Migrating Initial Sales

Key account penetration through Consultative Selling is a reciprocal process. Preliminary partnering makes possible initial entry at top-tier levels. Once entry has been accomplished, partnering should proceed apace so that migration opportunities open up beyond the initial sale. The purpose of preliminary partnering is to gain entry. The purpose of entry is to migrate, to penetrate a customer business in ever-expanding breadth and depth from your breakthrough point. The purpose of migration is to grow the customer's business and your business again and again.

In addition to the obvious benefit of providing ongoing high-margin sales opportunities, migration offers several other advantages. It helps amortize the investment in data collection. It helps develop new information sources about a customer business. It spreads awareness of your consultative positioning. And it helps deny opportunistic chances for competition to move in on a problem that you can, and should, solve. It helps prevent departnering.

Some migrations occur naturally—the solution of one problem leads progressively to the discovery of another, or a solution in one division stimulates customer interest about its transfer to a similar problem in another division. Other migrations take place only as a result of effort. You have to search out opportunities in the nooks and crannies of your customer businesses, relying on your customer process smarts to point up the most productive areas to explore.

The objective of penetrating a customer business in depth is to serve all major needs with your major products, services, or systems. This concept can be called maximizing "share of customer" as long as it is understood that it is not simply a volume criterion—it is a standard of the importance of your involvement. If you are significantly involved, you can become the preferred supplier of your customers' improved profits. Penetration in depth is inextricably tied to penetration in important areas of a business. Migration must be a selective policy whose aim is to consolidate your position as a profit improver of the most vital functions you can affect.

The ideal migration timetable makes improving profit in one operation the jumping-off place for improving profit in the next operation. In this way, you can extract maximum learning value from each experience. You can also avoid stretching your resources too thinly across more assignments than you can handle. It pays to remember that migration works both ways. One significant success encourages permission to try another. One significant failure discourages permission to try anything more at all.

Installing an initial system should therefore be regarded as planting the seed for follow-on sales opportunities, not the end of the sale. Once a sale has been made, the consultant has acquired a major asset: a more profitable customer. You can benefit the customer even further by additional profit improvement through one or more of three types of migration. You can offer to supplement the initial system with added value. Perhaps some value may have been sacrificed for financial reasons at the time the original system was approved. Or perhaps a greater need has become apparent only after installation. As a second type of follow-up, you can offer to upgrade the original system, up to and including the ultimate upgrading, which is total replacement of the system. Third, you can offer to integrate an entirely new complementary system with the initial system.

These profit-improvement opportunities are not mutually exclusive. You can use all three approaches in sequence with the same customer. First, you can supplement the entry system. Then, at a later date, you can upgrade some of the original system. Finally, a complementary new system can be integrated with the original one. Then you can recycle the sales approach by offering to supplement the new system, then upgrade it, and eventually integrate a third system with the first two.

This recycling strategy is illustrated by the following scenario. It begins after an initial system is in place and producing prescribed profit-improvement benefits.

Cycle 1

  1. Supplement initial system.

  2. Upgrade initial system.

  3. Integrate a complementary new system with the initial system.

Cycle 2

  1. Supplement new system.

  2. Upgrade new system.

  3. Integrate a second complementary system with one of the existing systems.

Cycle 3: Repeat Cycle 2 and turn it faster.

The incremental value of a consultant's relationship with a key account customer is simple to calculate. At any given time, it is the sum total of earnings from all of a consultant's Profit Improvement Proposals. A few proposals will probably be spectacularly successful. But for the most part, steady, modest success is all that is required.

Each proposal should be successful in its own right. Beyond that, it should also lead naturally into the next successful project. As your profit-improvement contributions accumulate in a value-adding chain, you are building equity. This equity consists of the value of the portfolio of PIPs you have installed in each account. The reward for good work is more work. By inviting you to remain in the game and try to improve profit one more time after each success, your customer is acknowledging a consultative partnership. As with all partnerships, "congratulations" is always followed by "you're vulnerable."

You, the consultant, are only as good as your last proposal. This should cause you to be financially conservative. Paradoxically, however, you will also have to be strategically daring in conceiving profit-improvement opportunities and planning to capture them. The net result of combining these two characteristics becomes the essence of your personal consultative style.

In planning to construct a profit-improvement portfolio, you should start small. At the outset, you must be content to make a single profit improvement in one business function or one product line in one account. Since the first proposal will probably be evaluated more critically than any of its successors, you must follow one injunction above all others: The first time out, be successful.

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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