The Paradox of Selling

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This article was first published in Raintoday.com

One obvious purpose of selling is to persuade buyers to buy what you are selling. Most people have no trouble agreeing to that proposition.

And yet—the harder you try to get people to do what you want them to do, the more likely they are to push back, resist, and generally behave contrarily. Again, I think most people would agree.

Put these two statements together, and we can easily see selling as an ongoing struggle to get people to do what we want, without making them feel that we are trying to get them to do what we want. Selling has at its heart a struggle to reconcile these two truths. You want to sell. They don’t want to be sold.

When two truths collide, one tends to lose, or they both tend to get watered down. But the way out is not to give up one goal (to sell) or the other (to not cause the feeling of being sold); it is to fully recognize both and transcend the apparent paradox.

It can be done. Here’s how.

The Tension Between Sellers and Customers

This paradox is hardly new. Sellers have palpably felt since time immemorial the tension to selling. Most sellers resolve the tension by one of three strategies:

Defaulting to Truth One: Hard-sell 24-7 to anyone who comes within feeding range;

Defaulting to Truth Two: Being nice and giving away money, relying on the hope that guilt will induce a sale;

Living with It: Internalizing some of form of denial, schizophrenia, or multiple personalities.

But there is another way:

The Other Way: Time, Gifts and Trust

People resist being sold. But people love receiving gifts. In fact, receiving a gift induces a sense of obligation on the part of the recipient. Which suggests a strategy of gift-giving might be the best form of selling.

For services businesses, there is an analogue to gifts—it’s what’s called sample selling in product businesses. Sample selling in the services might mean brainstorming; a small project; a lunch-and-learn; a webinar; a series of articles; a series of conversations for which you don’t bill time; sharing of some previous work.

Sample selling works even better in intangible services than in businesses with “hard” products. The best way for a client to learn how to work with you is to let them work with you. Create a sample experience.

But that’s only half the problem. The other half is, if you set out to give a gift with the express intent of inducing guilt-based buying, you’ll get the reverse—outraged backlash at what is perceived as bait and switch, duplicity, two-facedness. A gift has two features: it is open-ended, and it implies an ongoing relationship. (Think of Don Corleone’s in the movie The Godfather: “Perhaps, some time In the future, and that time may never come, I will call upon you for a favor.” It is non-specific; it is not legally or logically binding; but it carries huge emotional obligation.

When we try to use the language of the market: “If you give me this, I will give you that,” “If you do this for me, I will do that for you,” things change. That is the language of a contract, of money, of transactions.

We violate social norms when we offer a social good (like a gift), but really mean it as a market good (“you owe me”). In one case, there is no binding—yet we feel personally bound. In the other, there is explicit market binding—and we feel market-bound, not socially bound.

The trick is for the seller to give up attachment to the specific short term outcome of a particular gift to a particular buyer in a particular timeframe. To give a sample as a gift, not as an obligating transaction.

That power of a gift is unleashed if it is given without overt conditions of time or obligation. But a gift is diminished if it is conditioned on anything—it turns the gift into a market exchange at best, a bribe at worst. If the gift-giver puts conditions on the recipient, the receiver immediately knows it is not a genuine gift, and the magic connection is ruined.

Applied to selling, this means a strategy of loosely controlled sample selling is far more powerful than a tightly controlled strategy of transactions. In simple terms, if you’re generous as a policy to a sensible group of people in the short term, many of them will buy in the long term.

But only if you don’t ruin it by trying to control them, by treating them transactionally.

Why This is So Hard to Practice

The best salespeople practice this technique already: they freely give of their expertise—a tiny bit to everyone, a lot more to a select group of people. They don’t expect sales from any particular person at any point—yet they definitely expect an aggregate amount of sales from an aggregate amount of leads. They don’t know from just whom or when; but as long as the return rate remains high, they are quite happy not to be more controlling with any one lead.

Unfortunately, this line of thinking is the opposite of what passes for Received Wisdom in sales these days. Tools like Salesforce.com reinforce the idea of more control, not less; of smaller time increments, not longer; and of more metrics, not less. The dominant theme in improving sales is about efficiency, not effectiveness. Break it down, parcel it out, check it off.

In other words, every transaction is treated not only in isolation from others, but is broken down even more finely. Behaviors are sliced and diced, incentives more finely tuned. Qualifying the lead happens more and more frequently at shorter and shorter time intervals.

The net effect on the customer is to feel more and more mechanically processed. How does a buyer feel to be on the receiving end of a process which constantly evaluates his or her financial worth to the seller? Buyers will predictably feel resentment, and will push back. They don’t want to feel sold, to feel a pawn in someone else’s game. And any attempt to introduce social norms will backfire if they are tainted by overt commercial attempts at precise control. No one wants to be treated as a means to someone else’s ends.

How to Do It

It takes a strong personality to not give in to the general business demand for short term and impersonal sales techniques. But the rewards of staying the course are great. The way to think about it mainly comes down to two changes: less control in timing, and looser control in metrics.

Timing. Take a longer view of the desirability of a particular lead. One-off gifts from strangers don’t work as gifts; they just raise suspicion. It’s the ability to show a sustained, genuine interest that offers the chance of a relationship. A focus on transactions kills relationships; a focus on relationships allows transactions to blossom. This doesn’t mean you don’t screen and exclude buyers; it means you do it more definitively, and less frequently.

Selling this way doesn’t mean accumulating specific checkmarks—it means a periodic account review where the decision is simply ‘do we keep investing in this lead—or not?’ Maybe that review happens every 6 months, maybe a bit less. But it is not an ongoing, automatic, short-gated decision. If you’re investing in a client, invest in them—until you decide not to.

Metrics. If you loosen up the timeframe, you can also afford to loosen up the criteria. In a longer timeframe, you no longer have to be bound by 3rd level input metrics to evaluate the worth of a lead: at a longer timeframe, things can get simpler. Are you being invited in, or not? Are they returning calls, or not? Is there a real project being discussed, or not? If yes, keep it up. If not, stop it. The decision metrics become far simpler, and selling can focus on relationships, not evaluating transactions.

The Paradox of Selling

Yes, you still want to sell what you sell. And yes, they still don’t want you to control them.

Don’t choose one or another, and don’t sub-optimize. By lengthening your timeframe and reducing the precision and number of metrics, you open up space for the natural human instincts to work. In that context, you can intelligently give the gift of sample selling; and you can reduce the need to control that gift. That way people can feel the natural inclination to reciprocate, rather than the resentful guilt or rejection that short-term control induces.

Discounting, Price, Value and Psychology

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RainToday.com recently published its Fees and Pricing Benchmark Report: Consulting Industry 2008 in which they analyzed a ton of data from 645 consultants. There were six price-related topics, all of which are interesting. But one in particular caught my eye: the analysis on discounting.

As the authors point out, discounting is Ground Zero for hypocrisy in pricing. Everyone decries it—yet everyone (actually, 65%) does it. It reminds me of dieting—“I know I shouldn’t, but this one little brownie won’t hurt. And I’ll get back on the wagon again tomorrow.”

Couched this way, the problem of discounting is one of willpower—we all know we should stick to standards and principles, yet we are morally weak at the moment of truth.

I don’t think that discounting is a moral problem, however. Instead, it is one of bad thinking. And it centers around two false beliefs:

  1. the belief that certain customers are inherently “price buyers”
  2. the belief that feeding the price beast will make it away.

The truth is that price is a proxy for several different fundamental buyer concerns. It has no meaning inherently. Price per se is a clearing factor, the point at which money exchanged balances with the various benefits received. And this balancing point is not just “value” as most firms mean that term; it is very much tied up with the psychology of the buyer.

WHAT CLIENTS MEAN BY PRICE OBJECTIONS

It seems obvious.  A client expresses an objection to a price. They say they want a lower price. Clearly—they are concerned about money, value and price. Right? So the only question is, shall we discount, and by how much. Right?

No, and no. Here are four distinct things that buyers are saying when they say they want a lower price. And not one is really about price.

  1. Mismatch with expectations. Only experienced buyers do a good job of guesstimating price quotes from professional services firms. They tend to focus on a basic mental model of time vs. rate, and naturally under-estimate each.  (Recall your own shock at first finding out your billing rate as a newcomer; and the shock of industry hires when they first see time estimates for what they thought was just a request for a data-dump from an expert).This “objection” isn’t an objection at all—it’s just the natural human expression of surprise and dismay when we find out our expectations didn’t match reality.  Discounting just confuses them more, and rewards their delusions for the future.
  2. Mismatch with budget. Sometimes buyers just have a limited budget. They feel trapped, and often a little embarrassed that they have asked you to quote into a situation in which they under-budgeted—or over which they have no real control. Their natural reaction is to push back, in hopes that you can solve their problem without their having to confess their embarrassing ignorance, or go back to their boss for more money.This too is best not seen as an “objection;” it is a simple constraint of the world—budget vs. cost. Again, discounting just confuses the matter, and reinforces the idea that the client can afford to not be open and transparent with you.
  3. Mismatch with competitors. Frequently clients faced with competitive bid situations will say, “Company X is cheaper than you by 25%—you need to discount to stay in the game.” Let’s assume the claim is true on the face of it.  There are two reasons for one firm pricing 20% below another; one is intentionally buying the business, with the intent to raise price later.  The other—and most common—is that the client is comparing apples to oranges.The solution to the first is easy: explain to the client why your competitor’s cost structure is virtually identical to yours, and why a 25% discount is inherently unsustainable—therefore the client is facing a relationship vs. transaction issue.  If they choose transaction, then be glad your competitor just trashed their bottom line to buy a price-shopping client.  They’ll eventually be back.The solution to the second is to have the client carefully compare features of your bid with features of competitor’s bid. You know where costs get built up and where they don’t; have the courage to give your client the data to do the comparison.

    Competitive mismatches aren’t really price objections; they are fundamentally rooted in a misunderstanding of either industry economics or project design economics. The answer is not discounting, but education.

  4. Mismatch with motivation. Professional services firms suffer disproportionately from the delusion that clients make decisions on purely rational, monetary, statistical criteria. Clients, like everyone (including ourselves) make our decisions with the heart, and justify (rationalize) them with the brain.A basic human need is to make sure we didn’t get a “bad deal.”  You can give all the “value” data you want, but unless a client feels you are being straight with them and/or they’re getting the best possible “deal,” they will remain suspicious. When suspicious, our innate tendency is to bargain, to determine some subtle psychological resistance point, just as we would at a bazaar or yard sale.This behavior has nothing to do with price per se, and everything to do with transparency of your economics and the prices others have gotten from you.

    Not paying attention to motivations leads to discounting, which has the perverse effect of convincing buyers that—aha!—you really were holding out on them! Which leads them not only to haggle again the next time, but to fundamentally mistrust you because you quoted them a price that was an attempt to “get by.”

    So what’s to be done? We all know the answer—don’t discount—but we think it’s a moral weakness, a failure of principles. It’s not—it’s a failure of understanding the reason for price objections.

    Armed with the truth—that it’s not about price, and it never is about price—we can do the right thing; be curious, probe and sensitively get one level deeper when presented with price objections.

    Back to RainToday’s survey. Why do 65% of consulting firms discount, even when—as the authors point out—the average 11% reductions could go straight to the bottom line?

    It is simple fear—fear of losing the deal, particularly—which drives us inward rather than outward.  Rather than asking curiously, “Please, help me know what’s behind that?” we fearfully back off in the face of the aggression in the client’s tone—and start discounting.

    The only reason to discount is to buy your way into a strategically new piece of business. And be careful when you do so, because only certain clients buy that way.

The most tragic result of discounting is not even the lost profit; it is that we confirm the client’s suspicion that we are untrustworthy.  It leaves the client thinking, like Sir Winston Churchill’s apocryphal line, “we have now established what you are, we are merely haggling about the price.”

Client Focus Right vs. Client Focus Lite

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Do you remember the TV ad that showed a young man proposing to his beloved—by use of a powerpoint slide deck extolling his virtues?

Did you ever work for someone who asked his (rarely her) secretary to remind him of his wife’s favorite flowers, and the occasions on which they should be sent?

Did you ever learn something—then learn it again, as if for the first time, because you were going to have to teach it to someone else?

Then you have some sense of the difference between true client focus, and client focus Lite.

We all know what’s going on when we receive a “customized” letter with another person’s name in our place.  We all know what’s going on when a retail sales clerk says, “I’ve got just the right thing for your” after meeting us for 30 seconds.

But the B2B world—and particularly the professional services world—is loaded with tempting come-ons and how-to’s about client focus.  Beware.  You are often buying CFL (Client Focus Lite), not CFR—Client Relationship Right.  Worse yet, you may be passing it on in your own business development and client relationships practices.

This article describes the difference between CFL and CFR, and some practical suggestions about how to make sure you’re doing the latter.

CLIENT FOCUS LITE VS. CLIENT FOCUS RIGHT

With a nod to Jeff Foxworthy, here are some indicators that you may be practicing CFL (Client Focus Lite).

  • If your client focus is built into a business process model—you might be a CFL user.
  • If your client focus ends at “needs identification”—never touching the “wants” below the surface of the  “needs”—you might be a CFL user.
  • If your client focus is systematically linked to your company’s ROI, quarterly earnings, and your bonus—you might be a CFL user.
  • If your client focus is a synonym for lead screening—you might be a CFL user.
  • If your client focus is built around client political power maps—you might be a CFL user.
  • If your client focus is built around key phrases to advance the sales call—you might be a CFL user.
  • The difference between Client Focus Right and Client Focus Lite boils down to two things: intent and empathy. Let’s look at each.

Intent. If your intent boils down to nothing more than self-aggrandizement, then any client will see through it.  If your purpose in being client-focused is mainly about getting the sale, then you have made your clients into objects for your own goals. Means to your own ends. Chips in your own little poker game.

If, on the other hand, you actually care—even just a bit, once in a while—it comes through.  None of us are saints when it comes to intent; and no one expects us to be.  We all have a healthy dose of ambition and ego, and to some extent that’s what drives business.  When it comes to intent, a little difference makes all the difference.

There is a difference.  You know perfectly well when someone is trying to get out from under the tyranny of their own set of objectives, and genuinely trying to help you.  And you know equally well when someone has no intention of doing so—when they’re mailing it in, checking the boxes, and trying to process you as quickly possible to convert you to a sale or a reject; a win or a loss; a notch in the belt, or a piece of history.

Empathy.  Here is Wikipedia’s entry for empathy:

Empathy (from the Greek εμπ?θεια, transliterated as empatheia, meaning “physical affection, partiality”) is commonly defined as feeling or expressing emotion for another. Since the states of mind, beliefs, and desires of others are intertwined with their emotions, one with empathy for another may often be able to more effectively define another’s mode of thought and mood. Empathy is often characterized as the ability to “put oneself into another’s shoes”, or to in some way experience the outlook or emotions of another being within oneself, a sort of emotional resonance.

Not your everyday business reading. But perhaps it should be. The dominant thinking in business tends to cast empathy as vaguely wussy, or insufficiently tough. That’s unfortunate, because the toughest investment banker, oil tycoon or white-shoe lawyer wants to do business with someone they feel “gets” who they are. And that’s all empathy is: “getting” someone on a deep level.

Defining client “needs” is not the same thing. Client “needs” are things like asynchronous communications capability, real-time general ledger closing, or integrated management reporting. Empathy, however, deals in emotions: frustration, excitement, propriety, nervousness, delight.

We reflect agreement on needs through statements, proposals, contracts. We reflect agreement on emotions through empathy—from “I know how you feel” to “damn, that’s tough,” to “wink wink nod nod.”

If you’re just doing client needs, you’re doing Client Focus Lite.  Add intent and empathy, and you get Client Focus Right.

MAKING IT WORK

Here are 4 tips to moving from CFL to CFR.

  1. Brainstorm. Not client needs—client worldview. Get a few folks around the table and have an unstructured conversation about what it must be like to work in that organization, and what it must be like to be the person in question.
  2. Ask 5 levels of “what’s behind that?” Let needs definition be a starting point. Begin with, “they really need integrated management reporting,” and ask, “what’s behind that?” Pursue it until you get to answers like, “that’s what the CEO is screaming about,” or “that’s how she sees getting ahead.”
  3. Make a list of 27 questions. Some can be pure business (“who does he report to?”). Others ought to be more personal (“where did she grow up?”) and still more aimed at empathy (“what makes him really excited?  Upset?”). You’ll decide whether and how to ask these questions; the main purpose is in thinking about them.
  4. Role-Play. About the closest we can get to “walking in someone else’s shoes” is to pretend we are them, in some realistic context. You probably feel more uncomfortable doing this than doing any other suggestion. But nothing is more powerful. Try it; it works.

Remember the original Lite beer campaign?  In a faux competition against “regular” beer, Lite’s battle cry was “less filling.” If someone asked your clients about your degree of client focus, would they say your client focus “tastes great?”  Or that it’s “less filling?”

In the beer business, sometimes less is more.  But when it comes to client focus, more is more.  And the more it’s about you, the more it’s Client Focus Lite.  To be Client Focus Right, it really has to be about them.