In today’s world, change is constant in life and business. How you and your sales team manage this flux will determine your bottom line — regardless of whether the change involves emphasizing a new product lineup, introducing new services, or adjusting your mix of customers.
Most companies adhere to an “X-to-Y” change model when implementing sales transitions. If product X sells well, for instance, they introduce product Y in limited quantities. As Y starts to show promise, upper management begins to deemphasize X in favor of Y.
Typically, that shift begins with most of the sales team still selling X and a few members starting to specialize in Y. Over time, more and more of the X-focused salespeople are expected to shift toward Y until the entire team sells Y. And once product Z arrives on the scene, the cycle of change begins again.
Sounds great, right? Not exactly. In fact, there’s one problem with this seemingly reasonable model: it doesn’t work.
The X-to-Y Change Model in Practice
The reason this X-to-Y model does a poor job of handling change is that it starts with upper management. Executive management is often so focused on innovating that it fails to consider the challenges frontline employees could face when it comes time to commercialize a new product. Although the executive team might have been mapping out how to introduce product Y for months — or even years — the sales team is usually expected to commit to the transition immediately following its announcement.
Meanwhile, sales leaders tasked with launching the transition now have orders and timelines to execute on, and they might feel that it’s too late to share their input. The X-to-Y approach requires the sales team to focus on getting salespeople on board with Y as quickly as possible. On the front lines, that speed can make the change seem like a sudden, misguided, or desperate move by management (which likely made its decisions without input from the sales team). This generally breeds resistance.
The sales team’s reluctance goes beyond simply being more comfortable with X. It’s more often because salespeople have trouble building the case for change with their buyers. In fact, salespeople name “building a case for change” as the biggest challenge their buyers face in making purchasing decisions.
What is the primary hurdle?
Research indicates that senior leaders do not see generating product innovations as a primary issue when it comes to creating sustainable growth. The hurdle is actually monetizing those innovations. However, companies can solve this problem easily. By implementing more robust support structures for the sales team, companies help their sales force better address the challenges they’ll face with customers. Unfortunately, many companies fail to do this properly; sales training tends to focus too closely on the features of a new product or service rather than highlighting its benefits to the customer.
Too often, senior leaders forget that product changes also trigger a transition for customers, who incur the added cost, time, retraining, and fallout. These changes threaten their own mandate and are likely to accelerate revenues and minimize unnecessary costs. Customers need a reason to believe that buying into the innovation will make sense for them and solve a problem they have.
If salespeople need to learn how to reframe pitches on their own, it can slow down the transition to Y that sales leaders want to achieve. From the outside, the speed of the shift can make it seem like salespeople are resisting a switch — or maybe that they want to give up and go back to selling X over Y (which might not be the case). The typical response to a slow sales transition includes terminating lagging team members and hiring Y-only salespeople in their place. This results in turmoil and higher expenses. Likewise, a formerly effective sales team can start to fall behind, missing its targets and further compromising the transition.
Although change is inevitable, the X-to-Y model is not the most effective way to manage it.
A Better Approach: The X-to-XY-to-Y Change Model
In reality, a product change doesn’t produce a clear path. Again, at the start of a transition, most of the sales force sells X with maybe a few outliers specializing in Y. But in between, some individuals will need to sell a combination of X and Y (or XY). At first, these salespeople will likely sell substantially more of X than they do Y. They might also find a way to sell a combination of the two products to the same customer. Recognizing that this XY sales combination exists is the key to a successful transition.
By providing more support to facilitate the transition to XY, organizations will ensure sales’ success. This means offering more training, education, and proof points. The added support creates sales representatives who are better equipped to make the case buyers need to justify a change.
Transitioning to an XY sales combination might also mean revisiting how to incentivize salespeople. Representatives must be rewarded for the progress they make in adding Y business to their books, and companies should measure that success against attainable quotas. Salespeople who find early success with a transition should participate in forums and share insights with other team members who can help accelerate that process.
4 Steps Toward More Sustainable Change
Incorporating an XY phase into the sales strategy helps build the consensus upper management needs from sales. At the same time, this method bypasses the friction points that X-to-Y strategies create. Although the specifics will vary from organization to organization, you can still keep these four aspects in mind as you prepare to tackle change:
1. Map out a gradual transition.
The XY stage takes time. Consider this example: One United States health insurance broker developed a plan to broaden its services. It did an excellent job communicating the strategy both internally and with clients and gaining buy-in from various stakeholders, but the transition failed to gain sustainable momentum. That’s because the firm lacked a strong execution strategy; everyone was on board with the idea, but the sales team didn’t have sufficient support. The insurance company’s plan should have identified top customers that would prefer product Y over product X.
Trying to roll out a product or service across a firm tends to be less effective than rolling things out in phases. Start with prospects who are more likely to buy. Then, use that sales experience to perfect your pitch and make it compelling to clients who will be harder sells. Charting a deliberate course of action also puts less stress on an organization and can build support from the sales team as it sees success among early adopters.
2. Offer a distinct advantage.
Distinguishing between your offerings is critical for success. For example, one technology company I’m familiar with provided a solution for managing power use by data-storage servers. It faced problems when cloud storage took over, as this diminished the need for private servers. In response, the technology company introduced a variation of its solution: product Y, which was another private server not based on the cloud. Unfortunately, the company’s Y was not distinct enough from its X to quell the erosion in sales growth.
When it’s hard to distinguish between X and Y, it’s also challenging to create a sales narrative compelling enough to justify the product transition both internally and to customers. From a messaging perspective, Y might come across as a new flavor of X rather than an innovation. New flavors can be pleasant, but even a talented sales team will struggle to convince a change-resistant customer that the benefits of a switch warrant the time and cost.
3. Drive success through communication.
In organizations with multiple sales teams, transitioning from X to Y shouldn’t involve a silo. One global financial company headquartered in Europe accomplished its goal of gaining more advisors as clients — a problem shared by several areas of the organization. This resulted from a carefully orchestrated execution strategy based on cross-selling.
The organization started by creating a diverse group that shared the goal of gaining more advisors. Together, the group found a mutually beneficial solution that helped the company reach alignment on a new approach to selling its products and services. This solution also introduced customers in other parts of the organization to a wider range of capabilities. By transitioning its approach to cross-selling, the company identified $1 billion in new net assets. Overall, this strategy helped to sell more Y and strengthen existing relationships to make the organization a more valuable partner.
4. Keep it simple.
Simplicity is essential for a smooth transition. For instance, one cloud-based tax software firm shifted customers from X to Y by initially launching solutions that were complementary to its original product. The firm’s salespeople were able to clearly communicate X’s story, so representatives could also gain a deep understanding of why an XY add-on could address an X customer’s additional problems. When it came time to connect with customers, representatives could easily extend the sale of X by offering the XY add-on. Over time, representatives could easily sell Y to clients already purchasing XY. By keeping the sales dialogue within the context of X, the firm was successful in transitioning to its Y products.
This simple, easy-to-implement method ensures you meet transition goals and address client needs. As an incremental execution strategy, it succeeds by articulating the rationale behind a vision in a way that salespeople can easily understand, support, and implement.
Change is hard for both your internal teams and clients, but forcing transitions through too quickly can defeat the purpose of innovation. Many firms will pursue the seemingly reasonable X-to-Y change model with limited success. Instead, a better option is the more realistic X-to-XY-to-Y change model. Embracing the additional XY phase in your organization can significantly improve your chances of a successful, profitable transition.
Read More: Improve Sales Team Objectives