The One Thing To Understand About How Sales Works Now

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Monday, 8.56pm

Sheffield, U.K.

I had my first real lesson in how sales works as I sat in the back of a lecture hall listening to Neil Rackham, the author of Spin Selling, talk about his research into the secrets of successful selling. I listened and took notes as Rackham took us through how organisations changed over the last few decades, morphing from lumbering, inefficient beasts to lean, hyper-competitive machines, operating in the age of the Internet.

The world of sales has changed too, as a result. The approaches and lessons of the past cannot be applied blindly today. We need to examine them critically, look at what works, what doesn’t work and what we need to do differently to be successful now.

This starts with understanding the basic framework in which everything happens. Broadly, there are two extremes when it comes to something you can buy. At one end are Transactional products – simple and easy to compare. At the other end are Consultative products, a thing that you might not even realise you need but know you do when someone sits down and works through things with you.

Think of the last time you wanted to buy a book. A book is a good example of a transactional product. It’s the same product whether you buy it in a bookstore like Waterstones or a platform like Amazon. You don’t need someone to persuade you to pick one copy of the book over another. You can go off a recommendation, read a review and pick the place that is most convenient or cheap to get the book. You might even pay more in order to support your local bookstore. And the end, however, it’s a transaction and you simply exchange money for the book and get on with your life.

On the other hand, perhaps you’ve done a construction project, like a home extension. You didn’t just go out and buy and off the shelf extension. Instead, you talked to a few architects, selected one you liked, worked through a number of options, asked them for their opinion, looked at drawings and visualizations and eventually made up your mind. You couldn’t have done all that just by yourself – your architect was your consultant and advisor through the process and helped you make decisions by giving you the benefit of his or her information and expertise. This was a consultative sell.

Decades ago, before the Internet, things didn’t work quite like this. If you wanted a book, you walked into the local store and browsed the racks. Perhaps you spoke to the person behind the counter and asked for recommendations. You might have looked through the paper and read reviews of must-read books for this summer. In fact, there probably weren’t too many times you didn’t have to go into a store and ask someone’s advice, whether you were buying a new set of forks or a new car. The number of transactional sales were quite low then.

When you were in the store, you might be quite happy to pay a bit more if the service was good or if the next available store was several miles away. You’d pay for service, whether you were having your tyres changed or selecting furniture. You wouldn’t have known the options anyway – perhaps you went round three or four shops – but there was no guarantee that you couldn’t find the same thing at 20% off a few miles further on.

In this environment, the job of a salesperson was to help customers pick something. Many of the traditional selling approaches worked on the basis that the salesperson knew more than the customer and was going to spend their time together passing on their knowledge, working to “close” at the end. And that approach worked for a long time.

Then the Internet came along and changed everything. In less than ten years, many products became entirely transactional. Think of all the things you can buy online now without talking to a single person, from pencils and book and shaving cream to cars and televisions and insurance. All you have to do is do some research, compare your options and choose a product. If you know what you want, or are willing to find out by doing some research, you can then simply go on the best platform and buy it.

This has meant that that traditional rump in the middle – where you could go into a store and pay a little bit more for a little more advice has started to disappear. The relentless onslaught of the Internet is making product after product, market after market, more and more transactional. The traditional salesperson’s role is disappearing and being replaced by an online order form.

How about when you don’t know what you want? That’s the other end of the scale and it’s flourishing as well. In situations where you don’t have the expertise to evaluate your options yourself then you need some help. The individuals and organisations that do well here have the ability to help you when you don’t quite know what you need help with. For example, you might have an ache in your forearm, but you need the help of a doctor to tell whether it’s a simple muscle strain or the onset of rheumatism. If you need to carry out a major business transformation you might need to hire experienced consultants who can work with you to create and drive a process that works for your business. That needs a consultative approach.

All this means that different sales skills are needed for transactional and consultative selling. Transactional selling means you have to be great at optimising, at squeezing every last bit out of your systems and workflow and operations. Consultative selling means you have to be good with people, working with them, listening and coming up with creative and useful ideas and approaches. If what you do is repetitive and simple, it will be automated and become transactional. If what you do is human and creative, you’ve got some time still.

The first thing you have to do is figure out where you are and what you need to learn to sell in your business. You have to specialise in one end or the other – either be the best transactional salesperson out there or the best consultative. If you’re in the middle, you’re going to be squeezed out of business.

In this series of posts, I’ll start with consultative selling and then move onto transactional selling later – perhaps in another book.

As a reminder, this set of posts is part of a series that I’m planning on eventually collecting into a book. If you are reading this and are interested in this topic, please let me have any feedback, good or bad, so I can make this as useful and easy to read for you as possible.

Cheers,

Karthik Suresh

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