Selling Innovation

As promised, let us talk a little bit about selling innovation. Last week I asked the question, “How do you sell?” because selling is one of the two entrepreneurial functions.

The thing is this, not all sales processes are created equal. Unfortunately, a lot of advice about selling has been built on the premise that selling is selling. It is just not true. (Remember that old commercial saying, "Motor oil is motor oil"?)

To put it in the simplest of terms, people do not buy things until they have a problem. Some problems people are able to identify on their own. If you are out of Captain Crunch, you know you gotta problem.

For this reason, the way you sell cereal is different from the way you would sell houses. Although not as different as you might think. In both cases, your customer makes their decision without you.

Meaning, people decide to buy cereal, or sell their house, without the help of a salesperson. It is a similar situation with car sales. In all three of these cases, people understand the problems and the solutions.

The sales environment becomes different when we are talking about true entrepreneurship. One way to think of the job of an entrepreneur is that s/he sells innovation.

Innovation can take many forms but, one thing all innovations have in common, is they bring new value to the marketplace. Stated differently, innovation is about solving problems that have not been solved before.

Usually the problem is seemingly minor. Uber has quickly become an enormously successful company. And, when you think about it, the problem Uber solves is pretty simple. Uber is more convenient than a taxicab, thereby saving us time.

Waiting for a cab is not a huge problem. It is not cancer. But, that is how the economy progresses. Lots of little improvements add up to big changes.

Ok, so, as I have said, people do not change their situation, people do not buy things, until they have a perceived problem. As an entrepreneur, this becomes a real challenge, because people do not generally spend time thinking about problems that have no solutions.

As entrepreneurs, we are bringing new solutions to the market. This means, in order to sell innovation, we need to make people aware of their problems. Stated differently, if you sell innovation you need to “break” the person's current situation.

Below you will see a picture depicting the buying cycle which people go through. The image was created by the legend himself, Neil Rackham.

You only need to study the image for a minute to realize that entrepreneurs should spend most of their time working on the “Recognition of Needs” phase. As an entrepreneur, you sell a new solution. So, you need to make people realize they have a problem. A need.

How do we help people realize they have a problem? Well, there are lots of ways but the most effective method is the use of questions. Questions are the levers of change.

Think about it, how do you become aware of the existence of a problem? If you really think about it, I believe you would agree that you become aware of a problem by asking yourself questions.

As an example, how do you know if you are gaining too much weight? With questions, of course. You might ask yourself, “Are I getting too fat?” Or, “Am I becoming unhealthy?” Or, “I wonder how my heart is doing?” Or, “Should I buy some bigger clothes?”

You get the point. We identify problems through the use of questions. Everybody does it privately and, as an entrepreneur, we need to do it publicly as well.

To help people appreciate the solution you provide you are well-advised to ask questions to help them realize the problems that exist. I will give you one last example so you can tune-in to your own inner monologue.

Lately, I have been thinking about this thing called Bitcoin. If you do not know what Bitcoin is, you just asked yourself, “What is Bitcoin?” And, there we have question number one.

I will not, for one second, act like I am an expert on Bitcoin. In fact, I know very little about the service. What I do know is, “Bitcoin is a digital asset and a payment system,” according to Wikipedia.

Here is what I am trying to determine. Do I need to use Bitcoin? As of yet, my answer is, I do not know. I am trying to understand the problems that Bitcoin solves. And, I encourage you to do the same.

As you think through what Bitcoin can do for you, pay close attention to your thoughts. What you will find is that you ask yourself a lot of questions. And, that is the point of this post.

If you want to sell innovation, you need to help people understand your solution by helping them realize the problem. And, in order to do that I recommend we all master the use if questions.

Let me know how it goes.