Value Quadrant for Sales People

All sales people rate themselves highly in relationships and many regard themselves as being strategic. In truth, few operate strategically and even fewer interact at the most senior levels of power. The Value Quadrant for Professional Sales Agents is designed to highlight the four possible modes of operation and all sales people move between the quadrants during their career.

The bottom left quadrant — Transactional — represents the lowest value for all concerned. A transactional sales person can be likened to a professional visitor offering only marginal value due to their inability to differentiate or exert influence. The Transactional quadrant is the realm of commodity products or services where sales success is usually dependent on representing a strong brand. Transactional selling is most subject to price sensitivity as customers seek to drive down price for what they perceive as commodity products and services. Buyers want responsiveness to their procurement process and expect sales people to assist them in transacting with best commercial value. But because, in the Transactional quadrant, the seller is responding to client demand and participating in the buyer’s disempowering (for the seller) process of reducing price, the sales person’s role represents limited value and pays accordingly.

As a sales person progresses in their career they tend to move out of the bottom left quadrant to become either an Account Manager focused on incremental business through maintaining and developing customer relationships or they become a Business Development Manager seeking to generate new business in more competitive environments. But transactional sales people usually struggle to evolve and attempts by them to position ‘solutions’ are often perceived merely as the bundling together of products and services. More worrying is that there is often a lack of understanding from both buyer and seller concerning genuine value in the delivery of outcomes and management of associated risks. Instead there is myopic focus on features, functions and price. Although the transactional sales person may seek to use tactics and relationships to position their value or outmaneuver the competition, their limiting characteristic is dependence on recommendations from technical and middle management people well below those who set the agenda and hold real economic power.

Relationship selling (the bottom right quadrant) is important because people buy from those they like and trust; positive relationships are therefore prerequisite for success at any level. However, relationships must be built with the right people in the buying organization and as already stated, transactional/relationship sales people are usually limited by relationships with lower level and mid-tier operatives. All sales people leverage relationship skills in the role of Account Manager (bottom right quadrant) or Business Development Manager (top left quadrant) but the level of genuine influence is what actually defines the value of a relationship for the seller. On the other hand, for lower level buyers, they define relationship value by the perceived level of responsiveness and trustworthiness of the seller.

The top left Tactical quadrant is populated by Sales Executives or Business Development Managers seeking to influence the buyer’s process and requirements. Here the sales person employs tactics to differentiate and overcome the buyer’s efforts to drive down price through commoditization and competition. Sales people operating in this quadrant are usually assertive and competitive; positioning unique solutions and helping purchasers identify differentiating value. Tactical sales people also tend to suffer from being stuck with mid-tier relationships and they easily focus wrongly on features and functions.

A sales person makes a significant jump in the value they offer an employer when they move from responding to transactional demand (bottom left) to influencing the buyer (bottom right) or tactically competing (top left). The giant leap however in value for both employer and customer is achieved when the sales person operates in the top right quadrant strategically creating value for all parties. This quadrant is where buyer and seller value is balanced and where the return on investment is high for both parties. Value is maximized and price becomes less important as the focus moves to managing risks in realizing the business benefits of delivering high value outcomes.

Moving away from transactional selling into any other quadrant is often labelled ‘solution selling’. Beware of this cliché term however as ‘solution selling’ can manifest as the sales person acting like the cure looking for a disease — when you're a hammer, everything looks like a nail. The concept of solution selling is valid but only if it is preceded by a consultative approach to understanding the actual problem that needs to be solved. Solutions are an integral part of strategic selling but no strategy can be effective without trust, value and excellence in execution.

The top right quadrant is therefore populated by the very few who operate strategically with excellence in the execution of tactics and management of senior relationships. The very best sales executives masterfully engineer business value through alignment to the seat of genuine political and commercial power within the customer organization. They recognize that demand creation is achieved through early engagement and by understanding and aligning with serious problems or opportunities. They also know that differentiation is achieved through becoming a trusted adviser with intimate understanding of the customer’s operational constraints and potential risks — internal and external — in the delivery of business value.

Being strategic is therefore evidenced by proactive demand generation with effective strategy to defeat the competition while building compelling business value.

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Instructed by Tony Hughes

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