Consultative Selling Cleanup

Consultative Selling Cleanup

Consultative selling was the first blockbuster sales methodology. The core ideas of consultative selling come from Mack Hanan's Consultative Selling, first published in 1970. I own the "Advanced Sixth Edition." This is a good, thorough book with valuable ideas and is the best source for understanding consultative selling.

Sadly, the core ideas have been cluttered over time. When you read consultative-selling commentators talking about approaching "the customer with the mindset of increase" and deploying "OARS," which is "open ended questions; affirmation, reflections (reflective listening), and summaries," it's time to get back to fundamental principles.

Cleaning up the dirt

Value is the fundamental principle of consultative selling.

Mack Hanan's Consultative Selling book defines value, correctly, as value from the product outweighed by value contributed to the customer's profits. The consultative seller "knows value, sells it, positions value as the product, and prices on value." Every aspect of consultative selling is built from the principle of value.

The consulting part of consultative selling is about discovering, quantifying, and co-creating value. The key steps in a consultative sale are:

  1. Problem. Understand the customer's underlying needs, especially, what the problem costs the customer and their profit if the problem were solved (with your product or service naturally).

  2. Position yourself and your offering as a value adder. To quote Mack Hanan: "Consultative selling is profit improvement selling, It is selling to high-level customer decision makers who are concerned with profit -- indeed, who are responsible for it, measured by it, evaluated by it, and accountable for it."

  3. Propose financial value. In Hanan's words, "Consultative selling is NPV selling." And this is not vague benefit claims, it takes place at the level of the customer's microeconomics.

  4. Partner to realize value. You partner with your customer to create a business case they can use to request funding for a profit improvement proposal.

To make acronym addicts feel better, you can call these the four"P"s of consultative selling.

Even cleaned up, consultative selling is not easy. It requires combining the analytical skills of a performance improvement consultant with the persistence and people skills of a good salesperson. This is a rare combination.

Selling with the "holy trinity" of a salesperson, a business consultant, and technical specialist works well. But this is an expensive way to sell and only justified for true enterprise sales ($250,000 per annum and above). Mack Hanan expected only 20% of customers to warrant consultative selling. Also, the "consulting" in consultative selling, will almost always lead to the product or service you are offering. Although, this is no different than any other management consultant. 

To sum up, consultative selling has been stretched too far as a mass-selling approach. Cleaned up, the fundamentals of consultative selling -- focus on value, quantify value, profit improvement over features and functions -- are critical to genuinely helping your customer. 

Don't Crack the Bank

Don't Crack the Bank

Serious Solution Selling

Serious Solution Selling