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Speaking Out: Why Solution Selling Beats a Commodity Focus

July 1, 2014
Customers in our industry are now going through what those in the financial industry did years ago. Technology is driving an increase in options, which is driving a power shift to the customer, which is requiring sellers to deliver real value in order to survive.

As our industry confronts attacks from AmazonSupply, our best advice may come from the financial industry, and Steve Lockshin’s book, Get Wise to Your Advisor.

Jeff Bezos, the founder and brains behind Amazon, was a hedge fund executive before starting Amazon in his garage. After turning companies like Borders into dusty bookshelves, he’s now focused on the distribution industry. In his book, Lockshin predicts three changes in the financial industry due to online alternatives that have already changed the landscape of financial advising. Two of these changes ring true for our industry.

Separation of value services from commodity services. Stock brokers, or “stock pickers” as they are referred to in the financial industry, were decimated by online brokerage firms such as Scottrade in the past two decades. Although statistics are difficult to come by, Gerald Bifulco, a financial advisor for Ameriprise in Scotch Plains, N.J., estimates the “pickers” have dropped by over 50% in the past 10 years. Bifulco should know, as he was one for Merrill Lynch and now claims he is one of two out of 25 brokers from the company still in the business. That’s only 8%. On the other hand, financial advisors are predicted to increase by 27% over the next decade. That is close to three times the growth rate of all other U.S. professions.

Distinguishing between the pickers and the advisors for statistical purposes is nearly impossible. It’s as challenging as providing statistics on how many electrical salespeople are order takers versus how many sell real value. Bifulco claims as early as 2004 the pure stock picker was a dying breed and the push for the professional advisor was in full swing. The financial advisor market adapted into a much more value-driven solution and thrived as a result. Bifulco is one of those brokers who transitioned into the full-service advisor.

It turns out that Scottrade ad showing the stock broker as a buffoon was partially accurate. Those who did not adapt, are gone. But that’s good news. Based on that 27% growth number, professional salespeople who sell value proved they can win the war against online alternatives. If it can happen in the financial industry, where Amazon has its roots, it can happen in distribution business, too.

Empowerment of the consumer will emerge. Lockshin writes, “As the vanilla/chocolate/strawberry status quo is replaced by a marketplace full of options and flexibility, a brand new category will spring up to help consumers make the best choices.” He says the net result of technology improvement is a shift in power to the customer side. This is not a bad thing. It can be great for the seller if the seller adapts and focuses on providing the value that the new, empowered, customer is seeking.

Customers in our industry are now going through what those in the financial industry did years ago. Technology is driving an increase in options, which is driving a power shift to the customer, which is requiring sellers to deliver real value in order to survive. Those who adapt not only survive, but thrive. Those who stick to the status quo and continue as “stock pickers” will lose.

What can you do? Learn the lessons of the financial industry and embrace the concept of differentiating yourself by selling real value to your customers. The web-based brokerage companies found their niche, but they could not compete against the high-value advisors. Amazon can go after the commodity sector of your business but they cannot beat the value you deliver with your expertise. But you need to adapt and you need to fight.

About the Author

Sean Leahy | owner

Now a speaker, consultant and author focusing on helping salespeople hone their craft, Sean Leahy spent his entire adult life in the electrical industry. Leahy started his career as a sales trainee with Midland Ross Corp. and held various sales and management posts at Ideal Industries, as well as executive posts with Vantage Group and Vanguard National Alliance.

He is also author of The Sales Shot, a fast read loaded with sales ideas. To purchase a copy,  or to learn more about his speaking, consulting and training services, contact Leahy at 847-922-2181 or [email protected].

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