Applying the Consultative Selling Process


Figure I-2 shows the four-part Consultative Selling process: [1]

  1. It starts with a value database on the values you normally add to customer operations. Your normal values-added—your "norms"—are derived from the value database.

  2. By comparing customer revenues and costs against your norms, a lead database is automatically created. A lead opportunity exists wherever your norms offer a competitive advantage over a customer's current performance.

  3. Proposable leads flow into closable proposals. The outcomes from each closed proposal are fed back into the value database to fertilize your norms.

  4. The process culminates with a partnered penetration plan that locks in your consultative partnership and locks out competition.

click to expand
Figure I-2: Consultative Selling work flow.

For many suppliers, such as manufacturers of components and subsystems to original equipment manufacturers (OEMs), Consultative Selling is their saving grace. Without it, they become vendors by default, as they stand by helplessly and watch their products disappear—and their margins along with them—inside their OEM customers' equipment.

"We are such a small part of the end product," they lament. "The user never sees us. Unless something goes wrong, he never knows we're there." Or "There must be hundreds of suppliers they could buy from instead of us. If we try to raise our price, we're gone."

Honeywell Control Systems once said these same things. Then, applying Consultative Selling strategies, Honeywell has begun to quantify the added values they can bring. They have come up with a checklist of dollar-valuable benefits for their OEM customers, each one of which can form the basis for high-margin sales:

Customer Revenue Improvers

  1. Faster new product start-up time

  2. Improved product yield

  3. Improved quality

  4. Assured production scheduling

Customer Cost Savers

  1. Reduced installation time

  2. Reduced maintenance time

  3. Reduced labor

  4. Reduced process downtime

Honeywell has also prepared a checklist of added values that can be offered by OEMs to their own customers as a result of the contributions made by Honeywell's controls:

Customer's Customer Revenue Improvers

  1. Product uniformity

  2. Same-day order fulfillment

  3. Longer term warranty

  4. Reduced downtime

Customer's Customer Cost Savers

  1. Reduced energy costs

  2. Reduced manufacturing cycle costs

  3. Reduced environmental penalties

  4. Reduced costs of scrap and rework

Honeywell's controls still remain unseen unless there is trouble. But Honeywell's contributions to customer profits are now made immediately visible, before installation, on a PIPWARE cost-benefit analysis. By equipping its customers' sales forces with their own cost-benefit analyses and training them to sell consultatively, suppliers like Honeywell can help create cash flows that they would never otherwise be able to effect and can partner with their OEMs in sharing the benefits. "We can point to at least $65 million in increased business," says marketing VP Ralph Genesi, "and that's probably low."

The same strategy can be employed with dealers, distributors, and third-party value-added resellers (VARs). In this way, suppliers who are low on a value chain can extend their reach to end users to whom the value added is highest and whose gains are greatest.

[1]Fast-Value Calculator, Fast-Lead Targeter, Fast-Close Proposer, and Fast-Penetration Planner are modules of the Consultative Selling e•pert xystem.




Consultative Selling(c) The Hanan Formula for High-Margin Sales at High Levels
Consultative Selling: The Hanan Formula for High-Margin Sales at High Levels
ISBN: 081447215X
EAN: 2147483647
Year: 2003
Pages: 105
Authors: Mack Hanan

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