by Cindy Barnes
Should the prospect say no, the salesperson can ask more questions to uncover the objections. Sometimes these will be things that can be overcome and the question is then repeated, ‘So, if we overcome X, Y and Z…, then can we explore a solution together?’ But sometimes these objections cannot be addressed – after all, this meeting is a qualifying discussion and sometimes prospects qualify-out. The earlier this decision is taken in the sales process, the less time, money and effort is wasted pursuing an opportunity that could never have been won. However, if the prospective customer says yes, then the meeting concludes with plans of the next steps. During the factual and cordial exchange of next steps, the mood returns to a more neutral level as the minds of both the salesperson and the prospective customer focus on future activities and plans. If not already uncovered, at this stage the salesperson should ask:
What is the company process for making a decision to buy and are there any dates (eg board meetings) that need to be taken into consideration?
Who else needs to be involved?
Who makes the final decision?
Does it have to go to the board?
Is there a budgeting process or period that needs to be considered?
Are there specific ‘sign off’ levels that need to be considered?
Will the prospect facilitate the internal introductions?
Timescales… when can decisions be made?
So, if all goes well, the salesperson leaves with a qualified opportunity plus an agreed plan to sell a solution to the rest of the business. The prospective customer remembers the rational discussions and the feelings from the high point and at the end of the meeting – that is, optimistic good feelings plus the neutral feelings around matter-of-fact planning. Lurking in the background is that ‘they all lived happily ever after…’ feeling that ends a good story.
It all sounds easy – and it can be. An opportunity can go from 0 to 100 miles an hour within an hour-long meeting. However, for the discussion to end successfully there is an enormous amount of planning that happens before the meeting. Remember, this approach is for consultative selling and this means that the salesperson has to have some idea of the combination of products and services that might provide this tailored solution. They must also be certain that their company will support the sale, and this commitment should be obtained before the qualification sales meeting. All these details should be agreed with the salesperson’s own company before meeting with the prospective customer. The whole process is, perhaps, best illustrated by an example.
IT services company ABC Ltd had been selling commodity products in the form of ‘specialist bodies’ to do business and IT consulting, programming, technical design and project management. The business’s marketing and service offerings had achieved some level of sophistication, moving from pure Components to Offers. In this capacity it sold implementation services for third-party software and support services, for example: help desk and application support, and systems outsourcing. Yet all these aggregated offerings failed to bridge The Solution Gap between the bottom and the top of the Value Pyramid™ (see Figure 3.5 in Chapter 3). ABC Ltd remained a transactional sales business with a focus on low-cost pricing.
Executive management believed that the company was missing a trick. They put in place a team to configure solutions and design a consultative selling process to support such an approach. Note – the company approached this shift from the top down rather than assigning this task to sales alone. ABC Ltd understood the 1st Law of Selling your Value Proposition: the whole company plays a role in supporting the sales process. This team then looked at the marketplace to understand where there were organizations with the following attributes:
a market segment with a well-known business issue;
an issue for which ABC Ltd could configure a solution that pulled together the bulk of its individual capabilities;
time constraints on the target companies that would induce them to take action sooner rather than later.
The last attribute is important, but not essential. The difficulty in trying to sell solutions to many large corporations is that these organizations have enough money and momentum behind them to sustain significant losses before they need to take action. In many cases, decisions are deferred for as long as possible. Therefore, targeting businesses with a definite, well understood time limit is the most effective way to ensure a decision is taken quickly. Although not used for this example, all the Y2K (Year 2000) computer services illustrate an excellent example of a deadline for taking action. All software amendments had to be completed before the end of the millennium in order to be certain that the business systems would not fail on 1 January 2000. Businesses had no choice, they could not procrastinate – they were forced to fix their systems.
There are additional situations that help focus timely decisions. Some good examples include:
compliance with government legislation;
a pending merger or acquisition;
launch of a new product or service.
All or any of these circumstances can give a decision-making process a sense of urgency that helps to drive the sales process.
Returning to the example of ABC Ltd, it turns out that in one of their target segments there had been a recent change in the law, which meant that all companies in that segment were forced to provide potential customers with specific information before they signed a deal. For most companies in this segment, the computer systems were unable to cope with this legislative demand and, unfortunately, when the law was due to come into effect (about eight months in the future), these businesses would be unable to accept any new business until they could provide their customers with this data. Failure to comply with the law would be very costly.
So, having identified a segment with both a large problem and a time constraint, the working group at ABC Company put together what they believed to be a perfect solution, involving ABC Ltd’s products and services, to test a new sales approach for prospective customers in this situation. After designing this solution, the group assembled some sales collateral and began to design a sales approach. In doing so, the team asked a number of questions:
What companies should they target?
Who, that is, what role(s) within the company, would feel the most pain in terms of non-compliance?
How should the salesperson handle the qualifying sales meeting?
Where had they done something similar to offer ‘proof’ that ABC Ltd could do what the salesperson claimed?
The simple answer to the last question was ‘nowhere’ – not in the form of a total solution. However, ABC Ltd as a company had sold and implemented all the separate pieces of the solution many times, so it was simply a matter of configuring proof statements for different parts of the solution. These included: specialist business consulting and business process redesign; outsourcing of the current hardware, software and help desk facilities; and building a new piece of software that coped with the new legislative requirements. In describing the ‘how’, ABC Ltd decided that the better approach would be essentially to take over the running of all IT services, and it looked at any business processes that could be improved, while setting up and designing new systems that could cope with the new legislation. But the new sales approach didn’t focus on the ‘how’ it focused on the ‘what’ and the ‘so what’. As far the prospective customer was concerned, ABC Ltd was solving a big problem.
The next step was to decide ‘who’ within ABC Ltd should test this approach on a real opportunity. How would a qualifying meeting proceed and who drove the process? In fact, in this instance, a specialist business consultant was deployed who understood the issues and workings of that business sector. He arranged a meeting with the financial director/operations director and prepared his sales story. After introductions, the consultant asked if the business had plans to address the new legislation – he mentioned one or two other businesses in the same sector who he knew were mustering resources to tackle the issue. The
prospect replied that his IT department was ‘looking into it’.
‘Do you feel confident that your company will meet the deadline?’ the consultant asked. ‘Even those businesses I work with who already have a programme in place to fix it are a bit concerned.’
The prospect replied that, no, he did not feel confident.
‘What will it cost you if you don’t make the deadline?’ the consultant probed. ‘Have you estimated how much business you might lose?’
The prospect quoted a big number, something like 2,000 deals per day.
‘And what’s the average value of a deal?’ asked the consultant.
‘Oh, they aren’t big. Our target market is your working man who pays weekly so it is maybe £100 per day’, replied the prospect. ‘But we are also worried that this “gap” might give our competitors a chance to move in and that we will lose customers. To date, we have a long history of loyal customers.’
‘Have you estimated those losses? And do you know what it will cost you to try to recapture these lost customers?’
This conversation continued, with the consultant collecting numbers and negative impacts until he exhausted all avenues of exploration. By this time, he had reached the bottom of the emotional dip in his ‘sales story’. His next step was to begin to move up the emotional curve to discuss positive outcomes, but first he must ensure that the emotional curve has hit rock bottom and that he has captured and quantified as much as possible, all the negative outcomes. At this point, he sums up and says: ‘So, you are telling me that for every day you are late in having a compliant system, you estimate your business will lose £200,000 per day in revenue. Furthermore, you forecast a loss of 2 per cent of your current client base per month [50,000 is the current client base] as their policies come up for renewal – and this loss represents approximately £10,000 more per month in future revenues…’ There were additional losses that the consultant summed up. He then went on to suggest, ‘So, after one month you are losing at least £6 million, not to mention all the other losses we discuss. Is that right?’
When the prospect agreed, the consultant then said, ‘Well, I don’t know for certain if I can help you. I do know we have done something similar for [he mentions a client reference prepared in advance] and they saw benefits of X, Y and Z, but we don’t know enough about your business or your IT set-up to confirm we can do something similar for you. However, we do have a process that might help. If I could show you a way to move forward and solve your problem in time to comply with the legislation, would you be interested in exploring it with us [ABC Ltd]?’
Of course the prospect said ‘yes’ and so the consultant continued, the story now moving up the emotional curve to a more optimistic frame of mind.
‘We have a process – it takes six weeks’, explained the consultant. ‘In this process we send in a group of experts who will look at your system and your business processes. At the end of these six weeks, we will not only tell you what it will take to achieve your business objectives, we will provide you with a plan to do it. You then have the choice: either you can do it yourself with your in-house staff, or you can spend a few weeks and write a tender and send it out as a competitive bid, or you can ask us to do the work. The option will be yours.’
With this offer, the consultant has now shown the prospect a way to solve his problem; the mood is optimistic and things progressed quickly.
‘How much will it cost and when can you start?’ the prospect asked. And as details of a contract and the next steps were discussed, the mood of the story returned to baseline neutral emotions, but with that ‘happily ever after’ feeling that comes with the conclusion of a good story.
And the deal was won. Within 18 months, it led to business worth more than £50 million – five times higher than any single deal ever sold previously by ABC Ltd and yielding a much higher margin. Most importantly, ABC Ltd met and exceeded the customer’s expectations, so the customer was delighted.
Lessons learned
It would be wrong to say that all it took was a 45-minute meeting for ABC (in the above example) to sell business worth £50 million, although, on the face of it, that’s true. Actually, it took weeks of planning and preparation before the meeting in order to make sure it went successfully. In this case, the salesperson was a business consultant; however not all business consultants are capable of driving this sort of sale. In general, the style of selling consulting is very different. In fact in this instance, this individual was chosen for his ability to adapt and change styles and sell in a new way. All his references, the shape of the solution, guideline pricing – particularly for the first phase in which the solution was scoped – had to be agreed with senior management before undertaking the first prospect meeting. And finally, a scoping process needed to be designed that would not only produce a programme that ABC Ltd wanted to deliver but also provided the output that ‘sold’ the next phase of the programme.
Apart from the need for preparation and the support of the rest of the business, this example illustrates many salient points. The consultant had gained access to a high-level business person, the financial director/operations director. Typically, time is one of the most precious commodities that these individuals possess. A salesperson should never waste the time of such an individual by having nothing to offer in return for their time. That is why, as part of the preparation, the salesperson should always have a ‘Plan B’, even a ‘Plan C’, should the prospect not respond as expected. If this individual feels that his/her time has been wasted, then that salesperson will never get a second chance. Always have something to offer that has made the meeting worthwhile.
A second lesson that this example illustrates is the benefit of having a small first step – such as a scoping study – in the process of selling a big solution. Senior executives often have a large discretionary spend or can authorize a reasonable amount without going through a full-blown procurement process. If one can estimate how much this value is – in the example above it was £50,000 – then the first step (ie the first offering sold) should be priced accordingly. Don’t worry about profit at this stage; think of this first step as a sales process, so, essentially, the scoping study was paid-for sales effort even though the output was of value to the customer. Also, by contracting with a prospective customer for even a small amount, it breaks an important psychological barrier – the first deal with a particular company. Agreeing this first, smaller contract lowers the barrier to subsequent sales – even if the value of these later deals are much more expensive, it feels easier to buy because there is already an established business relationship.
Another feature to note is that the salesperson positioned this first scoping as part of a much bigger solution. He gave the prospective customer a feeling of control by offering a place in the process where the customer had choice – and a feeling of control is extremely important when a customer is about to ‘bet the business’ and take a change with a new supplier or partner. Starting small is important. However, positioning the total solution at the beginning of the whole selling process is crucial to the overall sales story and plants a picture of the overall solution in the customer’s mind.
Another point to mention is that this sales meeting focused on the person who owned the problem. Anyone trying to sell to this company and solve this problem would have to identify who this person was and somehow arrange a meeting with this individual. That also meant that if the scoping study was approved, all of this person’s precious time would be taken up with ABC Ltd, making it unlikely that this person would take the time to deal with anyone else unless ABC Ltd failed to meet expectations. By designing the scoping study to involve the decision maker, he ensured that person would have neither the time nor the inclination to look elsewhere.
Yet still more value came from this 45-minute qualifying meeting: the information gathered during this first meeting provided the salesperson with lots of quantitative information. These numbers served many purposes. As shown i
n the example, they provided part of a baseline cost for ‘the cost of doing nothing’. It is always important to demonstrate to prospective customers that doing nothing has a cost too – and sometimes not making a decision ends up costing a business even more than spending money. This cost helps drive a speedy decision and the quicker a sale can be closed, the higher the probability of its success. Finally, another use for these numbers is to help in determining a price for the solution.
Different sales behaviours
To undertake successful consultative selling, a company must select the right sales style. Knowing what behavioural types of salespeople the business should employ is critical. In fact, the sales process may require a whole team of individuals to be involved. When this is the case, it is absolutely vital to understand different styles, where they are appropriate and what happens when any combination of them are together with the customer and trying to progress a sale. The differences between transactional selling and consultative selling have already been explained; however, there are two other styles of selling that also exist: ‘solution sales’ and ‘expert sales’. A quick review of all four styles is useful along with an explanation of where each is the most appropriate.
Transactional sales
The transactional salesperson typically has a specific set of products and/or services to sell. His/her objective is to qualify any prospect as quickly as possible in order to understand whether that person has a need for these well-defined offerings or whether a need can be ‘developed’. A good transactional salesperson typically asks a lot of questions and then, if the prospect seems interested, closes as quickly as possible and then moves on to a new prospect. In those situations when no need is established, the salesperson quickly ends the meeting and moves on, saving time and effort to pursue more lucrative opportunities.