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Are You Worthy of Your Client’s Trust?

Have you ever stopped and asked yourself if you’re worthy of your client’s trust? It’s a big question, but one with an interesting twist.

It seems that trust, especially a client’s trust in us, is something that we too often take for granted. Just because a client signs on board with us – shouldn’t mark the end of building upon a trusted relationship. In fact, it should be just the beginning. Let’s dig in a bit further.

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Most salespeople will agree – there is no stronger sales driver than a client’s trust in the salesperson. Further, the most successful route to being trusted is to be trustworthy – worthy of trust. Faking trust is not easy – and the consequences of failing at it are large.

But is it possible to know if your client does trust you? Is there one predictor of client trust? Is there a single factor that amounts to an acid test of trust in selling?

I think there is. It’s contained in one single question. A “yes” answer will strongly suggest your clients trust you. A “no” answer will virtually guarantee they don’t.

The Acid Test Of Trust In Selling

The question to you is this:

Have you ever recommended a competitor to one of your better clients?

If the answer is “yes” – subject to the caveats below – then you have demonstrably put your client’s short-term interests ahead of your own. Assuming you sincerely did so, this indicates low self-orientation and a long-term perspective on your part, and is a good indicator of trustworthiness.

If you have never, ever, recommended a competitor to a good client, then either your service is always better than the competition for every client in every situation (puh-leeze), or, far more likely, you always shade your answers to suit your own advantage; which says you always put your interests ahead of your clients’; which says, frankly, you can’t be trusted.

Here are the caveats. Don’t count “yes” answers if:

  1. The client was trivially important to you;
  2. You were going to lose the client anyway;
  3. You don’t have a viable service offering in the category;
  4. You figured the competitor’s offering was terrible and you’d deep-six them by recommending them.

The only fair “yes” answer is one in which you honestly felt that an important client would be better served in an important case by going with a competitor’s offering.

If that describes what you did, and it is a fair reflection of how you think about client relationships in general, then I suspect your clients trust you.

This is the “acid test” of trust in selling. To understand why it’s so powerful, let’s consider the factors of trust.

Why This Is The Acid Test

My co-authors and I suggested in The Trusted Advisor that trust has four components, and we arrayed them in the “trust equation.” More precisely, it is an equation for trustworthiness, and it is written:

T = (C + R + I) / S
T = trustworthiness of the seller (as perceived by the buyer)
C = credibility
R = reliability
I = intimacy
S = self-orientation

Credibility is probably the most commonly thought-of trust component, but it is only one. Think of credibility and reliability as being the “rational” parts of trust. Believable, credentialed, dependable, having a track record – these are the traits we most consciously look for when screening vendors, doctors, and websites.

The third factor in the numerator – intimacy – is more emotional. It has to do with the sense of security we get in sharing information with someone. We say we “trust” someone when we open up to them, share parts of ourselves with them. We trust those to whom we entrust our secrets.

But all pale beside the power of the single factor in the denominator – self-orientation. If the seller – the one who would be trusted, who strives to be perceived as trustworthy – is perceived as being self-oriented, then we see him as someone who is in it for himself. And that’s the kiss of death for trust.

At its simplest, high self-orientation is selfishness; at its most complex, self-absorption. Neither gives the buyer a sense that the seller cares about any interests but his own.

Self-orientation speaks to motives. If one’s motives are suspect, then everything else is cast in a different light. What looked like credible credentials may be a forged resume and false testimonials. What looked like a reliable track record may be an assemblage of falsehoods. What looked like safe intimacy may be the tactics of a con man. Bad motives taint every other aspect of trust.

The acid test aims squarely at this issue of orientation. Whom are you serving? If the answer is, the client, then all is well. No client expects a professional to go out of business serving them — the need to make a good profit is easily accepted.

It’s when the need to run a profitable business is given primacy in every transaction, every quarter, and every sale, that clients call your motives into question. How can they trust someone who’s never willing to invest in the longer term, never willing to compromise, never willing to gracefully defer in the face of what is best for the client? They cannot, of course.

Passing the acid test suggests you know how to focus on relationships, not transactions; medium and long-term timeframes, not just short-term; and collaborative, not competitive, work patterns.

Flunking the acid test means clients doubt your motives. Whether you are selfish or self-obsessed makes little difference to them – the results are self-aggrandizing, not client-helpful.

The paradox is: in the long-run, self-focused behavior is less successful than is client-helpful behavior. Collaboration beats competition. Trust beats suspicion. Profits flow most not to those who crave them, but to those who accept them gracefully as an outcome of client service.

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

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.

 

Attract! Attract! Why Attract is the New Retain

The mantra of “attract and retain” has been around the HR community – and its general management constituency – even longer than the unfortunate rush to refer to people as “talent.”

It used to make sense. But it doesn’t anymore and the implications are significant.

Why Retention?

It’s been awhile since anyone dusted off the basic retention rationale, so let’s review the bidding. Here are some commonly stated reasons why companies should pursue employee retention:

  1. It costs more to hire than to retain people
  2. The more experienced the hire, the more it costs to retrain replacements
  3. Experienced employees know the ropes, the lingo, how things are done
  4. Experienced employees form deeper relationships with customers
  5. Retained employees are motivated, which helps customer relationships.

Of course, a few of these tenets were always subject to qualification – number 5, for example. Longevity can just as easily drive complacency and myopia as well as it can drive motivation.

But that’s not the Big Story. The Big Story lies in the assumptions underlying all five of those beliefs. Those assumptions are:

  1. the benefits of retention increase in direct proportion to longevity, and
  2. the pace at which new employees become productive is relatively fixed.

Both beliefs are looking a lot less true these days.

What’s Changed?

Two things have changed: work and people.

Work. Work has become outsourced, modular, plug-compatible, horizontal, contracted, bite-sized, for-hire, project-based. Employers shun fixed costs and value flexibility.

This is partly because they can: technology has made work-sourcing a global phenomenon, freed from space and time. It’s also partly because they have to: global sourcing means competitiveness is also global. The global economy has undergone a massive make/buy analysis and has come down heavily on the “buy” choice. If you’re not working with the world’s best/lowest cost doer of some key task, then you’re at a disadvantage.

The nature of work has shifted from a “job” focus to a “project” or “task” focus. Employers no longer need “someone who can do…” but rather “someone who has done, and will do…”  The new work model is not semi-permanent vertical employer silos of people; it is the model used by the film industry and by consultants, a constantly shifting nexus of tasks and resources.

Recruitment comes to resemble an ongoing speed-dating event.

People. I think we’re finally past decrying the lack of employee “loyalty;” it’s so last millennium.  People are “loyal” to their professions, their technologies, maybe their customers – but not to the constantly morphing corporate entities that sign their paychecks.

The skills of the new generation have evolved to fit the new workplace. The Facebook generation, adept at mass-scale peer relationships, doesn’t relate well to authority, no matter which side of the relationship they’re on. Geography? Twitter is everywhere and while not every 20-something can afford time in Europe, they all know someone who can and does, and can all Skype it and tweet it 24-7 in the meantime.

The oldsters may not like the verbal promiscuity of “friending,” but it fits perfectly with the new workplace. While society may pay a price in the dearth of deep, vertical relationships, the market place is demanding breadth.

Attraction and Retention Redux

Let’s put these trends together. What the economy needs, and what people are organizing to offer, is the ability to form relationships at the speed of transactions.

To companies, the attractive employees are not those with deep potential; they are those who can hit the ground running in a plug-compatible world, instantly connecting with thousands of like-minded peers within the company and without.

To people, the attractive employers are not those who offer long-term “commitments” (usually just relationship-disguised transactional offers anyway) but those who offer the ability to be instantly productive, while offering personal growth opportunities in the form of autonomy and new activities.

There is an obvious match here. What is no longer obvious is the relevance of “retention.”

Why would an employer want to retain people when the changing market requires ever-changing skills that can be bought quickly with precision rather than trained over time with generality?

Why would an employee want to be retained, when (s)he can find ever-changing opportunities to gain experience in a world thousands of times bigger than one employer alone could ever hope to offer?

Attract! Attract! Three New Strategies for Companies

The above are massive trends. The trend is your friend. The challenge is to ride the trend, not fight it. Here are three strategies for doing so:

1. Aim for zero cost onboarding and training. Zero works well as a stretch goal, but it’s not enough. How can you get people to pay you to join your company? (This is not as crazy as it sounds: how much do people pay to go to Harvard? So, become the “Harvard of YourNiche.”)

2. Reverse-hire search firms. Tell Russell Reynolds you want every employee to get one bonafide offer from an outside firm every year to keep them motivated. If they stay with you, they have re-upped, and become re-attracted. If they leave, you can choose either to recalibrate your attractions program, or wish the employee well and let them tell the market how employee-dedicated you are. (This is not as crazy as it sounds; Tony Hsieh already does a version of this at Zappos, paying people not to take a job offer).

3. Up your knowledge management game. Tenure is such an expensive way to gain company knowledge. Figure out how to make it available to every employee, from day one.

And don’t assume that means AI and databases. Try the same thing that works in the outside world: massive horizontal networking. Invent intra-LinkedIn and Intra-Tweet. (This is not as crazy as it sounds; Clay Hebert is working on SpinDows)

Attract and retain? That sounds like a motto for a roach motel. The new mantra is Attract! Attract!

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Many Trusted Advisor programs now offer CPE credits.  Please call Tracey DelCamp for more information at 856-981-5268–or drop us a note @ [email protected].

Attract and Retain: People Strategy, or Roach Motel Ad?

The phrase “attraction and retention” falls naturally off the lips of HR people. It’s also common with the customer relationships crowd.

Yet it’s also perfect ad copy for selling flypaper or roach motels; “they can check in—but they can’t check out.”

So which is it? High-minded strategy for people and customers? Or unfortunate parallel with the extermination business?

The phrase “attraction and retention” grew out of McKinsey’s 1990s “war for talent,” crystallized in the 1997 book of that name.

Excerpt:

…a company’s ability to attract, develop and retain talent will be a major competitive advantage far into the future. “The only thing that differentiates Enron from our competitors is our people, our talent,” said Enron Chairman Kenneth Lay recently.

Ouch…score a few points for the insect hypothesis.

Let’s have a look at how the phrase has evolved in ten years. Today:

It’s still about employee attraction and retention—in the HVAC contracting business.

For the 7-county Milwaukee area, Deloitte Consulting offers a 5-step process for attracting and retaining new business and industry residents.

It’s about website visitors

And it’s definitely about customers

But just how does one attract and retain?

Well, for customers, you could use one-to-one marketing:

Remember all of those advertising brochures you’ve found in your mailbox over the years from them? Those are the results of a one-to-one personalized marketing strategy. Most likely your relationship with Radio Shack began when you walked into one of their locations and purchased a stereo.

Yup, that’s probably where it started, all right. Though I haven’t been back in years…wonder why…

To attract and retain employees, you could create a retirement plan .

You could also “attract and retain more supporters, members, and donors, through a BrandXcellence consulting relationship.”

Here’s how Brunswick does it:

• Business and financial leadership development programs
• Products managed and engineered by local and regional talent
• Performance management process

You could do it through CRM.

You could read about the Five Key Elements of A&R.

But wait a minute—why is it that are we doing this? What purpose does attraction and retention serve? Ask that question, and we get some consistent answers:

the long-term sustainability of an organization’s business strategy and market differentiation hinge on effective recruitment, talent development, and retention.

Human capital continues to be the single-largest investment a company makes, and now management can quantify the return on investment of its human capital and connect it to business results…"

We use tools such as the Watson Wyatt Human Capital Index ® – which links the effectiveness of human capital practices to shareholder value creation

A primary challenge facing almost every organization today is quantifying human capital investments and their effect on shareholder value.

Ah, yes, that’s it—the reason we want to attract and retain employees and customers is so that we can raise shareholder value. People and customers are the means;  business success  is the end. Therefore the value of employees and customers can be measured by their contribution to financial value creation.

Does it not dawn on these people that they’ve gotten it backwards?  That financial performance is a result, an indicator, of success in serving employees and customers?  That companies should serve people—including shareholders—rather than the other way ‘round?  Causality flowing one way doesn’t mean it flows the other too; people who like things hang around for more, but just because people are hanging around doesn’t mean they like things (prisons, for example, have high retention rates).  

The sin of the roach motel approach is that it focuses on symptoms, not causes—and in so doing, perverts means and ends.

It all comes down to motives, and motives can be slippery. Even the same person, moments apart, can treat customers like ends—or like means.

One of the best—and most vacuous—recommendations is to engineer your entire company culture around doing things that attract people and encourage them to stay. Best, because it’s absolutely correct. Vacuous, because if you don’t start with a profits-exist-for-people mindset, you’re never going to get there by pursuing X-step processes in support of increased shareholder value.

You either live it or you don’t. People are attracted by genuine motives—not by some technician measuring their attraction levels. People stay most if they genuinely want to stay—not because of a program that locks them in in order to increase shareholder value.

The roach motel crowd is dominating the dialogue. In our pursuit of minute measurement of the effectiveness of flypaper, we’ve forgotten motives.

People come if we really, really like them and treat them well. Period. People stay if we really, really like them and treat them well. Period. Not for the sake of shareholder value. For their sake. Period.

Then—and only then—the shareholder value thing works best too.  As an outcome—not as a goal.