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Adopting Consultative Selling


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Adopting Consultative Selling

  1. 1. How-To Guide© 2013 Demand Metric Research Corporation. All Rights Reserved.Adopting Consultative SellingExecutive SummaryThis report has been designed to provide practical advice for converting to a consultativeselling approach.Read this brief 15-page report to learn how to: Identify Competitive Advantages & Differentiators Determine Product Features, Advantages, & Benefits Develop Key Account Plans Standardize Business Communications Promote a Consultative Sales Process Improve the Listening Skills of your Staff Effectively Handle Customer Objections Skillfully Negotiate Favorable Terms Teach Proven Closing TechniquesRead this report to identify opportunities to further develop and maintain consultativeselling in your organization.
  2. 2. How-To Guide© 2013 Demand Metric Research Corporation. All Rights Reserved.Table of Contents PageCompetitive Positioning 3Product Knowledge 4Key Accounts Planning 4Business Communications 5Consultative Sales Process 6Active Listening 7Objection Handling 8The Art of Negotiation 9Closing Techniques 12Conclusion 13
  3. 3. How-To Guide© 2013 Demand Metric Research Corporation. All Rights Reserved.Competitive PositioningHow a prospect competitively positions your company is a critical factor when engaging inthe buying/selling process. Fundamentally, positioning is about aligning your business withtheirs, so that a clear synergy can be visualized by the prospect.When a clear synergy is developed, selling becomes much easier because in the earlystages of the sales cycle the prospect mentally puts your organization ahead of thecompetition. Therefore, it is essential that the prospect correctly positions your company.To help prospects correctly position your company; many organizations use ourCompetitive Analysis Tool to: evaluate industry competitors; understand competitiveadvantages & differentiation points; develop a competitive product positioning map anda competition matrix.To effectively position your company, determine the following:1. What are your genuine competitive advantages?2. How can we differentiate our products?Competitive positioning is all about gaining a competitive edge in your market. It goesbeyond understanding your prospects’ needs and must incorporate knowledge of yourcompetition to ensure your product is favorably differentiated among many competingoptions.
  4. 4. How-To Guide© 2013 Demand Metric Research Corporation. All Rights Reserved.Product KnowledgeWhile 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 ofyour solution. Feature: these are components of your product/service that have been developedto 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 notnecessarily beneficial to all prospects. An example would be, “saving time by using apractical tool or template.” Note that this advantage is only a benefit when aprospect needs the particular tool shown. Benefit: a benefit is an advantage of a product/service that fulfills the explicit needof a prospect. For example, a restaurant offering a featured lunch that arrives in 10minutes or less would be advantageous to some, but a real benefit for those whoneed to be back to work in 30 minutes.Use our Feature, Advantage, Benefit Tool to quickly map out the most salient points foryour product/service offering.Key Account PlanningEvery organization has key accounts that are responsible for large amounts of revenue orhave a large growth potential.Account planning allows you to work backwards from annual sales targets to determinewhich actions need to be taken to achieve your goals & objectives. Additionally, accountplans provide measures that can be monitored and managed.
  5. 5. How-To Guide© 2013 Demand Metric Research Corporation. All Rights Reserved.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 CommunicationsThere are many types of business communications from introductions and appointmentconfirmations, to meeting follow-ups and order confirmations. Salespeople often rush tosend their communications without spending a few minutes to ensure that it will have themaximum impact possible.A well-constructed business communication, such as an email or introduction letter, can beeffectively described as a sleeping salesperson. Each communication should be strategicallyused to confirm what has been agreed and close the prospect on the next part of the salesprocess.Equally important, each communication should be structured to have an introduction and acall to action. It is recommended that standard email drafts be set up to ensureconsistency of electronic business communications.
  6. 6. How-To Guide© 2013 Demand Metric Research Corporation. All Rights Reserved.Consultative Selling ProcessAll 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 upcanceling their order.To mitigate this risk, salespeople need to work in partnership with their prospects to leadthem to the right decision for their organization, regardless of whether or not that means asale. The focus becomes the customer’s needs, and your ability to provide a solution fortheir needs.Following is a sales process guaranteed to win business:1. Introduction to Establish Rapport2. Provide Brief Value Proposition3. State the Agenda for the Call4. Probing Questions to Identify Implicit Needs5. Further Questions to Develop Explicit Needs6. Present Solution to Explicit Needs7. Handle any Objections8. Ensure Prospect is Sold in Principle9. Negotiate Terms to Mutual Agreement10. Get Commitment for the SaleNeil Rackham’s bestseller SPIN Selling provides an excellent framework for developingconsultative 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. Implicitneeds are statements of problems, dissatisfactions, and difficulties. Explicit needs arespecific customer wants and desires.
  7. 7. How-To Guide© 2013 Demand Metric Research Corporation. All Rights Reserved.It is the satisfaction of explicit needs that leads to a successful sales call. The goal of SPINselling 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 challengesImplication - 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 thatyou can quickly modify for new opportunities.Once your funnel starts to fill up, use our Sales Forecasting Tool to report expectedrevenues, and document where accounts are in the sales cycle.Active Listening SkillsIn order to effectively use the SPIN Selling methodology, salespeople must further developtheir active listening skills. Most salespeople are great talkers, but the exceptional starsellers tend to be even better listeners.Following is a comparison between strong and weak listeners:
  8. 8. How-To Guide© 2013 Demand Metric Research Corporation. All Rights Reserved.Strong Listeners Weak ListenersOpen Body Posture Closed Body PostureLeans Forward Leans BackInterrupts to Understand Interrupts to SpeakMaintains Eye Contact Looks AroundNods & Acknowledges No InteractionSits Still and Relaxed Fidgets and Acts RestlessRestates and Paraphrases Talks OverTakes Detailed Notes Doesn’t Take NotesAsks Great Questions Doesn’t Ask QuestionsObjection HandlingAlthough SPIN Selling prevents many objections that come up in the buying process, therewill always be some concerns or questions that need to be answered before a prospect willbe ready to move forward.Following is a simple 4-step approach for effectively handling objections and getting backto the sales process:1. Soften - empathize and agree with the customer. Some examples include: “Iunderstand.” 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 canalleviate the customer’s concern.
  9. 9. How-To Guide© 2013 Demand Metric Research Corporation. All Rights Reserved.4. Close - following your response, a trial close can be used to bring the discussionback on track to the sales presentation. For example: “do you see how we canalleviate your concern? Great! Are you ready to move forward?”Use an Objection Response Tool to determine how your top salespeople overcomecommon objections.Following are some objection handling techniques:1. Feel, Felt, Found - agree with the customer that many customers have “felt” thatway 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 followedby – “but have you ever thought about.”3. Restate & Qualify - paraphrase the objection to establish whether the objection isREAL or not.4. Convert to Question - if you need some time to think about your response, onetechnique is to ask a question of the prospect to buy some time.5. Isolate Objection - ensure that all other objections have been covered, and thenwork to isolate the most difficult objection and close on that one.6. Boomerang - make the objection the exact reason they SHOULD buy.
  10. 10. How-To Guide© 2013 Demand Metric Research Corporation. All Rights Reserved.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 buyerand 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-termbusiness relationship.Following is a summary of other agreement methods: Persuasion - implies that one party knows best and will therefore impose his/herwill on the other. It does not usually promote lasting relationships because it colorsall 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 somethingthey didn’t want to. This method promotes suspicion. Confrontation - describes a situation where both sides initially refuse to budge. Theresult is that either one side surrenders or no deal is made.
  11. 11. How-To Guide© 2013 Demand Metric Research Corporation. All Rights Reserved.Golden Rules of Negotiating Ensure Prospect is Sold in Principle - never enter a negotiation if the prospect isnot sold in principle. Otherwise, you will be in a position of disadvantage for yournegotiation. Remain Calm - be calm, cool, and collected. Remove Emotions - top negotiators are cold/clinical. Have a Plan - prepare for your negotiation by understanding your best-casescenario, fallback position, and concessions you are willing to make. Never Give Anything Away - instead of just giving concessions away, make sure toalways trade them and get something in return.Negotiating StrategyThe 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 orderPreparation 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
  12. 12. How-To Guide© 2013 Demand Metric Research Corporation. All Rights Reserved.Skilled negotiators do not start by making their best offer. Instead, they test the other sideby 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 needsWhen the buyer takes their initial stance, the sales negotiator should take their own initialstance at a point equidistant from the sales fallback position.Structure of the Negotiation InterviewThe salesperson should seek to take control of the negotiation. If control cannot beassumed immediately, the salesperson should keep cool until the opportunity arises.Following is a suggested structure for a lengthy negotiation. The salesperson shouldattempt 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
  13. 13. How-To Guide© 2013 Demand Metric Research Corporation. All Rights Reserved.BackgroundDiscuss the history of the deal and let the other party respond with their perspective. Donot state issues in such a manner that the other party will react and start to argue.Defining IssuesAgree on the items that are in scope for the negotiation. Do not discuss any points until allissues 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 DiscussionOnce all issues have been defined, create an agenda. The order of the agenda should bewell prepared. The following considerations will provide a guide: Start with a Bridge Issue - consider starting with a minor issue that can be easilyagreed 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 theminor issues in the early stages of the negotiation. This is a good method foravoiding a heated negotiation right from the beginning.Refining the IssuesThis is the process of discussion, offense and defense, giving and receiving, persuading andbargaining.FallbackEach side approaches their fallback position. If the positions are identical, this will be ashort, painless process. If not, more bargaining will be necessary.
  14. 14. How-To Guide© 2013 Demand Metric Research Corporation. All Rights Reserved.SettlementThis is when an agreement has been reached in principle.Closing TechniquesDefinition: closing is a natural conclusion to a well-presented sales argument.Most organizations feel that they need to have better “closers.” Although closing is anessential part of the sales process, research has demonstrated that effectively developingimplicit needs to explicit needs exponentially increases close rates.Generally speaking, closing should be used to affirm that value has been shown. The classicline “always be closing” makes sense if you consider that effective salespeople trial closeafter each and every feature they present.In many cases, a successful sales call will involve 5-7 trial/final closes. A trial close is astepping-stone to the final close, and usually confirms that the prospect sees value in aparticular aspect of the solution. For example, a trial close might be: “do you see how thispart 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.
  15. 15. How-To Guide© 2013 Demand Metric Research Corporation. All Rights Reserved.ConclusionThe manner in which organizations buy and sell products has steadily evolved over thepast 50 years. The old huckster approach of “boy have I got a deal for you” will simply nolonger work for today’s sophisticated, and informed, consumers.Organizations looking to adapt to a modern consultative approach need to focus onfundamentals such as: rigorous competitive analysis to identify differentiators; formalizedproduct training; account planning; standard business communications; adopting aconsultative sales process such as SPIN Selling; improving listening skills; handlingobjections; tactfully negotiating; and strong closing techniques.Use the tools provided in this report to create a custom Sales Training Manual for yourorganization.