During the past few years our firm has built an inventory of ways sellers can create value for their prospects within the consultative sales process-that is, before the sale actually occurs. In a transactional sale, the sales person focuses on price, delivery, and basic terms. But a consultative sale is more complex:
- The amount is usually high.
- The risk to the buyer is high.
- A relationship is implied by the sale.
- A group rather than an individual makes the decision to buy.
- The seller is rarely present when that decision is made.
The sales rep and the prospect have a lot more to think about. In consultative selling, it’s important to set yourself apart, and we believe that delivering value during the sales process is a great way to do that. We started years ago with a list of five ways to create value, and the list has grown over time to 15.
Recently in London I trained salespeople from Ireland, Spain, France, England, Germany, and the Netherlands in our popular FOCIS® approach to consultative selling. The diversity of the group led to a discussion that helped me “rediscover” a 16th way to create value for prospects during the sales process.
These sales reps work for a client of ours that provides equipment to its customers’ business locations, maintains it, and processes cash spent by consumers to use the equipment. A percentage of the revenue paid by consumers to use the equipment is split between our client and our client’s customers. The split depends on several factors, but the customer usually receives about 30 percent and our client 70 percent.
Our client’s customers never pay for the equipment, never pay to maintain it, and enjoy additional services not provided by the competition. Our client’s program is truly turn-key, allowing customers simply to accept the checks from our client each quarter and to focus on other challenges or opportunities their businesses present. In short, it’s a good deal in terms of both hard and soft costs.
Consequently, competitors try to switch our client’s customers with a sales sleight of hand by offering a 50/50 split. Admittedly, 50/50 sounds better on the surface than 30/70. But this split actually hides costs both hard and soft. Before customers see any revenues, for example, the costs of buying, replacing, and maintaining the equipment are deducted. The competition doesn’t reveal this information, however, except deep in the contract itself.
It’s a classic case of a complex contract about which the buyer knows far less than the seller, and the seller can elect to educate the prospect only on the specific parts favorable to the seller.
Worse, in such a situation, the buyer too often doesn’t take the time to “read the fine print” to bring himself up to speed on exactly what he’s buying. But that’s where the 16th way to create value comes in: A complex sales environment offers a skilled seller an opportunity to help a prospect better understand the details of his current contract or status, not just the portions a vendor chooses to tell him about. Even though he doesn’t know it, the buyer is really depending on the seller to do the right thing by clearly explaining not only the terms of the contract but also what they mean for the buyer’s business.
In this case, a buyer choosing the 50/50 revenue split is not unlike the young child who selects the nickel over the dime because the nickel is bigger and appears to have more value. In reality, our client’s customers ultimately receive more revenue with the 30/70 split than they ever would with the competition’s 50/50 split. The challenge, as in many complex sales, is helping prospects understand that value before they experience it.
The consultative seller has a major challenge: Hard costs are usually visible, but soft costs and the level of risk exposure over time are often hidden. That also means that the true value the buyer receives over time is camouflaged. Truly understanding the differences between price on Day One and cost over the life of a project is a starting point. Knowing how to educate prospects in a way that also persuades requires consultative sales training and a strong sales process. That’s what we were teaching our client’s reps in London.
The discussion we had helped me to rediscover the value a skilled consultative salesperson can provide in clarifying the ins and outs of a complicated contract. It’s the 16th way to add value in during a consultative sale.
Would you like to learn more about developing a strong, consultative sales process? Please contact us to engage in a complimentary discussion in which we will create value for you. If you do, we’ll also give you the complete list of 16 ways to create value during the sales process. Sweet.