In sales management circles there has been a lot of mention for a while now of concepts such as ‘value selling’ or ‘consultative selling’. People say things like “We need to position the value of our solution better” or “For this deal we need a consultative approach." Many sales people get confused by this. In workshops I keep getting questions about what consultative selling actually means, so I decided to write a few sentences to clarify the issue.
Defining what Consultative selling is NOT
It isn’t positioning yourself as a technical expert
Consultative Selling does not mean consulting the client on the technical intricacies of your solution in great painstaking detail. While this can potentially be an important step in the sales cycle, I’d call this presales consulting, or technical presales. I would generally discourage that Account Managers overly engage in this since there is a real danger that they shoot themselves in the foot. By positioning themselves as the technical expert, they run the risk of being labeled as a ‘Techy’, making it more difficult to get time in front of customer business executives who don’t care about – or might be turned off by - too much technical detail.
It isn’t about being a business consultant
On the other hand it also does NOT mean, acting as a business consultant by explaining to customer executives how they should be running their business. To start with, most sales people are not trained to do this. Secondly one needs a great deal of manufacturing experience to consult a manufacturer’s CXO on how to improve their business. Third there is the issue of credibility vs. self interest in selling and consulting respectively. So even if you did know the customer’s business well, from a management perspective, caution is in order, you risk irritating the customer and getting the: “ARE YOU TELLING ME HOW TO RUN MY BUSINESS???” response!
What consultative selling means
Now we know what is doesn’t mean, let’s define we at Integratis mean when we say ‘Consultative Selling’.
A consultative sales person:
- Actively reaches out and seeks discussions with non-technical buyers, who might be the technical buyer’s internal clients (customer’s customer).
- Reports on their findings from these non-technical discussion to the technical buyer, to enable them to serve their customers better.
- Uses consultative questioning techniques and active listening to collect the maximum amount of information, in order to come up with the best possible solution for the customer, technically and financially.
- Uses good process such as professional meeting planning to make life easier for their own team, also ensuring maximum meeting quality for the customer.
- Is aware of their specific sources of power / influence and uses these in a planned and professional way, with complete integrity.
- Moderates compromise between competing interests within the customer.
- Supports writing the business case/financial justification or writes one their-self.
- Never loses sight of the solution’s economies and profitability for the customer.
- Is capable of an intelligent discussion with the financial decision maker (FDM).
- Is capable of at least a high-level of discussion of financing options for their own solution.
- Helps the technical buyer to position and defend the economics of their solution.
- Is connected within the customer and can help technical buyers find budgets for their solution upon request.
- Doesn’t accept everything a customer says without reflection, but…
- Instead creates constructive solution-oriented discussion, again using consultative questioning techniques.
So there you have it, the consultative sales person. How many of these strategies do you currently employ? At Integratis it is our experience that engaging in any one or all of these behaviors will make your life in sales significantly easier and much more satisfying. Change is never easy, but rest assured, we meet lots of sales people and have seen incredible gains in effectiveness and success rates, once they’ve started applying some of the above concepts. They are the spirit and gist of the Integratis consultative selling program which we have rolled out to many clients on our customer references list.
How about you? Do you agree with our ‘traits of a consultative sales person’? What would you add? What works for you?
Author: Peter Schmitz
Peter Schmitz is an Integratis consultant representing Integratis in German speaking countries.
Peter is also owner/director of www.schmitzconsulting.com.
Contact Peter at: email@example.com
Why is thorough call preparation of such critical importance? Haven’t you already spent enough time in research through the process of reaching out to prospective customers and getting the appointment? The customer has agreed to see you, so must be interested in what you have to sell, surely all you need to do next is to prepare a succinct presentation articulating the benefits and features of what you have to offer to convince the customer to buy from you?
This is not the thought process of the consultative sales person. A consultative sales person isn’t aiming to just make a ‘one time’ sale but to position themselves as someone that understands their customer’s needs, someone to be trusted, someone that the customer can turn to for solutions to their problems. Good call preparation is a key component in building this partnership relationship. (See ‘How to develop a successful sales relationship’) Consultative selling starts with thorough preparation, a preliminary analysis of the customer’s market position and what is happening internally within the company itself.
Understanding the customer's market position
This means determining the customer’s areas of business stress and what their future goals might be; understanding who their customers are and what they expect from them. It includes looking at their competition and why they might be more successful; a review of their channel strategy and how it operates; their competency and utilization of technology; considering their regulatory environment, the economy and how trends and groups like banks, unions and business analysts might impact their business.
Understanding the customer's company
This is about understanding the customer’s company’s key priorities and business issues, researching their organizational structure and business strategy. Do their people have the required skills and systems, to do what it is needed? What is their company structure, is it well aligned to their strategy, what is their corporate culture, their values, are they innovative and likely to be responsive new ideas?
Where to source this information
Web Research is the most obvious source, the customer’s website and also their competition’s which often includes useful information in annual reports and brochures. Look at the press, industry pages relating to their specialty, industry periodicals and the financial press. Consider reference sources like Yahoo finance, Google and Hoover's, business analyst’s reports, credit status reports and ‘Hold, Buy or Sell’ recommendations.
There are several sales apps available to help keep you updated on industry news, competitors in addition to the achievements, projects and thoughts of people you follow, take a look at apps like Cloze and Newsle.
Never forget the importance of talking to people, both in your internal team and in the customer’s external network. Allies in your customer’s company are an essential way of supporting and adding to your research. Also talk to the customer; customers love to talk about their business and if they detect your interest they will more likely share information with you.
You’ve selected what you believe to be the right channel partner, what do you do now to ensure that that channel partner views you as the preferred supplier? How do you build a long term, stable, partnership with the channel based on trust and mutual business benefit? As a business partner, the channel manager, should try to develop a strategy to help the channel perceive the business win of partnering with you. For a successful relationship that gets results, the channel manager should aim to become a valued member of the channel’s team, helping them to improve their performance.
How to successfully implement an effective channel strategy.
1. Think Win/Win/Win - Win for the Customer/Partner/ You
Channel partners must perceive a real win for them to want to work with you. The most powerful way to achieve this win is to help them achieve a business objective which is important to them. Once they have agreed to the plan and are willing to resource it, show them what the business win will be and ensure that this becomes an ongoing reality.
2. Be proactive and involved
Be proactive and involved showing how partnering with you will help the channel partner achieve their business goals. Focus attention and resources on areas where you can provide the solutions. Identify business opportunities providing a business win for both parties. Sell those opportunities to the channel partner and build the partnership around them.
3. Develop a Partnership Plan
The development of a partnership plan will provide a business focus for the partnership. The partner’s business win needs to be clear and concise. A clear plan will define mutual expectations of commitment and return, enabling both parties to plan for and ensure success. It will help to focus partner activity, maximizing productivity and reducing channel conflict, concentrating the partner’s attention and resources on their activity with you. It will also provide a method for monitoring and managing the partnership. A medium and long term focus will then promote long term, not deal-based partnerships. This will provide a means of ensuring that the channel partner commits the right resources to support the plan, fulfilling the role you had previously defined for them.
4. Build a partnership based on TRUST
There are three key decision criteria which people use when choosing a partner. The channel manager should apply all three:
- Can we TRUST this person, or company?
- Can we GET ALONG with this person, or company?
- Can they PROVIDE THE SERVICE we require?
In summary, to develop successful, profitable, channel relationships, as the channel manager think not about direct selling but about partnership selling. Go from being a sale’s professional to an expert consultant. Turn attention from the customer who might buy your product through the channel, to the channel partner themselves. Focus on the long, not the short term, not on closing the deal with the customer but on helping the partner to win and in so doing helping you to win and dramatically impact the bottom line.
What have been your experiences, either as a channel manager or as a channel partner, we would love to hear from you?
This is the first in my series of blogs about channels. We will be discussing how to implement good channel strategy. How to identify, select and recruit the right partners, how to make the partnership successful for both the vendor and the channel and the best ways to support channels.
Developing a partnership with your channel
When developing good channel strategy much is said about being a partner with your channel but what does that actually mean? Google defines “partner’’ as: 'A person who takes part in an undertaking with another or others, esp. in a business or company with shared risks and profits.' Most vendors do indeed talk about their relationship with their channels as a partnership but all too often go on to complain about their performance; that they are not selling their products, they are not producing the results they had been promised or expected. Why might that be and whose initial responsibility is it to ensure the success of the relationship
1. Selecting the right partner
I would suggest that success of this type of business relationship rests initially with the vendor. The first part of their strategy is obviously to select the right channel for their distribution. The ‘right’ partner is one who shares with the vendor a mutual desire to want the relationship to work. I will go into more detail about this selection in my next channel blog. The vendor should then ask themselves are they committed to this success and do they feel that their potential partner shares this commitment
2. Provide on going channel support
“Ask not what the channel can do for me but what can I do for the channel?”
- How do they intend to contribute to that model in terms of revenue opportunities and bottom line profits?
- Do they have the resources to implement a joint and formal business planning process with their channel partners?
- What programs and services do they have available to help the channel partner optimize their performance?
- Do they have the capability to implement new and innovative channel partner programs and make program improvements?
- Are they able to offer incentives, and promotions to the channel partner and do they have the infrastructure to be able to effectively support these initiatives?
- Are there performance measurements available to determine achievement?
- Are there systems in place to provide further support to the channel partner when required and decision processes to consider further investment in the partnership?
3. Communication strategy.
The vendor should also consider their communicator strategy.
Do they have effective communication strategies in place to successfully compel their channel partners' participation and action?
Are there channel communication strategies and tools to be able to leverage the partner portal(s) and social media effectively?
Are there dedicated members of the vendor’s team responsible for channel partner communication tasked with accessing progress and providing support such as helping the partner develop a quote or close a deal?
4. Assessment strategy
The vendor should develop an assessment strategy and view it as an on going evolving process and commitment.
Are they able to devote time to assess their channel strategy based on market shifts and/or the competition?
How up to date and aware are they of market trends and competitive strategies that may significantly impact their channel business?
How effective and accurate is their assessment process?
Are their partners capturing new customers and making inroads into new markets? Opening up new markets and acquiring new customers requires an innovative approach and more resources.
5. Training and support from senior management
How is the vendor motivating and training their channel partners to invest in new markets and customers?
Are they prepared to provide the support and training to make this a successful partnership?
How vested is the senior management team in the channel’s success?
In essence is the vendor really committed to their channel partner’s success, to the partnership, truly sharing in the gains and losses, risks and rewards in working together?
As a channel partner how much of this rings true for you and as a vendor how much of this do you think is relevant and accurate? Are both of you doing all you can to make a successful channel partnership? Maybe you have other great suggestions, if so I would love to hear them!