Is Your Product Strategic or Tactical?
I hate to break this to you. But, for most of you reading this article, the products or services you are selling are NOT strategic to your customer. This doesn’t mean your product or service isn’t important. It’s just not strategic. And that dictates how, and to whom, you should be selling. Understanding the difference is crucial to your ability to help your prospect move more quickly through their buying process and give you the order.
For every product and service there is an Actual Decision Maker (ADM), a functional, economic or organizational buyer who really makes the decision which vendor to select. Making an accurate determination of whether your product is strategic or tactical is the first step to defining who the ADM will be. Identifying that person within your prospect’s organization is a key part of the qualification process. (Qualification is a collaborative process and you can’t qualify a prospect with someone who isn’t the decision maker.)
Which is Which?
Examples of strategic products are major acquisitions or purchases that can affect the direction of a company. Large capital expenditures for buildings or equipment. Major commitments to financial institutions. Large sole source volume purchases of critical inventory. Investments in mission critical systems such as data centers, network infrastructure and software. Anything that rises to a certain dollar level relative to the company’s revenues.
Tactical products and services are everything else. A company can’t operate or function without them but the dollar level of the purchase is low relative to the size of the company, the products and services are relatively commoditized and there are multiple vendors from which to choose. This equally applies to certain raw materials and components to build products as well as consumable supplies and services that companies need to keep the lights on and operate.
As a rule of thumb, decisions on strategic products are made by ADMs at high levels, or the highest, within your prospect’s company. Decisions on tactical products can be made a a wide variety of levels within a company. The consequences of incorrectly identifying the ADM and mis-characterizing your product or service as strategic vs tactical include elongated buying cycles as time is wasted selling to the wrong people at the wrong levels.
In part, this confusion between the strategic and the tactical stems from the sales literature and sales training that claims that the one true path to sales success lies in selling to the C-suite. However, if you blindly follow that advice without first accurately assessing the nature of the product you are selling, then you’re at risk of setting out on a path that will slow down your sales process. (Even complex software priced and delivered in SaaS models is now often a tactical product/service. I spoke with the VP of Sales of a well-known SaaS vendor at the Sales 2.0 conference in San Francisco. He said the great thing about their business model is that it had compressed their prospects’ buying cycles by largely eliminating the need for C-suite approval for their product.)
Fortunately for you the overwhelming majority of products and services that are sold are tactical. They are good products. Even important products. Perhaps products and services just like yours. Unless you are selling to a very small business where the CEO/owner makes every single decision, avoid wasting your sales time by insisting that your path to getting an order requires that you sell your product and service to the denizens of the C-suite.
Mind the Gap
A useful way to look at this is to envision that there is a time gap between each level of management. This time gap is the additional amount of time it takes for each additional level of management above the Actual Decision Maker to be briefed and add their input to a decision. In my experience this gap should be estimated to be at least a week in length, though it could be much longer. If there are two levels of management between your Actual Decision Maker (ADM) and the C-level Boss, then you risk injecting a minimum of two additional weeks into your prospect’s buying cycle if you persist in an attempt to involve the Boss in a decision that she was content to leave to her staff. This creates time for your competitors to get back into the deal. Falling into this time gap puts the brakes on your momentum and injects an element of risk into the sales situation that didn’t exist before.
Let me give you an example. One of my clients was Marv, the CEO of a small tech company that manufactured an electronics product with a bill of materials that consisted of a couple hundred components. Each one of those components represented a sales opportunity for one or more vendors to supply my client’s needs for the thousands of units they built each year. My client CEO signed off on the purchase requisitions that approved the expenditure for parts but he wasn’t making the decision about which vendor to select for each of those individual components. Those decisions were made by the design engineer, component engineer or manufacturing engineer.
One day a vendor’s salesguy, who was just about to be given an order, managed to convince his engineering contact that he absolutely needed to talk to Marv before he got the order. After all, he had been trained that he needed to sell all the way to the top. He triumphantly entered Marv’s office. Marv turned to his engineer and asked “Why are you bringing this to me? I don’t need to be involved.” He paused. “But now that you’ve brought this to me, I will give my opinion.” Suddenly the done deal was not so done.
In the London subway system, known as the Underground, some older stations have curved passenger platforms. The subway cars have straight sides. When the subway pulls into such a station and opens its doors, the passengers must step over what can sometimes be a substantial gap between the train and the platform. In order to remind its patrons to be mindful of this gap and avoid tumbling down between the platform and the subway car, the Underground helpfully plays an automated voice message whenever a subway pulls into a station. A mellifluous British male voice cheerfully, and repeatedly, urges you to “Mind the gap.”
You have to mind the gap while you’re selling, as well.