Norming the Value of your Sales

When you average your added values on an application-per-operation-per-industry basis, you come out with your norm for your ability to add value to that operation in that industry with that application: your normal value. A norm is the composite of your consultative expertise in improving customer profits. Consultative sellers who sell from their norms are routinely able to say provocative things to their customers:

"According to our norms for the optimal layout for a print shop of your volume and type of production," 3M can say, "your current layout is depriving you of up to $1 million in profits every twelve months of operation."

"According to our norms for an optimal receivables collection system for food processors," AT&T can say, "you can improve the profit contribution of your current system by an average of $500,000 a year."

Norms are the consultative penetration tool. All consulting professionals work from norms, whose metrics represent their track record—their single most important possession and the foundation of their reputation. When their norms are the industry standard, they can use them to issue a "norm challenge" against a customer's current norms as well as competitive norms. The challenge develops leads. Here is the standard of performance for this critical success factor in this business function or business line, it says. How do you compare? If my norms are better than yours, ask me how I can bring you closer.

IBM sales representatives apply their norm templates to the manufacturing operations of pharmaceuticals makers like this:

Our model design for automating a process like yours can help you reduce up to $200,000 in labor. According to our norms, your manning is excessive by five workers. Your control process is also slower than our standard in spotting and alerting you to deviations from specification. This will be reflected in added costs for quality assurance, scrap, and downtime. You can avoid these costs by computerizing your product testing and quality assurance. The difference between our models in these areas and your operations can yield you up to three quarters of a million dollars in the first year.

Unless you know the norms that a customer manager uses to make decisions and address them head-on in your PIPs, you can never achieve a one-to-one acceptance ratio of PIPs proposed to PIPs closed. Airbus learned this lesson when it came to Bob Crandall, when he was CEO of American Airlines, to propose a purchase of its 600-passenger jet based on a lower cost per seat mile than the Boeing 747. Crandall never looked at the Airbus cost-benefit analysis. Because he rejected the criterion on which it was based, it was irrelevant whether or not its numbers added up. "Big planes pay off only when they fly full," he said. "People don't want to get into an airplane that has 600 people and go to a place where they have to stand in line for two hours to get through customs." As a result, he concluded that "the fact that it's cheaper to fly per seat doesn't make any difference. The real cost is how much it costs per passenger."

Airbus may turn out to be more accurate than Crandall in assessing the market for big planes. It makes no difference. Crandall may be wrong about cost per passenger being more important than cost per seat. It makes no difference. As long as Crandall's key performance norm is cost per passenger, that is where—and only where—he will look for a signal to buy.

Your norms announce what is special about you: You know how to improve the profits of certain types of business operations. You know the standard specifications of what their profit values can be for these business functions; indeed, you are probably the discoverer and maker of many of them. If customers already exceed your norms, you can help them maintain competitive superiority. If your norms are better than a customer's current performance, you can help bring the customer up to your standard values.

Your norms—not your products—must become your consultative stock in trade. You sell consultatively by superimposing them over the current norms of customer businesses. A customer's new product norm may be only a plan. It does not matter. The plan contains a pro forma financial projection of the business-to-be. This is its as-if norm: as if it were up and running. Your norm is an if-then model: If the customer adopts your solution, then the customer norm more nearly approaches your own. The customer becomes improved.

At any given time, you can assess your competitive advantage as a consultative seller—in other words, the value of the net profits you normally contribute to your customers—by checking out your norms according to three criteria:

1. Are they better than enough customers' current performance? If so, you will have continued proposal opportunity.

2. Are they better than your customers' industry average performance? If so, you may have a competitive advantage over other consultative sellers to bring customers up past their industry average.

3. Are they better than or as good as each customer industry's best practices? If so, your norms are the industry standard of performance for all customers who want to achieve best practices.