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Consultative Selling: The Hanan Formula for High-Margin Sales at High Levels
Explains how to develop a consultant relationship with top clients, identifies the advantages of this approach, and shows how to create growth strategies, negotiate proposals, generate forecasts, and analyze investments
- GenresBusiness
256 pages, Hardcover
First published January 1, 2003
About the author
Mack Hanan
56 books1 followerMACK HANAN is an international consultant, trainer, and lecturer on accelerated business growth.
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Displaying 1 - 2 of 2 reviews
January 13, 2026
Consultative Selling is the delivery system for value in return for improved customer outcomes.
Profit-improving selling - Selling at high margins so that you can share in the profits that you improve. Selling at high margins to high/level decision-makers.
Vendor Selling - price is based on cost
Consultative Selling - price is based on their value
Consultative Selling is selling a dollar advantage, not a product or process advantage. High-margin selling - full margins are the proof of value.
Vending is discount selling, giving away value to make a sale.
The greatest gift of all: Being able to help customers grow their business so that the consultative seller’s business can be grown by high-margin sales in return.
Sales and R & D - Mist change-resistant of all business functions
The Acid test of competitive advantage
Who would grow our customers if we do not exist?
Who would grow them as much, as fast, and as safely?
If a company’s value can be replicated, so can the company. Replicas do not compete, they complement each other by selling similar offerings with similar, or similarly unmonetized, values.
The Profit Improvement Proposal (PIP) is the original value proposition. All proposals that sell on ROI or that use a cost- benefit analysis spreadsheet are derived from the PIP.
The Two-tier sales force
Tier One: Value-Based Sales of Branded Outcomes at High Margins
Tier Two: Price-Based Sales of Commodity Products at Low Margins
The Three Conversions
Convert price into investment. Price is a cost. Return on investment is a positive value.
Covert a product or service into the dollar value that comes from its been applied to a customer operation.
Consultative sellers sell the value added by application (VABA), not the product that is applied or the service that applies it.
Convert their focus on making individual standalone sales into making a portfolio of confusing sales, each one of which is a logical migration from the preceding sale.
Surpass present customer advantage
In vendor selling, one supplier’s features and benefits are compared against those of other suppliers.
Consultative Selling compares a customer’s current competitive advantage with the improved advantage that can be added by the seller. It is the customer’s competition, not the seller’s competitors, that must be surpassed.
Customer Profit Improver
Money Classification
Investment
What customers pay out
Return
What they get back on what they pay out.
Payback
When they get their investment back
Net Profit
What they make on their investment, or their increment over and above payback
Cost
An investment on which there is no return
Opportunity Cost
The profit they could have made on a different investment
A norm is the composite of your consultative expertise in improving customer profits.
Our Norm, Industry Average Norm and Customer’s Current Norm
Your norms are your value metrics. They say that there is a better way than the one the customer is currently using.
All customer operations are cost centers.
Only one, the sales function, can also be a profit center if profits from sales exceed the cost of sales.
Kind of smarts
Process Smart
Knowledgeable about the flow of the customer’s products through their distribution processes and where their critical values are added. Where the critical costs cluster.
Applications Smart
Knowledgeable about how to apply your products and services to the customer’s sales and distribution process so that revenues or margins can be increased
Validation Smart
Knowledgeable about how to quantify your contribution
Knowing your customer’s business means having all three types of smarts.
A sale is a transfer of values: A customer’s resources - time, talent and money - are transferred in return for the contribution to customer profits made by a supplier’s products and services.
Value has three specifications:
Muchness
You will be able to add a lot of value or only a little
Soonness
You will be able to add value either quickly or not for a while
Sureness
You will be able to add value with a high degrees of certainty or you will hedge.
The value of a dollar
Money Value
A dollar is a dollar
Time Value
A dollar today is worth more than the same dollar will be worth tomorrow
Investment Value
It can be invested at a rate of return that will multiply its original value several times.
Your value is worth what customers can do with it - it is a function of how much they get from you, when they get it, and what they do with it.
Prime Consultant
If your value is worth more than wha the customers can obtain working alone or with any other supplier, you may be prime consultant material
If you sell without knowing your value, everything else you know is rendered valueless for margin building.
You are each customer’s incremental profit improver, not a total profit maker.
Value-Basing Customer Investment
Product - Whatever a price is attached to. The thing that is sold; what the customer is asked to pay for.
Once price is eliminated, cost varnishes.
Positioning Profit Improvement
Three step process
Diagnosis of a customer problem to be solved or customer opportunity to be capitalized on
Prescription of profit-improvement benefit from solving the problem or capitalizing on the opportunity
Description of the operational and financial workings of the system that can yield the improved profit
Step 1: Problem Opportunity Diagnosis
Step2: Profit Improvement Prescription
Step 3: System Specification
Every business has natural patterns
They want to grow
The want you to grow them
The growth that they want from you is within your norms
They can grow you in return
Their growth by you will convert additional good partners
Three Transformations
Transform yourself from a supplier of products and services to a supplier of profits
Transform yourself from representing an added cost to representing continuous added value
Transform yourself from selling performance values at a price to returning dollar values on an investment.
A consultant’s job can be defined in three ways: Bring back sales, bring back customer information that can lead to sales, and leave behind alliances with top-tier decision makers.
Profit-improving selling - Selling at high margins so that you can share in the profits that you improve. Selling at high margins to high/level decision-makers.
Vendor Selling - price is based on cost
Consultative Selling - price is based on their value
Consultative Selling is selling a dollar advantage, not a product or process advantage. High-margin selling - full margins are the proof of value.
Vending is discount selling, giving away value to make a sale.
The greatest gift of all: Being able to help customers grow their business so that the consultative seller’s business can be grown by high-margin sales in return.
Sales and R & D - Mist change-resistant of all business functions
The Acid test of competitive advantage
Who would grow our customers if we do not exist?
Who would grow them as much, as fast, and as safely?
If a company’s value can be replicated, so can the company. Replicas do not compete, they complement each other by selling similar offerings with similar, or similarly unmonetized, values.
The Profit Improvement Proposal (PIP) is the original value proposition. All proposals that sell on ROI or that use a cost- benefit analysis spreadsheet are derived from the PIP.
The Two-tier sales force
Tier One: Value-Based Sales of Branded Outcomes at High Margins
Tier Two: Price-Based Sales of Commodity Products at Low Margins
The Three Conversions
Convert price into investment. Price is a cost. Return on investment is a positive value.
Covert a product or service into the dollar value that comes from its been applied to a customer operation.
Consultative sellers sell the value added by application (VABA), not the product that is applied or the service that applies it.
Convert their focus on making individual standalone sales into making a portfolio of confusing sales, each one of which is a logical migration from the preceding sale.
Surpass present customer advantage
In vendor selling, one supplier’s features and benefits are compared against those of other suppliers.
Consultative Selling compares a customer’s current competitive advantage with the improved advantage that can be added by the seller. It is the customer’s competition, not the seller’s competitors, that must be surpassed.
Customer Profit Improver
Money Classification
Investment
What customers pay out
Return
What they get back on what they pay out.
Payback
When they get their investment back
Net Profit
What they make on their investment, or their increment over and above payback
Cost
An investment on which there is no return
Opportunity Cost
The profit they could have made on a different investment
A norm is the composite of your consultative expertise in improving customer profits.
Our Norm, Industry Average Norm and Customer’s Current Norm
Your norms are your value metrics. They say that there is a better way than the one the customer is currently using.
All customer operations are cost centers.
Only one, the sales function, can also be a profit center if profits from sales exceed the cost of sales.
Kind of smarts
Process Smart
Knowledgeable about the flow of the customer’s products through their distribution processes and where their critical values are added. Where the critical costs cluster.
Applications Smart
Knowledgeable about how to apply your products and services to the customer’s sales and distribution process so that revenues or margins can be increased
Validation Smart
Knowledgeable about how to quantify your contribution
Knowing your customer’s business means having all three types of smarts.
A sale is a transfer of values: A customer’s resources - time, talent and money - are transferred in return for the contribution to customer profits made by a supplier’s products and services.
Value has three specifications:
Muchness
You will be able to add a lot of value or only a little
Soonness
You will be able to add value either quickly or not for a while
Sureness
You will be able to add value with a high degrees of certainty or you will hedge.
The value of a dollar
Money Value
A dollar is a dollar
Time Value
A dollar today is worth more than the same dollar will be worth tomorrow
Investment Value
It can be invested at a rate of return that will multiply its original value several times.
Your value is worth what customers can do with it - it is a function of how much they get from you, when they get it, and what they do with it.
Prime Consultant
If your value is worth more than wha the customers can obtain working alone or with any other supplier, you may be prime consultant material
If you sell without knowing your value, everything else you know is rendered valueless for margin building.
You are each customer’s incremental profit improver, not a total profit maker.
Value-Basing Customer Investment
Product - Whatever a price is attached to. The thing that is sold; what the customer is asked to pay for.
Once price is eliminated, cost varnishes.
Positioning Profit Improvement
Three step process
Diagnosis of a customer problem to be solved or customer opportunity to be capitalized on
Prescription of profit-improvement benefit from solving the problem or capitalizing on the opportunity
Description of the operational and financial workings of the system that can yield the improved profit
Step 1: Problem Opportunity Diagnosis
Step2: Profit Improvement Prescription
Step 3: System Specification
Every business has natural patterns
They want to grow
The want you to grow them
The growth that they want from you is within your norms
They can grow you in return
Their growth by you will convert additional good partners
Three Transformations
Transform yourself from a supplier of products and services to a supplier of profits
Transform yourself from representing an added cost to representing continuous added value
Transform yourself from selling performance values at a price to returning dollar values on an investment.
A consultant’s job can be defined in three ways: Bring back sales, bring back customer information that can lead to sales, and leave behind alliances with top-tier decision makers.
December 30, 2019
The wording
I have been looking for the right language to talk about my services and by learning The Hanan Formula I feel much better equipment to speak about my services as a consultant, where previously I spoke and sounded like a Vendor.
I recommend this book for coaches and consultants who are specialising in emotional intelligence, sales trainings and business model innovation.
I have been looking for the right language to talk about my services and by learning The Hanan Formula I feel much better equipment to speak about my services as a consultant, where previously I spoke and sounded like a Vendor.
I recommend this book for coaches and consultants who are specialising in emotional intelligence, sales trainings and business model innovation.
Displaying 1 - 2 of 2 reviews