B2B: what side is your bread buttered on?

What is there in common between an office suite and a supply chain management system? Nothing now. But they’re both software…

Between the operation of a staff canteen and a comprehensive facilities management solution? Nothing now. But they’re both services that involve optimizing the workplace.

Between the rapid hiring of a temporary accountant and the international headhunting of his/her second-line manager? Nothing now. But they’re both recruitments.

 

All B2B markets are being divided into two increasingly separate categories: commodity services on one hand and value services on the other.

They are the two sides of the bread… I’ll let you guess which side the butter is on.

The distinction is quite simple: does what we offer our client have value in terms of its ‘business objectives‘, such as additional business, client differentiation, acceleration of company transformation, risk management, process optimization, cooperation with the ecosystem…

Or not? In this second case, we’re already… we’re becoming… or we’re about to be… a ‘commodity’.

 

We’re not judging. Better to be a well-led commodity business than a badly run value business. But we need to choose our side and the right strategy.

The phenomenon isn’t new, but it is accelerating as technology is ‘commodifying’ (no, that isn’t in the dictionary) more and more services that still had a certain value until recently. Which suggests that today’s value services will be tomorrow’s commodities.

 

How is the difference between ‘commodity’ and ‘value’ reflected in the business process?

 

Commodities now have their sales model: Inbound Marketing, Insides Sales, Sales Automation…

Supported by all the bucket shops that are flourishing by the dozen in the Lead Generation business, which do nothing but replicate B2C processes with some links to Big Data technologies.

Until now, the commodity sales model has clashed with an equally glamorous purchase model: ‘Procurement’. That won’t last as we’re now seeing the ‘platforming’ (still not in the dictionary) of the business transaction.

Tomorrow, the service itself will be robotized. Again as in B2C. Remember, the ten-year banking model is to offer a ‘human’ advisor only to clients who have more than… a million euros to manage. Below that, you’ll get a robot (powered by Big Data and why not available 24/24).

 

In contrast, value services are seeing the need to build a specific sales model, with its own jargon: Outbound Marketing, Target Account Selling, Value Selling, Executive Selling, etc.

The new model is particularly demanding. For me, it’s built on two quite badly managed foundations: an underlying message on value and the ability to engage with executives.

 

So of course, all those who fear being ‘commoditized’ (yes really…) are furiously debating. I can also see three levels in the reaction:

  1. A ‘marketing’ layer, which involves explaining, with figures to hand, that keeping the toilets clean has a direct impact on the level of staff engagement, and so on our profits. That may be true, but it’s not easy to sell…
  2. A ‘service’ layer, e.g. ‘a manned helpline’, and in the best case the holy trinity: Assessment – Advice – Change Management… Not wrong, but not enough.
  3. A ‘business model’ layer, often called ‘XaaS’, that makes it possible to move towards a ‘recurrent’ model, i.e. monthly billing with a three-year contract, immediately renamed ‘Business Partnership’ by the marketing layer, and whose value is best seen by the service provider’s CFO…

 

Yes, the analysis is a tiny bit acerbic… but getting out with our head held high will be a little more complicated.

Value can’t be a commodity in disguise. Value is taking the market, or even the future market, crossing it with our DNA, our beliefs, our expertise, and developing a differentiating and profitable services offering. In short, reinventing ourselves.

Then setting that to music with a ‘value proposition’ that the sales representatives could take, face to face, to real value buyers: the CxOs.

François Drillon


www.executive-selling.com

 

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