Evolve From Selling Widgets to Wisdom


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When I previously wrote about the 1,024 different types of salespeople, one of the variables I talked about was the difference between selling simple products vs. selling ones that are much more complex and consultative in nature. I like to think of that as the difference between selling “widgets” vs. selling “wisdom”. This post will help you understand the difference between the two, the advantages of selling wisdom, and how to effectively transition your selling efforts towards selling wisdom.

The Difference Between Widgets & Wisdom

In one sentence, selling widgets is basically selling things, and selling wisdom, is selling actionable insights with the data coming out of those things. So, for example, let’s say you are an advertising platform (a thing). There are plenty of other advertising platforms in the market where advertisers can be matched to publishers. And, high levels of competition often put pricing and margin pressure on the players in that space.

On the flipside, there is a lot a data running through this advertising platform. If you can create algorithms that help the client make better advertising buying decisions, comparing which campaigns did better or worse, or clearly calculating product sales sold from each campaign, then you are selling wisdom. And, once clients are making decisions on the wisdom coming out of your system, it is like an addiction that makes it very difficult for the clients to switch to a competitor.

The Advantages of Selling Wisdom

So, as seen in the example above, what are the key advantages of selling wisdom? Firstly, it is very sticky. Once you are in the company and proving you can help clients make everyday decisions, they are not likely to kick you out, especially if their internal reports are built off the intelligence coming out of your systems (where they are going to want to maintain consistency).

Secondly, wisdom is harder to compare from vendor to vendor, and hence, makes it less subject to intense price competition. Once the customer trusts you are helping make their business “smarter” and more efficient in the ways it deploys capital, they will really compare your prices to the value of revenues or costs savings you are powering for them (not to the prices of your competitors, whom they have not yet tested, and will be afraid to swap out). Compare that to selling a widget, which can look very similar from one vendor to the next, leading your prices and margins to a race to the bottom.

Thirdly, customers pay up for wisdom, far more than they are willing to pay up for widgets. So, most wisdom sellers see a material increase in their average ticket, the farther up the “wisdom curve” they evolve their product or service. Therefore, you don’t need to sell as many wisdom customers to drive the same amount of revenues you are driving from widget sales.

How to Transition Your Sales Efforts Towards Selling Wisdom

Shifting from selling widgets to selling wisdom typically requires these three evolutions: your product, your marketing messaging and your targeted sales clients. As for your product, it is a pretty intuitive change:  instead of simply building a product, figure out what data can come out of the product and how that data can be synthesized into actionable insights and clearly communicated to your clients. The more beneficial the dollar impact from your wisdom, the better. For example, if the wisdom can lead them to a 20 percent lift in revenues or cost savings, that is a lot better than simply helping them drive a 5 percent- benefit.

Once, the wisdom is flowing, you need to educate your widget clients that your new wisdom solutions exist, with a clear overhaul of your product marketing materials. For example, you should no longer lead with the “what” of your product; you should lead with the “why” coming out of the data from your product and the “how” to make such insights actionable.

And, this last point is perhaps the most important: the individual person you are selling the wisdom to, is most likely a materially higher level inside your client’s organization than the person you are selling the widget. Mid-level managers have the decision-making authority on widgets, and they most likely don’t really care about the wisdom or the accountability that follows suit. But, their bosses and the bosses of those bosses at the executive level are interested in any wisdom that can help them improve their business economics and their ROI. This means you need introductions into higher levels of your client’s organization, or new sales people altogether that are pros in consultative selling. These people will have the right Rolodex of senior level relationships interested in buying wisdom (it is very unlikely your widget seller can effectively evolve into a wisdom seller, as the skills are quite different).

Case Study

I had one client that was selling widgets and giving away insights, reporting almost for free. But, as I studied their business, it became clear to me that the widgets were really becoming a commodity in their industry, and prices were on a free fall in light of increasing competition. Plus, what really made this company unique were the actionable insights that could be gleaned by the data coming out of the widgets, which no other competitors were offering. So we flipped the model: we stopped leading with widgets, and instead lead with wisdom sales, giving the widgets away as free enablers of wisdom. Sure enough, the average ticket on a new sale increased from $20,000 for a widget to $200,000 for the wisdom, and the company was off to the races.


Obviously, not all companies are in a position to sell wisdom (it is hard to drive wisdom from a hammer, as an example). However, if your widgets can be technology-enabled, like many of the new innovations we are seeing in the Internet of Things boom, the sooner you can start harnessing the data coming out of those widgets, the sooner you can start selling intelligence and the sooner you can be having a material and beneficial impact on your clients in the long- run.




Reprinted by permission.

Image Credit: CC by Diogo Rendeiro

About the author: George Deeb

George Deeb is a managing partner at Red Rocket Ventures, a Chicago-based startup consulting and fundraising firm with expertise in advising Internet-related businesses. More of George’s startup lessons can be read at “101 Startup Lessons — An Entrepreneur’s Handbook.”

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