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Enabling Stupid Marketing (and #Sales) at the Speed of Light: Part 3 of 3

This is the third part of a three-blogpost series.

  • In the first, I argued that “stupid marketing and sales” – defined as “a stultifying obsession with one’s own product features, to the exclusion of any meaningful focus on customer needs, much less wants” – has become endemic.
  • In the second, I stated three reasons for the endemic status of this sad situation: the complexity of technology, the tyranny of zero-cost marketing, and a pervasive view of business as impersonal and mechanistic.
  • In this third and final post, I want to outline two generic solutions to the problem.

If you want to contribute to a general improvement in the state of sales and marketing, may I suggest that the next time you spot an offender, send them a link to this series.

Hey, it can’t hurt.

Two Fixes for Stupid Marketing and Sales

If the problem is an obsession with features and an absence of other-focus, two solutions present themselves.

  • One is to offer a rich, compelling narrative – a story – that allows the customer to deeply appreciate one set of possible benefits of the product or service, triggering a series of ‘ah-ha’s’ in the customer’s imagination. I offer two great examples of marketers who use this technique.
  • The other is to go straight at the particular customer, suggesting a uniquely relevant scenario for them – and to do so in the familiar-as-etiquette form of a gift. This is an approach I call BARG, for Bring a Risky Gift.

Story-telling as an Antidote to Stupid Marketing (and sales)

I am far from the first to point out the power of stories. Something there is that we all love about stories. Stories offer meaning, but in a way that is not preaching.

Even if the ‘moral’ of a story is blindingly obvious, the form allows us to indulge the conceit that we, ourselves, have done the lesson-drawing.

Ian Brodie. @Ianbrodie is an ex-management consultant turned email marketer. He writes an insightful blog – and an even more brilliant newsletter. It’s the latter I want to talk about.

I look forward to reading each newsletter. In the kindest, gentlest way, Ian always manages to appreciate just how a particular email marketing technique, or a turn of phrase, or an approach to marketing, might work. Usually he tells it in the form of a wry, self-deprecating story about himself; occasionally, in the form of a triumphant story about a client.

He doesn’t write directly about me: but in writing insightfully and artfully about himself and others, he tells a story that unlocks my own imagination, and makes me interested in what he’s selling.

Ramit Sethi. @ramit also writes a blog, a newsletter, and various other missives. Some people are put off by the in-your-face title of his website – I Will Teach You To Be Rich.

First of all, he actually can. Secondly, he is a cornucopia of ideas of how to improve your life. But for present purposes, it’s how he does it on which I want to focus: Ramit tells in-your-face stories that rivet the attention and supercharge the imagination.

Like Ian, Ramit is a story-teller. Also like Ian, some of his best stories are about what he himself was, and what he managed to become. He’s also loaded with real life examples of others. Unlike a lot of happy-talk writers, Ramit doesn’t hesitate to describe failure: if you can’t stand the occasional ‘ouch’ of self-recognition, better not risk reading him. But if you can take it, this is great marketing.

Bring a Risky Gift

One of the most powerful forms of marketing – really, of influence in general – is the principle of reciprocity. If I do X for you, you’ll be inclined to return the favor. It’s as basic as a hand-shake.

Think about what you do when a friend invites you to dinner. You bring a gift – maybe a bottle of wine. But if you take a risk, you give some thought to that wine. You spend a little more; but especially, you spend some time thinking about it. Maybe you buy a bottle from Piemonte, because your friend recently returned from a foodie tour of Italy.

Critically, you could be wrong. Maybe they hated Italian wines. Maybe they quit drinking. But that’s the point. If you actually take a risk, you make yourself vulnerable.

Vulnerability and risk-taking are the drivers of trust. There is no trust without risk. Waiting for the other party to take the first risk is like aggressively waiting for the phone to ring. You need to create your own luck, and BARG – Bring a Risky Gift – is how you do it.

The best marketing is not shotgunning features lists into dead, cold email lists, but digging into those lists and doing just a bit of research to actually do something personal – and to offer a gift.

I don’t mean a bribe, or an illegal offering. I mean a sample of your wares. An insight; a tool; a white paper. Something that is valuable, that is clearly aimed uniquely at the target client in a transparent and intentional way, and that entails some risk.

That is what BARG is about. It triggers the reciprocity process. It triggers the trust process by taking a risk. It gives a humble sample of what you can do.

Who does this?  Really good consultants do it all the time. In the larger world of marketing, this is some of what Hubspot Marketing became famous for doing.

The point is, it’s another antidote to the impersonal, features-only approach to “marketing” that has come to plague the field in our time.

 

So, take your pick. Tell rich stories about yourself and your clients; or dig in to real life target clients, and BARG.  Either way, the point is to re-personalize marketing and sales, reconnecting with the human aspect of buying.

Let’s make sales smart again. Sell the hole, not the drill. Make it personal. You don’t have to put up with stupid marketing and sales as a customer; and you surely shouldn’t practice it yourself.

Enabling Stupid Marketing (and Sales) at the Speed of Light. Part 2 of 3.

This is the second of a three-part blog series. In the first, I argued that Stupid Marketing (and sales) has become endemic. Briefly, I defined “stupid” as “a stultifying obsession with one’s own product features, to the exclusion of any meaningful focus on customer needs, much less wants.”

In this second part, I want to explore how we got there: why is there so much of this kind of 101-level marketing and sales confusion going on?  In the third part, I’ll explore the two solutions to Stupid Marketing (and sales).

Why Is Stupid Marketing Endemic?

There are three basic reasons for this plague; the third one is the biggest.

Technical Complexity.

Marketing and sales have become so transformed (taken over?) by technology that complexity has gone way up. Previous generations of Willy Lomans were flummoxed by IBM 360s, yesterday’s marketers stand in awe as today’s generation navigates between content creators, media vendors, execution technologies, and automated ad buys.

That (mostly marketing) complexity has kept sales at a low level of sophistication. Because we have so recently become able to do so many things so much more cheaply and more quickly and more effectively, we have all gotten seduced into thinking that pouring old wine into new bottles changes the wine. It doesn’t. Features are still features – they’re not needs. And they’re miles away from wants.

In the early days of business process re-engineering, we heard about “paving the cowpath.” Automating a process doesn’t change that process per se. Putting features online, making them pop up through a thousand triggers, and linking them to highly targeted audiences doesn’t change the fact that they’re still features.

Technology makes us better at identifying customer needs. But too many marketers draw the inference that, having done so, all we have to do is throw a product-and-features advertisement their way at the right moment in the right medium, and sales will magically go up by a metric-measurable tick.

This leads to a semi-conscious belief that everything is marketing, and that marketing will absorb sales. Not going to happen.

If all you do with profound market intelligence is to throw digital darts with more and more precision, you’re still not selling – you’re just enabling creepiness.  People still crave engagement. The need for personal sales has not diminished, it’s simply shifted.

Search engines, AI, and CRM have not repealed a few laws of human nature – that people like to feel understood before they seek to understand. That they still want you to feel the problem they’re trying to solve. They still want to know that you care before they care what you know. Even an automated buying process is automated by someone who is responding to those laws.

Technology-based marketing enables sales – it doesn’t trigger them except incrementally.  Detailed descriptions of features are still just features.

The Tyranny of Zero-cost.

The second reason for endemic stupid marketing and sales is the zero marginal cost nature of information. Closely related to the tragedy of the commons, this speaks to the perverse incentive that makes almost any trivial sale profitable in the face of massive, destructive-of-relationships, spam-like emails.

When coupled with the short-termism of our times (remember IBGYBG from the recent recession? remember when startups aimed to become profitable, rather than to cash out?), this is toxic. Zero incremental marketing cost plus a disregard for long-term (heck, even medium-term) social or customer costs, leads to cynical, impersonal marketing and sales alike.

An Impersonal View of Business

The biggest reason, I believe, for endemic Stupid Marketing is the view that business itself is best described as impersonal, logical, deductive, sequential, behavioral, and self-serving.

By this view – dominant in the US since the 1970s – business decisions are made through cognitive and impersonal processes. Without going much deeper, let me just say this is at best a gross over-simplification, and in large part is simply wrong.

People, with all their protein-based emotional behaviors, still have a critical role to play in business. (The great philosopher Sidney Morgenbesser once told BF Skinner, “Let me get this straight – you’re saying we shouldn’t anthropomorphize people?”). Sidney was right to cock an eyebrow.

Many trends merged to create this impersonal view of business:  competitive strategy, the spreadsheet, business process re-engineering, the Internet, hyperlink technology, AI, cell phones. We can all see why modern marketers might think that sales and marketing can be reduced to incentives, chips, and bits and bytes.

But it can’t. People do behave rationally – just not according to the simple rules of economic self-optimization that marketers have adopted.

Instead, they behave according to rules of relationships, emotions and the heart – and then rationalize their decisions with the brain. And those rules transcend the basic features descriptions and simplistic “solutions” that so dominate the field today.

Why is stupid marketing and sales endemic? Because we mistake complexity for substance, because it costs nothing, and because we have come to believe the false gospel of People as Rational Self-Aggrandizers.

In the last part in this series, I’ll talk about the two generic solutions to the problem of stupid marketing – two strategies that are tried and true, and that incorporate the human part of business.

 

 

 

Enabling Stupid Marketing (and sales) at the Speed of Light. Part 1 of 3

How would you rate the quality of the following three unsolicited emails? What letter grade would you assign to each?

Sample A:

Hi Charles,

I have emailed you a few times now regarding your business cards. Let me know if you are not the correct person, also please tell me who I should be contacting?
We – ABC – are the leaders in online business card management for large organizations. We will save you money and make ordering business cards very easy.
Here is a link with more information and a demo – _____.
Sample B:

Dear Charles H.,

If you’re like most companies today, you spend tons of time and effort tracking all the sales tax rates, rules and processes required for compliance everywhere you do business. But are you 100% confident in the result? Are you confident you’re audit proof?

We’re called XYZ. Our cloud-based solution not only eliminates all of those unproductive hours, but it solves all the sales and use tax compliance guesswork for good. In fact, we guarantee the accuracy of every rate you use, rendering you audit-proof in the process.

Charles H., if you’re willing to give us just 15 minutes on the phone, we can show you how we automate all the sales tax rates, rules, and processes required for compliance. We even address consumer use and seller use tax, too.

 

Sample C:

Good Day how are they getting on? It’s Irina! I’m from Russia.

I’am very ripe person and for now looking dependable Man) If You want to date me;) response me;)

I can send You my photo attached have a good time

 

What do you think?

Here’s my grading of them.

They’re all about the same. I would grade them F, F and D respectively (yes, sample C is fractionally better – I’ll explain).

Worse yet – not only is that kind of effort by far the dominant quality of email marketing I see today – it is not all that much different from the supposedly sophisticated B2B sales and marketing initiatives we see major firms putting forth. Stupid marketing (and sales), I suggest, have become endemic.

 

This is part 1 of a 3-part blogpost series I’m calling “Enabling Stupid Marketing (and sales) at the Speed of Light.”

  • In this first part, I want to describe the problem – to point out how widespread it has become, to define the problem, to describe just what kind of “stupid” we’re talking about.
  • In part 2, I’ll talk about why this problem has become so endemic.
  • In part 3, I’ll talk about the two generic solutions to the problem.

Speed of Light Stupid Marketing (and sales): How to Spot It 

There have, of course, been amazing advances in recent years in the fields of sales and marketing. CRM and Salesforce have upended sales processes. Technology has enabled almost frighteningly good tools for identifying and targeting customer behavior. And amazing software tools are helping automate and micro-tune all kinds of sales and marketing functions.

But the sales and marketing folk of today – very much driven by the increased role of technology – have confused process with substance, features with benefits, and even sales with marketing.

The core, basic, Stupidity-101 mistake of our time is the same mistake that was made back in the Stone Age of business, when I came of age – a stultifying obsession with one’s own product features, to the exclusion of any meaningful focus on customer needs.

Let’s look first at how my three examples stack up:

  • What does ABC from Sample A have to tell me? That they’re the leaders in business cards. 100% features. Zero benefits. And don’t even look for a hint of connection with me. Do I care? Not one bit.
  • What does XYZ from Sample B tell me? That I’m indistinguishable from half the companies out there (it’s not easy to insult your customer in the first sentence), spending “tons of time” tracking sales tax rates. Not true for me (and I doubt for others); they want more time from me on the phone than I’ve spent in the last 5 years thinking about it. So now not only do I not care, but I peg the writer for a liar and/or a fool.
  • Irina, in Sample C, asks if I want to date her and have a good time.  To her credit, at least she leaves something to my imagination, which offers a chance of escaping the no-man’s land of ‘features and price’ that traps the other two.

This is 101 stuff. These days you can’t just put out a sign saying, “Stuff for sale here; and it’s really good stuff – let me tell you all about it.” You never could get away with just that, truth be told. Yet that’s what the majority of sales and marketing these days boils down to.

As a client/customer, I don’t care if it’s the latest AI-based PE Round Two-financed new app from Israel/Hyderabad/Silicon Valley that does blood tests while pre-emptively snuffing out Russian hackers and getting me Uber-delivered lunch. The only thing I care about is – what problem does this solve for me? Reciting your product’s nifty features does not, repeat not, constitute effective sales, or even marketing.

Drills vs. Holes.  The still-sentient among us with long memories will recall Ted Levitt’s old bit about “people don’t buy drills, they buy holes.” They also don’t buy business cards, they buy impressions. They don’t buy tax compliance software, they buy peace of mind. And they don’t buy Russian girls, they buy – well, to Irina’s credit, she at least engages her customers’ imagination to fill in the blank.

Listing features is simply describing the drill, not the hole.

As my friend @davidabrock points out, this obsession with description is a failing especially noteworthy in the tech industry. This leads to some delicious irony; I’m sure I’m not the only one who gets emails from tech companies telling me about their ability to increase my sales and bottom line via their powerful software, which enables micro-targeting, lead generation, personalization, and the like. Meanwhile, it is clearly aimed at businesses not like mine, clearly the product of a mass emailing, shows no evidence of having micro-defined me in any terms, and clearly impersonal.

If their own dog food is so great, how come they’re not eating it themselves?

The Collateral Damage of Drill-bit Marketing. If you think of your brilliant product as the scarce resource, then you probably think of the customer as the commodity part of the supply/demand equation. The focus becomes on how good we can get at describing ourselves to as many people as possible.

This is of course dead wrong. Properly thought of, the scarce resource is customers, and the commodity is what we’re selling. The right focus is to jointly define a problem, and then help solve it for the customer.

I remember a college acquaintance who claimed to use this approach with women: “Just ask enough of them to have sex, someone is bound to say ‘yes.'” Maybe, maybe not. More important is the impression you leave on all those you interact with.  A well known CRM vendor with a 3-syllable name used to be renowned for such scorched-earth sales approaches.

If you believe your job is to pitch as many leads as possible about your features, you devalue the customer. Conversely, if you believe your job is to understand a few customers as deeply as possible, your product features will take on new levels of meaning. But you have to view sales and marketing as about customers, not about your product.

Metaphors – Jobs and Dates. Here’s a metaphor. Imagine you’re looking for a job. You list your resume on all the job sites, email it in to employers, etc. You get an invitation to interview. You go in for the interview. Now – what do you do?

If your response to any question is to cite your resume, you lose the job. Because your features – the resume, in this case – are what got you the interview. What got you the interview won’t get you the offer. At that stage in the ‘sale’ (the sale of you), you need to go beyond features, and make a connection.

Another metaphor: you go out on a first date. Your date says, “So, tell me about yourself.”  If your response goes on for more than a couple of minutes, you’ll not get a second date. Your features are what got you in the door – they won’t get you to the other side.

Doing email marketing based solely on features is like getting a job solely on resumes. Doing B2B marketing based solely on putting features in front of people is like dating based solely on picking the right app.

And It’s Not Just Email Marketing. I’ve used email marketing examples, but I see the same tendency in sophisticated B2B clients – and not just tech clients, either. There is so much complexity out there that sellers in complex B2B businesses don’t know how to achieve escape velocity from the black hole of features. They make the same mistake their B2C email marketing brethren do – they fall back on describing features.

And don’t tell me “solutions” are different. What passes for “solutions,” all too often, are just slightly altered versions of descriptions. The “problems” they are set up to solve are simply descriptions of one level up the business process or IT chain. They are still far from what classic marketers would call ‘needs,’ and miles away from ‘wants.’

In some ways, the problem is not that new. For 40 years now I’ve heard clients tell me that, “You have to talk technically with them, they really want to know features, you don’t know my client, they’re content freaks.” After 40 years, I suspect a pattern. And the pattern is not about the customer, it’s about the seller.

We are in love with our products, our features, our hard-fought expertise. And if we’re in love with it, how could our customers not be? Besides, that customer focus stuff feels un-scientific, soft, and – above all – risky. Far safer to stay in the safe world of features and price, features and price, features and price. New bottles – old wine.

 

Next Blogpost: Part 2 of 3 – Why Has Stupid Marketing (and Sales) at the Speed of Light Become Endemic?

 

Trust-based Selling, the Advanced Course

Hand The Ball Over, See What HappensI had lunch the other day with Jack S., a client from 5 years ago. At the time, Jack managed a sales organization in the reinsurance business. (If you think insurance is complicated, try understanding reinsurance!).

Since then, the industry has consolidated; Jack works for one of the top three reinsurance brokerage firms. His job has evolved into a sort of senior advisor  to the 100 or so consultative salespersons. As we talked, I realized he is operating at the very top of the trusted advisory, trust-based selling world. See what you think.

Charlie: How do you get asked in to see customers?

Jack: Each salesperson has about 5 clients, and typically at least one is having problems. Since I’ve got deep expertise and experience, and the reps trust me, they invite me in to meet the client.

Charlie: So, you get invited in as an expert? What happens then?

Jack: Yes, the rep typically tells the client I’m some super-expert. They introduce me with a big pitch, my resume, all my qualifications and so forth.  Then they hand it over to me, and that’s when I surprise them.

Charlie: Yes?

Jack: I just ask the client to tell me what’s going on. I can always feel the rep beside me screaming inside his head, “What!? That’s all you’ve got? I pitched you as an expert, where’s your demonstration?”  But I’ve found this works much better.

They can tell pretty quickly that I’m totally paying attention, and that I’m nodding in all the right places. Just a short question or comment from time to time is all I really need to show that I know what I’m talking about, and I always make sure we turn the conversation right back to them.

Charlie: What a concept – open by letting the customer talk!  Any other best practices or tips about how to do that?

Jack: Yes. I frequently ask the rep before we go in to resist their temptation to fill empty spaces in the conversation – to just follow my lead. You know, when you’re trying to sell something, a lull of even half a second in a conversation can feel like an eternity, and you’re worried about filling that gap, keeping the momentum going.

But if you let the customer fill the silence, they almost always will. And they seem to interpret it as permission to go a little further, to tell a little more about the situation.  Which happens to be great – they’re sharing much more with us, and I haven’t said a word.  The rep is often amazed when we leave, “I can’t believe he said that, he’s never talked about that before.”

Charlie: Brilliant. Now, what about failures?  Aren’t there some times where you don’t have a major new insight, you can’t solve the problem?

Jack: You know, I’ve learned there really aren’t any “failures.” Maybe a quarter of the time it turns out that the client is already doing everything they can, I can suggest a tweak or two, but basically they have to just bear down and wait out the situation.

If that’s the case, I just say simply you’re doing the right thing, you’re not missing anything, there is no silver bullet you haven’t found, or at least I haven’t found it either.  And that actually makes them feel better. Because they’ve been fearful and guilty, and I’ve given them permission to feel OK. They could already handle waiting for things to clear up, but they really appreciate the relief that comes from knowing they’ve done what they can.

———

I’ve written quite a bit about trust-based selling. Besides the book itself by that title, here’s a good article from a few years ago called Three Strategies for Creating Customer Trust.  As I scanned it after writing Jack’s story, I realized he touches on all three of those strategies.  Jack is really teaching the advanced course.

I’m Selling Hammers, You Look Like a Nail

iStock_000000212423XSmallYou know the old line, “If you’ve got a hammer, everything looks like a nail.” It means we tend to see the world through our own frames of reference. It’s a good reminder to watch out for unconscious biases.  And in sales, it shows up in a very particular way.

[Trivia tidbit: the hammer/nail line is credited, in Wikipedia, to Abraham Maslow in 1966. But elsewhere, it’s attributed to Bernard Baruch – who died in 1965. Someone’s wrong.]

Hammers and Nails in the Field of Sales

Occasionally you get a salesperson who actually sees a wrench and mistakes it for a nail. But that’s an uninteresting mistake – that’s just incompetence.

A much more frequent occurrence is that once the salesperson sees the wrench, and recognizes it’s not a nail – they leave! They assume that the lack of nails means game over; nothing to see here folks, turn the lights out on your way out the door.

And it seems obvious, right? If you’re selling hammers and you find yourself in a nail salon, you say “whoops” and  ask directions to the hardware store. And you leave.

Because – wrong kind of nails. They’re never going to buy hammers, not from you, not from anyone. Because the only nails here are getting manicured. They…do…not…have…nails.

And in case it’s still not obvious you should leave, sales organizations reinforce it at every step. Don’t waste your precious time. Salesforce efficiency. Ruthlessly prune the lead list and the funnel. Deploy yourself where real nails are to be found. Go where the real nails are. Get out.

A Blinding Flash of the Non-Obvious

In our haste to get out of the nail salon and scramble to a He-Man nail store, we forget one thing. You just passed up a chance to do some high impact marketing.

And it’s easy. You were already there, standing in front of someone who probably buys. There are a hundred things you could have said to the lady at the nail salon:

  • Hey, I noticed your screen doors are getting a little worn – I know someone who fixes that, would you like his number?
  • Well, aren’t I the silly one! Unless, that is, you’re looking for a present for that special man in your life; if you tell me about him, I can tell you what kind of hammer to get him – and believe me, any man loves a new hammer.
  • You know what, as long as I’m here – you got any drawers that are always sticking, maybe an appliance that isn’t working right? I’ve got 10 minutes until my next call, anything I could help you with?
  • Tell me, what kind of ladies come in here, from where? How would I know if my wife would like this salon? What kind of friends should I refer here to you?
  • This is so funny, I was just thinking the other day about nails and nail salons, and they’re actually pretty similar – tell me, what works best for you in finding new customers, and in getting repeat customers?
  • Oh well, that’s my bad sales story of the week. Not so bad, really. How about you? You ever have a bad day in here? What would you say was your worst day in this business?

In other words – engage with and serve the customer in front of you. If you always do that, word will get around. The lady from the nail salon will tell friends, “A funny thing happened today; a guy came in selling hammers, and it turns out he’s really interesting…”

What does it cost you to make an impression? Compare the cost of that impression to a mailing, a phone call, a social media campaign – and then factor in the qualitative impact of that impression.

Sales Goals and Sales Outcomes

So much of what makes sales fail (and give selling a bad name) is thinking that the goal of selling is the sale. And so in single-minded pursuit of your sale, you leave negative impressions or no impressions at all as you bounce around the world – because you leave as soon as your goal is not immediately evident.

The better way to think about it is that the sale is an outcome – a byproduct – a consequence. It’s an outcome of a very different goal – the goal of helping people you run into, including a few who turned out not to be the nails you thought they were.

Don’t pass up a marketing opportunity because of your obsession with the sale. Play the long ball. Make your goal service. And if you do that – the outcomes, the byproducts, the consequences turn out to be at least as much, if not more.

The Five Levels of Customer Focus

iStock_000019257535XSmallOne of the Holy Icons of marketing is the concept of customer focus. It’s almost always used to signify a good thing, and something that is self-evident – that doesn’t require a lot of explanation. Of course, in reality things are a little more shades-of-grey.

Here, then, is a guide for distinguishing between Five Levels of Customer Focus.

1. Target Identification. Also known as the customer focus of a vulture. At this level, customer focus generally means follow the smoke to the fire, find the decision-maker as fast as you can, screen out the low-probability leads. In short, find that target so you can zero in on the bullseye.

2. Target Optimization.  At this level, customer focus means to find the ideal overlap between the customer’s need and your product. Find that need and feed it; find that pain point and pressure it; get the customer slavering for a solution, and pitch your product as the Filler of (that) Need.

3. Target Outreach. Reach out and touch someone the buyer. Get along with them, be friendly. Teach them how to buy, how to sell your product internally, how to be your ally within the customer company. Because that way you get higher share of wallet, higher ROI for the seller, better KPIs. Mo’ money for you, big picture.

4. Target Development.  Customer focus at this level means adding perspective to the customer’s view of their own business, challenging their belief systems, jointly developing product needs for the future and metrics to manage them by. You get longer client retention, lower sales costs, higher ROI for you both.

5. Post-Target Focus.  Get rid of the “target” metaphor entirely. Don’t see customers mainly as sources of profit; they are not means to your end – they too are ends. They are people and organizations with whom you spend time, helping to make them better. By this view, sales and profits are  byproducts – not the goal itself.

This taxonomy is of course arbitrary. You may have one of your own you like better, and that’s fine. In this particular view of things, things get better as you move from 1 to 5.

What do I mean by “better?”  Thanks for asking.

a. The seller’s profit goes up as you move up the scale. This is counter to the knee-jerk reaction that you make more money by being more rapacious.  You don’t, not in anything but the shortest of time-frames and the narrowest view of reputation.

b. The buyer’s profit goes up as well as you move up the scale. At level 1, one plus one equals two (actually less, because rapacious behavior leads to long-term system breakdown). As you move higher, efficiencies go up, effectiveness goes up, trust goes up, and so forth.

c. Economic utility gets maximized. Not only do seller and buyer each make more money, but the total benefit of the system is increased as you move up the scale. Costs go down, quality goes up, employment goes up, suppliers succeed, and so forth.

d. Social utility goes up too – not just economics. The world is generally happier when people get along than when they don’t. Suspicion and pessimism are unfortunate traits in business; trust and optimism are not only their own rewards, but are self-fulfilling prophecies.

Where do you and your business fit on the Customer Focus spectrum?

 

The Power of Transparency in Marketing

It’s a temptation that lures almost all marketers and salespeople: the desire to limit and control information to consumers. It seems so obvious – lead with your best attributes, downplay your least. Yet in many cases, this impulse turns out to be quite wrong.

An example – online car auctions:

Common sense would suggest some information—a car’s age and mileage—is essential, but that total transparency about other things (precise details on subpar paintwork) might deter buyers, and lower auctioneer commissions.

[Two researchers] set up a trial, randomly splitting 8,000 cars into two groups. The first group were auctioned with standard information, including age and mileage. The second had a detailed report on the car’s paintwork.

The results were striking: cars in the second group had better chances of a sale and sold for higher prices. This effect was most pronounced for cars in poorer condition: the probability of a sale rose by 23%, with prices up by 5%. The extra information meant that buyers were able to spot the type of car they wanted. Competition for cars rose, even the scruffier ones.              The Economist

The example is from an article about insights that micro-economists are bringing to business, but you don’t have to be an economist to get it.  Our trust in the seller, as well as our trust in the product, is increased when we know we have access to all relevant data.

Transparency in Talent

(Many) years ago I coordinated MBA recruiting for a small consulting firm. Our competitive offers fared poorly in terms of acceptance against BCG, Bain and McKinsey. Then I had an idea.

We had a worldwide partners’ meeting scheduled in Boston during recruiting season. I arranged for a select group of MBAs from Harvard and Sloan to have cocktails and dinner with all of our partner group (about 30 people at that time). The pitch was, we were the only firm who would offer 100% access to all partners worldwide.

Now, MBA students are not nearly as risk-seeking as they’d like you to believe – not, at least, about their first job. It turns out that the promise of transparency removed lots of perceived downside risk, and our acceptance rate soared that year.

Transparency in Marketing and Sales

The biggest fear consumers have of salespeople is that the salesperson will manipulate or mislead them – so their default position going in is mistrust. The early phases of a buying decision are also the times when the buyer has the least amount of information. In other words: salesperson suspicion is highest when the customer has the least data.

The answer seems obvious: make all relevant information easily available to consumers, in a manner which they control, and which minimizes the chance of manipulation. Your website, for example.

Having self-educated, consumers will then seek out salespeople for advice that goes beyond the data (does this work with Windows XP? can you customize it for wholesale grain distributors?). And this time, the interaction is near-free of suspicion.

The success of both inbound marketing and content marketing give evidence of the increasing use, and success, of this simple insight: transparency in marketing and sales helps all parties.

Good marketing and sales are enhanced by following trust principles, not by avoiding them. What’s good for the buyer is good for the seller too.

Sample Selling Without Giving Away the Store

“I know you recommend sample selling for intangible services, Charlie,” the caller said, “but I have to tell you, I think that’s naïve.”

“I followed your advice,” he continued, “I gave them a great idea; but I didn’t get the deal. Worse, they stole my idea; now they’re making it a practice area. You can’t trust everyone; you can’t give away the store.”

The Three Myths of Giving Away Too Much

My caller is not alone in his fear of being taken. And as the saying goes, just because you’re paranoid doesn’t mean they’re not out to get you.

Yet he is the architect of his own misery. He has fallen prey to three mistaken beliefs. And while you can’t think your way out of all tough situations, this one you can.

Myth 1: Ideas, Like Shoreline, are Limited. I’ve heard it said there are really only seven jokes—all others are variations. I have no doubt that’s true: but there is no end to standup comedians telling no end of those variations. Limited categories don’t preclude infinite instances.

Myth 2: Ideas are the Scarce Resource. As a consultant, I originally bought into the idea that corporate strategies were invaluable; if discovered by competitors, they could bring the company down.

This turned out to be a conceit. In truth, you could give an entire industry public access to each other’s written strategies, and due to a combination of hubris, incompetence and the inertia of culture, very little would change as a result.

As the NRA might put it, “ideas don’t change businesses—people do.”

Myth 3: They’re Out to Take My Stuff. Yeah, some are. And they are the people who believe that ideas are limited and that access to ideas alone is valuable. See myths 1 and 2 above.

Those who are out to take your stuff are co-conspirators in a joint exercise of self-delusion. They’re like thieves bent on stealing counterfeit cash. Go find some fresh air to breathe.

Sample Selling without Giving Away the Store

Let me acknowledge that there are certain businesses where idea theft is quite real. Chemical formulae in the pharmaceutical industry, novels in the publishing industry, code in the software business—I’m not talking about these cases. They are covered by patent, trademark and copyright laws. There are still lawsuits, but by and large the rules and case law are very well developed.

I’m talking about marketing, change management, business strategy, process change methodologies, sales processes, communications, systems implementation—the world of complex, intangible services. Like jokes, there may be a limited number of categories—but there is an unlimited number of applications.

How do you avoid falling prey to the myths? How do you not give away the store? Here are three tips to remember.

Sample Selling Tip 1: Present Ideas Collaboratively. The context in which you present an idea is critical. Don’t waltz in and dump an idea on your client’s desk; first they’ll reject it, then they’ll tweak it, then come to believe it’s theirs—leaving you to stew in your own juices. (That’s best case; most likely, they’ll ignore it.)

Instead, go back three steps and engage your client in a general conversation; let the idea emerge in context, between the two of you. Don’t be obsessed with ‘ownership’ of the idea unless you already have a patent.

You might say something like:

“Susan, I was thinking about the XYZ problem we discussed Monday. Does that situation ever arise in other divisions? I’m wondering if it’s really a process problem, or a people problem; can we bounce this around for a while?”

If you’re really smart—and evolved; see Tip 3 below—you’ll let your client discover the idea.

Sample Selling Tip 2: The Real Sample is Problem Definition. The idea of ‘sample selling’ is a bit of a misnomer. The real sample you’re giving the client is not a sample answer, but a sampling of how it feels to work with you.

You do this by continually asking—with the client—“what problem are we trying to solve?” You might say something like:

“Joe, we’ve come up with some great ideas in the business process arena. As we’ve talked, some related issues have arisen in the talent side of the business. Could we schedule some time to work those issues together?”

Then repeat Tip 1 above.

Sample Selling Tip 3: Rebalance Humility and Confidence. You need humility. Not humility about your ability—humility about your uniqueness. You are not Einstein (unless you are); you aren’t the only one with ideas. And frankly, your ideas are probably not unique either.

You need confidence. Not confidence in your ideas—confidence in your ability to spot an infinite number of problem areas in your client, and confidence in your ability to generate more ideas to address each problem. It starts simply with seeing opportunities for improvement.

Above all, you are the one with the client relationship; in that, you are unique. So—go define problems, and generate ideas collaboratively.

You’ll get credit—but more importantly, you’ll get repeat business.

Don Peppers and Martha Rogers: Customer Trust is the Next Big Thing (Trust Quotes #12)

We are delighted to have with us Martha Rogers and Don Peppers, the dynamic duo of the business guru business. Business 2.0 ranked them as two of top business gurus of all time. They’ve written one of the most influential business books in several decades, The One to One Future, and several others, including Return on Customer.

They’ve always had a healthy respect for the role of trust in marketing, but it’s their latest book that particularly makes them timely for the Trust Quotes series: Rules to Break & Laws to Follow: How Your Business Can Beat the Crisis of Short-Termism.

As they put it, “We believe customer trust is probably the ‘next big thing’ in business competition.” Let’s find out why they believe that.

CHG: Martha and Don, thanks so much for joining the dialogue. We’ve known each other for some years now, and you’ve always had a good sense of the power of trust—but it sounds like you’re increasing the focus more lately. What’s up with trust?

DP/MR: The basic ethos governing all human social interaction contains a very strong requirement for trustability. The simple trustworthiness of your statements and actions, as an individual (or as a company or governmental organization), is a key attribute – probably the key attribute – in how your interactions will be interpreted, understood, and acted on by others.   The social bond that connects us with others – the fuel that generates our collective intelligence and powers all our cultural and technological development – is based on trustability.  As a result, probably the biggest single driver of the increased demand for trustability is today’s rapid increase in the capability of interactive technology, leading to a more and more connected and interactive human race.

CHG: One of the four Trust Principles that I developed in my work (medium-to-long term perspective, relationships not transactions)  is built right into your title: “the crisis of short-termism.”  First of all, what’s wrong with short-termism?

DP/MR: When we talk about short-termism as a crisis issue, what we are talking about is the business world’s self-destructive, almost maniacal focus on short-term financial results. Obviously, a profit-making business should be cognizant of the short-term results of its actions, but this should not come at the expense of completely ignoring the long-term results. The long term counts, also – the interests of shareholders and other stakeholders are clearly harmed by obsessively short-term thinking. 

CHG: Is short-termism on the increase these days? And what does that say about trust?

DP/MR: Unfortunately yes, our verdict would be that short-termism is on the rise. It definitely undermines trust, because one of the central essences of trustability, as you’ve stated so well in your own work on the subject, is self-orientation. That is, the more selfish you think I am, the less willing you will be to trust me. And short-termism is a big flag for most people of self-orientation. 

CHG: What is driving all that toxic short-termism? What can be done about it, and who in particular can do it?

DP/MR: Do you know what “IBGYBG” means? 

CHG: The Wall Street euphemism?

DP/MR: Yes. It perfectly illustrates what we’re talking about here. Interestingly, during the financial frenzy that constituted the run-up to the mortgage meltdown and panic of 2008, traders and investment bankers were being paid bigger and bigger commissions and bonuses for doing bigger and bigger deals. Cash commissions and bonuses were the short-term compensation banks were paying their people for doing these deals – deals that had significant long-term implications. Many of the bankers and traders themselves knew that some of these deals posed significant long-term risks. But they had immense short-term motivations for doing them anyway. 

IBGYBG is a text message, a kind of short-hand like LOL or OMG. If a trader expressed doubt about the long-term consequences of a deal, he might get a message back from one of his colleagues to the effect that he shouldn’t worry about the long term, because in the long term IBGYBG – I’ll be gone you’ll be gone.

CHG: And what’s to be done?

Two things: First, tie compensation more closely to long-term consequences. We have no problem with paying people a piece of the action to do a deal – a business transaction can be immensely complex, and creativity and innovation should definitely be rewarded. But make it a true “piece of the action” rather than an upfront bonus in cash. 

And second, with respect to compensation in general, recognize that people work much more enthusiastically for the intrinsic benefits involved – recognition, credibility, self-reliance, accomplishment. No business should treat its people as if they are solely interested in money – unless they want them to be.

CHG: I’ve always felt that short-termism is inherently less profitable than taking a longer-run strategic vision. You’d think it would be obvious to CEOs; you’d also think it’d be obvious to Wall Street analysts. Someone said the real problem is in the compensation structure for mutual fund managers. Where do you think the key lies for fixing it?

DP/MR:  That’s why the opening chapter of our 2005 book Return on Customer: Creating Maximum Value From Your Scarcest Resource, was titled “An Open Letter to Wall Street.” Investors are in fact very interested in understanding a company’s long-term value, but at present there is no better or more reliable indicator of long-term value creation than, well, short-term financial performance. 

The discounted-cash-flow (DCF) method for valuing a business is based on forecasting the firm’s future cash flows, but in the end even the most sophisticated predictions rely mostly on aggregate business trends, projections of market growth, and competitor activity, and in any case all such projections begin with today’s numbers. So, like the butterfly whose wings cause a tornado a continent away, small fluctuations in current earnings or revenues wreak massive changes in projected company valuations and share prices, as their effects are extrapolated and magnified years into a company’s financial future. 

Ironically, the key to fixing this short-term-only perspective probably lies in applying better customer analytics. That’s why we coined the term “return on customer” and created the financial metric itself. Every value-creating activity of a business involves a customer at some point, but customers create value in two ways: they buy things immediately, in the current period, but they also have memories, which means how they are treated today will effect how much they are likely to buy in the future. A business that understands its customers lifetime values, and makes an effort to track how those lifetime values are impacted by current-period activities will be less likely to make self-destructive, short-term decisions.

CHG: What do you think about new social media and trust? Is it making trust harder to create? Or easier?

DP/MR: Trustability will become even more important as a social and economic norm in coming years, largely because of social media technologies, and the increasingly interactive world they are creating for everyone. This will have effects that reverberate throughout not just our business and economic system, but our society and culture as well. 

For one thing, better and more efficient interactive technologies will increase the demand for trustability on the part of people and organizations, including businesses and governments. Organizations, particularly, will need to respond to this demand by implementing policies and taking actions that are more worthy of trust from the beginning – that is, more transparently honest, less self-interested, less controlling, and more responsive to others’ inputs. It won’t be easy because it might be difficult for a business even to understand what kinds of policies improve trustability – from marketing and customer service, to production, distribution and financial reporting. Moreover, the clash between trustability and a company’s own short-term financial interest is real, and will represent a serious and continuing obstacle.

But second, the increase in demand for trustability will inevitably generate an increase in its supply. As a result, we believe that society will benefit from a “virtuous cycle” of increasing trustability, over time, leading to more rapid economic progress, which will lead to even more trustability, and so forth. This will have the effect of “raising the bar” for trustability, meaning that some previously acceptable business and government activities will become less acceptable, as consumer and citizen expectations rise. We can already see this happening with the influence that highly trustable, online businesses are having on the business practices of more traditional, offline businesses. 

And third, the dominant role of trustability in human interaction cannot be explained by applying straightforward economic thinking.   There are many subtle motivations for human behavior other than rational economic self-interest, and as technology reduces the barriers to interacting, these other, non-economic motivations will become more and more important. Rather than the kind of neoclassical economics still taught in business schools, the relatively new field of behavioral economics is more likely to play a dominant role in explaining how the trustability ethos actually works. 

CHG: What are some of the implications for marketing, broadly, of an increasing role of trust in the world?

DP/MR: We don’t trust advertising and marketing messages coming from companies because they epitomize “self interest.” We know these communications are designed with a particular, self-oriented purpose in mind: to improve the bottom line of the companies doing the communicating. Companies are always transmitting their self-interested messages to customers and potential customers, and these messages have bounced off each of us enough by now that we know what to expect. 

One survey showed that a scant 12% of people trust “big companies.” Even within companies themselves, just a third of employees believe “their leaders act with honesty and integrity.” Nor do investors trust the companies whose shares they own. Only 2% of investors believe the CEOs of large companies are “very trustworthy.” And 80% of consumers believe businesses are too concerned about making a profit and don’t care enough about their workers, the environment, or consumers. 

And the news is full of surveys showing that consumers’ mistrust of business is on the rise. But we think what’s really happening is that consumer expectations are increasing, as they experience best practices by some companies, and as they become increasingly interactive among themselves.

CHG: Interesting; declining trust metrics may be masking a rising standard of trustability. So, what must marketers change?

DP/MR: The primary thing marketers need to realize is that they are facing a trustability standard that is constantly on the rise now. The old “command and control” mechanisms don’t apply as easily to a world where customers can talk back, and also talk to other customers. It used to be that the marketing message was in the sole control of the marketer. Today, that’s no longer the case.

CHG: That’s a huge conclusion right there. 

Martha and Don, thank you so much for taking the time to share your thoughts. As always, they are innovative, yet grounded in deep commonsense and an intuitive feel for the customer. 

[If you are looking for earlier installments of the Trust Quotes: Interviews with Experts in Trust series, you can always find them in the dedicated Trust Quotes Index.]

——– 

This is number 12 in the Trust Quotes series.

The entire series can be found in our Trust Quotes section on TrustedAdvisor.com

Recent posts in this series include:

Trust Quotes #11: Jim Peterson
Trust Quotes #10: David Gebler

Trust Quotes #9: Chris Brogan

A Cautionary Tale for Marketers: Do’s and Don’t’s from the Perspective of the Marketed-To

Story 1: Don’t Do This

I got one of those broadcast email solicitations from a very reputable organization that hosts executive roundtables. Brian (a stranger to me) wanted me to attend an informational meeting. To his credit, he “had me at hello” with the very first lines of his email, which were both personal and complimentary: “Andrea, let me first say I LOVE the name of your company and the genesis of it…the ‘new beat’ story. Outstanding!”

“Wow,” I thought, “He’s taken the time to find out about BossaNova and make a personal connection to me. He gets me! He likes me! I like this guy!”

What followed was a directive to “Read on” with a photo of a jubilant baseball team and the assertion that “There are lessons you learn in Baseball that can apply to business leaders like YOU once you understand their importance and their impact” (with a bulleted list of those very lessons). His call to action at the end of the email was aggressive and impersonal.

Brian had me right off the bat and lost me soon after. I have nothing against baseball—not at all. I’m just not much of a sports enthusiast and, truthfully, get tired of the male-oriented metaphors. Brian’s very personal appeal followed by his very impersonal (and misaligned) form letter was a particularly lethal combo. Now, not only am I a “no” for the information session I was invited to, but I have an attitude about both Brian and his organization to boot. Three strikes, you’re out.

Story 2: An Approach to Emulate

A few weeks ago I was surprised by a knock at the door—an unexpected delivery of baked goods from a local sweet shop. The package included a hand-written note from Kacy, the office organizer I had hired exactly one year before. The sweets were to commemorate my first anniversary in my new home office, with a reminder that she was available should any lingering piles be in my way, and a request to tell others about her services if I was so inclined.

I immediately logged onto Facebook (well, by “immediately” I mean right after I had a cookie) and posted kudos for Kacy, along with a link to her web site. I sent her an email to thank her for the unexpected treat, alert her to the free Facebook advertising, and acknowledge her for the lesson in great marketing. She wrote me right back to thank me, saying, “I’m so glad you like them! I never know if someone’s going to be out of town or unavailable, but it always works out. In my client list, I have a column where I note the dates of our last sessions. Once a month or so I run through those and send the goodies out!”

The sweets hit the sweet spot, for sure, far more so than being hit over the head with a baseball bat. Maybe Kacy got lucky with her choice. Although it seems to me she could have sent me anything (even one of those giant foam fingers) and the good feelings from the unexpected personal acknowledgement would have prevailed.

A Plea to Marketers

The two anecdotes aren’t apples to apples—different relationship histories, different communication media, different calls to action. That said, I find them both illuminating.

To all marketers out there (including myself), here’s my plea:

  •         DO make it personal
  •         DON’T use a personal tactic to get someone’s attention and then switch to a more generic approach
  •         DO find creative ways to appreciate the people who have given you business in the past
  •         DO use the element of surprise
  •         DON’T be afraid to ask for more work or for referrals.

The moral of the stories: Intimacy is a powerful tool in business. Use it wisely, especially with strangers. Mix it in with a little unexpected generosity and you’ll hit a home run.