Jan 29, 2024 • Podcast

How do I avoid free consulting?

Has this happened to you? You work with the customer and develop the perfect solution, then they go with a cheaper competitor? Paul provides insights and ideas to help prevent this but to also resurrect that sale.

Show Notes

Set the expectation early that you are NOT in the free consulting business by securing a “micro commitment.”

Call higher in the organization. Get buy-in from that high-level decision maker to avoid this free-consulting scenario. 

Maintain a full pipeline of opportunities. This mitigates the need to maintain a relationship with these demanding prospects.

Think about this: if the customer goes with your competitor after you’ve provided pre-sale consulting, perhaps you’re not communicating the post-sale value of your solution.

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How do I avoid free consulting?

(Transcribed from podcast)

On today’s episode, we’re going to the website. Gordon emailed us a question and we’re going to answer that question on today’s show. Now, this is a challenge I know many salespeople are dealing with. Here’s the deal. Gordon reached out because he is sick and tired of performing free consulting work. Many salespeople have reached out to us regarding this challenge. And here’s what happens. From Gordon’s perspective, he’s got a prospect, he’s got a customer, and his team will bend over backwards to support them before the sale. They’re offering design support, engineering support, dedicating all these resources to the customer, and yet the customer ends up going to the competition, or they go online and they find a cheaper option after you’ve helped them create the perfect solution. Gordon, there is hope. You still can compete profitably and overcome this challenge. I’m going to share a few insights and ideas to help prevent this and then also what you can do after the fact after it’s already happened, to move the sale forward or resurrect the sale.

So, with that said before we get into it, make sure you pick up your copy of Value-Added Selling. Value-Added Selling is your go-to guide for going out there and competing more profitably based on value and not price. I’m going to share a couple thoughts on today’s episode that are highlighted in the book as well, so pick up your copy. Value-Added Selling is available wherever you get your books.

Alright, Gordon, so just a few tips for you. Number one, you’ve got to set the expectation early. Set the expectation that you are not in the free consulting business. And you can do this in several ways. One idea is to gain a micro-commitment early on in the sales process when you’re discovering the customer’s needs, and they explain what they’re looking for, and they indicate, “Hey, we need your help designing this. We need you to put a few engineers on this project for us,” or “We need you to prototype this,” or “Can you test this or demonstrate that product?” When you are required to dedicate resources, whether it’s time, energy, effort, people, you name it, gain a commitment and say, “You know what? I’m happy to schedule some time and to make this a priority, but we’re doing this with the expectation that you’re going to be partnering with us,” and ask them, “Can we have your commitment?”

If we can work out the details and get them to sign a letter of intent, maybe you have a partnership-type agreement you could put in front of them at that point. But here’s the reality. If they’re asking for your support early on, they’re demonstrating trust. And in some ways, they’re telling you, “Hey, I, do want to work with you.” They value your opinion and your feedback, your ideas—. Why would they ask you for your support if they don’t? So, at some level, they’re buying into it. And by asking them for that commitment, whether it is like a letter of intent or get them to verbally say, “Yeah, we’ll move forward with you if you can make this happen,” that’s critical. Because once there’s that micro-commitment, you can build on that momentum. So you want to set that expectation early.

And also, there is nothing wrong with invoking a little empathy here, and explain to the customer, “Hey, we’re a for-profit business and if we’re going to dedicate these resources, we need to have a reasonable expectation that you’re going to partner with us on this project.” It’s just good business. So that’s critical. And another thought too, one way to avoid this issue from the beginning is to ensure the customer or the prospect that you’re pursuing is a good fit for your company. This is another area where we can mitigate that risk. If we can highlight from the very beginning that yes, this customer is a good fit; they check all the boxes, then you can put your full value-added effort into pursuing this opportunity. So again, Gordon, you’ve got to set that expectation early.

Another way to prevent free consulting is to call higher within an organization. Our research continues to show that fully penetrating an opportunity at level three, which is that high-level decision maker, you are going to be more successful in pushing the project through. Our research shows that high- level decision makers are the least price sensitive of all. Not only that, but they are more comfortable making an abstract buying decision, such as buying into a partnership with a supplier versus just a product. So, they buy partnerships, they don’t just buy products. That means when a high-level decision maker buys into your ideas and your solution, you are going to work out the details. So calling at higher levels within the organization can prevent this from happening in the future. Call higher.

Calling higher also creates new possibilities. When you’re able to partner at a deeper level with your customers, you could unlock new opportunities that you didn’t know existed. Also, again, as I mentioned earlier, pricing becomes less of an issue so margin tends to be a little bit better. So, Gordon, make sure you’re calling higher within that organization.

The next piece here, I’m reminded of the expression, fool me once, shame on you. Fool me twice, shame on me. If we keep offering free consulting and they go with our competition, stop offering free consulting. Stop offering to put together a bid; stop dedicating resources to this opportunity. Be very direct and share that with your customer. That’s what one salesperson did. He was in our training a few years ago and he would spend time putting together these proposals, and designing with his engineers, the perfect solution. And he submitted two or three times to this one customer. And finally, when the customer reached out the fourth time for another project, and they’d yet to buy anything, the salesperson said, “Look, we’re done practicing with these proposals. We have enough practice. We’re only interested in working with companies that are interested in working with us. Every time we put together a bid, you take our bid, you take it to our competition, and you find someone to do it cheaper. We’re not in that business, so don’t worry about calling us again.”

Obviously, the salesperson was a little ticked off—sick of dedicating time, energy, and effort to opportunities that are never going to come into fruition. Don’t waste your time on these opportunities, and this is especially true for those repeat offenders. So make it clear you’re not in the free consulting business. Let them know if that’s all they need, don’t bother calling you. Again, you’d be amazed at how customers will respond to that. And maybe they’ll use that as a wake-up call to say, “You know what? I do need their value. Gosh, they deliver a lot of insight. They do a great job upfront. Maybe we should give them the business.” So take a clear stance. Again, fool me once, shame on you. Fool me twice, shame on me.

Now, another piece to consider here, Gordon, maintaining a healthy, full pipeline of opportunity cures all. Think about how much power you have as a salesperson when you have nine other opportunities that you can pursue versus just that one. I’ve found that salespeople who are clinging to one opportunity start to feel desperate. And I’m not saying that’s you in this context, I’m just saying, generally speaking. When you have fewer opportunities to pursue, we tend to hold onto them. We tend to do anything we possibly can to try to earn that business. And sometimes that comes off as desperation. We want to make sure we have a healthy pipeline of opportunity. Believe me, nothing will make it easier for you to set the expectation or walk away from a free consulting gig like having a full pipeline of opportunity, because you don’t need that free consulting opportunity. And so maintain that full pipeline. That is going to give you more power in the negotiating process. It’s also going to give you more confidence to ask the customer to make those micro-commitments as well.

Final thing we’ll talk about is stretching the time horizon. Now this is a hard truth. If the customer decides to go with the competition after you’ve already offered this free consulting, it means they haven’t seen any value that you are going to bring after the sale. Think about it. All they’re thinking about is the transaction at this point. In some ways, they feel like you’ve already contributed all the value that you can. The reality is, most of the value that you’re going to deliver happens after the sale. But if we have not highlighted that, if we have not communicated the post-sale value, then why wouldn’t the customer go with the competition? Especially if that competition is cheaper. What we need to do is stretch that time horizon into the future. Let’s emphasize that post-sale value by highlighting all the ways we continuously support the customer, create ongoing value, and help them capitalize on the investment that they’ve made. The more value you build on the backend, the more likely they are to move forward with you on the front end. We want to make sure we sell that long-term value.

Well, those are the suggestions, Gordon. Best of luck to you, sir. Maintain a healthy pipeline. Stretch that time horizon and make sure you set that expectation early that you are not in the free-consulting business.

Make it a big day.

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