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Fear and Loathing in Sales

Why is it that, when it comes to sales within a service-based industry, the very thought of selling seems to leave a bad taste in one’s mouth? Below, we dive into why the fear of sales creeps up on those of us “rewarded” with the extra task of “business development.”

Let’s dig a little deeper into the root cause of the fear and loathing that so often seems to accompany sales.

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Some people seem born to sell. They enjoy the challenge, the meritocracy of the numbers, the feeling of controlling their destiny, and the social interaction that comes with sales. They like selling, and they are good at it.

But that isn’t true if you’re a professional who sells services. If you’re a management consultant, accountant, lawyer, human resources professional, financial planner, or technology consultant, let me ask you a question: did you set out early in your career with the goal of being a salesperson? No? That’s what I thought.

Fear and Loathing in the Professional Services Sales Business

The biggest difference between professional services salespeople and other salespeople is the former’s general distaste for selling. Fear and loathing is often not too strong a phrase. A professional is generally hired, trained, rewarded, and promoted for subject matter mastery.

Up to a point, that is. At some point, like a cruel joke, they are “rewarded” with the additional responsibility of selling. Little wonder, then, that the word “sell” is a four-letter word in the professions; most firms prefer the euphemism “business development,” conveniently phrased in the passive voice. After all, they reason, clients buy from us because of the quality of our work. Our sales strategy is to aggressively wait for the phone to ring.

Fear of sales runs deep, yet few professionals can really succeed without confronting and overcoming their apprehension. And so people who thought they had chosen cold hard data and logic as their career end up having to self-psychologize to remain effective—yet another distasteful venture for a content lover.

The Source of Our Fears

Most professionals were attracted by the intellectual aspects of their career. They were bright, with good minds, and the professions worship intellectual achievement. Since clients are often from the same profession, both buyers and sellers share the same delusion—people buy solely through a process of rational decision making. No self-respecting in-house counsel or vice president of strategy would admit to hiring an external advisor based on vague criteria like trust or chemistry.

And so both parties contribute to the myth that services them both: clients buy value propositions, packages that deliver positive net present value, and providers who make the best business case. If one firm loses, they can feel secure that it was probably not their fault—it was just price. And price is the easiest reason for the client to give to the also-rans. The delusion continues.

To contemplate that things don’t work this way is a threatening idea to professionals. It suggests clients aren’t buying their expertise, but their personalities—which feels unfair and rather scary. Since the seller is often the deliverer, it suggests that rejection is far more personal than it is for the seller of a widget. Finally, to lose is the ultimate failure. It means your expertise, the thing you have prized all your life, just wasn’t good enough. And by extension, neither were you.

No wonder professionals loathe the need to sell.

Overcoming Fear and Loathing

Unfortunately, the sales world is all too full of salespeople willing to teach professionals how to sell. They and their professional clients buy into yet another myth: the idea that sales is sales and best practices cut across all industries. And so sales programs that teach closing techniques to manufacturer reps and clothing suppliers founder when they try to close chief financial officers.

What’s true of closing is also true of sales cycles, CRM systems, pipeline analyses, and sales efficiency programs. What works in “regular” businesses falls flat in professional services, and it accentuates the already bad taste in the mouth for selling.

This deep psychological aversion to selling cannot be overcome by behaviors, tips, techniques, processes, and tools alone. It must be addressed at the mindset level. While you can partly act your way into right thinking, in the fog-sculpting world of professional services, you must also think your way into right acting. It starts with re-conceiving the very purpose of selling.

The Purpose of Selling Is…

In most businesses, that is a simple sentence to finish. The purpose of selling is to get buyers to buy the seller’s products. Both buyer and seller know this, and they easily accept the rules of the “game.”

In the professions, we need a very different purpose—that of client service. By this view, the purpose of selling is to make the client better. The sale is not the goal; the sale is a byproduct of successfully helping the client improve. The sale is an indicator, not an objective.

Taking this definition seriously has serious implications. It means transactional selling is all wrong—transactions are just points along the way of a relationship. It means we don’t compete with our clients—we collaborate with them. It means our timeframe must be long, not short.

Most of all, it means we don’t sell by selling. We sell by successfully helping the client to see new possibilities and trusting that the clients we help will, with predictable regularity, prefer to do business with us. It means detaching from the outcome of the transaction and trusting in a broader pattern of human behavior.

If that sounds like selling based on trust, that’s exactly right. It’s the same powerful dynamic recognized in concepts such as customer loyalty. The economics of trust are compelling.

Perhaps best of all, though, is the message this viewpoint offers the professional. Rightly conceived, the only difference between selling and delivering is getting paid. When we think of sales that way, the fear and loathing can slip away—we are all comfortable with client service as a model for delivery. Selling is the same: the right way to sell professional services is to aggressively do good, and then, at the right time, ask to be (well) paid for doing so.

That view of selling isn’t to be feared. It’s a view we can feel good about, while generating a powerful business model at the same time.

If Selling Is Too Hard, You’re Doing It Wrong

Salespeople are frequently fixated on athletic metaphors. Try these two:

  • No pain, no gain
  • The harder you try to hit the ball, the worse you do.

So – which is it? Effort – or form? Grit – or ease?

Many fine sales authors will tell you that an essential ingredient in selling—perhaps the essential ingredient—is effort. Gumption, grit, hustle, sweat—whatever the word, the image it conveys is that success in selling is tough. No pain, no gain.

Selling is a lot like football, this view says: the team that exerts the most effort is the team that wins. And there is a lot of truth in that viewpoint.

But consider another truth. Think about hitting a golf ball. As anyone who’s tried doing that can attest, the quality of your golf shot is in inverse proportion to your effort. That pleasing “thwock” of a well-struck iron almost never comes from trying hard.

Instead, the “trick” in golf is not how hard you swing—it’s how smooth, relaxed, and “at ease” your swing is. If you’re swinging too hard, you’re almost certainly doing it wrong. And there’s a lot of truth in that viewpoint as well.

I’ve learned that most dichotomies like this are false. Selling isn’t only like football or like golf. It’s both, in different aspects. But that’s a different article. This article is about just one side—the golf side, if you will, where if you’re working too hard at selling, you’re doing it wrong.

Adam Smith, Competition, and Selling

Blame it on Adam Smith’s The Wealth of Nations, if you will. The Scottish moral philosopher and economist famously claimed that by the self-oriented struggling of the butcher and the baker, the “invisible hand” of the market makes itself known by balancing out all for the greater good. Out of individual selfishness grows the maximum collective good.

While Smith has been unfairly characterized as arguing against regulation and in favor of unfettered free markets, there’s no question that his powerful formulation rhymes with competition—individuals seeking their own betterment. Perhaps ever since, business has been full of metaphors from war and sports. And nowhere are those metaphors more prevalent than in sales.

Here’s a partial list for just one sport alone: pitch, curve ball, hitting cleanup, bottom of the ninth, pinch hit, get our signals lined up, strike out, bases loaded, don’t swing at the first pitch, home field advantage, double play, we’re on the scoreboard, leaving men on base, pop-up, foul ball, home run hitter, shut-out, and so on.

Here’s the thing about sports metaphors: they’re all about competition. Real Madrid vs. Barca. Yankees vs. Red Sox. All Blacks vs. Wallabies. Seller vs. competitor.

And—most of all—seller vs. buyer.

Selling without Competition

It’s hard for most people to even conceive of selling without that competitive aspect between buyer and seller. Isn’t the point to get the sale? Isn’t closing the end of the sales process? If a competitor got the job, wouldn’t that be a loss? And why would you spend time on a “prospect” if the odds looked too low for a sale?

When we think this way, we spend an awful lot of energy. It’s hard work—particularly because much of it is spent trying to persuade customers to do what we (sellers) want them to do. And getting other people to do what we want them to do is never easy (if you have a teenager and/or a spouse, you know this well).

There is another way. It consists in simply and basically changing the entire approach to selling.

The first approach is the traditional, competitive, zero-sum-thinking, buyer vs. seller—the age-old dance that to this day gives selling a faint (or not-so-faint) bad name. It is one-sided, seller-driven, and greedy.

The new social media capabilities have not made this approach to selling go away—they have empowered it. Just look at your inbox, spam filters, LinkedIn requests, Twitter hustles, and pop-up ads on the Internet.

And boy do you have to work hard to sell that way.

The second approach is different. The fundamental distinction is that you’re working with the buyer, not against the buyer. Your interests are 100% aligned, not 63%. If you do business by relentlessly helping your customers do what’s right for them, selling gets remarkably easier.

You don’t have to think about what to share and what not to. You don’t have to control others. You don’t have to white-knuckle meetings and phone calls because there are no bad outcomes.

Selling this way works very well for one fundamental reason: all people (including buyers) want to deal with sellers they can trust—sellers who are honest, forthright, long-term driven, and customer-focused. All people (including buyers) prefer not to deal with sellers who are in it for themselves, and constantly in denial about it.

This is the golf part of selling: the part where if you lighten up, relax the muscles, let it flow, you end up with superior results. And there’s a whole lot of truth to that view. If you’re working too hard, you’re not getting the sale.

This post first appeared on RainToday.com 

Clients Don’t Buy Solutions, They Buy Problem Definitions

You’re familiar with the old idea that people don’t buy products, they buy solutions – not drill-bits, but holes, in Ted Levitt’s classic formulation. This idea became closely allied with the commonplace view that we should be selling value, and packaging up ‘value propositions.’

But when it comes to complex services, Uncle Ted understated things.  The very idea of what is behind the “sale” in the first place needs re-examining.

So here’s a provocative statement: People don’t buy your value proposition – they buy your problem statement – and give you the sale as a reward for having defined it in a way such that the buyer can see the road to success with greater clarity.

Value: The Usual Suspect

If sales were like the movie Casablanca, and you rounded up “the usual suspects” for getting the sale, at the top of the list might be “demonstrated value.” Salespeople like to think that the reason they got the job was they did a better job at “adding value,” “demonstrating value,”  convincing customers of the “value proposition” they put forth. “Go with us,” salespeople say, “and you’ll get the greatest expected value.”

We impute this decision-making process to our customers, too. If they bought from us, it must be because we did the best job of creating potential value – maybe modified just a bit by their confidence in our ability to deliver on the value we promised.

This value-centric view of selling confirms all the biases of today’s salespeople: it’s a matter of producing challenging ideas, grand scopes, clearly articulated solutions. The winners are those who conjure up the right mixture of smarts, expertise, and hard work.

So we like to believe.

The Truth: It’s the Problem Definition

My old colleague David Maister once said, “The problem is never what the client said it was in the first meeting.” And while at the time I thought he was being slightly hyperbolic, I came to believe he was, in the real world, exactly right. A perfectly defined problem rarely requires outside expertise – it just needs a purchase order.

Consultative sellers get called in for other reasons.

The reason is, buyers – consciously or unconsciously – want the benefit of sellers’ expertise. They are open – more, or less (often less) – to learning from the seller. Yet arguably the most common error of sellers in consultative sales situations is – they blindly accept the customer’s definition of the problem.

If the problem definition is wrong, then a solution based on it is going to be wrong as well. Worse yet, a fully worked out proposal grounded on a faulty problem definition becomes increasingly tenuous. Buyers acutely and painfully recognize this, and this fact explains why so many consultant CRM systems are full of entries that say “died” instead of “lost.”

Clients don’t want to admit the definition was wrong from the get-go, so they simply stop returning calls, the sellers get resentful – and everyone goes off to try the same thing all over again, getting, of course, the same results.

The problem definition is the heart of the matter, for two reasons. The obvious reason is if you don’t solve the right problem, you’ll just make things worse, and as noted above, that becomes increasingly clear to all concerned.

But there’s a deeper, psychological reason.  If you as a seller can truly engage a buyer in a joint process of discovery, you then trigger something magical: a willingness to explore openly the true issue, and a willingness to engage your expertise in the pursuit.

The result is huge: an expertise-based joint journey of discovery, with a greatly enhanced likelihood of a better problem definition, and a vastly higher level of acceptance of that problem definition.

Getting There is Way More Than Half the Battle

A joint discovery of problem definition requires an openness and a willingness to collaborate on the part of the client. No client I’ve ever met starts out that way – no client has ever come to me and said, “Gee, Charlie, we’re really not sure what’s wrong here, but we kind of hope that maybe if you talk to us, things might get better.”

Instead, clients come to sellers with the usual set of highly defined problem definitions, desired solutions, and specifications for how those solutions must be tailored to their organization. It takes a great deal of skill to get to the point where you can mutually confess imperfection, and go on a joint journey.

It’s the opposite of that old “I’m OK, You’re OK” paradigm – it’s more like “I’m a Fool, You’re a Fool, Let’s Figure This Sucker Out Together.”  (And you don’t get there by quoting Maister about how their problem definition is wrong, either).

Having gotten to a point of mutually confessed imperfection, the best problem definition begins.  And when you do get to a great problem definition, the amazing thing happens.

The client doesn’t buy the best solution: instead, they reward the firm that did the best job of helping them define the problem. You’re not getting paid to do the job – you’re getting rewarded for having created the best ah-ha for the client – the ah-ha that says, “Ah, yes – thatis indeed precisely the issue that we’ve been having all along here. That’s the heart of the matter.”

Having gotten that ah-ha, why in the world would a customer then hire someone else to deliver on the vision you’ve jointly created?  Why would you trust anyone but the ones who created the bond with you to develop the insight to actually get you over the river?   You just wouldn’t, that’s all.

Clients don’t buy value: they buy the people they have come to trust. In particular, they hire those who have helped them define their problem in a way that they can finally see their way clear to a resolution of their issues. The project, the sale, is not “the thing” – it is simply the currency of reward for having best-defined the problem.

This post first appeared on Trust Matters. 

Buddhist Capitalism vs Competitive Selling: the Power of Trust and Collaboration

When you think of capitalism, you probably think of competition as a central, driving force. We have enshrined the value of competition in our antitrust laws. We view competition between providers as a way to increase innovation and reduce costs; in today’s parlance, competition is what yields creative disruption.  Adam Smith is frequently (and somewhat inaccurately) cited as the prophet of competition in his concept of the “invisible hand.”

At a micro-level, we have also glorified competition. Athletic competition is seen as a metaphor, as well as a proving ground, for competition in business. Businesses line up to sponsor major athletic events and athletes.

And nowhere in business is competition more revered than in sales.

The truth is much of what we think about competition is dysfunctional, suboptimal, and actually destroys value. By contrast, what I’ll whimsically call Buddhist Capitalism shows another way that adds more value. I’ll explore this theme first at the business world level, then at the sales level.

Business Competition in the Real World

In the real world, pure competition leads directly to monopoly. Competition is inherently unstable, resolving to dominance of one more powerful firm over all the others. What we call “competition” in the modern Western world is a finely tuned mix of rules and regulations, as well as a few customs, that serve to keep behavior within socially acceptable bounds.

If you doubt this, think of what the U.S. economy would look like in the absence of the FTA, the FDA, the FAA, the SEC, or the FDIC. Or just look back a few decades in the history books. Maintenance of a state of competition depends enormously on the power of the referees.

Pure competition, even where regulatory regimes are strict, rarely exists. There are imbalances of labor, education, geography, and a hundred other variables. The point is in nearly every industry, there is an imbalance of power, exploited by one party at the expense of the weaker parties. “Competition” in the real world is more or less about zero-sum games, with one party holding the stronger hand.

The definitions of “capitalism” have been hijacked by extremist theoreticians in recent years: people such as Milton Friedman, Ayn Rand, and Alan Greenspan, who believe in a moral purity produced by competition. (Never mind that an ethics built on selfishness isn’t worthy of being called ethics in the first place.)

Buddhist Capitalism

By contrast: imagine an economy relatively unencumbered by laws and regulations, but where trust and custom abounded. An economy with not nearly as many lawyers, but with fewer legal battles. An economy where the frictional costs of competition (and the regulation of competition) are lower, and innovation is higher.

You get such an economy when you introduce the concept of trust and collaboration. Zero-sum games shift to 1+1=3 games. Stephen MR Covey Jr.’s book The Speed of Trust is all about this: when trust is present, speed goes up and cost goes down.

If my Buddhist friends will forgive me the crude colloquial language, I’ll call this Buddhist Capitalism. What I mean is that it focuses on collaboration, not competition; on getting along harmoniously rather than vanquishing; on letting go attachment to outcome rather than obsessing over goal achievement.

It’s far from crazy. The lesson of the Prisoner’s Dilemma work in game theory is that a collaborative strategy always, always beats a competitive strategy if played long term. Research shows that collaboration produces more innovation than solitary introversion. Collaboration and trust build on each other, increasing knowledge of both parties to the point where they can jointly add value, cut costs, and reduce risks.

It may sound like a Beatles song—the more you give, the more you get—but it’s no less true for being musically suggestive.

Buddhist Selling

What does all this have to do with sales? Selling is just the micro-version of the same thing. We as human beings have a primal desire for survival, which can easily revert to competition. But we have an equally strong desire for connection, collaboration, and cohesion.

Except for pure commodities (and not even water or electricity is a pure commodity), buyers prefer to buy from sellers they trust. Trusted sellers have their customers’ interests at heart, ahead of their own. They play the long game because they know that the best way to long-term success is through their customers’ success, and, therefore, no particular sale is worth sacrificing the long-term relationship.

Trusted sellers are also not attached to a particular outcome. They don’t keep meticulous score at a detailed level, and they are willing to let their agenda be influenced by client needs. Finally, they keep no secrets from their customers because they see their interests and their customers’ interests as one and the same, and the value of shared information to both parties exceeds the value of secret information privy to just one party.

Of course, these attitudes are hard to come by in a world that prizes competition. Sellers everywhere are taught to compete not only with their competitors, but also with their own customers (that’s not a joke – go read Mike Porter’s Five Forces model of competitive strategy). Not getting a sale is considered bad form, if not unacceptable. Metrics in sales are short-term, incentives are largely extrinsic, and motivation basically consists of war chants.

But a seller who can “think Buddhist” will outperform a competitive seller over time because customers prefer to deal with sellers they trust. And they do not trust people who are in it for themselves.

The ultimate irony: by being willing to forego a sale and do the right thing, the “Buddhist seller” will end up selling more than the competitive seller.

 

This post was originally published in RainToday.com 

Perfect Pitch in Sales: 9 Rules

The dog and pony show, the beauty contest, the shoot-out. You may just call it “the pitch.” The term is especially common in some industries—advertising, executive recruiting, some law firms—but we all know it.

Typically we think of it as an event—a rather formal presentation by several professionals made to several members of the client organization that typically lasts 30 to 90 minutes. Secondary characteristics of a pitch often include PowerPoint and a timeslot among a few other competitors who are pitching on the same day.

Let’s be clear: there is no single perfect pitch, since the winning pitch is situational to you and your client. Still, there are some guidelines that hold true. Here are nine rules for perfecting your pitch.

1. When the Best Pitch Isn’t a Pitch

Sometimes the best pitch is one that never happens because both parties choose an alternative.

Think of a pitch as a blind date where each party is cautious. The quietly cautious buyer wants control and seeks it in an impersonal, formal event. The seller also wants control but expresses it by being assertive. One fears being “sold;” the other fears losing. When both parties are fearful, decisions get made on process, features, and price.

Both parties are often better off starting from a strong relationship. Though both know this, they don’t admit it. Sellers may try to go around pitch events. The trick—not really a trick at all—is to explore the possibility of meetings before the pitch during which personal relationships can be established. It’s critical that this be done from a position of respect and honest concern for what’s right for the client.

Sometimes the client then abandons the pitch idea altogether because they find one competitor that seems to understand them uniquely. That’s generally a good outcome for both parties. Do NOT try to force this outcome—you’ll jinx if it you do.

2. The Pre-Pitch Warm-Up

Your objective shouldn’t be to avoid the pitch, but to produce a good outcome for both parties. Any pitch will be improved by prior conversations with as many client people as possible.

If you are meeting the client representatives for the first time at the pitch, your odds are even less than one divided by the number of competitors. It’s less because with total strangers meeting each other, the “none of the above” option frequently appears on the table.

Of course, not every client wants to meet you in advance. Often the intent of the pitch is to prevent such meetings in the first place in pursuit of an “independent, fair” competition. Pushing too hard for meetings can appear distasteful.

How do you know how far to push the suggestion for prior meetings? Simple—ask the client. Point out the advantages of offering all competitors a chance to talk with them in advance, then gracefully yield if the resistance is too strong. You get a few points for offering if you do it respectfully—just don’t push your luck.

If you can talk to people in advance of a pitch, you’ll improve the quality of the pitch for both you and client. Of course, you learn valuable information, and you get to call people by name. But it goes much further than that because the next key to a great pitch is interaction.

3. Interact in the Pitch

Nearly always the client says, “Tell us about yourself.” And nearly all sellers assume that’s what the client wants—after all, they said so!

But the truth is, listening to someone—anyone—talk about themselves for 30 minutes is incredibly boring. Even more important, listening to others does not persuade human beings—they become persuaded by listening to others who have previously listened to them.

Letting clients be heard is critical to successful pitches. If you can’t do it before the pitch, then dare to be great and engineer listening into the pitch. Here are several approaches:

  • Tell the client ahead of time you’d like to ask for reactions
  • Build in “and what about you?” questions into your pitch
  • Offer data about similar situations and ask for comment
  • Ask the client if they’d consider a “first-meeting” approach. Instead of a standard pitch, offer to treat the pitch like a first meeting, as if you’d already been hired, and allow five minutes at the end to talk about how it felt. (This is not a crazy idea; I know of two success stories using it.)
  • If you’ve had any prior-to-pitch conversations, refer to them.

Remember: what you say in the pitch matters less than whether you have listened to them first.

4. Have a Point of View

Your qualifications, credentials, and references are worth absolutely nothing if you can’t show relevance to the client. To walk in without a point of view on the client and the issues facing them is arrogant, disrespectful, and selfish. Those are strong words; let me back them up.

If you want this job, you’ve (hopefully) thought about what you’d do if you got it. If so, why wouldn’t you share it? The probable answer is because you’re afraid you might have gotten it wrong.

But that fear is all about you. Now is the time when not to take a risk is risky. The client wants to see if you’ll do some homework on spec and if you’re willing to engage in real-time thinking about it. They want some sample selling. Showing up with nothing but a track record is like going on a blind date with just a list of past dates. It’s no better as a pitch strategy than as a dating strategy.

5. Collaborate on Talking Price

Conventional wisdom says don’t quote price until the client has heard benefits so that they can properly calculate value. This makes theoretical sense, but it ignores human psychology; price is the elephant in the room during the pitch.

While everyone listens (or pretends to listen) to your pitch, they are all mildly pre-occupied with what your price is going to be. That pre-occupation is death to their ability to listen to you, so air it.

When you walk in, place a five-page pile of paper on the table, saying, “This is the price part of our proposal—the bottom line and four pages of backup explaining it. We don’t want to focus on it, nor do we want to keep it from you. At any point in the conversation today, you can ask us to turn the page over, and we’ll talk about it. Wheneveryou want.”

The point is not when you talk price; it’s about who makes that decision.

6. PowerPoint Pointers

There seems to be an emerging consensus among presentation professionals that looks like this:

  • Most presentations are written as leave-behinds: build your pitch on the presentation, not the leave-behind
  • Less is more: limit yourself to several bullets
  • Don’t read aloud what’s written: get a picture and talk from that
  • Visuals are great, great, great: use photos, not clipart
  • Except for the title page, lose the logos and backgrounds

7. Handling Qualifications

Most big sales these days follow a two-step process: screening and selection. Most screening is done on credentials. That means if you’re in the pitch, your credentials got you there. The pitch is the sale you already got; stop selling it.

If the client specifically requested a section on credentials, don’t embarrass them by fighting it. But you can touch briefly on credentials, with a large leave-behind set of documents. Go through them only if the client insists.

8. Dissing the Competition

This is an easy one. Don’t. Don’t do it, don’t go there, don’t even think about it. If asked, demur, with, “We respect our competitors. You should talk with them. But they can speak well enough for themselves without our help.” Taking the high road never hurts, and it usually helps.

9. When to Ditch the Pitch

Imagine a pitch where an obstreperous client takes you off script away from the PowerPoint or raises a point well in advance of when you had intended to address it.

Disaster? Not at all. In fact, it’s quite the opposite. This is client engagement—exactly what you want—cleverly disguised as an objection. Greet it with open arms. Ask the client for permission to go off script and deal directly with the issue raised for as long as the client wants.

Remember: despite what the client said, it’s not your PowerPoint they want to see—they want to feel how it will be for you to interact with them. If you respect their wishes, move your agenda to fit theirs, and respond directly with relevant content, you will address precisely that desire. And you will more likely win the pitch than someone who stayed on (Power)Point.


Pain, Brain, or Reframe? How do Buyers Really Buy?

If you’re interested in selling, you might plausibly start with trying to understand how buyers buy. It’s a simple enough question. But then why are there so many answers?

Three of the most common answers to that question are:

  • People buy when they strongly feel a desire to alleviate a negative situation.
  • People buy as a response to a clear value proposition.
  • People buy most from those who offer differentiated, out-of-the box, creative solutions.

For short, let’s call those Pain, Brain, and Reframe, and examine them in turn.

The Pain Model

Many sales writers say things like these two quotes:

“The customers that are most likely to convert have a pain that they need to alleviate. Now.”

or

“Solid, smart sales are focused on our clients’ pain points, not on the tech demo.”

Within the Pain category, there is an internal debate about whether the prospect of a better situation can be as motivating as alleviating a painful situation. (One solution: reframe the gain as alleviating a potential pain.)

The Brain Model

Many other salespeople consider “value propositions” to be the key driver. Consider, for example, Investopedia’s definition of value proposition:

“A business or marketing statement that summarizes why a consumer should buy a product or use a service. This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings.”

Or consider this one from a sales training firm:

“Customer contact professionals must be engaged and expected to adapt a financially oriented value proposition to the customer or prospect.”

Many fans of value propositions suggest they are best used as conceptual maps for marketing and not as sales collateral. But this distinction is lost or ignored by a great number of salespeople.

Note that nearly the entire economics profession is built around the idea of rational economic choices. In my experience, greater exposure of salespeople to economics or MBA programs translates to greater reliance on the Brain model of selling.

The Reframe Model

One constant need among buyers is to de-commoditize their business. “What have you got that’s new?” is a powerful and relevant question for them, and sellers who have an answer will generally get a hearing.

The Challenger sales approach is a good example of this model:

They have “a deep understanding of the customer’s business and use that understanding to push the customer’s thinking and teach them something new about how their company can compete more effectively.”

This approach has some justification in business strategy, where the attempt to gain differentiation is an alternative to the low-cost producer strategy.

So, what is the truth? Are buyers motivated by the desire to remove pain? By a rational statement of value? By a compelling new way of articulating issues?

What’s best? To soothe the pain, appeal to the brain, or reframe the game?

Making the Buying Decision

If clients make buying decisions because of rational calculations, then the Brain model would appear to be the best. If buyers are looking for access to new, differentiated ideas—and the people who bring them—then the Game-reframe model looks best. And if buying is mainly motivated by emotional issues, then the Pain model is best. The question, therefore, becomes: which underlying psychological model best explains the process buyers undergo.

Of course, simple choices like A, B, or C often end up being solved only by rephrasing the question. This is no exception. For example, consider the buying decision as a multiple-step decision, or a multiple-psychology decision, rather than a single-step decision.

Different Buying Stages: In The Trusted Advisor (written by David Maister, Charles Green, and Rob Galford), we note that complex services buying decisions are typically two-step decisions. The first step is screening to identify plausible sellers. The second step is selection. Bill Leigh of the Leigh Speakers Bureau tells the story of one client’s decision process to hire a speaker for a major corporate event:

“They quickly narrowed it down to two—either Michael Porter, a major business strategist, or Lester Thurow, a prominent economist. They went back and forth until finally they agreed on a solution—ex-Chicago Bears football coach Mike Ditka.”

The first step is a relatively rational process of data-gathering. That process sounds very much like the Brain model.

But the selection step is taken much more emotionally, involving a complex set of cross-currents. That sounds more like the Pain model. (Or if you consider Ditka a redefinition of the problem, it’s more like the Frame model.)

Different Buying Psychologies: Another approach to splitting the A/B/C dichotomy comes from a large study by Bill Brooks and Tom Travesano, reported in You’re Working Too Hard to Make the Sale. Looking over thousands of sales across several B2B buyer types, their conclusion was summarized in one powerful sentence:

People buy what they need from those who understand what they want.

In other words, the identification of needs (systems, audits, legal advice) is fairly straightforward—the Brain model. But the actual choice is made on the basis of which seller most deeply taps into buyer wants—fears, hopes, aspirations, wishes, desires. It is not necessary that those wants be satisfied; it is enough that they are recognized, understood, and acknowledged. Doing that drives the decision to buy what, after all, has to be bought anyway.

Integrating Buying Psychologies: Neil Rackham, via his classic SPIN Selling, offers yet another insight, one that integrates the various models. SPIN (Situation, Problem, Implications, Needs-Payoff) operates at one level on a buyer’s emotional needs by forcing sellers to listen to the customer before they start offering solutions. At another level, it is a very rational model, methodically identifying both pain points and alternative, potentially breakthrough conclusions.

What’s the Answer?

Perhaps the last word may come from science fiction author Robert Heinlein, who is credited with saying, “Man is not a rational animal: man is an animal who rationalizes.” Putting it into sales terms, “People buy with their heart and rationalize it with their brains.”

That is not to minimize or discount the role of rational decision making. We all acknowledge rational analyses as important checks against the mistakes we might make if we rely solely on the emotions. At the same time, it recognizes the powerful role that emotions play in human decision making, of which the buying decision is just one.

The most useful answer is, “Develop a rich, insightful, trusting relationship with your client, and be prepared to offer them all the legitimate backup they’ll need to defend their decision to buy from you.”

This article was first published in RainToday.com



Traveling Salesman Meets Prisoner’s Dilemma

You may know “The Prisoner’s Dilemma.” In game theory, it is a classic conundrum. As Wikipedia states, it “demonstrates why two people might not cooperate even if it is in both their best interests to do so.”

It turns out that the solution to The Prisoner’s Dilemma is also the solution to a great many sales problems—those in which your customer doesn’t trust you. Are you living in the Dilemma? Or are you living in the solution?

The Dilemma of the Prisoner

Here is a classic version of The Prisoner’s Dilemma:

Two suspects are arrested by the police. The police have insufficient evidence for a conviction and, having separated the prisoners, visit each of them to offer the same deal:

  • If one testifies for the prosecution against the other (defects) and the other remains silent (cooperates), the defector goes free and the silent accomplice receives the full 10-year sentence.
  • If both remain silent, both prisoners are sentenced to only six months in jail for a minor charge.
  • If each betrays the other, each receives a five-year sentence.

Each prisoner must choose to betray the other or to remain silent. Each one is assured that the other would not know about the betrayal before the end of the investigation. How should the prisoners act?

What’s a poor prisoner to do?

If you analyze the situation rationally (the way a game theorist or economist defines that term), your odds are a lot worse if you remain silent—either you get 10 years or six months. But if you rat on your partner, you either get out free or—at worst—five years.

So, reasons the economist, Option A’s average “value” is five years and three months in prison. Option B’s average is two and a half years. “Ah ha,” says the economist’s rational player, “I’ll go for Option B.”

Of course, the other player does the same math and comes to the same conclusion. As a result, each gets five years in prison—a total of 10 prison-years between them.

If only the prisoners had cooperated with each other; they could have each gotten out with just six months in prison—a total of one prison-year between them.

The question is: why don’t they cooperate?

At least, that’s the economists’ question. In the real world, cooperation is quite common.

So the real question is: why do so many people listen to economists?

The Dilemma of the Salesperson

Before answering the Prisoner’s Dilemma, let’s note the similarity with The Salesperson’s Dilemma.

The salesperson has a similar series of trade-offs. For example:

  • “I could take some extra time to study up on tomorrow’s sales call, getting to know more about the prospect. That would improve the odds of my getting a sale tomorrow.”
  • “On the other hand, I could make another cold call with the time saved if I don’t spend it studying up for tomorrow’s call.”

Or, another example:

  • “I could tell them we have very little experience in this area, which would increase their sense of my honesty, which would help me in the long run.”
  • “On the other hand, experience might be the key in getting this job, and I’d better make the best case I can and fudge the rest.”

Still another:

  • “I could share a lot of my knowledge with them, which would really impress them and make them grateful to me.”
  • “On the other hand, if I give it all away in the sales call, they’ll just steal my knowledge and not pay me for it—I’d better wait until after we have a signed contract.”

And one more:

  • “I could go out on a limb and make some really far-sighted observations that would help them—it would go way beyond what they asked for.”
  • “On the other hand, we don’t have much trust built up yet. They might see that as presumptuous or unprofessional; I’ll just answer the questions they asked.”

Just as with The Prisoner’s Dilemma, if the salespersons continually choose Option B, they will sub-optimize. They will do cold calls, leading with no relationship, taking no risks, treating the customer like a competitive enemy, and offering no great help.

In other words, they’ll lose. Just like the prisoners.

In theory, the prisoners are identical, whereas the salesperson and the customer are distinct. But that’s theory. In the real world, sellers somehow tend to find buyers who are similar to them. Sellers who are fear-driven and guarded somehow often find buyers who justify their worst fears.

Both seller and buyer often operate from the Prisoner’s script. And the result is just as sub-optimal.

The Prisoner’s Solution

As postulated by economists and game theorists, The Prisoner’s Dilemma is usually presented with two key assumptions:

  1. The game is played only once
  2. The players do not know each other

The solution lies in changing each of those assumptions. If you tell the players the game will be played 10 times, cooperative patterns begin to emerge. If it’s played 100 times, cooperative strategies take over.

If the players are given information about each other, they become less abstract to each other. If the information is personal, then the relationship changes tone as well.

These two dimensions—time and relationship—are critical. Without a sense of continuity over time, and without a sense of personal relationship, those playing the game will opt to “rat out” each other—even knowing that the result, system-wide, is negative for them on average. But given time and relationships—the optimal solution emerges. Everyone is better off.

In other words, the solution to behaving stupidly is to develop personal relationships over time. Now let’s see how that insight applies to selling.

The Sales Solution

The sales solution should look pretty obvious now. Suboptimal behavior is the result of short timeframes and shallow relationships. In a Prisoner’s Dilemma world, both buyer and seller fear each other, suspect the worst, don’t have relationships beyond the transaction, and are interested primarily in their own self-aggrandizement, without regard to cost to the other party.

If that sounds familiar, just look at this quick list of sales topics that are hot these days: sales automation, lead screening, CRM, social media lead generation, multi-channel messaging. Think about the last step in nearly every sales process model you’ve seen—closing. Think about some of the trends in procurement: online, blind auctions, and RFPs.

What all these subjects have in common is a view of selling that is a) transactional and b) impersonal. In other words, they have short timeframes and weak relationships—two things sure to hurt sales.

Selling benefits from longer timeframes and better personal relationships. If you can stop thinking like an economist and work to eliminate the fear you and your buyers have, you’ll benefit from the long-lasting trustworthy relationships that develop as a result.

 

An earlier version of this post appeared in RainToday

Lowering Your Price: When to Drop It, and How

Few things in business so dramatically affect customer perception as how you handle pricing – particularly when and how you offer discounts.

People may evaluate your products or your service by averaging out multiple experiences. But drop your price just once – and see how hard it is to recover. For one large-scale example, recall Bill Ackman’s painful failure to revamp the image of JC Penney – away from frequent discounts to everyday low prices as a strategy.

And yet, in professional services and complex businesses, we play with offering discounts all the time. Shouldn’t we have a strategy behind it?

Don’t Just Stand There: Stand for Something!

There is no one “right” approach to offering discounts – I’m convinced that your approach will vary with your business, your objectives, and your markets. But there are some things every approach should do:

  • You should have a rule for when to discount
  • That rule should be easily explainable to clients
  • You have to be willing to live by the rule.

That may sound obvious. But how often have you heard things like, “Don’t tell Bill that Joe got that price – it’ll only encourage him to want it,” or “Those guys’ll do anything to get the business.” Those statements indicate a lack of policy, and a lack of policy is a reputation-killer.

What to Stand For

Your business will vary. Here’s what I decided for mine. I run a high-end professional services business, offering speaking, training, coaching and related services. I want to be known for high quality, professionalism and subject matter expertise. In my own special case, because the subject matter is trust, I need to be seen as completely above suspicion.

It’s clear, then, that I need to articulate and live by some rules about when to discount.  Here’s what I came up with over the years.

  1. Frequency. I want to be at the opposite end of the spectrum from a JC Penney strategy of frequent discounting. I don’t want clients looking to find bargains; if they’re looking to price-shop, I want to send a not-subtle-at-all message that they’re in the wrong place.
  1. Exceptions. To help that message, I need to be very clear about where discounts are appropriate.  In my business, I can clearly state three such situations.

Volume. For most consultative organizations, the biggest cost of all is cost of sales (the time, expense and investment it takes to generate professional fees). It stands to reason that if someone can reduce my cost of sales, I have room to pass some of those savings along in lower prices.

The biggest example of that is simply volume discounts. The economics of selling one training session to ten clients vs. selling ten training sessions to one client are pretty clear. I am happy to receive multiple orders, and happy to offer volume discounts to reflect it.

For me, volume discounts are easy to explain, and easy to justify. Are they for you as well?

Special Situations – For Me. Sometimes I want to work in a new industry, or with a novel offering. Those are as important for me as for the client. In those cases, I will offer a significant discount. I don’t want to shave nickels, I want to send a message about what is important to me and what isn’t, and in those cases it’s about the learning.  Those kinds of discounts are very infrequent.

Special Situations – For the Client. Non-profits never have the kind of money that corporations do; most associations are limited as well. I don’t say yes to all those requests, but when I do, it’s only reasonable to price “off-label.” (Government is a special case, one I won’t go into here).

  1. Non-Exceptions. That’s about it. That leaves a lot of other situations where I choose not to discount. It’s worth pointing them out.

Pleas for budget. Sorry – I’ve already got a list of charities, and corporations with a squeezed budget this year are not on the list.  Make that “never” if you’re in the pharmaceutical or financial services industries, or if you have office space in midtown Manhattan; I have convinced myself that I need your money more than you do.

(An exception: if you insist on driving my price down, then I am convinced that you need my business worse than I need yours – because what’s at stake for me is my integrity of pricing with all my other clients – present and future! I can’t afford to say yes to such situations.)

Bargaining. I have a simple way of declaring that this is not a bazaar – it’s transparency. I explain my business model, explain when and how I give discounts, and – that’s it. I recall one client who, after our initial phone call, suggested, “I assume that if we go ahead, you’ll grant us our customary 20% discount.”  He assumed wrongly.

The Positive Alternative. ‘Just say no’ may (or may not) be a good strategy for drug usage, but it’s not a very satisfactory answer to a client on the receiving end. None of us like to be told ‘no,’ even with a great explanation.

Over the years, I developed another business practice which turned out to have a great side benefit – making people appreciate my saying ‘no’ to discount requests. Yes, that’s right. That practice is to simply take a few minutes extra to talk with them about their situation, and refer them to someone else who can help them.

I am a very small player in all the markets I play in. I am far from the only one providing great service. If someone doesn’t happen to fit my business model, they may be caviar and champagne for someone else’s model.

It costs nothing to spend a little time thinking about alternatives for clients who don’t quite fit with my needs, and it generates huge amounts of goodwill. It’s a small investment with a big marketing return – they may come back when they have a need that is a fit with me, and they may speak well of me to others. And – they’re no longer complaining about me not discounting.

Again, my model is not the only one. You have to decide what’s right for you. But whatever it is, it should be clear, explainable, and you have to be willing to live by it.

An earlier version of this blogpost appeared in RainToday.com 

Seduced by Sales Models: It’s Not the Club It’s the Golfer

woman golfer golfing silhouetteHave a look from the 30,000 foot level at all the sales models on parade. Spread out below you, reaching to the horizon, you’ll find venerable models like Consultative Selling, Solutions Selling, SPIN Selling, Customer-focused Selling, High Probability Selling, Customer-Centric Selling, Fearless Selling, Provocative Selling, Action Selling, Challenger Selling, and so forth. 

Looking over this sales smorgasbord, the Big Message we get is that Models Matter. Unfortunately, the great sales model debate has a lot in common with debates about the best diet; most can work if well-executed, but there are no free-lunch panaceas out there.

To Buy is Human

Buying sales programs is really no different from buying anything else. Think of buying as a subcategory of being influenced or persuaded. Robert Cialdini laid out the drivers years ago, in his masterful Influence: The Psychology of Persuasion. They include scarcity (“act now, supply limited…”), liking (“Justin Bieber wears it…”), authority (“he’s written books!”), social proof (“everyone’s doing it”), and reciprocity (“try a free sample..”).

These principles can be played out on either a one-off transactional basis (think late-night infomercials), or as foundational to long-term B2B relational buying approaches (I emphasize reciprocity as being at the heart of trust, for example). But while the guts of sales programs may emphasize longer-term initiatives, the sale of those programs themselves is often done transactionally.  

Thus a systems integrator or a manufacturer of cooling systems may want a sophisticated selling system; but the process for selecting that system feels more like buying a car or choosing a diet!  And woe to the small business people among us; not only are we faced with conflicting claims, they collectively suggest you can have it all, now. And we so want to believe it. 

Bottom line results; lower waistlines in 10 days; better lead generation; a shapelier butt; categorize your customers this way; eat your favorite foods; watch your closing rate increase; watch the pounds melt away. 

We’re familiar with the struggle about whether or not to click on the latest Vegematic offer (or iPhone goodie, in my case); but are we prepared to deal with the seductive idea that sales programs offer a panacea for what ails us?

The Key to Life is…

I know people who have found that the Key to Life is, respectively: family, Catholicism, a good diet, Alcoholics Anonymous, yoga, money, Buddhism, cognitive psychotherapy, Jesus, GTD, and a good steak. Take your pick. I once heard that there is nothing that is true for all human beings. 

What I take from this is, “many paths to the same goal.” I don’t know about the steak or the money people, but the nirvana that many of the others find through their various routes sounds remarkably similar to the nirvana of others. The parable of the blind men and the elephant comes to mind. 

True Believers notwithstanding, this suggests that the path we take is less important then the way we travel it. Are you executing the system with good intent, or are you trying to pick up girls who hang around the yoga studio? Are you willing to put in the time, or do you blame the therapist when you find you’re still angry? Are you asking the Lord for acceptance, or, along with Janis Joplin, for a Mercedes Benz? 

The Keys to Sales Effectiveness

Solution selling talks about finding latent pain. SPIN selling tells you to spend more time asking questions before jumping to solutions. Challenger selling tells you about the value of having a point of view. Consultative selling teaches that clients buy solutions they have a hand in creating more than those they don’t. All great ideas. 

It’s the blind men and the elephant all over again.  

The choice of a model is not irrelevant. FIrst and foremost, you should go with one that feels right to you. Factors to take into account include your customers’ buying process, your value proposition, your industry, your own and your organization’s strengths and weaknesses, and a few other items.  But I would argue the choice of model is not the critical choice that the models’ purveyors would have you believe.

So what makes the difference? Execution f the basics.  I’m not a huge fan of sports metaphors, but Vince Lombardi surely got it right when he reportedly started each season by saying, “Men, this is a football,” and proceeded to emphasize the  blocking and tackling fundamentals (a metaphor which is redundant in the case of football). 

What are the fundamentals in selling? Reasonable people can differ, but I’d suggest they include listening skills, a good work ethic, empathy, imagination, problem definition and problem-solving skills, and a secure ego. I also suspect all those traits end up as prominent in all the sales models. 

I once played golf with my brother in law. I used rented clubs. After mis-hitting a drive, I made a disparaging comment about the driver. He took the driver from me and nailed a shot well down the middle of the fairway.  He didn’t say a word. He didn’t have to. It’s not the club, it’s the golfer – much as we all might like to think otherwise. 

(An earlier version of this post appeared in RainToday.)

When Customers Demand to Know the Price Up Front

Q. What should you say when the potential customer says, “Before we start discussions, I need you to tell me your price.”

A. Tell them your price.

What a concept.

I know, I know. Most of you reading this disagree with me, and you’re in good company. Many respected sales writers suggest just the opposite. But on balance – with all respect – on this point, I think they’re wrong.  Here’s why.

Offering Price Up Front – Pro and Con

The case against answering an upfront question about price boils down to two arguments.

  1. You haven’t had a chance to anchor price to value.
  2. By answering an up-front price question, you encourage price-based buying.

By both of those arguments, you have lost control of the conversation. And that, most writers say, is a bad thing.

But that’s precisely the problem. If you approach sales by trying to be in control from the very outset, you’re already in trouble. Customers have never liked being controlled, and in this day and age they like it even less. And increasingly they don’t have to put up with it.

Aretha Franklin Selling

There’s basically one argument in favor of answering the question, and it’s simple: R-E-S-P-E-C-T.

If you respect someone at first meeting, they are positively inclined toward you. They tend to then trust you, and in turn treat you with respect.

If you refuse to answer the question, you are disrespecting the buyer, in at least one of several ways.

  1. You are trying to control them – and nobody likes being controlled
  2. They expect you to try and evade the answer, and you just confirmed their suspicions
  3. They think you have something to hide

Any way you cut it, a refusal to answer a direct question, whether it is a direct refusal or an ‘artful’ (read ‘obfuscatory’) refusal, is a statement that you either know more than the buyer, or do not grant the buyer the privilege of asking their own question, or both.

And buyers resent it.

The Positive Effect of Respect

Most buyers approach most sellers with a certain degree of caution – they expect the seller to try and control them.  And, most sellers oblige them by trying to do exactly that. Which means the initial conversations are about dancing around questions, jockeying for advantage, each challenging the other.

But what if, right at the start, you opted out of that game? What if you could immediately convey to the buyer that you are not trying to control them, that you’ll answer any question they have, that you’re actually there to help them, rather than manipulate them to your ends?  What if you could do that convincingly?

Then they’d be more likely to trust you. If they trust you, then they’ll listen to you. And if they’ll actually listen to you, your odds of making a sale go up.

Establishing Respect by Answering the Price Question

Buyer: I want to know more about your XYZ offering, but first I need to know your prices.

Seller: OK, sure. It’s $8000 for the annual plan, or $1,000 per month for 12 months.

[Pause.  And seller, do not fill in the pause]

Buyer: Um, OK; so, it’s a better deal for the annual?

Seller: It depends on what you want; 2/3 of our customers do choose the annual plan, but 1/3 choose monthly.

Buyer: Other than cash flow, why would I choose the monthly plan?

Seller: For half of them it’s just cash flow; but others are intending to switch CRM plans within the year, so they value the flexibility.

Buyer: How does the offering relate to our CRM?

Seller: [discussion continues about product features, value, etc.]

Note there is no scripted answer to this dialogue, other than the first response: “It’s $8000 for the annual plan, or $1,000 per month for 12 months.” After that, everything is a response driven by the customer’s questions.

This is not rocket science – but it is science nonetheless. Call it the science of human relationships. When someone does a favor for us – like showing us respect – we unfailingly return the favor, by showing respect in turn. In sales, the currency of respect is listening.

If you listen to your customer’s question, and answer it directly, you are paying the currency of respect. The customer quickly gets the message – ‘This person is not trying to control me, they are respecting me. I’ll ask a few more questions, and if I continue to get that respect, I’ll show them respect in turn, by listening to what they have to say.’

If your service is competitive, this form of sales interaction will get you over the finish line. You end up with better sales results than if you had tried to control the dialogue in the first place.

The paradox: you end up getting better results by resolving to give up control over the customer than if you had tried to control them in the first place.