1. Complex Selling
in Today’s Global Economy
WHITE PAPER
Cincom In-depth Analysis and Review
S I M P L I F I C AT I O N T H R O U G H I N N O VAT I O N ®
3. 1
Introduction Issues with Complex Selling
Organisations selling complex products face some very
Companies selling complex products and services have specific issues, which may include:
always had their own very specific challenges as well as • Sales channels struggling to understand the products
the wider issues that all industry sectors have to face. well enough to sell them fully and effectively.
The changing business, economic and technology
landscape has thrown these unique challenges into • Getting sales reps and channel partners up to speed
sharp focus. on new and existing products is expensive and time-
consuming.
The global marketplace and the pervasiveness of the
internet have, perhaps inevitably, taken longer to impact • Sales spending too much time on “non-selling”
the world of complex selling than other sectors. But activities such as quotation preparation, chasing
even companies in the most protected market spaces corporate resources, expediting and resolving
can no longer ignore the changes brought about by problems with quotations and orders.
these and other factors. • Preparing labor-intensive and time-consuming
proposals and quotes.
In this paper, we look more closely at the issues and
opportunities that arise from these changes; in particular, • Heavy dependence on inside sales and other internal
the challenge of capturing and deploying the groups—“Chasing the Expert.”
knowledge that the “extended enterprise” needs to sell
• Diverting key internal resources from more
complex products and services in today’s global
strategic/high-value activities.
economy.
• Errors in quotations and orders.
• The desire to grow sales through new channels, partners
Complex Products and the web.
Complex products are largely, although not exclusively, • The need to assimilate product lines/sales teams from
found in the high-tech and industrial product sectors. mergers and acquisitions.
While there has been much activity in the development
Examples of complex products include:
and deployment of CRM (Customer Relationship
• Network, communications and IT equipment Management) systems, the focus has almost exclusively
been on the needs of companies selling standardised
• Air and liquid movement systems
products. The functionality has targeted areas of sales
• Electrical power systems efficiency rather than effectiveness. CRM systems tend
to look at the processes around the sale but do not
• Motors, compressors and fans
address the issues highlighted above.
• Transportation equipment
Although the fortunes and perceptions of the internet as
• Industrial machinery a selling vehicle have fluctuated wildly, the fact remains
that it offers an invaluable additional or supporting
channel (and differentiator) for those companies that can
Complex products are typically characterised by: address the specific challenges it poses for complex
• High-end item value products.
• Many features and options
• Complex rules governing applicability and
interoperability of options
• A complex product structure and/or manufacturing
process
• A selling process that is heavily dependent on
knowledge or expertise, frequently involving multiple
“domain experts”
• Being sold through direct and indirect sales channels
4. 2
Business Drivers
Companies have spent considerable time, money and
resources implementing enterprise backbone (ERP)
systems to improve the performance of their “back
office” processes (finance, manufacturing, purchasing,
etc.). Companies selling complex products and services
must now move their focus to the “front office”
(customer sales and service). The need for this shift is
driven by several trends:
• Cost containment – The economic changes flowing
from the bursting of the dot-com bubble and the
aftermath of 9/11 mean that few companies are
insulated from the need to contain or cut costs.
• Increased competition – Technological or
manufacturing excellence no longer guarantees
competitive advantage. Innovative, fast-moving
competitors who are more responsive to customer
needs are challenging market leaders.
• Customised products and services – Increased
competition means more choice and increasing
customer demands. Customers are no longer willing to
buy “standard” products when they can have “exactly
what they want, when they want it, for a fair price”
from someone else.
• Broader product offerings – Most companies are
responding to these demands by extending product
ranges and offering more variation and options within
their products and services. But increasing product
variety and complexity puts heavy demands on a sales
channel that is probably already struggling to keep up
with existing product and service offerings.
• Shorter product life cycles – While product offerings
are growing, product life cycles are shortening—a
“double whammy.” Traditional product ROI models
are invalidated as companies are driven to embrace
the principles of Mass Customisation1.
• The internet – The internet makes it possible for
customers to rapidly assimilate information about
products and services that might meet their needs, to
match them against their requirements and to obtain
prices—without ever talking to a salesperson. While
sellers of more complex items have been relatively
immune from this pressure, the expectations of buyers
are rapidly changing.
• Knowledge – Customers are more knowledgeable
Selling has
and they expect knowledgeable selling. Yet few
companies can afford to involve their “experts” in never been
every sales cycle. so complex.
1
Mass Customisation - The profitable delivery of customised products
and services at mass-production prices.
5. 3
Responding to the Challenge
To address the issues that we highlighted earlier and to
keep up with increased competition and customer
demands for personalisation of complex products and
services, many companies have adopted some obvious
(but ultimately flawed and self-defeating) responses.
Simplify Your Offering Sales Automation
One business response to the information-management Numerous sales automation projects have been
and communication issues associated with complex targeted to improve “sales effectiveness.” In reality,
products is to “dumb down” the product offering to however, a vast majority of these projects have focused
some markets or channels. The supplier deliberately on making the sales channel “efficient” rather than
restricts the product options available to lessen the “effective” and have frequently increased the non-
information requirements. selling time required by the sales organisation.
This may resolve some of the issues, but it is likely to lead A primary reason for this mismatch between
to lost or lower-value sales because of unavailable expectations and results is that most sales automation
competitive product features or the inability to sell add-ons. software packages are first and foremost sales
administration systems and do little to improve selling
effectiveness.
Adopt the “Push” Model In addition, most software packages are designed to
accommodate a direct sales organisation model but
Another common “low-cost” response by suppliers is to
cannot accommodate a complex sales channel
issue secured information on CD-ROM. But, by
consisting of both direct and indirect channels.
definition, CDs can only be produced periodically and
stock availability, product options and price changes
occur by the minute, not by the week, month or quarter.
The Real Solution
A significant but often overlooked issue is that CDs are
a one-way street, allowing the supplier to pump The real key to successfully selling complex products
information into channels but offering no solution to the and services lies in addressing the underlying issue—the
required exchange of information backward and forward. need to capture knowledge from wherever it is held in
the organisation and making it available to whomever
needs it, whenever and wherever that is.
6. 4
Changing Routes to Market
Knowledge—a Core Requirement Direct Sales
Today’s buyers demand personal, knowledgeable and The traditional sales arm, the field sales force, has
responsive selling. Addressing these requirements is become increasingly frustrated with the difficulties of
challenging for any company, but much more so for selling a broadening range of complex, customised
companies selling more complex products and services. products and services in an increasingly competitive
Traditionally, these products have been sold by a direct environment with inadequate tools. Typical frustrations
sales force, perhaps supported by closely tied dealers are:
and often in protected market spaces.
• Incomplete product, price and customer information
However, companies now need to reach their markets
• Customers demanding more rapid, yet personalised
both through direct channels, such as field sales and call
responses, requiring frequent revisits to finalise
centres, as well as through indirect channels, such as
customer need and product fit
resellers, remote sales offices and even self-service
internet capabilities. Each of these “touch points” has • The need to “return to base” to complete customer
specific support requirements. The challenge is ensuring proposals
that the channels work seamlessly together and can • “Chasing the expert” to determine missing details for
communicate common knowledge rapidly. product specifications or quotations
Information about products, pricing and customers may • High potential for order errors
have once remained static for long periods, but today
changes constantly. More people need to understand
the latest picture immediately, yet the pressure is on to Increasingly complex products, pricing and financing
reduce the resources and costs required to provide this result in the salesperson selling “familiar” products—not
information. To compete effectively, companies must necessarily those best suited for the customer or most
become lean and agile in this area as in others. Shared profitable for the supplier.
knowledge enables companies to implement rapid,
coordinated action across the extended enterprise. To resolve these frustrations and to become more
effective, the knowledge that is so often frustratingly
Traditional support methods fail rapidly in today’s locked away elsewhere in the organisation needs to be
competitive, faster moving, multi-channel, global made available to field salespeople. Solutions are
market. A sales process relying on paper-based needed to help them close business (not just manage
catalogues and frequent interaction with increasingly their contact lists). Salespeople need solutions that:
pressured product, manufacturing or pricing experts will
quickly fracture. • Are available at the point and time of sale—tools that
can be used away from the office while face to face
with the customer
A major challenge is to ensure that all channels work
• Provide up-to-date product, price, customer (and
cooperatively, sharing and communicating knowledge
other) information
in a timely manner.
• Develop a complete and accurate product offering to
meet a specific customer requirement
• Have “point and click” synchronisation with central
enterprise systems
• Enable them to rapidly assimilate new or upgraded
products, revised pricing or other changes
• Deliver true benefit (not seen as a hindrance)
Of course, field salespeople can become more efficient
by using a traditional Sales Force Automation (SFA)
solution. However, SFA does not create more effective
salespeople. Surveys show that increased effectiveness
is the highest priority sales managers seek from selling
systems.
7. 5
Telephone Sales and Support Indirect Sales
The typical call centre is not often used to sell complex A network of dealers, agents, resellers, distributors and
products. On the other hand, there will be many remote sales offices enables effective, low-cost, rapid
occasions when information needs to be given or expansion into new and unfamiliar markets. However,
received by phone. Some configured products such as the issues faced by the direct sales force are magnified
PCs may use telephone sales and support quite for these indirect sales channels. Invariably separated
extensively. from the parent organisation by distance and frequently
by time, indirect sales channels surely present
Internal sales and support people share many of the formidable communication and management challenges
frustrations of their colleagues in the field and need to any organisation. These challenges are much more
similar solutions. However, there are some specific issues demanding when those remote partners handle
in dealing with complex or customised products products that require considerable sales knowledge.
satisfactorily via the telephone. While communication
may be two-way, we must make allowance for the Customers selecting products over the internet face
limitations of a solely verbal interaction with the similar problems. Like a reseller, they will almost certainly
customer where only the agent has the full benefit of have a good understanding of their needs and domain
detailed system information. Therefore, a support knowledge. But even more so than the reseller, they are
system for telephone users must be: unlikely to have a deep knowledge of a particular
vendor’s products. Some concerns are very specific to
• Simple to use this arena:
• Able to present even complex products clearly
• Protracted sales cycles because of the need to consult
• Completely foolproof in taking 100 percent correct the vendor over many areas of detail.
orders, every time
• Security and geographic concerns can make it very
• Able to promote up-selling and cross-selling difficult to distribute information and keep it current.
opportunities
• Because of product complexity, agents may choose or
• Closely integrated with fulfillment and other may only be allowed, to sell a limited range of
downstream systems products. For instance, companies may simplify their
products through dealers to make them easier to sell.
But as we noted earlier, this process almost invariably
damages competitiveness and profitability.
• Lacking the most current information, reseller
quotations may be error-prone.
• Dealer training is difficult and costly.
• Generating forecasts for indirect business is
notoriously difficult.
A solution addressing these issues needs to:
• Cover agents and remote sales offices as well as
customers.
• Help agents sell a particular company’s products in
Companies selling preference to those of competitors.
complex products • Deliver current product price and customer
and services must now information that is always available.
move their focus to • Help develop and close business by providing tools
the “front office”— for lead management, quotation and forecasting.
customer sales • Operate in multiple languages, currencies and
and service. cultures.
Communication is vital in any supplier/buyer
relationship, even more so in supplier/indirect-channel
relationships with complex products. Information
exchanged between supplier and dealer must be two-
way and above all, current if the relationship is to realise
its full potential for both parties.
8. 6
A New Channel Model
Companies must develop a new model to optimise The Internet
information flowing between suppliers and their indirect
channels. It must be: Clearly the World Wide Web provides the foundation to
implement this new form of channel support. Internet
• Cost-effective and easy to use support of indirect sales channels or direct to consumers
has evolved through three generations.
• Accurate and consistent
• Secure and two-way
• Immediately accessible and always available Generation 1 – Static Web Publishing
Most companies have taken steps to publish information
Three technologies have matured and converged to on a website and make it available on a 24-hour basis to
resolve these issues: their prospects, customers and indirect channels. This
information is typically “static” with periodic updates
• The internet and may consist of marketing information, technical
• Knowledge-based Configurators product information and perhaps secured pricing
information.
• Enterprise Relationship Management systems
This “First Generation” web approach is primarily one-
way communication where the supplier publishes
information, but interactive sales transactions are not
supported.
Generation 2 – Selling Simple Products
The growth of e-commerce, electronically selling over
the internet, has been well documented with highly
publicised “success” stories for companies such as
Amazon.
However, most high-profile e-commerce websites
actually operate in the business-to-consumer market
where the products themselves are relatively simple
(books, clothes, CDs, etc.) and of low transaction value.
Powerful search engines accessing product catalogues
and links to credit card payment systems are
characteristic of these sites. Transactions can be secured
and encrypted as necessary. But there are few, if any,
options associated with the selection and ordering of
these consumer products and they could not be
described as anything other than extremely simple in
their technical specifications and pricing.
The cost-effectiveness of internet selling cannot be
disputed although its appropriateness for anything
beyond selling simple products may seem open to
question.
9. 7
Generation 3 Is Defined by Complex Configurators
Selling The latest generation of configurators based on Expert
The “Holy Grail” of electronic commerce—the ability to System technology is having a real impact in selling
sell complex products with multiple variations through complex products. A good configurator package
the web. captures the rules associated with product offerings and
intelligently guides customers, dealers or salespeople
Information flow needs to be bidirectional with links to through a selection process without the need for
fulfillment systems in the supplier’s back office. Dealers supplier intervention.
or customers need to identify themselves through log-in
procedures and information is securely transmitted. Beyond product selection, the configurator must
manage the business rules associated with pricing,
This is the real requirement for industrial products in the customer terms and service requirements as well as
business-to-business environment, sold directly or being able to generate personalised documentation for
through dealers, resellers and agents. prospects, dealers and internal needs. Finally the
configurator must translate the product into the format
In this environment, the many rules associated with
needed by the “downstream” users within the selling
specifying and pricing a complex product must be made
company itself.
available through the internet. But how, when
conventional catalogues or conventional programming In effect, the configurator captures and deploys the
languages cannot capture and convey that knowledge? knowledge that humans bring to bear in a sales
dialogue, acting as an intelligent agent in product
The answer lies in a knowledge-based tool called a
selection, pricing and technical specifications.
configurator.
If configurators are going to be useful, they must allow
rules to be captured and published very easily
(otherwise the rules will change before they are issued)
and rule maintenance must be simple and quick.
The ability for the configurator to be deployed across
the internet is a must if up-to-date information is to be
made available to the entire direct and indirect sales
channel network at the “touch of a button.”
Configurators present the product options available in
terms understood and relevant to the buyer. The
configurator will prevent the buyer from selecting invalid
product combinations and will translate the buyer
requirements into a technical specification for the
supplier to fulfill.
It is important that the outputs from the configurator
satisfy the needs of both buyer and supplier. The buyer
needs a quotation or proposal for a correctly specified
and priced product. The supplier needs a specification
that will allow the complete and accurate generation of
sales and manufacturing orders within “back-office”
fulfillment systems if the quotation is released as a firm
order.
The customer requirements and resultant product
configuration need to be stored on the supplier’s
database to allow retrieval and amendment by the dealer
or customer if the requirements change. This database
also gives tremendous visibility of the pipeline for
forecasting purposes.
Once the configuration rules are captured and deployed
throughout the sales network, the need for order
validation by the supplier is eliminated since the
configurator will ensure that only valid configurations
and specifications are generated at the point of sale.
One hundred percent correct orders, one hundred
percent of the time right across your sales and
distribution network.
10. 8
Opportunity or Threat?
The internet by its nature is a global marketplace and is
increasingly viewed as the major enabler in allowing
both central control of information and potentially
unlimited low-cost access through browsers. Visionary
companies are leveraging the internet as the means to
make new sales channels effective quickly, significantly
reducing training and information transfer costs
throughout their sales network.
The Gartner Group and other industry analysts consider
technology-enabled selling to be the single, highest-
impact investment companies can make in sales and
marketing technology. Shared customer and market
knowledge throughout the whole enterprise, along with
optimal resource allocation, are key factors to surviving
tough global competition. Automating these areas
promises a huge return on investment by delivering a
competitive edge whenever you interact with customers
and prospects.
11. 9
The Bottom Line
Selling complex products and services has always
presented special challenges. These have been
magnified by marketplace, distribution channel,
technology and customer expectation changes. To retain
a position of leadership, organisations need to
understand the specific threats and opportunities for
their products and markets and develop approaches
that will allow them to become more efficient, more
reactive and more effective. Software applications are
now available that address the very specific issues of
selling complex products and services and enable these
new approaches to be implemented.
The implementation of these applications is accelerating
rapidly and a significant and growing number of
companies have now delivered dramatic, quantified
improvements in key sales-performance measures. Users
have impacted performance, cost and time across the
board reporting increases in sales revenue, reduction in
time-to-quote, reduction in quotation and configuration
errors and cost reductions in developing quotes and
proposals.
About Cincom
Cincom and its partners deliver and support innovative Software applications are
software and services to simplify complex business now available that address
processes. Cincom Acquire® simplifies complex selling
by delivering critical product, pricing and process
the very specific issues of
knowledge to the point of sale. For 40 years, Cincom selling complex products
has empowered thousands of clients worldwide to and services and enable
transform their businesses and outperform the
competition by providing ways to increase revenue,
these new approaches
control cost, minimise risk and achieve rapid ROI. to be implemented.
Cincom serves clients on six continents including
American Power Conversion, Air Products, BMW,
Boeing, Ericsson, Rolls-Royce, Rockwell Automation and
Siemens.
For more information and additional resources, contact
Cincom by phone or e-mail at one of the regional offices
quoted on the last page of this document. You can also
visit the company's website at
http://acquire.cincom.com.
