Consultative Selling is not simply about selling products! It is intensely concerned with meeting the other party's needs, especially financially. The aim is to maximise profitability, productivity and long-term security for both parties, and this requires the Key Account Manager to understand the customer's business as thoroughly as the customer does him/herself.
Consultative selling is non-manipulative selling; slick selling techniques are not appropriate. And consultative selling talks the language of more senior players in the customer's decision making process, discussed in another of our blog posts. Click here to read our post on selling to top-tier decision makers. (Ed. Some of our links, shown in red text, are not up and running yet, but they will be soon!)
A Consultative Approach requires all five of the Key Success Factors shown in the figure at the top of this post. The three aspects enclosed in the triangle are operational core competencies, fundamentally important to any style of Customer Relationship Management. But to leverage the Consultative Selling Model in full, the "soft skills" in the outer circle are critical. The five areas are discussed below:
Key Success Factor 1 Information
Because consultative selling is customer-value-based, it is not enough to know your own side of the relationship; you need three more information banks which will become key resources.
Segment Database: First, you need a database on each key segment you serve. You will need both qualitative and quantitative data. From this information, you will learn average costs, average profits, average inventories etc. which will allow you to compare customer performance against industry or segment norms. Opportunities may be found where significant differences exist, or where segment problems are seen.
Account Database: Next, of course, comes your individual customer data-base. You must know your customer inside out if you are to manage them effectively, and their policies, systems and practices. Summarising critical information has many benefits:
Do not think of your customer as the whole account, nor even a division. It is specific business function managers whose contribution to sales and profits you can improve. Record all of these details, and structure your data around specific functions.
Customer's Customer Database: Only by understanding the marketplace your client is operating in, only by studying the accounts they sell to, can you understand the complete relationship which is available to you. You are searching for costs which can be reduced, and/or sales opportunities which can be enlarged, so you must learn the major cost areas your customer affects in their customers, and the main sales opportunities they help them to achieve.
Key Success Factor 2 Process
As a process, Consultative Selling is about much more than selling products and services, although of course they remain fundamentally important. It requires at least the following additional steps:
Profit Improvement Proposals are your basic consultative sales tool for Account presentation. They are designed to permit you to penetrate at high customer levels and to sell at high-profit margins. They identify you as being in a consultative partnership that affects the financial state of the Account’s business. You should be aware of the differences across:
Click here to read our blog post on preparing Profit Improvement Proposals.
Key Success Factor 3 Skills
Clearly, to be successful as a consultative salesperson, you need best-in-class skills in a number of areas. Our experience is that the mission critical skills start with insightful question skills, perhaps using a technique such as the OPEN© model (read about it here). Such skills are foreign to the "professional sales representative" who applies standard techniques to opening, presenting, handling objections and closing calls. These are the techniques of product-oriented, or vendor, selling. We call it “Selling 101”.
On the other hand, Consultative Selling is a combination of needs-focused selling skills, marketing, management, business acumen and relationship building. You are expected to:
In most markets, financial selling skills are particularly important for consultative selling. To provide continuous incremental profit or profitability for the customer, it is important to understand the financial metrics which drive the customer's business, and to quantify the benefits of joint proposals in their terms. Click here to download our free corporate backgrounder on using consultative selling to deflect price pressure.
Key Success Factors 4 & 5 Values and Paradigms (Personal and Corporate)
The last two factors are less tangible than the three operational competencies enclosed in the triangle. They have also proven to be more elusive. Leaders such as Steve Jobs, Richard Branson and Anita Roddick have shown us how to galvanise the corporate "psyche" through vision, values and goal alignment, but their stories are the exception, rather than the rule. Our practice reveals numerous examples of sales and service teams striving to deliver or exceed customer expectations, but stymied by lack of cooperation from others. "Don't make promises you can't keep" has become the default mantra, rather than "Go the extra mile" as espoused by Peters and Waterman so many years ago.
From a corporate culture perspective, the link with Marketing Strategy is of particular importance. In most companies, selling is regarded as a subservient marketing function. Others hedge, marrying sales and marketing in a single function. Marketing is the creation of customer perceptions of premium value for a business. Since high-margin prices are the reward for perceived premium value, marketing strategy obviously has the ability to make a serious positive or negative impact on consultative selling to Key Accounts. Total marketing strategy must be made supportive to Key Account penetration.
Consultative selling is non-manipulative selling; slick selling techniques are not appropriate. And consultative selling talks the language of more senior players in the customer's decision making process, discussed in another of our blog posts. Click here to read our post on selling to top-tier decision makers. (Ed. Some of our links, shown in red text, are not up and running yet, but they will be soon!)
A Consultative Approach requires all five of the Key Success Factors shown in the figure at the top of this post. The three aspects enclosed in the triangle are operational core competencies, fundamentally important to any style of Customer Relationship Management. But to leverage the Consultative Selling Model in full, the "soft skills" in the outer circle are critical. The five areas are discussed below:
Key Success Factor 1 Information
Because consultative selling is customer-value-based, it is not enough to know your own side of the relationship; you need three more information banks which will become key resources.
Segment Database: First, you need a database on each key segment you serve. You will need both qualitative and quantitative data. From this information, you will learn average costs, average profits, average inventories etc. which will allow you to compare customer performance against industry or segment norms. Opportunities may be found where significant differences exist, or where segment problems are seen.
Account Database: Next, of course, comes your individual customer data-base. You must know your customer inside out if you are to manage them effectively, and their policies, systems and practices. Summarising critical information has many benefits:
- assists the Key Account Manager prepare tailored account plans & presentations
- briefs other colleagues on whom you may call for support
- a fast learning aid for anybody taking over the account
Do not think of your customer as the whole account, nor even a division. It is specific business function managers whose contribution to sales and profits you can improve. Record all of these details, and structure your data around specific functions.
Customer's Customer Database: Only by understanding the marketplace your client is operating in, only by studying the accounts they sell to, can you understand the complete relationship which is available to you. You are searching for costs which can be reduced, and/or sales opportunities which can be enlarged, so you must learn the major cost areas your customer affects in their customers, and the main sales opportunities they help them to achieve.
Key Success Factor 2 Process
As a process, Consultative Selling is about much more than selling products and services, although of course they remain fundamentally important. It requires at least the following additional steps:
- monitoring the customer's business for future opportunities
- planning the business development of the customer, with the customer
- evaluating the impact of market trends on the customer's business
- selling the benefits of establishing a long-term relationship to both parties
Profit Improvement Proposals are your basic consultative sales tool for Account presentation. They are designed to permit you to penetrate at high customer levels and to sell at high-profit margins. They identify you as being in a consultative partnership that affects the financial state of the Account’s business. You should be aware of the differences across:
- Entry proposals
- Strategic proposals
- Opportunistic proposals
Click here to read our blog post on preparing Profit Improvement Proposals.
Key Success Factor 3 Skills
Clearly, to be successful as a consultative salesperson, you need best-in-class skills in a number of areas. Our experience is that the mission critical skills start with insightful question skills, perhaps using a technique such as the OPEN© model (read about it here). Such skills are foreign to the "professional sales representative" who applies standard techniques to opening, presenting, handling objections and closing calls. These are the techniques of product-oriented, or vendor, selling. We call it “Selling 101”.
On the other hand, Consultative Selling is a combination of needs-focused selling skills, marketing, management, business acumen and relationship building. You are expected to:
- monitor the customer's business for future opportunities
- plan the business development of the customer
- evaluate the impact of market trends on the customer's business
- sell the benefits of establishing a long term relationship to the customer
- ensure that proposals are "sold" to all levels of the customer, not just the buyer
In most markets, financial selling skills are particularly important for consultative selling. To provide continuous incremental profit or profitability for the customer, it is important to understand the financial metrics which drive the customer's business, and to quantify the benefits of joint proposals in their terms. Click here to download our free corporate backgrounder on using consultative selling to deflect price pressure.
Key Success Factors 4 & 5 Values and Paradigms (Personal and Corporate)
The last two factors are less tangible than the three operational competencies enclosed in the triangle. They have also proven to be more elusive. Leaders such as Steve Jobs, Richard Branson and Anita Roddick have shown us how to galvanise the corporate "psyche" through vision, values and goal alignment, but their stories are the exception, rather than the rule. Our practice reveals numerous examples of sales and service teams striving to deliver or exceed customer expectations, but stymied by lack of cooperation from others. "Don't make promises you can't keep" has become the default mantra, rather than "Go the extra mile" as espoused by Peters and Waterman so many years ago.
From a corporate culture perspective, the link with Marketing Strategy is of particular importance. In most companies, selling is regarded as a subservient marketing function. Others hedge, marrying sales and marketing in a single function. Marketing is the creation of customer perceptions of premium value for a business. Since high-margin prices are the reward for perceived premium value, marketing strategy obviously has the ability to make a serious positive or negative impact on consultative selling to Key Accounts. Total marketing strategy must be made supportive to Key Account penetration.
