Tuesday, April 04, 2006

Consultative Selling - Way to sell Enterprise Software

Companies decide to buy enterprise software or opt for developing their own software based on the business needs. Customer will then choose a solution which will satisfy their needs. In other words, the "satisfaction of the needs" drives the buying decision.

To understand this better, lets consider a manufacturing firm (say DIY Inc) which makes and sells semiconductor I.Cs. The company has 40+ existing customer for its products and is talking to 500+ potential customers. The company wants to implement a CRM software to manage all its customer interactions. This represents a latent need for DIY Inc. The management at DIY Inc has recognized the need for a CRM solution - and calls for quotations from several vendors.

This is when a salesman - selling enterprise software comes in. To close the deal, the salesman must adorn a role of a consultant and work with the customer - to identify all aspects of the customer’s need, help in evaluating the options, resolve all the concerns the customer may have, help in making the purchase and support the implementation.

This process is called as ‘consultative selling’. Consultative selling involves five distinct stages:


Stage-1: Recognition of Needs

The value a salesman can add in this stage is to help customer recognize all the aspects of his/her needs. At the end of this stage, the customer must be able to define all his needs.A successful salesman will be the one who can get the customer define his/her needs in a way that closely matches with the solution he/she is trying to sell.

In our example, the salesman must help the management identify who all will use the CRM solution - Finance department - to account for sales from a particular customer account, legal department - to draw up the contracts with the customer, marketing department - to communicate with the customer on future marketing messages, Manufacturing department - to integrate their ERP system with any new orders from new customers etc.

Stage-2: Evaluation of various options

In this stage, a salesman must be able to present multiple options to solve the customer’s need with his CRM solution. A salesman must convince that the solution he is trying to sell can meet customer’s needs in more than one way. This will set the stage for the salesman to show the value of his solution and demonstrate that his solution is superior to other competing options.

In our example, the salesman must demonstrate the flexibility of his CRM solution - how the CRM software can be configured in different ways to solve the same problem. Demonstrate or convince the customer on how the CRM solution will integrate seamlessly to their accounting system, ERP system etc.

At this stage, it becomes essential to use value based selling techniques to convince the customer that his solution has a higher ROI (return on Investment) or lower TCO (total cost of ownership). A successful salesmen will be the one who can convince the economic value of his solution to the customer.

Stage-3: Resolve all concerns

Selling an enterprise software is always a complex sale. There will be few persons (also called as customer champion) in the customer company who will be supporting one solution, while there will be few persons who will be opposing it. People who oppose a particular solution will always raise concerns - regarding its functionality or ease of use etc., and will raise objections based on these concerns.

Salesman’s job at this stage is resolve all concerns and convince all doubters that his solution will work. This is essential because in most complex sales, decision makers will be putting their career and reputation at stake by opting to buy your solution - and if they perceive that your solution does not work for someone then they are more likely to back off.

To understand this better, say the VP of Sales is convinced about your CRM solution and wants to buy it. But the Marketing head feels that the CRM solution does not meet his needs. As a salesman, your task is to talk with the marketing head, understand his concerns and show how the CRM solution meets his needs.

Stage-4: Purchase

Purchase of any enterprise software is not simple. The purchase is a complex process involving several contracts, SOWs (Statement Of Work), payment terms, software support contracts etc. The salesman job in this stage is to work with the legal departments on both the companies - his own & customer’s firm and ensure that the purchase goes through smoothly. A salesman must answer any questions regarding the legal terms and resolve any objections to contract terms as quickly as possible.

In out CRM solution example, a salesman must ensure that maintenance terms & conditions are understood by the customer, get the paper work done, and contracts signed.

Stage-5: Implementation

A salesman’s job is not done with the sales contract. He/she must oversee the implementation and see to it that the software is implemented in the way the customer expected. The salesman must then organize training for the customer on how to use the new software - and see to it that the software delivers the value he promised to the customer.

Closing thoughts

"Satisfaction of Needs" forms the basis for consultative selling. This approach is customer centric. The salesman adds value to the customer and plays an important role as a consultant to the customer throughout the buying process.

Companies which sell complex software often do not use the term "salesman". The sales is handled by "Account Managers" or "Business Development Managers" or "Client Partners" etc. Irrespective of the job title, these people have to play the role of a consultative salesman.

5 comments:

Shankar said...

Hi Arun,

It's a long-shot .. but will you be having any material on the roadmap / essentials to setting up a contact centre. If yes, kindly email the same at shankarnath@gmail.com

Warm Rgds
Shankar

Alokk said...

Hi Arun,

it was indeed a wonderful article, lots of points you have touched is useful for me. If you have any material on deal closing techniques(negotiation) or techniques to win a prospect, it would be great.

Thanks
Rohan Kapoor
rohan_is_urs1@rediffmail.com

valkal said...

Hi Arun,
Wonderful atricle. Can you send me any case study which covers all the points you covered.

Warm Regards,

Valkal
valkal.bairagi@gmail.com

Suha said...

Hi Arun,

Nice Article...It would be Great if you can send me any material which has the info on selling skills and and winning a prospect.

Regards
Suha

suha.reddy@gmail.com

Sanya saxena said...

Excellent blog!!! I definitely savored every little bit of it and I have you bookmarked to check out new stuff you post. Consultative Selling Training