How to Sell New Products
Professors Steenburgh and Ahearne explain how to more successfully commercialize innovations that your R&D department has come up with in their most recent article in Harvard Business Review. https://hbr.org/2018/11/how-to-sell-new-products
SUMMARY
The professors "combed the academic literature, conducted numerous one-on-one interviews with senior sales leaders, and led several studies of our own" to find out why some companies struggled to commercialize new products, while others were successful.
Why Companies Struggle to Sell New Product Lines
1. More intense time demands needed in educating the customer
2. Customers losing resolve to close the sale later in the sales process due to resistance to more profound business changes. (The sales process, by the way, was described as a six stage process as follows: "(1) sales inquiry, when the initial call is made; (2) needs recognition, when the salesperson helps the customer better understand his or her needs; (3) evaluation, when the customer begins to consider various products; (4) solution development, when the customer sits down with a limited set of suppliers and works out potential solutions; (5) decision, when the customer decides whether or not to buy; and (6) after-sale maintenance, which takes place when the product is being used.")
3. Lack of the right type of training (Instead of training salespeople about how they can truly help customers in their changing industry context, companies train salespeople on the bells and whistles of the product)
How Successful Companies Do it
1. Companies develop competency maps and align talent assets to business goals (They take inventory of individual salespeople's strength and weaknesses by measuring traits and skills and map them to company strategies)
The competencies that salespeople who are successful at selling new products have are:
They spend more time on finding good prospects for the new products and divert time from existing products and other administrative work
They are more attune to where in the sales process challenges will arise and think more deeply about how to better work with prospects to overcome challenges
2. Companies develop training programs to cultivate and improve upon necessary competencies.
They have a learning mindset about selling strategies
They are customer focused and personally adaptable
2. Companies develop training programs to cultivate and improve upon necessary competencies. For example, "[t]o address knowledge concerns, [one successful company] created a market awareness training program. After that ended, it provided regular updates on trends in digital media so that salespeople could help their customers make sense of where the market was moving. But more important, it provided its people with coping mechanisms to make them more comfortable with the pace of change. The emotional barriers to making a sale were bigger than the knowledge barriers."
3. The companies launched new products through Strategic Account Managers (SAMs). SAMs "are assigned to the most important customers, are permitted to take a longer-term perspective for business development and are responsible for building a useful network at all levels of their customers’ organizations. They help the field sales team overcome challenges as they arise. SAMs typically receive more long-term incentives as part of their compensation than regular salespeople do; companies with SAMs typically experience higher sales costs but usually see a return on that investment. At large companies SAMs help break down internal barriers between business divisions that prevent important conversations with customers."
It is best practice for SAMs to hold regular planning meetings with customers and establish mutually beneficial goals to support the sale of new products. This form of planning and collaboration allows SAMs to become intimately familiar with customers’ business practices, culture, and strategies. They analyze their customers’ industries and identify their customers’ strengths and weaknesses relative to competitors in the market. Intimately working together on strategic priorities lowers barriers to adoption for new products. Trust is established, so customers don’t worry that the seller is holding back information about the product and are confident that the seller understands the challenges they will face as the product is rolled out to users.