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 In the book, Rethinking the Sales Force, Neil Rackham and John DeVincentis delineated a set of market forces that had forced a new reality in most marketplaces. The confluence of two forces in particular had rendered product-focused selling obsolete.
First, the amount of information publicly available (principally over the Internet) has redefined buying in almost every market. Because of the enormous increase in quantity and quality of information available about products, services, companies, sellers, etc, buyers are now fully informed about the features and functionality of most products, services and companies before they ever meet with a sales rep.
This same information flow, because it is available to every competitor in every market, has accelerated the natural force that drives innovations to become commoditised. It is now easier than ever for a competitor to adopt any feature or characteristic that appears to offer buyers a differentiated reason to favour a particular supplier. The speed with which companies now adapt to innovations by their competitors has made it increasingly difficult for buyers to associate any brand or any seller with a value-driving product or service. The lines of differentiation have blurred.
Secondly, purchasing strategies have changed. Buyers are increasingly adopting a segmentation strategy in their supply chain management system. Typically, this segmentation process measures each of a company’s suppliers against a set of criteria such as those listed on the axes of the graph below. Then, a different purchasing strategy is adopted for each category.
As can be seen in Figure 1 above, those suppliers that the customer categorise as “Easy to Substitute” and “Not Strategically Important” fall into a quadrant labelled “SHOP.” The purchasing strategy adopted here is to treat suppliers as commodity brokers. In purchases such as these, the customer employs only two criteria to make a purchasing decision: (a) ease of acquisition, and (b) price. Think copy paper. Very few companies would regard suppliers of copy paper to be either difficult to substitute or strategically important. They just don’t want to run out of it, don’t want to have to store too much of it and definitely don’t want to pay too much for it.
Moving up the vertical axis, if the customer identifies a particular customer as “Easy to Substitute” but “Strategically Important,” then the purchasing strategy adopted can be labelled “Leverage.” Here the customer utilises their buying power to extract the biggest bang for the buck. The strategy is to combine all related purchases into the biggest possible carrot and offer it to as many suppliers as possible. This may entail national or global contracts, multi-year terms, large product/service mixes, etc.
One area where this strategy has had a big impact in recent years has been in the area of commercial banking. There was a time when any commercial enterprise most likely had a banking relationship with the local or community business bank. With consolidation, however, there are now a number of banks with national or global footprints. From the standpoint of the commercial banking client then, a “Leverage” purchasing strategy for banking services became the preferred option. Most banking customers today have done away with the practice of allowing each facility around the country or globe to establish a separate relationship with their local or community bank. National, even global, banking relationships are now the norm for such companies. What these companies have been able to do is obtain a greater breadth of service at a more competitive price.
Alternatively, if a customer identifies a particular supplier as being “Difficult to Substitute” but “Not Strategically Important,” then the purchasing strategy most often employed can be labelled, “Manage Risk.” The risk being managed in this case is the risk to the customer of being too beholden to any one of the few suppliers available. In these cases, the customer consciously chooses to maintain more than one supplier relationship in order to keep their options as open as possible.
Overnight shipping services provide a great example of how this particular purchasing strategy can work. For many companies, overnight mail services are not so vital to their operation that they would be considered “Strategically Important.” On the other hand, there are only four companies that control more than 90% of the market. Therefore, many companies have accounts with more than one overnight delivery service. This way, if one of the suppliers has a problem, or if one raises rates, the customer has some way to mitigate the inconvenience and/or their exposure to change.
The final purchasing strategy is one adopted for those suppliers who the customer judges as supplying products or services that are deemed “Strategically Important” and the supplier is seen as “Difficult to Substitute.” This strategy could best be labelled “Partner.” One note of caution is warranted in this case, however, because the word “partner” could be the most over-used word in the business lexicon. So often a customer or client will deem a particular supplier as their “partner” when what they are really referring to is the kind of supplier that takes abuse and yet continues to come back for more. This is not what the label “Partner” means in this case. What is meant by the label in this segmentation strategy is that the purchaser sees so much that is important and unique about a particular supplier that the purchaser is willing to make fundamental changes in the structure and operation of the purchaser/supplier relationship.
Perhaps the best example can be seen in industries where industrial design and manufacturing are complex and long term, but the dynamics of the marketplace drive a rapid pace of change. Consider the market for computer chips. It can take several years to perfect a new chip, but the time horizon for a new chip design to move from unique in the market to just a commodity is quite brief. This means that the manufacturing line producing new chips has to be ready to start up almost simultaneously with the completion of the design and test work. It is not possible to wait until the design has been finalised to begin designing and constructing the production line. Therefore, to the chip manufacturer, the supplier of production line chip manufacturing machinery is very difficulty to substitute and strategically essential. These companies establish very unusual degrees of transparency, intimacy, information sharing, etc, in their supplier/customer interactions.
One might legitimately ask, “Interesting dissertation on supply chain management, but what does it have to do with value?” In a word, everything. If market forces are now overwhelming the capacity of corporate strategists to create value through product and service innovation; if this has resulted in a tectonic shift in what defines professional selling; and if this now means that sellers have to be the primary value-creating engine of a supplier, then this segmentation tool provides a clear litmus test for how any given sales force is performing. In a nutshell,
If customers cannot identify what it is that makes any particular seller, “Difficult to Substitute” and/or “Strategically Important,” then that seller is losing the value-creation battle.
Ask yourself a simple question: What is it that my sales force is doing today, independent of the products or services we sell, that they would say makes us Strategically Important or Difficult to Substitute? Don’t be surprised if your answers make a very short list.
If the seller is failing to meet this test, then it is inevitable that the purchaser is assigning the seller to the SHOP quadrant where the only decision criteria that matters is price. Huthwaite’s research has shown that many sellers are behaving in a manner that begs the customer to put them in a SHOP quadrant. Sellers who rely on product features, demonstrations, presentations, pricing models, “value added services,” etc, are failing to offer the customer real differentiation. This is dangerous ground. Once the customer hears similar stories and gets a product-centric approach from sellers, it is inevitable that the buyer will adopt a SHOP quadrant, price-driven purchasing strategy. What should be especially frightening to most sellers is that the competition between SHOP quadrant vendors will ultimately result in a single winner….the low-cost supplier. And one primary strategy for becoming the low-cost supplier is to do away with the direct sales force. If customers are only going to decide on price, no one needs a walking, talking quote machine. The very behaviour of most sellers is spelling their own doom.
In summary then, it is essential to have great products and services. No one can effectively compete with superior offerings. But it is no longer possible to win the value battle or to escape the price-driven sale if all of the value the customer obtains is embodied in the product or service. The seller has to create value, not just communicate value throughout the selling process.
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TheSPIN 
There is no doubt about it, questions persuade more powerfully than any other form of verbal behavior. Not just in sales, but in any interaction. There is a clear statistical association between the use of questions and the success of the interaction. The more you ask questions, the more successful the interaction is likely to be. While some questions are more powerful than others, even if you can't remember the