Value Capture Selling

“The sales book of the decade” —Selling Power magazine

Value Capture Selling is the first book to directly address one of the most destructive shortcomings in sales organizations today. Author JC Larreche’s approach is so innovative that Selling Power magazine named it “The sales book of the decade.”

For years, sales professionals have focused on creating value for their customers—the first phase in selling. However, in today’s fast-moving world of business, that is just not enough. Under increased financial pressure, businesses today are being pushed to move to an emphasis on the second phase of selling: the capture of corporate value. However, as all-too-many business leaders are finding out to their great dismay, sales professionals have not been trained in the techniques for the capture of corporate value, and they are at the mercy of very well-trained and tough professional buyers.

Value Capture Selling is the first book to address this gap. It is specifically designed to provide sales professionals—both veteran and new alike—with a complete roadmap for making the transition from value selling to value-capture selling, including:

• Why the creation of corporate value—short, medium, and long term—is essential for the firm and its internal and external partners
• How to master the key drivers of corporate value: profitability, market share, and customer satisfaction
• How to prepare for value capture
• How to frame strategies and tactics for value capture
• How to close deals for higher corporate value capture

Value-capture selling is the current challenge for corporations and sales professionals everywhere—making the transition from a revenue objective to a focus on corporate value. This requires a fundamental shift from a strong belief that bigger is better to a new creed that richer is better. It is what JC Larreche, professor emeritus at INSEAD and an expert on sustainable value creation, calls the 3rd Sales Transformation.

In a future marked by escalating financial pressures, the significance of value capture will only grow, and in Value Capture Selling, JC Larreche provides sales professionals everywhere with the tools they need to become masters at this new art!

Praise for Value Capture Selling:

"Most sales forces focus only on revenue, not value capture. Larreche’s book can help you make the necessary transition. If you are in Sales, read it because the data revolution is increasing scrutiny from Finance and others in your firm about how selling efforts build or destroy enterprise value. And if you are a C-Suite executive, read it carefully, because selling affects core elements of value creation."
―Frank Cespedes, Harvard Business School, author of Aligning Strategy and Sales and Sales Management That Works

"Value Capture Selling is a very compelling and complete work that illustrates well the challenges of the transition from product value to corporate value—both for the customer and for the supplier. JC Larreche lays out a powerful framework for any sales professional anywhere to win in this new world of selling!"
―Laurent Beraza, Director - UK, Germany, France - Microsoft Solutions Support Sales

"Value Capture Selling gives us the powerful insights required to capture more value for our company while keeping the customer at the center—right where they belong."
―Anna Campagna, Sr. Director Global Sales, HEINEKEN

Preface xvii

Chapter 1 The Advent of Value Capture 1

Selling as Push 4

The Three Sales Transformations 5

Hop on the Bus of Change and Become a Value-Capture Champion 11

The First Step on the Bus of Change 12

The Structure of the Book 13

Chapter 2 The Creation of Customer Value 15

From Product Selling to Customer Value 17

The 1st Sales Transformation 20

The 2nd Sales Transformation 31

Customer Centricity Helps Win the 2nd Sales Transformation 39

But the Creation of Customer Value Is Only One Side of the Story 41

Chapter 3 The Creation of Corporate Value 43

General Electric’s Big Shift 46

The Sources of Value Destruction 48

Changing the Yardstick for Corporate Success 50

Business Transformation for Corporate- Value Creation 54

The Drivers of Corporate- Value Creation 58

Chapter 4 Mastering Multiple Objectives 61

Moving from the First Selling Phase to the Second Selling Phase 63

Revenue Management Systems and the Value- Capture Culture 65

Negotiating According to Incentives 67

Harnessing the Three Drivers of Corporate- Value Creation 76

Upgrading the Role of Sales Pros 80

Chapter 5 Steering Customer Satisfaction 83

Customer Satisfaction and Corporate Value 85

Measuring Customer Satisfaction 87

Chapter 6 The Leadership Attitude 101

Why Should You Be a Leader? 102

What Is Leadership? 103

Your Personal Growth as a Leader 114

Ego and Leadership 117

Your Corporate-Value Capture Mission 119

Chapter 7 Preparation for Value Capture 121

The Art of Preparation 124

The Negotiation Setting 127

Primary Preparation 129

Do You Know Your BATNA? 138

The BATNA Frontier for Value Capture 141

Chapter 8 Value- Capture Strategy 147

The Buyer’s BATNA 150

Do You Know ZOPA? 152

Visualizing Your ZOPA for Value Capture 154

Anticipating the Buyer’s BATNA Frontier 160

Exploring the ZOPA Space 163

Shadow Coaching 167

Chapter 9 Value- Capture Tactics 169

The Negotiation Setting 170

The Negotiation Pathway 174

Active Listening 185

Body Language 188

Putting All This into Action 190

Chapter 10 Value- Capture Closure 197

Always Be Closing 198

Closing the Two Selling Phases 200

Bridging the Gap 203

The Closure Map 207

Managing Risk at Closure 211

Tom Closing 216

Moving On 219

Chapter 11 Win and Learn, Learn to Win 221

Win and Learn 222

Celebrating Wins 230

Learning to Win 232

Winning and Learning Traps 240

Make Yourself Lucky 244

Epilogue 249

Thank You, Dear Reader 253

Acknowledgements 255

About the Author 257

Notes 259

Index 275

JC LARRECHE is Emeritus Professor at INSEAD, the leading international business school with campuses in France, Singapore, and Abu Dhabi. In addition to his distinguished academic career, he has been a consultant for many leading global corporations and served on the board of several companies. He is also the Founding Chairman of StratX Simulations, a leading provider of experiential learning solutions.

Sales is increasingly being recognized as a strategic function. Over the last few decades, salespeople have been trained in consultative selling, becoming more alive to helping their clients create value for their customers. They are now also expected to capture corporate value for their employers, with significant implications for the role of sales professionals.

In Value Capture Selling: How to Win the 3rd Sales Transformation, JC Larreche delivers a practical and insightful guide to an often-neglected phase of the selling process: value capture. In the book, you’ll learn how to better capture value during a sale and learn the background, concepts, and techniques associated with the strategy.

The author illustrates the concepts discussed in the book through the story of Tom Werner, a sales professional in the process of negotiating a major contract with Sue Newton, a professional buyer. He offers insights into the value capture process drawn from real-world sales training situations using the REVMANEX simulator, as well as the author’s extensive expertise in corporate marketing and strategy.

In the book, you’ll discover hands-on discussions of the strategy and tactics of value capture, including specific techniques for effective preparation and closure, as well as how to master multiple objectives, how to steer customer satisfaction, and develop a leadership attitude.

Perfect for sales managers, sales team leaders, sales directors and account managers, executives, and marketing managers, Value Capture Selling: How to Win the 3rd Sales Transformation will also prove invaluable to students in MBA programs and undergraduate business majors with an interest in pursuing or continuing a career in sales, sales management, or marketing.

Praise for VALUE CAPTURE SELLING

“Larreche brings a wealth of expertise in sales and marketing to this insightful book. By focusing on the importance of value creation for both the customer and the corporation, this book revolutionizes the sales approach. Value Capture Selling is a must-read for anyone seeking to master the art of selling and create lasting customer relationships.”
— Marshall Goldsmith, Thinkers50 #1 Executive Coach and New York Times bestselling author of The Earned Life, Triggers, and What Got You Here Won’t Get You There

“Value Capture Selling is the sales book of the decade! It provides a novel approach that leads salespeople to a more effective negotiation position that satisfies customer needs while creating corporate value for your business. A must-read for anyone who wants to win more sales and achieve higher profits.”
—Gerhard Gschwandtner, Founder and Publisher, Selling Power

“Most sales forces focus only on revenue, not value capture. Larreche’s book can help you make the necessary transition. If you are in sales, read it because the data revolution is increasing scrutiny from finance and others in your firm about how selling efforts build or destroy enterprise value. And if you are a C-Suite executive, read it carefully, because selling affects core elements of value creation.”
— Frank Cespedes, Harvard Business School, author of Aligning Strategy and Sales and Sales Management That Works

“Value Capture Selling is a very compelling and complete work that illustrates well the challenges of the transition from product value to corporate value—both for the customer and for the supplier. JC Larreche lays out a powerful framework for any sales professional anywhere to win in this new world of selling!”
—Laurent Beraza, Director, UK, Germany & France, Microsoft Solutions Support Sales

“Value Capture Selling gives us the powerful insights required to capture more value for our company while keeping the customer at the center—right where they belong.”
—Anna Campagna, Senior Director, Global Sales, Heineken

“Value Capture Selling is an excellent reference for any sales professional who would like to improve their ability to create and capture value for their firm. The ever-more-relevant concepts of BATNA and ZOPA are brilliantly demonstrated, and the emphasis on preparation is rightly hammered home!”
— Manish Kumar Singh, Global Head of Marketing, Customer Services & Solutions, IGT Systems, Philips Healthcare

“Selling with the emphasis on corporate value requires more business acumen and a stronger leadership attitude from sales professionals—that is, an upgrading of their function. In Value Capture Selling, Larreche provides sales professionals in every industry the knowledge they need to excel in this exciting new world. I highly recommend this book!”
—Omar Haddadeen, Inside Sales Analyst, Bombardier