The amount of available data is doubling every two years.
The number of patent applications has increased on an annual basis for more than a decade. Terms like “disruption” and even “revolution” pervade the marketplace.
Many sales professionals are questioning how their roles will adapt to this new environment. They are trying to understand how they will position the value of increasingly complex products. For many, the solution is to embrace a selling strategy that leverages the power of reasoning from first principles.
Reasoning from first principles is the practice of breaking a problem down to its core parts. A first principle is a truth that cannot be reduced any further. It is a building block. This approach has served people facing some of the most intractable problems.
What Is Consultative Selling?
Consultative sales professionals help customers understand the true nature of a business issue and how best to address it. They strive to demonstrate credibility, foster trust and offer ideas that shape thinking and help surface unrecognized needs, and connect the dots to create value. They sell by leading with questions, not products. With more questions come more customer details. With more details comes more effective product positioning.
Consultative Selling Techniques
Here, we look at the three ways in which sales professionals can reason from first principles by adopting a consultative selling approach. The result is a more effective way to sell today’s complex products and services.
1. Overcome Assumptions by Questioning
Today, reasoning from first principles is a concept largely attributed to Elon Musk who famously uses the practice to overcome the challenges of the electric car business. However, the origins of first principles reasoning dates back centuries. In his book Physics, Aristotle remarked, “We should try first to determine questions about the first principles. The naturally proper direction of our road is from things better known and clearer to us.” Put simply, he explains that we must interrogate assumptions because when we remove all assumptions, we are left with core truths.
Sales professionals can put this simple but effective idea to use with consultative selling. They can use a customer questioning strategy to determine what is truth and what is merely an assumption. Without the customer’s answers, it is difficult to separate the two.
Asking incisive question is critical to consultative selling for three reasons:
Questions Enable Positioning
Questions help uncover the root of the customer’s challenge or goal. Without understanding the customer’s core needs, the sales professional will never be able to correctly position the value of the solution to their individualized needs.
Questions Demonstrate Authenticity
Authenticity is increasingly important as the buying group becomes desensitized to a daily assault of automated “insights.” The customer needs a sales professional who truly understands them. Questions help sales professionals develop this understanding.
Questions Drive Momentum
Just as questioning helps the sales professional arrive at core truths, it does the same for the customer. Questions help the customer move beyond their assumptions and gain clarity on their needs. As the customer better understands the challenge, they develop more confidence in the solution.
Questions are the tools of some of the greatest problem solvers in history. In fact, questioning assumptions is often referred to as “Socratic questioning.” Questioning has served many great thinkers.
A questioning strategy will be critical to success in 2021 as sales professionals approach a market in which “about two- thirds of companies have a strategy horizon of four years or less,” according to research from ATKearney. Questions help track the moving goal post within businesses experiencing routine change. Effective consultative sales professionals ask questions like “what are the primary obstacles to your goals,” and “how well does this solution meet your needs.”
2. Break Down the Customer’s Decision-making Process
First principles reasoning works by breaking down a problem into smaller parts. Similarly, sales professionals need to handle the customer’s decision-making process this same way.
The reason: Buying decisions today come from a group of stakeholders rather than one person. Therefore, it is the sales professional’s job to leverage first principles reasoning by breaking down the stakeholder group into its individualized parts. Doing so allows the sales professional to accomplish three key goals necessary to advancing the sale.
Identify the Source of Misalignment
There are varying degrees of support for a solution across a group of stakeholders. Therefore, the sales professional must view the stakeholders as a set of individuals, rather than one entity. Each decision maker has unique needs, goals, and leanings. Each has a different set of biases. By exploring the perspective of each individual, the sales professional will be able to identify the source of misalignment: the stakeholder in opposition to the solution. By understanding where support is strong and where it is weak, the sales professional can address misalignment early.
Build One Story Supporting Change
Once the sales professional understands each stakeholder’s stance, they can begin joining those perspectives into one story for change. This story must acknowledge and address the key needs of each decision maker. This approach must focus on both those with the authority to purchase and those accountable for making the solution work. This step can only occur once the sales professional is certain that they understand each stakeholder’s opinion.
Underscore the Risk of Inertia
Reasoning from first principles is about asking the question “Why?” repeatedly. The consultative sales professional should address the customer’s “Why?” to drive their momentum. Doing so often means citing risks associated with the status quo. Sales professionals can answer “Why this solution?” by citing the time-sensitive nature of business challenges.
The stakeholder group can be obscure. Reasoning from first principles demystifies the group by giving the sales professional a way to understand each decision maker independently, then understanding how they all fit together.
In short: To understand the whole, the sales professional must understand the parts.
3. Move Beyond Conventions to Become a Trusted Advisor
Reasoning from first principles avoids reasoning by analogy.
When someone reasons by analogy, they are attempting to solve a unique problem by replicating a solution applied to a previous challenge. They are using a template. Occasionally, this person will make a minor change. However, the major characteristics of the solution are unchanged.
The problem with this approach is that it ignores the nuances of the challenge. This shortcoming matters as business challenges change with increasing pace. Consider research from BCG showing that “since 1980, the volatility of business operating margins, largely static since the 1950s, has more than doubled.” Reasoning by analogy will not work when customer needs are dynamic.
By reasoning from first principles, sales professionals can track the customer’s changing needs and goals. As a result, they get a closer reading of the customer’s world. This in-depth information helps them transcend “seller” status and rise to the role of a trusted advisor. The three key benefits to this status are:
Expanded Business with Existing Customers
A trusted advisor wins more sales. Moreover, they are better positioned to expand their business with existing customers because they are agile. A trusted advisor’s proximity to the customer allows them to adjust and adapt as the stakeholders’ strategies change. Customers see the trusted advisor’s perspective and suggestions as professional business acumen rather than self-serving “sales speak.” As a result, customers are more receptive to ideas.
A trusted advisor does what a product provider and a technical expert don’t do. They are more than the product they sell — they are a strategic partner who can see the customer’s big picture. They see how and why the solution fits, what the capabilities mean for long-term success, and how it can be implemented in the best possible way. Moreover, they feel free to communicate these things by asserting a point of view. Their inclusion into the stakeholder’s circle gives them the license to make their perspective clear and direct.
A trusted advisor provides insight and creates value. They have a set of skills that go beyond an in-depth understanding of the solution’s capabilities. A trusted advisor is viewed as more than a sales professional — they are considered part of the decision-making process. They are often consulted in advance of decisions, which gives them an advantage in influencing the sale. Decision makers frequently seek their opinion on competing solutions.
Avoid the trap of reasoning by analogy. Ensure that the solution addresses the nuances of the customer’s challenge. This approach not only advances the sale, it also creates a foundation on which to build additional business.
The Bottom Line
Business needs are changing. Sales professionals need a better way to address these changes. Doing so means avoiding the shortcut of making assumptions. Sales professionals need to build from essential truths by reasoning from first principles. Using consultative selling to do so means:
- Engaging in a deeper questioning strategy that distills the customer’s challenge to its elements
- Breaking down the stakeholder group and understanding everyone’s needs and leanings
- Closely tracking the customer’s changing needs by becoming a trusted advisor
At Richardson, a global sales training organization, we have seen sales professionals succeed across industries with a consultative selling approach. With better questioning skills, sales professionals work only from core truths. This approach has driven results for the more than two million sales professionals we have trained.
FAQ: Consultative Selling
Here are the answers to the most common consultative selling questions:
What is a consultative approach?
A consultative selling approach is one that’s based on customer needs. It focuses on building a relationship with the leads and customers, understanding their pain points, and developing solutions to tackle their pain points through appropriate questioning.
In short: it puts the client’s needs over the salesperson’s needs.
Why consultative selling is important?
Consultative selling is very important because it allows you to develop client trust and loyalty. With it, you can easily identify the best solution for your customers, which will translate into a high level of customer satisfaction.
Consultative selling is also perceived as less manipulative and more trustworthy.
What is the first step in the consultative sales approach?
The first step in consultative sales is always research. Research will allow you to understand everything you need to know about your customer, so you can come up with better solutions that are tailored to their needs.
What are consultative selling skills?
Consultative selling skills are abilities to help salespeople find a lead’s pain points, and then find a solution that better alleviates them. These skills are typically active listening, customer focus, empathy, and creative problem-solving.