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Solution selling is a type and style of sales and selling methodology. Solution selling has a salesperson or sales team use a sales process that is a problem-led (rather than product-led) approach to determine if and how a change in a product could bring specific improvements that are desired by the customer. The term "solution" infers that the proposed new product produces improved outcomes and successfully resolves the customer problem. Business-to-business sales (B2B) organizations are more likely to use solution selling and similar sales methodologies.
Solution selling has value and application in high complexity sales and selling situations. This complexity can be the result of existing customer circumstances, or the proposed combination of new products required, or a combination of each, such that the seller and the buyer must consider and compare many interrelated factors to achieve the desired solution and outcome. Enterprise-class software development projects, technical integration projects, large plant engineering projects, or construction projects are examples that illustrate high complexity situations. Selling organizations use a solution selling approach when one or more of the following circumstances exist:
- High levels of business, operations, technical, and or risk complexity are present in the current and or proposed solution
- Specialized experience is needed to assess the current scenario
- Specialized knowledge is required to develop and proposed a viable and appropriate solution that produces the desired outcome
- A combination and collaboration of products and services is necessary to create the desired results; third-parties organizations may need to supply and support portions of the solution
- Financial, technical and operational levels of risk exist for the buyer, the seller, or both parties
- A successful outcome requires high economic costs
- A comprehensive understanding of the issues and a clear set of answers is not readily apparent to buyer or seller
So what is the definition of the word solution? The typical response is, "An answer to a problem." I agree with this response but feel it's important to expand the definition. Not only does the problem need to be acknowledged by the buyer, but both the buyer and salesperson must also agree on the answer. So a solution is a mutually agreed-upon answer to a recognized problem. In addition, a solution must also provide some measurable improvement. By measurable improvement, I mean there is a before and an after. Now we have a more complete definition of a solution; It's a mutually shared answer to a recognized problem, and the answer provides measurable improvement.— Keith M. Eades
Origins of solution selling and terminology
Frank Watts developed the sales process dubbed "solution selling" in 1975. Watts perfected his method at Wang Laboratories. He began teaching solution selling as an independent consultant in 1982. He presented his sales process as a one-day workshop to Xerox Corporation in 1982. By 1983 Electronics magazine would portray solution selling as "an unmistakable trend in the distribution of systems-related products". In a 1984 account Dick Heiser could look back to IBM's pre-1975 "solution sale" methodology.
Mike Bosworth founded a sales training organization known as Solution Selling in 1983, based on his experiences at Xerox Corporation (the Huthwaite International SPIN (Situation, Problem, Implication, Need-payoff) selling pilot project) and began licensing affiliates in 1988. With intellectual-property contributions from his affiliate network, Bosworth's methodology continued to evolve through the years. He sold the intellectual property in 1999 to one of his original affiliates, Keith M. Eades.
While 'solution selling' has become a generic term in many sales and selling organizations, Solution Selling as a brand denotes distinct characteristics. Followers of "solution-selling" generally apply a consultative sales approach to all aspects of their sales process (or cycle) including:
- Diagnosing customer needs
- Crafting a potential solution
- Establishing value
- Understanding the buying center / decision making unit (DMU)
- Bargaining for access to decision-makers[clarification needed]
- Positioning proof, ROI and the total solution
- Negotiating a win-win solution
- Following up to ensure customer success
The solution selling methodology has evolved as key components of professional selling evolve. As a result, solution selling has become more broadly defined — to include dimensions of "sales process", "competitive selling", "value selling" as well as "consultative selling" or "complex selling" which set the focus on the team's aspects of the sales.
Solution selling in management contexts
The advent of solution selling may have an impact on business models and on organization practices. Eades and Kear discuss solution-centric organizations and the focal role of solution sales in such environments. Robert J Calvin compares some of the financial implications of various type of sales: transactional sales, value-added sales, solution sales, and feature/benefit sales. Robert L Jolles proposed that, among managers and salespeople, a chosen solution is not always the best solution.
"Electronics". Electronics. McGraw-Hill. 56: 92. 1983. Retrieved 2011-10-15.
The solution sale is an unmistakable trend in the distribution of systems- related products and is simply what the business is all about.
Lunch Group (1984). Steve Ditlea (ed.). Digital deli: the comprehensive, user-lovable menu of computer lore, culture, lifestyles, and fancy. Workman Pub. p. 71. ISBN 978-0-89480-591-2. Retrieved 2011-10-16.
He'd worked for IBM at one time and liked their 'solution sale' approach to business - first find out what is needed, then come up with an answer.
- Sant, Tom (2006) "The giants of sales: what Dale Carnegie, John Patterson, Elmer Wheeler, and Joe Girard Can Teach You About Real Sales Success." Amacom books. ISBN 0-8144-7291-5
Sant, Tom (2006). The giants of sales: what Dale Carnegie, John Patterson, Elmer Wheeler, and Joe Girard can teach you about real sales success. AMACOM Div American Mgmt Assn. p. 31. ISBN 978-0-8144-7291-0. Retrieved 2011-10-14.
[...] Xerox [...] adopted the IBM sales model [...]. And from the Xerox professional sales methods, either directly or by inspiration, have arisen many of the most successful sales approaches used in our own time - Professional Selling Skills, Strategic Selling, Solution Selling, SPIN Selling, and many others.
- Keith Eades is CEO and founder of "Sales Performance International".. Bosworth author two books on the topic of "creating buyers in difficult selling markets". Bosworth, Michael. Solution Selling: Creating Buyers in Difficult Selling Markets, McGraw-Hill, 1994. ISBN 978-0-7863-0315-1
Bosworth, Michael; Holland, John. CustomerCentric Selling, McGraw-Hill, 2003. ISBN 978-0-07-142545-2
In 2003, Eades authored an updated version of the solution-selling methodology released as The New Solution Selling Eades, Keith M. (2003). The new solution selling : The revolutionary sales process that is changing the way people sell. New York: McGraw-Hill. p. 299. ISBN 0-07-143539-5.
Handbook of business strategy. Warren, Gorham & Lamont. 2003. p. 64. Retrieved 2011-10-16.
The VP of sales believes reps should present only those products that speak to identified needs, and sponsors sales training based on this 'solution sale' assumption.
Kagermann, Henning; Österle, Hubert; Jordan, John M. (2010). IT-Driven Business Models: Global Case Studies in Transformation. John Wiley and Sons. p. xiii. ISBN 978-0-470-61069-5. Retrieved 2011-10-15.
The switch from product to solution sales calls for new price structures [...] that until recently would have generated far too much administrative outlay. More important, the entire sales process and value proposition must be rethought and restructured. In nearly every case that we have seen, merging products and services into solutions requires a change to the business model and the supporting business concepts.
Eades, Keith M; Robert E. Kear (2005). The solution-centric organization. McGraw-Hill Professional. p. 98. ISBN 978-0-07-226264-3. Retrieved 2011-10-15.
Aligning compensation and reward programs with a solution-centric approach involves ensuring that behaviors that lead to more solution sales are rewarded.
- Calvin, Robert J. (2004). Sales Management. McGraw-Hill executive MBA series (2 ed.). McGraw-Hill Professional. pp. 105, 138. ISBN 978-0-07-143535-2. Retrieved 2011-10-14.
- Jolles, Robert L (2005). The Way of the Road Warrior: Lessons in Business and Life from the Road Most Traveled (1 ed.). John Wiley & Sons. p. 112. ISBN 978-0787980627. Retrieved 2014-11-23.