Uikoo Blog

Ownership may be effected through outright purchase without indebtedness, through financed purchase, or, for all practical purposes, through a long-term lease. In an outright purchase, the buyer has full rights of ownership. Where the buyer obtains financing (before or after the purchase), his ownership is diminished by the limitations on his control of the asset. [...]

When a capital expenditure is proposed, the project must be evaluated and the economic consequences of the commitment of funds determined before referring it to a budget committee for review or to management for approval. How are the economic consequences described best? This is done in two steps:
First, set up the project in a [...]

Objectives are a plan’s purpose. Strategies are the methods of achieving objectives. In Consultative Selling, strategies are packaged in PIPs. Each proposal represents a strategy to improve customer profit by solving a cost or sales problem. If the customer is a not-for-profit organization or a government agency, proposal strategies focus on reducing costs and improving [...]

The ability of Consultative Selling to command high-margin price points for products, services, and systems is documented by cost-benefit analysis. The objective of analysis is to derive a customer’s economic benefits; the benefits can then drive the costs, which compose the investment required to generate them. In the cost-benefit process, the customer’s investment is a [...]

End-user customers become nonusers and noncustomers when they outsource an operation to a third-party provider. The outsourcer—or the insourcer, if a customer’s operation is managed internally by the third party—becomes the customer for the products, services, or systems that the original customer no longer needs to purchase, install, maintain, or upgrade. When this happens, the [...]

Automating the proposal process makes it easy to produce a continuous series of PIPs, improving your productivity as a profit improver a hundredfold while reducing your PIP cycle times close to zero. The PIPWARE software program permits you to create "a PIP a minute." A new iteration of what-ifs can be prepared every sixty seconds [...]

The ability to propose a steady stream of investment opportunities or, more correctly, return opportunities to your customer partners is the engine that drives Consultative Selling. Proposals mean business. They make money for you and your customers, keep your learning curve strong by giving you access to new sources of information about customer businesses, and [...]

The penetration plan is your annual blueprint for getting into and staying in the business of a principal customer. The way you get in is by improving the customer’s profit. The way you stay in is by continuing to improve the customer’s profit, extending it to the solution of new problems, and never letting go. [...]

Key account penetration through Consultative Selling is a reciprocal process. Preliminary partnering makes possible initial entry at top-tier levels. Once entry has been accomplished, partnering should proceed apace so that migration opportunities open up beyond the initial sale. The purpose of preliminary partnering is to gain entry. The purpose of entry is to migrate, to [...]

As a consultant, you should be proposing improved profits as a result of solving customers’ business problems by the application of your technology to their operations.
You are not selling your technology. Nor are you selling solutions to customers’ business problems such as "improving materials flow" or "decreasing production backlogs." You are selling improved profits; [...]

Gains for sharing come about as the result of applications of one or more of three forms of capital:

Intellectual capital in the form of the expertise required to initiate and manage a profit-improvement project
Financial capital in the form of investment
Operating capital in the form of products, services, and systems

Applying intellectual capital [...]

Once a PIP has been accepted, even before its value has been realized, the consultative sellers’ customers are already counting on the new earnings they just contracted for. They will find sources of investment for the project’s earned funds just as soon as the funds are available, not wanting to waste a minute in putting [...]

When customers invest their money to acquire your products or services, they obtain an asset. Their goal is to turn it over as quickly as possible so that it will revert to cash. Then they can reinvest in another asset with you and start the process over again. If they make good investments with you, [...]

When you present a PIP to a Box Two manager, what questions can you anticipate?

What is the net present value of this deal? To get the answer, the manager discounts your proposal’s future cash flow projections at the rate of his company’s cost of capital. The manager then calculates the cumulative value of these [...]

The key to profits is contribution margin—how much margin each product line or business unit contributes to a customer’s total profits. Affecting a customer’s contribution margins is a key objective of Consultative Selling. There are two ways to do this. You can help increase sales volume at the current contribution margin. Or you can help [...]

The circulation of capital funds in a customer’s business takes on meaning only when it relates to time. Since capital funds turn over in a complete cycle from cash to inventories, then to receivables, and finally back into cash again, their rate of flow can be measured as the rate of turnover. The faster the [...]

Profit is made by the circulation of business capital. Every business is founded on capital or funds that start in the form of cash. The objective of business is to make the initial cash grow into more cash. This is accomplished by circulating the capital, the initial cash, through three transfer points. Each transfer adds [...]

Customer profit improvement begins with knowledge of how customers make the profits that you are going to improve: how they make their money right now. This is the starting point for Consultative Selling. Unless Consultative Selling strategies can improve the profits a customer can make, the customer will not be a prospect for high-margin sales. [...]

Not all lead opportunities are created equal. Some have subtle contraindications. Others are booby-trapped. Still others may be genuine opportunities that, at the time they become qualified leads, are for one reason or another inopportune. Your success as a consultative seller is predicated as much on the opportunities you walk away from as the ones [...]

Key performance indicators come in two types:

Dollar values, expressed as minimum revenue or maximum cost objectives
Ratios, expressed as percentages

Some KPI classifications are standard across all industries. They are part of a manager’s position title. Other KPIs are industry-specific.
KPIs for Profit Center Managers
Position title predicts the key indicators for all profit [...]

If you are going to have a norm of 1:1 for PIPs closed to PIPs proposed, you must get into the customer managers’ "red zone," where they are compelled to take action on each PIP you present. It is not enough to say that your proposal "certainly made them sit up and take notice" or [...]

Nothing happens in Consultative Selling until you get to PIP. At the PIP point, you make your preliminary PIP to customer managers and begin your partnership. This begins the process of putting you in business with them. It positions you as potentially partnerable, permitting the belief that you may provide them with a compelling reason [...]

The number one, which is the smallest whole number, can have enormous power. One more product sold every day, one more percentage point added to current revenues or profits every week, or one more day gained every month in the collection of accounts receivable can yield astonishing amounts of improved profits for a customer. Applying [...]

To vend, you need to know your own costs. To sell in a consultative manner, you need to know customer costs. To vend, you need to know your own sales opportunities. To sell as a consultant, you need to know customer sales opportunities. Realizing that you must come up with a cost-reducing or revenue-adding option, [...]

All business operations have a flow—they have a beginning, a middle, and an end. Manufacturing begins with raw materials and ends with finished goods in inventory. Data processing begins with raw information and ends with reports. There are costs at both ends; in between, there is nothing but costs.
Consultative sales representatives should be able [...]

The high margins that accrue from Consultative Selling are your reward for knowing more about the customer operations you affect—and being able to improve them—than your competitors do. Margins are merited by mastery of how a customer runs the business lines and functions that are your sales targets. The more you know about them, and [...]

You and your support staff are the essential partnering agents in Consultative Selling. Together, you compose a profit-improvement team for each of your customers. You, the consultant, are the leader of the team. You will partner with the customer business function managers whose costs you can reduce and with the managers of the customer’s lines [...]

Aconsultant’s job can be defined in three ways: Bring back sales, bring back customer information that can lead to sales, and leave behind alliances with top-tier decision makers.
Sometimes a sale will build an alliance. More often, alliances help build sales.
There are four levels on which alliances must be structured in a key customer [...]

In order to grow a customer’s business, you must get inside it. Unless you know it, you cannot grow it. No business can be grown from the outside. By being an insider, you can be in business together with your customer instead of just doing business as an outside supplier. The opportunities to be in [...]

For both consultative sellers and their customers, profit is the name of the game. While the game is the same, the role you play in it is very different from that of your customer.
Setting profit objectives is the customer’s business. It cannot be abdicated, nor can the customer delegate it to anyone outside the [...]

Top-tier customer management rarely deals with vendors, and then only under duress. They speak different languages. Vendors speak price and performance; management speaks value and profit. Vendors speak of their competitors; management is concerned about its own competition. Vendors wonder when management will ever buy; management wonders when vendors will ever leave.
Vendors who stand [...]