nearly half of sales professionals worldwide (49%) say social media is integral to their success, with 65% of top-performing salespeople agreeing with them*, whilst 91% of business buyers read blogs, watch user-generated video and participate in social media. 55% of all decision makers use social networks, and 43% create media – from running blogs to uploading videos and articles**. In light of these facts, it is important for salespeople to embrace the unquestionable role that social media now plays in the sales process – by understanding and making best use of the various communication channels available. With the speed and depth of change at many levels, now more than ever, it seems, it’s time to change behaviour to change results. This is the art of modern selling. * Selling in the 21st Century by OgilvyOne ** Forrester Research – Social Technographics of Business Buyers
“Given that we’re living in a world of rapid change, customers are likely to find that staying abreast of these changes is a challenge in itself – so salespeople can add value to their offering by providing the help and support that customers need.”
Social media adoption isn’t just rising amongst consumers, but crucially amongst senior business decision makers. In fact, recent research has revealed that The Journal 09
The Journal Issue 06
SALES – WHOSE RESPONSIBILITY? CREATING SALES THROUGH SERVICE IN THE LEGAL SECTOR Introduction By Tony Hughes, CEO, Huthwaite International ‘The Disappearing Client’ By Kate Fleming, Huthwaite International As the economy continues to show little sign of recovery and ‘lean’ is the watchword on everyone’s lips, most companies are doing what they can to drive costs down and are demanding the very best value from their suppliers. In light of this continued situation, we’re revisiting a topic that’s close to our hearts: who’s responsible for winning business? With more and more companies scrutinizing their spend, identifying ways to create value remains one of the most important ways for firms to generate revenue. But can we rely on the traditional model, where it is principally the Business Development Team who are responsible for creating value for clients and generating revenue? The answer is no. As our research revealed, businesses need to consider motivating and training
all client-facing staff to identify and add value for clients. This, however, can be challenging! In this article, we focus on how these issues can be addressed in the legal sector and how the emerging legal landscape poses serious challenges for traditional providers, but also presents a wealth of opportunities for firms who are willing to make the most of changes. Following the introduction of the Legal Services Act (LSA) which came into force in October 2011, the legal profession has faced a seismic upheaval in the way their services are delivered, as many well-known names such as the Co-op can start offering legal services and clients can also buy legal services online. So what is the solution, and what role can sales and service play?
‘THE DISAPPEARING CLIENT’
In most firms it is traditionally the partners who have principal responsibility for managing client relationships and winning business. But as companies strive to reduce costs and improve the delivery of their service, partners have less ‘face time’ with clients and associates, whereas junior lawyers have more contact on a day-to-day basis. So what’s new? Of course clients are going to cut back on their legal spend during a difficult economic period. If this was the only issue, it would be tempting to just hang in there and wait for the good times to come round again. Unfortunately, it’s not that straightforward. Huthwaite’s research of this sector paints a very different picture – one that will have a big impact on professional firms.
Of those questioned: • Only 13% believed that the economic downturn was the reason clients are less willing to see them to discuss business development opportunities. • Fewer than one in four had put it down to the fact that partners have less face time and opportunity to develop new business. • The big surprise is that almost two-thirds of firms cited clients’ centralised purchasing process as the cause – forcing all providers into a narrower channel with fewer contacts. Long-term trend This clearly points to more deep-rooted and structural change within the buying organisation, which has significant implications for all firms. In many cases, they will find themselves up against a
new breed of procurement professional which is taking on a greater role within the purchasing process. It’s also true to say that clients have become more resistant to being overly sold to. With the sheer number of competitors around, they also have the luxury of being able to be more demanding and more selective about the firms they choose to work with. Our own experience of talking to partners confirms that this has one inevitable consequence: firms will have fewer opportunities to discuss their clients’ business needs and how the practice can help them. This is critical, as it’s the point at which partners and the Business Development Team can get past a conversation about cost and billable hours, and start to talk about the real value they can bring. Out of the silo However, there is a much wider issue at stake here. Business development can no longer be viewed as the sole responsibility of the partners and the specialist Business Development Team. Any member of staff who has direct client contact must realise that they have a vital role to play in helping to grow the practice. There are two reasons why this can no longer be ignored. Firstly, all staff across the practice (fee earners or not) can proactively help to build the relationship each time they come into contact with the client. Secondly, staff who are client-facing on a day-to-day basis are likely to have more opportunities to talk to key influencers than their business development colleagues. Unfortunately law firms have yet to take full advantage of this vital contact, as such staff do not yet recognise their potential to directly contribute, and many practices provide little or no firm-wide client relationship manager programmes.
Furthermore, many associates still consider that their main responsibility is to deliver legal advice, and consequently miss new sales opportunities.
there is the full-blown business development/sales role, which is centred on identifying client needs and creating value for both parties.
Sales through service You might think that many lawyers will throw up their hands in horror and refuse to become salespeople. The good news is this is largely unnecessary. Service and sales is not an either/or state with clear dividing lines. The reality is that it is a road along which each member of the firm can be encouraged to travel and develop their skills.
Reward for effort For those who have risen to the challenge, the pay-off in terms of business benefit has been powerful. Half of those questioned in the research had seen an increase in sales leads and broader business development activity. Even more impressively, a further 25% reported improved bottom line performance.
At one end there is pure service, where clients get what they have asked for, no more and no less. The next step is outstanding service, often called going the extra mile. This is the area where the professional services businesses typically excel. This then moves through to a position of sales awareness, where individuals actively start to look beyond the immediate service being delivered. At this stage, they begin to identify potential business development opportunities for the firm by adding value to the client’s business. I recently witnessed a great example of this, as I sat in the reception area of a large law firm. A client came in and asked for the deeds for some of his properties. The receptionist said, “Yes of course, could you tell me why you need them?” And, as a result, discovered some underlying needs and additional business opportunities – not by becoming a salesperson, but by becoming sales-aware. At the next stage, sales through service, the lawyers use the contact and time they have with clients to proactively identify client needs and start to offer solutions to them. The differentiator here is that any additional solution is sold, not given free to the client. Finally,
It’s clear that everyone in the firm with direct client contact needs to recognise they have a vital role in the delivery of effective client management. They can add tangible value at every touch point and, increasingly, will have more opportunities to talk to key influencers than their partners with business development responsibilities. Interestingly, the majority of these firms were able to quantify the level of profit improvement, with more than 70% registering gains of at least 5%. And there is another issue here. The positive belief and commitment shown by those undergoing successful change, as much as the level of improvement itself, which indicated that this is an initiative with a long-term future. The reason for this seems clear: that there are attractive and tangible benefits for the firm, its staff and its clients – in other words, a win/win/win investment. All of this highlights the importance of senior buy-in, if change is to be effective. Put simply, if the corporate culture does not promote a link between client development and service, then it will not happen. In conclusion, law firms can no longer just rely on the skills of their front-line people. Tomorrow’s successful organisations will be those that effectively align their service delivery and business development operations more closely – by helping and
supporting all client-facing staff to play a more direct role in business generation and client management. WHAT THE EXPERT SAYS
STEPHEN MAYSON Professor of Strategy and Director of the Legal Services Institute at The College of Law and a Senior Fellow in The Law School at the University of Melbourne
“Providing an excellent service for clients will be key to law firms adapting to changes brought in by the Legal Services Act. In my opinion, law firms are more reserved when it comes to promoting their brands in the same way as supermarkets and bank chains. As a result, they need to add value for the clients in a new way – not focusing on their existing ‘how much does it cost, therefore that’s how much we charge’ system. That system is not about value creation for the client, it’s about cost covering. That’s not what this world is about now – it has moved on from time-based billing. “If you’re talking about value creation, we are in a very different type of world and most lawyers will do things like keep their clients up-to-date with legal developments – but clients aren’t too concerned with this. Others will talk about developments in their own businesses or their own personal lives, and that’s important but it’s not value creation. What I’m talking about is that if, as a businessman, I’m looking to reduce my operating costs, or looking to move to new premises, what can you do to make it easier and quicker and anticipate the problems that could arise. Now that’s creating real value.”
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The Journal Issue 06
THE EVOLUTION OF CONSUMER BUYING BEHAVIOUR Insight from Mobile Money Network
Consumers’ growing desire for both convenience and choice has prompted a huge shift in buying behaviours. Analyst firm TeaLife predict that by 2020 around 50% of all Visa payments will be made with mobile devices* – pointing towards the ever-increasing number of consumers wanting to use their mobile devices to buy items and manage their finances ‘on the move’. According to Monitise, a global leader in money management solutions, the majority of Britons will be using mobile money by 2015 – just two and a half years from now – as customers become increasingly used to paying for goods on their handsets**. As a result, we
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will see consumers spending £2.5bn shopping on their handsets by 2016, according to a study by PayPal***. Although m-commerce is a relatively new technology, early adoption levels are still quite high. Starbucks in the US has rolled out payments by Near-Field Communication (NFC) throughout America in over 6,000 stores, and in January we saw them roll this out in the UK at around 700 outlets. This trend is expected to increase, with the market predicted to be worth £102bn by 2015. Due to technological advancement in the industry, consumers will start to engage more with mobile initiatives
to enhance their shopping experience, making it quicker and more convenient to buy goods. Introducing Mobile Money Network & Simply Tap™ Mobile Money Network (MMN) is a collaborative that delivers quick, easy and secure mobile payments for consumers, bringing together a network of retailers, advertisers, banks and media owners to provide consumers with a simple way to discover and buy goods and services using their mobile phone. In direct response to the consumer need for a more efficient mobile payment system, MMN developed and launched a service called
in the technology. In addition, retailers including Carphone Warehouse, HMV, Thorntons, Pretty Green, Universal Music, Labelsneak, Thehut.com and MoreTVicar.com have already signed up to the scheme. The service allows consumers to pay for goods using their mobile phones as opposed to a credit or debit card – creating a quicker, more instant purchasing experience. Sir Stuart Rose, Non-Executive Chairman at Mobile Money Network, says, “We live in a cashrich, time-poor society. People have other demands on their time and they want instant satisfaction and service.” Simply Tap™ 18 months ago. The service operates via an app or directly in conjunction with retailers’ sales channels (including Facebook pages, m-commerce sites or apps) providing an instant mobile checkout, which enables retailers to close the sale at the point where the decision to buy is made – whether that’s in a store, online or even on the move. This technology effectively turns every advert into a point of sale – a game-changer in the world of retail. It’s a fact that today’s consumers are becoming increasingly timepoor, so this device has been created to tap into this market and save valuable time by making shopping instant and more convenient. The proposition is very simple, making it very userfriendly. Once a consumer has completed a one-off registration form with their bank details, they can simply tap in the alphanumeric code (already found on most products) of the product they want to buy into any mobile device, and enjoy the instant gratification of knowing the goods are ordered and on the way, at the tap of a button. Visa Europe has already bought a 15% share in Simply Tap™, demonstrating real confidence
A marked change in buying behaviour The power to buy goods securely, from any mobile device, with any payment card at the time, makes a very compelling argument. We believe that by adapting to the changing behaviour of today’s society, in terms of buying habits, retailers can reap the benefits of both brand awareness and increased sales through this clever technology.
share, which is fundamental to the success of this technology. So, although Mobile Money Network provides and facilitates the purchase, the customer relationship is still with the retailer, so shoppers still receive the high level of customer service they are used to from their favourite retailer, which we think is crucial to maintain. The incredible rise in internet shopping has proved that consumers are happy to interact with a machine to buy the products they want, in a way and time that is convenient for them. Mobile shopping takes this one step further. With retail gurus including Sir Stuart Rose, Lord Davies of Abersoch and Johnny Hornby, Co-founder and Partner at advertising agency CHI on the board of directors, Simply Tap™ is in very capable hands. You can find out more about Mobile Money Network by visiting their website: www.mobilemoneynetwork.com *Total Telecom – March 2012 **Monitise – May 2011 ***Retail Week – PayPal Study
It’s been the case for a number of years that retail is entirely dependent on technology to deliver goods and services to consumers. For instance, the humble barcode has been around since the 1970s and revolutionised the supply chain that stocks the shelves in the first place. Even debit cards have been used in the UK since the mid 1980s. The point is, technology needs to be blended with human interaction at even the most mundane level. The mobile phone is the most personal device, and therefore dependent on human interaction. Mobile Money Network has created a platform, but it is the user who determines how, when and why – what details they input and ultimately what data they
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The Journal Issue 06
THE CHANGING ROLE OF THE PROCUREMENT PROFESSION AND HOW TO DEVISE A WINNING ENGAGEMENT STRATEGY By Tony Hughes, CEO, Huthwaite International
Over the past five years, the pressure for companies to deliver greater returns has created an intense focus on the performance and role of procurement departments. Previously viewed as a ‘back office’ function, they have now been thrust into a strategic position with a remit to deliver ‘value’ in addition to significant cost savings on the goods and services they procure. To understand the changing role of the procurement profession, Huthwaite International have conducted an extensive global survey – interviewing 124 senior and director-level procurement professionals from a range of multinational companies. The goal of this research
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was to gain insight into the world of today’s procurement professional and to use this information to enable sales professionals to identify the best strategy to cope with this changing environment. Given that procurement has increasingly become central to corporate strategy, the practical and financial implications of these findings are profound – and demand a major shift in the procurement/ sales relationship. Primarily, our findings revealed that, contrary to current hype, power does not rest entirely with the procurement department. Indeed, even with a board-level mandate, practitioners were found to face a number of significant challenges; their role is not
sufficiently valued by internal stakeholders, they face severe difficulties achieving corporate ‘buy-in’ to their procurement strategy, and they’re rarely involved in the early stages of the buying process. So what does this mean for the sales profession? First off, we must understand that being thrust into a strategic role, as many procurement professionals have been, has left a gulf of knowledge and necessary skills. This means rather than circumventing practitioners, we need to engage with them at the earliest possible stage of the procurement process; to ensure they understand the value we hold and how our product or service is unique. At this point, collaboration is
the key to mutual respect and understanding. In fact, the cost of ignoring the need to partner with procurement is incredibly significant. The success of procurement engagement initiatives, and the creation of value and innovation with budget holders, are dependent on the ability of sales professionals to master the procurement relationship and involve procurement professionals early in the decision-making process. By ignoring the need to involve them, you not only risk being commoditised but also enlarging the gulf between sales and procurement. And that’s something we’re all trying to avoid.
WHAT THE SECTOR SAYS SUPPORT PROCUREMENT FOR GREATER ECONOMIC VALUE
TIM CUMMINS President, IACCM
Both sales and procurement operate in an environment where they must cope with uncertainty and volatile external influences. Because of this, the core issue we face is trust. Put yourself in the mind of a buyer: can you trust that a company will truly deliver on its promises? Will it work with us to deal with changes and to deliver incremental value? Or, once the deal is signed, will performance simply become someone else’s problem? Many procurement staff are cynical about the motives of sales – that ‘success’ is seen as getting paid and having the deal in the bag, rather than working for a successful contract outcome. So, what’s the future role of sales within all of this? Clearly, we can view procurement as the enemy and hope to marginalise them. But this creates real risk. Smart sales organisations increasingly look to understand and befriend procurement, actively involving them early in the process and ensuring open, transparent communications. We have it in our control to assist procurement’s status and success, especially through a focus in areas such as ‘total cost’. Put simply, it’s our job to support procurement – helping them to achieve even greater economic value. Honesty, both internal and external, is key to the success of this relationship. Finally, it’s important to remember that no company in the world exists to buy things. Companies buy things only if they are successful in selling things. So, the real challenge is to fit into your customers’ shoes – and consider how your company can assist them in selling more.
WHAT PROCUREMENT SAY AVOID BECOMING A COMMODITY
WHAT SALES SAY SELL ON TOTAL COST NOT PRICE
TODD SNELGROVE Global Manager, Value
It’s my opinion that, when it comes to selling or buying, we should focus on the total cost of ownership (TCO) and not price. Why? Because TCO is the summation of all costs including price, and that’s the number we all want to reduce. To illustrate total cost of ownership, if you pay 30% more for a product, you could save 10% operating costs. A 2009 Accenture report demonstrated that the initial purchase price of an item (such as a car, plane or industrial asset) is between 8% and 14% of the TCO. A 10% saving on the operating cost is eight or nine times more powerful than a 10% price saving upfront – which is why companies that measure and buy on total cost of ownership are so much more profitable, and why we need to work with our product development, and sales and marketing teams, to explain this. I find there are five major procurement pushbacks or misunderstandings on value that we, as sales people, need to understand and be in a position to address: • Price is measurable, value is not. • Price hits my bottom line today and value does not. • Price is guaranteed and value is not. • My boss rewards me on price reductions not TCO savings. • Price is immediate but value programmes take work. When we’re looking at total cost, it’s about measuring all the factors. If we’re not getting the deal we want, maybe we haven’t articulated all the factors or listened to what the procurement professionals need.
LARRY BEARD Business Transformation, Tate & Lyle
If you can articulate every factor – enumerate and quantify – this gives you total ownership of the cost discussion. Personally, my view is that people who measure TCO actually gain more value than just measuring price. The problem is, everyone promises value – so we need to provide a checklist for procurement to measure all sales proposals against: • Do they have the people who can go in and save money? • Do they have a process to find cost-saving opportunities? • Do they have tools that measure cost-saving? • Do they have an ongoing pipeline of solutions? • Have you considered their corporate culture and their overall view on value?
“I find there are five major procurement pushbacks or misunderstandings on value that we, as sales people, need to understand” Will they enter into pay-forperformance agreements? In conclusion, we need to quantify value in a way that everyone understands. Value creation takes work, but it’s the answer to the five major challenges above – and that’s why companies who buy on total cost always make money. Buying on lowest unit price is not the way to create value, as the highest price can sometimes give you the lowest cost.
At this point, I’d like to share some insight from a buyer’s perspective with you. To put it bluntly, during the tendering process you will definitely be evaluated closely – and possibly viewed as a commodity. This is because we need to measure your service in some way, taking into account the value you can add. Talking of value-add, this needs to be of real value, measurable, quantifiable and of genuine value to the buyer. I am consistently amazed during the tender process when sellers don’t quantify what the valueadded benefit is and what this means in monetary terms. So, what can you do to avoid becoming a commodity? Firstly you need a USP that sets you apart. You need to make sure you understand it, and then ensure your customer stakeholder and purchasing contractor understand it too. I’d also advise sharing your strategic account plan, to foster a closer relationship and keep everyone in the loop. This will certainly help to improve buyer/seller relations. In summary, know where you’re positioned in terms of the partner vs. commodity continuum, and where the buyer is positioning you. Be different, refresh your presentation and educate the procurement professionals. In my opinion, you should get them on the same level and then keep on top of them, and know when to influence the tender process. Most importantly, understand what drives your customers – then you’ll be able to develop the kind of relationship you want with them. The Journal 15
The Journal Issue 06
BITESIZED THE MAGNIFICENT 7 – ENGAGING CUSTOMERS THROUGH SERVICE What really makes for an outstanding customer service experience? As with so many human interactions, even the best customer service advisors are not really aware of what it is that they do or say that really makes the difference for their customers. With Huthwaite’s Behavioural Analysis, we have a technique that enables us to objectively observe and categorise exactly what it is that the effective people say to achieve a successful outcome. This was the methodology that created SPIN®, and now Huthwaite have used it to identify a set of verbal behaviours in the
customer service arena that can really make the difference between a loyal and delighted customer and one who is considering a move to the competition.
LATEST RESEARCH FINDINGS
Cream of the crop are a set of behaviours we call The Magnificent 7. We’re not the only ones who think that they can set the world of customer service alight. David Warburton, Group Sales Capability Director at Unipart Group – who consider customer engagement as a key part of their value proposition – described our Magnificent 7 behaviours as “Interesting and sophisticated. For an individual to be able to demonstrate this style of verbal behaviour consistently to a high level, they’d need to be experienced, confident, show initiative, and ultimately have high levels of emotional intelligence, which I think is at the heart of great customer engagement.”
Huthwaite’s report on effectively handling customer complaints is now available to download from our website.
Developing outstanding corporate customer service
We’re the Headline Partner at the National Sales Awards 2012
The awards take place on 6th November 2012 at Grosvenor House, Park Lane, London. For more information please visit: nationalsalesawards.com
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