Selling Consulting Services

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2 2001, 2006 Huthwaite, Inc. All rights reserved. These copyrighted materials may not be reproduced, publicly displayed, or used to create derivative products in any form without prior written permission from: Huthwaite, Inc. 901 North Glebe Road, Suite 200 Arlington, VA

3 Huthwaite is the world s leading sales performance improvement organization. Founded on scientifically validated behavioral research, our methodologies which include the internationally renowned SPIN Selling guarantee sales success. Huthwaite assesses your organization s needs and Services develops customized sales performance improvement and coaching programs that drive real business results. Huthwaite Creators of SPIN Selling. Selling Consulting The distaste many professionals feel for the word selling isn t entirely misplaced. Sales concepts, models, and methods imported from product selling have generally had questionable success in professional services firms. Professionals typically find models derived from product selling to be pushy and manipulative. Recent research into high-level selling of both products and services is leading to the development of newer and more appropriate models. Our own research, using behavior analysis methodology to build statistical success models of selling, is an example of this more sophisticated approach to the high-level sale. We built success models based on observational studies of 35,000 sales calls, carried out over a period of 12 years. 1,2 The results from these studies have led to the development of sales models that have been extensively tested in the professional services sale. What Is Selling a Consulting Service? As Figure 1 illustrates, classic sales models are about how to get the business. The measure of success of classic selling is how much business you get relative to the business you lose. That s fine on the assumption that all business is desirable. In simple product sales, the assumption may be fair; but it s certainly not so in professional services. Frequently, potential opportunities are highly undesirable they constitute bad assignments. In this context, bad may mean that you lack the skills to complete the assignment well, that you can t deliver value to your client, or that the assignment doesn t meet your criteria for success. However you personally define bad, it s as valid and important a task in the professional sale to avoid bad assignments as it is to get good ones. Finally, as Figure 1 shows, there s another, even more important, dimension to the consulting service sale. In this case, the desired outcome is to take what would otherwise be a bad assignment and, through a skillful selling process, gain the client s agreement to rescope the assignment so that it now meets your criteria for good and you can deliver it effectively. 2001, 2006 Huthwaite, Inc. 1

4 The ability to redefine and rescope assignments during the sales process is arguably the most important of all selling skills. We ve observed hundreds of consultants during the sales process; almost universally, those consultants regarded as most successful by their own organizations give considerable care and attention to rescoping. Figure 1: Three outcomes for the consulting sale. Sales Models for Consulting Services An effective sales model for a consulting relationship must have very different characteristics from the classic selling model. For example, the model must ensure that: Client and consultant are sitting on the same side of the table. Inappropriate engagements are avoided. Selling is a process, not an event. Compatibility exists with consulting models , 2006 Huthwaite, Inc.

5 Sitting on the Same Side of the Table Client and consultant have to be collaborators, not antagonists. An objective of selling must be to bring the parties closer together to reach a shared understanding of the client s problems, their significance, and the value the client will gain from solving them. Avoiding Inappropriate Engagements Effective selling or negotiation means avoiding the inappropriate assignment or rescoping it so that the consultant can deliver real value. Making Selling a Process, Not an Event Selling must be a continuing and dynamic process between client and consultant, not a fixed event which sets scope and fees. The more complex the assignment, the more need to continually resell or renegotiate such elements as priorities or timing. Ensuring Compatibility with Consulting Models If selling and negotiation are continuing parts of the consulting process, it follows that you can t sell in one way and consult in another. The way you sell must be compatible with the way you consult. Both consulting and selling have the common purpose of solving problems, and it s important for an effective sales process to build on this common basis. Background to the Models In this paper, we ll examine one sales model that embodies these characteristics and which is particularly appropriate to professional services. It is a model that: Is one of several emerging from Huthwaite s studies of 35,000 selling interactions. In this brief paper, we re just outlining some conclusions from our research; the detailed evidence is published elsewhere. 1,2 Looks at selling as a collaborative process of mutual clarification between consultant and client. So it starts from a wider definition of selling than commonly used by writers in this field, including the Withdrawing and Rescoping elements described in Figure 1. Is built from studies of the client s needs and concerns. So it reflects the stages through which clients characteristically progress during the sales process. 2001, 2006 Huthwaite, Inc. 3

6 Needs: The Starting Point for Selling The client s starting point in decision-making and the beginning of the problem-solving process is the recognition of a need. Without a perceived need, the client has no reason to acquire services. The consultant s function in helping clients recognize needs isn t one of passive listening. It s an interactive, two-way communication. And it s not a neutral process either: You provide added value to the client by actively influencing the way in which needs are defined and clarified. Needs, in a complex sale, normally progress through characteristic stages, beginning with feelings of dissatisfaction, then progressing through an increasingly clear perception of the problem to a point where the client feels a want or desire to take action. It s important to understand that: Working through these stages with a client ensures that needs are mutually understood and clear many unsatisfactory engagements can be traced back to a lack of shared understanding and clarity during the discussion of needs. The more developed the need, the more likely the client will be to act so helping the client think through these stages of needs development speeds the decision process. Not only is clarification of client needs crucial to structuring an appropriate assignment, but, in ongoing client relationships, helping clients understand their needs allows a consultant to deliver genuine value in a professional manner, thereby further enhancing the consultant s relationship with a client. This clarification of needs is achieved primarily by the use of questions. Our research showed that four types of questions were used by successful professionals with their clients to help them arrive at mutually understood needs. These were: Situation Questions fact-finding questions to establish a mutual understanding of the client s present operation. Problem Questions questions about a client s difficulties or dissatisfactions. These questions uncover Implied Needs, the basic raw materials out of which a client s needs will be defined. Implication Questions questions about the effects or consequences of a client s problems. These questions are particularly important for ensuring shared understanding of a problem s severity or urgency , 2006 Huthwaite, Inc.

7 Need-payoff Questions questions about the value or utility the client sees from proposed solutions to problems. What these questions do is to help the client clarify the benefits which a solution could provide. These four questions form the acronym SPIN. Often they are used in a broad sequence: Situation Questions to establish background, Problem Questions to uncover difficulties or dissatisfactions, Implication Questions to establish the seriousness of problems, and finally, Need-payoff Questions to explore the value of alternative approaches to a solution. Exploring the Sales Model Let s look at that sequence more closely to see how it s used to explore and clarify client needs. Let s assume we re in the recruiting business and you re in the early stages of discussion with a client about recruiting a National Sales Manager. Situation Questions What questions would you be asking as the discussion opens? Typically you might ask: How is the sales force organized at the moment? What s the management structure? Do you have a major account group? How does your remuneration plan compare with competitors plans? The common link in these questions is that they are all collecting data on how the client is operating right now. They are all examples of Situation Questions. Who benefits most from Situation Questions you or the client? Potentially, both parties can benefit; but, generally, you are likely to be the primary beneficiary: The client is educating you in the hope that, later, the knowledge you re gaining will let you add value. Research evidence suggests that most people ask too many Situation Questions early in the discussion. The client will be more prepared to answer detailed Situation Questions later when it s clear that you are able to contribute something of value. Figure 2: The SPIN Model. 2001, 2006 Huthwaite, Inc. 5

8 Problem Questions Let s suppose you know the essential details of the client s situation. Where do you go next? A client who s genuinely satisfied with the way things are now has no reason to take the discussion further. The client must perceive a problem or a source of dissatisfaction in order to proceed. That s why research shows a high number of Problem Questions in successful sales. The common factor in these questions is that they explore the client s perception of problems, difficulties, and dissatisfaction. In our sales force example, typical Problem Questions might be: Has sales productivity fallen behind your competition? Are customers satisfied? Implication Questions How do you and your client come to a common understanding of a problem s seriousness? That s the role of Implication Questions. In this case, for example, you might ask questions such as: Does the poor communication between R&D and Marketing lead to sub-optimal technology in your products? Are you losing your best technical people as a result? Does that mean your competition is taking your market? Implication Questions such as these explore the effects or consequences of problems. They create a shared understanding of a problem s severity and, by doing so, increase the value the client perceives from solving the problem. Implication Questions are the most powerful of all selling behaviors. Our research has consistently shown that successful business developers make higher than average use of them. What s more, clients give positive ratings for professionalism, candor, and competence to consultants who use many Implication Questions. Furthermore, the effective use of Implication Questions is likely to defuse subsequent concerns about high fee levels. Need-payoff Questions The questions we ve looked at so far Situation, Problem, and Implication are all concerned with defining the extent of the problem. At some point in the discussion, your attention must turn to the solution to the benefits which the client gains from solving the problem. Traditionally, we ve been taught that this is the point in the sale where, having defined the problem, you explain the benefit of the solution you could offer. You make statements such as, One benefit which you d get from a planner with a marketing background would be a better product development strategy. But, in a professional relationship, there s a danger in telling clients about the benefits they might get from your approach. If you re not careful, you can sound as if you re selling your solution. A preferable way to discuss benefits is for you to use what we would call Need-payoff Questions. These are questions like: How would that help you? What benefits would you see from this approach? Marketing skills will help you in terms of product launches, but do you see any other benefits? , 2006 Huthwaite, Inc.

9 Need-payoff Questions explore the utility or value of a particular solution. In doing so, they: Get the client to tell you the benefits of a proposed approach. Check whether the client s expectations are realistic. Allow you to explore the benefits without seeming to sell your solution. Figure 3: Establishing a shared understanding of a problem s severity with Implication Questions. Applying the Model It s important to recognize the dangers of adopting any mechanistic selling formula. The SPIN approach isn t a rigid sequence, although it frequently is sequential. That s because it s generally true, for example, that you need to find out something about the situation before you discuss problems and you wouldn t normally start to explore the value of a solution before the problem has been defined. We put the model forward here as an example of the newer and more 2001, 2006 Huthwaite, Inc. 7

10 sophisticated approach to selling which is emerging from studies of complex sales and which has direct applicability to the consulting sale. As research continues into high-level selling, we anticipate that further sales models will be developed that have increasing relevance to the professional sale. A common thread in these newer models will be their non-manipulative emphasis on gaining a shared understanding with the client of problems and their severity. 1 Rackham, N. SPIN Selling, McGraw-Hill, New York (1988) 2 Rackham, N. Major Account Sales Strategy, McGraw-Hill, New York (1989) , 2006 Huthwaite, Inc.

11 Huthwaite is the world s leading sales performance improvement organization. Founded on scientifically validated behavioral research, our methodologies which include the internationally renowned SPIN Selling guarantee sales success. Huthwaite assesses your organization s needs and develops customized sales performance improvement and coaching programs that drive real business results. Huthwaite Creators of SPIN Selling.

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