What is Consultative Selling?

For years, traditional consultative selling was the approach many sellers used to successfully compete and consistently win sales. Today, it’s no longer enough.

Since Mack Hanan coined the term in 1970, consultative selling has been the most widely accepted—and most pursued—sales approach. However, massive changes in buying technology and the vast amount of information on the internet are significantly changing how buyers buy at an unprecedented pace.

The traditional approach to consultative selling must evolve.

The New Definition of Consultative Selling

We propose the following new definition for consultative selling in our white paper, The Future of Consultative Selling:

Consultative selling is an approach to sales whereby sellers redefine reality and maximize buyer value through:

1. A mix of understanding, shaping, and redefining need, crafting compelling solutions to address the need, and communicating maximum impact for the buyer. This is known as core consultative selling.
2. Inspiring buyers and driving change with ideas that matter. We call this process advanced consultative selling, or insight selling.

As a result of these actions, consultative sellers build relationships, build trust with buyers, and maximize sales wins.

Traditional consultative selling still has a place in sales—see the first part of this definition. Sellers are still required to understand need and craft compelling solutions, but this is now just the price of entry.

We know buying has changed, and that the sellers who stop here don’t win nearly as often as others. But what are the sellers who consistently win doing? We conducted a major sales study to find out.

How Consultative Selling Needs to Change

The formula of consultative selling has existed for many years, and it can be challenging for sellers to change old habits. However, when you think of consultative selling as a foundation to build upon, it becomes easier to adopt new best practices to evolve as a seller. The following are the three primary areas where consultative selling must change to stay relevant.

1. Move From Diagnosis to Understanding

In consultative sales, there’s typically a heavy emphasis on the seller “diagnosing” the needs of the buyer. The need for diagnosis implies that the buyer doesn’t have a thorough understanding of why they find themselves in their current, undesirable situation or what to do differently. Through diagnosis, the seller figures out what the buyer needs, but doesn't always know what's necessary to enact positive change.

These days, diagnosing needs isn’t nearly as important as simply demonstrating understanding of needs.

In a study of over 700 B2B purchases, we looked at what the winners of actual sales opportunities do differently than second-place finishers. Of the 42 factors we studied, “deepened my understanding of my needs” was 40th on the list of what winners do. Winners barely did it compared to the rest of the factors, yet they still won the sale.

Second-place finishers actually focused more on diagnosis than the winners, yet they still lost.

Depending on the situation, diagnosis can be important. If the buyer wants to make improvements, but doesn’t know what their issues are, diagnosis is necessary. But at a macro level, it’s not nearly as important as it used to be.

While sellers may not have to diagnose as often or as deeply anymore, they do have to demonstrate understanding of need. This is critical. The terms may seem similar, but throwing the "understanding" baby out with the "diagnosing" bath water is not a good idea.

Looking at the differences between winners and second-place finishers, "understood my needs" was the fifth largest gap. In fact, winners demonstrated they understood buyers’ needs 2.5 times more often than second-place finishers. On top of that, of the 42 factors, buyers said “understood my needs” was the fifth most important factor that second-place finishers should change in order to win their business.

This isn’t to say that buyers have it all figured out all the time. But with the internet and other sources of information, buyers are further along than they used to be when engaging sellers.

It’s much like when a person doesn’t feel well these days. They often turn first to WebMD, Wikipedia, and Google to investigate. If need be, they find themselves at a doctor’s office, but people are often much further along in their understanding of what might be going on than in years past.

Fundamentally, sellers need to shift from diagnosing needs to demonstrating an understanding of needs.

2. More Focus on Aspirations

Another needed change in the consultative selling concept is a shift away from the prevalent use of the words "problem" and "pain." These are the two most common terms associated with discovering buyer needs. These words all too often drive sellers to employ find-out-what’s-wrong-and-fix-it thinking.

Let’s say the buyer doesn’t perceive anything—or anything important enough to act on—to be wrong. Soothe-the-pain sellers find themselves at a dead end. No problems to fix. Nothing to sell.

The sales winners, however, don’t just focus on the negative, they focus on the positive. Along with having much richer sales conversations, focusing on the positive opens the door to significant opportunity to increase sales: driving their own demand versus reacting to demand that comes directly from buyers.

The sellers who are most successful at creating opportunities focus much more on the positives, such as the goals, aspirations, and possibilities achievable by the buyer—even if the buyer doesn’t know it yet.

Sellers who focus on aspirations as well as afflictions can directly influence the buyer’s agenda by inspiring them with possibilities they hadn’t been considering, but should be.

3. Understand That Consultative Selling is the Price of Entry

While a consultative sales approach used to be enough to win the sale, it’s now only the price of entry.

Imagine for a minute that someone is selling to you and you perceive the seller doesn’t understand your needs and doesn’t craft a compelling solution. Their chances of winning business from you are probably pretty slim.

Now consider that the seller demonstrates a strong understanding of your needs and crafts a compelling solution, but you perceive that they aren’t listening to you and you haven’t made any kind of personal connection with them. As long as any other seller meets the minimum criteria, you’re not likely to buy from the unlikeable seller who isn’t listening.

The point is: sellers who do a good job, even with these changes to the traditional consultative sales approach, haven’t yet won the game, but they’re in it.

Top 3 Factors for Advanced Consultative Selling

For our research, we wanted to know what the winners of actual sales opportunities do differently than sellers who come in second place—from the buyer’s perspective. We studied 731 major B2B purchases, and the results underscore the evolution sellers must make.

According to buyers, the top 3 factors that most separate winners from second-place finishers are that winners:

1. Educate me with new ideas and perspectives
2. Collaborate with me
3. Persuade me we will achieve results

Sellers inspire buyers and drive change with ideas that matter by taking these three actions. This is advanced consultative selling, or insight selling.

Educate

When sellers educate buyers, they inspire buyers with ideas that matter. It’s rare that a buyer contacts a seller and asks for ideas. But when a seller proactively brings opportunities, research, and insights to buyers, they win deals more often, demonstrate their credibility, and help buyers think outside of the box.

Collaborate

When sellers collaborate with buyers, they redefine need, redefine reality, and drive change. They don’t just present to buyers, but rather encourage conversation, ask questions, and get buyers to picture what their new reality can be. When buyers aren’t part of the solution, they’re less likely to commit to change.

Persuade

It’s not enough to drive conversation—sellers must also drive action. The best sellers communicate the impact of solutions, outlining how the buyer’s aspirations and afflictions might come to pass (or not) and demonstrating a new reality. The credibility and trust sellers build with buyers help motivate buyers to act and close deals.

Putting the Consulting in Consultative Selling

To refine how we think about the consultative selling process, let’s examine the consulting industry. Strategy firms like Bain, McKinsey, Roland Berger, Boston Consulting Group, and Booz Allen help their clients make the best decisions to drive their success.

In fact, these strategy consulting firms redefine reality for their clients using two common strategies:

1. Give advice

Sometimes they do it evangelically, such as sharing with clients the direction an industry is going or how a new technology is emerging, and then providing ideas for how to take advantage.

Sometimes they do it after collaborative analysis. They study and interact with clients to dig deep into their situations and needs and provide guidance for what to do. In any case, they give advice that inspires their clients and drives them to new heights.

2. Question the status quo

Strategy consultants push back. They don’t accept current thinking and paradigms. Always leery of the dangers in the comfort zone, these consultants challenge everything about the status quo.

Rigorous analysis and critical thinking lead to “aha” moments that shape decision making.

Both traits of strategy consultants lead to the same outcome for their clients: they redefine reality.

What Makes an Effective Consultative Seller?

Peter Block, author of Flawless Consulting, would call the best consultants "collaborators." Collaborators, he says, don't just create and implement solutions; they give clients fresh perspectives, clients benefit from their diversity of experience, and clients work with them to define the problem before solving anything.

Another type of consultant is one Block would call a "pair of hands." Their job is to understand the need as presented by the client, position their offerings to solve the need, and execute.

"Pair of hands" consultants don't redefine reality. They may execute effectively (no small feat), and perhaps have their own novel ways of doing so, but the client's reality stays the same.

Exploring the dynamics of consulting itself is instructive because it’s an almost exact parallel to what’s happening with consultative selling.

After almost 50 years of consultative selling focusing on implementation of the buyer's vision, the concept breaks new ground to include strategy consulting, in which the seller takes an active role in setting—or later altering and improving—the agenda itself. Consultative sellers would do well to think about themselves less as consultative sellers and more like actual strategy consultants.

If you want to find yourself in the winner's circle more often, it's time to evolve and embrace the new definition of consultative selling.

Want more on the new scope of consultative selling? Get free resources to change your buyer conversations with our Change the Buyer Conversation with Insight Selling Toolkit.  Download now >>