February 11, 2019

Creating A Blue Ocean Sales Approach

Many startup companies invent new markets or approaches to solving existing problems.  In doing so, they need to convince their markets to think differently about this brand-new approach to industry problems.  This is very difficult and requires a non-traditional sales approach.  These opportunities are Blue Ocean opportunities and they require Blue Ocean knowledge, a Blue Ocean approach and Blue Ocean sales people which is not a strength of most traditional sales people.

As background, Blue Ocean principles show three basic ways to create new markets.  These are:

  • Offering a breakthrough solution for an existing industry problem
  • Identifying and solving a brand-new problem or seizing a brand-new opportunity
  • Redefining and solving an existing industry problem

Part of the challenge is making sure that, as an entrepreneur, you don’t hire sales people who can only sell in red oceans (commodities) or in markets where the buying-decision rules are already established. These red ocean people know how best to compete within existing boundaries. This never works with Blue Ocean opportunities.  And, this may often be why only the founder or the founding team can sell the product. Since only the founder (and/or the founding team) fully appreciates the change required in the buying criteria and the value created by the new product, they can get prospective customers to think differently while red ocean sales people that they hire do not.

The fundamental challenge is to begin the sales hiring process with Blue Ocean sales people who can then leverage their knowledge and experience to other newer sales people.  Beginning with red ocean sales people leads to frustration and creates doubt in the founder’s mind about the viability of the opportunity.  It also creates issues with investors.  Remember that red ocean sales people will not succeed in Blue Ocean companies.  It requires a different mentality and different skill set.

Many founders don’t even understand Blue Ocean Strategy, have not read the books and therefore do not understand the problem that their companies have creating uncontested market space.  They also do not have experience hiring sales people in general, let alone Blue Ocean sales people.

Selling Blue Ocean products requires

  • Passion for the product/application/market
  • Clear understanding of the pain points in the industry
  • Understanding of “Crossing The Chasm” principles and ability to determine early-adapters, early majority, late-majority and laggard prospects
  • Selling how and why a new approach is better (use of Blue Ocean Strategy Canvas)
  • Understanding of three tiers of non-customers and exploiting this new opportunity
  • Understanding of Six Path Framework and looking for ways to change the buying agenda
  • Understanding and use of Buyer Utility Map and looking for hidden pain points in an industry
  • Interviewing for and hiring Blue Ocean sales people who will believe in a new approach, not be wedded to existing solutions and buying criteria and who have the skill to get customers to change their buying criteria
  • Strong on-boarding and training, development, certification and measurement of sales people in all Blue Ocean concepts
  • Ability to understand and counter cognitive, motivational, resources, political, feature and risk objections.  This requires planning and pre-emptive strike on known objections in all categories.
  • Helping buyers justify their decisions with a Justification Toolkit
  • Unwavering belief in Blue Ocean concepts and the ability to quickly walk away from prospects who are industry laggards and refuse to accept new buying criteria.

Mind of a Blue Ocean sales person

  • Does not take industry conditions as given.  Can shape them in his/her favor
  • Does not try to beat competition.  Makes competition irrelevant by radically altering the buying agenda of the buyer
  • Focus on capturing new demand, not competing over existing demand
  • Will simultaneously pursue increased value and lower costs by helping the buyer understand things they really do not need
  • Will not waste effort on prospects committed to red ocean buying criteria
  • Will sell value innovation, not technical innovation
  • Will not do feature/function demonstrations.  They will only do problem solving and value innovation product demonstrations

Blue Ocean sales people will begin by uncovering market pain and helping buyers understand why buying decisions need to change in order to solve the pain. They focus on why their company exists and what pain points the company is trying to address and get buyers to agree on those pain points.  Then, they will focus on features, benefits and uses.  They will take maximum advantage of customer references and make sure that references help to change prospects buying criteria. This is a different reference approach than a classic approach of “Yes, things went smoothly”.  Blue Ocean companies write more detailed case studies that focus on why buyers bought the product.  They don’t settle for short 2-paragraph case studies that ignore the most important parts of the process.  Blue Ocean sales people do not respond to RFP’s they create RFPs.  Blue Ocean sales people help their internal champion sell the product internally understanding that decision makers who were not involved in the evaluation process will be confused by the new criteria.

Blue Ocean sales people do not just try to exploit existing demand, they create new demand by turning buyer’s latent pain to pain. This means that they help buyers understand that they have a problem, that can be solved but with a new, different and better approach.  They clearly articulate problems and solutions that the buyer may not have seen on their own and convince buyers to think about solutions from a different perspective.  They do not fall into the trap of allowing the buyers to use traditional methods for choosing a solution. This requires extra effort that most sales people will not put in.

Blue Ocean sales people understand that buyers hate risk and do not necessarily like change.  Change implies risk.  It also implies a change to workflow, job functions and other things that many buyers would rather not deal with.  So, if this is a new approach that will interrupt the existing processes and procedure, the value of this needs to be properly sold and risk needs to be mitigated.  Also, buyers will be confused if they are looking at four or five alternatives and all but one of them are basically the same and pushing a very similar buying criteria and one is selling something very different.  While many sales people think this is good, if not properly explained it can cause confusion and create risk for the buyer.

Interviewing and hiring Blue Ocean sales people is not easy.  Founders who have never hired sales people before are normally woefully ill-equipped for this task.  They simply do not know how to interview sales people, in general and therefore are at a total loss for interviewing blue ocean sales people.  But this is what they require for sales success and scale.

Sample Interview questions

  • Did you read the Blue Ocean books?
  • Tell me about any Blue Ocean experiences that you have had in sales
  • How would you sell a product that is unique?
  • Have you ever sold a completely unique product in a market before?
  • How do you handle objections?  What kinds of objections do you expect and plan for?
  • Are you more comfortable in a market with known competitors where the buying criteria is established or one where you can create the buying criteria?  Why?
  • How do you educate potential buyers?
  • How do you demo products?

Also, founders are not generally very good at on-boarding sales people (in general, let alone blue ocean concepts).  On-boarding and training of sales people needs to focus on helping these sales people understand that their traditional sales approach will not work.  Blue ocean sales is not simply a numbers game.  The best product does not win.  A different approach wins.  If the buying criteria is not fundamentally changed, the blue ocean company will not win.  On-Boarding, training and certification require extensive focus on helping sales people learn how to change buying criteria, not simply focus on features.  It requires helping sales people understand current custom reference stories and why that customer bought the product, what risks they had to overcome, what internal objections they got and what benefits they ultimately derived. Most founders try to on-board sales people by teaching them a feature-oriented demo of the product.  This will not work in blue ocean companies. The knowledge that founders have and unconsciously use, are critical factors that sales people need to have transferred to them.  In the case of blue ocean companies, on-boarding needs to consist of:

On-Boarding Plan

  • Why we exist as a company
  • What problems we solve and what industry pain points we address
  • What our strategy canvas is and how to use in in messaging and sales
  • What our three tiers of non-customers are
  • What the buyer utility map is and how it applies to our market opportunity
  • Customer case studies and why they bought from us (story telling)
  • Ideal customer criteria that is aspirational
  • Objection handling (cognitive, political, resources, motivational, feature and risk)
  • Problem solving demo (not a feature/function demo)
  • Buyer qualification criteria
  • Messaging, messaging, messaging
  • Value proposition
  • How to sell value innovation, not technical innovation
  • How to help buyers justify the purchase of your Blue Ocean product

In summary, there are two fundamental challenges that need to be addressed in Blue Ocean sales.  One is a recognition by founders that sales people are not generic.  Red Ocean sales people will very rarely be successful in Blue Ocean opportunities.  Their skill set is to compete based on a given set of decision criteria.  Blue Ocean sales people change that criteria. Second, and equally important is for founders themselves to understand the concepts behind Blue Ocean strategy.  The company simply cannot execute Blue Ocean strategy, Blue Ocean marketing or Blue Ocean sales if the founder/CEO does not fully understand Blue Ocean principles.  Founders often unconsciously use Blue Ocean principles in early sales but do not know how to translate that to the sales people they bring in to scale their company.

To learn more about implementing a Blue Ocean sales approach, write to arbordakota@me.com.  We are experts and creating and exploiting uncontested market spaces.