Trust Matters, The Podcast: Getting Through Procurement (Episode 3)

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The Limits of Value Propositions

In sales, especially B2B sales, having a clearly developed and clearly stated value proposition is unquestionably important. This is especially true for large, complex, or intangible offerings.

In fact, some experts go so far as to suggest a value proposition is the key component of successful sales. And most would say that a value proposition is at least a necessary condition for success, if not a sufficient one.

But this is certainly to overstate the value of value propositions. Not only are they not sufficient – sometimes they’re not even necessary. They are frequently less important than classic issues of needs and wants. And discussing value propositions without overtly addressing client confidence in the capability of the seller is not useful.

Value propositions are unquestionably powerful. But if you think nailing down a clear value proposition is going to solve your sales issues, you need to think again.

Thinking about Value

First, let’s set some definitions. I’m using “value” in a simple, narrow way to mean economic value. For example, I might offer a client a value proposition that says, “By using a distinctive approach to account development, I can improve top-line revenue by 10% within six months at virtually no cost to margins.” The “value” in that example is “10% of full-margin top-line revenue,” and the total statement includes reference to how I’m going to achieve it and in what realm of the client’s business.

But usually that’s not how clients start out thinking. In my experience, clients go rather quickly from “we’ve got a revenue problem” to “the biggest reason for our revenue problem is sales force turnover,” from whence it’s a quick hop to “we need a salesforce recruiting solution.” In which case, my highly articulated value proposition about the account development process, even if it’s correct and relevant, doesn’t even get invited to the party.

Their problem (“10% top-line revenue gap”) may rhyme with your value offering (10% top-line revenue growth”), but if the buyer is fixated on sales force turnover, game over. You could argue you need to present your value proposition earlier in the buying cycle, but that’s a problem outside the value proposition per se. Call that the “misaligned diagnosis” problem.

Another problem is relative lack of urgency. A 10% increase in top-line growth, while it sounds great, may produce yawns in organizations that are transfixed by products going off patent, or by R&D rejuvenation, or by M&A activity, or by the urgency of a cost-cutting drive.

A value proposition can work its magic only if the client (a) agrees on the issue at hand, (b) feels a need to address the issue, and (c) wants to use the particular value proposition to address the need.

That is not a radical statement. (The value of a glass of water in the desert is greater than when lakeside.) And yet it is violated all the time. Salespeople keen on articulating value propositions to clients risk making the world look like a nail to match their value proposition hammer. We know better than to sell product vs. solution, but it’s so tempting when the “product” is disguised as a total value proposition.

Note: this can work in sellers’ favor. Over half my clients already see what they want in my offerings by the time they contact me. They articulate my value proposition for themselves. And unless they’ve gotten it quite wrong (not very common), there’s little point in forcing them to tweak it. At that point, the imperative to add value as the opportunity presents itself becomes the key task.

Selling Value and Buying Value

Suppose you haven’t productized the value proposition. You’re engaged in a constructive dialogue with an interested client. You’ve articulated your value proposition, they comprehend it, and it meets their needs. However, the same can be said for two competitors, each of whom is also talking to your potential client about increasing top-line revenue by changing the account development process.

Several issues then arise, such as the level of detail. (Just how does your approach to changing the account development process differ from theirs?) You could call this a deeper level of value proposition, but below some level it starts to look like just product variations.

But the biggest issue for buyers at this point is often not the value proposition at all, but the confidence or trust the buyer has in the seller. Confidence and trust can not only overcompensate for lower stated value, but they can overturn the value proposition entirely.

Expected Value

Consider two firms competing for a bid, with general agreement on the value proposition that the client is looking for. Let’s say the economic value calculated by each firm is about net $5 million. Sophisticated decision analytics might reveal the client has 90% confidence that firm A will deliver fully on the expected value, but only a 75% level of confidence that Firm B will do so.

That’s 15 percentage points variation in expected value—the same as if one firm had quoted a value of $750,000 more than the other! It’s also a discrepancy often sufficient to entirely wipe out the fees difference between the two sellers. Even greater discrepancies emerge when the issues turn to, “what if things go wrong? What will they be like to work with then?”

Yet this discrepancy virtually never gets talked about—at least not in a direct and quantitative way. The discussions are more along the lines of, “I don’t know. I just don’t feel like when push comes to shove they’re going to be able to get with our program.”

If you lose a bid and are lucky enough to get some post-bid debriefing, you’re not likely to hear, “Well, we just didn’t feel like when the chips were down you’d be able to get with our program.” That would be the corporate version of politically incorrect speech.

Instead, you will hear, “The other guys had a more compelling set of resumes on their team, ” or “We just felt like we had to go with their longer track record in this area.” In other words, the language of value proposition gets cited as post hoc justification even though it was not the basis for the actual decision. More prosaically, people buy with their heart and rationalize it with their brains.

Trust Can Even Overturn a Value Proposition

I’ve been on both ends of this one. I won a job by telling the client they flatly didn’t need to do a significant part of the job they were requesting. I didn’t win because I came up with a better value proposition; I won because I showed I could figure out the right thing to do. And the proof of it was they didn’t bother to solicit other bids around the new value proposition.

Sadly for me, I’ve lost this way, too. It’s not about picking the right game, it’s about picking the person who knows how to pick the right game.

The Role of the Value Proposition

Too often it’s assumed that the purpose of the value proposition is so obvious it doesn’t need stating. Doh! We assume clients buy value, clearly expressed, and tightly calculated. After all, that’s what they say they do.

There are seriously valuable roles for a value proposition, of course. They are:

  • To force the seller to have a Point of View: my client may or may not buy what I’m selling, but my statement of it marks a beginning point of discussion, a coherent account—one that suggests other ideas, proves I’ve thought things through, and shows I am worthy of valuable time.
  • To give the buyer “air cover” in justifying a decision internally: a B2B buyer wants to be able to tell anyone who asks, but especially his superiors, that they bought a proven product with a 35% ROI that will provide a 15% CAGR by an experienced-based approach to account management. They do not want to tell everyone they chose vendor A because, gee, they really felt good about them—even if that’s the truth.
  • To undergo a required, universal protocol: like meeting ISO standards, following tax rules, or complying with traffic laws, the tight definitions that come from rigorous thinking about value propositions are an assurance of quality. They may be a little pro forma, they may be subject to some tweaking, and they may not be a guarantee. But if everyone must do them, they form a common denominator by which to compare something of importance—value.

Value propositions are powerful, useful, and often necessary. Typically, however, they are not sufficient. Don’t go to into the sale armed with a value proposition alone.

 

This post originally appeared on RainToday.com

Trust Matters, The Podcast: Why Won’t My Client Say ‘YES’? (Episode 2)

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The Degradation of Trust in Marketing

 

Think for a minute about the relationship between words and reality. In theory, we use words to describe reality. In practice, it goes the other way too. The words we use first affect our perceptions of reality, and then – through acting on our perceptions – reality itself.

Propaganda is the obvious example. But there’s a creeping, more insidious form of reality-distortion that has been playing out in the field of marketing in recent years.

Let me hone in on just three words: Content, customer, and relationship.

Ripped from the Headlines

Before and after AT&T’s recent US District Court victory in its pursuit of acquiring Time Warner, CEO Randall Stephenson stated on several occasions (e.g. here and here) the strategic rationale for the deal, basically:

We have direct relationships with over 120 million customers; data analytics allow us to match them to their preferred content, allowing maximum monetization.

I picked this example precisely for its banality. There is nothing incomprehensible about this statement; nothing logically or strategically wrong with it in business terms. We all understand what Stephenson means.

And yet – this statement, had it been made just 10 years ago, would have meant something entirely different. In fact, I’m not sure it would have been even comprehensible. That’s how far we have moved in terms of the meaning of words.

Content. Thanks to the cool Google Trends tool, I can tell you that interest in the  phrase “content marketing” as a search term grew by 1,400% in the 8 years from July 2000 to now.  With that growth came a change in meaning.

Way back then – ten years ago or so – the dictionary definition of ‘content’ was: “the substance or material dealt with in a speech, literary work, etc., as distinct from its form or style.” Synonyms included “subject matter, subject, theme, argument, thesis, message, thrust, substance, matter, material, text, ideas.”

That definition is now woefully out of date. Here’s how Wikipedia talks about content marketing:

“Digital content marketing, which is a management process, uses digital products through different electronic channels to identify, forecast and satisfy the necessity of the customers. It must be consistently maintained to preserve or change the behavior of customers.”

Today’s “content” (new meaning) is literally “content-free” (old meaning). (See how hard it is to talk about this stuff?).  The relevance – and even the substance – of today’s “content” lies solely in its ability to generate changes in behavior.

“Content” no longer means “the substance or material dealt with…as distinct from its form or style.” Instead, it is precisely the ‘form or style’ that has become the arbiter of quality. If they click on it, it’s good quality; if not, it’s bad content.

Anecdote. I get about two inquiries per week from “marketers” offering to write “content” for this blog, including clickable links, for which they offer to pay me.  About two thirds of them literally have spelling or grammatical errors in their (vastly impersonal) emails. Such a low bar, and yet the majority fail.

I invite the minority who can hurdle that low bar to feel free to take a shot, but that they actually have to demonstrate some knowledge of the subject of trust.

Most of them take me up on the offer to send a sample – and every single time, the drivel they send is massively content-free (old definition). It is banal, un-insightful, trivial, showing no interest in the subject matter –  little more than clickbait, cadged from other people’s “content.”

The word “content” has been stripped and flipped. Not only does it no longer mean what it meant – in the case of “content,” it has arguably come to mean the opposite – what we might have called “content-free” in another era.

Customer. This word grew only 300% in relevant Google search interest in the last decade. In the same time period, the word “consumer” actually declined by 50%. I’d like to suggest that today’s “customer” is what we used to mean by “consumer.”

Merriam Webster defines the difference thusly:

Customer: An individual usually having some specified distinctive trait: “a real tough customer”

Consumer: One that utilizes economic goods: “Many consumers make purchases on the internet”

In other words, one is an individual, a person, a human. The other is an abstraction, a datapoint, a statistically refined category.

Back in the 1990s, Martha Rogers and Don Peppers foresaw a brave new world of “One to One Marketing,” in which an organization fine-tuned its responses to address the unique needs of customers, ultimately at the individual level. They talked about “Interacting with customers” individually through “mail, phone, or online communication.”

Let me ask you: If you’re one of Randall Stephenson’s 120 million “customers,” have you recently tried “interacting” with AT&T through “mail, phone, or online communication?” Do you feel like an “individual?” Or like one of many ‘consumers?’

The word “customer” – just like “content” – has been stripped of its common meaning of only a decade ago. It has become bloodless and transactional. [Note: there’s a lot to like about this: I assure you I love buying online and having interconnected CRMs that learn my desires. But I don’t confuse it with having a ‘relationship.’]

Relationship. Google Trends tells us that the popularity of “relationship” as a search term has roughly doubled in the last decade. The Cambridge dictionary suggests “a relationship is the way two or more people are connected, or the way they behavior toward each other….A relationship is also a close romantic relationship between two people.”

That is so last decade.

For Randall Stephenson (and I’m not picking on him alone, it’s true for any BigCo these days), a “relationship” means a billing relationship, i.e. we send them invoices and they interact with our billing system, in accordance with complex fine-print clauses contained in contracts.

Or it can mean “Amazon may want to construct a more seamless relationship with its millions of customers.” Hmmm…ever tried to talk to an Amazonian?

A “relationship” is at the heart of CRM software, the “single largest area of spending in enterprise software” by 2021. Yet said “relationship” is conspicuously devoid of much in the way of interpersonal connection, the essence of the old definition of relationship.

Adding It All Up.

I didn’t call out Stephenson’s last word: monetization. But it speaks volumes for itself.

For all too many companies, monetization has become the goal, the objective, the point. And if your goal is simply and solely to monetize the customer-content relationship, you will end up cheapening the relationship – precisely the opposite result of what (supposedly) was intended. This is no different from shareholder-wealth-maximizing companies of the ’80s. Treating profits as goals rather than outcomes not only ruins relationships, but ultimately ruins profits as well.

Listen, I’m not trying to make a Luddite case. I am all in favor of most things tech and business. I’m trying to point out, however, that when we subconsciously appropriate old words for new realities – and fail to notice the shift – we end up adrift.

Is it any wonder we hear so much about declining customer loyalty? Unfulfilled young people’s real-world relationships? Angst, anomie and anger in social interactions? Reversion to tribal political connections? Lowered institutional trust ratings?

Part of the answer, I believe, is that in our haste for the brave new world, we neglected to provide names for some of the old virtues and values. Yet without names, we can’t talk about them.  And if we can’t talk about them, we forget them, and create a reality devoid of those same virtues and values.

Words – or their absence – really do affect the world we live in.

 

Question Obsession: The Consultant’s Nemesis

Do you go into sales meetings – even meetings with your existing clients – with a slew of prepared questions? Do you constantly find yourself asking question after question in a meeting?

You may be thinking, “Duh, of course. Aren’t we supposed to? How else are you going to demonstrate value added, explore hypotheses, prove your expertise?”

But let’s explore this apparent no-brainer. The fact is, Question Obsession can actually be detrimental. Lets explore why and how.

Consultants and salespeople (especially consultative sellers and sellers of consulting) have learned one mantra, and we love repeating it. It is the mantra that says, “Listen first; talk later.” In other words, it’s all about the question. Ask a great question, the logic goes, and all else will fall into place.

That is the great lesson of Sales and Consulting 101. And I have no beef with it.  The problem is – if you never graduate from 101, you will end up in quicksand because an obsession with questions alone ultimately leads nowhere.

The Obsession with Questions

There’s good reason for the Sales 101 and Consulting 101 lesson of focusing on questions. Go no further than Neil Rackham’s SPIN Selling, in the case of sales, or Peter Block’s classic Flawless Consulting for consultants. Each one shows with wisdom and data that artfully posed questions generate dialogue and interaction, and that is always superior to pre-emptively beating up the client with the answer.

Of course, we often forget our 101 lesson and go into meetings with answers blazing. But that’s not what this article is about. This article is about the downside of obsessing with questions. It’s what happens when we turn the 101 lesson into a mantra, and we begin to focus on questions alone.

Is questioning an obsession? Try doing a web search on “Top Ten Sales Questions;” you’ll get millions of results.

Now ask yourself whether you recognize these themes:

  • Should I ask open-ended or closed-ended questions?
  • Should I ask about implications or needs?
  • Should I ask about the client’s opinions or offer “challenger” questions?

As one sales website puts it, “Get the answers to these questions, and take action based on those answers, and you’ll get the sale. It’s that simple.”

No, it isn’t.

The sales version of question obsession manifests in lists. The consultant version of question obsession manifests in the Great Keystone Arch Question—what is the central supporting element?

You can recognize this form of obsession because it leads consultants speaking among themselves to say things like, “If we can set the data up right, we can frame the discussion such that when we finally pop the Keystone Arch Question, the whole logjam will be released. They’ll feel the pain, envision the solution, and fall all over themselves in a rush to buy our solution.”

No, they won’t.

That’s because good questions are necessary—but not sufficient. You have to have them, but they won’t get you to the end zone.

If all you do is focus on questions, you’ll end up obsessed with yourself, with your solutions and products, and with how clever you are. That’s called high self-orientation, and it will kill trust and sales both. Question obsession is quicksand for salespeople and consultants alike.

Beyond Question Obsession

The narrow purpose of a question is sometimes to get an answer. But there are broader purposes to most questions, and certainly a broader purpose to the art of questioning itself. One is to create a greater sense of insight for the client. Two others are to improve the client relationship and to give the client a sense of empowerment.

These goals are best accomplished not so much by focusing on the “what” of the question but on the “how.” Some examples:

  • Questions to create insight: Consultants often come up with “insights” that only an MBA could understand or that leave the client feeling helpless. These are not useful insights. We don’t want to leave our clients saying, “Gosh, that’s really smart. How will I remember that?” Rather, we want them to say, “Oh, my gosh, of course! it’s so clear when you put it that way, isn’t it?” Our objective is to create insight, not to demonstrate that we have it.
  • Improve the relationship: The better the relationship—buyer/seller or consultant/client—the better everything else gets. Innovation, profitability, time to market, and insights all improve with relationships. Great questions allow the parties to get closer together, more comfortable sharing the uncomfortable, and more willing to take risks by collaborating. Questions such as, “Let me ask you, if I may, do you personally find that scary?” have nothing to do with “content” insight, but they are critical to advancing the relationship.
  • Create client empowerment: The point of all this questioning is not, ultimately, to understand things. It is to change them. And change will not happen if the client feels the insights are threatening, depressing, or out of his control. The key to action is to help the client see ways in which they can change, take control, own, and improve their situation.

It’s not what you ask; it’s how you ask it. All three of these broader objectives have little to do with the content of, or the answer to, a business question. Instead, all of them focus on the outcome of the question-answer interaction. From this perspective, it is not what you ask that is important, but how you ask it. We need to get past the Q&A outcome, which is just about knowledge, and focus on the outcome of the interaction, which is how we help our clients drive change.

Avoid the quicksand: get past questions for questions’ sake, and focus on real business outcomes.

Competing with Colleagues

When I wrote The Trusted Advisor with David Maister and Rob Galford, it became reasonably successful within several months. (Amazingly, it still ranks #11,014 – as of this morning – on the list of all books on Amazon. That’s all books, including Harry Potter (#218), Capital (#16,000), etc. I’ll take long-sellers over best-sellers any day of the week).

With its success came a happy problem: how to parcel out the leads between the three of us? Let me be clear, the book wasn’t drowning us in leads; any one of the three of us could have happily fielded all inquiries. And while we wanted to be fair to each other, we were also all of us very clearly in competition with each other.

So the question: how do you compete with colleagues?

Competing with Colleagues

What if one of us got a lead based on the book? Did we have any obligation to pass it along to the other two? If so, how?  Should we establish a quota system, whereby each of us would get every third lead?

Should we let the market dictate things, and let whomever the client had reached out to handle the response? What if the client had written to all three of us?  Should we all respond confidentially, or in some sense share our responses?

The problem was not unique to us, though it seemed so at the time.  You may face a similar problem within your organization – who gets the lead? Who gets to present?

Or, you may come face to face with an  old friend who has changed uniforms and now works for a competitor. In any case, the tension is much the same – the sensation of being a colleague feels intensely in conflict with the sensation of being a competitor.

How do you resolve it?

The Solution

The answer to the problem came to us fairly quickly, on reflection, and I documented it as part of the Four Trust Principles in my later books. The answer lies in true focus on client needs.

In our case: we agreed that we should all respond similarly to all client inquiries, regardless of to whom they were addressed. In all cases, we would say words to the effect of:

The Trusted Advisor was written by the three of us. I suspect that each of us could do an excellent job in response to your query, and each of us would handle the work slightly differently. You would be best served by having discussions with each of us, and making up your mind on that basis.

We will each be candid with respect to our own strengths and weaknesses, and answer questions to the best of our ability about the others. Each of us will respect your decision, and we are each committed to you making the best decision possible for you.

The best decision for you is what all three of us seek, and each of us will do our best to help you reach it, regardless of your choice.

This solution made everything easier. It kept our relationship collegial. It removed any awkwardness about responding to clients. It removed any awkwardness that clients might experience in choosing whom to talk to.

And, of course, it resulted in the best decision for clients, as each of us have our own particular skills and drawbacks.

So what’s the answer?  Grindingly relentless focus on client service, and the willingness to pursue that logic wherever it leads.

How You Use Your Smarts Is What Attracts Clients

 

“It’s not what you know; it’s who you know.”

You’ve probably heard that. But – you’ve also probably heard the exact opposite.

You’ve heard, “You’ve got a limited amount of time to impress them; use it.” But you’ve also heard, “Let the client do most of the talking.”

And you’ve probably heard, “You’ve got to be just a little smarter than your client.” But you’ve probably also heard, “Don’t think you know more about your client’s business than your client does.”

So, what’s the role of smarts? How important is it to be smart? In fact – what does that even mean?

To define terms, I’m not talking here about emotional intelligence, political savvy, or so-called street smarts. I’m talking about what we usually mean by “smart” in business, which generally boils down to three things:

  • Native intelligence, IQ-ish talent
  • Subject matter mastery
  • Industry knowledge

But let’s also be clear: being smart is less about what kind of smart you are and more about how you use your smarts. And usage, in turn, deconstructs into timing, amount, and context.

Kinds of Smart

I’ll use “IQ” as shorthand for some measure of native intelligence, mindful that there’s a lot of debate about its validity. IQ is seen as an innate form of smarts—you’re supposed to be born with it.

People with high IQs tend to think highly of high IQs, but that doesn’t mean everyone else does. In fact, if clients perceive someone as more clever, sharper, quicker, adept than them, it can be perceived as a negative—particularly if you’re selling.

“Watch out for this one,” the client thinks. “He might pull the wool over my eyes and outwit me.”

Subject matter mastery is different. It’s not an innate kind of smart; it’s derived from experience.

“I could be as smart as him,” thinks the client, “if I had chosen to work in that area.”

In fact, it’s that mastery that clients seek. A client hires a lawyer who knows the law precisely because the client doesn’t know it as well. A subject matter expert with a slightly lower (perceived) IQ than the buyer is even better. They are seen as knowledgeable but unthreatening.

Like subject matter mastery, industry smart is derived, not innate. But unlike subject matter mastery, its presence isn’t a plus so much as its absence is a minus. Clients, particularly those in professional and financial businesses, look down on “generalist” subject matter experts and functional specialists. There’s a general feeling that “our people won’t accept advice coming from you unless you have industry smarts” (though the speaker usually refers to ‘our people’ and not to himself).

In general industries, it is believed that management is management and sales is sales, that the know-how is transferable across industries. That isn’t the case in the professions—rightly or wrongly. You won’t win fighting that feeling; it runs deep.

Timing: When to be Smart

The time to show your IQ smarts is before you meet. Show it in your resume, qualifying documents, and your website’s “About Us” section. That’s because IQ smarts are the only kind of smarts that are potentially embarrassing to the client. The client doesn’t want to be over- or under-estimating you in real time; they’d prefer to know what kind of person they’re dealing with up front, in advance of meeting you. That way they feel much more in control, which is a good thing.

Once you’re in a meeting or interacting with the client, never mention IQ smarts again. Don’t bring up your resume, your degrees, your globe-hopping upbringing, or the brilliant circles in which you travel unless, of course, you’re asked a direct question.

You also want to show a little bit of subject matter smarts and industry smarts in advance of a first meeting or interaction—enough to assure the client they won’t be wasting their time and that they might well benefit from meeting you.

In short: be IQ-smart before you meet. And in face-to-face meetings, be subject-matter and industry-smart.

Amount: How Smart Should You Be?

No one likes to feel condescended to. Fortunately, it’s easy to avoid being condescending in subject matter and industry smarts. The main place to worry is in IQ smarts. If you really think your IQ is so much higher than your client’s, remember that your client is likely to resent or fear you if you make a point of it. Go work on your emotional quotient.

For subject matter and industry smarts, there is no natural upper bound. You’re being hired in part for your expertise, and your client will respect high levels of knowledge of your industry without fearing it. Your biggest challenge here is to be gracious in revealing how smart you are.

Context: Being Gracious about Your Smarts

The single most common sales error regarding smarts that professionals make is to think they have to show how smart they are. They somehow believe that a goal of client interaction is to demonstrate how smart they are. This is almost always unfounded, and frequently it accomplishes the very opposite of what’s desired. It makes the client feel you are self-centered and ego-driven and that you’re only out to make the sale.

Instead, the rule should be to use your smarts as necessary in support of the right thing for the client:

  • If it’s useful to mention that a particular recommendation has been followed successfully by three other clients, then say so. But if you say so just to demonstrate your clout, it’s better to leave it unsaid.
  • If it might be useful to the client that you know so-and-so, a big industry player, then mention it. If you do it only to prove your industry smarts, don’t.
  • If a question is asked to which you clearly know the answer, answer it. But if it’s another question that was asked, and you’re piling on to that question to answer another one, unasked, stifle yourself.

Following that simple rule demonstrates that your driving motivation is client service, not the pursuit of the sale and not your search for ego gratification. And if you’re worried about not knowing the answer to an occasional question, remember a client would rather hear an honest “I don’t know” than a transparent struggle to fake your way through an answer.

The smart call is to use your smarts only in service to your client.

Best Practice for Opening a Sales Call: Bring a Risky Gift

How do you open a sales call?

Do you strive to establish credibility? Thought leadership? Make a positive first impression? Establish trust rapidly?

There are lots of answers to that question, and I’m going to suggest most of them are sub-optimal. And, I’m going to suggest, there is one single Best Practice way to do it. It’s called Bring a Risky Gift—BARG for short.

Why Your Opening Sales Conversation is Critical

First, let’s be clear. This question is more important than it used to be – not less important. Many sales authors are fond of noting that the sales process is becoming far more composed of pre-meeting interactions – collecting data from websites, emails, search engines and the like. They then draw the wrong conclusion – that the actual sales meeting itself is declining in importance.

The opposite is true. As long as complex B2B buying decisions are made by human beings – that is, protein-based entities who are the products of eons of emotional and social evolution – we require some kind of personal interaction before making a major decision. Let’s call that the sales meeting.

The fact that less total time is taken up by face to face meetings these days simply means that those meetings’ relative importance in the entire sales process has increased, not decreased.

A Metaphor

Let’s say you and your spouse or significant other are invited to dinner at the home of a business acquaintance. It’s your first time meeting them in a primarily social context. What must you do?

You know the answer to this one. On the way there, you stop at the liquor store and pick up a nice bottle of  wine. It’s what you do. The culture of gift giving in a thousand forms (including simple gestures of respect) is deeply embedded in every culture, including modern western business culture.

By doing so, you fulfill a minor cultural obligation. The host thanks you, and the evening begins on a fractionally higher note than before you walked in with the gift. But notice – this is more obligation than generous gesture. The downside of not bringing a bottle of wine is probably greater then the credit you get for doing so. You’re supposed to do this.

But imagine this. On the way to the liquor store, you say to your SO, “I think they went to northern Italy last year. What if we bought them a really nice bottle of Barolo, with an Italian looking gift card?“ and maybe you spend a few dollars more than you might have otherwise.

What happens when you present the gift? Notice – there is a risk here! It’s possible they are alcoholics. Or perhaps it was Spain they went to, not Italy. But here’s the magic: you actually get more credit for having taken that risk – even if you were wrong – than you get for buying the conventional, safe Napa cabernet.

What happens if your host really is an alcoholic? They are likely to say, “You know, we don’t drink, but that’s very thoughtful of you – we’ll save it for our next guests who do.“

And if it was Spain they went to? They are likely to say, “Ha ha, we used to confuse Spain with Italy too,“ or, “No, it was Spain, but with wines like this Barolo, we’re thinking Italy is our next destination – have you been?”

The point is: yes, you get credit for bringing any wine, but not much more than for fulfilling an obligation. You get serious extra credit for having been willing to take a risk – even if you’re wrong! It shows you are willing to be vulnerable in service to the client.

The act of showing vulnerability and taking a risk first means that you are playing the role of the trustor – the one who initiates a trust relationship – rather than waiting to passively play the lower-risk role of merely being trustworthy.

The possibility of being wrong is critical to that extra credit: it says to your host, “I may be wrong here, but I have put serious thought into this, and I’m willing to accept the gamble that I could conceivably be wrong; I trust that you will appreciate my well-intentioned gesture and the quality of thought that went into it.”

Now let’s see how that metaphor plays out in opening up a Sales conversation.

BARG to Open the Conversation

First, notice that you rarely get an opening sales conversation without already having established serious credibility. B2B buyers don’t waste their time, they’ve done their homework on you, and you have established enough credibility to get this meeting.

Do not waste their time by launching into a demonstration of how smart you are. It is annoying, and they’ve already acknowledged that point. Continuing to do so is all about you, not them. Worse, it’s rude. Any sales author who tells you you should open a sales conversation by establishing your credibility is oblivious to the serious emotional undercurrents happening in these moments.

That includes authors who suggest you should open with a breathtaking demonstration of how you are able to challenge their thinking. If that’s all you lead with, it is not only rude, it is insulting and arrogant.

Insights are great, but they must come well-packaged in the emotional wrapper of respect and etiquette. That’s where BARG comes in.

(It should go without saying that the wrong answer to, “so, tell us about yourself“ is to launch into your prepared deck about yourself. They were merely being polite by asking that question; you should not take it as any more than a pleasantry, which the rules of etiquette suggest requires only a 30-second answer.)

Here’s what you should say after the minimal pleasantries are complete:

Thanks for having us here. It is apparent to us, having looked through a lot of available information about you, that you are truly expert in [insert something] [insert something more]. It would be arrogant of us to claim that we know more about these areas than you do.

However— we do know a thing or two about similar situations, and one thought arose as we looked over your circumstance. It seems to us – please correct me if I’m wrong – that [X] might be a critical issue for you. Is that the case? And if so, could you tell us more about how X plays out in your business?

Two things: first, note that X had better be a meaningful, thoughtful insight.

But second, and frankly even more importantly, X had better be possibly wrong. If it is an absolutely 100% safe hypothesis, then you get no credit for having taken a risk. If you cannot be wrong in your hypothesis, then you are refusing to show any vulnerability. You are refusing to take the first step in creating trust. That is simply a variation on “I’m smarter than you are, and I’m going to start off by showing you why and how that’s true.”

There are two possible answers to your risky gift, and they are both good:

  • The first answer is, “you’re totally right – anything you have to say about that critical issue, we are very interested in hearing.”
  • The second answer is even better. “You know, most people think of X as the big issue, but the fact is – it’s really Y.”

In which case, you respond with, “Oh my gosh, I see it now – of course you’re right. Please, tell us more about Y, and how that plays out for you.“

And of course they will be happy to tell you about Y: because you have demonstrated vulnerability, you are showing sincere interest in what they have to say, you are focusing on them not on you, and you are demonstrating the willingness to learn from them.  At that point, the polite thing for the client to do is to answer your question of them.

If you think these rules of social propriety are vague and imprecise, think about how you respond when someone extends a handshake to you: how often do you spurn them and turn away with a cold shoulder? Pretty much never. You can make serious book on the hard-wired social responses of human beings in these situations – we are extremely predictable.

Insight by itself is worse than useless if not wrapped in the package of social propriety. BARG is that wrapper. It triggers hard-wired responses of etiquette, respect and other-focus in an ever-ascending spiral of reciprocating exchanges between two trusting and trustworthy parties.

To close the loop: should you open a Sales conversation with credibility? With a first impression? With insight? With rapid trust creation?

The answer to all of those questions is Yes. What’s critical is how you do it. And how you do it is BARG—Bring a Risky Gift.

 

What Buyers Really Want

What do buyers really want?

In particular, what is the true role of expertise in evaluating the purchase of complex intangible services?

The head of marketing for a US East Coast major law firm was asked by 3 partners to help rehearse and prepare them for a key sales meeting at a major potential new client. “If only we can convince them that we are absolutely the best in this area, which we are,” the lead partner said, “then they’ll have to go with us.”

This point of view seemed so self-evident to the senior partner that it didn’t feel like an opinion; it seemed like an obvious truth. Unfortunately, not only is it just an opinion—it also is not particularly accurate.

Lawyers, accountants, bankers, actuaries, consultants—all behave more often than not as if the key to selling lies in a powerful display of expertise. Most complex intangible services sales are sold with the implicit, if not explicit, belief that expertise is the issue. But that doesn’t make it right. And if it’s not right, then we must answer three questions:

  • if expertise doesn’t sell best, then what does?
  • don’t buyers seem to want to buy expertise?
  • if selling expertise isn’t the best approach, why is it the dominant one?

Good questions all. The answers lie in the psychology of buyer and seller of complex intangible services, and in trust—which is what really lies at the heart of successful sales.

WHAT’S THE ALTERNATIVE?

If buyers don’t primarily buy expertise, then what are they buying? The answer, in a word, is trust.

Take a simple case. Imagine you have recently moved to a new city, and must find a pediatrician for your 2-year old child. You have a list of 6 doctors, referrals from a combination of health plans, co-workers and neighbors. One doctor clearly has a slight edge in reputation of medical school; another has the most years’ experience; another is on staff at a teaching hospital and has written several articles.

But there is one who hits it off immediately with your 2-year old. This pediatrician connects with and seems genuinely focused on your interests as a parent and on those of your child, rather than on getting you as a new patient. In other technical respects, this physician is in the top half, but not number 1 in any category.

What do you do? Not everyone, but a majority nonetheless, will go for the pediatrician who seems to care, as long as he or she is within an acceptable range of expertise. And, they will use the word “trust” to describe their decision. There are exceptions, of course; a few people always buy purely on the basis of technical specifications, a few more buy only on price, and occasionally one seller is overwhelmingly dominant in the technical realm.

But the majority behave as if expertise has an acceptability threshold. Achieving that threshold is a necessary condition for getting hired—but even expertise beyond the threshold is not a sufficient condition. Given an acceptable level of expertise, people prefer—strongly—to buy from someone whom they trust. In other words, expertise serves as a first-order screen in the buying process—but not as a final decision-making criterion.

To put it simply: most buyers of complex intangible services prefer to find an expert they can trust, rather than to evaluate expertise across experts.

THEN WHY DON’T BUYERS BEHAVE THAT WAY?

They do. They just don’t say so. There’s a difference.

First, buyers are a little intimidated by the role of buyer. Usually the seller has greater expertise. There is often a lot at stake, and the services are costly. It is often truly hard to choose between several very competent sellers. So, buyers feel a need to display some level of technical expertise themselves, partly out of natural human ego, and partly to keep the seller on his toes.

Second, corporate buyers of complex intangible services are usually professionals themselves—they worship at the same altar of expertise. And, they are particularly concerned to be able to justify their decision. Justification in business almost always consists of rational, mostly financial, arguments. Therefore buyers drive discussions in the technical direction, even while looking to assess their level of trust with the sellers.

How does this play out? Buyers look for rational reasons to justify what is finally an emotional decision, built heavily on trust. The most commonly accepted rational reasons are price and features. (Price is a very comfortable excuse for saying no—it is quantitative, impersonal, and only the buyer has all the numbers. However, price is rarely given as a positive reason for selection). Very few chief counsels will say to their CEO or board nothing more than, “I think we should go with XYZ because, basically, I think like them better and trust them more.” Yet that is how most of us do behave when buying complex intangible services.

THEN WHY DO SELLERS SELL EXPERTISE?

Professionals over-emphasize expertise for three reasons.

First, that’s what they think (falsely) the buyer wants— and the buyer encourages them in that belief.

Second, expertise is what we professionals are most comfortable with. Very few lawyers went into law because they wanted to sell, or because they wanted to work with people. They went because they love the law, and the vast majority of their learning, development, evaluations and study consist of greater and greater mastery of content expertise. The same is true for consultants, commercial bankers, accountants and actuaries. Why would anyone want to sell on any other basis than what they’re good at and spend all their time and energy at?

Finally, professionals have an emotional vested interest in selling on expertise. It is not comfortable to believe that success in selling might depend on something other than what we spend almost all our time and energy focused on. Still, it’s the truth.

Most buyers of complex intangible services prefer to use technical expertise as a screening mechanism, and then make final decisions based on trust. Sellers who recognize this will listen more, talk less, and focus on the issues of the client at hand (rather than those of past clients). These simple client-focused behaviors are the ways buyers assess trust. Get yourself in the door by focusing on expertise; but once in, drop it and focus on the client, not on yourself.

Ditch the Elevator Pitch and Take the Escalator or the Stairs

As tech infiltrates every aspect of our personal and business lives, efficiency becomes an ever-more celebrated virtue. This is as true in communications as elsewhere. Think one-word book titles (Blink, Switch, Drive); think the obsession with CRM metrics; and think the Elevator Speech.

You know the “Elevator Speech.” It’s the hypothetical answer you would give if you were alone in a high-rise building elevator with the CEO of a potential client. Presumably the CEO says, “Tell me about your company,” or “Tell me why we should work with you.” Your presumed answer – sometimes called “the elevator pitch” – turns out to be a good solution in search of the right problem.

There are situations where a 30- to 60-second answer to those questions is exactly what’s called for. But there are other situations – far more, in fact – where different approaches are called for – let’s call them the Escalator Speech and the Stairs Speech.

THE STANDARD ELEVATOR SPEECH

Try searching “elevator speech.” Depending on whom you read your elevator speech should last 30 seconds – or maybe 120. It should answer the question, “What do you do?” or maybe it should just make an impression. It should – or shouldn’t – be a sales pitch. It is applicable to a job hunter, as well as to an entrepreneur in search of venture capital.

One size does not fit all, of course. But there is one simple question to help you craft your response speech, and it is this: What does the other person really want from you?

There are three possible answers, each requiring a different “speech”:

  1. Do I want to be involved with these people?
  2. What can these people do for me?
  3. Who are these people, and do I care?

Let’s examine each.

DO I WANT TO BE INVOLVED WITH THESE PEOPLE? THE TRUE ELEVATOR SPEECH

If you’re an entrepreneur pitching a venture capitalist, there is a definite frame of reference established simply by naming those two roles. A venture capitalist’s key question is, “Shall I invest more time, and ultimately more money, in developing an investor relationship with these people?”

Answering that question is part of what venture capitalists do. They deal in business models, competitive analyses, concept descriptions, and corporate story lines. A snappy 60-second comprehensive, high-talk, low-listen pitch is very right – if you’re an entrepreneur in an elevator with a venture capitalist.

WHAT CAN THESE PEOPLE DO FOR ME? THE ESCALATOR SPEECH

That question rarely comes up in other corporate roles. A line executive doesn’t spend much of his time interviewing consulting firms or deciding on systems or communications vendors. Even an HR executive doesn’t spend a lot of time interviewing candidates.

If such clients are approached by someone in a captive audience situation and forced to endure a 60-second speech – no matter how insightful or clever – their reaction is likely to be one of resentment. They didn’t ask to be informed about the benefits of a relationship. If anything, it feels presumptuous if a consultant or vendor starts to talk about one. If they’re with you on a trip to the 46th floor, this is when they hit the 26th floor button and say, “Oh, I just remembered, I have to…”

And yet consultants and vendors are often encouraged to think about the “elevator speech” concept – to emulate the entrepreneur – and begin telling their “life story” to a stranger who hasn’t invited a relationship conversation.

Meanwhile, the client is stuck back at something like, “Relationship? Slow down – I don’t even know what you can do for me. Let’s not put the cart ahead of the horse.”

This is the question more commonly being asked in a happenstance business encounter. The client is not interested in an investment relationship, but they might be interested in a simple services relationship. It depends on what we can do for them. So, answer that question. Do it with what I’ll call the “Escalator Speech.”

The Escalator Speech should be limited to about 20 seconds and culminate in a question. The rest of the time is entirely up to the client—who can, after all, choose to invite you to continue the conversation on whatever building floor they choose.

Your “speech” needs to sound something like this:

Mr. Jones, I’m James Smith from XYZ Associates. We’ve worked with a customer of yours, ABC, and I’m acquainted with Janice Johnson of your firm. We work to improve trust levels in our clients’ sales processes. It’s always seemed to me there’s untapped potential for improved customer relationships in your insurance business by changing the way benefits payments are transmitted. Do you see it that way too? Why isn’t there more personal contact at that critical point in the industry’s business process models?

Then shut up and listen for the rest of the escalator ride. There are two possible outcomes to this conversation, and both are good:

  1. The client says, “You’re right, it’s a constant source of amazement to me that we don’t do a better job on that. Let’s talk some more about how you’ve gotten organizations to do that.” Good conversation ensues.
  2. The client says, “Ah, that’s what many people think, and it sounds right at first, but there’s a hidden reason it doesn’t happen this way, and I’ll let you in on it. The reason is….” Even better conversation ensues, because you learned something, and the client had the pleasant experience of giving a smart person an even better education. They get to look smart – always a fun thing. Your original insight doesn’t have to be right; it just has to be intelligent and thoughtful.

The Escalator Speech starts off by giving the bare minimum of information required for social comfort, then it offers a piece of free insight to the client, ending with a genuine question. This gives the client total control over whether to take the conversation further.

DO I CARE WHO THEY ARE? THE STAIRS SPEECH

Both the elevator and escalator speeches happen in a business context – a semi-random event within a non-random environment. But other situations arise as well. You sit next to someone on an airplane who turns out to be a potential client. You go to a neighborhood cocktail party and run into someone who works at a potential client organization.

In such a situation, even an escalator speech is presumptive because the occasion is largely social. The impression you make here is based first on obeying the social roles that govern the situation. And rule number one is you don’t get deeply into business.

In this situation, if someone says, “What do you do?” they’re not inviting you to assess their business, much less pitch your own. And remember, they probably don’t care much about your answer. Their question was a social nicety; they didn’t come to this event looking for business contacts.

Here, you need to say something like this:

“I spent 12 years in consulting. I then joined a small healthcare client company as their CEO. Last year, I started my own consulting firm focused on the health industry. And you – what do you do?”

The rules of this dialogue are that it’s back and forth, and you shouldn’t spend more than 30 to 60 seconds on your side before tossing the conversational ball back to the other side. Your only business objective here is to give the client enough information to know if they care who you are. If they do care, then further discussions can be held later – exchange business cards or email addresses, and look for signs that the other party prefers to start talking about football. Follow their lead.

Let’s call this the Stairs Speech – so named because you take it one step at a time.

The next time someone says to you, “So, tell me, what is it that you do?” ask yourself what that questioner really wants to know.

  • Are they just being polite? Give the Stairs Speech.
  • Are they interested in what you might do for them? Use the Escalator Speech to escalate from monologue to dialogue.
  • Are they interested in investing serious time and money in you? Use the Elevator Speech to show you’re on top of your business and respectful of their time.

There are several ways to get up in a building, and only one involves an elevator.