Traditional Sales Training

Sales representatives in product-centered companies learn that sales is like a funnel. At the wide end of the funnel are prospective customers who are believed to be primed to buy our product. Leads are vetted, one-by-one, either in person, by phone or email, etc. The uninterested are culled, and the rest are prequalified into opportunities. This prequalification narrows the number of leads, which are then pitched and hopefully closed over time.

This funnel has dozens, or hundreds, of variations. The gist is always the same, however: sales is a numbers game based upon simple math:

It is viewed by many sales organizations almost as a manufacturing process and managed similarly—with internal metrics, reports, and meetings. The sales funnel approach may be a useful approach for products with a high volume of prospective customers, but it's not terribly helpful when you are a credence good and when the entire universe of those you wish to serve may be represented by a few dozen organizations. When selling consulting or professional services, the goal is not to identify prospects and process them like corn flakes; it is to identify a community and position yourself to serve it over time.

The Science of Yield

When managing sales—either of oneself or others—the traditional sales funnel theory tells us to measure yield from one step to the next. If 20 percent of one hundred leads produce a first meeting, and half of those meetings lead to an opportunity to make a proposal, of which two eventually are sold, you have a 2 percent lead-to-sales yield. Pretty simple, really. The trick is to track and improve those yields over time.

This leads to the second half of how salespeople are taught to sell everything from railcar loads of coal to missile defense systems, namely, the tactics used to move from one step to the next. If improved tactics let you move your first meeting rate from 20 to 30 percent, you can increase your new accounts from two to three. It is just math.

So, and this is the question that sales trainers make their money on, how can you increase your yields? If you have ever been exposed to software, hardware, commodity, consumer product, or OEM sales, you've likely heard of Neil Rackham's SPIN selling, the consultative sale (they are largely the same), Miller and Heinman's Strategic Selling (the authors spun out of IBM to create their eponymous firm), Mike Bosworth's Solution Selling, Xerox's Needs Satisfaction Selling, or the Corporate Executive Board's Challenger Sale. All of these approaches are about how to choreograph moving from one level of the funnel to the next, generally from meeting to close, with the goal of improving yield. And, as we'll soon discuss, this array of sales techniques—while perhaps useful in selling mass-market consumer products—are not helpful at all in consulting and professional services. In fact, they may be more detrimental to our sales success than helpful.

The Myth of the Perfect Pitch

A good friend of Doug's works for a successful midsized management consulting firm. Doug and his friend were having drinks one Friday after work, and his friend shared his senior partner's sales philosophy: “It's all about the pitch. You got to ‘hook’ them. If you don't have a compelling ‘pitch,’ you're dead in the water.” If a prospective client didn't immediately ‘bite’ after his persuasive pitch, the senior partner's typical reaction was “Screw 'em! If they're too stupid to see the value in our proposal, then they're a bunch of idiots, and I don't want to work with them.”

Both the question of how to hook a fish and how to land it depend on this emphasis on technique. If you take a sales training course, you will find that much time is spent thinking about and practicing these sorts of clever tactics.

This line of thinking goes: if you could only prospect better, pitch better, negotiate better, and close better, you would win more business. But that's not the typical way consulting and professional services are sold. We're sure if we took one of the negotiation programs offered in the in-flight magazines, we'd be much better at buying a home or car, but the fact is, being a master negotiator just isn't that relevant to earning trust and respect necessary to “close” a consulting or professional services assignment and might even be counterproductive. Great client relationships are built over time on foundations of trust and are not, by definition, transactional.

Better Personality

Sales trainers will also talk about polishing your personal skills, what we call the Better Personality approach, which was first popularized by Dale Carnegie in the 1930s with the runaway sales of his book, How to Win Friends and Influence People. The core of Carnegie's approach can be summed up as “It's possible to change other people's behavior by changing one's behavior toward them.” The cover of the book promises to answer three questions:

1. What are the six ways of making people like you?
2. What are the twelve ways of winning people to your way of thinking?
3. What are the nine ways to change people without giving offense or arousing resentment?

A pleasant personality in and of itself isn't a bad thing, of course. The issue is that most individuals who have made it into consulting and professional services have already had the rough edges of their personalities sanded off. By the time they have finished law school or a top MBA program or made it to partner in their firm, most people are not lacking in people skills. It's not to say there aren't some who would benefit from a healthy dose of humility or empathy, but generally speaking, this isn't the limiting factor.

Sure, being likeable isn't a bad thing. It's just not typically the most important component of the credence buying decision. Respect trumps charm when it comes to most buying decisions for consulting and professional services. You'll frequently hear people say that “clients hire people that they like.” We're not entirely convinced. If you are looking for a good bankruptcy attorney, do you focus more on whether they can protect your assets or would they be fun over drinks?

Why This Model Doesn't Work for Consulting and Professional Services

One of our core beliefs is that consulting and professional services are bought differently from products. They are bought on reputation, referral, and relationships—not on tangible features or attributes. They are credence goods, meaning their virtues cannot be tasted in advance of the sale; they must be bought on faith alone and that faith takes time to build.

Despite this, the temptation is to pretend the purchase of expert recruiting advice is the same as buying pork bellies in volume, and we can use the same funnel paradigm and step-by-step sales process to close a sales prospect.

But that's not true. Here's why:

1. The funnel assumes an infinite supply of leads. If you are selling accounting software for small businesses with up to $50 million in revenues, you can be pretty sure that a lifetime of pitching software will not exhaust the global supply of potential customers. On the other hand, if you sell predictive analytics to community, regional, and superregional banks in the United States, there are seven thousand potential customers (oh, and by the way, that is half the number there were fifty years ago). You'd be wise not to just churn and burn your way through such a relatively small list. If you design currency hedging strategies for reinsurance companies with a billion dollars (or more) in premiums written, you have thirty-seven potential clients. You might be thinking that's too small a market segment to serve, but you'd be wrong. Thousands of consultants and professional services practitioners “own” a similarly small segment, cover it up with a dominant service, and are compensated handsomely for their expertise. Look no farther than the “Big Four” accounting firms whose audit units are laser-focused on the Fortune 500, each with roughly 25% market share. With 125 audit clients, the addition of another dozen is material.
2. The funnel assumes that leads are of short duration. Read sales training advice for product salespeople, and it will tell you to read your prospect like a poker player might read her opponents. By closely observing what your potential customers say, you can determine if they are buyers, have objections that can be met, have objections that are a smokescreen for “real” objections, or are a “no,” in which case, the best practice is to move on—no reason wasting time on a prospect who isn't going to buy. But that's not how it works in consulting and professional services. We've sat in on a Big Four partners meeting where their best rainmakers shared the advice they would give to young professionals. Said a senior partner,

   Make friends on engagements when you are young, because the people you get to know at client companies will grow up and be decision makers. Stay in touch.

   This is a decidedly different perspective—looking at a lead as a relationship to be cultivated over a lifetime. When the “financial advisors” in Margin Call were dialing the phone book to make a sale of their penny stocks, they didn't start over on a page when they got through with it. They were like sharks moving through the water—never stopping, never blinking, always swimming and looking for something new to eat. That might work for someone selling gym memberships but not for those of us trying to engage with new clients. Successful practice leads in consulting and professional services firms are much more like farmers cultivating their forty acres, careful with every relationship, knowing that if those relationships are treated well over time, they can sustain life.

3. The funnel assumes if you can measure, you should. Like the drunk who looks for his lost keys in the light below a street lamp and when asked why he is focused on such a small area, answers, “Because that's where I can see,” there's an implicit choice being made by measuring yield just because it's available to measure. Maybe instead of measuring how many opportunities led to projects, a better measure would be “How deeply did you connect philosophically, intellectually, and socially with a key executive you met at a conference?” That's not nearly as easy to measure as “What percentage of appointments did you set on those leads we purchased?” but it may be more strongly correlated with increased revenues per consultant over time.
4. The funnel fails to appreciate the referral effect. Doing good work for clients, staying in touch with them over time, having dinner and talking shop when you are in town, being helpful even when you are not under contract: These are the sorts of actions that deepen and maintain relationships. They are the throne on which positive word-of-mouth sits. You met a person who knew your sister-in-law. You dropped an email to your sister-in-law to say you met her friend, which reminds her that she just learned her son's soccer coach was in your business school, two years before you. She introduces you to the guy the next Saturday at practice when you stop by. You exchange small talk with him, but he begs off, saying he's headed to Singapore to a conference to speak. He leaves, and you check out his LinkedIn page on your phone. Turns out he speaks on how digital is transforming intellectual property management. You just received a letter from Paul Hastings saying they're abandoning their intellectual property practice, which has you on the hunt for a new IP attorney. You ping the guy asking for a referral. He says he knows a good sole practitioner who spun out of a large firm. Ten minutes later he writes you, saying he checked you out on LinkedIn while sitting at the gate and noticed you do work with manufacturing companies to outsource facility management. He has a client who just got a new CEO that is talking about focusing on core competencies. Would you be open to him introducing you to the head of manufacturing? What started as a guy you met on the soccer pitch turns into an introduction.

   Here's the thing: every one of your new clients has a shaggy dog story like that. The typical funnel-based sales model doesn't appreciate shaggy dogs.

5. The funnel assumes the client's buying journey is linear. It assumes that you create awareness first, then uncover interest and desire, and finally catalyze action (this is the AIDA model of client engagement for those of you who took undergrad marketing). But what if you stumble on desire in a potential client first, like when a new acquaintance says he is looking for a website designer at a Friday-night cocktail party? That might cause you to follow up and say, “I'm a website designer” (awareness). In the process of designing his website (action), you lift the stone on what turns out to be his real problem, which is not the need for a website but the need for strategic focus (interest). Relationships for consultants and professional service providers almost never unfold serially. It is more like chords played on a guitar. Do you need to play the G chord in the second position before the D7 chord in the twelfth position in order to make music? No. You can, but it's also possible to enter a beautiful piece from the G chord first.
6. The funnel perpetuates the myth of the super-salesperson. By focusing on the meeting and the art of the sale, it suggests that some people have some special way with others that causes the target of their affection to bend to their wills. Like Svengali in George Du Maurier's novel Trilby, they are able to dominate and manipulate their subjects and cause them to do things they might not otherwise choose to. Not only is this creepy, it doesn't square with our experience. First, salespeople who are thought to be really good with people often come off as just inauthentic, oily, or unctuous. Call it the backfire effect. Second, we all know of experts who are just terrible with people but who have a line out the door. In consulting and professional services, substance matters, and experts who are known to be worth their weight in gold needn't be charmers. It's nice if they're nice, but nice isn't necessary.