RELATIONSHIP DEVELOPMENT

The sales processes involved in developing relationships with new and existing clients are known as hunting and farming respectively. Traditionally, hunters go out to find their quarry - departing from their home territory to wherever their quarry might be found. In like manner, the hunter-salesperson goes out beyond the existing client base to find new clients. By contrast, farmers stay on their homeland and use that to produce the food required; the farmer-salesperson produces new sales from an existing client base. Both hunting and farming are necessary, but - like their rural analogies - salespeople often have a preference and aptitude for one rather than the other.

The hunting process starts with suspects - those organizations that might need your consultancy services. If yours is a large consultancy, then all organizations might be suspects for the full range of your services. (Size of client organization is not necessarily a limit; I have worked for one of the largest corporations in the world in the same year that I also worked for an organization of only six people.) Such a large number of suspects is not helpful, and so it is best to look at them according to consultancy product.

The suspects might also be limited by market segmentation (for example, geography or industrial sector). From this long list of suspects you would select a shorter list of companies to approach - that is, prospects. These might be selected against criteria such as: 1) a need for your service - this might be general (for example, organizations are usually interested in worthwhile ideas for increasing performance) or event driven (for example, a company that has just made a new acquisition, or expanded into a new market); 2) ease of access - for example, you might choose to avoid companies that you know have a good relationship with one of your competitors who can supply the same consultancy services that you are trying to sell.

The next stage is to warm up the prospect so that they will agree to a meeting. This is a limited objective - that is, the approach is not to get the prospect to buy, but to secure the meeting - or to disqualify the organization as a prospect (see 'Qualification' in Chapter 5). The purpose of the meeting is to start building a relationship, and initiate the prospection process.

Figure 4.2 shows a model of hunting as a sort of target: the closer to the bull's-eye, the better the chances of success.

Figure 4.2: Developing relationships with new clients

At the centre is shown farming; the link between hunting and farming is described below. Moving out from the bull's-eye are shown leads and introductions. Both are kinds of referral via a connector. An introduction is to a client who might need your consultancy services. A lead is more than an introduction, in that the connector has seen an immediate requirement for the type of consultancy that you might offer.

Cold calling is the least fruitful of hunting activities as, in the words of one salesperson, 'You have to kiss a lot of frogs before you find a prince.' Cold calling with a telephone call out of the blue is least likely to work; 'warming up' clients beforehand is important so that they will be more receptive to that telephone call when it does come.

Farming is about developing relationships with existing clients. Figure 4.3 illustrates how this can be done.

Figure 4.3: Developing relationships with existing clients

A small organization may have only one purchaser of consultancy, but large ones have many. You may therefore seek new points of entry to existing clients. Similarly, you may try to sell services other than those being purchased already.

You need first to ensure that existing clients continue to use your practice to supply services as in the past. For example, a consultant in logistics would want to secure all consultancy work in this area from an existing client. If the client gave an assignment to a competitor, this would place the consultant's business under threat. So, you have to nurture existing clients so that your firm is the one that comes to mind when new opportunities arise for services that they have used in the past. This is about prospection.

Selling new services to an existing point of entry is called cross selling; establishing new points of entry with an existing client is penetration. If the salesperson is seeking to sell new services to a new point of entry, this is an activity similar to hunting, when you can get warm leads and introductions from one part of the organization to another.

Extrinsic and Intrinsic Selling

Imagine that you are moving house and you have a solicitor who is carrying out the conveyancing for you. At your final meeting with her, you remark that you will need to install a new central heating system in your house. Your solicitor then says, 'Oh, I can do that for you - I practise plumbing as well as law.' Now, it may be that your solicitor is the best and cheapest plumber to do this job, but you would need some convincing to accept her in this role. If she was to persuade you to consider her services, she would have to engage in extrinsic selling.

Extrinsic selling legitimizes the seller as a provider of a product or service. In the example above, the solicitor has to convince you that she is indeed a bona fide plumber before you would even start to discuss the work that you need doing. So extrinsic selling is persuading the prospective client that your consultancy practice is worth doing business with in the first place. By contrast, intrinsic selling is persuading the client of the merit of a particular proposition. Intrinsic selling will not be successful unless the extrinsic sales process has been completed, and completing the extrinsic sales process does not imply success in completing the intrinsic one. Continuing the example above, even if your solicitor does convince you that she can install your new heating system, you might seek quotations from other plumbers to make sure that her quotation is competitive and, if it isn't, you would choose another. Likewise, you will not work - say - with an insurance broker unless you are convinced that he or she will probably give you the service you want (the extrinsic process). On the other hand, you will not necessarily accept every suggestion he or she makes concerning the insurance policies you might invest in (the intrinsic process).

So, every sale consists of these two stages of extrinsic followed by intrinsic selling. Given the importance of managing time effectively in selling, then the less time that has to be spent on extrinsic selling, the more that can be spent on the intrinsic stage - making specific sales.

Marketing and promotion help the extrinsic sales process by developing a brand. The value of a brand is that it helps with extrinsic selling. If your consultancy practice is well known for its skill in introducing production control systems, say, then less effort is required to legitimize your consultancy offering in this area to a specific client. On the other hand, the same consultancy would have greater difficulty in selling assignments in - say - marketing, unless it was equally well known in its target market for this.

Note that in hunting, there has to be considerable extrinsic selling activity before you can engage in intrinsic selling. This is in marked contrast to the farming selling process because less effort is required in selling extrinsically to existing clients - they have already accepted your bona fides as a consultant. It is for this reason that consultants sell mainly to their existing client base. From the client's point of view too, there are advantages in dealing with the same consultant. It takes time to educate a consultant into the ways of a client's business. Dealing with a consultant used in the past avoids this time and cost.

It is worth noting that some extrinsic selling is required when seeking to sell new products or services to existing clients. This is vividly exemplified by IT hardware suppliers in the early 1990s. Faced with increasing competition and diminishing margins in their traditional markets, they enlarged their services to include consultancy. This presented a challenge to their sales forces. Say the names of any hardware supplier to a client and they would think of it as a hardware supplier; there was no need to legitimize it as such. When it came to their services as consultants, however, salespeople had for the first time to engage much more in extrinsic selling to persuade their clients to accept them as bona fide consultants.