Who’s eating your lunch?

I can often sell my clients' business better than they can sell themselves. Some have little sense of the magnitude of strategic value they are capable of providing their customers. Others have sales staff who rarely communicate such value, much less understand it. As a result, they undercharge their customers or otherwise find themselves merely pushing product to low-level buyers.

What do I mean by a low-level buyer? You know, the kind of buyer who has a checklist of requirements, and is tasked with collecting quotes and proposals to submit to someone else. They are empowered only to say ‘no’ and never empowered to say ‘yes’ to any proposal. They rarely understand the business need that was the genesis of their task to procure proposals, so even if your sales staff could communicate value, it would fall on deaf ears. After all, value is always about what makes the customer’s business successful, not about the product or service you provide. If your buyer can only talk about product or service requirements, specs, price, and delivery time, forget about trying to have a conversation about value because none those things matter to him or her. All that matters is what is on the checklist. All offers are reduced to a commodity, including yours.

My most successful clients always sell to high-level buyers. What do I mean by a high-level buyer? A business leader who is individually accountable at least for generating profit if not also increasing market share with the business he or she oversees. High-level buyers don’t have to ask permission from anyone else to decide to purchase something that will help achieve those ends. They are only interested in how you can improve their business, not in what products and services you have. High-level buyers never care about cost, just ROI. High-level buyers make budget for unplanned opportunities by transferring budget away from purposes with lower ROI. You can talk about value with a high-level buyer if you know how.

If your company does not routinely sell to high-level buyers, then you are likely someone’s subcontractor. In the 1990s, consulting companies began to eat the lunch of IT systems integration companies, because the IT companies had no sales force capable of having business conversations with high-level buyers, just low-level IT people. They ended up being subcontractors to consulting firms whose account managers do know how to talk about value compellingly with the right buyers. If you don’t believe me, why do you think IBM ultimately acquired PwC Consulting? Why do you think NTT Data acquired Cap Gemini Japan?

Of course, none of this has anything to with the advertising and PR industries, or with marketing professionals in general. After all, marketing professionals are experts at marketing, so they know how to market themselves. If you are a marketing professional, you can stop reading here. You don’t have anything left to learn.

Or do you?

The sales force at companies like Accenture is accustomed to discussing value with higher-level buyers. It does not matter whether value is generated by IT, advertising, marketing, PR, or something else. The principles around how to conduct the business conversation with a high-level buyer are the same and transferable from one industry to another. Delivery expertise in marketing or anything else doesn’t matter when you can subcontract cheaply to a company that has it.

The company that can acquire the high-level buyers as clients owns the lion’s share of the value. It is client acquisition capability that counts, not delivery.

So what about your advertising, PR, or creative business? Are you the equivalent of a systems integrator in your industry? Even though your business is profitable, do you feel that your margins are not as high as they ought to be, that your competition is intense, and that you can only increase your business by increasing your staff numbers proportionally?

Are your account managers fielding enquiries from PR and marketing department factotums who are collecting quotes and proposals for someone else, or are they talking with non-marketing professionals who have ownership over the business they lead? Can your account managers consistently hold a provocative and compelling conversation with such business leaders as opposed to just talking about marketing options? When a buyer asks for TV advertising time, do your account managers ask the buyer how much TV space they want, or what makes them think they need it?

If you were unsure how to answer any of the questions above, I have one more for you. Who do you think is eating your lunch, or is about to?

---

Steven Bleistein is a specialist in business growth and organisational change in Japan. He is CEO of Tokyo-based Relansa, Inc. His recent book is entitled Rapid Organizational Change (Wiley & Sons).