Value in the Seller, Not the Product

As early as 1970, books such as Mack Hanan’s Consultative Selling¹ began popularizing the concept of focusing on how products and services improve a customer’s financial condition: less features, more benefits; less blind pitching, more connecting customer needs with how products and services solve them.

A revolution was born.

As products and services continue their march toward commoditization—and as buyer choice grows year after year—the value of the product or service in many cases has diminished. This isn’t because the product or service is not good; it’s just that buyers perceive they can get them from many places. This means they’re replaceable.

A new breed of sellers, however, has been changing the game. They’re not replaceable because of the value they, personally, bring to the table. This value is insight.

Insight is the new revolution.

Wolf & Company is a major regional accounting and consulting firm and a longtime client of RAIN Group. We spoke with one of their clients—the chief financial officer at a manufacturing company—about why the company continues to work with Wolf.

She told us, “Whenever I meet with Margery, our partner, I feel like I learn something. We don’t just talk about accounting and audit—we talk about business strategy, people management, improving our financial condition. She knows our business, our industry, and makes it her business to add something over and above the competent delivery of just the accounting services that, frankly, in my view, I can get almost anywhere.”

You might think, “That’s what our customers say about us!” Perhaps they do. The question is, Do the sellers at your company behave in the selling process so that buyers would say the same before they start working with you? Sellers across industries—from financial services to technology to manufacturing to professional services—tout the value add of their interactions with their customers after they buy, but this value add doesn’t often translate to the selling process (ironically, not even when the sellers are the same people who deliver the work, such as at service firms).

When it does, it’s powerful.

This is the kind of story increasingly playing out across industries. It’s a great example of insight in action when the buyer perceives parity in the various sellers’ products and services.

Value in the Seller and the Product

Although buyers are reporting widespread parity across seller offerings, when we ask company and sales leaders, “What’s your greatest opportunity for revenue growth?” they overwhelmingly say there are offerings their buyers should be buying that they aren’t, because they don’t know about them. They say that if they could sell new ideas, new products, and new services proactively versus only selling reactively (i.e., when the buyer states a need), they’d have tremendous revenue growth.

In late 2013 we asked several hundred sellers their level of agreement or disagreement with the following statement:

There are things buyers should be buying from me that they are not currently considering buying because they don’t know the difference I can make for them.

Figure 2.1 shows 92 percent of sellers agreed or strongly agreed.

The opportunity to sell more than what the buyers themselves state the need for is there for most everybody. And it’s not just a selfish thought that sellers could sell more; they truly believe that if the buyer buys, the buyer will be better off. When we ask, “If you were the buyer, would you buy this [whatever this is] from you?” they say, “Absolutely. It would make a tremendous difference for the business.” We then ask, “So then if they just knew what you know about it, they’d buy enthusiastically?” The answer tends to be yes.

This, then, is a problem of communication. It’s a seller problem—a problem the winners are solving.

We see the problem across industries. Bankers have business clients with corporate checking and savings accounts who haven’t purchased insurance, investments, or lending. Technology companies see only a fraction of what they sell—and what buyers should buy—installed at their client sites, and the opportunities to sell consulting and services are everywhere. Professional services providers of all types tell us their greatest opportunity is to sell more to existing clients.

The main reason that buyers aren’t buying the additional offerings is this: It’s usually up to the seller to create these opportunities—introducing buyers to the ideas, inspiring buyers with the possibilities, and driving the demand themselves.

It’s a bit of a paradox. Although many buyers know they can buy products and services from many companies, there are offerings that most companies have that the buyers actually don’t know about (or don’t know they should care about). For these offerings there tends to be scant competition and little parity. These products and services are the companies’ innovations. They’re the unique products and service packages that buyers don’t have to buy, but should be buying, because of the impact they will have on the customer.

To take advantage of this opportunity, sellers must implement levels 2 and 3—convince and collaborate.

In fact, sellers can’t drive demand without being able to (level 2) convince buyers why they should consider doing something they are not currently considering. They can’t sell anything without being (level 3) proactive. They must take the initiative or the conversation never begins. They can’t inspire buyers to think differently unless they (level 3) educate them with new ideas and perspectives.

Think about it. There is no value in the product or service if the buyer doesn’t buy it. It’s up to the seller to bring the idea forward and make the case for the buyer’s benefit. So the value is not just in these products or services that are, even in a world of perceived parity, highly differentiated; the value is in the sellers and their ability to create conversations and lead them skillfully. The offerings and the sellers here are an inseparable team: The value is in both.

Let’s say sellers do take the initiative, educate, and inspire. When the buyers perceive the seller to then collaborate with them versus simply pitching them an opportunity, the ownership of the idea tends to shift from seller to buyer. When that happens, the idea—previously not even in consideration—becomes an important item on a buyer’s agenda. This is critical for driving demand and moving sales forward proactively. And remember, this was a sale that never would have been possible if the seller hadn’t gone beyond level 1, a place where so many sellers stop.

In effect there are two somewhat contradictory phenomena in play:

1. Buyers perceive product and service parity across many offerings.
2. Sellers know there are highly differentiated products and services buyers should be buying but aren’t because they don’t know (or know enough) about them.

Sellers who win take advantage of both phenomena through insight.

Insight Selling Defined

What, then, is insight selling?

There are two applications of insight selling (Table 2.1).

The first is interaction insight, which (as the name might tip you off to) focuses on providing value in the form of sparking ideas, inspiring epiphanies, and shaping strategies based on the interplay between seller and buyer. The stories earlier in this chapter are good examples of interaction insight. Although the buyers may be buying products and services that they could likely source from a number of places, when sellers employ interaction insight, buyers see them—and their implementation, delivery, and service teams—as sources of insight. Here, the value is in the interactions with the seller.

When we talk to people about insight selling, however, the conversations often focus on how to sell something that buyers should be buying but don’t have to buy.

This is when to apply the second form of insight selling: opportunity insight. Opportunity insight focuses on the selling of a particular idea, which often comes in the form of new strategies and tactics to pursue and leads to the consideration of products or services a buyer should buy.

Insight selling in either form hinges on the concept of cognitive reframing. Cognitive reframing refers to creating alternative ways of viewing ideas, events, situations, strategies, possibilities for action, or really anything. In other words—driving change with ideas that matter.

Change a buyer’s perception of what’s true and what’s possible, and sellers can influence the buyer’s agenda for action because they can influence the buyer’s success. This is what insight selling is all about.

The accounting firm we mentioned in our earlier example, like many accounting firms, gets a large portion of its business from tax and audit services. But it also has a technology and set of consulting services that truly revolutionize the companies that buy from it. These offerings consistently reduce operating costs and risks by at least 10 times what the technology and services, themselves, cost.

Again, the buyers don’t have to buy these products and services like they have to buy tax and audit. They want to buy—they just don’t know it until the seller brings it to their attention. With opportunity insight, buyers first must be introduced to the concept and then inspired to pursue it.

Both opportunity insight and interaction insight are important concepts that work together. The more buyers see a seller as an ongoing source of insight (interaction insight), the more they’ll listen to and trust the seller. The more they trust the seller and value their interactions, the more open they’ll be to ideas the seller wants them to consider, and, the more applying opportunity insight will work for the seller as a sales strategy.

A Fundamental Shift in Thinking

Take a mental tour around the intellectual capital in the field of sales, and you’ll find many words appearing in front of the word selling. People have been using the word insight in front of selling for decades. We didn’t invent it—like consultative selling (enterprise selling, trust-based selling, solution selling, relationship selling, and all the rest), it’s simply a descriptive term used to communicate the concept of infusing insights and ideas into the selling process. The point, however, is that the concept continues to grow in importance and influence.

For more than a century now, opening and winning sales opportunities by creating, communicating, and inspiring with ideas has been how management consulting firms sell. After all, it’s rare that a buyer must buy classic management consulting services. Buyers buy the vision of what that consulting can produce. They buy specific ideas and buy interactions with people who are sources of insight.

It’s ironic that, to help define the concept of insight selling, we’re using a management consulting firm as an example. Shouldn’t the term consultative selling fit best for how consultants sell consulting? If you define consultative selling the way many do, we’d say no.

The concept of consultative selling was relatively new 40 years ago. It was often contrasted with the common selling tactics of the day: Pitch and close hard (and damn the buyer’s objectives, goals, issues, and needs). Instead, be a consultative seller: Ask many questions, get to the heart of issues, put customer needs first, craft a custom solution, and make a business impact.

Over time, however, consultative selling, along with its cousin solution selling, became synonymous with antipitch, antipresentation of any kind, anticonvince, anti–point of view, heavy questioning and diagnosis, and heavy listening (mm-hmms and drawn-out pauses) selling.

Now, we aren’t suggesting that inquiry, listening, and client understanding are bad things. Quite the contrary, they’re necessary components of successful selling. When the pendulum swings, however, it can swing too hard. Nowadays, many people equate consultative selling with a question-intensive, no-pitch approach.

Unfortunately for many consulting firms, taking that approach would effectively kill their revenue. Here’s an example. A global consulting firm we work with sells consulting services in a very specific niche area: reducing overhead costs for institutions such as hospitals and universities.

To do this work, the consulting firm’s research team has exclusive access to confidential information about how more than 300 institutions manage their overhead spend. For a hospital system, overhead includes areas such as real estate, administrative staff, facilities management, telephone systems, technology, and more.

This firm has developed a sophisticated method for first analyzing, and then reducing, spend in more than 200 overhead areas for clients. By applying the process, it’s able to lower clients’ administrative costs by an average of 7 to 10 percent, without reducing operating capacity or quality.

Now, let’s do the math: A $2 billion hospital system might have an overhead spend of about 10 percent, or $200 million. That would result in an annual savings of about $14 million to $20 million for the hospital if it buys from this consulting firm. The savings would also accrue for years after the project.

The consulting projects cost $2 million to $3 million on average and another $250,000 per year afterward.

Here’s how it looks, assuming the consulting firm can help its client save about $15 million a year (Figure 2.2).

It’s like going to the bank, giving the teller $4, and getting back $45. No-brainer, right?

This firm’s buyers seem to agree because they buy all the time. But here’s the interesting part: This service didn’t sell well when the sellers (people who were classically trained, as they put it, in consultative selling) opened sales conversations with many needs-discovery-like questions.

The consulting services sold a lot better when, in first sales meetings, the sellers delivered an executive briefing on what they did and why—inspiring buyers with the possibilities and then influencing their agenda to consider something they weren’t otherwise considering. When the classically trained consultative sellers opened with lots of questions, buyers got frustrated and the meetings went nowhere. (Note that after the presentations a rich discussion tended to ensue, with the seller asking incisive questions, but when the seller started here and stayed too long, the conversations fizzled.)

As one of their buyers told us, “This meeting wasn’t worth my time.” Worth is the key word here. Worth = value. No value perceived in the interaction + no valuable opportunity presented = no second meeting.

The sellers’ mental model was wrong. These sellers equated consultative selling exclusively with questions, diagnosis, and mm-hmms. Once their mental model—and meeting approach—changed, sales took off.

Ultimately, it was a fundamental shift in thinking that helped them increase their sales, that has helped many sellers do the same, and that is waiting to have an impact on those who haven’t yet made the shift.

Seller as Change Agent

One of the reason sellers, professionals, and leaders like using the terms consultative and solution selling to describe their selling philosophies is because of their association with customer centricity.

One client brought us in to deliver training after a search for the right consultative selling method. She told us after we delivered training to their teams, “If one of our clients secretly got ahold of our old sales training program, it would be a catastrophe. They’d never trust us after seeing what our teams were trained to do to them versus with them. But if they got ahold of this set of materials, they’d probably think quite highly of us. It’s focused on them and their success and how we can collaborate with them to help them achieve it.”

When our client introduced our trainer before a live delivery began, she introduced it as a consultative selling method. We had in this class a number of more experienced sellers who had been through many training programs before. One asked, “So this is a question-centric method, then, yes?”

To which our trainer responded, “Questions are essential, but if you think of them as the defining characteristic of the method, you’ll miss out on the power of advocacy. You’ll focus on an action, not an outcome. The defining characteristic of RAIN Selling is an outcome. And that outcome is change.”

It’s the mind-set of seller as change agent versus seller as question asker that makes all the difference.

When sellers think of themselves as change agents—wielders of ideas, champions of vision, and masters of influence—a whole new world of possibilities opens up to them.

Simply put, change agents are great at selling ideas and bringing them to life.

Overview

• The value is in the seller: A new breed of seller is not replaceable because of the value the seller, personally, brings to the table. This value is insight.
• Insight selling is the process of creating and winning sales opportunities, and driving change, with ideas that matter.

Key Takeaways

• There are two applications of insight selling: interaction insight and opportunity insight.
• Interaction insight focuses on providing value in the form of sparking ideas, inspiring epiphanies, and shaping strategies based on the interplay between seller and buyer.
• Opportunity insight focuses on the selling of a particular idea, which often comes in the form of new strategies and tactics to pursue and leads to the consideration of products or services a buyer should buy.
• Change a buyer’s perception of what’s true and what’s possible (cognitive reframing), and you can influence the buyer’s agenda for action because you can influence the buyer’s success.
• You have the opportunity to sell more when you drive demand (rather than rely on the buyer’s expressed needs) for your offerings. To do this, you must implement levels 2 and 3—convince and collaborate.
• If the buyer perceives (1) no value in the interaction and (2) no valuable opportunity presented, you won’t get a second meeting.
• Shift your mind-set to that of seller as change agent versus seller as question asker. Change agents are great at selling ideas and bringing them to life.