Matt Scherocman saw his profits soar after adopting the Microsoft Solution Selling sales methodology. Here's how you, too, can use it to cement customer relationships and boost profitability.
- By Joanne Cummings
- September 01, 2005
Matt Scherocman started his new job as director of PCMS IT Advisor Group, a Microsoft Gold Certified Partner in Cincinnati, the week of Sept. 11, 2001. It was an inauspicious start to say the least.
At the time, the group's primary revenue—about $1 million that year—came from its staff augmentation business, which was declining, especially with the soft economic climate ushered in by the events of that day. The group needed a quick turnaround, and when Microsoft suggested Scherocman be part of the beta for its new Microsoft Solution Selling (MSS) sales training methodology, he jumped at the chance.
Fast forward a few years and the outlook at Scherocman's group is a whole lot brighter. "From 2003 to 2005, our profitability numbers went up 2,700 percent and we've been growing at about 46 percent a year," he says of the 17-employee company. "And I attribute that to our switch to a solution selling and project-driven mentality."
Solution selling sounds like a buzzword, but it's actually a formal sales methodology that aims to help salespeople get beyond selling products and become more like consultants or trusted advisors to their customers. Rather than approaching a prospect with a list of gee-whiz features in the latest and greatest product, salespeople who embrace solution selling take a more deliberative approach. They work to ferret out what a customer's underlying business problems or opportunities are, and then piece together a comprehensive solution—using software, hardware and services—that addresses those needs.
"It's more than what most salespeople think of as solutions," says Keith Eades, CEO of Sales Performance International Inc. (SPI), a training company that helped Microsoft build the MSS curriculum and trains partners on the methodology. "When I ask salespeople about the last solution they provided their customer, almost inevitably, they will tell me the name of the product, service or packaged offering that they sold to them. That's not solution selling. That's product selling."
When solution selling is done right, actual product names may only come up in passing. The real emphasis instead is on how well the overall solution addresses the customer's needs. "I remember a discussion with one of my clients centering around the difficulties they were having in terms of systems, security and information management," says George LaVenture, president and CEO of Trinity Consulting Inc., a Microsoft Gold Certified Partner in Marlborough, Mass. "We talked for two hours and still hadn't used any product terminology. Successful solution selling focuses more on business processes and in mapping out a whole strategy, not on individual products. By the time you introduce a product into the scheme, it's more of a given, just part of the overall solution."
"By the time you introduce a product into the scheme, it's more of a given, just part of the overall solution."
President, Trinity Consulting
In Your Own Best Interest
Partners say the switch to solution selling is no easy feat. It requires significant up-front investments in training, sales staff retooling and large-scale sales cycle adjustments—all of which actually serve to change the way the entire company does business. Training alone can cost between $300 and $500 per employee, SPI's Eades estimates.
"It's hard. And it's expensive. But it's not as expensive as going out of business," says Michael Haines, a research vice president at Gartner. In fact, Gartner predicts that by the 2007-2008 time frame, 30 percent of today's VARs will no longer be around. "And that's primarily because they've failed to change their sales model to become more attuned with the changes in customer requirements and how they buy," he says.
Microsoft partners became acutely aware of the change in buyer mentality right around the 2000-2001 timeframe. "It started with the dot-com bust," says Brad Murphy, senior vice president of strategic partnerships at Valtech Technologies Inc., a Microsoft Certified Partner in Addison, Texas. Unlike most Microsoft partners, Valtech focuses on selling into large Global 2000 and Fortune 500 accounts.
"In the late '90s, opening a new account actually wasn't that difficult because at that time, anything with a new capability or wrinkle was enough to get in the door to have a very substantive conversation with a decision-maker," Murphy says. "But that all changed around 2000, when people changed their whole mindset and process around what they buy and spend money on."
Buyers no longer had technology shopping lists, he says. "Instead, their discretionary money was held in reserve and used as the funding mechanism for problems they wanted to solve." In addition, "rarely is there a single decision-maker now," he says, noting that you can't just go straight to IT anymore. "There's almost always a collaborative decision-making process because the solutions are complicated and require a mix of IT and business executive input."
Murphy says his firm's sales cycles ballooned from 45 to 60 days in the late '90s to as much as 12 months after the dot-com bust. "Suddenly, it was very expensive for us to acquire new customers because they were requiring us to spend a lot more time, energy and money discovering a problem and coming up with a compelling solution."
And if his salespeople approached a customer on a pure product basis, "they wouldn't get in the door. You just can't lead with product today and be successful. It doesn't work," Murphy says.
Buyers have also changed the way they shop for pure products. They continually pit vendors against one another, shaving price points and leaving product sellers with shrunken margins.
"If you're operating in that razor-thin transactional kind of customer market place, solution selling is a no-brainer," he explains. "It's infinitely more difficult to do than selling was five years ago, but if you can master it and you can build this working relationship with customers, it's far more difficult for you to get displaced because you have become a trusted partner. They view you as an extension of their own trusted circle of people who help solve problems."
|Potential Roadblocks to Solution Selling
|Partners offer five ways to avoid potential pitfalls of the MSS sales methodology.
1. Avoid the techie trap. Many partners embarking on solution selling find it difficult to get past their product-focused, more technical past. Rather than focusing on the business problems a company may be facing that could be alleviated by a move to Exchange Server 2003, for example, they focus on key features of the new product. "In the past, we'd walk into a customer situation and say, ‘Have you guys heard about RPC over HTTP? It's the best thing since sliced bread,'" says Matt Scherocman of PCMS IT Advisor Group. "But that's a recipe for disaster. Nobody cares what the solution is—they just want to know if it takes care of their VPN pain or makes it easier to get employees connected."
2. Don't jump to a solution. If you're focused properly, eventually you should begin to see the same problems crop up in the same way within similar customer organizations. It's tempting to just jump right in and offer a solution, without going through the prescriptive process of asking questions and working through the problem with the customer. "Don't jump to that conclusion," Scherocman says. "You still need to go through the entire solution selling process to understand what they really need because you have to build the trust and the credibility."
3. Get past the ‘no time' argument. A big hurdle to solution selling is getting the time to meet with all of the key business stakeholders involved to get a clear handle on the problem they're facing, says Valtech Technologies' Brad Murphy. Partners need to get creative. "If they won't schedule a time for the key three players to meet, then schedule something with them separately. Or do it via e-mail," Murphy says.
4. Work around the know-it-all. Some customers go through the problem definition stage on their own and only approach a partner when they're trying to make a final product decision. It can be tough to build value into what you offer at that point, since much of the initial legwork has been done by the customer. "At that point, you may have a hard time getting to the problem stage because they just want to know if your product or service can do X," says Keith Eades of Sales Performance International Inc. "The challenge there is not creating the vision of what they need, but it's really re-engineering that vision around the capabilities that you bring to the table. Ask them what their stretch goals are and find out if you can craft a more profitable solution for them."
5. Don't let the bigwig intimidate you. Many salespeople in partner organizations have no trouble discussing the value of their solution with the customer IT representatives. IT understands technology and what it means to the business. But solution selling requires selling to business executives as well, and meetings with CFOs, vice presidents and CEOs tend to be intimidating. "In that case, we say the salesperson needs to bring someone who is more a peer of the customer executive," Murphy says. "Top executives tend to think well on their feet, see the big picture and all that—but that's sometimes a tall order for a salesperson. Having another executive on your team makes the whole process go smoother."
— Joanne Cummings
Getting to that point may require completely retooling your sales staff to ferret out those who are good at solution selling. Salespeople must be able to see the big picture, ask the right questions and communicate the value of a proposed solution to business executives in their own language.
"The salesperson shouldn't be trying to answer the question of whether the customer should buy this technology or that one," Scherocman says. "The question is what do you need that technology for? They need to drive down to the business reasons, and it's very tough to find salespeople who can do it. They have to be not only business savvy enough to ask the right questions, but tech savvy enough to understand the answers."
"A key indicator for us is how salespeople choose to spend their time if left to their own devices," Murphy says. Those who are motivated by nurturing relationships and maintaining clients over time tend to be the people with the patience and work ethic required for successful solutions selling. "If they tend to be more transaction-oriented, and just make a sale and move on, they're not going to be patient enough," he says.
Gartner's Haines says many companies actually test their salespeople—either internally or via outside testing firms—to determine which ones have the skills necessary for successful solution selling. "The ones who are qualified or on the bubble are the ones you invest in training [in programs like MSS]," he says. Others can be relegated to a product specialist role, or simply let go.
Murphy says when his firm made the transition to solution selling, he did ask some more transaction-oriented people to leave, but many left of their own accord. "People leave because of frustration. Their approach isn't successful for them anymore and they know it," he says. "Most just move into other industries or roles where they can continue to sell in that fashion."
Solution selling requires a unique temperament for sales managers as well. "They need to be sales coaches, not sales screamers," Haines says.
The most successful take more of a mentoring approach. "They work with their salespeople to align and qualify the opportunities, and to bring the resources necessary to close them," Haines says. "They help their salespeople succeed as opposed to driving numbers."
Microsoft, for its part, also recognizes this need. It not only offers MSS seminars aimed at sales staffers and executives, but coaching classes for sales management.
Overall, companies should plan on investing between one and two years in retooling their sales organization for solution selling, Haines says.
|| "[Microsoft wants to] help the partners build out a different kind of services organization so that they're providing more consulting kinds of services—and getting paid appropriately for it."
Focus on Your Passion
Partners and experts say that beyond staffing, however, the company itself must change its focus in order to be successful at solution selling. "If you do it right, you'll be bringing in fewer opportunities, but you'll be selling larger and more profitable solutions," Haines says.
Haines says that partners should study the technology trends and then focus on two or three areas where they have the expertise and knowledge to make a difference. "For example, a partner could first focus on a technology like storage, and then pinpoint that even more to something like customers wrestling with securing their storage."
The next step would be to focus vertically, such as storage security in health care. "But whatever the focus, it should be something you as a partner are passionate about," he says.
Once a partner gets that focus, having conversations with customers about key business problems in their sector becomes much easier. "You'll know, for example, that all investment banking companies are facing the same problem of getting enough throughput, capacity and performance out of their systems to support large volumes of transactions because you keep seeing it," Murphy says. "And you'll be able to better tailor your solution. You could show that customer, for example, how to make the machinery run faster, smoother and better without dramatically increasing cost. And then you're in."
Know Your Limits
One caveat here is to resist the urge to go beyond the core competencies you've chosen. "You have to learn to say no sometimes," PCMS IT Advisor Group's Scherocman says. "Once you're trusted, the customer wants you to do everything, but you shouldn't because in the end, if you're not the expert you promised to be, you'll ultimately end up damaging the relationship."
When clients ask Scherocman to do projects outside his core competencies, he takes it as a compliment, but also uses it as an opportunity to remind them of why they're engaged with his company to begin with. "We're respected because we focus within these boundaries," he says. "We'll have to ask them to look for help elsewhere, or even offer to facilitate or connect them with someone else who might be better suited."
And that becomes a golden opportunity to partner with other partners. Solution selling often involves more than one partner, especially if the solution is large and complex. "We may provide the infrastructure, the connectivity and so forth, but we don't have the accounting or CRM expertise that may be required," Scherocman says. "But we can always bring in a partner with that expertise and work together to craft the solution."
In such cases, solution selling eases the collaboration because both partners know the methodology and use the same vocabulary to define where they are in the sales process. "You're all on the same page. You understand what it means to reach this level of qualification and you understand what it means to identify an opportunity this way because you've had a common orientation," Valtech Technologies' Murphy says.
Top GTMs for 2005
This year, Microsoft's top go-to-markets (GTM) for mid-market and enterprise customers focus on solutions, not products.
||Microsoft CRM, SQL Server
|Connected Productivity Infrastructure
||Executives, information workers
||Exchange, Office, Outlook, Pocket PC, SharePoint, Windows Server
|Operational Efficiency and Productivity
||Exchange, Microsoft Operations Manager, Office, Outlook, Pocket PC, SharePoint, Systems Management Server, Virtual Server, Windows Server
||Windows Media Center Edition, Windows XP SP2, Tablet PC
How Microsoft Helps
Microsoft has made a similar shift in focus. In addition to providing training on the MSS methodology itself, it has developed within its partner go-to-market kits a series of tools, templates and job aids for business partners, broken down by vertical industry, that they can use to hone their marketing message and business expertise within their chosen focus.
"Within that kit, there might be a questioning template," Eades says. "It's a simulation that says if you're going to have a conversation with this type person at this level in this industry, then these would be the questions you would ask to help define their business problems. And these are the capabilities you would begin to set up to create a vision around."
In addition, Microsoft in just the last year has made a more concerted effort to position its technologies not as individual products, but as solutions for customers, says Margo Day, vice president of the U.S. Partner Organization for Microsoft.
"Several years ago, our marketing campaigns were pretty product-specific," Day says. "But now, our go-to-market model has underlying messages that talk more to the customer about the business and technology challenge they're trying to solve as opposed to just product features. So now we have a go-to-market built around Operational Efficiency and Productivity, as opposed to Office or Windows Server" (see chart, "Top GTMs for 2005," this page). In addition to that new focus, Day's group is earmarking 40 percent of its budget to helping partners market using solution selling.
"Let's say I'm a partner and I've got a great solution for the wine industry, maybe it's an inventory management and supply chain management solution that would use things like Microsoft Great Plains and Microsoft CRM," Day says. "Through our partner engagement programs, I'm able to co-fund that kind of marketing program for the partner. The partner actually drives the solution for the customer, while Microsoft is there to augment and support with co-marketing, branding and materials." Such support includes helping set up and build appropriate references and case studies, she says.
To date, more than 20,000 partners have used the partner engagement programs focused on solution selling, she says.
In addition, Microsoft is changing the focus of its technology training to be more solution-oriented. Day says the focus, especially in fiscal 2006, will be not only to train on specific technologies such as SQL Server, for example, but also on how partners can build business intelligence solutions using SQL Server.
A new training push from Microsoft, Day says, is focusing on helping partners become consultant-like. "We want to help the partners to make the transition from selling products to selling solutions," Day says. "Part of that is the solutions selling methodology, but part of that is to help the partners build out a different kind of services organization so that they're providing more consulting kinds of services—and getting paid appropriately for it." She says curriculum along those lines will appear later this year.
A Welcome Change
The new solution-based strategy is more than welcome to Microsoft partners. "Microsoft has historically sold and led with product," Murphy says. "The fact that they're rolling out this new solution selling approach to partners is a huge concession on their part that we have to collectively engage customers in a very different way."
It's still too early to tell, he says, whether Microsoft will be able to follow through and if the new steps will help partners build profits using solution selling. "But I think where Microsoft will help most is when they're so serious about selling solutions that the customer doesn't automatically think of Microsoft as a product company. And today, my customers still think of Microsoft as a product company."