Challenges
While virtually everyone would agree that selling to new customers and broadening your customer base is desirable, few would argue that increasing profitability by selling more to your existing customers is even more desirable. The cost of finding new customers is estimated to be between 500% and 800% higher than that of repeat or additional sales to existing customers. With profitability, therefore, significantly higher when selling to existing customers, it’s time to decide what kind of sales representative you want to be: transactional (hunter) or consultative (farmer).

There’s a lot of pressure on salespeople to constantly keep their pipeline full of warm to hot prospects. On top of that, sales quotas are ever more challenging in an increasingly tight economy. Competition is hotter. Buyers are more sophisticated. Commoditization is rampant. Your unique value in the marketplace has been eroded by the incessant claims of your competition that they can do everything you can do – and do it better. Any (or all) of this sound familiar?

Hunting
While these are all common factors we’re forced to deal with regularly, at the end of the day (week, month, or year) increasing sales and profitability is the job of every sales professional. It might seem natural that increased profitability would automatically result from an increase in sales. But reality is that not all sales are created equal. Sales professionals who are primarily “hunters” typically look for their sales increases from transactions with new customers. They likely are successful cold-callers who work hard at finding sparks of interest in their offerings that they then develop through their sales funnels to close. They uncover prospects who have a need for their product or service and are willing and able to make a purchase now. Or they repeatedly respond to bid or quote requests with little hope of engaging the prospect in an investigation of their true needs and wants.

This method has some up-sides: top line sales dollars are increased; your customer base is, in theory, broadened; you may be luring customers away from your competitors; and the number of unit sales or transactions may increase. While each of those results is desirable, they are not the whole story. Top line sales increases do not always translate into higher profits. Similarly, a larger customer base is not an indication of customer loyalty.

Sales “hunters” often concentrate their efforts on meeting the lowest common denominator with their prospects. They frequently deal with “default” buyers – those who are technical buyers in larger organizations or those who wear many hats in smaller organizations but are not professional buyers. These buyers are looking for the most expeditious, least painful transaction they can arrange. They accomplish this by limiting the scope of the purchase to single products that meet predetermined specifications or features. Their fervent hope is for the product to deliver benefits limited in scope to a very narrowly framed need, problem or issue. Transactional sales are often price driven rather than value based.

Many transactional customers are new to the sales organization. A worse situation is that repeat customers are still transactional. This would indicate that the customer doesn’t have any particular loyalty to the sales organization or representative and that any relationship that exists is very fragile – tenuous at best. It probably also means that, for the sales organization, this is just a marginally profitable customer. The situation and relationship could quickly deteriorate even further due to feelings on the part of the sales organization that the level of service required after the sale exceeds the profitability of the relationship.

On the right track
Somewhere along the way to becoming less transactional, some sales representatives start to get a taste for selling in a more customer-focused, consultative manner. This yields better results for both the sales representative and the customer but doesn’t yet rise to the level of fully consultative selling.

Sales at this level involve mid- to upper-level management in the buying process. For these buyers the decision making process is aimed more toward deriving operational results. The sales transactions are typically larger, involve multiple products and bring value to the specific objectives of those manager/decision makers. The sales professional has an opportunity in this scenario to build trust by asking probing questions and proposing a solution that helps the manager/buyer to reach their objectives – to act in a consultative manner. These customers may be new to the sales organization or they may be existing customers who are advancing to the next step in their relationship with the sales organization.

This type of sale presents a great opportunity for a thoughtful sales professional to demonstrate his or her willingness and acumen to be a trusted business advisor. Working with the customer at a strategic level will take the relationship to the most beneficial place for the customer, the sales organization and the sales professional.

Farming
The most successful sales professionals employ a customer-centric method of selling, very focused on the needs and wants of their prospects and customers. They act as a trusted business advisor working to bring strategic value to each transaction. These salespeople realize that to accomplish their goal of maximizing value for their customers they need to get out of the trenches and interact with C-Level (CEO, CFO, CIO, etc.) executives. Decision makers at this level typically transact more complex deals that have a direct impact on their businesses’ bottom line.

Evidence indicates that selling at this level has an abundance of positive implications for all parties. Just getting to this level takes solid planning and research by the sales representative. The information gathered in this process gives the sales representative a basis for credible conversation and further exploration with the executive buyer. Investigation and communication at this level transcends departmental rivalries and addresses the customer’s strategic concerns. Even in smaller organizations, using this approach positions the sales representative to become a strategic partner with their customer, wherein the customer relies on the trusted advice offered and the results achieved through the relationship.

Customer loyalty arises naturally out of the strategic-level partnership created when the sales representative takes a genuine interest in helping the customer meet strategic goals. The existence of a strong, customer-focused, strategic relationship effectively locks out competitors, thus lowering the cost of doing repeat or additional business with that customer. Sales people who employ this method of selling are “farmers” sowing seeds of trust and harvesting increased sales, higher profitability and customer loyalty.

Customer-focused solutions, increased sales, higher profitability . . . everybody wins! You decide what kind of sales professional you’d rather be, hunter or farmer.

© 2005 Patrick A. Hassett. All rights reserved.