Selling a Diversified Solution – is it your Silver Bullet?

(This article first appeared in the July edition of Workplace360 magazine)

In last month’s article, we took a look at the customer now that we have a diversified solution. We started to explore how potentially new customers might be motivated to change (to you) or how your existing customers might look to embrace your new diversified offering – simplified by ‘greed’ and ‘fear’ – and what you can do to get more diversified-ready as you push on to new horizons.

We have already, in previous articles, touched on how you may have your own sales resistance to drive a diversified offering (fear); how to initiate, embed and nurture supplier relationships in new areas; and strategic business options you have and should consider before you even begin.

So, it’s time to move on a step.

This month I would like to make an assumption that we are now armed with our diversified customer solution – even if it is in its infancy – and it is now pretty much oven ready (as Boris would say).

Selling to our Existing Customers – risk and reward

Raising awareness of our new solution with our existing customers is often seen as a logical first step when we have new products or services to sell – after all, selling new products/services to our existing customers (or established markets) is a key growth strategy of most, if not all, established business models. If you take the well-regarded (and one of my personal faves) Ansoff matrix model you will see that selling new products into existing customers is referred to as ‘product development’ not ‘diversification’, but it is widely regarded as the 2nd (of 4) riskiest ways to achieve growth (‘diversification’ – selling your new products to new customers/markets is the highest risk!

Selling existing products to existing customers/markets (‘market penetration’), and existing products to new customers/markets (market development) are the least ‘risky’ respectively.

Any experienced business consultant will tell you that you should focus on the first two…well, first.

But can I also assume that, given the shift seen in the office supplies market in the last 10 years, that we are, to one degree or another, already trying our very hardest to make the most of ‘market penetration’ and ‘market development’ and that ‘product development’ and ‘diversification’ are not just a would like but a must have.

Selling new products to existing customers (product development) comes with a degree of risk that we have covered in previous articles. The risk to the customer relationship for any mis-step is obvious; but the risk to not doing so is bigger (somebody else will, you lose the customer/lose your core business with them and probably never get them back).

So how do we do it?

The direct approach is to just tell them (sales conversations, marketing campaigns et al). Why not? The No1 reason your customers do not buy X from you is they didn’t know you sold it after all.

“Did you know we sell workwear? I noticed you don’t buy that from us? Can I ask why not?’

And you are off and running. They will tell you why. It really doesn’t need to be more complicated than that. I have lost count the number of times I’ve seen this simple approach replaced by needlessly complicated approaches that try and avoid this simplest of routes to a sale.

Another more subtle way would be through just including your new products or services in a customer review meeting or report/document. Put a big zero next to workwear (as an example) showing them how they spent zero with you on that category. Put a zero next to every non-spending category.

I have heard many a salesperson ask for that to be removed from a report as ‘they don’t buy that from us!’.

EXACTLY!

Here’s the thing, if you DON’T include that new category in your reports how are you ever going to introduce it to the conversation/review in the future? When they start buying it?

I have sat in some terrific customer reviews when, at the 4th or 5th or 6th time of pointing out that ‘there’s workwear, still a zero’ that the customer has said ‘oh, hang on….do you actually sell workwear?’

Don’t be offended. It was never important enough before. You was not someone they viewed as selling that product, even though you have been mentioning it and marketing it for 6 months. They had no need or their motivation (fear is greater than greed remember) wasn’t strong enough to consider changing. Or changing to you!

A customer review meeting or conversation is a big opportunity easily missed. The art of a good review is to not make it a meeting to sell them something all the time. Nobody likes that, knowing that Gary Nap is going to try and sell me something. If the review is to report and inform of their previous/current habits and expenditure/purchases wrapped in pro-active advice on how they can improve, the reception will be a positive one and the idea of a regular review will be embraced (and they will not be offended by the zeros nor any mention of new areas).

The reason, in my opinion and experience, that Igor Ansoff considers this approach the 2nd riskiest strategy of the four is not that it is inherently risky in itself, it is because it can take a little time to deliver results. It is not a silver bullet solution. It takes time to establish. But once it does…..oh boy!

There are also some other, less obvious, but useful upsides.

I have witnessed many times how Introducing a new category or two can provoke a question of other areas that the customer may need. Areas that you are not (yet) operating in. ‘No, I don’t want to talk about workwear, but do you know anyone that can supply X?”

We have referenced our previous experience in this and how milk became Anglo’s biggest selling product line in less than two years; and how that led onto fruit and other catering lines and lunches etc which had not been our diversification radar at the start.

What happens, sometimes slowly but definitely surely, is your customer starts to see you as someone who can provide other areas they hadn’t previously considered. i.e. a broader supplier of solutions and not just what they previously knew you for. You have re-positioned yourself in the customers eyes.

I have also often witnessed how presenting a new and expanded solution re-enforces the single source benefits in your customers eyes and leakage or other locations or departments who have NOT been buying your current core offering from you (for whatever reason) are then swept up so you get a nice bump from that too.

Existing Customers – Your Suppliers

Steve Gorham’s previous articles explained how supplier engagement and relationship management was absolutely crucial to the start of the diversification journey at Anglo.

From a sales perspective, taking your first steps into selling new products or services to existing customers will be done with little or no history or case studies or credibility in that category. The supplier relationship is so important. Especially so in the early days. Until you have established your own case studies and credibility in your own right, you will need to lean on your supplier’s credibility; their case studies, their expertise and knowledge, their trustworthiness.

It is therefore imperative that your salespeople have a relationship with them, that you have had some training and good awareness of not just what they sell but who uses and chooses their products (I don’t mean their other distributors but the consumer themselves) and why; who their ideal consumer is, what objections they get to their offering, how they overcome those objections, how they market themselves, which areas they focus on for ‘point of entry’, their success stories and so on.

Your existing customer already trusts you but they may be fearful of trusting you to supply a new area for them, so your ability to clearly demonstrate that you have chosen a trusted and proven supply partner for this new area will be needed. You need to know all of the above plus their history, story, core values etc. as you will be selling them and the reason you chose to partner them first. Your customer trusts you to have made the right decisions in your suppliers (for them) but you still need to demonstrate it.

Please make sure you make these areas above a part of any supplier training as it often gets overlooked in favour of just product features and benefits.

Existing Customers – Marketing and Awareness

There are far more qualified people than me who can explain the multitude of ways to get your message to market in today’s digital age. So I won’t try to. What I would like to look at though is the way that a diversified solution opens up so many more possibilities (from a marketing perspective) to change the way that your customers view you.

I have already mentioned a sales-biased way (I am a salesperson after all) that you should start to raise awareness – ask the question, reviews etc – but for now I would just like settle on the possibilities the new you has to create multiple marketing engagement points with your sales message (or customer proposition) and, if you like, a plea to the marketeers amongst you to consider this from a sales perspective.

I’ll start by travelling back about a thousand years or so (feels like it) to when Adam Noble was CEO of The Irongate Group and I joined as Sales & Marketing Director. Fun times.

The Irongate Group had two very distinct parts to the Group – office supplies and print. Adam had led both parts of the business where each was equally and separately successful.

This was really my first exposure proper of how to deliver a successful ‘product development’ strategy with Irongate’s office supplies customers embracing the print side and vice versa.

This was also the time that the print industry was being revolutionised with the introduction of digital print production solutions. Irongate was one of the early adopters of the magic of digital production solutions and, at the time, the IGen from Xerox.

Being a print novice (‘print ignorant Nappy’ I can hear Adam say) I wanted to understand the sales message; why was digital print right for the customer? What benefit would it deliver to them etc.?

‘Short runs, fast turnaround and personalisation’ were the standout features of the time – the benefits being lower costs, less waste/obsolescence, greater customer impact from personalisation (and greater response rates). Wonderful stuff.

And that’s how it was marketed. Not just by Irongate but by most people in that space.

Being a relatively early adopter, it wasn’t yet widely accepted by the consumer as a proven solution. The customer needed educating and made aware of just how beneficial it could be to them. And it wasn’t always hitting the right mark with the customer. The customer was being encouraged to consider ‘short-run, fast turnaround and personalisation’ as the new solution. Why weren’t customers all over this? This is great for them.

The lightbulb moment came in the carpark after work one evening. Adam and me would often have an end-of-the-day carpark chat (we still remember those eureka moments as the ‘car park’ moments) when we realised that we was over-complicating things. We, like many of our fellow early-adopters, were presenting this solution as a ‘catch-all’ solution if you wanted ‘fast-turnaround, short-run and personalised’.

But what if you didn’t need or want all 3 of those? What if you only needed two? Or one? What if all you needed was an emergency turnaround? Or a short run of something?

So we started marketing and selling the solution this way. One feature (and benefit) at a time. Separate them out. If a customer hooked on to personalisation but was worried about the cost of whether it was worth the risk, just do a short-run first and try it.

It worked.

And that lesson has stayed with me.

When we diversified at Anglo, we had multiple points of entry we could market. Hundreds. Yes, the catch-all, ‘single source’ solution was even more achievable with a diversified product and service offering, but the ability to create many more product and solution sales and marketing messages was incredible. The ability to justify on-going and continuous (yet variable) customer marketing took on a whole new lease of life. Vida Barr-Jones and the team at Focus 7 had a field day creating such a variety of material and messaging for us and had a continuous flow of ‘what do you think to this?’ ideas and suggestions.

The salespeople loved it. It gave them confidence to talk about the new areas as the ‘point of entry’ to a customer – existing or new – grew. One day it could be milk, the next fruit, document storage and retrieval the next, workwear at the next review, and so on and so on.

The message here is we just don’t know what the point of entry will be when we add a new range or category. We don’t really know when it will present itself. We are all really good at selling what we have always done – save money, reduce processing costs/admin, rationalise your supplier base – but so is everybody else we compete with. The ability to differentiate in our core sector has diminished. Amazon Business are eating our traditional lunch!

Your new diversified solution has just opened up a world of customer engagement and marketing possibilities.

The diversification solution is not a sales silver bullet but one that takes a little time, some investment and, of course, belief. The possibilities to change the way your customers see you and regard you really are there to be had. What’s not to like?