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

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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

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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

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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 

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.)

Clients Don’t Buy Solutions, They Buy Problem Definitions

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I read an awful lot written about the role of value creation in sales, and I think it’s often misconstrued. 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.

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 – that is 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.

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.

 

Caught Between the Grinding Wheels of Sales

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A workshop participant recently said something that instantly took me back a few decades. I remember feeling exactly as he described it:

What am I supposed to do? On the one hand, I genuinely want to do right by my client. At the same time, my firm is depending on me to drive revenue there. They’re not asking me to do anything wrong, of course, but the pressure is there nonetheless; it’s on me to figure out how to do it, how to ring the bell. And I’ve got to make it happen; it’s my job.

I feel caught between two grinding wheels: everyone’s nice about it, but that just makes it worse.  I don’t know how to make both sides happy, and it’s just grinding me down.

Exactly. Boy do I remember that. And if you sell systems, or professional services, or complex B2B services, I bet you can relate too.

So here’s what I’ve learned that’s kept me away from the grinding wheels for a long time now.

What You Must Remember

Here’s the thing. Three things, actually.

Thing 1. You can’t make people do what they don’t want. Trying to do so just makes it worse. And much ‘selling’ rhymes with trying to do just that. (One of my favorite findings in Neil Rackham’s great work SPIN Selling is that attempts to teach ‘closing’ actually made students worse at closing).

Thing 2. If you help other people, it predisposes them to help you. And “help” comes in many flavors, including – very much including – just plain old listening. Listening to people predisposes them to listen to  you. And listening to you tends to increase the odds of their buying.

Thing 3. Principle-based behavior beats tactical behavior. If your actions are always based on short-term self-interest, others will not trust you. If your actions are based on principles, others will see it and trust you, including in the buying process.

If you accept Thing 1, you’ll lose less. If you start doing Things 2 and 3, you’ll win more.

If you think rightly about these three ideas, and act on them – you can escape that feeling of being ground down.  Here’s how.

Putting the Basic Things Together

In the happy event that your offering is better than your competitor’s, don’t blow it by over-reaching. Be calm, open, and natural. Be forthright, but confident that your offering can speak for itself.

If your offering is worse than your competitor’s, don’t blunt your sword. Admit it. Do what you can to help your client, including – yes, I’m serious – recommending your competitor (you’ll gain hugely in credibility). Then go back to your product people and convince them you’ve got a product problem, not a sales problem.

In the most usual case – your offering is comparable – you do not win by clever pricing, sexy presentations, or ingenious politics. And frankly, winning by adding more value or being cleverer at content is over-rated. Because let’s be honest: your competitors are more or less as smart or clever as you are. Expertise these days is a commodity.

Where you can win is by playing the long game, and the principles game. If you consistently aim to help your clients, being forthright at all times about what is in their best interest, they will notice. And you will get more than your “fair share” of business, i.e. more than just the share you might expect based solely on quality of service offering.

Because buyers prefer to deal with principled sellers who have their long-term interests at heart, rather than with serially selfish tacticians. For proof, just ask yourself and your firm how you behave as buyers.

Escaping the Grinding Wheels of Sales

Back to my workshop participant, caught between the grinding wheel of sales. How to escape it?

The answer is an inside job. It requires recognizing that all the tension comes from an inability to accept the Three Things:

  • We feel tension when we try to get people to do something we know they don’t really want
  • We feel tension when we try for what we want, rather than what helps the client
  • We feel tension when we try for the transaction, not the relationship.

So – don’t do that.

You must believe in and act on those principles. If you decide the principles need a little nudge, that somehow they’re not strong enough on their own, then you are simply willing yourself back into that space between the grinding wheels. If you can’t live your principles, you will not benefit from them. Nor would you deserve to.

But if you can believe and act on them, you no longer have to worry. Just do the next right thing. Be client-helpful in the long term. Don’t Always Be Closing: instead, Always Be Helping.

Work hard, but don’t spend an ounce of your effort on trying to get others to do your short-term selfish bidding. Let your competitors play that game, because it simply helps you play yours.

Answering Objections

What if your boss doesn’t buy it, you ask? Tell them you need 9 months to prove it. If they refuse to have anything to do with your view, then you must either come to peace with the grinding wheels, or accept that you’ll be happier in another place. The good news is, many managers are quite educable in this regard, particularly if you begin to deliver the numbers, and 9 months give or take is about enough time.

What if your clients don’t buy it, you ask? In my experience, about 80% of clients react the way I’ve described above. The others are either nasty people or monopolists, and they are the ones you should willingly cede to your competitors.

You can stop feeling ground down any time you choose to, starting now. Just choose to Always Be Helping.