Redrawing Your Map: Selling in the Knowledge Economy

Redrawing Your Map: Selling in the Knowledge Economy explains how the 21st century and digital social networks are changing client behavior, and sales, forever.

Redrawing Your Map: Selling in the Knowledge Economy

Having started in business in the 1980s in Chicago, I have had a front row seat to the waning of the Industrial Economy, which has created unprecedented human wealth through fabrication, distribution and scale in countless iterations. Its meltdown sets the context for a profound shift in all businesses, and it holds the key to understanding the new ways to bring new business to your firm. The Industrial Economy practice that is known today as “selling” is on life support in the ICU, and it won’t survive in most areas of the economy. Here I’ll explain how profoundly things have shifted and how you can use this understanding to revitalize how you bring new business to your firm. I’ll close with how social business empowers this disruption.

Quick History on the Industrial Economy

It is easy for professors, authors and consultants to talk about shifts, but I’ll risk a quick treatment here because it can help you to empathize with the degree of disruption that everyone is facing. Whether you are a CEO of a declining company, a frustrated sales executive with faster churn each year or a client marveling at appalling (desperate) sales behavior, you can be more aware and productive by understanding the shift. It is important because people in wealthy “modern” economies have had assumptions and success formulas hard coded into their brains, and most will fight tooth and nail to retain them even though they don’t work anymore. “Sell harder.” Not.

Winning, Then and Now

Everybody wants to succeed, but the rules have shifted profoundly. The Industrial Economy roughly overlays the Indusrial Revolution and is waning rapidly. By the way, by no means will it go away. Its predecessor, the Agrarian Economy, was far longer lived, but it paled in the face of the Industrial Economy and today serves as a mere input to it (in the early 20th century ~35% of the U.S. population was involved in agriculture; today 3% are, and economists predict a similar deflation of industry). The Industrial Economy is shifting to an analogous role now. It’s still there, it just doesn’t produce the value it used to. The Knowledge Economy is a totally different animal that’s built on top of Agrarian and Industrial economies.

Because many “services” have been managed as products, you can read them as synonymous here:

Industrial Economy Success Factors Knowledge Economy Success Factors
Long product life cycles Very short product life cycles.. and getting shorter
Main value drivers: scale and efficiency Main value drivers: innovation and client experience
Deliver vast quantity and low prices to relatively few broad demographics Deliver unprecedented choice to many narrow customer segments; low prices table stakes
Tightly integrated command/control organization Loosely coupled collaborative networked organization
Failed new offering launches are the rule because it’s a low velocity, internally-focused research/produce/sell process New offering launch processes are high velocity and feature client input and collaboration with external specialists
Off-line clients isolated and passive; buying decisions usually made using firm-influenced information; clients can’t easily find client-produced information On-line clients validate each other’s interests and influence purchases, creating micro-markets with unique demands; this will also be the rule in emerging markets, where on-line is the default for new middle classes
Sales focus: “selling” fabricated products focusing on product/service features Sales focus: when the client’s UBN* fits the firm USP*, doing whatever it takes to give the client a rewarding experience

New Business, Then and Now

Then: Selling

The economic shift invalidates many of the concepts that have defined what we used to call “selling.”

  • “We have a great product (look at all these features), so let’s go out and sell it!”
  • “The customer”/client has to be “educated” about the feature set and value proposition; “They’ll love us if they know enough about us” (notice emphasis on firm, not client)
  • “To differentiate, let’s add more features!” (this compounds complexity) and begins a loop in which the product becomes harder to buy, lengthening the sales cycle
  • B2B is defined by micro-niches in which use cases are often complex; exceptions are the rule due to the complexity (to whit, IT implementations, construction projects); how firms anticipate and work with clients to work through exceptions is a huge driver of client experience

Now: Serving and Social Business

The era of “selling” is over, and firms and people who want to skate to where the puck will be realize that serving clients whose UBN fits the firm USP will enjoy a quantum leap in sales results. Social business, because it involves people interacting in digital social venues, features a different kind of scale that few people understand yet.

In the Industrial Economy, “serving” was largely subjugated to selling product. It’s a “cost center” in which, following the efficiency mindset, firms “optimize” help offered and end up wasting the client’s valuable time by forcing him/her to endure a service taxonomy that ratchets involvement only after the least impact (for the firm) interventions have been tried. Reflect on your own experience a minute. When was the last time you felt really cared for? I’ll wager you’ll have to reflect a long time.

But serving has always been the main driver of word of mouth because when people feel heard and cared for, they tend to talk about it.

They often feel most cared for when exceptions are worked out with care. Client service is the new marketing.

Social business puts word of mouth on steroids. The stage is set to serve people in digital social venues, in full view of (theoretically) infinitely many people that search for the keywords in the conversation.

Clients who sit in their offices taking calls from “sales reps” are an extinct species. Increasingly, they self-educate by posting questions in industry- or function-specific forums or general business venues like LinkedIn Answers. They ask very serious questions about industrial, technology or design applications—or they get feedback on contract terms.

They regularly ask each other for referrals for vendors of all kinds.

This is where salespeople need to be, but to succeed, they need to understand the new rules of interacting in these venues. When they enter these conversations and consistently add value without selling, they will build reputation very fast. More on this here: B2B Customers Getting More Social Fast: How Marketing and Sales Can Evolve.

We feel so strongly about serving that we have just launched a blog that shows it in action. Serve Don’t Sell selects and honors inspiring acts of service by businesspeople and professionals.

* USP=Unique Selling Proposition; UBN=Unique Buying Need; more on this here

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