1. The document discusses the differences between consultative selling and traditional sales techniques. Consultative selling focuses on building long-term relationships based on trust and expertise, rather than individual transactions. It involves understanding the client's business and needs.
2. A key part of consultative selling is the profit improvement proposal, which quantifies how the consulting services can specifically help increase the client's profits.
3. Another technique discussed is the "trial delivery", which provides initial consulting services to help the client see the consultant's value and mitigate risks, with the goal of developing a long-term relationship.
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Consultative Selling
1. Consultative Selling
By Chris Marocchi
Last September, I participated in a national Best Practices conference in Chicago. One of the keynote
speakers was an adjunct professor from Montana State University named Doug Fletcher. Professor
Fletcher delivered an excellent presentation on consultative selling and co-authored a book titled ‘How
Clients Buy.’ Over the course of several years, I have attempted to piece together my own
methodology for consultative selling, and how I would train sales teams I led with that methodology.
The best sources for consultative selling I’ve found are ‘The Trusted Advisor’ by David Maister,
Charles H. Green and Robert M. Galford; ‘How Clients Buy,’ and ‘Consultative Selling’ by Mack
Hanan. Perhaps you have other favorite sources for consultative selling that you enjoy? Please share
these by commenting on this post.
How Does Consultative Selling Differ from Traditional Sales Techniques?
To better understand how these two selling styles contrast, it’s best to start with a definition. Listed
below are the characteristics of consultative selling:
1. Instead of sitting across from a Purchasing Manager – or a manager of information services or
telecommunications who has a purchasing role – consultative sellers sit side by side with a
midlevel operating manager who runs a profit-centered business function.
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2. Instead of selling the added cost of a product, service, or system feature by feature and benefit
by benefit based on price and performance, consultative sellers sell the added value of an
improved contribution to profits.
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3. We’re selling our expertise. When we’re experts at what we do, we can provide consultation
services. We’re not selling, they’re buying our expertise.
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4. We’re selling based on trust earned through relationship building. Actually, we’re not “selling”
per se, we’re earning the client’s trust. Then we’re working with our client to help them to
solve problems.
5. Relationships are long-term, and business is not transactional.
2. Traditional selling methods rely heavily on the following:
1. Transactional based selling – once we close the deal, we’re out.
2. Selling based on features and benefits, not value.
3. Selling based on a cost-plus model, focusing on margins.
4. Using closing techniques to complete the transaction.
5. Reliance on company sponsored sales or presentation materials without a deep understanding
of the client’s industry and client company situation.
‘The Goal’
A great example of consultative selling and the notion of our clients “buying our expertise” is found in
a book by Eli Goldratt titled ‘The Goal.’ In the book, the protagonist Alex is mentored by a consultant
named Jonah. Throughout Alex’ three-month journey to turn his failing manufacturing division
around, Jonah offers “free” advice via the Socratic teaching method to Alex. As Alex starts to
eventually comprehend the lessons in lean manufacturing taught to him by Jonah, he eventually is
successful in turning his division around. And at that point, Alex desires to hire Jonah to provide
further consulting services, and even offers to pay Jonah’s premium rate due to his immense industry
knowledge and expertise.
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Understanding the Client’s Buying Decision Journey
It’s important to understand the client’s buying decision journey. What is their process? Who makes
the decisions? Start off by understanding what their pain points are, then learn what this process is.
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Understanding the client’s decision process early will help you move toward engagement much faster.
The Profit Improvement Proposal
One of the ways to move the decision maker to the approval stage is by taking the Profit Improvement
Proposal (PIP) approach. This concept starts with the end in mind: how much can we help the client to
increase profit? Clients of consulting services often complain that results from consulting or training
services are intangible/unmeasurable. Tracking profit improvements is even more elusive. What if we
could help our clients to understand that forecasting profit improvements is not only attainable, but can
be determined as early as the proposal stage of the sales cycle?
Consultative Selling suggests that a PIP solution can be used based on focusing on any of the
following five financial metrics
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:
1. Circulating Capital
2. Turnover
3. Contribution Margin
4. Return on Investment
5. Payback
By incorporating the end state (profitability) into our proposal, we can absolutely help our clients to
more clearly understand the value inherent in our consulting services.
3. The Trial Delivery
During my time as a sales director at CMTC, I introduced an offering for our field sales team to utilize
called the Trial Delivery. The offering was simple: it was a commitment to provide up to 16 hours of
initial consulting services to a new, larger client with whom the advisor had qualified a potential
consulting service opportunity. The approach was intended to help bridge the “trust gap” between
CMTC and a new client with whom we wanted to develop a relationship. By using the Trial Delivery,
the client would be able to see how CMTC operated, would get to see the delivery consultant in action,
and see the value of continuing a longer-term consulting engagement together. In other words, it was a
means to mitigate perceived risk on the client’s end.
This offering was inspired by a section in ‘The Trusted Advisor’ titled “What Clients Want.” In it, the
authors detail a list of 10 things most clients want that they don’t typically find offered by a consulting
firm. Listed as #2 on this list is “Do more things ‘on spec’ (i.e., invest your time on preliminary work
in new areas).”
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Offering 16 hours of work “on spec” might seem risky to the consulting firm. But the
potential upside of moving the relationship forward by mitigating the client’s risk concerns far
outweighs this risk.
Conclusion
In conclusion, I hope that this article has sparked new interest in you to think about how improving
your consultative selling approach might help you be more successful in 2023. Consultative Selling is
all about building relationships as Trusted Advisors with our clients and prospective clients.
Stephen M.R. Covey, son of the famed Stephen R. Covey, writes in his book ‘The Speed of Trust’ how
there is a strong correlation between the amount of trust that exists in a business relationship and the
success (profitability) you can expect to result from that relationship.
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Trust must be earned, and
advisors must be credible – remember, it’s our expertise that the client is buying.
Please feel free to share this article with others, and comment on this post. Whether you agree or
disagree with the points shared in this article, hopefully the methodologies cited here will help you to
determine how you can learn more from the experts in the area of consultative selling.
Sources
1. ‘Consultative Selling’; Hanan; 2011
2. ‘Consultative Selling’; Hanan; 2011
3. ‘How Clients Buy: A Practical Guide to Business Development for Consulting and Professional
Services’; McMakin & Fletcher; 2018
4. ‘The Goal – A Process of Ongoing Improvement’; Goldratt; 1984
5. ‘How Clients Buy: A Practical Guide to Business Development for Consulting and Professional
Services’; McMakin & Fletcher; 2018
6. ‘Consultative Selling’; Hanan; 2011
7. ‘The Trusted Advisor’; Maister, Green & Galford; 2000
8. ‘The Speed of Trust’; Covey; 2006