What is Consultative Selling?
First, let’s define consultative selling. Throughout the course of this study, we heard it referred to by many different names: consultative selling; value-added selling; professional selling; needs satisfaction selling; customer-oriented selling; strategic selling; relationship selling; solution selling; partnering. It is worth noting that each phrase meant something slightly different to the person who used it but, in general, each definition had several of the following key elements in common.
Within a consultative sales cycle, all sales conversations revolve around a customer need. This is a marked departure from the “product push” approach that still dominates many sales calls today. More specifically, the core of a sales call will be a mutual exchange of information where the salesperson uncovers and develops an understanding of customer needs (or helps the customer become aware of a need). Thus selling becomes a two-way street. To be sure, as one organization notes, “customers may want to buy, but they sure don’t want to be sold.” Along the same vein, the language the salesperson uses to provide information to the customer should be benefit-oriented—not feature-oriented—and linked to these needs. It’s the difference between a digital camera “with 3 megapixels and 3´2 optical zoom” and one that “will allow you to take high-resolution pictures of your upcoming cruise vacation.” Both are accurate statements but the latter helps the buyer see how the product will help meet needs. Rocket science? No. But even as the product and service commoditization found in every industry necessitates this transition, you’ll find that most sales organizations still spend the majority of its training time and marketing investment on communicating product features instead of benefits.
Frequently characterized by aggressive and high-pressure tactics, car sales is perceived as one of the most nonconsultative sales professions left—regardless of what part of the world you live in. Yet even in that highly transactional environment, the need for a more consultative selling approach is gaining significant ground.
Take Honda Clio Shin, one of the largest Honda dealership networks in Japan. As information on products and features becomes so widely available on the Internet, along with purchasing advice and competitive comparisons, Clio found that the average customer was no longer coming to the lot to “collect information” and that their expectations of salespeople had changed.
Faced with this more demanding buyer and an environment of increasing competition, Clio launched the “Committee for Success” project. A critical piece of this initiative is the “with” strategy. The “with” strategy represents a renewed focus on “keeping promises with customers, growing with customers, and working with the local community.” Furthermore, Clio renewed its focus on the customer relationships and activity (such as vehicle servicing) that occur post-sale. Among the changes, customers have access to a Web site that assists them with their ongoing vehicle ownership (e.g., directions, troubleshooting, advice, and product knowledge). Furthermore, service transactions are treated as an integral part of the customer relationship as well as an opportunity for sales rather than as a disconnected activity.
Along with this philosophy, of course, comes the need for advanced skills. This new brand of selling was summed up by one respondent, “We can no longer sell without sales skills. Rather we have to listen to the customers’ voices carefully to seek out necessary information and identify the car that satisfies those needs—building a reliable relationship with the customer.”
Multioffering, Creative Solutions
Another key component to this sales approach is the ability of the salesperson to act as a consultant and select products and services from a broad portfolio to create a solution for a client. As a seasoned rep clarified, “I sell projects, not products.” This solutions approach presents many challenges as mergers and acquisitions have doubled, even tripled, product sets. As a result, there are cases where it is not realistic for a salesperson to be a product expert in every offering. What typically results is a sales force that is well-versed in some product features, but is not adept at using the information to assemble integrated solutions to meet a client need. Instead, the tendency is to “feature dump,” or to rely on recommending only products that they are comfortable with.
The answer, however, does not lie in ramping up product knowledge training. Respondents in our survey indicated a more current view of product knowledge, advocating that the ability to tap in to the product expertise resident in the selling organization (in people or in online systems) has become more important than individual product knowledge itself. Furthermore, according to Wilson (2002), salespeople who are more confident with the skill of selling are more likely to appropriately use product knowledge. This is not to say that product knowledge is not necessary. In fact, Schaaf (2004) found that product knowledge is one of the biggest reasons why purchasers value one salesperson over another. It does imply, however, that product training is better delivered in the context of selling skills, focused on how key features yield valued results and indicative of how the product can be commercially or technically integrated with others in the product suite. This idea was well summed up by a sales training manager, “You can be average with product
knowledge—but you will never be great without selling skills.”
Traditionally, Ingersoll Rand’s Air Solutions division in Taiwan had a customer base comprised of state-owned entities. Today, however, this is changing to a more diversified customer base, including foreign-owned joint ventures. As a result of this change and in support of a new global value proposition called Solutionizing, the sales organization found itself with a need to sell and service in a new way.
Solutionizing promises that IR’s Air Solutions will focus on a “customer’s energy costs, and increase the reliability, quality, and uptime of compressed air systems.” Implicit in this approach is that salespeople will be capable of creating end-to-end systems that solve business problems, such as energy costs, rather than selling the features of an air compressor. As such, salespeople are focused on mastering consultative selling, particularly in regard to playing the role as an advisor or consultant to clients, communicating in benefit language, and becoming more heavily involved in post-sales service activities. As one sales manager noted, “Being an expert in air systems is a lot more than just being able to compare equipment.”
Unwavering Focus on Value
Another aspect commonly associated with consultative selling was a focus on value. Over time, this has become less of a vague concept around “speaking in benefit language” and much more of a need for being able to articulate quantitative business benefit. Although some of this is clearly due to the impact of a slow economy in recent years, this is no temporary requirement. Increased customer sophistication across the board makes it a mandatory part of the sales cycle. Noted one sales manager, “It’s about how to sell value rather than exchanging quotes.” Additionally, being able to talk about a solution in terms of ROI (return on investment) or TCO (total cost of ownership) assists in the ability to sell on factors other than just price and in the ability to combat the product and service commoditization that dominates the marketplace.
Yellow Book USA, the largest independent yellow pages company, owns and operates more than 600 yellow pages directories in the United States and the United Kingdom. Part of its approach to market is to pursue small business customers. Such businesses include trades, small retail boutiques, restaurants, and medical, financial, and legal practices. Typically, such businesses operate with tight marketing budgets and must carefully scrutinize the return on every expense.
As a result, salespeople must be conversant with regard to the costs and benefits of different media options and be able to express, in financial terms, how a yellow pages advertisement yields results as compared to radio spots or other options. Furthermore, because small business owners (the decision makers) often function as head of sales, marketing, customer service, and more, salespeople must understand and articulate value in terms of the overall business strategy. This means having knowledge of how a variety of different businesses make money along with an understanding of advertising and its role in marketing strategy.
To assist with this daunting task, every sales professional is provided with the training and tools to run ROI calculations and articulate business value in every sales conversation.
The challenge for the salesperson is helping customers understand where value comes from. It may be derived from the benefits of the product or service being sold; it also may come from the ancillary support services or customization that accompany it or the reputation of the supplier organization. Importantly, it may also arise from the information, expertise, and professionalism provided by the salesperson. Being able to articulate value in this manner allows for deeper relationships with customers and, in the business-to-business (B2B) world, at higher levels in the organization.
Aim for Trusted Advisor Status
The last element that was common to each definition was the idea that every salesperson should, in ideal circumstances, aim to become a trusted business advisor to their client base. To be a trusted business advisor with a client means that you have superceded the role of vendor or supplier and are now viewed as an advisor by your clients. To earn such a position with a client, salespeople need to have superior sales skills as well as industry expertise and client insight. Clearly, it might not be practical to invest in this kind of relationship with all clients, nor would all clients desire this kind of relationship with all of their salespeople. Salespeople need to be capable of determining where these relationships are appropriate and they must have the ability to build and maintain them. By providing information and advice as a Trusted Advisor, salespeople are able to add value to the relationship, creating a differentiator versus the competition.
To sum it up, we’ll use the following as a working definition for consultative selling:
Consultative selling is the process of partnering with prospects and customers to create lasting, mutually beneficial relationships. Salespeople who successfully construct and build upon these relationships do so by continuously understanding the current and future business issues and needs of the customer and his or her organization, and by providing solutions that provide value helping customers reach their goals. The outcome of this consultative process is for the salesperson to deepen and strengthen the relationship over time, ultimately becoming a trusted business advisor in the customer’s eyes.
Infineum is one of world’s leading formulators, manufacturers, and marketers of petroleum additives for the fuels and lubricants industry. In addition to the many challenges noted in Chapter 4, Infineum finds itself in the unique situation of operating in an extremely consolidated industry—there are both a limited number of suppliers and of customers. While this environment certainly poses unique challenges, it also provides the opportunity to form deep relationships with every customer.
One of the ways in which Infineum is able to add value and create and maintain these types of relationships is by providing leading-edge industry insight to its customers. This is accomplished through the selection of a very knowledge able sales force (many of whom are chemists and chemical engineers) and by leveraging an arm of the marketing department, called market managers.
Market managers work as an integral part of the sales team and are responsible for, among many other things, collecting information from markets, countries, manufacturers, industry experts, liaisons, and the like, and compiling it into comprehensive trend analyses. This very valuable output is shared with customers and used to increase the industry expertise of the sales force and distributor network through seminars and briefing notes distributed regularly. This ability to leverage both sales and marketing in business development efforts enables Infineum to improve business results and form tighter relationships with its customers.
You’ll notice we used the term “working definition.” This is because nothing in sales is ever static. Markets change. Customers change. Consultative selling has changed—from referring to any nonaggressive sales approach to the much higher standard outlined above. In the future, the bar will continue to rise.