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Sales Consultation Services for Service-Based Companies
INSIGHTS IN THIS GUIDE
Before you enter into a relationship with a sales consulting firm or individual sales consultant, you need to consider your exact business needs. And, this predominately comes down to one question: What are you selling?
Many CEOs and company managers in service-based businesses know that strategic management and sales operation differ from the product-based sales organization.
However, I have met with others who fail to see the distinction. Let me quickly summarize.
The primary entity sold in a service provider is its professional services, and that distinction is essential. Any product element (physical or concrete) is incidental to that service.
For example, an accountant consulting business’s written report is incidental to the consulting services performed. Other service-based companies include airlines, construction repair services, banking, SaaS solutions and services, law firms, accounting firms, and management consulting firms that span across industries like marketing and sales and many more.
The challenge for service-based companies is that customer success looks different to each business. Therefore, replicating a sales process and scaling a sales team to increase sales performance and revenue growth is custom-tailored. Sales consulting firms can bring your team out of a plateau or decline.
This guide will explain some tips you need to know about selling services.
But if any of these points you recognize as challenges in your own service-based business, then hiring a sales management consultant may be precisely the right course for you.
SERVICE BUSINESS AND SALES CONSULTING
So, what does a service-based sales consultant do? The sales consultant will analyze a service-based sales organization’s performance and position and implement transformative solutions by taking advantage of opportunities within the market. Sales management consultants evaluate the sales organization specifics and provide turn-key custom-tailor solutions to the sales process, operations, and team management.
Before you enter into a relationship with a sales consulting firm or individual sales consultant, you need to consider your exact business needs. And, this predominantly comes down to one question:
What are you selling?
There is a big difference between selling products and selling services. So don’t assume that a consultant who specializes in product sales will also be able to help your service-based company.
You will also likely need to hire a specialist within your service industry. Many people categorize service-based companies together under one umbrella, but critical differences distinguish each and the exact sales operations and strategy you should employ.
Get sales consultants that specialize in your niche wherever possible.
For example, suppose you’re selling SaaS or other services, you need to work with sales consulting services specializing in that niche.
Here’s an analogy.
Would you hire a manager to oversee 200 employees in a Fortune 500 company if they currently manage a local restaurant with ten employees?
Just because they are a manager doesn’t qualify them for any management position. The roles are very different in these two scenarios.
The same concept can be applied to sales consulting. You need to find a consultant who knows how to sell services, specifically your type of services, instead of just products.
Sales consultants specializing in service-based sales organizations will ask fairly common questions around strategic sales management. However, the answers will vary widely for service businesses. The questions are listed below:
- Have you fully defined the specific type of service business?
- How does your customer understand the value of your service?
- How can you defend your company from competitors?
- How do you set up a sales compensation strategy?
- What is your pricing strategy?
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DESCRIBING SERVICES
The key to selling a service is communicating precisely what you do to a prospect.
In a product-oriented business, the physical or concrete product is the base you build around a companies’ description. A product is physical and tangible to a prospect, so the work is half done in these cases.
In service-based businesses, you sell an abstract service that the prospect can’t touch, kick or feel, so your sale technique requires more finesse.
Here’s a very straightforward example that’s easy to follow. Selling a basketball is different than selling a basketball coaching service. Basketball is a tangible product described based on its size, surface, and use.
Describing a coaching service is different. You’re not selling a physical coach, so the service shouldn’t be described that way. Instead, you need to explain how the service works – though this is often more challenging.
Another challenge for service companies is they generally get lumped together, leading to the misunderstanding of service businesses. Though, they differ significantly. There is firstly a distinction between equipment-based and people-based service businesses.
The conventional interpretation of the service business is erroneous: “as something performed by individuals for other individuals.” Automated banking, online accounting services, and SaaS solutions are three examples of service providers automated by equipment. The sales organization and data analytics for these companies are entirely different from those where individuals perform services for other individuals.
A working understanding of their differences allows a sales consultant to identify strategic opportunities in each.
Here’s the deal. Even if your sales team is lazy, calling them out will not change them. You’re probably going to make things worse.
You can deal with the difficulty of describing a service by conveying it to a prospect as if they were a product.
Sales training may include changing your sales teams’ communication with prospects to a more product-oriented language.
An example: online marketing services have no tangible product. Your prospect has no experience working with an online marketing company.
So, you need to become the product rather than describe yourself as a marketer. Describe SEO, PPC campaigns, social media marketing, and email marketing. This message needs to be conveyed to the prospective customer clearly and accurately.
Getting this message right will lead to increase sales performance.
You can deal with the difficulty of describing a service by conveying it to a prospect as if they were a product.
Sales training may include changing your sales teams’ communication with prospects to a more product-oriented language.
An example: online marketing services have no tangible product. Your prospect has no experience working with an online marketing company.
So, you need to become the product rather than describe yourself as a marketer. Describe SEO, PPC campaigns, social media marketing, and email marketing. This message needs to be conveyed to the prospective customer clearly and accurately.
Getting this message right will lead to increase sales performance.
DEFEND YOUR BUSINESS FROM COMPETITORS
All businesses must build and protect a solid competitive position. Sales departments achieve this through carefully analyzing the economics of the company.
The competitive strategies that you use as a service business will differ from product-oriented markets.
Your goal as a service provider should be to create an enduring institution. You create an enduring institution through the management of economies of scale, proprietary technology, and the company’s reputation.
Leverage social proof for company reputation
Services are intangible. Since your service can’t be seen or touched, your company needs to develop other ways to explain the value of your offer.
Just telling a prospect that your service can help them or make their life more accessible doesn’t mean anything to them. You need to prove it.
Storytelling, customer testimonials, and case studies are great ways to accomplish this in the digital age.
If you can explain how your service helped other people, your prospects will be more inclined to buy.
The important rule for case studies is to be specific. If you’re vague and say something like “we help companies make more money,” it doesn’t prove anything. What does “more money” really mean?
But if you can say something like, we brought HH Land Development from $4.3 million in annual revenue to $14.9 million yearly income less than three years; then it speaks volumes to your prospects.
Not every customer will be comfortable letting you use personal information like annual revenue in a case study. That’s OK.
Get them to provide customer testimonials.
Don’t be afraid to ask your customers to be specific in their testimonials. Get them to articulate how the service increased productivity or made a positive impact on their lives.
Let your social proof do the talking for you, and you will see an increase in sales performance.
Talent recruitment & development
A significant component of sales culture is the hiring and development of each salesperson to meet the specific needs of the sales organization.
Suppose a salesperson or sales rep feels they get limited value from the sales leader. In that case, they will not utilize the sales leader to their fullest potential because they won’t feel confident in the leader’s abilities and training.
When the leader isn’t beholden to any particular rep, they can push the boundaries and make the sales representatives achieve more. This also creates the need to have crucial conversations while also implementing the forcing functions that keep the team in line without constant hand-holding.
The leader must prioritize sales hiring to build and scale a team of the right people and retain highly accountable, professional salespeople while consistently weeding out unimproved low performers.
Sales talent
All sales leaders need to succeed as sales representatives in their past. Prior experience and previous roles are irrelevant.
I want hard proof that they can sell because, on paper, a VP of Sales with experience in a big company does not mean they can drive revenue upwards.
There are myriad factors for revenue growth: competitive market, marketing strategy, and founder skills, to name a few.
In SaaS, the leader knows:
- what they are selling and what their customers buy (software, hardware, services).
- the market you’re selling to (industry, geography, role, people)
- how you’re selling (SaaS vs. On-Premise; high-volume, low price vs. premium).
You may be thinking: but my VP of Sales shouldn’t be closing deals with the rest of them; they need to be leading.
I agree that your VP of Sales is most likely not pulling in all your deals. They are hiring, culture developing, and scaling your processes in an ideal world.
But your sales representatives need to aspire to a leader that can sell. Think about the power imbalance. If your top performer weren’t your VP of Sales – you would have mutiny.
As a founder, I need to know a VP of Sales can close a deal versus allowing solid sales teams to experience failure as a learning opportunity. Only high-performing sales experience provides you with this insight.
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SALES COMPENSATION STRUCTURES IN SERVICE-BASED COMPANIES
I’ve set up hundreds of commission structures for service-based sales organizations, including comp structures. They all, more or less, come down to this simple fact.
You must incentivize more of the behaviors and results you want and de-incentivize what you don’t want. It is just that simple.
If your goal is to create an enduring business, you need in-house sales reps on the payroll, not contractors.
Now, this might not be possible if you are an person-based service, or perhaps you are at an early stage as a founder. This is different.
However, when you are ready to build out a sales team, avoid anyone asking for a 100% commission role.
In-house sales representatives will commit to certain behaviors and activities that will lead to your company’s success.
There is a level of commitment you get from a salaried employee. There is accountability.
Pricing Strategy
Pricing units is based on the customer perceived value in service-oriented businesses, much less its cost. For certain service-based businesses, the cost is more straightforward to determine, such as SaaS and equipment-based services compared to people-based companies.
An equipment-based service usually has some common quantifier that can be analyzed.
However, people-based service businesses are much more complex as accurate pricing is on an aggregate basis.
Professional services pricing is often based on value rather than cost, which the customer and competition generally determine.
Customers will pay whatever they think the service is worth, directly impacting revenue goals.
This is challenging to people-based service businesses that rely on professionals to provide the service. Suppose you price the service too low, then that is necessary for a professional operation that expects to remain competitive.
You are also at risk of pricing too low in equipment-based service businesses. Many SaaS operations require a fixed-based operator (FBO) performing one or several functions necessary to the operation.
Price as a strategic weapon in service-based companies compared to all other strategic variables.
Therefore, one thing is crucial. Sales leaders in service businesses must leverage marketing methods to enhance the perceived value of the service to ignite revenue growth. Sales consulting services provide assessments and tangible implementation measures to achieve that.
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CONCLUDING COMMENT
Rose Garden Consulting is a world-class sales management consulting firm specializing in redefining your process into a quality sales experience. We ignite revenue growth with transformative solutions based on behavioral economics.
We help close deals faster and at a higher rate. Rose Garden uses a combination of assessments to identify sales team members’ strengths and motivators, also providing you with lousy culture fits and recommendations. We present our Team Member Assessment finings in a one-day workshop.
We also recommend our sales accelerator assessment that provides you with an in-hand diagnostic and sales experience road map for quick results.
In today’s ever-evolving sales landscape, new businesses need to stay up-to-date and ahead of the competition at all times. We provide Founders and CEOs with hands-on coaching to create systems & strategies to scale their sales team. You can’t afford to leave anything up to chance.
Get started with a Team Assessment or dive right in with our Sales Accelerator.
About the author:
Ali Mirza is the Founder & CEO of Rose Garden, a national sales consulting organization, and featured in Forbes, Inc, Business Insider, The Huffington Post, Business Rockstars, and The Wall Street Journal.
Ali is a highly sought-after public speaker presenting at multiple national conferences on innovative ways to accomplish transformational growth on your sales team.
Rose Garden provides unparalleled support and guidance to growth-minded founders via sales strategy differentiation, world-class sales culture creation, and exclusive playbooks, processes, and scripts to position them for limitless growth.
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