Adopting Consultative Selling

Competitive Positioning

How a prospect competitively positions your company is a critical factor when engaging in the buying/selling process. Fundamentally, positioning is about aligning your business with theirs, so that a clear synergy can be visualized by the prospect.

When there is a perfect fit between organizations, selling becomes much easier because the in the early stages of the sales cycle the prospect mentally puts your organization ahead of the competition, in principle. Therefore, it is essential that the prospect is comfortable with the salesperson, and correctly positions your company.

Many organizations discover value by using a Competitive Analysis Tool to: evaluate industry competitors; understand competitive advantages and differentiation points; develop a competitive map and a competition matrix.

To effectively position your company, determine the following:

• What are your genuine competitive advantages?
• How can we differentiate our products?

Competitive positioning is all about gaining a competitive edge in your market. It goes beyond understanding your prospects’ needs and must incorporate knowledge of your competition to ensure your product is favorably differentiated among many competing options.

Product Knowledge

While it’s true that deep knowledge of all products/services comes with time and effort, there are methods for quickly understanding the key features, advantages, and benefits of your solution.

• Feature: these are components of your product/service that have been developed to deliver value to the customer. An example would be “practical tools” like this one.
• Advantage: these are implicit benefits resulting from the features, but are not necessarily beneficial to all prospects. An example would be .saving time. by using a .practical tool. template. Note that this advantage is only a benefit when a prospect needs the particular tool shown.
• Benefit: a benefit is an advantage of a product/service that fulfills the explicit need of a prospect. For example, a restaurant offering a featured lunch that arrives in 10 minutes or less would be advantageous to some, but a real benefit for those who need to be back to work in 30 minutes.

Use our Feature, Advantage, Benefit Tool to quickly map out the most salient points for your product/service offering.

Key Account Planning

Every organization has key accounts that are responsible for large amounts of revenue or have a large growth potential.

Account planning allows you to work backwards from annual sales targets to determine which actions need to be taken to achieve your goals & objectives. Additionally, account plans provide measures that can be monitored and managed.

Following are the components of an effective Key Account Plan:

• Corporate Overview - a brief description of this account
• Hierarchy - where does power lie in the organization?
• Opportunity Size - how much revenue can you attain?
• Current State - what does this account buy now?
• Goal State of Account - what is your vision for growth?
• Account Objectives - specific, measurable objectives.
• Account Action Plan - step-by-step action plan.

Use a Key Account Planning Tool to determine where your revenues will come from.

Business Communications

There are many types of business communications such as introductions, appointment confirmations, meeting follow-ups to document agreed next steps, and order confirmations. Salespeople often rush to send their communications without spending a few minutes to ensure that their communication will have the maximum impact possible.

A well-constructed business communication, such as an email or introduction letter, can be effectively described as a sleeping salesperson. Each communication should be strategically used to confirm what has been agreed and close the prospect on the next part of the sales process.

Equally important, each communication should be structured to have an introduction and a call to action. It is recommended that standard email drafts be set up to ensure consistency of electronic business communications.

Consultative Selling Process

All businesses need customers who are confident that they made the right decision to buy. In many cases, prospects feel that they bought under pressure, and invariably end up canceling their order.

To mitigate this risk, salespeople need to work in partnership with their prospects to lead them to the right decision for their organization, regardless of whether or not that means a sale. The focus becomes the customer’s needs, and your ability to provide a solution for their needs.

Following is a sales process guaranteed to win business:

1. Introduction to Establish Rapport
2. Provide Brief Value Proposition
3. State the Agenda for the Call
4. Probing Questions to Identify Implicit Needs
5. Further Questions to Develop Explicit Needs
6. Present Solution to Explicit Needs
7. Handle any Objections
8. Ensure Prospect is Sold in Principle
9. Negotiate Terms to Mutual Agreement
10. Get Commitment for the Sale

Neil Rackham’s bestseller SPIN Selling provides an excellent framework for developing consultative sales process in any organization. Based on research of over 35,000 sales calls, this methodology is based on the most research ever conducted on the sales process.

At its core, SPIN selling is all about converting implicit needs into explicit needs. Implicit needs are statements of problems, dissatisfactions, and difficulties. Explicit needs are specific customer wants and desires.

It is the satisfaction of explicit needs that leads to a successful sales call. The goal of SPIN selling is to convert surface-level implicit needs into deeply rooted explicit needs.

To convert implicit needs into explicit needs, Rackham suggests using the SPIN framework, which is an acronym for:

• Situation - questions designed to gather facts.
• Problem - questions to identify challenges
• Implication - exploring the impact of problems.
• Need-Payoff - discussing the value of a solution.

Use a SPIN Selling Tool to further develop appropriate questions for your organization.

Additionally, create a standardized Sales Proposal and Sales Presentation template that you can quickly modify for new opportunities.

Once your funnel starts to fill up, use an Opportunity Pipeline Tool to report expected revenues, and document where accounts are in the sales cycle.

In order to effectively use the SPIN Selling methodology, salespeople must further develop their active listening skills. Most salespeople are great talkers, but the exceptional star sellers tend to be even better listeners.

Following is a comparison between strong and weak listeners:

Although SPIN Selling prevents many objections that come up in the buying process, there will always be some concerns or questions that need to be answered before a prospect will be ready to move forward.

Following is a simple 4-step approach for effectively handling objections and getting back to the sales process:

1. Soften - empathize and agree with the customer. Some examples include: “I understand.” or “I agree with you.” or “that’s a valid concern.”
2. Confirm - paraphrase their concern to demonstrate understanding. For example: “so what you are telling me is that you need.”
3. Respond - use an objection response to present a valid argument that can alleviate the customer’s concern.
4. Close - following your response, a trial close can be used to bring the discussion back on track to the sales presentation. For example: “do you see how we can alleviate your concern? Great! Are you ready to move forward?”

Use an Objection Response Tool to determine how your top salespeople overcome common objections.

Following are some objection handling techniques:

1. Feel, Felt, Found - agree with the customer that many customers have “felt” that way in the past, what we have “found” is that by [insert response], our clients have “found” that.
2. Yes, But. - this is an empathy statement by agreeing with the objection followed by – “but have you ever thought about.”
3. Restate & Qualify - paraphrase the objection to establish whether the objection is REAL or not.
4. Convert to Question - if you need some time to think about your response, one technique is to ask a question of the prospect to buy some time.
5. Isolate Objection - ensure that all other objections have been covered, and then work to isolate the most difficult objection and close on that one.
6. Boomerang - make the objection the exact reason they SHOULD buy.

The Art of Negotiating

“When selling you never get what you deserve, you get what you negotiate for.”

Definition: Negotiation is a mutual exchange of concessions, which provides both buyer and seller with a profitable deal, or a win-win situation.

How is Negotiating Different?

Fundamentally, negotiation is different from all other methods of reaching an agreement, such as: persuasion, accommodation, compromise, and confrontation.

Negotiation is based on the premise that both sides will win and commence a long-term business relationship.

Following is a summary of other agreement methods:

• Persuasion - implies that one party knows best and will therefore impose his/her will on the other. It does not usually promote lasting relationship because it colors all future transactions with tension and distrust.
• Accommodation - this is a one-winner strategy, where the weaker party gives in.
• Compromise - is a nobody-wins strategy as each side usually gives up something they didn’t want to. This method promotes suspicion.
• Confrontation - describes a situation where both sides initially refuse to budge. The result is that either one side surrenders or no deal is made.

 Golden Rules of Negotiating

• Ensure Prospect is Sold in Principle - never enter a negotiation if the prospect is not sold in principle. Otherwise, you will be in a position of disadvantage for your negotiation.
• Remain Calm - be calm, cool, and collected as possible.
• Remove Emotions - top negotiators are cold/clinical.
• Have a Plan - prepare for your negotiation by understanding your best-case scenario, fallback position, and concessions you are willing to make.
• Never Give Anything Away - instead of just giving concessions away, make sure to always trade them and get something in return.

Negotiating Strategy

The sales negotiator must first decide on a strategy, based on:

• The needs of the customer
• The strengths of the selling company’s position
• How much the selling company wants the order

Preparation for a negotiation should include:

• Analysis of previous history
• Analysis of buying company’s needs & objectives
• Defining the sales objectives
• Planning the negotiation interview
• Costing of what you can afford to give away
• Estimating the value of concessions to the buyer

Skilled negotiators do not start by making their best offer. Instead, they test the other side by various tactics. During this exchange, each side takes an initial stance.

During the subsequent bargaining, each side moves towards a prepared fallback position. The final agreement will normally depend on:

• The relative skills of the negotiators
• The strengths of the buying/selling companies
• The intensity of each side’s needs

When the buyer takes their initial stance, the sales negotiator should take their own initial stance at a point equidistant from the sales fallback position.

Structure of the Negotiation Interview

The salesperson should seek to take control of the negotiation. If control cannot be assumed immediately, the salesperson should keep cool until the opportunity arises.

Following is a suggested structure for a lengthy negotiation.

The salesperson should attempt to set the mood by:

• Stating “why we are here.”
• Stressing mutual objectives
• Being confident that an agreement will be made
• Maintaining eye contact
• Avoiding dominant questions
• Avoiding distractions
• Letting the other party respond with their overview

Background

Discuss the history of the deal and let the other party respond with their perspective. Do not state issues in such a manner that the other party will react and start to argue.

Defining Issues

Agree on the items that are in scope for the negotiation. Do not discuss any points until all issues have been identified. If the other party surprises you with an unexpected issue, remain calm. Question, makes notes, but remain neutral at this stage.

Select Issues for Discussion

Once all issues have been defined, create an agenda. The order of the agenda should be well prepared. The following considerations will provide a guide:

• Start with a Bridge Issue - consider starting with a minor issue that can be easily agreed and promotes an atmosphere of partnership.
• Make Concessions Early - make concessions early and seek concessions on later, more important issues.
• Work up to Key Issues - prioritize your agenda such that you deal with all the minor issues in the early stages of the negotiation. This is a good method for avoiding a heated negotiation right from the beginning.

Refining the Issues

This is the process of discussion, offense and defense, giving and receiving, persuading and bargaining.

Fallback

Each side approaches their fallback position. If the positions are identical, this will be a short, painless process. If not, more bargaining will be necessary.

Settlement

This is when an agreement has been reached in principle.

Closing Techniques

Definition: closing is a natural conclusion to a well-presented sales argument.

Most organizations feel that they need to have better “closers.” Although closing is an essential part of the sales process, research has demonstrated that effectively developing implicit needs to explicit needs exponentially increases close rates.

Generally speaking, closing should be used to affirm that value has been shown. The classic line “always be closing” makes sense if you consider that effective salespeople trial close after each and every feature they present.

In many cases, a successful sales call will involve 5-7 trial/final closes.  A trial close is a stepping-stone to the final close, and usually confirms that the prospect sees value in a particular aspect of the solution. For example, a trial close might be: “do you see how this part of our product can save you time?”

Following are some closing techniques:

• Direct Close - simply asking for the order.
• Assumptive Close - assuming prospect is ready to buy.
• Choice Close - providing two purchasing options.
• Silent Close - waiting for the prospect to respond.
• Final Objection Close - closing on final objection.