Consultative selling was the first blockbuster methodology to move sales beyond the Death of a Salesman era. The core ideas of consultative selling come from Mack Hanan's Consultative Selling, first published in 1970. I own the 1999 version, curiously called the "Advanced Sixth Edition." This is a good, thorough book with valuable ideas and is the best source of understanding consultative selling.
Sadly, the core ideas have been badly obscured by commentators with a fondness for complication and a distant relationship with the actual principles of consultative selling. An example of this obscuring is a recent article on consultative selling, where "26 business sales experts" shared their "expert tips." Observations range across the obvious, cliches, and pure nonsense.
No news here, just obvious observations such as:
- "Act as a consultant."
- "Consider a sales call as an exchange of value."
- "A consultative approach is [a] conversational approach."
Reading on, fatigue sets in, you have heard all this before:
- "Use Power Questions"
- Abundant doctor metaphors: "Does a doctor prescribe you medicine before they have fully listened to your story and symptoms?" and the "consultative professional acts like a doctor."
- "A consultative sales approach all but requires a strong focus on...content creation and audience building, you've got to think of yourself as a brand."
Further into the article, the puzzling declarations and management mush compound aggressively:
- "The #1 way to develop a consultative sales approach and to really excel at consultative selling is...understanding sales leadership."
- "Approach the customer/client with the mindset of increase."
- "Deploy OARS: open ended questions; affirmation, reflections (reflective listening), and summaries."
- "The five key fundamentals of building a successful long-term relationship are communication, common link, trust, mutual reciprocity, and a warm nurture."
Just value: consultative selling explained
Value is the fundamental principle of consultative selling.
Mack Hanan's Consultative Selling book defines value, correctly, as value from the product outweighed by value contributed to the customer's profits. The consultative seller "knows value, sells it, positions value as the product, and prices on value." Every aspect of consultative selling is built from the principle of value.
The consulting part of consultative selling is about discovering, quantifying, and co-creating value. The key steps in a consultative sale are:
- Problem. Understand the customer's underlying needs, especially, what the problem costs the customer and their profit if the problem were solved (with your product or service naturally).
- Position yourself and your offering as a value adder. To quote Mack Hanan: "Consultative selling is profit improvement selling, It is selling to high-level customer decision makers who are concerned with profit -- indeed, who are responsible for it, measured by it, evaluated by it, and accountable for it."
- Propose financial value. In Hanan's words, "Consultative selling is NPV selling." And this is not vague benefit claims, it takes place at the level of customer's microeconomics.
- Partner to realize value. You partner with your customer to create a business case they can use to request funding for a profit improvement proposal.
For lovers of acronyms, you can call them the four"P"s of consultative selling.
Despite the centrality of value and profit improvement to consultative selling, our 26 consultative selling experts (reviewed above) only mention "value" twice in a 6,776-word article. The words "profit" or "profit improvement" do not appear, even once.
Even after stripping off the nonsense and getting back to fundamentals, consultative selling is not easy. It requires combining the analytical skills of a performance improvement management consultant with the persistence and people skills of a good salesperson. This is a rare combination. Selling with the "holy trinity" of a salesperson, a business consultant, and technical specialist works. But this is an expensive way to sell and only justified for true enterprise sales ($250,000 per annum and above). Mack Hanan expected only 20% of customers to warrant consultative selling. Also, the "consulting" in consultative selling needs some skepticism, as the consultation will always lead to the product or service you are offering. Skeptics could say that consultative selling amounts to clever sequencing of leading questions! Anyway, as long as the buyer is wary and wise, this is no worse than the fiction that any management consultant is completely objective, even when the client they advise is paying their bill.
Now consultative selling has been stretched too far as a mass-market approach suitable for most sales teams. However, it's fundamentals of focusing on value, quantifying that value with a cost-benefit analysis, and proposing profit improvement rather than features and functions are profoundly important. They have greatly influenced my thinking for my new book The One-Page Business Case. Please Sign Up for updates.