What is the value of consultative sales in a digital world? Even more valuable than it was before the Internet age. In our fast pace world, it is hard to keep up with the challenges and opportunities of our customers. Young salespeople learn quickly that today’s customers are looking for solutions, not their company’s product. Products are simply tools to solve problems or take advantage of opportunities.
When you come knocking on a customer’s door, you better be prepared to add value by talking about solutions to their needs or problems. You will have to take some time to learn their business. You must find a way to gain trust so that customer will share their concerns or plans for growth markets. That customer may be losing traction in profitable, vertical markets or have recently fallen out of favor with end users, but they won’t share that information without their trust.
My experience is that the best salespeople are solutions providers even when it does not involve an immediate incremental sale. These consultative salespeople become a valuable resource worth spending time and energy on. Why? These individuals find a way to add value. They are relentless about finding new ways to use their current product mix or new products to solve the customer’s issue.
At my second start-up venture Netcentives, I experienced the necessity of being open and flexible to market shifts. We developed Click Rewards to securely distribute airline miles as rewards for e-commerce purchases. Our business model was to buy the miles for $0.02 per mile and distribute them for $0.04 each. Merchant volume was the critical ingredient in our success. Since our only customers were online retailers we were banking on an explosion in e-commerce in 1999. That explosion never came. Those involved in only e-commerce began to die off. Only Amazon, e-Bay and Dell seem to be doing well. Despite that, Amazon was losing money along with almost every other retailer.
After a number of Netcentives’ sales presentations we found that even the best online retailer in 1999 projected very little increases for 2000 sales. Plus their margins were constrained severely by high shipping and handling costs. It was clear we had to find a new sales channel because the Netcentives mileage incentive for e-commerce was before its time and it never really took off. What did work well was selling large banks of miles to distribute to companies as incentives–using miles as quarterly or annual bonus to top-off a cash bonus that did not get taxed. It also became a retention strategy for certain companies who wanted to reward loyal personnel.
My first start-up was a marketing agency in San Diego with a creative name: The Capener Company. We were struggling as an agency to get more business. We found that finding talented personnel was not cheap or easy. It was also difficult to keep the top performers happy since they were always getting calls from competitive firms. We needed our talent to bill more hours to clients, but the more we pushed the faster we burned people out.
It was similar to the model law firm use when they offer partnerships to sixth year associates. They bill on a muliple of salaries too. At The Capener Company, we pitched and won the Ocean Pacific (OP) business. One of our first recommendations to our new client was the development of a new basketball apparel line with long board shorts and t-shirts with a basketball theme. OP did not like the concept for their brand but helped us develop it into what became Above The Rim. It is how ATR got started. I would like to say the idea came to my brother or I as a stroke of genius in the shower, but it didn’t happen that way. ATR became an alternative source of revenue for the agency and quickly grew. Three years later we sold it to Reebok.
My recommendation to new ventures is be open to new business models and sources of revenue. You are likely to find opportunities in your efforts to satisfy the needs of key customers. It created a lot of value for The Capener Company.
