The cost of finding new customers is estimated to be between 500% and 800% higher than that of repeat or additional sales to existing customers. With profitability, therefore, significantly higher when selling to existing customers, it's time to decide what kind of sales representative you want to be: transactional (hunter) or consultative (farmer).
There's a lot of pressure on salespeople to constantly keep their pipeline full of warm to hot prospects. On top of that, sales quotas are ever more challenging in an increasingly tight economy. Competition is hotter. Buyers are more sophisticated. Commoditization is rampant. Your unique value in the marketplace has been eroded by the incessant claims of your competition that they can do everything you can do - and do it better. Any (or all) of this sound familiar?
While these are all common factors we're forced to deal with regularly, at the end of the day increasing sales and profitability is the job of every sales professional. Sales professionals who are primarily "hunters" typically look for their sales increases from transactions with new customers. They likely are successful cold-callers who work hard at finding sparks of interest in their offerings that they then develop through their sales funnels to close. They uncover prospects who have a need for their product or service and are willing and able to make a purchase now. Or they repeatedly respond to bid or quote requests with little hope of engaging the prospect in an investigation of their true needs and wants.
Sales "hunters" often concentrate their efforts on meeting the lowest common denominator with their prospects. They frequently deal with "default" buyers - those who are technical buyers in larger organizations or those who wear many hats in smaller organizations but are not professional buyers. These buyers are looking for the most expeditious, least painful transaction they can arrange. They accomplish this by limiting the scope of the purchase to single products that meet predetermined specifications or features. Their fervent hope is for the product to deliver benefits limited in scope to a very narrowly framed need, problem or issue. Transactional sales are often price driven rather than value based.
Many transactional customers are new customers. A worse situation is that repeat customers are still transactional. This would indicate that the customer doesn't have any particular loyalty to the sales organization or representative and that any relationship that exists is very fragile. It probably also means that, for the sales organization, this is just a marginally profitable customer.
On the right track
Somewhere along the way to becoming less transactional, some sales representatives start to get a taste for selling in a more customer-focused, consultative manner. This yields better results for both the sales representative and the customer.
Sales at this level involve mid- to upper-level management in the buying process. For these buyers the decision making process is aimed more toward deriving operational results. The sales transactions are typically larger, involve multiple products and bring value to the specific objectives of those manager/decision makers. The sales professional has an opportunity in this scenario to build trust by asking probing questions and proposing a solution that helps the manager/buyer to reach their objectives - to act in a consultative manner. This type of sale presents a great opportunity for a thoughtful sales professional to demonstrate his or her willingness and acumen to be a trusted business advisor.
The most successful sales professionals employ a customer-centric method of selling, very focused on the needs and wants of their prospects and customers. They act as trusted business advisors working to bring strategic value to each transaction. These salespeople realize that to accomplish their goal of maximizing value for their customers they need to get out of the trenches and interact with C-Level (CEO, CFO, CIO, etc.) executives. Decision makers at this level typically transact more complex deals that have a direct impact on their businesses' bottom line.
Evidence indicates that selling at this level has an abundance of positive implications for all parties. Just getting to this level takes solid planning and research by the sales representative. The information gathered in this process gives the sales representative a basis for credible conversation and further exploration with the executive buyer. Investigation and communication at this level transcends departmental rivalries and addresses the customer's strategic concerns. Even in smaller organizations, using this approach positions the sales representative to become a strategic partner with their customer, wherein the customer relies on the trusted advice offered and the results achieved through the relationship.
Customer loyalty arises naturally out of the strategic-level partnership created when the sales representative takes a genuine interest in helping the customer meet strategic goals. The existence of a strong, customer-focused, strategic relationship effectively locks out competitors, thus lowering the cost of doing repeat or additional business with that customer. Sales people who employ this method of selling are "farmers" sowing seeds of trust and harvesting increased sales, higher profitability and customer loyalty.
Customer-focused solutions, increased sales, higher profitability . . . everybody wins! You decide what kind of sales professional you'd rather be, hunter or farmer.