It's a familiar lament: executives at business-to-business (B2B) companies say that their largest customers have never been more demanding. But whereas some companies are simply caving in to price pressure, others are trying to create and capture more value through sales approaches such as enterprise selling, key-account management, or solutions selling. Regardless of the label, each involves forging highly collaborative relationships, with selected customers, that can yield exciting results.

Clearly then, collaborative selling can yield tailored products (Alcoa's wheels) or bundles of products and services (Sonoco's packaging and conversion). In other cases, collaboration has generated more elaborate, customized products that integrate proprietary intellectual property or expertise to solve a customer's problem. These examples also suggest, however, that intense collaboration is a complex, time-consuming endeavor. Many would-be collaborative sellers fail to master that complexity. In some cases, the buyer and the supplier aren't able to identify unique sources of value. In others, suppliers don't achieve the necessary coordination (across business units, geographies, or functions such as product development, engineering, marketing, and legal affairs) that is vital to collaboration. And some companies find moderately successful efforts so resource intensive that they don't yield a good return. As a result, roughly half of all collaborative sellers enjoy only modest benefits from their efforts, and a quarter actually lose money in those relationships, according to a recent McKinsey survey of more than 200 sales executives at Fortune 1000 companies.

For the leading sellers in our survey, however, collaborative initiatives increased revenues and profits by more than 20 percent, on average. These leaders start with a rich understanding of the customer's economics and engage the appropriate customer personnel (from product developers to purchasing agents) in joint strategy sessions to uncover mutually beneficial opportunities. They also scrutinize internal organizational issues—meticulously choosing collaboration managers, who often come from outside the sales department; thoroughly training account teams in the field; engaging senior executives in targeted ways; and fine-tuning incentives. Finally, the leading companies recognize that collaborative selling is a costly business and approach it with a hard-nosed, investment-oriented mentality by carefully selecting trial customers and by periodically reevaluating relationships, much as pharmaceutical companies stage-gate their R&D investments.

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