Lowering Your Price: When to Drop It, and How

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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 

That’s Not a CSF – That’s Just a KPI!

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That's not a CSF – I'LL show you a CSF!!

I had a conversation with BigCo., Inc. They want their B2B salespeople to become trusted advisors.

They felt (correctly) that greater trust levels with their customers would result in greater intra-customer market share,  and greater profitability. And they’re right.

But then they described their implementation plan. It consisted of breaking down the objectives into finer and finer components, matching them up with accountable org units. Pretty standard practice.

As we dug deeper, a pattern emerged. The higher penetration levels, for example, were broken into more sales calls, more proactive ideas, and greater time spent up front.  On the face of it, that sounds perfectly reasonable: if penetration were to increase, you’d probably see these changes in activities.

Confusing Cause and Effect

The problem is – simply increasing the number of sales calls won’t do a thing; they have to be good calls. Simply offering more ideas won’t do a thing; they have to be decent ideas. Simply spending more time up front won’t do a thing; the time has to be well-spent. And simply assuming good calls, decent ideas, and well-spent time does not make it so. 

I know, it sounds perfectly obvious in the telling.  But I’ve found that BigCo’s story (actually a composite of several clients) is very common. It may even be the norm.

BigCo has managed to confus KPIs (key performance indicators) with CSFs (critical success factors). They have confused correlation with causation.  They have confused measurements with the things being measured. And since we live in a management world that uncritically worships metrics (“if you can’t measure it you can’t manage it”), this confusion has critical and strategic implications.

Especially when you’re trying to implement a values-driven strategy – like becoming trusted advisors.

Measurement and Management

Just because something looks obvious in the rear view mirror doesn’t mean it was obvious when you first came up on it. Case in point: BigCo’s flawed logic in their approach to trust-based selling.

Increasing penetration requires more sales calls, they thought; and they’re probably right. Their mistake lay in thinking that “more sales calls” was a cause. It’s not – it’s an effect.

“More sales calls” may be a KPI, but it’s not a CSF. It may be an outcome, but it’s not a driver. “More sales calls” is a metric – it is not the thing that “more sales calls” is intended to measure. That “thing” is something like “more high quality interactions driven by mutual curiosity.”

This confusion between actions and measurements, causes and effects, KPIs and CSFs, is not only common, it’s becoming rampant. It’s a real issue not only for old-line businesses, but for new era businesses as well. Let’s look at some examples.

Gaming the Numbers

We’re all familiar with the salesperson who knows how to tweak an imperfect system to maximize his commissions at the expense of, say, the company’s gross margins. “Hey, I’m just following the incentives you built in.” That salesperson seized on a metric that imperfectly measured the company’s  intended sales behaviors. (The proper management response would be not to change the metric, but to insist on a higher set of principles that overrule one misguided number).

Next time you get a customer service operator on the line, check to see whether they conclude by saying something like, “May we say that I gave you excellent customer service today?”  You are experiencing a system that is driven by metrics to the point where operators shamelessly beg for ratings.   The metrics have been pimped out to serve a goal other than the customer service they were meant to measure.

See for yourself. Go to Amazon, and search for books under any significant topic you like (e.g. sales). Make sure you’re sorting on relevance. It’s amazing how many books are rated over four stars (out of five). The reason is simple: we have been taught to look for ratings. Of course, the emphasis on ratings suborns all kind of perjury, misleading, and even outright falsehoods.

It’s not just books. Look at the flood of ‘recommendations’ on LinkedIn. Look at the massive follow-me-I-follow-you dynamic on Twitter and other media.  Or just look at your own behavior; what do you do when a friend asks you to rate a book, to promote a blogpost, or to recommend them. In Dave Eggers’ 2013 best-seller The Circle (still #2992 on Amazon as I write this – another metric), there is monstrous grade inflation on all metrics in his Facebook-Google fictional internet firm of the future.

Much of this comes down to our obsession in business with metrics. It goes back to the invention of the spreadsheet and the success of books like Reengineering the Corporation.  All numbers all the time are our secular business religion.

The Wages of Confusion

The “so what” is big indeed. Assume that any metric, almost by definition, has to be a pale reflection of the “thing” that is to be measured. We accept anniversary gifts as tokens of our love; market share as an indicator of competitive success; and, in the case of BigCo, numbers of sales calls as indicators of trusted advisor relationships. But we all know an anniversary gift does not a marriage make.

The only way to become trusted advisors to your customers is to gain the trust of your customers. You do not cause trust by increasing the number of sales calls; rather, greater trust causes more invitations for you to call on prospects. Doing the dishes doesn’t cause a great marriage; instead, a great marriage results in you doing the dishes willingly.

Confusing KPIs with CSFs causes KPIs to be artificially inflated. We know this intuitively, and so we discount them – while still trying to get higher scores on more of those discounted-value KPI metrics. We all know the game is rigged – but we keep playing it faster and faster.

What’s at stake is nothing less than how we implement things like “better client relationships.” You don’t get there by measuring metrics and deluding yourself that you’re addressing root causes. You get there only by understanding what it takes to interact with your very human customers – and then doing it.

Do that, and the numbers will take care of themselves.

This article first appeared in RainToday. 

 

Caution: Sales Experts May be Hazardous to Your Sales

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Neil Rackham’s classic SPIN Selling book is famous for many reasons – the depth of research, his clarity of thinking, the deeply commonsensical conclusions he draws. It’s a great book, and deserves all the acclaim it’s gotten over the years.

Yet I’ve always been amused and delighted by a small item he mentions almost in passing: the fact that certain techniques developed for small-item selling – notably closing – actually backfire when applied to larger, more complex sales. In other words, “sales expertise” of a certain kind may actually be hazardous to your sales health.

That may not seem like much of an insight, over 25 years later. Since the book’s publication in 1988, we have seen major growth in thinking about B2B sales, as well as the transformative impact of the Internet on the sales function. Nowadays no one would be caught dead trying an “assumptive close” in a modern B2B sales interaction.

Now, that may seem obvious too, to most everyone. Yet does that mean all sales expertise these days works, more or less? I think not. In fact, there still remains a glaring assumption at the heart of almost all sales systems which, if not properly understood, will actually decrease your sales effectiveness, just as much as improper closing techniques.

It is the assumption that the point of selling is to get the sale.

What is the Point of Selling?

You may think the “point of selling” is obvious. What else could the point of selling be, except to get the sale? And I’m not talking about the difference between single transactions and repeat business, either. I’m talking about the very purpose, the underlying goal, aim, objective, of the salesperson, sales process, and sales function. What else could the purpose be, except to get the sale?

The alternative purpose of selling, I suggest, is – to help the customer.  That is not a trivial distinction – it’s meaningful. It’s also a powerful distinction, and one that’s not easy to achieve. But if you do achieve it, you’ll do better on many dimensions – including sales.  

To see why this is a meaningful and powerful distinction, let’s first explore what it would mean to have a different purpose for sales – a purpose other than to get the sale.

Design Implications of Helping the Customer as a Goal

Suppose your primary purpose was to help a customer. What exactly would you do differently?

You’d be less concerned about whether you won or lost the sale. You’d spend a little more time on situations where you thought you could help – and a little less time where you thought you couldn’t. You’d take more time with leads to help them determine the best way for them to find and receive help; and you would often refer them out to other providers where you thought they might get better help.

You’d seek out slightly different leads and targets than if you focused solely on where you thought you could sell. You’d view your competitors differently – as alternative offerings to help your customers get what they need. You’d give up time and expertise on occasion, if you felt it would help your customers advance a key cause.  Conversely, you might be quicker to embrace value-billing in cases where you clearly bring value to the table.

You’d talk less about your own capabilities, and more about what would be good for your customer. You’d be naturally curious about what your customer needed, and what would make their business better. Your curiosity would extend outside and beyond your own company’s service offering, to include those of other firms.

If your organization similarly supported a goal of helping the customer, then the metrics you operate under would be changed as well. Instead of an emphasis on quarterly sales results, progress against closing, and forecasted probabilized backlog rates, you’d see consumer-focused metrics which spoke to customer performance and result of that performance. Noticeably absent would be much of the fine-toothed combing by lawyers enumerating the thou-shalt-nots of the relationship.

Operationalizing a Customer-Helping Goal

Looking at the above list, you’re probably having three thoughts:

  1. “Not a bad list, actually, we could do with a bit more focus like that,”
  2. “Yes, but you have to make money,” and
  3. “Yes, but you can’t be letting customers just take advantage of you.”

Note that thoughts two and three have an implicit assumption: the assumption that if you don’t focus on getting the sale, then you probably won’t get the sale. And that’s where the miracle happens: because precisely the opposite is true.

People don’t like to be told what to do. People don’t like to feel controlled. People respond positively to a sense that they are being listened to, and to people whom they feel have their best interests at heart. We respond positively to generosity, and negatively to greed. We tend to return favors, and to avoid those who have burned us.

In short, we reciprocate. The lessons of game theory, marriage therapy, and political organization all point in one direction – favors done, attention paid, and interest shown all beget the same in return. This simple truth is deeply embedded in our simplest human interactions (think handshakes, smiles) and our most complex ones as well (cultural affinities, political alliances).

And the main result of reciprocation is – more reciprocation. If you listen to me, I will listen to you. If you treat me well, I will keep coming back. If I buy from you and you respond well, I’m likely to keep buying from you.

Unless, that is – the seller gets selfish. All bets are off to the extent we perceive the seller as completely self-oriented, selfish, manipulative, driven only by his own needs. If we as buyers feel objectified, treated solely as walking wallets by the seller, then we reciprocate – we coldly calculate the value of the seller to us, and become willing to walk, in part because we also feel insulted by such behavior.

The Paradox at the Heart of Great Selling

The best sales come from interactions where the sale is not the goal, but a byproduct. Where the sale is a natural outcome of an attitude of other-focus, genuine concern, and focus on the other. Where the attitude is long-term, not transactional, and built on an assumption of win-win, rather than of scarcity.

There’s a paradox here. The best selling comes when you stop trying to sell, when you simply focus on doing right by the customer.  This doesn’t mean you turn into a non-profit charity. There is still a role for profitability metrics, CRM systems and funnel statistics.  But they must become subordinated to the broader goal – helping your customer.

Dial those metrics back 90%, lengthen their timeframe, and don’t think of them while interacting with customers. I know, you’re worried there are customers who’ll take advantage of you, those who are just looking for a free ride? Yes, though not nearly as many as you think. And those who act that way are the ones you gift to your competitors anyway.

If you help your customers, they’ll help you. That’s a rule that doesn’t need your thumb on the scale to work. Don’t force it. Make customer help your goal.

 

An earlier version of this post was published at RainToday.com.

 

 

 

 

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

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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

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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.

 

 

Actually, We’re Run by Pre-Adolescents: Why Reason Deserts us at Make or Break Moments…and Restoring Sanity

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I was recently chatting with a good friend, Mark Hurwich, about some of the struggles we encounter when it comes to walking into a sales meeting. I think Mark hit the nail on the head when he spoke about how we can really be run by inner pre-adolescents that can take over even when we’re the most prepared–inevitably keeping us from closing a sale. I asked him to speak more on the subject–and it turned into this week’s guest blog post.

——————————–

Isn’t it amazing? You diligently trained—be it around trust, negotiation, whatever. You did homework and composed your mind. And now, 15 minutes into a critical meeting, you’re hiding out, puffing yourself up, or…or, anything but demonstrating that mature partnership-building way of being you earnestly practiced.

What happened?

Quite probably, you were hijacked by parts of you that got their jobs when you were between a toddler and 12 years old…parts that haven’t matured much since pre-adolescence!

The longer story: We like to think we’re rational beings who operate in an integrated, intentional way. And when life is calm, that’s passably true.

But when threatened, we get triggered, and reason takes a back seat to our emotional programming. Like if you’re trying to build trust in a selling situation and a client asks you to talk about experience in an area you don’t have. Or, negotiating when your job is at risk. Despite all the training you got about how honest, vulnerable disclosure builds trust. When the stakes are high it can be SOOO hard to speak a truth you think a client would prefer not to hear.

Why is that hard?

Internal Family Systems shows that when threats move us from our essential Self, we go to a back-up system: parts of ourselves that were recruited in situations that have similar emotional signatures as the apparent threat. These parts take over our defense in that moment. So, when it feels like we are at risk of being judged as inadequate, we’ve got “managers” that puff up our credentials…and if that fails, we might even have “firefighters” that respond by undermining the person challenging us.

Ever find yourself in a sales conversation with the intention of developing a trusted relationship—but somehow treating your prospect as an adversary without knowing how you got there? That’s why.

Consider the kinds of experiences that recruited these parts to their jobs in the first place. Maybe…arguing with a sibling or quarreling on a playground in grade school? When these parts are animating you now, chances are your language has improved…but the emotional signature and energy hasn’t changed all that much. And while you were training to build skills, those pre-adolescent parts didn’t attend, so when a situation comes up that triggers them, they’re pretty much stuck where they used to be.

So, what can you do about it?

One way is actually to invite these parts of you into a dialog. Put yourself back in the situation where you started to get triggered. Notice where in your body that young/defensive energy seems to be located. Focus on that sensation as if it’s a little person. As you approach that part of you with compassion and curiosity, it can start to reveal what’s going on. Simply being self-present to these parts can help them—like young children, if they don’t experience you as present and trustworthy, nothing else can happen.

For example, in a situation like this, one client connected to parts largely created in a grade-school bullying scenario. To these parts, challenging questions from a prospect were a similar threat. Once he understood how these parts felt threatened, and the parts felt his connection to them, he was able to talk to them about what he could do to help them not be so scared. He told them it wasn’t their job to sell or negotiate…if they liked, they could even go to a safe place. The parts identified a place they loved in childhood (grandparents’ cabin), and he found that mentally checking in with the parts before a meeting and bringing them to this place gave him the ability to bring new skills to the selling situation. [The result, by the way, transformed this client’s perspective of a negotiating situation from a selfish act he didn’t have the right or enough skills to do to an authentic way to serve those he cared about—and a contract worth $500,000 above the initial offer.]

Once internal trust has been established, you can start to see parts as positively intended, but not having the best strategies to realize what they seek. Understanding parts’ positive intentions and fears as an ally opens the doors to finding a different strategy that satisfies these parts and enables you to apply the new skills you just learned.

Sometimes it helps to talk to another person, especially one trained in deepening your connection to deep intentions behind the skills you’re struggling to apply, as well as help parts relax into alignment with these intentions. You may have a friend or colleague with natural gifts along these lines. It’s also something I do with clients over the phone, by Skype, or in my office.

Good luck.

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Mark Hurwich founded Concentrated Coaching to help entrepreneurs, innovative business leaders, and writers/other creatives who’ve become “stuck:” there’s something they have skills to do, but struggle to do it. For more info, visit ConcentratedCoaching.NET, or email Mark at [email protected]

Cross Selling: Part 3 of 3 – How to Get It Right

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This is part 3 of a three-part series. If your organization offers multiple service offerings, you may find this series of interest.

Part 1 – What’s at Stake

Part 2 – What Goes Wrong

Part 3 – How to Get it Right

In Part 1 I said that cross-selling was the single biggest growth opportunity for sales. In Part 2 I listed six ways cross-selling efforts go wrong. Let’s now talk about getting it right.

Good cross-selling boils down to One Core Concept: the scarce resource is not content, it’s relationship.

Most sellers view cross-selling as matching up an internal content expert with a potential buyer on the client side. This typically has bad consequences. It plays out in “the business card scenario.”

The Business Card Scenario

Picture this conversation:

Seller (Bob): Josephine, in our work with you at XYZ, we’ve noticed that there are some widget-related issues. If you like, we’ve got some people who are experts in widgetry – I’d be happy to introduce you to Bill. Here’s his business card.

Buyer (Josephine): Thanks Bob, I’ll keep that in mind. Let me think about it.

Put yourself in Josephine’s place. She is being asked to take several propositions on faith – to trust Bob. First, she’s being asked to trust that Bob (the seller) is competent to assess an issue of widgetry (and he’s probably not). Second, that Bob is competent to recommend Bill. Third, that this fellow Bill is himself competent at widgetry and would understand it in the context of Josephine’s business.

That’s a lot to ask! Unless Bob already has a superb relationship with Josephine, he has just asked her to ‘trust me’ without giving her any specific reason to do so.

Meanwhile, back at the office, Bob meets Bill, his firm’s internal expert: it sounds like this.

Seller (Bob): Bill, I gave your business card to Josephine, a buyer at our XYZ client. I think they’ve got some widget issues you could be great at.

Expert (Bill): Great, I’ll look forward to her call.

Which call, of course, frequently never comes. Funny how that works.

Now put yourself in Bill’s place. You’re being asked by Bob to trust several propositions as well. First, that Bob knows enough about widgetry to have successfully identified a widget issue. Second, that Bob has appropriately and fairly described you and your capabilities (and hasn’t underpriced you!). Third, that Josephine is competent on issues of widgetry. And fourth, that Josephine actually wants to talk to you.

In the Business Card scenario, Bob has successfully drawn down on his trust relationship with both his client and his internal expert, asking them in seven distinct ways to trust him.  And, asking people to “trust me” is a good way to actually destroy trust.

Notice the baseline assumption in the Business Card scenario. It assumes that the critical scarce resource is expertise in the area of widgetry. ‘If only we could get the widget expert in touch with the owner of the widget problem, all will be well.’ That is the operative assumption – and it is false.

Three Steps to the Real Issue

The real scarce resource in cross-selling is not matching up expertise with problems – it is ensuring the continued strength of the relationship such that it can survive the introduction of a third person. Here’s how it’s done, from the point of view of Bob, the seller.

Step 1a. Jointly refine the problem definition. Bob (the relationship owner) does not have to be an expert in widgetry; all he has to know is enough about widgets to intelligently define the business issue. The client knows Bob is not a subject matter expert and is OK with that – but wants to know that Bob “gets” the business case.

Step 1b. Re-affirm the client relationship. Bob discusses with Josephine (the client) what an outside expert like Bill might bring to the game. Bob assures Josephine that he will be at the first meeting, and continually available to ensure the hand off is being done well.

Step 2a. Ask the expert to make you just smart enough. Again, Bob does not have to be an expert in widgetry – he just needs to know enough to ask the right questions.

Step 2b. Reaffirm the internal relationship. Bob must assure Bill that he will get him whatever information or perspective he needs before meeting with Josephine, and that Bob will be at the first meeting, and continually available thereafter.

Step 3. Iterate as necessary. Bob must go back and forth between Josephine and Bill to ensure that each is comfortable about the problem definition, expectations, and that Bob will continue to play the same trusted advisor role he played with each client prior to this meeting.

Thinking Right about Cross-Selling

Bob thought his job was to match a technical need. And so he abdicated the responsibility for framing and owning the problem, and for making both Bill and Josephine feel his commitment to their relationship.

We too often think of cross-selling as like a data query – trying to guess at a solution to a problem from afar. But that’s hard – like throwing darts with mittens. You’re not an expert in either the content or its application to the business.

Instead, think of cross-selling as like setting up friends on a date. The date may or may not ultimately work out, but you want to make the process as comfortable as possible for each party. You want each of them to:

  • know something about each other ahead of time
  • have a basis for conversation so they can hit the ground running
  • feel an easy, legitimate ‘out’ in case the fit isn’t right
  • know that you are committed to your pre-existing relationships with them regardless of how this particular connection works out.

If you handle cross-selling in this manner, you will not need to draw down on trust. In fact, you will increase the amount of trust that each party has in you – because you have placed the relationship ahead of the solution or the sale.

Done right, cross-selling not only works, it builds trust in the process.

Cross-Selling: Part 2 of 3 – What Goes Wrong

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This is part 2 of a three-part series. If your organization offers multiple service offerings, you may find this series of interest.

Part 2 – What Goes Wrong

In the first part of this series (link above) I suggested that “cross-selling done right represents the lowest cost-of-sales approach to growth.” Not ‘one of’ the lowest – the lowest.

And yet – I find massive inertia at best, and resistance at worst, to cross-selling.

If you’d like to reap the benefits of cross-selling, you’re going to have to grapple with the underlying causes of what’s kept you from it to date. There are three underlying barrier causes, and you can suffer from more than one of them. See which one best describes your situation.

Objection 1. Cross-selling is too complicated for us.

You may be thinking, “It’s hard enough to master the complexity of one product or service – we just don’t have the time or budget to cross-train everyone in everybody else’s offering.”

Or, you may think, “It’s tough enough already getting access to our clients and avoiding channel confusion; adding in the complexity of multiple salespeople from the same company calling on the same client people would just be over the top.”

Objection 2. Cross-selling is crass, overt and unprofessional.

You may be thinking, “We can’t go walking the halls with order sheets – our relationships are built on quality content, client service and trust, not on acting like hustlers.”

Or, you may think, “Cream rises to the top. There’s no harm in occasionally asking a client to put in a good word, but making a self-serving goal out of it actually hurts our image, not helps it. It amounts to asking our clients to become salespeople for us, and that demeans them and cheapens our image.”

Objection 3. We already know how to do this.

You may be thinking, “Networking within the client organization is something we do naturally. We don’t need special training to do something that got us in in the first place, we just need a little more time.”

Or, you may think, “It comes from knowing the client, and knowing how far and how fast you can push things through the organization. You can’t just barge into a situation and demand total access, there are human relationships you need to work through, and trust takes time.”

Handling the Objections.

All three of those objections (and note they’re internal objections, phrased by us in our own heads in fear of speaking to clients, rather than by clients themselves) are false. Here are the headlines:

It’s too complicated.

Myth: you have to understand all your organization’s services in order to cross-sell them.  Not true – you only have to understand them well enough to define the problem. (See part 3 in this series for how to do it).

Myth: you will cause channel confusion. Not true – if you actually have a solution. More confusion would be caused by bringing in another seller than by using you. 

It’s crass and unprofessional.

Myth: a buyer-seller relationship is inherently distasteful for the buyer. Not true – a buyer whose problems are addressed and who is treated with respect is a buyer who is delighted to buy. It’s how you do it that matters. (See part 3 in this series for how).

Myth: our clients don’t want to help us sell. Not true – if we have solutions that will help our clients’ fellow employees, they are proud to be associated with us and help us help their organization. 

We already know how to do this.

Myth: Cross-selling is no different from ongoing business development. Not true – by definition, you are dealing second-hand with both expertise and relationships. That’s very different.  

Myth: You can’t cross-sell until you’ve built up enough trust. Not true – you never want to draw down on trust. Done right, cross-selling builds trust.  (See part 3 in this series for how to do it right).

 

To summarize: Cross-selling is the least costly way to add growth. You probably aren’t doing it. You’ve probably got one or more excuses – which don’t hold up.  But there is a solution, and it’s not all that hard. Stay tuned for the final post, How to Get It Right.

Cross Selling: Part 1 of 3 – What’s at Stake

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This is part 1 of a three-part series.

Part 1 – What’s at Stake

Part 2 – What Goes Wrong

Part 3 – How to Get it Right

If your organization offers multiple service offerings, you may find this series of interest.

What is Cross-Selling?

Definition: Cross-selling refers to two kinds of sales relationships with an existing customer client:

a. Selling the same service to new buyers within the existing client organization,

b. Selling new services to the same buyer within the existing client organization.

Too many B2B and services companies don’t pay attention to cross-selling. Some think it is too advanced a concept for them to grasp. Others think it smacks of selfish, unprofessional “salesiness.” Still others think they already understand it.

So it’s worthwhile being clear about the “why” of cross-selling.

    Cross-selling done right represents the lowest cost-of-sales approach to growth. 

Yes, the lowest cost.  You’ve probably heard estimates to the effect of “the cost of a dollar of sales to a new client is 4 – 7 times higher than the cost of a dollar of sales to an existing client.” (Or, read here.)

These points are usually made with respect to customer loyalty. But cross-selling falls within the “existing client” part of that formula as well. Just envision all the parts of the sale that disappear if you can quickly engage in a conversation with parts of an organization you’re already involved with.

Financial Impact of Cross-Selling

Take a second to comprehend the scope of that statement: if your cost of sales (in aggregate, not per project or sale) amounts to 25% of revenue, think what dividing that number by 4 to 7 means for your bottom line.

For example: Assume you have four service offerings – A, B, C and D. . Assume your client is currently using only A, but could benefit from B and D. Your cost of selling B to a new client might be 25%. But your cost of selling B to your existing client might be only 6%. How much is that worth to you?

On top of the lower cost of sales, existing-client sales typically take less time to develop; they can hit your income statement this year, not next. And, sales to existing clients are frequently larger than those to new clients.

But the real clincher is on the client side. Clients buying from previously-known sellers are more likely to take your advice; more likely to provide you with relevant information and to open up about pitfalls; more likely to implement your recommendations, and to do so sooner. In other words: cross-sold clients are more likely to benefit from your offerings.

The Bottom Line of Cross-Selling

Bottom line: cross-selling is a huge opportunity for a win-win with your clients. You make more money, and grow, faster and more profitably. Your client gets time-tested advice, customized by a provider who already knows them, and in whom they already have some trust. Solutions are more likely to work, to be accepted, and to be implemented.

So why isn’t there a rush to try cross-selling? Because of fears it’ll go wrong. Fears which are not unfounded.

I’ll deal with that in the next post in the series.

 

Agile Selling: Q&A With Jill Konrath

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Agile SellingJill Konrath has made a name for herself as one of today’s top thought-leaders in sales. A well-known author & speaker, Jill seems to be just about everywhere these days, and with good reason.

I’ve known Jill for years. A smart, driven and straightforward woman, Jill epitomizes the best of the Midwest – she lets you have the truth between the eyes, with good intent and a generous spirit. She also knows just about all there is to know when it comes to selling. Her most recent book, Agile Selling, represents a further evolution of her thinking. As I note in the interview, it reminds me in some ways of The Trusted Advisor.

We sat down recently to discuss her new book on how when it comes to sales, you can never stop learning.

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CG: How did you come up with the idea for Agile Selling?

JK: Shortly after SNAP Selling came out, tons of salespeople said to me, “This is great info on selling to today’s crazy-busy prospects. But I’m frazzled too. Just like them. How can you help me?”

Initially, I thought it was a time management problem. But, after pondering it awhile, I realized it was an information management problem. Too much was changing: customers, products, buying cycles, the economy, competitors. It was literally impossible to keep up.

When I thought about it, I realized that rapid learning was one of my core competencies. And, I’d never even talked about it before. It was just who I was.

Then, when I thought deeper about it, I realized I’d developed innumerable strategies over the years to address the fears and challenges you face when you’re trying something new. In researching the book, it was fun to discover that the approaches I’d stumbled on were now verified by neuroscience research.

CG: This book struck me as very similar to Trusted Advisor – a ‘wisdom’ book that can only be written after subject-matter and process mastery. It’s fundamentally about consulting. Comments?

JK: Personally, I’m amazed that it took me so long to “see” some of these things that are now blatantly obvious to me. They are truly the meta-skills that enable subject-matter and process mastery. Yet no one really talks about them. That’s why so many people don’t reach their potential.

And, you are so right that selling is really about consulting. Nothing more, nothing less. It’s about maintaining a singular focus on your client. Where are they trying to go? How can you help them get there? What value will they get from working with you?

Unless you do that today, you won’t get clients. Selling is truly about service.

CG: How far can you get in sales without coming to grips with some of these agility issues? I assume the answer is getting ‘less and less’ as the pace of change accelerates – is that true?

JK: Learning agility issues start from Day One of any new position. At that moment in time, you’re thrown into massive overwhelm, trying to learn all sorts of new things.  And, unless you have a process for doing that, it will take you longer than necessary to become proficient.

Most people don’t realize there are rapid learning practices they can use to quickly master new information or pick up skills. I’m talking about strategies like dumping, chunking, connecting and more.

Plus, when you take a new sales position, you need to take an immediate 30-day deep dive in order to develop situational credibility. Unfortunately, most people don’t know how to maximize that time frame. Instead, they muddle around, hoping to absorb everything by osmosis.

In reality there are certain things that need to be learned first – which I outline very clearly in Agile Selling.  And, if the company doesn’t have the info you need (which many don’t), there are fast strike ways to get it.

CG: What about dealing with all the changes? Does that cause more agility issues?

JK: Absolutely. In a world of lookalike products and services, our expertise is primary differentiator. Essentially that means we can never stop learning.

And, those who learn faster than others will have a serious competitive advantage.

CG: On the face of it, this book is an “advanced” book on selling.  Does that mean a newbie can’t read it? What advice would you give a relatively new salesperson on reading this?

JK: Funny you should ask that. Too me, it’s a foundational book that all sellers should read. Here’s what I’d say to a new person:

“These are the underlying skills of all top sellers. They’re not visible on the surface, when you observe or talk to them.

“But this is what’s at their core.  It’s about how they learn, deal with challenges and transform themselves into an invaluable resource.

“If you focus on becoming an agile seller at the onset of your career, you will be in high demand – regardless of the direction you choose to take in your life.”

I think Agile Selling will help anyone who wants to shorten his/her path to proficiency.

CG: This book strikes me as out of sync with what’s usually written in sales books these days – and beautifully so. It’s about the art and craft of sales, not about the mechanics and plumbing. Is that how you see it?

JK: It’s totally out of sync with other sales books. Nobody is writing about this critical meta-skill of agile learning.  And thanks for your kind words too.

To me, Agile Selling is about “being” a top performer. It’s about the mindset that enables people to thrive when they’re in the midst of change. It’s a skill set about being able to quickly assimilate lots of information or to pick up new skill. It’s also a discipline about creating an environment for success.

The more you embrace agile selling strategies, the higher your likelihood of short-term success and long-term mastery.