Can your business handle the change to a consultative sales model?

07 January 2013 by Charles Howden

Consultative selling is the current paradigm for selling complex products and services but how suitable is it for your business? Here are some of the challenges that companies face, when they decide to change from a transactional sales model, to a consultative one.

1) Is the sales model suitable for your sector? If your offering has become undifferentiated, with customers focused on price and delivery alone, then you may struggle to differentiate on your sales model alone. The worst case is that you introduce higher selling costs, and achieve lower sales (because customers want to buy in a transactional way).

2) Can your business model afford it? The higher selling costs come from a greater reliance on face to face meetings, delivered by sellers who have a higher level of product (and business) knowledge that you either have to pay for through hiring, or through training, or probably both. Couple this with a longer sales cycle and your costs start escalating.

3) Can your salesforce learn to sell in a new way? Your salesforce may not have the right set of behaviours to deliver a consultative model, and it is unusual to find sellers that can perform both models well. If you have developed a group of transactional sales pitbulls, don’t expect them to change overnight into something more restrained.

The paradox is that the behaviours that result in successful transactional selling, make for very poor consultative selling. In our experience, consultative selling requires more sophisticated behavioural skills (EQ) than transactional selling, not to mention more brain power (IQ).

4) How do you count your numbers? Your organisational metrics, the numbers you measure to manage your sales function will also need to change, along with your remuneration model if it is weighted towards monthly sales agreed. Focusing on monthly deals done, sales revenue signed, all drive the transactional sales model to the point that at the end of the month, customers relationships are burned in order to squeeze in sales that would have been better left to conclude the following month. You will need to start measuring milestones in the sales process, not outcomes.

5) Can your sales management handle the change? Are they capable of coaching performance from their reports, or are they entrenched in transactional model carrot and stick, activity measuring, number crunching line management.

We love the consultative sales model, it’s our primary area of experise. And because we know so much about it, we can advise that it may not be the most appropriate sales model for your sector. If your offering is largely commoditised, then you may be better selling transactionally at a lower unit cost per sale.

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