Many companies reach a point where they consider hiring a sales consultant as a way to create a positive push on their workers’ productivity, especially the sales team. Additionally, this step also impacts the company’s overall profitability, but it is essential to consider the procedure’s costs. Analyzing costs and benefits will bring you closer to the decision regarding whether the sales consultant is necessary for your business and how expensive it is to have a consultant on board. In the contemporary business world, hiring a consultant is considered a good investment, especially since the fees, even though high, are justified, considering all the impact the consultant brings.
Keeping in mind the positive impact, it is also essential to analyze all necessary steps that should be taken in that process. It is vital to outline the goals and budget assigned when hiring a sales consultant for preparatory steps. In this blog, we will discuss precisely why it is beneficial to hire a consultant, how to assess budgeting options for this step, and how much consultants charge.
So let’s dive in!
Who is a Sales Consultant?
As noted in the introduction, sales consultations have been used to help businesses increase their revenues by directly impacting your company’s customers. Professionals in this area are hired mainly to help teams determine specific goals and objectives based on the needs assessment.
Assessment, in the end, serves to increase companies’ profitability. This goal is achieved by using skills and techniques that impact customer relationships as a prime target of consultants.
Better customer relationships are built using strategies related to sales, which essentially means setting targets, making a recommendation, and creating a detailed plan that includes the strategy and processes related to sales. To achieve the mentioned strategies, experts need to have interpersonal, analytical, and presentation skills while being convincing and having excellent listening skills. For companies, maybe essential skills you seek as a sales consultant are problem-solving and strategic planning skills, as mentioned earlier.
Sales consultants’ expertise and skills impact their value extensively on the market. If we talk about experienced professionals who have an excellent reputation and often have credentials tied to their name or practice while proficient in specific skill sets, their price significantly increases.
The Benefits of Hiring Sales Consultants
Suppose we reflect in more detail on the benefits of hiring a sales consultant, noteworthy ones include expertise and management of the team and objective insights and analysis since they come from a person outside of companies.
Consultants can look at your business with a ‘helicopter view’ and help foster processes and communication, and adapt the documentation from another viewpoint to better fit the profitable business.
We have already touched upon the sales consultants’ expertise since they impact business operations, teaching the company how to grow partnerships to achieve more considerable and visible achievements.
These benefits have close ties with stepping in and managing your team. New energy can inspire them to take a new approach to recurring problems.
The analysis of the overall team functioning is an additional benefit that comes out of all other mentioned activities that include a sales consultant’s involvement in your company. The analysis consists of an internal and external examination of the sales processes where consultants usually recommend expansion and improvement for better results.
How to Create a Budget for Sales Consultants
One more time, we emphasize that the costs of sales consultants are also impacted by the expertise and reputation of the expert more than the overall objectives you seek to achieve. But it is essential to also keep in mind that their expenses vary.
Therefore, the company and sales team or whoever decides within the organization about hiring new consultants needs to consider the services they are looking for and the objectives you want to achieve. That decision reflects the budget you will need for hiring sales consultants.
If we continue the discussion about budget around the objectives we seek to achieve, companies often disregard some hidden costs tied to these objectives. One great example is the strategy development for the sales team, which usually requires training for its members. The company rarely includes this in budgeting, and therefore sometimes sales consultants’ fees may seem a little bit high.
After calculating how expensive the sales consultant is, what businesses need to do is to take a pause and compare the potential return on investment for the business, as well as if this idea is suitable for the business in the long run or not, and how beneficial it is for your company and staff.
Sales consultants often calculate their fees based on factors, including their reputation and expertise, the needs of companies and the extent of work that needs to be done, and the time this consultation is conducted.
Criteria that the consultants use when calculating their fee include any expenses of completing the tasks, availability influenced by demand and capacity, the value placed on their time, and the amount of work and academic experience. Further factors that companies often disregard are cost indicators that cannot be altered, such as the type of industry the company is in or where your business is based compared to the consultant.
According to several types of research and consultations done with sales experts, their consultations fees can be encountered in several forms:
- Flat fee – project-based fee
- Hourly or day rates – fee charged by timeframe and often used in the short-term.
- Performance-based rate – consultant works for a percentage of the increase in sales achieved.
- Companies usually prefer performance-based deals since it aligns with the psychological indicator that consultants would make more effort and companies have assured success.
Consultants usually pay around $250 per hour for the pre-MBA level to understand the actual numbers better. As the above rates increase, the more managerial experience and academic accomplishments the consultant achieves. For top-level consultants who work with multinational clients, rates can be as high as $800 per hour.
Our advice related to flat fees is to make calculations and convert the set price into an hourly rate:
For example, a $10,000 flat rate for a project of 3 months gets the consultant a $20.83 hourly rate. The same is for 20% of your revenue after three months; if you earn $50,000, the consultant will also get a $20.83 hourly rate.
This can help the company understand better the price they are dealing with and whether they are willing to pay the set amount.
After discussing how expensive a sales consultant is, the message that is left to be shared lies in having a clear goal you seek to achieve and the effects on the team that hiring a consultant includes. Then after being sure about the objectives you want to achieve, you will have a much easier task in hiring the consultant. Lastly, remember that all great leaders and entrepreneurs need help to achieve that greatness.