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Partnering to Create Demand Is the New Paradigm for Business-to-Business Sales—So Act Now or Be Left in the Dust

Posted By John W. DeWitt, Wednesday, November 19, 2014

Sales consulting firm Revenue Storm recently asked business and sales leaders, “Do you believe that the role of an Account Manager must expand from one that just does Demand Capture to one that includes Demand Creation?” A whopping 97% of respondents said yes—and 79% agreed that this shift in focus needs to happen immediately, according to Revenue Storm’s Chief Revenue Officer LaVon Koerner.

 

“Any company that is not moving from a demand capture philosophy to a demand creation philosophy is going to be left in the dust,” Koerner said bluntly. In his workshop session at the 2014 ASAP BioPharma Conference in Boston USA, Koerner challenged alliance executives to recognize the full implications of what he called “the disruption factor” caused by converging trends such as alternative information sources, current economic conditions, widespread commoditization, and the next generation of technology user. “There’s a fair amount of denial about it—it’s hard to accept that what you’ve been doing for years upon years without interruption is about to go through a major, unrelenting, irreversible transformation,” he explained.

 

There’s been a major shift in what your customers and partners value more from you—according to research cited by Koerner, 82% seek partners who challenge their thinking, proactively bring innovative ideas, and provide thought leadership. Only 18% value how you execute requests, provide the best offering or price, and respond and listen when approached. Increasingly, the latter types of interaction are being automated—the analyst firm Gartner now predicts that by 2020, 85% of interactions between businesses will be executed without human intervention. As a result, Koerner says, of the 18 million salespeople currently working in the US, only about four million will be left in five years.

 

Koerner’s message resonated with biopharma alliance executives—while most are not accountable for revenue today, many alliance execs at the ASAP BioPharma Conference agreed with Koerner’s premise that in the future, their jobs will be more closely linked to value and revenue creation, as it is for many alliance leaders in high tech and other industries. ASAP Media caught up with Koerner this week to ask him about his well-received ASAP BioPharma Conference session and how he thinks alliance executives in biopharma and other industries should respond to impending (or rapidly unfolding) disruption. Here’s what he had to say.

 

ASAP Media: The data points you presented at the ASAP BioPharma Conference are eye-opening—everyone talks about disruption, but I don’t know if people are grasping just how profound this disruption will be for them, their companies, and their industries. How do you explain what’s going on?

 

LaVon Koerner: What exactly is happening? The old business-to-business sales paradigm is built on a philosophy of demand capture. There’s enough demand out there—“go get it you guys!”  You capture demand with your best products or pricing or relationships or whatever—and assume the demand is out there to be captured. Now, because of a number of converging trends, there is not going to be enough demand to capture for companies to reach their growth targets. … Those 4 million sales executives left standing will be those who excel at creating demand, not capturing demand. All the old sales training will all be antiquated and will not mean a hill of beans—it’s now about creating demand.

 

ASAP Media: Can you explain more precisely about what you mean by creating versus capturing demand—and how that impacts the B2B sales process?

 

LaVon Koerner: In the past, capturing demand is where you go in and discuss “known points of pain.” That’s a key phrase. That will be changed, so that a salesperson will go in and talk about “unknown points of gain.” Another way of saying it is, instead of going out into the market and finding customers, your charge will be to go out into the market and make customers.

 

The whole world of RFPs—those are going to be drying up because they will be accomplished all through the Internet or a call center. You won’t need the live body interfacing for those kinds of discussions. But discussions built on thought leadership, or a “value encounter,” would be of interest. In the future, every meeting with senior people has to be a value encounter with three important facets:

 

  1. You have to take the executive’s mind to places it’s never been before
  2. You have to put options on the executive’s table that he or she has never considered before
  3. You have to get the executive to draw lines of connection that he or she has never drawn before

 

If you can do those three things, you’ve earned the right to ask that executive to do things he or she has never done before—and in that moment demand will have been created.

 

ASAP Media: How do companies and their salesforces create these “value encounters”? What will value encounters look like five years from now?

 

LaVon Koerner: It used to be that we, the salespeople, would bring privileged data to the customer of which they were not privy, and they would find that exciting and of high value. Customers can be in data smog in a few minutes just by Googling. So the 90s then migrated towards information—if you can put summaries on data you now have information and that became important. … That did well except that the trends are so quick and accelerating, now that is done. Now the business professional salesperson has to take the information and translate it one more step into insight. You have to take all the information and be able to pontificate on the “so what?”—here are the implications; here is the significance of that. If you can do that before the customer solidifies its information, then you become a strategic resource.

 

By 2020, it will take yet another step forward, and insight will not be enough. At that point, it will have migrated towards prediction—what this new insight will produce in their company—and it will be necessary for the sales professional to be able to offer a gain-sharing arrangement around the prediction. So they will now become a partner with the customer, built on a prediction. If you follow that evolutionary ladder, it goes from data to information to insight to prediction—that’s how value is being redefined as we speak.

 

ASAP Media: So how does this create opportunity for the alliance management community?

 

LaVon Koerner: I believe that strategic alliances will be a major part of the sales professional’s worlds. Today it’s a minor part, but that will completely flip-flop. You will have to have that [partnership] to create the value. I think ASAP’s best days are probably four to five years from now. Proactive partnering that creates demand—not the reactive partnering that companies have practiced in the past—will be standard operating procedure in a few years from now.

Tags:  2014 ASAP BioPharma Conference  Demand Creation  LaVon Koerner  Proactive partnering  Revenue Storm 

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