Tom Steenburgh on Selling New Products, Part 2
Nov 27 2018
We continue our conversation with Tom Steenburgh, the Richard S. Reynolds Professor and Senior Associate Dean for Faculty Development at the Darden School of Business, co-author of “How to Sell New Products” in the current issue of the Harvard Business Review. See Part 1 here.
Q: In the sales organization, who should drive the new approach to selling new products? Where should the change in training come from?
TS: Most sales organizations seem to rely a lot on L&D to help develop the training programs, and that’s certainly one group that needs to be involved. There’s another group, though, that a lot companies could use but don’t: If you think about the new product design process, companies that have a design thinking group spend a lot of time with the customer designing products. And that process of spending time with the customer will give you a lot of insight into how the product will change things in the buying organization.
Using that marketing function, or innovation function, to gain customer insight, and then applying it to the sales process, is an underutilized resource. When I’ve asked companies, how long does your marketing function stay on with the sales function post-product-launch, the median answer is zero months. And it should be part of the product development process for marketing to stay on, to help develop the training program, to help salespeople at least initially to think about how to sell the product. And then constantly revise that training program as you learn more about the product, how the product goes out into the wild.
Q: In the article, you write, “Sales teams would be better off spending their time developing a psychological profile of the ideal customer.” Is this what marketers call a persona, or do you have something different in mind?
TS: It’s very similar to a persona, with the main addition being that you dwell more on the emotions of a customer than you might with a persona. And thinking about how they’re going to deal with change. So it’s getting into the head of the customer and figuring out who in their organization is going to be supportive and who is going to object, and helping them feel comfortable throughout the change management process. When we did the research, I was surprised to find that so much of the hold-up in a new product sale had to do with emotions of the customer. In retrospect, it makes a lot of sense.
Q: On the seller side, who develops the psychological profile?
TS: It has to be done in conjunction with salespeople. Some of the best examples we have seen of that have come out of strategic account management groups, people who spend a lot of time with their key clients and develop a person-by-person analysis of how they would react to changes in the organization. The advantage of using a strategic account as a beach head for new product is that you develop long-term relationships with the account, and you’re able to understand the psychology of the buying organization through that relationship.
Q: Is there a specific function in the sales organization that should handle this? Would you bring in, say, a psychologist, to develop this psychological profile? Or would you rely on the strategic account management group?
TS: We’ve worked with some companies where we’ve mapped the behaviors and the mindsets of both the buying and the selling organizations to understand problems in the sales process itself. You absolutely could think of using an industrial psychologist or someone who has that sort of training to develop a survey based mechanism to figure out the types of profiles you have in the buying organization and the selling organization.
Q: In parallel with the idea of a psychological profile of the ideal customer, can we also think in terms of a psychological profile of the ideal salesperson for new products, and if so, what are their characteristics?
TS: We’ve done this! We’ll go into a company with a set of questions, with a number of different traits and characteristics, and we interview the sales reps to figure out how they see themselves. And the traits being examined are not obvious to the interviewees, so they answer honestly. And then we map those traits and characteristics back to the ideal characteristics of a rep who sells new products. And the reps do vary quite a bit. You might find that someone who is in the middle in terms of performance for typical sales is actually terrific at selling new products. And some of the top performers aren’t enthusiastic about selling new products and may not perform as well in this area as they usually do. Figuring out who has the right behaviors, skills and mindset to go and sell is critical, and that pretty easy to do, actually.
Q: It’s easy to do?
TS: I should say it’s relatively easy to do. You run an assessment of the reps to figure out what the traits and competencies are; you can figure out where the shortcomings may be relative to selling new products, and then put in training programs to overcome those competency deficits or skill gaps. And then you let them go out in the field and sell. You figure out who actually is doing a great job and who’s lagging. Then you tie that back to your initial guess about traits and competencies, and revise your training program and do it again.
One of the messages I have for companies that are trying to sell new products is that you should take the same trial-and-error approach to your sales process that you take to product development. It’s sort of crazy to think that we go through four phase gates in developing a new product because we need to get the bugs out, so we spend a lot of time in that process, but then we think everything is going to be solved for us once it hits the field. But once it hits the field, you have to go through the same trial-and-error process, mapping out competencies, taking a guess about what works, then letting people sell, then tying back performance and asking, well, what really happened here? And then revising plans and moving forward.
Q: One very interesting finding in this Harvard Business Review article: Regarding the characteristics we’re talking about that are associated with success in new product sales, salespeople rated themselves higher than their customers did. And behavior change is difficult. Can training fix that?
TS: It absolutely can help. One piece of evidence to support that is that if you look at the training that is given to reps, it’s mostly on product knowledge. And if you look at the one area where the rep’s perception and the customer’s perception match, it’s product knowledge. Both the customer and the rep see the rep as having adequate product knowledge. Everything else, whether it’s adaptability, or empathy or long-term mindset, the rep and the customer see the rep in very different ways. Adaptability is the one that stood out the most. The reps think they’re very adaptable and that they understand exactly where the market is moving. But the customers see them as being very fixed in their ways, and as not understanding the market nearly as well as they should. In some respects, this disconnect is not surprising, because the sales organizations aren’t spending much time helping the reps manage that. And training will make a difference here.
Read “How to Sell New Products” in the Harvard Business Review here.