Philip Lay

Todd Hewlin

Geoffrey Moore

<article-ideainbrief class="article-ideainbrief">
 <h4 class="ideainbrief-title">The Idea in Brief</h4>
 <div class="ideainbrief-contents">
 The downturn is making it tougher than ever to make a sale. The companies you serve are slashing budgets. Senior executives—not the managers you’ve traditionally dealt with—are now the decision makers. But you can motivate those executives to allocate funds for your offering—by using provocation-based selling:
 <ul>
 <li>Identify a critical problem facing your customer—one so ominous that, even in a downturn, it will find the money to address it.</li>
 </ul>
 <ul>
 <li>Formulate a provocative view of the problem—a fresh perspective that frames the problem in a jarring new light.</li>
 </ul>
 <ul>
 <li>Lodge your provocation with an executive who has the power to approve the solution you’re proposing. To win support, convey the magnitude and intractability of the problem—without putting him on the defensive.</li>
 </ul>
 The Idea in Practice
 Follow these steps to provocation-based selling:
 <h2>Identify a Critical Problem</h2>
 Note what securities analysts are saying about the target company or its industry. When analysts flag a problem, the customer’s investors are likely pressuring management to resolve it. Critical problems meet these criteria:
 <ul>
 <li>They seriously jeopardize the company’s ability to compete.</li>
 </ul>
 <ul>
 <li>They’ve proved intractable to date.</li>
 </ul>
 <ul>
 <li>You’re a credible source of advice on them.</li>
 </ul>
 Example:&nbsp; 
 A tech company targeting wireless communications carriers identified a critical problem facing them: plunging average-revenue-per-user (ARDU), leading to losses of $100 million to $1 billion annually. Carriers had assumed that adding enhanced features would help, but they weren’t generating meaningful new revenues. 
 <h2>Formulate Your Provocation</h2>
 Rather than finding out how your client’s executives currently view the problem you’ve identified, determine how they should view it. Example:&nbsp; 
 The tech company determined that the ARPU problem was worsening as carriers threw bundles of value-added-services into the marketplace. It postulated that a carrier must identify one service from which it could make money. The tech company estimated that if carriers didn’t address the problem within 9–12 months, they would risk losing up to three points of market share. 
 <h2>Lodge Your Provocation</h2>
 To deliver your provocation to the right person, in the right manner, follow these steps:
 1. Pave the way: Identify the executive who has the power to allocate funds for your offering. Find a mutual acquaintance who can provide you with a personal referral. Sell the referrer on your provocation. Then ask her to make the introduction and help you arrange a meeting.
 2. Rehearse: Before the meeting, test-drive your provocation with internal advocates lower in the customer organization or with third parties well acquainted with the company.
 3. Deliver: During the meeting, present your provocation in a way that clarifies the challenge and makes the status quo untenable in the executive’s mind. Demonstrate your knowledge of the problem and the customer’s current approach to it. Example:&nbsp; 
 One vendor said, “By our estimate, your current approach may be costing you $100 million a year in lost business. We believe if you don’t stem the bleeding, you could lose 4% of market share within 6–12 months.” 
 4. Get approval for a diagnostic study: The study produces a no-strings-attached report on the company’s vulnerability and resources to mitigate it. It also gives you deeper access to the organization. Use it to underpin your provocation; forge relationships with major constituencies; and identify key sponsors, detractors, and competitors.
 </div>
</article-ideainbrief>No question about it: This is a tough time to be selling to business customers. The budget allowances simply aren’t there. If you thought it was hard to make a sale before—when typically 85% of a customer’s budget was allocated to existing commitments and only 15% remained for discretionary spending—you’re finding out how much harder it can be, as even that fraction disappears in across-the-board cuts. Making matters worse, your customer relationships have lost much of their power. With less money to go around, proposals are subjected to higher levels of review in buying organizations, and the managers you’ve traditionally dealt with are no longer the decision makers.

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Reprint: R0903C
Even as discretionary budgets are drying up, some B2B vendors have found a way to reach their customers&#8217; resource owners and motivate them to buy. They do this by identifying a thorny issue in the customer&#8217;s company or industry and developing an original, compelling point of view about it. They pitch this point of view to a carefully chosen line executive in one crucial meeting and then prove its worth with a short diagnostic study. This is the essence of what the authors, all managing directors at TCG Advisors, call provocation-based selling.
Sybase, a data management and mobility company, was successful with this approach in the summer of 2008, as it tried to pry business out of financial services clients that were severely cutting their operating costs. Instead of probing for what those clients thought they might need, Sybase salespeople pointed out what they should be worried about: an industrywide failure to manage risk comprehensively. By revealing the scale of the threat and the opportunity, Sybase was able to sell its Risk Analytics Platform, a new tool for integrating risk management.
Provocation-based selling doesn&#8217;t align with the customer&#8217;s outlook; it provides a new angle on the situation. It doesn&#8217;t identify and respond to the customer&#8217;s &#8220;pain points&#8221;; it outlines a problem the customer hasn&#8217;t yet put a name to. Framing a provocation creates a readiness to listen, and a diagnostic study converts the dialogue into a contract. The provocation-based sales cycle is resource intensive but appreciably shorter than that for solution-based selling&#8212;and it leads to significant business opportunities.

In a Downturn, Provoke Your Customers

Reprint: R0903C Even as discretionary budgets are drying up, some B2B vendors have found a way to reach their customers’ resource owners and motivate them to buy. They do this by identifying a thorny issue in the customer’s company or industry and developing an original, compelling point of view about it. They pitch this point of view to a carefully chosen line executive in one crucial meeting and then prove its worth with a short diagnostic study. This is the essence of what the authors, all managing directors at TCG Advisors, call provocation-based selling . Sybase, a data management and mobility company, was successful with this approach in the summer of 2008, as it tried to pry business out of financial services clients that were severely cutting their operating costs. Instead of probing for what those clients thought they might need, Sybase salespeople pointed out what they should be worried about: an industrywide failure to manage risk comprehensively. By revealing the scale of the threat and the opportunity, Sybase was able to sell its Risk Analytics Platform, a new tool for integrating risk management. Provocation-based selling doesn’t align with the customer’s outlook; it provides a new angle on the situation. It doesn’t identify and respond to the customer’s “pain points”; it outlines a problem the customer hasn’t yet put a name to. Framing a provocation creates a readiness to listen, and a diagnostic study converts the dialogue into a contract. The provocation-based sales cycle is resource intensive but appreciably shorter than that for solution-based selling—and it leads to significant business opportunities.

In a Downturn, Provoke Your Customers

Summary.

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