Consultative Selling

[Consultative selling is] Selling the way your customers want to buy… Not the way you like to sell!

-Richard Grehalva (Author of the book Unleashing the Power of Consultative Selling)

The term consultative selling is often used by sales managers and professionals to describe a more soft sell approach. In reality, consultative selling is much more complex than that, but it can be a lot more rewarding as well. Using a consultative approach in your sales process can bring improved profits, increased customer satisfaction and reduced sales cycle timing, which means you get more return for less time and energy investment.

Here are 9 ways that consultative sales differs from the standard sales vendor approach.

  1. The seller supplies profit as the product.

    Conventional wisdom has the seller selling a product to the customer that suits their need or problem. With consultative selling, you cut right to the bottom line and sell what the business really cares about: making a profit. Whether it is through increased revenue or decreased costs, as a consultative salesperson your job is to understand the real needs of the business, then selling your product in a way that fits these needs and motives. A customer is more likely to be interested in a 10% profit increase than the features and benefits of a specific product.

  2. The seller offers the customer a return on investment.

    Don’t just charge a price for your product or service. When you offer the customer a return on investment, and you have the figures to back it up, then it becomes much easier to secure their business. If your product costs $10,000 and it will save the customer $20,000 over the next 2 years, then they will be getting an ROI (return on investment) of $5,000 a year. When you pitch in these terms, it becomes hard to refuse. This is what we mean when we talk about mutually beneficial sales.

  3. The seller uses a Profit Improval Proposal.

    Instead of submitting a bid to your customer, you can use a PIP (Profit Improval Proposal) to provide a complete summary of not only what you are offering, but to highlight quickly to the customer the profit increase they will receive as a direct result of your product or service. This entire consultative selling model is around the customer and their true needs, so your proposal needs to reflect that and make it a logical business choice for them to do business with you.

  4. The seller quantifies the benefits from the customers investments.

    In leymans terms, instead of justifying the cost of your product, you highlight each and every benefit that the customer will receive from their initial investment. This works because you are on the front foot, making real changes that positively impact their bottom line. Whereas, when trying to justify cost, you are on the back foot trying to explain why they should fork out the money to secure the deal.

  5. The seller attaches the investment to the customers return.

    When talking about product pricing, it isn’t enough anymore to just say 10,000 blue widgets will cost 50c per widget. With consultative selling, you attach the investment (i.e. the price) to the return the customer will receive. What you get instead is, “For your investment of $5,000, the 10,000 blue widgets will lower your overheads by 10% and increase your product line efficiency by 8%, saving you a total of $14,900 per year.” Obviously these numbers are fabricated, but when you use this type of selling with a client, why wouldn’t they want to save $15k a year by investing $5k?

  6. The seller helps their customer compete against their customers competitors.

    Sales people are competitive by nature. We often try to outdo competitors with lower prices, better service, faster supply and so on. This puts you at a disadvantage because you always have to make concessions to compete. 10% discounts and preferential treatment – you take a lot from clients who know you are scared to lose their business. Instead, focus on how you can help your customer against their competitors. This makes you unique, gives them tangible results that most other companies do not offer and makes it easier to secure a deal.

  7. The seller lets their customer close.

    When you offer prospects increased revenue, lowered costs, fast production time or anything that improves their profit – they are often very quick to try and secure a deal without any real closing on your part. So by consultative selling you can reduce sales negotiations and close more business without objection. Make people more money and you’ll never have to spend days, weeks or months, trying to close a deal again.

  8. The seller features their customers improved performance.

    The customer doesn’t really care what your improved product can do. They care about the improved performance their organization will achieve as a direct result of using your product. Focus on their performance increases and reduce time spent talking about how great your product is. Most business decisions are determined based on bottom line improvements maximizing value.

  9. The seller sells to a business manager.

    One of the most common sales mistakes is to try and sell to a purchasing manager. The problem is that both your objectives are complete opposites. He wants to lower prices and get the cheapest option, making him look good. You want as much investment as possible. Selling to a business manager, on the other hand, is more in line with consultative selling. Business managers want to add value to their assets and will be more aligned to your product if it can increase profit and make the business better.

How to convert to consultative selling

If you or your sales team are looking to switch to a more consultative style of selling, then you can do so using these 3 tips to make a conversion in your mindset:

  1. Convert price to investment. Price is a cost and has a negative value in the mind of the buyer. Customers want to pay as little as possible to obtain negative values in their business. On the other hand, investment signifies a return on that investment and customers will gladly pay out to receive a larger return in exchange.
  2. Convert a product/service into the dollar value applied to customer operation. By selling using the VABA (value added by application) approach, you can assign dollars values to benefits such as reduced lead times or down time so that the customer knows exactly what value they will get from securing a deal.
  3. Convert your focus from standalone sales to a portfolio of recurring sales. A customers profit improval proposal should not be a one time event. Instead, you should aim for multiple streams of new cash flow that can be predicted. Once you can prove that your products and services improve profit reliably, over and over again, then you become indispensable to the customer.

How to use consultative selling to make yourself the number one asset

Customers determine their return on investment by dividing the profits you made them by the amount of investment they made. This will show whether doing business with you will result in a net gain for them, therefore making you worth securing the deal. To be successful, you need to tell them how you are going to make them money.

Whether it is increasing volume, lowering costs or both, you will be able to sell them on your return rather than your cost.

The aim as a consultative seller is to free yourself from being perceived as an added cost. When you are regarded as a value adder – an asset whose investment pays back a profit – you free the price from the asset and assign it to the measurable return the customer will achieve.

The key word when selling in this way is value. Know your value, know your product value, sell the value, position your value as the product, and price the value as an investment. Consultative sellers take pride in their value and are confident of their ability to deliver it. Your value is not in providing a service. Your service is providing value.

If you can master the art of consultative selling you will soon discover that closing deals becomes predictable at a hit rate of almost 1:1. The reason for this is simple: customers want to buy-in on the first proposal because they want to realize the NPV (net profit value) of your product or service without incurring any delay costs. Remember though sales isn’t an exact science like say accountancy where going on the right cima courses is a must to practice, its a relationship game and being naturally helpful is what counts.

Becoming a consultative seller can save you time, make closing easier, allow you to take control with minimal negotiation required and provide real value that your customers actually want. When you look at it in those times, why wouldn’t you want to sell this way?

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