Selling Return on Investment

From a customer's point of view, a consultative sales representative is an integral part of every sale. Unlike product vendors, who are identified as a part of their own company and therefore do not go along with the sale of their product or service, consultative sellers are embedded in their systems and are "packaged" along with them. Although a piece of equipment may endure longer than the equipment vendor does, the consultative seller generally goes on making an important contribution to customer profit long after the original system has been installed. The seller's durability with a customer aptly defines the vital role a seller plays over and above the other elements of a consultative system.

A consultative sale is not the sale of products or equipment. Nor is it the gift of so-called "value-added services," which are actually cost-added services, since their dollar value added to customer operations is almost always unknown and their cost is almost always unrecoverable by attempts to price them. A consultative sale is the sale of a positive return on the customer's investment: the economic impact of what is sold and not the components of the sale itself.

The most difficult challenge to consultative sellers is to stop selling products and start selling the added financial values that they can contribute to a customer's business. This requires more than merely substituting one vocabulary for another; it means substituting one mindset for another. Before this can be done, however, you must first undergo a desensitization to traditional product affiliations.

Most sales representatives metamorphose into consultants through a two-stage process. The first stage is to forsake performance benefit orientation for financial benefit orientation. This is akin to the classic features-versus-benefits conversion that all vendors undergo. It is the next order of magnitude. But in Consultative Selling, performance benefits are insufficient reasons for a customer to buy. Performance benefits describe what a product is; they are its operating specifications. Consultative Selling requires a seller to describe what a product does; these are its financial specifications. It is the end accomplishment of a product's performance benefits that must be sold.

The second stage in translating performance benefits to financial benefits is the calculation of their dollar values. These values, referred to as incremental profits, are the consultative seller's stock in trade.

Product desensitization starts with awareness that systems selling is a translated dialogue. All systems components, including the systems seller, must be translated into a customer value. Hanging out a laundry list of systems components is meaningless unless their individual contribution to the customer's incremental profit is quantified. Mentioning product, elaborating on the technological superiority of equipment, extolling its construction characteristics or other qualities—all are meaningless unless their incremental contribution to the system's capability for profit improvement is quantified.

Translating product performance benefits into incremental profit benefits is the way consultants must think. "What is the contribution to customer profit?" is their key question. They sensitize themselves to bottom-line thinking because they have learned that intermediate-line thinking fails to accomplish two key objectives: to position their customers as clients, since a client is a bottom-line beneficiary; and to position themselves as consultants, since a consultant is a supplier of bottom-line benefits.

Nothing will deposition a seller from a consultative stance faster or more certainly than lapsing back to a preoccupation with the product. It is the consultative seller's deadliest sin and an ever-present pitfall. At a customer's top tier, it can be fatal. The word product rather than profit lies poised from long habit on the tips of most vendors' tongues, ready to undo them. The best way to avoid slips of the tongue is to learn to use the new frame of reference in parallel with the old one and translate as you go. Whenever a product is mentioned, define it immediately in terms of its contribution to customer profit. This is what customers do; they listen for the numbers. Consultative sellers must become sensitive to this need and deliver the benefit that customers seek: quantification of the dollar values they will receive, not enumeration of the products or their performance specifications.

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 © 2008-2017.
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