Posts

Don’t Confuse Your KPIs with Your CSFs

/0 Comments/in , , , /by

I spoke with BigCo, Inc. They wanted their B2B salespeople to become trusted advisors.

They felt (correctly) that greater trust levels with their customers would result in greater intra-customer market share and greater profitability. And they were right – as far as that goes.

But they then described to me their implementation plan. It consisted of breaking down the objectives into finer and finer components and matching them up with accountable business units – pretty standard practice.

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

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

This sounds perfectly obvious in the telling, but I have found that BigCo’s story (which is a composite of several clients) is common. It may even be the norm.

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

That’s especially true when you’re trying to implement a values-driven strategy – such as becoming trusted advisors.

Measurement and Management

Just because something sounds obvious in the retelling, it doesn’t mean it’s obvious when you’re in the middle of it. Case in point: BigCo’s flawed logic in their approach to trust-based selling.

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

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

This confusion between actions and measurements, causes and effects, and KPIs and CSFs is not just common – it’s becoming rampant. It’s a real issue for digital age businesses in some ways even more than old-line businesses. Let’s look at some examples.

Gaming the Numbers

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

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

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

It’s not just books. Look at the flood of “recommendations” on LinkedIn. Look at the massive follow-me-I-follow-you dynamic on Twitter and other media. Or just look at your own behavior. What do you do when a friend asks you to rate a book, promote a blog post, or recommend them? There is monstrous grade inflation in most customer-rated aspects of business today.

Much of this comes down to our obsession in business with metrics. It goes back to the invention of the spreadsheet and the success of books such as Reengineering the Corporation. Numbers-all-the-time is today’s secular business religion.

The Wages of Confusion

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

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

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

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

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

Buddhist Capitalism: Why Trust and Collaboration Outperform Competitive Selling

/11 Comments/in , /by

When we think of capitalism, we typically think of competition as a central, driving force. At a macro-level, we have enshrined the value of competition in our antitrust laws. We think of competition between providers as a way to increase innovation and reduce costs. Adam Smith is frequently (and somewhat inaccurately) cited as the prophet of competition in his concept of the “invisible hand.”

At a micro-level, we have also glorified competition. Athletic competition is seen as a metaphor, as well as a proving ground, for competition in business. Businesses line up to sponsor major athletic events and athletes. And nowhere in business is competition more revered than in sales.

The truth is much of what we think about competition is dysfunctional, suboptimal, and actually destroys value. By contrast, what I’ll whimsically call Buddhist Capitalism shows another way that adds more value. I’ll explore this theme first at the business world level, then at the sales level.

Business Competition in the Real World

In the real world, pure competition leads directly to monopoly. Competition is inherently unstable, resolving to dominance of one more powerful firm over all the others. What we call “competition” in the modern Western world is a finely tuned mix of rules and regulations, as well as a few customs, that serve to keep behavior within socially acceptable bounds.

If you doubt this, think of what the U.S. economy would look like in the absence of the FTA, the FDA, the FAA, the SEC, or the FDIC. Or just look back a few decades in the history books. Maintenance of a state of competition depends enormously on the power of the referees.

Pure competition, even where regulatory regimes are strict, rarely exists. There are imbalances of labor, education, geography, and a hundred other variables. The point is in nearly every industry, there is an imbalance of power, exploited by one party at the expense of the weaker parties. “Competition” in the real world is more or less about zero-sum games, with one party holding the stronger hand.

The definitions of “capitalism” have been hijacked by extremist theoreticians in recent years: people such as Milton Friedman, Ayn Rand, and Alan Greenspan, who believe in a moral purity produced by competition. (Never mind that an ethics built on selfishness isn’t worthy of being called ethics in the first place.)

Buddhist Capitalism

By contrast: imagine an economy relatively unencumbered by laws and regulations, but where trust and custom abounded. An economy with not nearly as many lawyers, but with fewer legal battles. An economy where the frictional costs of competition (and the regulation of competition) are lower, and innovation is higher.

You get such an economy when you introduce the concept of trust and collaboration. Zero-sum games shift to 1+1=3 games. Stephen MR Covey Jr.’s book The Speed of Trust is all about this: when trust is present, speed goes up and cost goes down.

If my Buddhist friends will forgive me the crude colloquial language, I’ll call this Buddhist Capitalism. What I mean is that it focuses on collaboration, not competition; on getting along harmoniously rather than vanquishing; on letting go attachment to outcome rather than obsessing over goal achievement.

It’s far from crazy. The lesson of the Prisoner’s Dilemma work in game theory is that a collaborative strategy always, always beats a competitive strategy if played long term. Research shows that collaboration produces more innovation than solitary introversion. Collaboration and trust build on each other, increasing knowledge of both parties to the point where they can jointly add value, cut costs, and reduce risks.

It may sound like a Beatles song—the more you give, the more you get—but it’s true.

Buddhist Selling

What does all this have to do with sales? Selling is just the micro-version of the same thing. We as human beings have a primal desire for survival, which can easily revert to competition. But we have an equally strong desire for connection, collaboration, and cohesion.

Except for pure commodities (and not even water or electricity is a pure commodity), buyers prefer to buy from sellers they trust. Trusted sellers have their customers’ interests at heart, ahead of their own. They play the long game because they know that the best way to long-term success is through their customers’ success, and, therefore, no particular sale is worth sacrificing the long-term relationship.

Trusted sellers are also not attached to a particular outcome. They don’t keep meticulous score at a detailed level, and they are willing to let their agenda be influenced by client needs. Finally, they keep no secrets from their customers because they see their interests and their customers’ interests as one and the same, and the value of shared information to both parties exceeds the value of secret information privy to just one party.

Of course, these attitudes are hard to come by in a world that prizes competition. Sellers everywhere are taught to compete not only with their competitors, but also with their own customers. Not getting a sale is considered bad form, if not unacceptable. Metrics in sales are short-term, incentives are largely extrinsic, and motivation basically consists of war chants.

But a seller who can “think Buddhist” will outperform a competitive seller over time because customers prefer to deal with sellers they trust. And they do not trust people who are in it for themselves.

The ultimate irony: by being willing to forego a sale and do the right thing, the “Buddhist seller” will end up selling more than the competitive seller.

 

 

 

 

 

 

Trust and Selling to the C-Suite: Interview with Ken Roller

/0 Comments/in , , , /by

Ken Roller is an experienced B2B salesperson; he spent the past 35 years in Corporate America working for 2 industry leaders (including 21 years at Intel), serving Global 1000 customers.

Ken’s classic sales credentials are impeccable: he exceeded his quarterly sales quota for over 20 years straight – 83 quarters in a row – in a time and in industries that faced brutal competition and roller-coaster global economic conditions.

I came to know Ken during his tenure at Intel; he was extremely helpful to me at a time I was writing Trust-based Selling. We’ve stayed in touch; I asked Ken to share with us some hard-earned wisdom from his career.
——————————

Charlie: Ken, it’s great to have you ‘here’ on Trust Matters. I’ve always thought you embodied many of the things I write about.

Ken: Thank you. I’ve always thought that we’re kindred spirits in our concepts and feelings on how we work and relate to customers and people. One of the inflection points in my professional career was when I read “The Trusted Advisor.” It succinctly captured the essence of selling with integrity, something that is paramount to my being and who I am.

Charlie: Well then, you’re a great person of whom to ask this question: How do you establish trust with “C” level execs at some of the biggest companies in the world?

Ken: First, I’ve always taken seriously my counsel with my customers and would never jeopardize their livelihood, career and their family’s future with my guidance. That’s not pablum, that’s truth; it is the root of my answer to your question.

It’s easy to tell somebody about your experience and the benefits of your products and services. It’s harder to demonstrate that you “truly care.” That has always been a differentiator for me. You quote the late great George Burns as saying, “you can’t fake sincerity.” He’s right, and the continued attempt to do so is why there’s a pervasive view of salespeople being the proverbial “used car salesperson,” with their only concern being themselves and their company.

Charlie: Now, let me just get this straight. I ask you about selling to the C-suite, and your answer is “you have to care?” I don’t think that’s the typical canned response from most sales ‘experts,’ is it? Maybe you can give an example of how you showed a customer “you cared” in this manner?

Ken: Sure. I was blessed that the companies I worked for had world-class products. Even so, the reality is that not all products are always great – or even good.

I was working closely with the CTO and his staff at one of the largest Financial Services companies in the world. Our competitor’s product was 78% faster than our comparable product out of the box! That was the context in which I put together a several day meeting at our facility in Ireland, and had this company’s entire senior staff fly in from Europe and the US for a strategic update.

During the meeting, I asked them if our technical team could work with them to ensure that they implemented our solution properly so we could have a fair bake-off – and, I told them, if our competitor were to beat us, they should purchase their product and shame on us.

When I said that, you could hear an audible gasp come from my company’s execs. They had a look on their face of “Did Ken really just say what I think he said”?
The thought that my career was over suddenly crossed my mind.

However, my customer’s CTO noticed the ruckus I caused and immediately stood up. He said, “Thanks, Ken, for putting together this wonderful 3-day gathering; you’re a breath of fresh air in an industry that is polluted with unscrupulous salespeople.”

“You educated us to the fact that your next generation product, coming out in a few quarters, will have a new micro-architecture that will enable you to leap-frog the performance of your competitors. We believe you, and trust you, and are looking forward to testing your new platform ASAP. We want to work with you Ken.”

He basically told my executive management that my candor and “caring” should be applauded; and if anything were to happen to me, my company would lose their future business.

And…our next generation product did perform as promised, and has been the industry leader ever since.

Charlie: What I called the Acid Test of trust is whether you’re willing to recommend a competitor to a client. In effect, that’s what you did here.

Ken: It’s not that hard if you have a long-term perspective. If you want to build a long-term strategic relationship, and have faith that the next iteration of your product will fix your issues, you’d do what I did. If not, you might sell them your current product, but your reputation will be ruined forever.
Be honest and live to sell another day!

Charlie: Switching gears: I think when a lot of people find themselves in the C-suite, they get tongue-tied. Their pulse rate goes up, they get flustered, and they end up making any number of rookie mistakes. Advice?

Ken: Senior executives have no time for those who are in “awe” of whom they’re meeting.
Confidence – especially, confidence in yourself – is critical. You don’t have to be an expert in everything – but you’d better be expert in something, very clear about the boundary lines – and just as forthright about what you don’t know. Be prepared, and do your homework: then tell the truth. Honesty trumps ignorance.

You have to have great respect for them – but also remember they’re your equal! Deal with your insecurities and don’t psyche yourself out.

Talk about what’s important to the executive. Being STRATEGIC and not tactical is critical. Don’t discuss problems, just solutions. The higher up you go, the more you’ll find people who are surgically focused on growing revenue, innovation, and garnering a competitive advantage.

Charlie: Any additional tips?

Ken: Creating long-term relationships with senior executives is like shooting a good game of pool – you’re always shooting for the next shot!

As we discussed earlier, listen more than you talk, but be prepared based on your research to share some 30-second “nuggets” that will be of interest to them that also demonstrates your reputation as a known expert in your specialty.

Ultimately, if you want a trusted advisor relationship with executives, you have to make sure they see you as a “Player” that a) constantly educates them to things that they and their staff don’t know, and b) does so respectfully but in an insightful, direct manner that clearly shows you have the customer’s interest at heart.

Charlie: In your experience, what’s the single biggest obstacle to a salesperson building trust with their customers?

Ken: That’s an easy one! Sorry for my politically incorrect answer, but it’s imperative that salespeople learn to STFU and LISTEN!

So many salespeople are myopic – enamored with themselves and their voice when the conversation is not about them; it should be about their customers and helping them solve their business / OPEX problems and issues.

That’s why I feel the “Trust Equation” is the single most important sales theory ever created. With Self-Orientation in the denominator, the more you talk about yourself, the less trust you build! So in the words of the Kevin Spacey character from “Swimming with Sharks”, Shut-up, Listen and Learn!

Charlie: Thanks Ken for sharing with us your thoughts and ideas.

Ken: Thank you, as always, it’s been a pleasure!

Perfect Pitch in Sales: 9 Rules

/3 Comments/in , , /by

You may know it as the dog and pony show, the beauty contest, the shoot-out. Or you may just call it “the pitch.” The term is especially common in some industries—advertising, executive recruiting, some law firms—but we all know it.

We typically think of it as an event – a rather formal presentation by several professionals made to several members of the client organization that typically lasts 30 to 90 minutes. Secondary characteristics of a pitch often include PowerPoint and a time-slot among a few other competitors who are pitching on the same day.

Let’s be clear: there is no single perfect pitch, since the winning pitch is situational to you and your client. Still, there are some guidelines that hold true. Here are nine rules for perfecting your pitch.

1. When the Best Pitch Isn’t a Pitch

Sometimes the best pitch is one that never happens – because both parties choose an alternative.

Think of a pitch as a blind date where each party is cautious. The quietly cautious buyer wants control and seeks it in an impersonal, formal event. The seller also wants control but expresses it by being assertive. One fears being “sold;” the other fears losing. When both parties are fearful, decisions get made on process, features, and price.

Both parties are often better off starting from a strong relationship. Though both know this, they engage in denial, not wanting to admit it. Sellers may try to go around pitch events. The trick – not really a trick at all – is to explore the possibility of meetings before the pitch during which personal relationships can be established. It’s critical that this be done from a position of respect and honest concern for what’s right for the client.

Sometimes the client then abandons the pitch idea altogether because they find one competitor that seems to understand them uniquely. That’s generally a good outcome for both parties. But do NOT try to force this outcome—you’ll jinx if it you do.

2. The Pre-Pitch Warm-Up

Your objective shouldn’t be to avoid the pitch, but to produce a good outcome for both parties. Any pitch will be improved by prior conversations with as many client people as possible.

If you are meeting the client representatives for the first time at the pitch, your odds are even less than one divided by the number of competitors. It’s less because with total strangers meeting each other, the “none of the above” option frequently appears on the table.

Of course, not every client wants to meet you in advance. Often the intent of the pitch is to prevent such meetings in the first place in pursuit of an “independent, fair” competition. Pushing too hard for meetings can appear distasteful.

How do you know how far to push the suggestion for prior meetings? Simple – ask the client. Point out the advantages of offering all competitors a chance to talk with them in advance, then gracefully yield if the resistance is too strong. You get a few points for offering if you do it respectfully – just don’t push your luck.

If you can talk to people in advance of a pitch, you’ll improve the quality of the pitch for both you and client. Of course, you learn valuable information, and you get to call people by name. But it goes much further than that because the next key to a great pitch is interaction.

3. Interact in the Pitch

Nearly always the client says, “Tell us about yourself.” And nearly all sellers assume that’s what the client wants – after all, they said so!

But the truth is, listening to someone – anyone – talk about themselves for 30 minutes is incredibly boring. Even more important, listening to others does not persuade human beings—they become persuaded by listening to others who have previously listened to them.

Letting clients be heard is critical to successful pitches. If you can’t do it before the pitch, then dare to be great and engineer listening into the pitch. Here are several approaches:

  • Tell the client ahead of time you’d like to ask for reactions
  • Build in “and what about you?” questions into your pitch
  • Offer data about similar situations and ask for comment
  • Ask the client if they’d consider a “first-meeting” approach. Instead of a standard pitch, offer to treat the pitch like a first meeting, as if you’d already been hired, and allow five minutes at the end to talk about how it felt. (This is not a crazy idea; I know of two success stories using it.)
  • If you’ve had any prior-to-pitch conversations, refer to them.

Remember: what you say in the pitch matters less than whether you have listened to them first.

4. Have a Point of View

Your qualifications, credentials, and references are worth absolutely nothing if you can’t show relevance to the client. To walk in without a point of view on the client and the issues facing them is arrogant, disrespectful, and selfish. Those are strong words; let me back them up.

If you want this job, you’ve (hopefully) thought about what you’d do if you got it. If so, why wouldn’t you share it? The probable answer is because you’re afraid you might have gotten it wrong.

But that fear is all about you. Now is precisely the time when not to take a risk is risky. The client wants to see if you’ll do some homework on spec and if you’re willing to engage in real-time thinking about it. They want some sample selling. Showing up with nothing but a track record is like going on a blind date with just a list of past dates. It’s no better as a pitch strategy than as a dating strategy.

5. Collaborate on Talking Price

Conventional wisdom says don’t quote price until the client has heard benefits so that they can properly calculate value. This makes theoretical sense, but it ignores human psychology; price is the elephant in the room during the pitch.

While everyone listens (or pretends to listen) to your pitch, they are all mildly pre-occupied with what your price is going to be. That pre-occupation is death to their ability to listen to you, so air it.

When you walk in, place a five-page pile of paper on the table, saying, “This is the price part of our proposal—the bottom line and four pages of backup explaining it. We don’t want to focus on it, nor do we want to keep it from you. At any point in the conversation today, you can ask us to turn the page over, and we’ll talk about it. Wheneveryou want.”

The point is not when you talk price; it’s about who makes that decision.

6. PowerPoint Pointers

There seems to be an emerging consensus among presentation professionals that looks like this:

  • Most presentations are written as leave-behinds: build your pitch on the presentation, not the leave-behind
  • Less is more: limit yourself to several bullets
  • Don’t read aloud what’s written: get a picture and talk from that
  • Visuals are great, great, great: use photos, not clipart
  • Except for the title page, lose the logos and backgrounds

7. Handling Qualifications

Most big sales these days follow a two-step process: screening and selection. Most screening is done on credentials. That means if you’re in the pitch, your credentials got you there. The pitch is the sale you already got; stop selling it.

If the client specifically requested a section on credentials, don’t embarrass them by fighting it. But you can touch briefly on credentials, with a large leave-behind set of documents. Go through them only if the client insists.

8. Dissing the Competition

This is an easy one. Don’t. Don’t do it, don’t go there, don’t even think about it. If asked, demur, with, “We respect our competitors. You should talk with them. But they can speak well enough for themselves without our help.” Taking the high road never hurts, and it usually helps.

9. When to Ditch the Pitch

Imagine a pitch where an obstreperous client takes you off script away from the PowerPoint or raises a point well in advance of when you had intended to address it.

Disaster? Not at all. In fact, it’s quite the opposite. This is client engagement – exactly what you want – cleverly disguised as an objection. Greet it with open arms. Ask the client for permission to go off script and deal directly with the issue raised for as long as the client wants.

Remember: despite what the client said, it’s not your PowerPoint they want to see – they want to feel how it will be for you to interact with them. If you respect their wishes, move your agenda to fit theirs, and respond directly with relevant content, you will address precisely that desire. And you will more likely win the pitch than someone who stayed on (Power)Point.

Competing With Colleagues

/0 Comments/in , /by

Co-opetition. Have you heard the term tossed around? It’s one that I learned earlier on in my career and has always stayed with me. A catchy phrase, to be sure; but how do you do it?

—

When I wrote The Trusted Advisor with David Maister and Rob Galford, it became reasonably successful within several months. (Amazingly,16 years later, it still ranks #5 in Consulting under Small Business and Entrepreneurship.)

With its success came a happy problem: how to parcel out the leads between the three of us? Let me be clear, the book wasn’t drowning us in leads; any one of the three of us could have happily fielded all inquiries. And while we wanted to be fair to each other, we were also all of us very clearly in competition with each other.

So the question: how do you compete with colleagues?

Competing with Colleagues

What if one of us got a lead based on the book? Did we have any obligation to pass it along to the other two? If so, how?  Should we establish a quota system, whereby each of us would get every third lead?

Should we let the market dictate things, and let whomever the client had reached out to handle the response? What if the client had written to all three of us?  Should we all respond confidentially, or in some sense share our responses?

The problem was not unique to us, though it seemed so at the time.  You may face a similar problem within your organization – who gets the lead? Who gets to present?

Or, you may come face to face with an  old friend who has changed uniforms and now works for a competitor. In any case, the tension is much the same – the sensation of being a colleague feels intensely in conflict with the sensation of being a competitor.

How do you resolve it?

The Solution

The answer to the problem came to us fairly quickly, on reflection, and I documented it as part of the Four Trust Principles in my later books. The answer lies in true focus on client needs.

In our case: we agreed that we should all respond similarly to all client inquiries, regardless of to whom they were addressed. In all cases, we would say words to the effect of:

The Trusted Advisor was written by the three of us. I suspect that each of us could do an excellent job in response to your query, and each of us would handle the work slightly differently. You would be best served by having discussions with each of us, and making up your mind on that basis.

We will each be candid with respect to our own strengths and weaknesses, and answer questions to the best of our ability about the others. Each of us will respect your decision, and we are each committed to you making the best decision possible for you.

The best decision for you is what all three of us seek, and each of us will do our best to help you reach it, regardless of your choice.

This solution made everything easier. It kept our relationship collegial. It removed any awkwardness about responding to clients. It removed any awkwardness that clients might experience in choosing whom to talk to.

And, of course, it resulted in the best decision for clients, as each of us have our own particular skills and drawbacks.

So what’s the answer?  Grindingly relentless focus on client service, and the willingness to pursue that logic wherever it leads.

Sales Strategy: Never Let Them See You Sweat?

/4 Comments/in , /by

What’s your favorite sales movie? Glengarry Glen Ross? Wall Street? Jerry Maguire?

Here’s one that might not have made your top ten list for sales, but that may help you take a fresh look nonetheless.

—

September 1961 saw the release of the classic The Hustler. Starring Paul Newman as “Fast Eddie” Felson and Jackie Gleason as Minnesota Fats (with great performances by Piper Laurie and George C. Scott), it portrays what happens when great talent meets self-destructive impulsivity.

Small-time pool hustler Felson takes on the legendary pool shark Minnesota Fats in an epic all-night duel of young talent vs. old savvy. As the game continues into the early daylight hours, they take a break. Felson, nearly exhausted, collapses sweaty and drained into a chair with yet another pack of cigarettes.

Fats, meanwhile, goes into the men’s room and emerges minutes later freshly shaved, wearing a newly laundered tux. Felson’s confidence is shattered by this show of confidence, and he goes on to lose disastrously.

Never let them see you sweat. That’s the wisdom Minnesota Fats employed, and in a game that’s intensely mental (what games aren’t?), it gave him a decisive edge. A great pool strategy, to be sure.

And a terrible sales strategy.

Unless you’re selling widgets B2C at $19.99, there are three principles that we don’t talk enough about in sales: your objective, your character, and your relationship to the customer. Never letting them see you sweat violates all three. Here’s how.

  1. Your Objective

A game of pool is a zero-sum game, pure and simple. There is a winner, and there is a loser. There is no win-win, and there is no synergy outside the game itself. Within the boundaries of the rules, psych-out strategies to beat the opposing player are fair game. And if that’s how you view sales, you’ll be seduced by Minnesota Fats’ clever stratagem.

But that also means you think of your customer as the enemy. You think your entire customer relationship is a series of one-off unrelated transactions, all win-lose, so there can be no accrued trust or synergy. You will also, quite naturally, seek out more ways to put one past your customer.

What’s the alternative? Think of your customer as your partner. Think every transaction is connected to every other transaction, past and future, in an ongoing narrative of relationship. There are economies of scale and levels of relationship, each adding more and more financial and psychic value at every step.

In this view, your objective is to help your customer, long-term. Period. All else follows.

  1. Your Character

If you believe “never let them see you sweat” is a great strategy, then you have adopted duplicity as a core value. That can be a treacherous decision.

It means you can’t be authentic. It means you can’t relax and let down your guard, lest the customer see your true motives or objectives. It means there is a limit to how much trust, information sharing and collaboration can go on between you and your customer.

Our beliefs drive our actions, and our character drives our beliefs. If you continue to hold a duplicitous perspective in all your customer relationships, you will behave duplicitously and be seen as a duplicitous person. And in a world that is increasingly online, transparent, and available to all, it’s more and more likely that duplicitous behavior will be exposed.

  1. Your Relationship

If you believe “never let them see you sweat,” then you’ll never have a rich relationship with “them” no matter who “they” might be. All human relationships are characterized by a degree of shared risk and vulnerability. There is a reason why in all cultures there is a set of rituals we go through in business before “getting down to business.” They may be as short and simple as, “How ’bout them Bulls,” and “I see you went to State also,” or they may be as complex as late night drinking bouts on successive visits, but they are there for a reason.

The reason: we do not trust people who never let us see them sweat. We interpret their guardedness as secretive, threatening, fearful, and unfriendly, masking motives about which we know nothing but which are suspect. If you don’t let me see you sweat, I conclude you’re probably hiding something, and you’re not the type I can trust. That’s no way to win a sale.

Never let them see you sweat? Au contraire. In Finland, they literally invite customers into the sauna to sweat together! Other cultures have their own approaches, but the aim is the same. Good selling means customer-focused objectives, a habit of transparency, and a commitment to relationship.

If you get those right, you won’t have to sweat in the first place.

 

 

 

 

 

 

Why Listening to Sales Experts May Be Hazardous to Your Sales

/13 Comments/in , , /by

A sales expert, I’m not. A trust expert, I think I’ve become. And it turns out, there’s a big overlap.

—

One of the interesting points in Neil Rackham’s classic SPIN Selling is 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 more than 25 years after the book’s publication. Since then, 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.

But does that mean all sales expertise these days works more or less? I don’t think so. In fact, there’s 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?

That may seem like a stupid question, with an obvious answer. 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, and objective of the salesperson, sales process, and sales function. What else could the purpose be except to get the sale?

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

To see why, 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.  Just suppose, just for a minute. 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 get help. You would often end up referring them out to other related-service 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 your 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 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 that speak 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 statements, you’re probably having one of three thoughts:

  • “Those aren’t that bad, actually. We could do with a bit more focus like that.”
  • “Yes, but you have to make money.”
  • “Yes, but you can’t let customers just take advantage of you.”

Note that thoughts two and three have an implicit assumption: that if you don’t focus on getting the sale, 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 we respond negatively to greed. We tend to return favors and 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 and smiles) and our most complex ones as well (cultural affinities and political alliances).

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 that we perceive the seller as self-oriented, selfish, manipulative, and 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 partly 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. You do your best selling when you stop trying to sell, when you simply focus on doing right by the customer. That 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 subordinate to the broader goal: helping your customer. Dial them back 90%, lengthen their timeframe, and don’t think of them while interacting with customers.

Are there customers who’ll take advantage of you? Sure, though not nearly as many as you think. And those who act that way are the ones you gift to your competitors.

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.

 

Don’t Focus Just on Skillsets

/4 Comments/in , /by

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.”

 

 

 

 

 

 

 

 

 

 

Wants vs Needs? Dylan and the Stones Weigh in on Sales

/4 Comments/in , /by

Should you sell to someone’s wants, or to someone’s needs?

It’s a much-discussed topic in sales. Some say you should sell to wants, not needs.  Others say exactly the opposite. And some say you should sell to both.

 

Clearly the case cries out for a good definition. I checked in with the well-known sales consulting firm of Jagger, Richards & Dylan.

You Can’t Always Get What You Want

Never mind Maslow’s hierarchy of needs, let’s talk about Mick Jagger’s. After all, this was the 100th greatest song of all time; whereas Maslow, as far as I know, never even made the Billboard Charts.

The tagline is “but if you try sometimes you might find you get what you need.” In other words, wants are higher, deeper and often more unattainable than needs.

There’s more than one way to define the difference between wants and needs, but I’ll settle for the definition used by the Greatest Rock ‘n Roll Band in history. But if that’s not good enough for you – wait, there’s more!

Robert Zimmerman, Salesman

Bob Dylan, from Blonde on Blonde, also wrote about sales:

An’ she says, ‘Your debutante just knows what you need; but I know what you want!’

Stuck Inside of Mobile, with the Memphis Blues Again

Dylan and Jagger are pouring from the same bottle of wine. Here too, the idea of one’s wants transcend that of one’s needs.

Needs are tangible things we’ve got to have, necessary conditions: toothpaste, bicycles, audits, CRM systems. Wants are aspirational: hopes, wishes, dreams, desires, visions.

The Roles of Wants and Needs

Which should you sell to? What do buyers relate to? The right answer (it’s remarkable how often this is the right answer to seeming quandaries) is “both, at different points.”

Here are a few hints.

1.    People buy with the heart, then rationalize it with the brain.

In other words, sell the wants and let everyone talk about the needs they resolved by making that decision. The wants are dealt with more personally, arm-around-shoulder; the needs are what you tell the purchasing committee after the fact about why you did the deal.

2.    People prefer to buy what they need from those who understand what they want.

In other words, if you’re going to sell stuff that people need, first tap into their wants. You don’t even have to give them what they want, you just have to be someone who can tap into it. That makes you a seller someone wants to buy from.  The greatest exponent of this idea, I find, was Bill Brooks (see my interview with his son Jeb).

Basically, you need to touch people on both fronts.

  • If you only sell to needs, you’re a features-only kind of person limited to competing on price.
  • If you sell only based on wants, you might do well in designer bricks or perfume, but forget about selling complex systems.

Be well-rounded. Listen to both the Stones and Dylan.  Until you do, you’re just Blowin’ in the Wind, and will get No Satisfaction in sales.

The Traveling Salesman? Or the Prisoner’s Dilemma?

/2 Comments/in , , , /by

The Prisoner’s Dilemma is a classic conundrum in game theory. It purports to explain 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.

The dilemma is that – 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, so perhaps I should 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 might just steal my knowledge and not pay me for it – perhaps I should 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. (Or, what amounts to the same, sellers project fear, and buyers reciprocally return the same – as humans are wont to do).

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 what sales topics are hot these days: sales automation, lead screening, CRM, social media lead generation, predictive analytics, search-based prospecting, multi-channel messaging. Think about the last step in nearly every sales process model you’ve seen—closing.

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.