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 of business whose sales can be increased. The minimal resources you need as team leader and their relationship to you are shown in Supplier profit-improvement team.
Three types of support from within your company will be essential: financial, data, and technical. All supportive team members will play two roles. Internally, within the team, they will coach and counsel you in preparing and presenting Profit Improvement Proposals, as well as implementing them. Externally, they will create partnerships with their correlates in the customer’s business—finance to finance, data to data, technical to technical.
Your first act as consultant should be to form your profit-improvement teams on a customer-by-customer basis. Your second act is to consult with your clients on the organization of companion teams composed of their own staff resources. As Client profit-improvement team shows, a client team is built around the decision makers who will be your partners. By melding the two teams, you create your partnership.
In Supplier profit-improvement team you must be able to see yourself in the box marked "Consultant Comanager." This will enable you to be the partner in charge of your team. As such, you will be a playing coach, a manager who also plays a position, charged with setting each profit project’s objectives and the most cost-effective strategy for achieving them.
Partnering on Common Denominators
All partnering is based on a few common denominators:
- Partners have a common objective. Each partner wants to improve profit.
- Partners have common strategies for achieving their objective. Their methods are based on mutual need-seeking and mutual need-fulfillment. In both cases, needs are arrived at through negotiation.
- Partners are at common risk. Each partner has something of value to gain or lose.
- Partners have a common defense against all others who are not included in the partnership. Each party deals as an equal. Outsiders range from being less equal to being perceived as competitors.
Cooperative negotiation strategies enable partners to treat each other as equals. This is the principal rule of partnerships. There are ten additional rules that can help in partnering:
- Add value to each other. Teach each other new ways to improve personal achievement and professional productivity so that both partners profit by the relationship.
- Be supportive of each other, not competitive. Form a staunch team.
- Avoid surprises. Plan work together and work according to plan.
- Be open and aboveboard. Always level with each other.
- Enter into each other’s frame of reference. Learn each other’s perceptions in order to see things from the other’s point of view. Learn each other’s assumptions to understand the other’s expectations of the partnership.
- Be reliable. Partners must be there for each other when they are needed.
- Anticipate opportunities and capitalize on them. Forecast problems and steer the partnership around them. Keep the partnership out of trouble. If trouble is unavoidable, give the partnership a head start in solving it.
- Do homework. Know what’s happening. Know what may happen.
- Treat each other as people, not just as functionaries. Be willing to provide the personal "little extras" that make a partnership a humane as well as a mighty force.
- Enjoy the relationship and make it enjoyable. Both partners should prefer to work within the partnership rather than within any other relationship because it is one of the most rewarding associations either of them has ever had.
The customer decision makers who must be partnered as clients are multimotivated. They rarely act on the basis of one motive alone. Status, money, autonomy, and self-realization propel them. Of all their drives, three are likely to be major: power, achievement, and affiliation.
Client Need Set
In Client need set, three aspects of client needs are illustrated in typical proportion. They contrast with the proportions shown in Consultant need set for the consultant’s need set. The major difference lies in the relative significance of self-actualization income and psychic income. For the consultant, self-actualization must always take precedence over the psychic rewards of power, prestige, and promotion. For the client, however, you should assume that power and promotion—which represent realizable objectives for a client—supersede self-fulfillment. By remembering the primacy of power and promotion when you negotiate, you will be able to keep your client’s perspective in mind. You will also be able to visualize your role fairly accurately in the way the client sees it: to help the client obtain increased power income and maximize money income as well.
Consultant Need Set
There are three aspects of consultant needs. Each represents a certain type of income: money income; psychic income, representing such rewards as power, prestige, and promotion; and self-actualization income, including self-fulfillment, competence, and the realization of talent potential.
These needs are present in every consultant’s motivation set. Yet they vary widely from one consultant to another. To negotiate effectively, your need set must be proportioned something like Consultant need set. The money drive you have should be significant. But your use of it to give you power, especially the power to dictate solutions or appropriate a client’s leadership, should be small. Although you may enjoy great prestige, you will always be required to work through your client to accomplish your purposes. You can help a client achieve power and promotion and thereby share vicariously in them. But you will often work unheralded, usually anonymously.
On the other hand, consultants must have an unusually large amount of self-actualization in their need set. This aspect is the key to success. You must have, and be driven by, a need to realize your own fullest growth and development by growing and developing your client partners. You must want to utilize all of yourself in your clients’ behalf, engaging your full complement of skills and expressing your widest range of knowledge. You must need to translate these qualities into unique profit projects that only they and they alone should ever know have originated with you.
Predicting Partnerability
Before admitting you into partnership, a customer manager screens you through a checklist like this:
- What is the reward—can they produce what they propose within the time they have proposed it?
- How much will it cost to educate them in my operation?
- How much disruption will it cause if I bring them in? What is the most likely interruption to my people’s productivity?
- What is the risk of sharing my priorities and proprietary objectives with them?
You can predict your own partnerability by evaluating yourself against a profile of the critical success factors of partnerable consultative sellers:
- Gains rewards by rewarding others, credits others for their contributions, likes to mentor others and leave them improved.
- Negotiates by presenting options for the single best solution. Asks "What if?" rather than tells "What-to."
- Enjoys collaboration. Acts as coleader and comanager. Demonstrates acute people-sensitivity.
- Displays high frustration tolerance. Enters unstructured situations and shapes them according to the consultative model.
- Lives a consultative lifestyle. Partners at work or play.
- Stands up to being evaluated.
Customer satisfaction for clients is not a prescription from Dr. Feelgood. It is a pairing of two quantifiable outcomes that come together to form the standards of minimally satisfactory partner performance:
- Zero cost, which requires that all significant discretionary expenditures must be investments, not costs, and as such they must earn a positive return.
- Zero risk, which requires 100 percent certainty of achieving each proposed profit improvement.
These are the "hurdle rates" for satisfying clients. That means they get you in the door, but they do not compel a customer to invite you to sit down and partner. They serve to put a floor under your performance. You provide the ceiling, consisting of the height of the profits you can contribute and the frequency rate with which you can repeat your contributions. These are the measurements that determine how high your customers’ satisfaction with you can be.
Departnering occurs when two conditions are met. An alliance that is incomplete or unfulfilled within itself is vulnerable. When a more promising partner appears, it succumbs. Many troubled partnerships linger on because both partners temporarily subscribe to the belief that "You know what you’ve got, but you don’t know what you’re going to get." As soon as one partner believes that what he or she is going to get is better, the partnership will end. In Consultative Selling, this means that the client will also be lost.
Because markets are tight communities, the loss of one client inevitably raises doubts, creates assumptions, and fosters anxieties that threaten the stability of other client relations. A domino effect can follow. The loss of one key account opens the door to competitors who, even if they have not been a cause of departnering, will be anxious to take advantage of its effects.
What leaves a partnership incomplete or causes it to be unfulfilled? There are two major factors that predispose to eventual departnering: divergence of objective and inequality of risk.
Divergent objective. Partnerships rest on a common objective. Both partners must have the same result in mind before they partner, see the same result as being achieved while they are partnering, and be able to look back at the accomplishment of their result as a consequence of the partnership.
Consultative partnerships are known by the objective the partners have in common. The eternal question of what partners see in each other is easily answered: They want to achieve the same objective, and they perceive the partnership as the optimal means of reaching it. This is their hidden agenda.
A consultative partnership is not a one-on-one situation. More accurately, it is a two-for-one relationship. Both partners share one objective—to improve the client’s profit. Unless this is accomplished, the consultant’s objective of improving profit on sales will be impossible. For this reason, the client’s objective must come first for both of them. It is not philanthropy but enlightened self-interest that makes it so.
When objectives diverge, or simply appear to be going off in different directions or losing conviction, alliances atomize. A client partner may acquire the belief that the consultant is more interested in self-promotion to the client’s top tier than in merchandising the partnership. The client partner may feel used, demeaned, and taken unfair advantage of by helping the consultant develop business elsewhere, either inside or outside the organization. The consultant, on the other hand, may believe many of the same things about the client partner. Whether such perceptions are true or not, they will have an erosive effect on the partnership.
Restating objectives and recommitting to them are essential elements in keeping partnerships on track. Objectives should be brought up for discussion at frequent intervals; this should be at the consultant’s initiative. A good time to introduce them is when progress is being measured against them. At some of these checkpoints, the original objective may have to be downgraded. Perhaps it can be increased. In either event, keeping objectives current perpetuates the values that both partners are working for.
Unequal risk. Partnerships are a means of reducing risk. Two parties can share the load, divide the responsibility, and parcel out the components of the risk that would otherwise be borne by one or left undone. Although risk can be reduced, it can never be eliminated. It must be shared as equally as possible if the partnership is to be preserved. Otherwise, one partner may accuse the other of "putting your hand out further than your neck."
No matter how hard consultants try to bring into balance the risks inherent in improving customer profits, clients will always be left with the major exposure. They are exposed on their own behalf. They are exposed on their recommendation of the consultant. And they are exposed to their topmost tier of management. In any business situation, there can be no riskier combination of exposures.
Once clients commit themselves to work with a consultant to improve their profit, they must be successful. It is no wonder that they will be ultrasensitive to their own inherent risk and to the support they receive from you.
There is no way you can have the same degree of risk as your clients incur, but you can provide a greater degree of risk calculation and limitation. This must be your equalizer.
Obsessing on Control
The Box Two mindset is obsessed with control. Every manager knows that costs must be controlled. So must sales, since too much demand that cannot be met can overwhelm manufacturing, inventory, and distribution just as seriously as too little demand can underwhelm them. If shipments get out of control, managers get into trouble. An uncontrolled rate of scrap or mean-time between downtime or repair and replacement under warranty, or market share that deviates from plan, is an ominous sign that managers are going to be off budget and off plan. This will bring them to the attention of Box One.
In most customer companies, deviations from plan call for Box One to "manage by exception"—to apply supervisory management practices and procedures to correct the exceptions and either get the manager back on plan or find a new manager who will be unexceptional. Box One’s philosophy is often expressed like this: "When managers go off plan, I invite them to lunch. No one gets invited to lunch twice."
When customer managers partner with you, their purpose is to reduce the risk of being invited to a "box lunch" by Box One. That is why you must be sure that you can help them achieve the new contributions to profits, either by cost reductions or revenue increases, that you have proposed to them and that they can achieve them within the time you propose. Otherwise you will expose them to catastrophic risk.
To be "in control" means that a manager is on plan—on budget, on time, attaining each milestone on schedule—so that payback of Box One’s investment can be made on or before its due date and so that the manager’s return on investment reaches its projected rate. This is the way that your Box Two partners build their track record as good managers. As good managers, they will again be favored to manage the next cycle of investment, and you will again be favored to be their partner in replicating your mutual success. Together, you will become a reliable team.
All business is based on reliability. Customers prize reliability over every other attribute—in their people, their products and services, their operations, and their reputations for their own customers’ satisfaction. To be out of control is to be unreliable, which means that the profit contribution you and your partner have proposed cannot be counted on any longer. You should take these words literally. The expression "counted on" is a quantitative measure of your value, and it says very clearly that you and your customer-partner will come in with new profits as scheduled or you and your partner may be out.
Making PIPs that can be counted on is your transcendent task. It is the basis for your partnered positioning. Take that away, and you have what the computer industry calls vaporware and the food industry calls empty calories—promise without performance, the essence of unreliability.
In order to be an acceptable partner for customers’ Box Two managers, you must share their obsession with control. In consultative terms, control means two things: controlling clients’ costs to help them maintain low-cost production, and controlling the flow of their revenues to help them maintain high margins or high market share.
To be admitted into a major client partnership depends on a single compelling requirement: Can you bring more money to the client’s party than any other candidate for partnership?
If you "make partner," you can achieve control of the contributions to costs, revenues, and earnings in the clients’ business functions and lines of business that you affect. They will place responsibility for controlling these contributions in your hands, either as a dedicated supplier or as a facility manager of their operations. As their partner, they will count on you—counting dollar by dollar, in the most literal sense—to deliver your contributions "on the money" and on time.
By controlling your contributions according to the proposals you make to your clients, you control the continuity of your business with them. If your contributions slow or falter, your partnerships will be in trouble. Every time you deliver a proposed contribution, you earn the right to propose again. If you lose control of your ability to improve a client’s profits dependably, you will lose your client.
So what is it that you can actually control? It is not the client, nor is it the client’s business. You can control only the contributions you make to it.
As a result, PIP control becomes essential for partnering. Your PIPs must be reliable contributors to customer profits. The best way to ensure this is to set up a three-phase process of PIP control:
- PIP previews. These enable each client-consultant team to preview the potential proposals in each account’s fast-penetration plan, rank them in priority order of their perceived sureness in dollar value and timeliness, and then certify their value before presentation.
- PIP reviews. These enable each team to review each proposal after its acceptance to warrant its deliverability and to schedule its monitoring and measurement milestones to make certain that its full proposed value is progressively delivered.
- PIP overviews. These enable each team to agree on each PIP’s contribution, to log it in their joint database, and to seek follow-on enhancements for it and natural migration opportunities in the near-term future. At each overview, the partnership’s norms for improved customer profits can be updated to keep them current.
Accounts that get out of control are caused by PIP management processes that become uncontrollable. Through PIP management, you can always know where you stand in account control by asking questions like these:
- Are we making the profit contributions we are proposing?
- Are we measuring and monitoring them with our customers?
- Are we keeping up enough "PIP flow" to earn our partnership all over again every day?
- Are we maintaining our contributions above the level of the industry standard?
- Are we generating a steady state of future leads from each completed proposal?
- Are we making our competitors beat us in our norms or beat it?