25 March 2020
What is solution selling?
Solution selling refers to the process of engaging with a customer to deliver a product or service where DESIGN or DEVELOPMENT of the requested product or service is a significant proportion of the project scope.
The key point is, you can't propose the solution to the problem until you understand what the problem is.
"Problem" of course, is the broad term for a requirements specification which may or may not be documented or even fully articulated. Often in solution selling the first step is to fully understand what the client is asking for, working through various potential solutions, and testing their budget perceptions before agreeing on a specification. This process is often referred to as a "needs analysis."
Examples of Solution Selling
- The design and construction of architecturally designed homes or commercial buildings
- The design and construction of infrastructure such as roads, bridges and tunnels
- Bespoke software development
- Designing, fabricating, installing and commissioning of electrical, mechanical, hydraulic, or pneumatic systems used in processing plants
- Designing and building ships
- Many others
Before developing a proposal (submitting a bid) the competing firms need to translate the customer's requirements specification into a design before they can calculate a cost estimate.
Firms compete for the project based on differentiating via the following main methods...
- Their proposed design (which will be unique)
- Reputation evidenced by delivery of past projects
- Value for money
- Business terms
- Strength of relationship
For the buyer the challenge is comparing offers as each firm will have put forward a unique solution making it harder to compare.
For the selling firms the challenge is being able to put forward an attractive bid without investing too much time and money in developing the solution and preparing the proposal.
Solution selling firms therefore need to be selective about what they decide to bid for to avoid expending resources on low probability opportunities. This process of selecting opportunities is called capture planning.
Often, the firm requesting proposals may provide funding for a shortlist of rims to develop proposed designs. This is done to ensure they receive sufficient competing proposals. However, this is restricted to large projects in specialized industries.
Solution selling techniques
The word "selling" is perhaps not appropriate in solution selling. Which sounds contradictory, however the general principal of acquiring a new project opportunity is to assume the project is real and keep moving forward until proven otherwise.
Before the project has been fully scoped (a detailed requirements specification) the only thing you can sell is your capability and track record, however this is best done through capability statements or other means and only when you understand what the customer is looking for.
For lower value project opportunities...
- Never sell over the telephone: The primary objective of the first contact with a sales prospect is to sell the appointment; until you understand the problem they are trying to solve, you have nothing to say. You could rabbit on about how good your firm is, but a general sales pitch is likely to be dismissed as sales hyperbole.
- Listen before speaking: If you have achieved a face-to-face meeting with a sales prospect, the first question is "what is the problem that you need to solve?" - sit back and take notes and encourage the customer to keep talking by asking clarifying questions.
- Don't provide the solution at the first meeting: Sometimes the solution to the problem is obvious. You might be tempted to blurt it out. However, there are many dangers to doing this. Firstly, they might suspect you are a one trick pony - you propose the same solution to every problem because that is all you have to sell. You might get it wrong because you haven't had time to think it through or discuss it with colleagues. They won't value it - often years of experience and deep industry knowledge allows an expert to nail the correct solution on the spot. However, to charge the full value of that intellectual property can't be achieved if the client thinks you've pulled a rabbit out of the hat. Go away, prepare a quality presentation, and return to deliver a well rehearsed sales pitch.
While the above general approach is applicable to all solution sales, solution selling as it applies to large contracting is described in greater detail here.
How do you sell engineering?
Solution selling - building a better sausage machine
What cycling teaches you about business
Capture planning - is this project suitable for you?
Tenders; knowing when to hold and when to fold