No one wants to feel like an anonymous cog in a machine. This includes your customers. They want to feel special. They want to be heard, understood, and treated like individuals.
"But we’re product-led", you say. "Our go-to-market is defined by a self-serve sales funnel without any human interference.?
That may be, but product-led does not equal anti-sales.
At some point (assuming your company is growing) you’ll be faced with the task of building out some kind of sales function. Do you know which approach will be the most beneficial for your customers and your organization?
Consultative selling is becoming an increasingly critical skill set for product-led companies as they expand into market territory that requires sales support. Also known as needs-based or solution-based selling, this approach shares a lot of similarities with a product-led mindset. Both practices:
Keep the user in the driver’s seat by putting their needs front and center throughout the customer journey
Maintain a clear focus on the product experience and how it serves the user needs and goals
Provide thoughtful, in-depth insights into how different customer segments (including specific verticals and use cases) engage with the product
In addition, the consultative sales approach helps B2B SaaS companies build stronger customer relationships. Unlike a traditional sales approach, which focuses on straight-up transactions, the consultative sales process is all about having 1:1 conversations that deepen the rapport between prospect and salesperson, ultimately leading to increased customer lifetime value and NPS scores.
To help product-led SaaS companies get a leg up on implementing a consultative sales approach, we’ve compiled an overview of what the methodology looks like, how to measure performance, and who to hire.
What exactly is consultative selling?
Consultative selling is a sales conversation that focuses on the customer and the customer’s problem rather than on the product and the product pitch. Facilitated by sales people who listen more than they talk, it delivers a prospect experience that’s more about being heard than about being sold to.
Framing the sales conversation this way means that there’s no running through a list of the latest bells and whistles and hoping that something grabs the prospect’s attention. Instead, sales people hand the mic over to the prospect and let them lead the conversation based on what they are most interested in—themselves.
The 6 steps of the consultative sales methodology:
Consultative sales starts with the customer’s pain point, which means you don’t have to guess which product benefits and features will be of greatest interest. All you have to do is listen well, and you’ll know exactly what to say to win the sale. The approach to sales can be broken down into 6 key steps:
Qualify the prospect
Close the deal
Step 1. Do your research
Don’t go into the conversation blind. Put the odds in your favor by learning as much as you can about the customer and their business. Your sources might include lead intelligence from your inbound marketing and data from your CRM as well as good, old-fashioned digging around on Google, LinkedIn, and the prospect’s website, social media profiles, and blogs. You goal is to become as well versed as possible in the prospect’s business and needs. Done right, research will help you:
Qualify the prospect
Understand the competitive field
Know which questions to ask
Anticipate which questions the prospect will ask
Forewarned is forearmed, so give yourself the advantage of knowing what lies ahead.
Step 2: Ask the right questions
You’ve done your research, and you have a pretty good idea of what the customer needs. Stop right there—you don’t know as much as you think you do.
Step 2 is when you start putting the picture together based on what the prospect tells you. Your job at this stage is to ask the right questions to uncover the buyer’s challenges, goals, constraints, timeline, budget, and role in the decision process. Best practice is to ask open-ended questions that invite detailed responses instead of yes/no answers. Think who/what/when/where/why/how versus do you/are you/can you/will you.
Step 3: Listen like you mean it
Active listening is a powerful tool for engaging a prospect, uncovering critical information, and building trust. Active listeners are attentive, focused, conversational, and authentically interested in what the other person has to say. Practicing active listening is really about having good manners:
Focus your attention by removing distractions and taking notes.
Resist the temptation to finish the other person’s sentence or interject with your opinion or solution. This applies even if there’s a pause in the conversation while the other person works through what they’re trying to say. Don’t put words in their mouth.
Avoid tuning out so you can formulate what you’re going to say next.
Let the other person know that you hear them by offering brief acknowledgements, paraphrasing what was said and repeating it back, and—when appropriate—asking clarifying questions.
Pay attention to the subtext by reading between the lines, noticing what’s not said, and looking for verbal and non-verbal cues about values and context.
In short—talk less, listen more. Simple, but powerful.
Step 4: Demonstrate your passion
When it’s your turn to speak, take the opportunity to express not only your knowledge, but also your enthusiasm. This is your opportunity to educate the prospect, but you don’t want to get preachy or slip into a dog-and-pony presentation.
Instead, let the prospect see how passionate you are about helping solve their problem, whether the solution involves your product or not. Share your experience and expertise in a real and conversational way, not as part of a sales pitch. Don’t be afraid to share your “why”—the reason you do what you do (helping people just like them).
Step 5: Qualify the prospect
Throughout the conversation, you will be uncovering details that indicate whether or not the prospect is ready to become a qualified lead. If it looks like they aren’t quite qualified, you can still take the opportunity to help in whatever way you can; but don’t make the mistake of continuing to push for a sale.
If they do appear to be qualified, you can move on to the final step in the process.
Step 6: Follow through and close the deal
Before you can get to the finish line, you will likely have to do some follow up. Most deals take a little time as prospects review their options, take your solution to their internal team, review funding, and so on. At this stage, patience and perseverance are key. You don’t want to become a sales “stalker,” but you do want to stay top of mind. Keep in touch with a prospect by sending them articles and other content relevant to their situation. Continue to be helpful and when they’re ready, the close should come naturally.
Which metrics matter most?
The 2 metrics that are most relevant in a product-led organization are also the most relevant to a consultative sales method.
Product-qualified leads (PQLs)
These are leads who have already experienced your product’s value, often activated users of a trial or freemium account. Because they’ve already had their aha moment, they are just about the warmest leads a sales team can get.
The exact criteria that goes into defining a PQL will vary by company, but they are always prospects whose behavior indicates they are ready to move on to the next stage of the user lifecycle.
PQLs are important to a consultative sales process because these are the people who are ready to have a more in-depth conversation. So, the more PQLs you generate, the more consultative conversations your sales team will be able to have.
Customer lifetime value (CLV, sometimes LTV)
Customer lifetime value is a prediction of how much revenue you can expect from a specific customer over the duration of their relationship with you. This metric is one of the most important to SaaS companies because it helps identify valuable customer segments and provides long-term perspective on acquisition and retention strategies.
Along with other qualifying factors, knowing a prospect’s projected CLV helps a salesperson determine the appropriate amount of time and energy to spend on a conversation. When you are able to include likely upsell an expansion in your assessment of an opportunity, it’s easy to discern a prospect’s true customer potential. Factoring in CLV might reveal that an eager prospect with low initial value but lots of expansion/upsell possibilities is actually a better bet than one with high initial value but a limited use case that will inhibit account growth.
This long-term perspective delivers other business benefits as well. For instance, it helps cut through the clutter of distracting vanity metrics. And it keeps the sales team from over focusing on short-term wins that pass the buck to customer success and support.
One a related note, organizations using a product-led, consultative sales approach should be mindful of which KPIs they use to assess sales performance.
Avoid incentivizing irrelevant behaviors. For instance, it doesn’t make sense to compensate sales people on dials and talk time since those are not accurate measurements of the consultative process. Instead, focus more on CSAT, NPS, and net churn. These experience- and relationship-focused KPIs tell a much more important story.
What skills do sales people need in a product-led company?
No matter what kind of sales organization you’re building, the first step is always to have an open conversation about how to integrate the sales function in a way that is culture appropriate and aligns with your company’s mission and values. Once you’ve clearly articulated what’s permissible and what’s not, you can start looking for the right people to join your team.
Successful consultative sales people have 4 key traits in common:
1. A product-led mindset
Consultative sales people are passionate about your product and the problem it solves. Words like “evangelist” and “champion” come to mind. They are committed to using their extensive knowledge about the product, use cases, markets, etc. to help customers overcome their biggest challenges.
Good consultative sales people also have an above average respect for the product team, an attribute that is particularly important in a product-led organization. They don’t view sales as being “above” product. In fact, they take on the responsibility of working with product to really understand how things work, and also often become a valuable source of insight for the product team when they share key details from prospect conversations.
2. Unrelenting focus on creating an exceptional customer experience
When a sales team fully embraces a consultative approach, they tend to be so responsive, personable, and eager to solve problems that they might be confused with the customer success team.
Consultative sales people are deeply invested in customer outcomes. Quotas, not so much. Their day-to-day is all about how to be the best customer partner and advocate by taking every opportunity to go above and beyond the call of duty.
3. The ability to think creatively
Successful consultative sales people can work independently and without a net. They don’t rely solely on existing playbooks, preferring to adapt their approach based on what they learn from the prospect. They are also comfortable with a little uncertainty and not afraid to experiment in order to improve on the process.
4. Excellent collaboration skills
Internally and externally, consultative sales people are strong communicators, diplomatic collaborators, and respectful partners. They are true team players whose main concern is solving the customer’s problem, not seeking personal glory. They want to deliver the best possible solution. Full stop.
Can you really be product-led and have a sales organization?
It’s important to respect and maintain your product-led roots as you evolve. As you move upmarket to pursue more enterprise business via a more high-touch sales operation, make sure you aren’t compromising your core product-led model. While these two practices complement each other well, they work best when they operate in their own lanes.
But you don’t have to choose between being product-led and having a sales organization. You can have it both ways. In fact, building out a consultative sales organization makes a lot of sense in a product-led environment. Both approaches focus on solving customer problems—one directly through product, and the other through a sales-enabled partnership that helps customers move seamlessly to the next stage in the customer lifecycle.
So long as your consultative sales team continues to lead with your product, you’re golden.
Frida is the Sales Manager at Appcues. Originally from Sweden, she left Stockholm for Boston 4 years ago. When she’s not busy managing the sales team, you’ll find her fostering rescue dogs and road-tripping across the US.