Skip to content

Selling Consultative Positioning Strategies

December 1, 2008
tags: ,

The definition of business partner is therefore the customer manager’s definition: someone who can add incremental value to the manager’s contribution to profits. If you are going to qualify as a consultant partner, you must make yourself incrementally valuable to a business manager. This means you must deliver one or more of three types of added value:

  1. You must enable your partners to add more profits than they would be able to contribute without you.
  2. You must enable your partners to add profits sooner than they would be able to contribute without you.
  3. You must enable your partners to add profits with greater certainty than they would be able to contribute without you.

These “deliverables” set the standards of performance for consultative sellers. You will be judged for your partnerability by the manager’s answers to three questions: How much value do you propose to add? How soon do you propose to add it? How sure can I be that you will add as much value as you propose as soon as you propose to add it?

Consultative sellers succeed or fail on their ability to ally themselves with their Box Two counterparts. They cannot sell without them because Box Two sells for them in ways that they cannot. Their alliances are founded on creating an ongoing stream of Profit Improvement Proposals for the customer managers to sell internally, thereby obtaining the funds to support the consultative seller’s strategies. In order to act consultatively, the seller must conform to the requirements outlined in Figure.

From blog

Box One thinks, feels, and acts in ways that are standard operating performance for all Box One managers, emulated by all Box Two managers who interface with them, and virtually unknown to everybody else. Box One’s position self-description is that of a money manager.

As a money manager, Box One is preoccupied with financial stewardship, the management of other people’s money. This involves making prudent, duly diligent investments, the control and fractionalizing of risk into small, survivable bites, and a conservative management style that emphasizes certainty over the chance for a windfall, incremental gains over breakthroughs, and consistency over flashes in the pan.

Your alliances at the Box Two level depend on the same standards of performance as your Box Two counterparts’ internal alliance with their own Box One: the contributions that you make to competitive profit making. When you work in partnership with Box Two function managers, the added contribution you make to them becomes incremental to the contribution they have committed to make to Box One. That is why they will partner with you. The incremental value of your contribution becomes their test of how much you are worth as a partner.

These are very different questions from the traditional ones raised at the Box Three purchasing interface. When vendors make their sales calls there, they are asked how much performance they can propose and how little price they can charge for it. But Box Two managers do not buy products; they invest in value. They do not buy at all; they sell proposals to obtain funds for their own operations. The Box One managers they sell to are your customers’ ultimate buyers. They buy investment opportunities that can put their money to work at the highest rates for the surest return within the shortest periods of time.

They judge their Box Two operating managers by how good they are as money managers. “If I give you one dollar,” they ask in effect, “How much more will you give me back? How long before I get it? How sure can I be?” Managers who partner with you as their consultative seller are betting that you can help them enhance their performance by enabling them to return more money than they could alone, or return it faster, and return it more surely.

When you reduce one of the Box Two managers’ critical cost factors, you can help them improve the contribution they return from their operation. When you increase one of their critical revenue factors, you do the same. These are the mutual objectives of your cooperative partnerships because they are the achievements that improve your mutual profits.

Box Two managers have a simple set of needs:

1. They want money.
2. They want money now—yesterday would have been even better.
3. They want money so that they can make more money with it.

In order to position yourself for Consultative Selling, you must be able to prove to customer managers that you can help them get their hands on money, that you can help them to get it soon, and that you can supply them with a steady stream of investment opportunities that will enable them to make more money. These are the empowering features and benefits that will make you compellingly partnerable.

There are three main strategies for optimizing a customer’s operating mix:

1. You can supplant one or more elements in the current mix. If the mix is labor-intensive, for example, you may be able to reduce labor content by substituting an automated process or eliminating an operation altogether. Or you may be able to combine multiple processes such as forecasting and inventory control, thereby eliminating overlapping and duplicated costs.
2. You can substitute your product or process for a competitive product or process that is part of the customer’s current mix. The basis for your recommendation must be that improved financial benefits will accrue to the customer if the mix is altered—not simply that more advantageous performance benefits will be realized.
3. You can manage the mix internally as its systems integrator or facilities manager, working under a profit-improvement contract with a customer. Alternatively, you can manage the mix as its outsource.

In order to consult with a customer line-of-business manager (LOB), you must be expert in the customer’s markets. This means that you must have three kinds of smarts. You must be process smart, knowledgeable in the flow of the customer’s products through their distribution processes and where their critical values are added. You must be applications smart, knowledgeable in how to apply your products and services to the customer’s sales and distribution process so that revenues or margins can be increased. And you must be validation smart, knowledgeable in how to quantify your contribution.

In order to consult with a customer function manager, who supports or supplies a line of business, you must be expert in his or her operation. This means that you must have three kinds of smarts. You must be process smart, knowledgeable in the flow of the customer’s process and where the critical costs cluster. You must be applications smart, knowledgeable in how to apply your products and services to the customer’s process so that costs can be reduced or productivity can be increased. And you must be validation smart, knowledgeable in how to quantify your contribution.

In common with all products, value has its own specifications. These give it its performance capability, that is, what it is able to do inside a customer’s business. Your performance capability is customer-dependent and will vary for each customer application. Each of your “products” will be unique to its customer. No two values will be the same, except by chance. As a result, you will no longer be able to print a price list. As values differ customer by customer, moving up and down within the range that establishes your norms, the price you require in the form of a customer’s investment to achieve each value will also differ.

Value has three specifications:

1. It has “muchness”: You will be able to add a lot of value or only a little.
2. It has “soonness”: You will be able to add value quickly or not for a while.
3. It has “sureness”: You will be able to add value with a high degree of certainty or you will hedge.

Advertisements
No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: