Selling Power Magazine Article

Any manager who has ever witnessed a new product launch will recognize this familiar scene: At the national sales meeting, marketing and product people swarm around like bees on honey while a top executive makes the mother of all motivating speeches. "This is a make-or-break product for us all. A fabulous opportunity for a fine sales force. With this product you and the company share an unrepeatable opportunity to become indecently wealthy."

The product enters stage right, wheeled in by professional entertainers in skimpy clothing. Now the product-marketing people make their pitch. "Folks, this new product has bells and whistles that will make it a dream to sell - customers will mortgage their children for the chance to own it."

Top management is optimistic, product marketers are happy. The sales force is fired up and raring to go. The initial trajectory is encouraging, which bodes well for the future.

First month's sales are a little slow but with all those bells and whistles how could this great new product fail? When customer enthusiasm doesn't translate into the expected orders, management gets worried, product managers panic and everyone points fingers.

There's more than enough blame to go around and soon the sales force becomes cynical. The new product tumbles from its status as the answer to all customer ills. Before long, it's just another product.

The Twist
Just as everyone has written off the new product, results begin to pick up and sales figures start to look respectable. Results may not reach the enthusiastic projections of the early days, but stage a good recovery nonetheless.

The first time I experienced this sequence - great promise, followed by disappointing results and, finally, by unexpected recovery - was at the Xerox Corporation. Since then, I've seen the same pattern in organizations as diverse as Kodak, Honeywell and American Express. In fact this sequence happens so often it's nearer the rule than the exception. Since I'm a research psychologist and measuring sales success is my profession, I decided to look for scientific answers to the two questions that really bothered me.

Why should a good product fail to sell? After all, when it's new, a product has all the advantages: maximum competitive lead-time, greatest sales force enthusiasm and a high level of top management attention. In theory, a product has its highest chance of success when first introduced.

And why should a failed product unexpectedly recover? This was an even more puzzling question. The sales force loses enthusiasm for a new product and its sales increase? You'd expect just the opposite.

The Theories
First, I thought that customer resistance to innovation might be the best explanation both for the slow initial sales and for the late recovery. I soon abandoned this idea. For one thing, in any product launch there are always some customers - the early adopters - who welcome innovation and are attracted to a product's newness. As Jeffrey Hipps, SVP Marketing & Production of Sherwood America, says, "Early adopters really do want the bells and whistles."

When Xerox launched the first of their mega-copiers, the 9200, I talked to many of their potential customers to assess their resistance. A few found the new technology threatening, but the majority of customers were actively interested in innovation.Besides, a change-resistant customer normally starts resistant but becomes less so as discussions continue. These customers were the other way around.

Could the explanation be resistant salespeople? Many companies have learned the hard way that their sales force doesn't automatically welcome a product just because it's new. Dick Dryden, president of Dryden Engineering, reflects the experience of many executives when he says, "In fact, salespeople don't like new products. They are hesitant because the pioneering work needed to sell a new product uses up time and can take away from their commissions." Perhaps the reason for the slow start at Xerox was reluctance, or lack of motivation, on the part of salespeople.

To test motivation, during the launch my team administered to each salesperson a confidential questionnaire that allowed us to measure enthusiasm for the new product. We were bewildered to find that there was a slight negative correlation between enthusiasm and success.

The Field Test
We wanted to know how salespeople were behaving face-to-face with customers. At the time I was working with Xerox as part of a massive research study of 35,000 sales calls, to find the behaviors most linked to sales success. The research, published in SPIN(r) Selling (McGraw-Hill, 1988), involved sitting in on real sales calls, recording both seller and customer behavior and looking for patterns of behavior associated with sales success. The Xerox part of the research had earlier tracked many of the salespeople who were now involved in selling the new 9200 copier. We sent our research team out again to follow salespeople, to analyze whether there were any differences in how they were selling this new product. Bingo. We found two major differences:

1) When selling the new product, salespeople asked customers 40 percent fewer questions. This was particularly disturbing because earlier studies had shown that the more questions salespeople asked, the more successful the call was likely to be.

2) Product details increased threefold - salespeople were dumping product details on their customers with a vengeance. Three times the number of product details were described when selling the new product as when selling existing products. From our earlier studies we knew that these feature dumps were a surefire recipe for failure.

Since then I've studied more than a dozen product launches, from technology to financial (continued on page 2)

services, and found similar results. When products are new, salespeople become very product-centered and spend their time describing the product, and they lose focus on the customer's needs. The more bells and whistles a product has, the worse the dumping. Although this was an important insight to me as a researcher, people whose business is sales force development have long recognized the problem. Michael Nagle, director, Sales Training & Development, at Astra USA, says "Our salespeople are better at selling existing products. Reps know their customers' businesses, including how old products fit in. They often substitute focusing on features of the new offerings for learning about customers' needs."

John Machesny, manager of marketing excellence at Albemarle Corporation (suppliers of specialty chemicals) is another practitioner who recognizes the bells-and-whistles trap. "If you position a product based on its features, it will be seen as a commodity. If it is positioned to answer specific needs, the customer will see the business value. Simply put, salespeople must be customer-centered to be great at selling new products."

Mike May, currently an independent consultant to the software industry, who has served as VP of marketing at Texas Instruments and Enterworks as well as general manager at the Client/Server Division of Compuware, explains, "In the software industry, salespeople need to be focused on customer needs to stay in the game. The technology changes so rapidly that it's tough to keep up. But even if you don't know the new technology, if you know how to solve customer problems, you'll win."

The Answers
I now had tentative answers to both of my troubling questions. First, "Why should a good product fail to sell?" Because salespeople become product centered and lose sight of customer needs.

Second, "Why should sales of a failing product unexpectedly recover?" Because, when the sales force loses its enthusiasm for the new product, salespeople focus once again on customers and their needs, becoming more successful as a result. Reintroductions of products frequently generate many more orders than the initial launch did. Indeed, industrywide, relaunches commonly focus on the customer's needs.

The Dumb Things
Psychologist Roger Harrison once said, "There are only two reasons why people consistently do dumb things. Either they are crazy, or there's something in their work environment that encourages the dumb behavior." Looking back over product launches I'd watched, there was an environmental factor.

The product launch introduces the new product to salespeople by describing all its bells and whistles. Salespeople communicate the product to customers in the same way that it was communicated to them. They describe bells and whistles instead of focusing on customer issues and needs.

The Kodak Test
It's a plausible theory but - even better - it's eminently testable. We had a chance to test the value of focusing on client needs during product launches when Kodak introduced its new blood analyzer - a product with so many bells and whistles that we knew it would be a magnet for feature dumps. It was too late to influence the long-planned main launch, but Kodak allowed us to work with 12 salespeople, chosen at random, and to introduce the product in a different way.

We told salespeople how the product solved different problems for doctors, clinicians, technicians and administrators. But we didn't describe the product's bells and whistles. In fact, to dramatize the point, we covered the demonstration analyzer with a tarpaulin, so salespeople didn't see it.

We helped salespeople understand how the new product could solve or reduce the kind of work problems each customer type faced.

Salespeople then identified which of their customers was experiencing the sort of problems that the analyzer had been designed to solve.Each salesperson then practiced sales calls to that customer. We coached them to avoid product details and to ask questions that uncovered and developed needs. Finally everybody planned the questions they would ask to understand customer needs.

In the year that followed, we tracked the progress of our pilot group and found that, compared with a matched control group that had used the standard "bells and whistles" launch, our group averaged a 54 percent higher sales volume for the new product.

The Customer-focused Product Launch
Since the Kodak test, we've worked with such companies as Microsoft and Citicorp to introduce products in a more customer-focused way.* And we're not the only ones who have been developing customer-centered approaches to introducing new products. David Milliken, national director of business development at Deloitte & Touche, explains, "We make a real effort in our training to keep people focused on the explicit needs of the customer. Any minute you spend talking about a product or feature that doesn't connect to an explicit need is a minute wasted. We introduce new offerings in terms of the value they bring to the customer and the right questions to ask."

How serious a business issue is the "bells and whistles" approach to launching a product? Back then, when Xerox introduced their 9200, they calculated they had about three and a half years before competitors could come up with a rival machine. If it took six months for their people to forget the bells and whistles and return to customer needs, how much did that really matter? They still had a three-year competitive lead time. Most companies today are lucky if they have three months. Lose customer focus for an instant and competitors will pass you by. With an ever shrinking window of competitive advantage, it's become vital for effective sales forces to hit the ground running. Nobody can afford the slow learning curve - and equally slow sales revenue - that results from traditional product launches.

Something else is changing - bells and whistles don't matter as much as (continued on page 3)

they once did. Robert Hanson, account manager at Tektronix Inc., tells us, "There's a lot more focus on the business needs of customers. You have to know how to bring value beyond the features of your product." As markets commoditize and as competitive products proliferate, product characteristics have less and less impact on customers. So I say a plague on those bells and whistles. Forget them. Focus on understanding your customer and build that understanding into all that you do - especially into the way you launch your next product.