…and How Marketing Can Support Its Effectiveness
The most noteworthy article on the subject of B2B selling was published in a 1966 Harvard Business Review article (#66213). In “How to Buy /Sell Professional Services,” author Warren J. Wittreich explains the differences between extrinsic and intrinsic selling.
Extrinsic selling occurs, according to Wittreich, when a B2B seller relies on successful work that’s been performed for other customers, as a means to validate the seller’s capabilities and potential ability to perform for a prospective customer. The weakness of extrinsic selling is that it requires the prospective customer to make a leap of faith: to believe the service provider will provide a level of success that matches or exceeds the work performed for the seller’s past or current clients. Extrinsic selling is a “trust me” approach, employed by a great number of B2B product and service providers.
Conversely, intrinsic selling does not require a prospective client to base its selection of a seller based on work done for others. Instead, it engages the prospect in a meaningful dialogue that (1) addresses their specific situation; (2) demonstrates — on an immediate, first-hand basis — the seller’s understanding of that situation; and (3) validates the seller’s ability to help the potential buyer. Intrinsic selling provides buyers with a significantly higher level of confidence in the seller’s capabilities, and leads to an engagement or sale far more frequently and far more rapidly than extrinsic selling.
The B2B marketer’s task is to equip the sales force with methodologies and tools that help initiate and facilitate intrinsic selling. This is rarely accomplished through client / customer “case studies,” which are widely used, which prospective clients rarely read, and which carry the same level of credibility as references on a job applicant’s resume. (Would a company ever publish examples of its past work that were not portrayed as highly successful?)
Create Simple Tools to Engage Prospects
One example of Marketing Craftsmanship that leveraged the power of B2B intrinsic selling involved Phibro Energy’s introduction of energy derivatives…which enabled large companies to hedge price risk related to gasoline, jet fuel and heating oil. Phibro’s CEO Andy Hall understood that in order to capture the attention of CFOs of FORTUNE 500 companies, and to convince them that energy derivatives were a viable and prudent risk management strategy, his sales force would need to be equipped with more than fancy brochures. To be sold on the concept, a CFO would need to understand exactly how energy derivatives would benefit his company
To establish an intrinsic sales dynamic, Phibro Energy equipped its sales reps with a simple worksheet to be used in their face-to-face meetings with CFOs. The worksheet was designed to roughly calculate the range and depth of a large company’s energy price exposure. Based on past and projected volumes of jet fuel, gasoline, heating oil, etc. used by the prospective client, and by applying an algorithm created by Phibro’s in-house quants, the sales rep was able to show the CFO sitting across the table exactly how energy risk management would impact their company’s balance sheet.
Phibro’s energy exposure worksheet not only enabled their sales reps to establish an intrinsic sales dynamic, it immediately repositioned the sales rep’s role and stature. Having demonstrated Phibro Energy’s potential value in tangible terms, the sales rep was no longer viewed by the CFO as someone simply pushing products or services. In the eyes of prospective clients, Phibro sales reps assumed a consultative role who could assist their company in reducing economic risk and in lowering operating costs.
Marketers at most B2B businesses, as well as many B2C firms, have similar opportunities to build disciplines and tools that can empower their sales reps to leverage the power of intrinsic selling. A major reason why these opportunities are not captured is that many marketers don’t understand the needs of the marketplace as well as their sales reps do…which is a blog topic for another day.