What bad habits do retail solution providers need to break?
Through a special arrangement, presented here for discussion is a summary of a current article from the Spieckerman Retail blog.
Business is booming for companies that provide data, merchandising, tech and other support because retailers no longer believe they can, or even should, develop every capability in-house. Both big enterprise solution providers and niche players are benefitting from this mind shift, however, retailers tell me that some are at risk of blowing it by reinforcing a few bad habits:
Attempting to run before learning to crawl – When salespeople begin lobbying new decision-makers when the ink is barely dry on the beta, relationships can hit the skids. Build a solid case study before branching out.
Committing a scale fail – It’s hard for smaller providers to turn business down, especially when demand exceeds their wildest dreams. Retailers want to see that you will pivot your model to meet their scale.
Abusing access privileges – “Who are these people?” — four words that you don’t want a retailer to utter. If your teams are roaming the halls at retailer HQ and popping heads in doors, you’re setting yourself up for the Big Revoke.
Going long – Retailers tell me that they will increasingly favor shorter-term, high-impact projects over long-term contracts. Craft bite-sized solutions that achieve specific outcomes.
Pushing professional services – Solution providers often see consulting as a next-stage growth opportunity but retailers are more receptive when the benefits are clearly quantified from the start. How does your team’s expertise drive additional value for your solutions?
Forgetting your place – Condescension to lower-ranking retail employees, and miscalculations as to who “matters” in the first place, are fatal mistakes.
Providing sketchy value – Retailers expect your solutions to provide a clearly-defined competitive leap. Solutions-in-search-of-a-problem and those created under false assumptions are still far too common.
Ignoring the future – With so much happening in retail, it’s easy to get lost in the present, yet retailers are relying on industry experts to help them see ahead of the curve. Create a clear product roadmap, including which emerging innovations (artificial intelligence/machine learning, for example) are on your horizon.
Retailers are seeking advantages outside their borders. Don’t let easy-to-avoid mistakes bungle your opportunities to go big and branch out.
Discussion Questions
DISCUSSION QUESTIONS: What mistakes do solution providers make when pitching and partnering with retailers? Which ones mentioned in the article resonate the most?
Poll
BrainTrust
Dave Bruno
Director, Retail Market Insights, Aptos
Zel Bianco
President, founder and CEO Interactive Edge
There are some great tips in here. As humans (that is what most solution providers are), we tend to view things through our own eyes. We believe our solutions are high impact and light integration, but we sometimes fail to realize all the folks within an organization who will be impacted by our solutions. It is critical to step back and try to put ourselves in the shoes of each person within an organization who may be impacted by the integration or ongoing use of our solution and ensure that we are addressing that impact and calming the nerves of the individuals involved.
Good point, Jon. Specifically, when bringing in new retail technology the existing staff can easily feel either left behind, at risk of being replaced or having to face a steep learning curve. Solution providers must make sure to educate them when possible and definitely help calm nerves, because the unknowns are what scare associates.
Carol nailed this pretty well. We see the same problems in marketing research, particularly the vaporware applications that don’t actually exist yet and the “technology in search of a problem” approach.
To a hammer everything is a nail and this, along with the enthusiasm for solving problems, can too often place the cart before the horse for the passionate solution provider. By clearly understanding the nature of the problem and understanding the priority in resolving it, the solution provider is able to talk in the language of value, return on time and money or overall economic impact which matters most and exclusively to retailers and brands.
The need to mitigate risk at both the enterprise and professional levels are too seldom realized as the top priority, and so appreciating their contributions to change management must be foremost in the establishment of the relationship that solution providers seek.
Carol has a done great job of pointing out many of the most common mistakes providers make with retailers! I think the overarching one is probably that providers need to focus on the business challenge that the retailer feels they have, rather than a challenge that the provider thinks they have — and from there drive home how the retailer can grow profitably by addressing that challenge. After they agree that the problem can indeed be addressed effectively, then the provider may talk about their solutions, but not before that time.
As a technology solution marketer I truly appreciate these warnings, Carol, and I would be severely disappointed to hear of our sales teams committing any of these mistakes. My big takeaway from your post that I will communicate to my sales team is a simple one: either add value or don’t engage. I believe that the only way we can succeed is if our singular mission is to provide value to retailers, whether they buy anything from us or not. From the first time we meet a retailer, your article indicates that we must immediately evaluate how we can provide value — whether it be via humble advice based upon our experience with other retailers or via targeted discussions of how our solutions can help them solve their unique problems and capitalize on competitive opportunities.
If we don’t see an opportunity to provide value — with or without a sale — then we will annoy them, we will run the risk of forgetting our place and we will be tempted to “go long” — and if that is the case then we simply shouldn’t engage.
Outsourcing to trusted partners has certainly become en vogue. Although there has always been a place for quality, vetted outsiders to bring value to retail operations, today’s pace of business, downward earnings pressures and need to bring “new thinking” to retail has made it mandatory.
Carol succinctly touched on eight pitfalls of outsourcing. The two that resonated with me most (and the ones where our firm is sometimes called in to right the ship after a poor outsourcing decision was made) include: providing sketchy value and attempting to run before learning to crawl.
From my 25 years experience providing value-added services across the retail supply chain in areas such as product assortment and placement, retail execution strategies, fixture coordination, item database management, brand marketing and analytics, I must admit that some retailers make short-sighted decisions. Too often they select an outsider to provide a quick fix to a problem rather than choosing a longer-term strategic partner that can immerse themselves into the operation and serve as a valued member of the team.
Some solution providers have the attitude that they must have a big ticket deal in order for them to care and provide excellent service and support. Some retailers have been so tied to those solutions, even if they are not producing value due to the huge investment they originally made, that it is difficult for them to admit their mistakes. They continue to throw good money after bad. Short-term projects that are clearly defined and ones in which both the solution provider and retailer agree to the scope and time lines are the ones that tend to be successful. I feel that when you do the right thing for your customer, they will be there for the short-, medium- and long-term. In fact, if you put their success first, they will allow you to pivot when the need is there and even wait for a solution to be developed because they trust you.
I have had to battle to get in the door with prospects because of the bad experiences they have had with some solution providers. It makes my job much more challenging. On the other side of the coin, I’ve had customers who have been with us for over 15 years because it’s not about us, it’s about them.
Excellent observations Carol! All too many vendors roll out their “deck” to espouse all the things they do rather than focusing on the two or three capabilities that actually matter. They hope that their audience will grasp at the one capability that resonates with them as the list streams by — “take a card — any card!” This tactic muddies the water for those of us who can bring a focused value to retailer’s challenges.
One of the primary obstacles is the ability to scale a viable solution. Lots of people can design an impressive experience but fail miserably when it comes to executing that at scale. I focus on measuring, optimizing and activating shopper experiences that scale and use a defined project — with a beginning, middle and end to determine its viability and success with shoppers.
As a solution provider, we try to avoid the pitfalls described in the article, many of which appear to be a function of inexperience and lack of common sense. In my experience, providing sketchy value is among the most common sins among service providers. Selling benefits is really easy; delivering benefits and backing it up with quantitative measures and ROI is really hard. As budgets continue to tighten, retailers are rightfully demanding formal impact assessments to support solution providers’ claims and so accountability is a big part of the discussion today. This all said, it does take two to tango. Many retailers, and especially ones struggling with poor results, can be very difficult to sell to and work with. Arcane procurement processes, rigid and/or vague RFPs and meandering decision making all contribute to protracted and convoluted negotiations.
Great column! I’d add another mistake in the pitching phase — there are many technology companies that cannot succinctly describe what value they bring to the market. If you can’t describe your value proposition briefly, and if it’s inaccurate on your website, you’re going to have difficulty providing value to retailers down the line.
One common theme I have found in selling retail technology relates to pushing professional services. Several clients have confided with us that they did not go with some larger competitors because they were already getting the add-on module; a never-ending series of sales pitches. As a technology provider, it is important for us to take a step back and to make sure we are not irritating the client with a continual series of up-sell conversations. Don’t damage the relationship for the sake of bringing in a few extra dollars on an expanded solution your customer really might NOT need.
Great tips, Carol! I would add “failing to market your solutions on a global stage.” If retailers have never heard of your company, they can’t take advantage of the solutions you have to offer.
I’ll add one more. Providers are claiming crazy outcomes from their work — outcomes that are magical in nature and far beyond what’s ever possible. Of course sales teams always exaggerate by painting a great picture. But in the retail tech and data business the claims are far beyond mere puffery.
Providers would serve themselves and their clients better by focusing on the tremendous potential of their work but ratcheting back their claims.
Of course, it’s the retailer’s job to take a serious and deeply skeptical “buyer beware” attitude toward this type of selling. Still, it’s concerning how few providers for retail recognize it’s an incredibly, richly complex challenge where no single technology or data application has the ability to “be the magic change” — yet those are the pitches that are made.
Many solutions providers these days try too hard to be all things. Instead of having a strong point of view, they say that they can do whatever the retailer wants. Retailers want a partner who is focused and can get them from point A to point B. They want to know that their partner sees a future and can ready them for it. A loosey goosey provider does not come across that way. And that’s my 2 cents.
Carol delivers a great list of tips in this article. The only thing I would add (or maybe just reinforce) is that it all comes down to business value. If the solution isn’t providing a direct (or indirect) business value to the retailer then there is little reason for the retailer to stay engaged.
Along those lines — case studies that show the value in tangible, monetary terms can go a long way to helping a retailer understand why your solution can deliver the promised value. When working with retailers, we always ask our sales teams to highlight past success stories while recognizing that every retailer is different and unique in some way. While we can show how other retailers have benefited from our solution (either with increased store revenues or reduction in operational costs) we still have to understand that each retailer will be different from the next — trying to impose the idea that everyone will see the same benefit and value won’t instill the trust level needed to successfully partner.
Solution providers should work alongside their retail customers to deliver quick wins for the business. This doesn’t mean entering long pilots and betas, as retailers need to evolve faster than in the past. It means agreeing on the scope and success criteria upfront while managing the project carefully. In addition, solution providers cannot underestimate the change management curve for the retailer and their associates. Oftentimes it’s not the technology that fails – it’s managing the change given the unique culture of the retailer. Good senior leadership in the business and strong project management by the retailer or their delivery partner(s) are critical.
Lastly, solution providers need to listen better and seek to understand while still being a leader. Don’t say yes to every “my business is unique” requirement. This could result in putting the retailer in a technology dead-end, which is worse than the retailer thinking they can create their own solutions and keep up with the pace of change needed to survive today.
Right on, Carol! Solution providers need to solve a problem or create a new opportunity for the retailer. Having people with retail experience on the solution provider’s team always helps with the product/market fit. I’m most aligned with the combination of a short-term, high impact project along with a long term product roadmap. Really working with the retailer to see some returns in the short term and partnering through growth is a best-case scenario.
I agree with you, Sterling. The only caveat, the opportunity to test new technologies who do not have a sales force yet and limited traction. As a retailer marketing my technology to retailers, unfortunately, I have found the key to entry with a retailer is being VETTED by the retailer’s tech team. People who have no merchant/retailing experience and no physical world product development experience. A huge disadvantage for the tech teams ability to evaluate new, future facing retail technologies. The result, updated, new and improved versions of the same technologies we have had for years. Yet, in apparel, for example, conversion is still around 3% since 1995. Good news, it sounds like your company is working to solve this problem.
This is a great list. I would add: a “solution” is just a product, until it addresses an actual customer problem. The word solution is abused. Also, another mistake is not understanding your customer’s customers.
One of the things that greatly influences the retailer/vendor process is “competition.” Essentially most engagements are competitive at the onset as the retailer wants choice and pricing leverage. The competitive process itself can sometimes blur the ultimate goals as it influences a lot of the interactions. Many RFPs that are written can be vast in scope and clearly not well understood or correlated to the problem at hand. In newer studies on project success both internal and partner based, have found that true collaboration across stakeholders with shared KPI’s can lead to the best outcomes. This could be a way to rethink the vendor/sales retailer interaction process.
Fully agree with Dave Bruno below. My description is that we need to deliver first, build trust and only then seek to “ladder up” in the organization to sell more product or services. All too often, a first sale is made and more attention is given to incremental business than delivering on the reality of the day. Stay focused, be grateful for what you have, and build trust with your client. Good things will happen down the road.
Great job on tackling this issue. This list is really solid. I would add for us that thinking that our timelines based on internal goals have any impact on our retailers timelines for decision making. In some ways it is a simple human skill of being patient in the sales cycle and understanding that what we do and what we offer is the most important thing to us but is most likely a bullet point on a long list of things they need or want to do.
Always important to understand “the why” before “the how.” Then build/present the appropriate solution.