What Is Consultative Selling? Consultative Selling In A Nutshell

Consultative selling is a sales approach favoring relationship building and open dialogue to meet a prospective customer’s needs adequately. By building trust quickly, a consultative selling approach can help the customer better meet her/his expectations, and the salesperson hits her/his targets more effectively.

Component	Description
Definition	Consultative Selling is a sales approach that focuses on building strong, long-term relationships with customers by acting as a trusted advisor and offering personalized solutions to their specific needs and challenges. It involves active listening, asking probing questions, and providing expert guidance to help customers make informed purchasing decisions.
Customer-Centric	The primary focus of consultative selling is on the customer’s needs, goals, and challenges. Sales professionals aim to understand the customer’s business and industry thoroughly, tailoring their approach to provide maximum value and relevance.
Needs Assessment	Consultative sellers conduct in-depth needs assessments by asking open-ended questions to uncover pain points, goals, and opportunities. They aim to identify the customer’s underlying problems and objectives, which forms the basis for proposing solutions.
Custom Solutions	Unlike traditional sales approaches, consultative selling emphasizes customizing solutions. Salespeople collaborate with customers to design offerings that precisely address their unique requirements, ensuring the highest possible satisfaction and ROI.
Product Knowledge	Consultative sellers possess in-depth knowledge of their products or services, enabling them to align offerings with customer needs effectively. They can demonstrate how their solutions address specific pain points and deliver superior value.
Relationship Building	Building trust and credibility is crucial in consultative selling. Sales professionals aim to establish strong, long-lasting relationships with customers, positioning themselves as reliable advisors who genuinely care about the client’s success.
Communication Skills	Effective communication is vital in consultative selling. Salespeople must be skilled listeners, ask relevant questions, and articulate solutions clearly. They adapt their communication style to match the customer’s preferences and maintain a collaborative dialogue.
Problem Solving	Consultative sellers approach each interaction as an opportunity to solve a problem or address a need. They present solutions that not only meet the customer’s requirements but often exceed expectations, demonstrating added value.
Value Proposition	The value proposition in consultative selling extends beyond product features and pricing. It encompasses the benefits, outcomes, and competitive advantages that the customer will gain from choosing the solution, emphasizing the value of the partnership.
Customer Education	Consultative sellers educate customers about industry trends, best practices, and potential challenges. They empower customers with knowledge, enabling them to make informed decisions and understand the full impact of their choices.
ROI-Focused	Consultative sellers emphasize the return on investment (ROI) that customers can expect from their solutions. They provide data-driven insights and case studies to demonstrate how their offerings contribute to revenue growth or cost savings.
Applications	Consultative selling is applicable across various industries and sectors, including B2B and B2C. It is particularly effective in complex, high-value sales scenarios, such as enterprise software, professional services, and customized solutions.
Benefits	– Increased customer trust and loyalty. – Higher conversion rates and average deal sizes. – Enhanced customer satisfaction and retention. – Improved sales team performance and motivation. – Greater competitiveness and differentiation in the market. – Long-term revenue growth.
Implementation	Implementing consultative selling requires sales training and development programs that focus on active listening, problem-solving, and relationship-building skills. Sales teams should adopt a customer-centric mindset and align with the organization’s goals and values.
Metrics	Key performance indicators (KPIs) for consultative selling may include customer satisfaction scores, deal close rates, average deal size, customer lifetime value, and sales cycle length. These metrics help assess the effectiveness of the approach and drive continuous improvement.
Examples	– A technology salesperson conducts a thorough needs assessment and proposes a tailored IT solution that optimizes a company’s operations. – A financial advisor provides personalized investment strategies based on a client’s financial goals and risk tolerance. – A real estate agent offers a range of property options that align with a homebuyer’s preferences and lifestyle. – A business consultant analyzes a client’s operations and recommends process improvements to enhance efficiency and profitability.

Table of Contents

Understanding consultative selling

Spoilt for choice and with high expectations, modern consumers and businesses are extremely sensitive to traditional marketing and sales tactics.

This is particularly evident when they feel pressured to buy something from an aggressive sales representative determined to make a commission.

Consultative selling focuses on the experience or interaction a potential customer has with an organization.

It is solution-based, customer-centric, and prioritizes the formation of solid relationships.

Company representatives act more like advisors than salespeople, recommending value-providing solutions tailored to the customer’s individual needs.

Trust is about competence

This can radically improve the chances of closing a sale and speed up building trust between the potential customer and the salesperson.

The salesperson that uses the consultative approach is aware that to build trust with the customer, rather than trying to be pushy, she/he needs to build a solid competence around the product.

This is a critical step to serve the potential customer properly.

The consultative approach transforms the salesperson into an engineer with the sensibility of a potential customer

So much so to be able to interface with the product and engineering team, to understand all the facets of the product and how they can serve the customer.

Only, in that case the salesperson becomes truly useful to the potential customer, as she/he understands in the first place how the product can be applied to the potential customer’s business.

And the salesperson becomes a sort of analyst able to provide key business insights to the potential customer.

When the potential customer grasps the ability of the salesperson to provide insights for the business and identify opportunities, this makes the whole sales process way smoother.

The five steps of consultative selling

There are five steps, or guiding principles, to consultative selling:

1 – Ask the right questions

Here, the business must diagnose the root cause of a problem by asking the right questions.

Open-ended questions that avoid “yes” or “no” answers encourage the lead to volunteer information themselves, which increases trust and mutual understanding.

In the B2B space, it can be helpful to peruse the company’s social pages and website to get an idea of its size, approximate turnover, core product offering, and target market.

It’s also important to determine how much the customer has budgeted for a solution to avoid any unwelcome surprises later.

The more you move from consumers to enterprise clients, the more you’ll need a sales force able to manage complex sales. As a rule of thumb, a more expensive product, in B2B or Enterprise, will require an organizational structure around sales. An inexpensive product to be offered to consumers will leverage marketing.

For that, the salesperson needs to identify early whether the customer is on target with the product.

Imagine, for instance, the case of a company offering an enterprise product that works well for larger organizations.

This solution might not be in target for the customer, and this might hamper the whole sales process, thus wasting the time of both the potential customer and salesperson.

2 – Listen actively

Customers are always aware of their own problems, but many believe they need one solution when they need something else entirely.

Active listening helps the business read between the lines, as it were. To listen actively, the advisor needs to spend 80% of the time listening and 20% speaking.

Active listening is the process of listening attentively while someone speaks and displaying understanding through verbal and non-verbal techniques. Active listening is a fundamental part of good communication, fostering a positive connection and building trust between individuals.

This allows them to pay attention to verbal and non-verbal cues, which provide essential insights into their motivations for buying.

Ultimately, these motivations are based on pain points, which are based on emotions not always communicated in words.

3 – Educate

In consultative selling, education means teaching a lead how to make an educated decision.

Always assume the lead has done their research and requires help implementing what they already know.

Education can take the form of related case studies from previous clients.

Alternatively, it may incorporate a well-presented plan for addressing the problem supported by factual evidence.

In any case, it is important to balance helpfulness with oversharing to avoid giving the lead everything they need for free.

When it comes to enterprise clients, it’s critical to find the sweet spot between what can be offered as a free service to introduce the service and make sure the potential customer, on the other side, fully understands the product’s value.

Indeed, at the enterprise level, it might be fine for the organization to offer a free pilot, for instance, as it might reduce the friction on a very complex product that needs the whole organization to be aligned.

Therefore, the onboarding and sales process will highly depend on the ability of the company to show value to have large clients commit to a complex and substantial deal.

Take the case of Palantir, which goes into very complex deals that very few are willing to take, investing millions upfront to do integrations before having the client sign up for the deal.

That’s because Palantir knows that when the deal is in, it’ll become a sizeable multi-year agreement that can be consolidated and grown over time, providing an incredible ROI in the long run.

Palantir is a software company offering intelligence services to governments, institutions, and large commercial organizations. The company’s two leading platforms, Gotham and Foundry, are integrated at the enterprise level. Its business model follows three phases: Acquire, Expand, and Scale. The company bears the pilot costs in the acquire and expand phases and runs at a loss. Where in the scale phase, the customers’ contribution margins become positive.

A similar logic is followed by SaaS companies that look at the lifetime value of a potential customer and based on that, they invest in sales and marketing activities.

One of the first mentions of customer lifetime value was in the 1988 book Database Marketing: Strategy and Implementation written by Robert Shaw and Merlin Stone. Customer lifetime value (CLV) represents the value of a customer to a company over a period of time. It represents a critical business metric, especially for SaaS or recurring revenue-based businesses.

Of course, when capital is readily available and revenues grow quickly, sales and marketing people have way more flexibility in giving more – for free – to the potential customer to acquire it.

When capital is expensive, and it’s harder to grow the top line, then it becomes critical to understand what core actions salespeople can take to close deals with a consultative approach.

4 – Customise

As a potential sale draws nearer, tailoring the customer’s experiences becomes crucial.

The key at this point is to organically suggest how specific products or services may meet the consumer’s needs.

Abruptly entering into a sales pitch may pressure the lead and undo the good work done in the previous steps.

Showing the product in action can help solidify this suggestion.

While the advisor is trying to make money for the business, they must remain authentic and genuine.

A tailored solution must be just that: tailored.

Can the business tweak its existing product or service to meet the needs of a specific customer? Can it offer an exclusive discount or promotion?

Customization goes a long way, as long as it’s in target with the overall business strategy.

For instance, imagine you have a software business, but your potential clients ask for consultancy.

Offering a consultancy service on top of the software business can be a great way to acquire them.

Is this in line with the long-term mission of the business?

If so, you can customize your product to enhance it with services.

If not, you might have to rethink your sales funnel and the customers you’re targineting.

5 – Close

The chances of closing the deal are increased by following the above principles.

However, pushback may occur in certain circumstances for a variety of reasons.

In this situation, it may be helpful for the advisor to broach the topic of the potential consequences of not making a purchase.

What might happen if the buyer can’t reach a goal, execute on strategy, or overcome their challenges?

Above all, a successful close should feel like the natural conclusion to discussions for both the business and its new client.

This increases the likelihood that the two parties are a good fit.

When you walk into a deal, make sure you have the right mindset.

Usually, that is a win-win mindset.

Win-win negotiations first rose to prominence during the 1980s, thanks in part to books like Roger Fisher, William Ury, and Bruce Patton’s bestseller Getting to Yes: Negotiating Agreement Without Giving In. Having said that, there was also a shifting mindset at the time as negotiators saw win-win negotiations as preferable to the then-dominant win-lose approach. A win-win negotiation is a negotiation outcome resulting in a mutually acceptable and beneficial deal for all involved parties.

And you can leverage concepts like WATNA, BATNA, and ZOPA.

With WATNA, you can set up negative boundaries for the negotiation.

In negotiation, WATNA stands for “worst alternative to a negotiated agreement,” representing one of several alternative options if a resolution cannot be reached. This is a useful technique to help understand what might be a negotiation outcome, that even if negative is still better than a WATNA, making the deal still feasible.

Whereas with BATNA, you can set up positive boundaries for the same.

In negotiation theory, BATNA stands for “Best Alternative To a Negotiated Agreement,” and it’s one of the key tenets of negotiation theory. Indeed, it describes the best course of action a party can take if negotiations fail to reach an agreement. This simple strategy can help improve the negotiation as each party is (in theory) willing to take the best course of action, as otherwise, an agreement won’t be reached.

And the ZOPA will be the range within which the deal can be successfully closed.

The ZOPA (zone of possible agreement) describes an area in which two negotiation parties may find common ground. Indeed, ZOPA is critical to explore the deals where the parties get a mutually beneficial outcome to prevent the risk of a win-lose, or lose-win scenario. And therefore get to the point of a win-win negotiation outcome.

Drawbacks of Consultative Selling

Time-Consuming Process:

Lengthy Sales Cycle: The consultative selling approach typically involves a longer sales cycle due to the time taken to understand customer needs deeply and develop tailored solutions.
Resource Intensive: It requires significant investment in terms of time and resources both from the salesperson and the potential client, which might not always be feasible or desirable.

Dependency on Skill and Relationship:

High Dependence on Salesperson’s Skill: The effectiveness of consultative selling heavily relies on the salesperson’s ability to build trust, understand client needs, and provide insightful solutions. Inconsistent skill levels among sales staff can lead to variable success rates.
Risk of Misinterpreting Customer Needs: There is a potential risk of misinterpreting or inadequately addressing customer needs, which can result in lost sales opportunities or damaged relationships.

Not Suitable for All Products or Markets:

Limited Applicability: Consultative selling may not be suitable for all types of products or markets, particularly where quick transactional sales are the norm or where customers do not require extensive guidance.
Less Effective for Low-Value Products: This approach may not be cost-effective or necessary for low-value or commoditized products where price and convenience are the main selling points.

Potential for Customer Resistance:

Possible Resistance from Customers: Some customers may be resistant to the in-depth approach of consultative selling, preferring a more straightforward, transactional interaction.
Perceived Intrusiveness: Customers might perceive the deep questioning and exploration of their needs as intrusive, especially if not executed with the right level of tact and professionalism.

When to Use Consultative Selling

Ideal Use Cases:

Complex or High-Value Products/Services: Particularly effective for selling complex solutions or high-value products where customers are likely to benefit from a consultative approach.
B2B Sales: Often used in business-to-business (B2B) scenarios where customized solutions are required and where the buying process involves multiple decision-makers and a longer decision cycle.

Strategic Application:

Building Long-Term Relationships: Ideal for sales strategies focused on building long-term customer relationships and loyalty.
Solution-Based Selling: Useful in situations where understanding the client’s broader business challenges and goals is key to offering the right solution.

How to Use Consultative Selling

Implementing the Approach:

Research and Preparation: Conduct thorough research about the potential client and their industry to understand their potential needs and challenges.
Build Relationships: Focus on building a relationship based on trust and credibility with the client.
In-Depth Needs Analysis: Engage in detailed discussions to deeply understand the client’s needs, challenges, and business objectives.
Tailored Solutions: Develop and propose solutions that are specifically tailored to address the client’s unique requirements.
Collaborative Decision Making: Work collaboratively with the client to refine and adjust the solution as needed.

Best Practices:

Active Listening: Employ active listening to truly understand the client’s perspective.
Expertise and Insight: Bring valuable insights and expert advice to the table, demonstrating a deep understanding of the client’s industry and challenges.
Patience and Persistence: Be patient and persistent, as consultative selling often involves nurturing the client relationship over a longer period.

What to Expect from Implementing Consultative Selling

Enhanced Customer Relationships:

Stronger Client Bonds: Can lead to the development of stronger, more trusting client relationships.
Higher Customer Satisfaction: Clients who feel their needs are understood and met are more likely to be satisfied and loyal.

Organizational Impact:

Potential for Higher Sales Value: Consultative selling can lead to higher-value sales through the development of customized, comprehensive solutions.
Increased Customer Lifetime Value: The focus on long-term relationships can increase the lifetime value of customers to the organization.

Potential Challenges:

Skill Development Required: Sales teams may require training and development to effectively adopt a consultative selling approach.
Adapting to Different Customer Preferences: Salespersons need to adapt their approach based on customer preferences for the level of consultation and engagement they desire.

Long-Term Benefits:

Sustainable Sales Growth: By focusing on long-term relationships and customer needs, consultative selling can contribute to sustainable growth.
Competitive Advantage: This approach can provide a competitive edge by positioning the sales team as trusted advisors rather than just vendors.

In summary, consultative selling emphasizes building strong, trust-based relationships with customers, focusing on understanding and meeting their needs with tailored solutions. While it offers significant benefits in terms of customer satisfaction and long-term value, it requires considerable skill, time, and resources, and may not be suitable for all sales contexts.

Case Studies

Scenario 1: Real Estate Agent Assisting Homebuyer

Ask the Right Questions:
- “What are your ideal features in a home?”
- “Are there any specific neighborhoods you prefer?”
Listen Actively:
- Homebuyer mentions a preference for a quiet neighborhood and a backyard for gardening.
Educate:
- The agent provides information about neighborhoods with these features.
Customize:
- The agent shows homes in quiet neighborhoods with spacious backyards.
Close:
- The agent asks, “Are you ready to make an offer on the home that fits your preferences?”

Scenario 2: Financial Advisor for Investment

Ask the Right Questions:
- “What are your long-term financial goals?”
- “How comfortable are you with investment risk?”
Listen Actively:
- Client expresses a desire for retirement savings and low-risk investments.
Educate:
- Advisor explains low-risk investment options and their potential returns.
Customize:
- Advisor suggests a diversified portfolio with low-risk investments.
Close:
- Advisor asks, “Shall we proceed with setting up your investment portfolio according to your goals and risk tolerance?”

Scenario 3: Marketing Consultant for Small Business

Ask the Right Questions:
- “Tell me about your target audience and current marketing efforts.”
- “What are your primary marketing goals?”
Listen Actively:
- Business owner expresses frustration with low website traffic.
Educate:
- Consultant explains the benefits of SEO and PPC advertising.
Customize:
- Consultant recommends a digital marketing plan focused on increasing website traffic.
Close:
- Consultant asks, “Are you ready to proceed with our tailored marketing strategy to boost your online presence?”

Scenario 4: Technology Sales to Enterprise Client

Ask the Right Questions:
- “What are your current technology systems and challenges?”
- “What are your long-term IT goals?”
Listen Actively:
- Enterprise client mentions scalability issues with their current software.
Educate:
- Sales team presents a comprehensive solution with scalability features.
Customize:
- Sales team offers a tailored implementation plan.
Close:
- Sales team asks, “Shall we move forward with the integration of our software to address your scalability needs?”

Key takeaways

Consultative selling is a solution-based, customer-centric sales approach with a core focus on building strong relationships.
Consultative selling is underpinned by a deep understanding of the client. Avoiding open-ended questions and doing some background research on a company can go a long way to establishing trust from the outset.
Consultative selling also advocates active listening, where 80% of the meeting is spent listening and 20% speaking. This approach allows the advisor to identify verbal and non-verbal buying motives often based on emotion.

Key Highlights of Consultative Selling:

Customer-Centric Approach: Consultative selling prioritizes building strong relationships with customers by focusing on their individual needs and providing value-based solutions.
Trust Building: Trust is a crucial element of consultative selling, and it’s built through competence. Salespeople need to deeply understand the product or service they are offering to gain the trust of potential customers.
Five Steps of Consultative Selling:
- Ask the Right Questions: Effective questioning helps diagnose the root cause of a problem and uncover customer needs. Open-ended questions encourage dialogue and build trust.
- Listen Actively: Active listening is essential for understanding customers’ motivations, pain points, and emotions. It involves spending more time listening than speaking.
- Educate: Advisors should help customers make informed decisions by providing relevant information, case studies, and evidence to support their recommendations.
- Customize: Tailoring solutions to meet the specific needs of each customer is crucial. This customization should align with the business’s long-term mission and strategy.
- Close: Successful closing should feel like a natural conclusion to discussions and should align with a win-win mindset, considering the best alternatives to a negotiated agreement (BATNA) and the zone of possible agreement (ZOPA).
Win-Win Mindset: Consultative selling promotes a win-win mindset in negotiations, aiming for mutually beneficial deals. Concepts like BATNA, WATNA, and ZOPA help navigate negotiations effectively.
Key Takeaways: Consultative selling is customer-centric, emphasizing strong relationships, deep understanding of the client, active listening, and a win-win negotiation approach. Open-ended questions and background research are essential for building trust and providing value to customers.

Related Frameworks	Description	When to Apply
Needs Assessment	– Description: Involves thorough exploration and understanding of the customer’s challenges, goals, and pain points. Needs Assessment lays the foundation for tailored solutions and value propositions.	When engaging with prospects and customers to uncover their specific needs, priorities, and pain points, guiding the development of customized solutions and recommendations.
Solution Selling	– Description: Focuses on positioning the company’s products or services as solutions to the customer’s identified challenges and needs. Solution Selling emphasizes value and benefits over features.	When presenting offerings as solutions to address specific customer challenges and objectives, highlighting the unique value proposition and benefits that meet the customer’s needs.
Questioning Techniques	– Description: Utilizes open-ended questions to probe deeper into the customer’s situation, uncovering valuable insights and opportunities. Questioning Techniques facilitate active listening and discovery.	When engaging in conversations with customers to understand their objectives, preferences, and challenges, using open-ended questions to elicit detailed responses and uncover underlying needs.
Active Listening	– Description: Involves fully concentrating, understanding, responding, and remembering what is being said by the customer. Active Listening fosters empathy and builds rapport.	When engaging with customers, actively listening to their concerns, preferences, and objectives, demonstrating empathy and understanding to establish trust and credibility.
Consultative Discovery Process	– Description: Guides the sales process through a structured approach to uncovering customer needs, goals, and pain points. The Consultative Discovery Process informs tailored solutions and recommendations.	When engaging with customers, following a systematic approach to uncovering their specific challenges, objectives, and preferences, guiding the development of customized solutions and recommendations.
Value Proposition Development	– Description: Focuses on articulating the unique value and benefits of the company’s offerings to address customer needs and challenges. Value Proposition Development emphasizes relevance and differentiation.	When communicating with customers, crafting compelling value propositions that highlight the unique benefits and advantages of the company’s offerings, resonating with the customer’s specific needs and objectives.
Relationship Building	– Description: Establishes and nurtures long-term relationships with customers based on trust, credibility, and mutual understanding. Relationship Building fosters loyalty and advocacy.	Throughout the sales process and beyond, investing time and effort in building rapport and trust with customers, demonstrating reliability and commitment to their success.
Educational Selling	– Description: Involves providing valuable insights, information, and resources to customers to help them make informed decisions. Educational Selling positions the salesperson as a trusted advisor.	When engaging with customers, offering educational content, resources, and thought leadership to help them better understand their challenges and explore potential solutions, building credibility and trust.
Problem-Solving Approach	– Description: Focuses on collaboratively identifying and solving customer challenges and pain points through innovative solutions. Problem-Solving Approach demonstrates commitment to customer success.	When engaging with customers, adopting a collaborative problem-solving mindset to address their specific challenges and objectives, exploring creative and innovative solutions together.
Continuous Improvement	– Description: Emphasizes ongoing learning, feedback, and adaptation to enhance sales effectiveness and customer satisfaction. Continuous Improvement drives innovation and excellence.	Throughout the sales process and beyond, actively seeking feedback, reflecting on performance, and making adjustments to improve sales techniques, customer interactions, and overall outcomes.

Related Business Concepts

Business Development

Business development comprises a set of strategies and actions to grow a business via a mixture of sales, marketing, and distribution. While marketing usually relies on automation to reach a wider audience, and sales typically leverage a one-to-one approach. The business development’s role is that of generating distribution.

Sales vs. Marketing

Sales Cycle

A sales cycle is the process that your company takes to sell your services and products. In simple words, it’s a series of steps that your sales reps need to go through with prospects that lead up to a closed sale.

RevOps

RevOps – short for Revenue Operations – is a framework that aims to maximize the revenue potential of an organization. RevOps seeks to align these departments by giving them access to the same data and tools. With shared information, each then understands their role in the sales funnel and can work collaboratively to increase revenue.

BATNA

WATNA

ZOPA

Revenue Modeling

Revenue modeling is a process of incorporating a sustainable financial model for revenue generation within a business model design. Revenue modeling can help to understand what options make more sense in creating a digital business from scratch; alternatively, it can help in analyzing existing digital businesses and reverse engineer them.

Customer Experience Map

Customer experience maps are visual representations of every encounter a customer has with a brand. On a customer experience map, interactions called touchpoints visually denote each interaction that a business has with its consumers. Typically, these include every interaction from the first contact to marketing, branding, sales, and customer support.

AIDA Model

AIDA stands for attention, interest, desire, and action. That is a model that is used in marketing to describe the potential journey a customer might go through before purchasing a product or service. The AIDA model helps organizations focus their efforts when optimizing their marketing activities based on the customers’ journeys.

Social Selling

Social selling is a process of developing trust, rapport, and a relationship with a prospect to enhance the sales cycle. It usually happens through tech platforms (like LinkedIn, Twitter, Facebook, and more), which enable salespeople to engage with potential prospects before closing the sale, thus becoming more effective.

CHAMP Methodology

The CHAMP methodology is an iteration of the BANT sales process for modern B2B applications. While budget, authority, need, and timing are important aspects of qualifying sales leads, the CHAMP methodology was developed after sales reps questioned the order in which the BANT process is followed.

BANT Sales Process

The BANT process was conceived at IBM in the 1950s as a way to quickly identify prospects most likely to make a purchase. Despite its introduction around 70 years ago, the BANT process remains relevant today and was formally adopted into IBM’s Business Agility Solution Identification Guide.

MEDDIC Sales Process

The MEDDIC sales process was developed in 1996 by Dick Dunkel at software company Parametric Technology Corporation (PTC). The MEDDIC sales process is a framework used by B2B sales teams to foster predictable and efficient growth.

STP Marketing

STP marketing simplifies the market segmentation process and is one of the most commonly used approaches in modern marketing. The core focus of STP marketing is commercial effectiveness. Marketers use the approach to select the most valuable segments from a target audience and develop a product positioning strategy and marketing mix for each.

Sales Funnels vs. Flywheels

The sales funnel is a model used in marketing to represent an ideal, potential journey that potential customers go through before becoming actual customers. As a representation, it is also often an approximation, that helps marketing and sales teams structure their processes at scale, thus building repeatable sales and marketing tactics to convert customers.

Pirate Metrics

Venture capitalist, Dave McClure, coined the acronym AARRR which is a simplified model that enables to understand what metrics and channels to look at, at each stage for the users’ path toward becoming customers and referrers of a brand.

Bootstrapping

The general concept of Bootstrapping connects to “a self-starting process that is supposed to proceed without external input.” In business, Bootstrapping means financing the growth of the company from the available cash flows produced by a viable business model. Bootstrapping requires the mastery of the key customers driving growth.

Virtuous Cycles

The virtuous cycle is a positive loop or a set of positive loops that trigger a non-linear growth. Indeed, in the context of digital platforms, virtuous cycles – also defined as flywheel models – help companies capture more market shares by accelerating growth. The classic example is Amazon’s lower prices driving more consumers, driving more sellers, thus improving variety and convenience, thus accelerating growth.

Sales Storytelling

Business storytelling is a critical part of developing a business model. Indeed, the way you frame the story of your organization will influence its brand in the long-term. That’s because your brand story is tied to your brand identity, and it enables people to identify with a company.

Enterprise Sales

Enterprise sales describes the procurement of large contracts that tend to be characterized by multiple decision-makers, complicated implementation, higher risk levels, or longer sales cycles.

Outside Sales

Outside sales occur when a salesperson meets with prospects or customers in the field. This sort of sales function is critical to acquire larger accounts, like enterprise customers, for which the acquisition process is usually longer, more complex and it requires the understanding of the target organization. Thus the outside sales will cut through the noise to acquire a large enterprise account for the organization.

Freeterprise

A freeterprise is a combination of free and enterprise where free professional accounts are driven into the funnel through the free product. As the opportunity is identified the company assigns the free account to a salesperson within the organization (inside sales or fields sales) to convert that into a B2B/enterprise account.

Sales Distribution Framework

Zero to One is a book by Peter Thiel. But it also represents a business mindset, more typical of tech, where building something wholly new is the default mode, rather than building something incrementally better. The core premise of Zero to One then is that it’s much more valuable to create a whole new market/product rather than starting from existing markets.

Palantir Acquire, Expand, Scale Framework

Palantir is a software company offering intelligence services from governments and institutions to large commercial organizations. The company’s two main platforms Gotham and Foundry, are integrated at enterprise-level. Its business model follows three phases: Acquire, Expand, and Scale. The company bears the pilot costs in the acquire and expand phases, and it runs at a loss. Where in the scale phase, the customers’ contribution margins become positive.

Consultative Selling

Consultative selling is a sales approach favoring relationship building and open dialogue to adequately meet the needs of a prospective customer. By building trust quickly a consultative selling approach can help the customer better meet her/his expectations and the salesperson hit her/his targets more effectively.

Unique Selling Proposition

A unique selling proposition (USP) enables a business to differentiate itself from its competitors. Importantly, a USP enables a business to stand for something that they, in turn, become known among consumers. A strong and recognizable USP is crucial to operating successfully in competitive markets.

Read: product development frameworks here.

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