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Trust Matters, The Podcast: Asking a Client for a Rate Increase (Episode 24)

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This is the newest of Trust Matters, The Podcast. Listeners submit their personal questions about professional relationships, trust, and business situations to our in-house expert Charles H. Green, CEO, Trusted Advisor Associates.

A solo consultant asks , “How do I ask a long-standing client, whom I already bill a lot monthly, for a rate increase?”

Do you want to send your questions to Charlie & Trust Matters, The Podcast?

We’ll answer almost ANY question about confusing, complicated or awkward business situations with clients, management, and colleagues.

Email: [email protected]

We’ll be posting new episodes every other Tuesday.
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When Your Client Gets In Your Face

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What do you do when your client gets angry at you, upset with you, in your face?

In truth, most clients don’t actually yell at you.  But of course you can tell when they’re upset. Maybe we even project a little bit, and imagine the horrors of what they might actually be thinking, regardless of what they actually say.

It all feels pretty horrific.

Well, there’s a simple two-part way to deal with that situation.

  1. Recognize it’s about them, not about you, and
  2. Ask to talk about it.

Here’s how that plays out.

It’s About Them

When someone’s angry at you, even yelling in your face, about something you may or may not have done, it’s critical to see what’s happening.

  • What you think is happening is, “he’s angry at me.”
  • What you need to see is happening is, “he’s angry.”

If the “someone” is your three-year old child, we have no problem doing this. We think, “Oh, he’s tired,” and we have patience. What we don’t do is take seriously for a moment whatever horrible things the three-year old is saying about us.

But let’s say your child is 15; suddenly, it’s all personal, and we become offended and lash back at them. We feel attacked, and return anger for anger.

And when clients do it, it’s infinitely worse.

But – it’s still your choice. You can react as you do to a three-year old – with calmness and understanding about what’s going on with them – or with anger, getting sucked into a downward spiral.

Guess which response is right. Always remember: when someone’s angry at you, the key observation to make is that he or she is angry. It’s an emotional state in them.

The fact that they’re angry at you is relatively unimportant. You may feel hurt for a hot moment, because pain is inevitable – but suffering is a choice. Your choice.

Ask to Talk About It.

People get angry because they feel afraid about something, and are trying to be heard.

So – hear them.

Find the words to acknowledge their anger. In fact, to go further than that, and ask them to tell you more about it.

Them: I can’t believe this whole thing happened, and it’s your fault. It’s costing me money, and time, and I’m now behind schedule, and I want to know what you intend to do about it! Right now!

You: Whoah, wow. I’m not sure I appreciated how important this obviously is to you. And I get it, you’re upset – at us, and at me in particular. I, uh, think I really need to take some time and hear you out on this.

Them: I’ve been talking to you guys; I want to know what you intend to do about it.

You: Fair enough. You deserve that.  At the same time, I don’t want to hip-shoot some solution without really understanding fully your context. And obviously we haven’t done that yet. So – give me 5 minutes to really understand your perspective; I promise to listen, and to talk about action steps – in 5 minutes.  Now please – talk to me.

Or words to that effect. Nobody can script for you exactly what to say – that’s a function of who you are, and who your client is. But the point is to acknowledge the anger, and commit to listening.

And by the way, this doesn’t mean you need to be all passive and apologetic. You can, and should, push back on the insistence on immediate action. It can wait 5 more minutes, and the truth is until you really have listened to your client’s outbursts, he or she is not going to listen to your solutions.

Remember: It’s not about you. And until you talk about it, they’re not going to accept your solutions.

 

Trust Matters, The Podcast: How to Establish Trust When Managing a New Team (Episode 8)

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Trust Matters, The Podcast: How to Present Choices to Clients (Episode 7)

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The Comp System Made Me Do It (Be a Low Trust Advisor)

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It happened again the other day.

A (fairly articulate) participant in one of my workshops said:

Charlie, you don’t understand our system. We can’t do the trust stuff you suggest when the incentive system is set up the way it is. We get paid on the basis of the transactions we bring in and close; we are incentivized to focus on the next deal, and to maximize our individual contributions. While no one would call it this exactly, it’s eat what you kill and kill what you eat. You can’t ask us to behave against our own interests just to be nice.

In fact, until leadership takes this seriously and changes the incentive system, this is really all very high-sounding, but you’re not going to see collaborative, long-term client-focused trust-based behavior around here. Not when it’s in our best interest to behave otherwise.

If you’re nodding your head to that argument, and think it makes sense, listen up – this is for you.

That thinking is dead wrong. And not for some ethical or happy-trust-talk reason. It is a misreading of the very incentive system you think you are responding to. If you are buying that line of argument, you are sub-optimizing by shooting yourself in your own foot.

Here’s why.

The Problem is Not the Comp System – It’s You

There’s nothing wrong with a comp system that pays by results, and that apportions pay for accountability. The problem is in you interpreting that system wrongly. You are the one making a hugely false inference, namely:

Believing that the way to optimize short-term performance is to operate from a short-term perspective.

The truth is – and it may be obvious when I put it this way – the real way to optimize short-term performance is to consistently operate with a long-term perspective.

Consider:

  • The company that changes strategy every quarter has no strategy at all;
  • Repeat customers are hugely more profitable than high-churn new customers;
  • We trust people who have our best interests at heart; we distrust those who treat us as one-off transactions.

Let’s connect the dots. If you think that because you get paid by the transaction in short time periods you must behave transactionally or in a short-term timeframe, you are sadly deceiving yourself. You are announcing to your clients – and to your fellow team-members – that you are not interested in long-term relationships, or in doing what’s right for them. Instead, you are focused on maximizing your own short-term financial interest. And they will respond accordingly.

The paradox is – because of your unenlightened focus on the short term, you are actually sub-optimizing your own short term performance. Long term client-focused behavior manifests in an ongoing display of superior short term performance.

A golf metaphor:  don’t focus on hitting the ball – instead, just let the ball get in the way of your swing.

The Solution is not the Comp System – It’s You

One of the great things about trust in business is that it’s far less dependent on top management actions than are other cultural or systemic issues. Trust is very much within range of your own freedom of motion. You do not have to wait for the CEO or the compensation committee – you can act on your own, starting right now.

Resolve to yourself that:

  • You will do what is right for your client’s long-term interests – period;
  • You will treat your partners as if you, and they, will be partners forever;
  • You will do what is long-term right for the firm, not just what is right for you in that moment;
  • You will look at your quarterly performance numbers as a time series – not as a disconnected set of discrete events.

If you do that, here’s what will happen:

  • Your clients will stay with you, refer you to others, stop pushing back on price, ask you about follow-on work, etc.
  • Your colleagues and partners will seek you out, bring you into deals, and help you with your own;
  • Your firm will note that you, as opposed to the Selfish Others, are actually helping the firm.

And most important of all – your income will go up. Not down, up. Because your short term income is maximized if you consistently behave in others’ long-term interest.

Move that gun away from your foot. Now put it away entirely. Doing the right thing pays; not because the world is a happy-talk place, but because in the real world, clients and partners reward those who play the long game – not the short game. And pretty quickly, the short game improves as a result. 

The Consulting Industry: the Critical Role of Interpersonal Relationships

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This is the first in an occasional series on trust in particular industry verticals. This post looks at the consulting industry.

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In consulting, some things are changing. And some are not.

The biggest trend is, of course, the digitization of the firm’s service offerings. For example, nearly three quarters of one large consulting firm’s HR practice consists of moving processes into the digital age. Naturally, firms increasingly put more emphasis on technical qualifications of their consultants.

Another change, nearly as big, is the shift in business development practices (this one isn’t unique to consulting). Depending on who you talk to (Marketing Blender, Gartner), something like 50-60% of the buying process is complete before the buyer meets a seller. This number is only going higher. Naturally, firms focus increasingly on managing that non-personal-contact front end of the business development process.

However, the critical role of interpersonal relationships is not going away. Paradoxically, the increasing role of technology and automation does not mean that the role of relationships is decreasing – in fact, it means exactly the opposite. Here’s why.

On the project side, expertise is a commodity. The markets for human capital are efficient, and widely accessible. On the business development side, virtually no client wants to buy a significant project without understanding, and meeting, the people who will staff it.

This is an important fact of human biology. Reducing the time spent on human interaction merely increases the leverage that such time has on final decisions. Those infrequent interactions take on geometrically more importance as their duration declines.

The implication for consultancies?  The ability to rapidly and genuinely create trust with clients is more critical than ever. You don’t have the luxury of schmooze time to establish comfortable relationships; it’s got to be done deeply and quickly, and done right.

Trusted Advisor and Trust-Based Selling workshops, are aimed at this need. 60% of our work is done in various professional services clients, with consulting a heavy component.

For a discussion about these issues, drop me (Charles Green, CEO, Trusted Advisor Associates) an email at cgreen-at-trustedadvisor-dot-com. You’ll not go onto an email list; there are no automated follow-ups; no cost, no obligation. Just let’s talk.

Relationships or Metrics? I Haven’t Got Time for Both

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Why is it that, in today’s age of instant gratification, we feel like we never have enough time? Emails fly across our inboxes – we get instant responses. Someone reaches out via text, and we expect a reply so fast that we are caught watching the tiny ellipses flash about as we wait.

Life and technology go much faster now. Why is it then that we keep saying there’s not enough time? We connect faster; shouldnt there be more time to create trust?

The truth is – there’s still plenty of time. And it doesn’t take much.

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I heard it again today. I hear it in almost every workshop I do, and in every – bar none – big company sales organization I work with. It sounds like this:

I believe in trust and relationships, but it’s a luxury problem. Here in the real world, the pressure’s on. I don’t have time to do all that nicey-nice stuff, I’ve got to hit my numbers. And even if I did have that kind of time, my clients don’t. The days of easy-going ‘what’s keeping you up at night’ conversations are over – they’ve got as much pressure as I do, and maybe more.

I just don’t have time to build trust-based relationships. Hopefully, someday I will.

But with that attitude, that day will never come. Because trust-based relationships don’t come when you’ve got plenty of time – they’re forged when you don’t have time, and have to trust someone. The whole relationships-vs.-metrics debate is based on four false beliefs. When will you get rid of them?

Myth Number One: You Don’t Have the Time

Maybe you’re old enough to remember an old ad for Fram Oil Filters: “You can pay me now – or you can pay me later.” It stuck because it rang very true – if you refused to pay for a cheap oil filter, you’d end up paying for much more expensive engine repairs later.

It’s the same here. Every phone call, conversation and meeting that you cut short to “save time” puts a label on your head. The label says, “I’m a transactional sales guy; I will never invest in my customer, and I’ll blame you for being the busy one.”

As Aristotle said, you become what you practice. If you never take time for relationships, if all you do is transact, then you become a transactor. And nobody suddenly decides one day out of the blue that they really want to have a trust-based relationship with someone who’s been transacting with them since forever.

The truth is, a little time taken now, up front, results in far more efficient use of time down the road – even just next month. Trust-based relationships aren’t just more effective, they’re more timely and less costly.

You do have the time; you’re just constantly refusing to invest it for returns in future time.

Myth Number Two: Your Client Doesn’t Have the Time

How do you know? Because they told you so? Get real. What client is about to tell you they’re not busy? They want to control their time with you, not give control over to you.

And the same logic applies: our customers are as short-sighted as we are, constantly failing to invest a bit of time up front for future gains of time. So they tell you they don’t have the time, and you believe it, and the two of you race off so as to cut the elapsed time of your transaction. And then do it all over again the next time you meet.

They have as much time or as little time as you do; and if neither of you breaks the vicious cycle, the cycle will stay unbroken.

Who should break it? That’s easy – you should.

Myth Number Three: Trusted Relationships Take Time to Create

The truth is, people form strong impressions of trust and relationship very, very quickly. Initial impressions get formed in much less than a second.

Think about someone you trust. If asked why, your first thought is not, “our trust has grown over the last 6 years.” It’s far more likely something like, “One day we were talking about XYZ and he said an amazing thing…ever since…”

Because trusted relationships are step functions, not continuous curves. They are based on events, moments, instances. Trust gets created in those moments. If you never let yourself be open to those moments, it will never happen.

Trust doesn’t take time. The only sense in which it does is the creation of a track record. All qualitative aspects of trust take virtually no time at all.

Myth Number Four: Relationships are Built on Quantity of Time

Wrong. Relationships are built on quality, not quantity. It’s true with your dog.  It’s true with your five-year old child. And it’s equally true with your client.

The quality of your time matters far more than the quantity. An hour on the golf course or hoisting a beer doesn’t hold a candle to sincerely asking a difficult question, and conveying to your client that you care about the answer, and that you’re a safe haven in discussing it.

A lot of the “I don’t have time for relationships” line is frankly a cover-up for fear of customer intimacy. Invariably, the workshop participants who tell me they haven’t got time are the same workshop participants who tell me that customer intimacy is too risky, and potentially unprofessional. Meanwhile, their compatriots who understand the qualitative basis for relationships are selling circles around them.

Haven’t got time to form relationships and still meet your metrics? If that’s what you’re saying, you don’t understand how to meet your metrics. In any medium timeframe, the person with the relationships will outperform on all business metrics the person without the relationships.

And being busy’s got little to do with it.

Don’t Focus Just on Skillsets

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It’s become a truism: you can’t manage what you can’t measure. (Actually, it’s quite a debatable proposition.) A corollary is that therefore what matters are observable behaviors, hence the essence of training is to develop skills that generate those behaviors. We’ve all seen, in the opening page of nearly every corporate training session’s objectives statement, “Participants will learn the skills associated with the behaviors of…”

But focusing on skills alone produces dangerously myopic results.  Let me use a sports analogy here – let’s go with golf.

Whether you’re stroking a 3-foot putt or hitting a long drive, two kinds of things can go wrong:

  • You may do something incorrectly, e.g. swing in a bad plane or aim the club face wrong. This will result in the ball going other than where you intended.
  • You may think incorrectly, e.g. correct some last-minute perceived error or try to set a course record. This too will result in the ball going other than where you intended.

If the results are the same, which error do you fix? Does it matter? Remember that mental errors manifest in physical ways. A desire to “kill the ball” may result in swinging in a wrong plane. Worrying about missing the putt is likely to cause you to over-control and flinch, thus aiming the club face wrongly at point of impact.

Fixing the “doing” is improving our skillsets. It includes things such as altering the grip or moving the ball forward in our stance. Fixing the “thinking” is improving our mindsets. It includes advice such as “swing through the ball” or “trust your swing.”

Mindsets and Skillsets

The metaphor for sales is clear, I hope, though it applies equally to other fields of advisory business relationships. Sometimes we do or say the wrong thing. More typically, we don’t do or say the right thing. But how do we know which issue-set to focus on in sales? Does the golf metaphor give us guidance, or does it just help define the problem?

It’s been my experience that when it comes to sales – here comes a gross generalization – we put too much emphasis on skillsets and not enough on mindsets. A couple of qualifications: my experience is mainly built around B2B sales, with a heavy focus on complex and/or intangible products or services, and a concentration in professional services. So, I have my biases, just to be clear, in what follows.

We Live In a Skillset World

In the Western world of business, the sub-world of sales has not been immune to some larger trends. Those include, first and foremost, a recent massive trend toward quantification.

Cloud computing is relatively new. iPhones are only 10 years old. Computer laptops are only a few decades old. The web didn’t exist before the 90s. The spreadsheet was invented only in the late 70s. And the 1981 IBM PC had one (big) floppy disc that held 64K (another optional drive doubled capacity all the way to 128K).

Two other phenomena are worth mentioning: the creation of Michael Hammer’s Business Process Re-engineering strategy and the invention (courtesy of the Boston Consulting Group and Michael Porter) of the quantitative approach to competitive strategy.

These big three—computing power, process perspective, and competitive calculation—changed the way business is done. In a nutshell, we began hearing that mantra about “If you can’t measure it, you can’t manage it” and “You get what you measure.” Business began to view organizations as processes, not hierarchies, with all the data that come with processes (not to mentions manuals and procedures). All this happened within recent times for Gen X managers (but feels ancient to millennials).

Sales Skillsets

These trends greatly influenced (led to?) CRM systems. Sales trainers (influenced by behaviorally trained organization trainers) began to phrase training in terms of measurable behaviors. And after all, isn’t sales the ultimately quantifiable function?

In a skillset world, two assumptions keep popping up: one is a linear approach to cause and effect, and the other is a belief in breaking things down into pieces. The first belief views sales as “a sale, repeated over and over.” You’ve all seen depictions of sales processes, typically rightward-moving arrow diagrams. They all boil down to, “If you do X, you’ll get Y.”

The second assumption is that we gain greater control over a process by breaking it down into finer and finer pieces. This assumption has been greatly enabled by the availability of data. (It’s also been only a few years since the word “analytic” was turned from an adjective to a plural noun).

Sales Mindsets

Of course, with data and behavioral skillsets come many advantages. But there are two advantages to focusing more on mindsets.

First is that the more complex the situation, the more difficult it is to map out all the appropriate skillsets. A level of generalization, an ability to deduce specifics from the general, allows not only more customization, but more speed. With skillsets alone, all we can generate is practiced behavior. With mindsets, we gain the ability to improvise.

Put another way – mindset scales; skillsets don’t.

The second benefit of mindsets is that the more human the buyer, the less likely they are to respond to mechanistic behaviors (or the perception thereof). Sometimes we just want to interact with a chatbot, and we want it to just plain work. But other times, we want to interact with a human. And when we do, we want the person to do more than just recite rules, try to manipulate us, or emulate a robot.

Mindsets don’t guarantee behavior. No golfer ever succeeded by simply envisioning a swing and never practicing.

But if all you do is increase your repertoire of behaviors, your customers won’t be able to tell you from an automaton. The really effective salespeople have internalized mindsets, and they can generate the appropriate behaviors “on demand.”

 

 

 

 

 

 

 

 

 

 

The Antidote to Resentment

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A lot of time is wasted debating the relative merits of “hard” and “soft” skills. The right response is almost always “both,” and “it depends.”  I want to focus here on the “both” part.

There is a growing belief – particularly in tech and in consultative professions (and everything is becoming both tech and consultative) – that we should approach the ‘soft’ stuff in ‘hard’ terms, i.e. through metrics, short-term goals, competency models and the like.

Treating ‘soft’ skills this way completely disintegrates them. You can’t have both if you’ve turned one into the other.

Case in point: dealing with resentments in the business world.

You Might Be Copping a Resentment If…

You may not think you’re a resentful person. And maybe, graded on a curve, you’re not.

But how often do you find yourself muttering at the driver who cut you off; re-litigating arguments in your head, where you win this time; waking up in the middle of the night pre-occupied with your checking account; and gossiping with someone about how so-and-so really isn’t all that?

All those are versions of wishing you could change reality – when you can’t. And that’s pretty much resentment.

It’s the difference between hoping and wishing. Hoping things will change is fine, particularly if you’re doing something to help the change. But wishing that things were other than they are – that’s living in an alternative universe. That’s resentment. It’s fine to hope you win the lottery—as long as you bought a ticket. But wishing you’d won last week’s lottery – that’s resentment.

By living in an alternative universe, you’re playing at being God. (Unless, worse yet, you think it’s not play, and you actually believe that all your wishing makes a dime’s worth of difference to Reality). Well, hear this: there is a God – and you’re not it.

Resentment tends to eventually manifest as resentment against other people. But personal resentment is like taking poison and waiting for the other person to die. All it does is eat you up from inside, while the Resented One is either blissfully unaware, or at least generally doesn’t give much of a damn.

Why Resentment Kills Sales and Influence

This is not afternoon TV psycho-babble. It makes a daily difference in business – a huge difference.

If you are prone to the Black Art of Resentment, then you are likely to believe in short cuts, quick fixes, fad diets, new interpersonal techniques, flashy methodologies, and come-on lines for dating bars – because all those gimmicks appeal to your desire to live in a world other than this one: one in which you can dominate, control, bend the other’s will to your desire. And when they let you down – and they do, and they will – you will once again feel your Old Friend Resentment (or its kissing cousin, self-pity).

People don’t buy from those who are trying to change them. People don’t pay attention to people who are trying to persuade them. People don’t take advice from those whose egos are tied up in having their advice taken. (Interestingly, people of both genders also don’t like to date people who are needy; they prefer people who appear independently self-contained).

We interpret all those things as attempts to manipulate, and we shun the manipulator. This is not a good thing.

It also has serious business consequences. It makes for salespeople who can’t sell; advisers whose advice isn’t taken; and relationship managers that people don’t relate to. The absence of soft skills has dramatically hard results.

 

The Best Way to Sell and Influence

The best way to sell and influence is to get rid of resentment; to get rid of living in alternative universes; to accept everything, starting with the customer in front of you.

Acceptance in this case means taking them at face value, getting to know them on their terms, giving up all attachment to your outcome (because that’s about you, not them) – and applying your focus, energy and attention to simply helping them. Let’s call that, for lack of a better term, empathetic client focus.

If you do that, and spend your time and energy seeking to understand them, you’ll do a far better job of connecting with them than all the other resentment-fueled alternate-universe salespeople and advisors.

One result of which is – you’ll end up selling more and having your advice taken more often.

Is that a paradox? Definitely. But it’s life. People buy from those who don’t try to sell them. People listen to those who listen to them, not those who talk. The best way to sell it to stop selling. The best way to influence is to shut up.

Training to Get Rid of Resentments

You do not get rid of resentments by examining best practices.  You don’t banish resentments by designing a training program based on four levels of resentment-coping skills, with behavioral metrics indicating competencies at successive levels.

Instead, you get rid of resentments by doing a Jedi mind trick; an emotional/spiritual jiu jitsu flip; a Paul-on-the-road-to-Damascus conversion. You have to come to believe that you are not God – and that all your resentments are nothing more than an attempt to claim otherwise, doomed to fail because your whole approach is selfishly based on You trying to dominate Them. It doesn’t work. They push back.

In practical terms, the solution is not the usual ‘act your way into right thinking.’ Instead, this new perspective comes about through conversations with others; through reflection; through role-playing; and through discussion with others about shared experiences. This is a different approach to corporate training – but a necessary one for certain advanced ‘soft’ skills.

Goals are Great, but An Expectation is a Pre-meditated Resentment

Goals are great. So are objectives and milestones and targets. They give you a sense of what you’re aiming for, and help you envision the to-be state.

But don’t confuse goals with their purpose. The purpose of a goal is not to achieve the goal – the purpose of a goal is to help you achieve your True Purpose. You should never confuse a quarterly sales quota with a Purpose.

It’s when goals get transmuted into expectations that we confuse goals with purpose. When we start living in that alternative universe defined by the goals, when we start obsessing over the new car, winning the contest, getting the boss’s approval, ranking in the top 20% on the bonus plan – that’s when we begin to have expectations. And an expectation is a pre-meditated resentment.

Think. Do. Accept. Rinse and repeat.

Plan, set goals, and strive. Then celebrate what you get; because to bemoan what you haven’t got is to live in resentment. A life spent wishing you were other than you are is a failed attempt at playing God, and a recipe for unhappiness – and for poor sales and unheeded advice.