Recently, I’ve noticed that many of my clients—regardless of size or industry—are grappling with the same issues. They’re in the process of transitioning from selling products to selling consultative services.
Why are so many businesses experiencing the same changes? The answer is data.
Today, companies can collect data from hundreds to thousands of individuals or things. They can aggregate it to identify trends or patterns, combine it with other data streams, and then return to an individual with meaningful information.
How it works
The traffic feature on your map app is a good example. It pulls your location from your cell phone, combines it with location data from thousands of other phones, plots how fast everyone is moving, and displays it on the map. You see which routes are congested and can decide which way to go home.
Data enables companies to provide not just information, but personalized recommendations —something many of them couldn’t have done even a few years ago. Often, these recommendations allow companies to then sell more of their traditional products or services.
For instance, the experts behind a hypothetical map app—let’s call it MapCo—could automatically reroute a shipping company’s drivers around heavy traffic to avoid late deliveries. They could analyze the shipping company’s historical data against traffic, weather, and population patterns to predict the best routes. Then, they could help the shipping company decide where to take on new clients, how to charge clients in different locations, or which vehicles to add to its fleet.
Thanks to MapCo, the shipping company has now optimized its routes, pricing, clients, and fleet, and it can make deliveries more efficiently. The shipping company is motivated to continue working with MapCo, because MapCo has so much of its historical data. The shipping company is also more likely to buy more MapCo products, because they will enhance data collection and provide even better information.
Using “big data” to deliver consultative services can help companies strengthen their relationships with customers, increase brand loyalty, and ultimately sell more products. But the transition isn’t easy.
Customers who have never received the personalized recommendations data can offer don’t understand how valuable these insights can be. And many companies struggle to convey ROI because the offerings are so new and so customized.
If your organization is in the process of rolling out consultative services based on data, here are four ideas to consider as you structure, sell, and deliver your offerings.
1. Identify which services customers value.
Many companies are just scratching the surface of what their data can do. They know their data is valuable but aren’t sure how to turn it into an offering. Often they ask, “What can I offer customers with the data I have?” This is like having a yard sale. Offer customers what you already have, and they might have to hunt to find a nugget they’ll pay for—or they’ll lose interest and go elsewhere.
A better approach is to think about how you can make a difference for customers. Ask, “What recommendations will make my customers’ lives better?” Then figure out whether your current data can support that information, where the gaps are, and how to close them.
For example, MapCo might be able tell truck drivers where the closest refueling stations are—but so could a road sign. This isn’t information customers would pay for. But maybe they would pay for real-time recommendations that tell drivers how to make the fewest amount of refueling stops without running out of diesel. MapCo can’t access its drivers’ fuel gauge information yet, but if it decides the offering is valuable enough to customers, MapCo will figure out how to get the data it needs.
2. Design an offering that customers will pay for.
Many customers are accustomed to getting information for free (your map apps doesn’t charge you to see where traffic is thick) and they’ll balk if they have to pay for it. On the other hand, customers who aren’t already receiving consultative services may not see a need for them.
There are several strategies companies use to whet their customers’ appetites for a new service. One option is to offer a tiered structure in which customers get a base-level service for free, or at a minimal cost, and pay more as the value of information and level of service increases. Often referred to as “freemium,” many Internet-based software packages are structured this way. As an example, MapCo might show you traffic patterns for free, but charge for route optimization.
Another option is to offer a free trial for a limited amount of time. Cable providers typically sell this way. One benefit of this strategy is that you can establish a baseline of usage for your customer that you can use later to demonstrate ROI. In this instance, MapCo could measure how much time drivers lose in traffic at the beginning of the trial and compare that to optimized times at the end of the trial.
If you choose to offer a free trial, be sure to tell customers up front how long their trial lasts and when it ends. They’ll perceive you as dishonest if they become dependent on your service and you cancel it on them or force them to upgrade.
3. Train, incentivize, and provide tools for your sales staff to sell consultative services.
Selling consultative services starts with understanding customers’ businesses and helping them solve their problems. This is a different mindset for salespeople who are used to demonstrating a product and selling its features. Many companies educate their salespeople about their new data-driven services but neglect to train them on how to sell these services. Without consultative sales training, many salespeople will have a difficult time convincing customers to try or buy your services.
When preparing your sales force to sell consultative services, make sure to adjust how they’re compensated as well. A sales cycle for consultative services takes longer than a product sales cycle. However, the business strategy at many companies changes independently from the sales compensation structure. So if salespeople are told to sell consultatively but paid for the number of products they sell, they’ll continue to sell products.
Another way to help your salespeople is to arm them with materials that truly convey the value of your services. Because the benefits are personalized, the sales materials should be, too. Think beyond the brochure and consider ROI calculators, simulation apps, or choose-your-own-adventure microsites. If you can show customers personal, tangible benefits, they’ll be more likely to buy.
4. Give customers meaningful information—and remind them how valuable it is.
Once you’ve sold a client data-driven, consultative services, it’s important that the information you give them is clear. It’s your job to translate the raw data into meaningful, actionable information and recommendations.
Are your reports easy to read and skim, or are they obtuse? Do you make recommendations or expect customers to come to their own conclusions? Are customers getting exactly what they need, or are they getting everything? Carefully consider how much you communicate and how relevant it is to your audience.
Finally, use your reports or other communications to remind your customers about the value they’re receiving. Show customers how much not using your services would cost them. It’s taken a lot of work to get to the point where you’ve structured, sold, and implemented your services. Be sure that your client-facing communications convey the value you’ve worked so hard to mine.
Barbara Gordon is a writer and researcher at ThoughtForm. She helps clients develop and deploy brand and communications strategies.