Chapter 2: Consultative Positioning Strategies - How to Penetrate High Levels


Overview

Top-tier customer management rarely deals with vendors, and then only under duress. They speak different languages. Vendors speak price and performance; management speaks value and profit. Vendors speak of their competitors; management is concerned about its own competition. Vendors wonder when management will ever buy; management wonders when vendors will ever leave.

Vendors who stand before their customer's top tier will not do so for long, or soon again. For consultative sellers to make a stand, and make it again and again, they must be prepared to speak the language of management, address customer concerns instead of their own, and put to work their knowledge of the customer's business so that a demonstrable improvement—not just a shipment of goods—takes place.

Key account sales representatives who want to penetrate the top customer tier must position themselves to discuss, document, and deliver their answers to the question, "How much profit will you add?"

In order to be accepted as profit improvers, sales representatives must pledge allegiance to the Consultant's Credo, reproduced in Figure 2-1. Only by understanding the consultant mindset—which is the mirror image of the customer manager mindset—will you be able to partner at the Box Two level shown in Figure 2-2. The customer business line managers and business function managers are concentrated at this level, reporting directly to Box One, where the funds are.

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Consultants sell money, not products. They transact returns from investments, not sales. Their price is an investment, not a cost. Their performance is measured by the amount and rate of the customer's return, not by product performance benefits. They work inside their customer businesses as partners, not from the outside as vendors. They relate directly to customer line-of-business managers and business function managers, not purchasing agents. They work at these middle management levels on a long-term, continuing basis, not from bid to bid. Their focus is not on competitive suppliers but on competitive profit making for their customer partners and for themselves.

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Figure 2-1: Consultant's Credo.

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Figure 2-2: Customer-manager hierarchy.

Box One is the home of the "C Level" managers, the chief officers of operations, finance, information, and other core corporate functions, including the chief executive officer (CEO).

By partnering at Box Two, you can capture customer managers to act as your "economic sellers"—there is no such thing as "economic buyers," since Box Two managers do not buy—who will help you do your job so that you can help them do their jobs more successfully.

If you are a Box Two manager, what constitutes success? It means always improving your contribution to profits. For a business line manager, it means expanding revenues or increasing margins. For a business function manager, it means reducing costs. And where does the money come from to do these things? It comes from Box One. What is your role in this process? You must help your customer partners get more funds, and get them more quickly and more surely so that they can increase more revenues or margins and decrease more costs.

As Figure 2-2 shows, Box One is the keeper of the keys to the corporate treasury. Box One is Box Two's funder, open to suggestion twenty-four hours a day, seven days a week, from their Box Two managers on how corporate funds can be invested more cost-effectively—in other words, how to get "the biggest bang for the buck." Box Two managers are always in a proposal mode with their Box One funders, claiming a stake in the funding process for their own businesses or functions. Box One favors them on the basis of the strategic fit of their proposals with corporate growth policy and their adherence to financial objectives for each dollar invested with them. What rate of return will be achieved? When will the investment be paid back? How abundantly will the cash flow? What is the degree of risk?

With every release of funds to a Box Two manager, a control procedure goes along with it to make sure that the invested funds are, first of all, paid back on time, and then maximized for the greatest return. The Box Two managers who get the most funds the most often are the best internal sellers. If you can help them get even more, or more often, they will "go partners" with you to do it again and again.




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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