Consultative Selling for Agencies

What is Consultative Selling?

Covid-19 and social distancing has become the new normal. Hence, it is even more significant to focus on a trusted sales approach and consultative selling in B2B sales cycles. We see professional service firms overcoming these difficult times by applying a stringent trusted advisor approach within their four stages of their sales cycles.

How does a typical sales cycle look like?

Nowadays there are two approaches to address prospects and thus gain leads: either an inbound or outbound sales approach. Depending on the number of potential customers, either an outbound (many potential customers / e.g. toothpaste) or inbound (few potential customers / e.g. airplanes) approach is taken.

With an inbound focus the consultative selling approach is essential to convert leads into customers. The following basic principles must be followed when using the approach in order to create the basis for successful lead generation:

  • Doing research homework
  • Ask questions
  • Active listening
  • Stay authentic
  • Ask for feedback
  • Build confidence

How can a consultative selling approach be implemented in your salesforce?

We have worked with many different professional services firms both agencies as well as consulting firms. After many training and coachings, we finally have developed a simple sales clock that helps the salesforce to implement basic trusted advisor skills /the consultative selling approach.

  1. Phase – Understanding: In this phase it is important that the sales person collects essential information about the potential customer. This includes information about the decision-makers and their personality profiles as well as the company itself. We have listed our favorite research tools here: LinkedIn, Xing, Crystalknows,, Google or even the company’s website.
    On the basis of your research list the potential challenges and problems of your lead and map your previous experiences or services. This allows you to get a broader picture of how to support your potential lead.
  2. Phase – Building trust: Your goal is to expand the collected data through a personal contact with the company. We have found that asking specific questions about e.g. the business health, the competitive environment of the company, current challenges, etc can be a real door opener. Furthermore, we highly recommend you to structure the problems on a meta level. According to our experience, a structured understanding as well as a synthesis of the problems increases trust of the potential customer.
  3. Phase – Define your value: In this phase, you should clearly evaluate the costs of the problems and especially the long-term added value of your services. According to our research, it is very important to tailor your services to the customer’s problems.
    Based on the above mentioned insights, you can now create your tailored offer. A best practice is to proactively follow up after the offer has been placed.
  4. Phase – Realise Value: After you have successfully sold your services to your customers, it is important to become a trusted advisor for your customer.

How can you become a trusted advisor?

The Trust Quotient (according to Charles Green) can be very valuable for you to analyze and improve your current trust quotient.

To drive the individual elements of the formula forward, we have summarized our best practices for you below:

  • Credibility: Enhance your credibility through accuracy and reliability.
  • Reliability: Stand by your words and deliver what you promise.
  • Integrity: Strengthen your already gained trust through discretion.
  • Customer orientation: Put yourself in the position of your customers in order to better understand their problems / challenges.

Furthermore, the following 5 virtues can help you to build up the trust level between you and your customer:

  1. Know yourself
  2. Listen
  3. Be a partner
  4. Don’t fear the risk
  5. Maintain flexibility and improvise if necessary

And of course, last but not least when it comes to an offer you should have also a good price logic in mind. We wish you the best of luck with the successful conversions of your coming leads.

If you want to get to know more about us or about what we do and what we offer, please don’t hesitate to contact us at any time.

Furthermore, we have provided the slides of the call four you here.

Below, you will find the video of the call.

Pricing Options and Billing Models

Pricing Options and billing models for Digital Marketing Agencies

Making the right choice of pricing options and billing models becomes more and more important for agencies. In addition, the Cookie-BGH-Judgement, passed in May 2020, forced some agencies, which had linked their pricing model to the percentage of performance, to restructure their pricing model. The difficulties occurred because of the new “opt-in” regulation, that made it more difficult to measure their online performance.

In this post, we share our insight to make your services more profitable.

Which pricing options are used by agencies?

We found through many consulting and coaching projects with various agencies, that agencies generate their revenue through the following three pricing mechanisms (percentage of agencies using this mechanism):

1. Retainer (63%): Customers pay a flat fee for the services (subscription model).

2. Project-based (34%): The customer pays an individual hourly rate for a defined project.

3. Rate-Card (3%): The customer chooses the scope and the corresponding rate each month.

The mentioned pricing mechanisms are associated with both advantages and disadvantages. You can find the summary in the following presentation: Presentation Pricing Options

Why do clients use the services of a marketing agency?

In advance, it is important to understand the reason why customers use the services of a marketing agency.

We identified the following reasons:

  • Consulting: Acquisition of skills: Your client does not have the internal skills to develop new concepts for digital marketing. Therefore he/she buys your skills.
  • Managed: Acquisition of additional resources: Your client can’t invest in the development of additional resources and uses you as a contractor.
  • Outsourcing: Saving operating costs: Your client has/had the digital in-house skills, but wants to use them freely and buys them from you for a lower price.

In order to ensure the profitability of each service, each service brand has to find a way to calculate the hours worked and the material used.

Which billing models are used by agencies?

Agencies have the following billing models, with each agency having different models (percentage of agencies using the billing model) at the moment:

  • Time & Material (4%): The hours worked are recorded and billed. This method requires a proactive agreement with the client and an annual renegotiation of the price. In 2019, the average hourly rate in existing contracts was €89. In new contracts the hourly rate increased up to €127, illustrating the relevance of annual renegotiation.
  • Package price (67%): Services are offered in packages (S.M.I.). However, packages can only be offered with limited scope and customer accounts can only develop to a limited extent.
  • Percentage of Media Budget (52%): This billing model is widely used among media agencies. In this model, the agencies performance will be questioned by clients after 12 months. As an example, a media budget rate of 10% is currently common for a monthly customer budget of up to 10tsd. € / month.
  • Percentage of performance (43%): This model only works for performance services. In addition, due to the BGH ruling issued in May 2020, this model will no longer be used. As an example, the agencies receive a sales commission of 4.5% for a monthly performance of up to 100tsd. € / month
  • Value-based pricing (2%): Compensation is based on a percentage of the estimated value added for the customer.

The above-mentioned pricing models are associated with both advantages and disadvantages. We listed them for you in the following presentation: Pricing Options presentation

DIY: How can you improve the profitability of your services through price negotiations?

According to our research, the billing models of the agencies were 4.6 years old and have not been updated since. As an example, the inflation rate from 2017 to 2020 was about 4.78%. If an agency would revise the compensation from 2017 to 2020, it would correspond to an increase in turnover of 2.75%, and thus an average value of approx. 77 616€.

The following steps should be followed by an agency to effectively communicate the price increase of its services:

1. Identification of customers: Identify customers with whom no price increase has been agreed for a long time and transfer them to a project list.

2. Customer value vs. fee analysis: Compare the generated customer value with your monthly fee.

3. Sort your customers: Sort your customers according to the probability of granting a premium on the value you generated.

4. Discussion with the customers: Discuss the value proposition for 2020 with your customers and talk about inflation in 2020.

5. Progress Tracking: Track your progress in the price increase with your team.

6. For new customers: Always start by evaluating the value proposition during the pitch/offer process.

You can watch the video from our Community Call here: Video of the call . Furthermore we have provided the slides of the call: Slides of the call

If you want to get to know more about us or about our what we do and what we offer, please don’t hesitate to contact us at any time.

New Work in times of social distancing

New Work in times of SocialDistancing

Since the beginning of this year, most companies have not only been confronted with economic challenges, but also with the term “new work” with increasing frequency. In times of physical distancing, terminologies such as home office, online meetings and teamwork are gaining new meaning. However, the long-term effects of this form of work, for both employees and companies, are not yet foreseeable, but their analysis is essential for the success of a company.

What is New Work?

The term “New Work” can be understood as a summarizing concept of work approaches. The overall goal is the creation  a “New World of Work”. The foundation on which this “new world of work” is based can be summarized by 6 principles:

1. Flexibility: Self-management and productivity management of the workforce is gaining importance. This is supported by the desire for more flexible working time models.

2. Flat hierarchies: Employees strive to promote independent thinking and want to be involved in decision-making. This can be achieved through situational levels of authority.

3. Agility: Flexible structures and processes are considered an important part of the New Work approach. For example, strategies and budgeting are reviewed at short and regular intervals and adjusted as necessary.

4. Digitalization: The digital networking of both companies and their employees is the enabler of all principles of the “New Work” approach. This  enables effective, collaborative and transparent cooperation between all employees across teams.

5. Individuality: Great importance is attached to the ability to adapt to the individual needs of employees.

6. New office concepts: Cross-departmental teams, an open-door policy and the possibility of home office hours are representative of a wide range of new office concepts.

What effects do new work approaches have on the HR department?

The new principles permeate all HR functions and serve as enablers in times of physical distancing:

  • Personnel development: Working on remote as well as digital training opportunities are fundamental components of the working world. Times of Covid19 promoted those components even further.
  • Compensation & Benefit: The increase in short-time working allowance, the possibility of special leave and the salary waiver for members of the Management Board are just a few of many possibilities. Those support employees both physically and mentally during the period dominated by Covid19.
  • Recruiting & Employer Branding: Virtual assessment centers, talent pooling and remote onboarding have emerged as new opportunities in the recruiting field.
  • HR services: Flexible working time models and a Digital Employee Care Center can help to support HR services.
  • Structure and process organization: Agile teams, new office concepts and the progress in digitalization enable and require the reduction of rigid hierarchical structures in companies.
  • BGM / Health & Safety: In times of the Covid-19 crisis, the company health care system plays an overriding role in ensuring employee health and safety.
  • Culture & Values: Transparent and open communication promotes the building of trust among team members, especially in times of physical distancing.

How can a new culture and new values be effectively anchored within an organization / team?

We have compiled a DIY-Guide to facilitate the implementation of a new culture and new values. The DIY-Guide includes the following points:

1. Influence the changed corporate culture: Interactive video conferencing, daily stand-up meetings and virtual happy hours can support the anchoring of the new culture.

2. Define a virtual meeting etiquette: Mood surveys at the beginning of each meeting as well as paying attention to a suitable background. Furthermore, lighting and seating position contribute to an open and more productive online session.

3. Influence changing everyday structures: Integrating sports, varied and creative activities into the daily work routine increases quality and productivity at work.

4. Adapt your management style: Transparent, emphatic and optimistic communication kept to reduce the stress level of employees. Furthermore, the creation of goals, fewer controls and trust in employees promote culture and value development within teams / organisations.

You can watch the video from our Community Call here: Video of the Call . Furthermore we have provided the slides of the call here.

If you want to get to know more about us or about what we do and what we offer, please don’t hesitate to contact us at any time.