consultative-selling

What Is Consultative Selling? Consultative Selling In A Nutshell

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.

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 a organisation. It is solution-based, customer-centric, and prioritizes the formation of strong relationships. Company representatives act more like advisors than salespeople, recommending value-providing solutions tailored to the individual needs of the customer.

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.

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

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

3 – Educate 

In the context of consultative selling, education means teaching a lead how to make an educated decision. Always assume the lead has done their research and requires help in 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.

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 certain 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?

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. 

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.

Related Business Concepts

Business Development

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 on a one-to-one approach. The business development’s role is that of generating distribution.

Marketing vs. Sales

marketing-vs-sales
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 on marketing.

New Product Development

product-development
Product development, known as the new product development process comprises a set of steps that go from idea generation to post-launch review, which help companies analyze the various aspects of launching new products and bringing them to market. It comprises idea generation, screening, testing; business case analysis, product development, test marketing, commercialization, and post-launch review.

BCG Matrix

bcg-matrix
In the 1970s, Bruce D. Henderson, founder of the Boston Consulting Group, came up with The Product Portfolio (aka BCG Matrix, or Growth-share Matrix), which would look at a successful business product portfolio based on potential growth and market shares. It divided products into four main categories: cash cows, pets (dogs), question marks, and stars.

Ansoff Matrix

ansoff-matrix
You can use the Ansoff Matrix as a strategic framework to understand what growth strategy is more suited based on the market context. Developed by mathematician and business manager Igor Ansoff, it assumes a growth strategy can be derived by whether the market is new or existing, and the product is new or existing.

User Experience Design

user-experience-design
The term “user experience” was coined by researcher Dr. Donald Norman who said that “no product is an island. A product is more than the product. It is a cohesive, integrated set of experiences. Think through all of the stages of a product or service – from initial intentions through final reflections, from first usage to help, service, and maintenance. Make them all work together seamlessly.” User experience design is a process that design teams use to create products that are useful and relevant to consumers.

Cost-Benefit Analysis

cost-benefit-analysis
A cost-benefit analysis is a process a business can use to analyze decisions according to the costs associated with making that decision. For a cost analysis to be effective it’s important to articulate the project in the simplest terms possible, identify the costs, determine the benefits of project implementation, assess the alternatives.

Empathy Mapping

empathy-mapping
Empathy mapping is a visual representation of knowledge regarding user behavior and attitudes. An empathy map can be built by defining the scope, purpose to gain user insights, and for each action, add a sticky note, summarize the findings. Expand the plan and revise.

Perceptual Mapping

perceptual-mapping
Perceptual mapping is the visual representation of consumer perceptions of brands, products, services, and organizations as a whole. Indeed, perceptual mapping asks consumers to place competing products relative to one another on a graph to assess how they perform with respect to each other in terms of perception.

Value Stream Mapping

value-stream-mapping
Value stream mapping uses flowcharts to analyze and then improve on the delivery of products and services. Value stream mapping (VSM) is based on the concept of value streams – which are a series of sequential steps that explain how a product or service is delivered to consumers.

Read the remaining product development frameworks here.

Read Next: SWOT AnalysisPersonal SWOT AnalysisTOWS MatrixPESTEL AnalysisPorter’s Five ForcesTOWS MatrixSOAR Analysis.

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