5 Ways the Consultative Sale Improves Profits

August 8, 2017

Here is how to foster deeper client relationships. A friend of mine says that we’re judged by the quality of the questions we ask. In professional services consulting, I believe this is very true. I was reminded of this recently when conducting market research for a client. This client is looking for ways to expand their service offerings, increase client impact and, of course, enhance their profits.

To achieve these goals, we are conducting research with their clients to identify a set of unmet needs. During an interview with one of my client’s clients, I heard something very insightful. I asked this person about their experience in working with multiple professional advisors. Here is what they said.

“We’ve worked with a lot of different advisors over time. As great as they are individually, I still feel that we have to do all the thinking ourselves. We have to protect ourselves. It always feels like advisors are pigeon-holed in their area of expertise and not willing to step outside of that. It’s rare to find someone who really thinks with us, brings us a variety of solutions and then helps us make decisions. This means we have shallow transactional relationships with advisors.”

Ouch. I hear this more often than you might realize. The root cause of this problem is looking at the world through your eyes instead of looking at the world through your client’s eyes. The solution to this problem is the consultative sale. This approach to inaugurating client relationships creates deep trust, opens minds and wallets and greatly enhances your profits. Let me show you how to do this.

DO YOU HATE SALES?

Before I talk about how the consultative sale enhances client impact and profits, let me address a concern that might be lurking in the back of your mind. Many professional service firm leaders don’t like the term “sales.” In fact, some people feel that selling and serving are antithetical and that you have to choose between them.

These people feel that selling is for slick hucksters who lack integrity, who will do or say anything to get a deal and who won’t stick around once the deal is signed to ensure they deliver on their promises. Sales people are not to be trusted.

If that is how you think of selling, let me clarify my definition of selling so we’re on the same page. I think of selling as helping clients apply your capabilities to their goals, opportunities and challenges to achieve the most valuable and successful outcomes for them.

Let’s be honest about something here. When you first engage with clients, they really don’t understand what you do or how what you do will benefit them. Selling is about crossing this chasm.

Selling is about discovering whether or not there is a fit between what you do and what prospects want done. It’s about creating a match between your capabilities and a prospect’s needs. Selling is also about negotiating fair rates for the value and impact of what you deliver.

By this definition, anyone (possibly everyone) at your organization might be in sales. Anyone who is responsible to achieve a great outcome for a client is in sales. Anyone who is responsible to communicate the value of what you do and why it matters to the client is in sales. Anyone who helps guide the client toward the right service package for their unique needs is in sales.

KEY TAKE-AWAY

SELLING IS ABOUT APPLYING YOUR CAPABILITIES TO A CLIENT’S GOALS, OPPORTUNITIES AND CHALLENGES TO ACHIEVE THE MOST MEANINGFUL OUTCOMES FOR THEM.

THE CONSULTATIVE SALE VERSUS THE PITCH

Given this definition of selling, let me outline the two primary approaches I see today to selling professional services: the pitch and the consult.

The pitch goes like this:

A prospect reaches out for a conversation.
A firm employee handles an initial call and tells the prospect all about their firm, often in great detail and with a slide deck.
The firm employee asks if the prospect wants a quote or is ready to become a client.
The prospect has to choose, within a very short window of time, to say yes or no. They have to choose whether or not they trust the firm and their staff and how much money they are willing to spend – all while they are still in the early stages of trust building.

The consult goes like this:

A prospect reaches out for a conversation.
A firm staff member handles an initial call and determines whether or not the prospect fits the firm’s ideal client profile.
If the prospect fits the ideal client profile, the staff member asks the prospect if they would be willing to describe their goals in greater detail through a discovery process. The staff member outlines what the discovery process looks like, how long it takes, who should be involved, and – most importantly – the value to the prospect of taking the time to do so.
The prospect says yes.
One or more staff members at the firm walk the prospect through the discovery process. The staff ask questions about the prospect’s goals, opportunities and challenges. These questions are based on lessons learned from helping other people achieve the goals that the prospect has identified. The questions are insightful and cause the prospect to stop and think.
The staff collect the prospect’s responses and build a profile of the prospect’s resources, timelines, lose results, win results and why they care about these outcomes.
The staff then creates a proposal that begins with a list of the prospect’s stated goals and outcomes. The proposal details the firm’s approach, deliverables and timelines. It also includes references and proof statements from other clients who have achieved similar goals. Finally, the proposal includes the fee structure.
The staff presents the proposal to the prospect and focuses on the goals the prospect wants to achieve.
Only after the goals, the approach, timeline, deliverable and fees have been presented does the staff ask the client to commit to the relationship by signing the proposal.

WHY THE CONSULTATIVE SALE IS SUPERIOR TO THE PITCH

The consult is a lot more work than the pitch. Let’s be clear about that. It takes longer and requires service providers to think outside of their normal silos. It’s challenging because you never quite know what the prospect will say in discovery. It may not always be clear, at first, how to create a connection between your capabilities and what a prospect wants to achieve.

But this approach produces a feeling of value and respect that is nearly impossible to overstate. It tells the prospect that you care about them, that you’ve listened, that you’re willing to put their goals at the center of your dialogue. That creates deep trust. Money follows trust.

Here is the ironic part for me in all of this. Nearly every service-leader I’ve ever met who is opposed to sales is a pitch-oriented professional. This is the exact opposite of how they see themselves. I’ve seen this time and time again from leaders in numerous service industry verticals including CPAs, lawyers, engineers, IT consultants, medical staff and management consulting. These people all hate sales and slide decks. But at their core, they’re pitch-oriented.

How do I know this? There is one simple litmus test that proves my point and it goes like this. When pressed by a prospect to answer the question – why should I do business with you – they nearly always fall back on talking about their company, their brand, their history, their firm.

They almost never talk about the prospect’s goals and how they are best positioned, among all available service providers, to most likely achieve the goals that matter to the prospect. They talk about themselves rather than talking about what matters to the prospect. That my friends, is a pitch.

FIVE WAYS CONSULTATIVE SELLING IMPROVES PROFITS

The single biggest reason to adopt consultative selling is because it greatly enhances your profits. But you might be wondering how this approach produces better profits. After working with thousands of service professionals at hundreds of different mid-size firms, here are five benefits I’ve come to recognize.

Prospects who are confident that you can achieve their goals are far less fee sensitive.
The consultative process opens up service opportunities beyond the presenting need.
Clients who trust you are easier to work with, enhancing your productivity.
Clients who follow your counsel are more likely to achieve meaningful outcomes, which gives you proof statements to persuade future clients.
Long-term client loyalty is cemented through the consultative process.

Let’s explore these a bit.

PROSPECTS WHO ARE CONFIDENT THAT YOU CAN ACHIEVE THEIR GOALS ARE FAR LESS FEE SENSITIVE

One of the biggest ways the consultative sale improves profits is by greatly reducing fee sensitivity. When presented with a proposal after a pitch, a prospect will often bypass the other parts of the proposal and go straight to the bottom line – the fee section. If the fees are not to their liking, they’ll either try to negotiate down or simply refuse to sign. In their mind, there is little connection between the fees charged and the value of the outcomes that the service produces.

But the consultative sale produces a different response and usually a different set of questions in the mind of the service buyer. Here are questions a service buyer often asks themselves as they enter dialogue with service providers:

Do we really need to spend money on this?
How much do we think it will cost to achieve these goals?
Can we do this work ourselves, do we need to pay someone else to do it or can we share the work-load?
How much is it worth to us to achieve these important goals?
Who is best qualified to achieve these goals and how confident are we in them?

What I’ve noticed is that prospects ask themselves a different set of questions after they’ve been through the consultative sale and are considering a proposal – even a proposal that may include fees that are more than twice as much as they expected:

How much will it cost us NOT to achieve these goals?
Can we expand the budget beyond what we were thinking and feel good about that?
If we don’t work with this firm, who else is left that we believe in?

These are very different questions. They all imply one key concept – the prospect is sold. The prospect wants to move ahead. They want to award you the business and they’ll pay more than what they thought it would cost.

THE CONSULTATIVE PROCESS OPENS UP SERVICE OPPORTUNITIES BEYOND THE PRESENTING NEED

Every service engagement begins with a presenting need. In my experience, the presenting need is often only the tip of the iceberg. Don’t get me wrong, you have to focus on the presenting need or you’ll alienate the prospect. But the consultative sale helps you discover what’s behind the presenting need.

Usually what’s behind the presenting need is a much bigger goal or challenge than what the prospect describes as the presenting need. One of the biggest mistakes made by those who practice the pitch is that they try to win a deal too quickly. They hear a presenting need and want to put a proposal in front of the prospect right away.

The consultative sale enables you to discover a cluster of issues that probably should be addressed just as much as the presenting need itself. Of course, this allows you to expand your scope of services… If the prospect is willing to entertain an expansion of the budget. If not, you have a list of future services to offer the client. Either way, your profits will be stronger and the client will be better served.

CLIENTS WHO TRUST YOU ARE EASIER TO WORK WITH, ENHANCING YOUR PRODUCTIVITY

One of the biggest challenges of the service industry is people. Clients in particular. Here is what I mean. Clients who don’t trust your counsel and who are always arguing with you about your approach take up time and energy that could be applied to other clients and projects. I’ll bet you know what I’m talking about.

The consultative sale fixes this. The consultative sale creates deep trust and a feeling from the client that you know them, care about them and want to help them achieve their goals. The consultative sale also allows you to vet your approach BEFORE the client signs the deal. If they object to something, to a strategy or a specific direction, you’ll know about this and have a chance to address it before the engagement begins.

I have seen, time and time again, high-maintenance clients cost service firms money because that client doesn’t trust the provider. I wrote an article about this that explains what I mean.

The consultative sale lays the foundation for a much smoother client relationship. This allows you to spend more time serving other clients, which improves your profits.

CLIENTS WHO FOLLOW YOUR COUNSEL ARE MORE LIKELY TO ACHIEVE MEANINGFUL OUTCOMES, WHICH GIVES YOU PROOF STATEMENTS TO PERSUADE FUTURE CLIENTS

The greatest indicator of future success is past success. I have long believed this. So do most smart service buyers. For you to win more deals and command the fees you desire, you need proof statements that bolster confidence in your firm.

Here is a phenomenon I’ve noticed. Clients who only half-heartedly believe in a service provider don’t really follow the counsel of that provider. They are often reticent to fully commit and do their part. If they put in half the effort, they’ll get half the results. That’s just the way this seems to work.

But the consultative sale addresses this issue nicely by enhancing client confidence. Clients who are confident are far more likely to suspend their disbelief and do their part. This means they are also far more likely to realize the goals outlined in your proposal. The best part is that they’ll also then be ready to give you a testimonial or some other proof statement. These proof statements help you close future deals faster and with a more favorable fee structure that improves your profits.

LONG-TERM CLIENT LOYALTY IS CEMENTED THROUGH THE CONSULTATIVE PROCESS

Maybe the best outcome of the consultative sale is what it does to client-lifetime-loyalty. This has a huge bearing on profits. I’m sure you’ve likely heard the saying: it’s easier to sell something new to an existing client than it is to sell something existing to a new client.

The point is simply this. Winning new clients is hard. For most service organizations, the majority of their annual revenue comes from clients they’ve earned in prior years, not that fiscal year. This is where the consultative sale really shines.

When you deeply satisfy a client by achieving outcomes that matter to them, they don’t want to go somewhere else. As hard as it is for you to find new clients, it’s often just as hard for them to find a new service provider they trust. When they stay with you, your profits grow year after year. It’s like compounding interest. That’s why you want the consultative sale.

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