Posts

Clients Don’t Buy Solutions, They Buy Problem Definitions

/7 Comments/in , /by

You’re familiar with the old idea that people don’t buy products, they buy solutions – not drill-bits, but holes, in Ted Levitt’s classic formulation. This idea became closely allied with the commonplace view that we should be selling value, and packaging up ‘value propositions.’

But when it comes to complex services, Uncle Ted understated things.  The very idea of what is behind the “sale” in the first place needs re-examining.

So here’s a provocative statement: People don’t buy your value proposition – they buy your problem statement – and give you the sale as a reward for having defined it in a way such that the buyer can see the road to success with greater clarity.

Value: The Usual Suspect

If sales were like the movie Casablanca, and you rounded up “the usual suspects” for getting the sale, at the top of the list might be “demonstrated value.” Salespeople like to think that the reason they got the job was they did a better job at “adding value,” “demonstrating value,”  convincing customers of the “value proposition” they put forth. “Go with us,” salespeople say, “and you’ll get the greatest expected value.”

We impute this decision-making process to our customers, too. If they bought from us, it must be because we did the best job of creating potential value – maybe modified just a bit by their confidence in our ability to deliver on the value we promised.

This value-centric view of selling confirms all the biases of today’s salespeople: it’s a matter of producing challenging ideas, grand scopes, clearly articulated solutions. The winners are those who conjure up the right mixture of smarts, expertise, and hard work.

So we like to believe.

The Truth: It’s the Problem Definition

My old colleague David Maister once said, “The problem is never what the client said it was in the first meeting.” And while at the time I thought he was being slightly hyperbolic, I came to believe he was, in the real world, exactly right. A perfectly defined problem rarely requires outside expertise – it just needs a purchase order.

Consultative sellers get called in for other reasons.

The reason is, buyers – consciously or unconsciously – want the benefit of sellers’ expertise. They are open – more, or less (often less) – to learning from the seller. Yet arguably the most common error of sellers in consultative sales situations is – they blindly accept the customer’s definition of the problem.

If the problem definition is wrong, then a solution based on it is going to be wrong as well. Worse yet, a fully worked out proposal grounded on a faulty problem definition becomes increasingly tenuous. Buyers acutely and painfully recognize this, and this fact explains why so many consultant CRM systems are full of entries that say “died” instead of “lost.”

Clients don’t want to admit the definition was wrong from the get-go, so they simply stop returning calls, the sellers get resentful – and everyone goes off to try the same thing all over again, getting, of course, the same results.

The problem definition is the heart of the matter, for two reasons. The obvious reason is if you don’t solve the right problem, you’ll just make things worse, and as noted above, that becomes increasingly clear to all concerned.

But there’s a deeper, psychological reason.  If you as a seller can truly engage a buyer in a joint process of discovery, you then trigger something magical: a willingness to explore openly the true issue, and a willingness to engage your expertise in the pursuit.

The result is huge: an expertise-based joint journey of discovery, with a greatly enhanced likelihood of a better problem definition, and a vastly higher level of acceptance of that problem definition.

Getting There is Way More Than Half the Battle

A joint discovery of problem definition requires an openness and a willingness to collaborate on the part of the client. No client I’ve ever met starts out that way – no client has ever come to me and said, “Gee, Charlie, we’re really not sure what’s wrong here, but we kind of hope that maybe if you talk to us, things might get better.”

Instead, clients come to sellers with the usual set of highly defined problem definitions, desired solutions, and specifications for how those solutions must be tailored to their organization. It takes a great deal of skill to get to the point where you can mutually confess imperfection, and go on a joint journey.

It’s the opposite of that old “I’m OK, You’re OK” paradigm – it’s more like “I’m a Fool, You’re a Fool, Let’s Figure This Sucker Out Together.”  (And you don’t get there by quoting Maister about how their problem definition is wrong, either).

Having gotten to a point of mutually confessed imperfection, the best problem definition begins.  And when you do get to a great problem definition, the amazing thing happens.

The client doesn’t buy the best solution: instead, they reward the firm that did the best job of helping them define the problem. You’re not getting paid to do the job – you’re getting rewarded for having created the best ah-ha for the client – the ah-ha that says, “Ah, yes – thatis indeed precisely the issue that we’ve been having all along here. That’s the heart of the matter.”

Having gotten that ah-ha, why in the world would a customer then hire someone else to deliver on the vision you’ve jointly created?  Why would you trust anyone but the ones who created the bond with you to develop the insight to actually get you over the river?   You just wouldn’t, that’s all.

Clients don’t buy value: they buy the people they have come to trust. In particular, they hire those who have helped them define their problem in a way that they can finally see their way clear to a resolution of their issues. The project, the sale, is not “the thing” – it is simply the currency of reward for having best-defined the problem.

This post first appeared on Trust Matters. 

Bleeding Trust from Every Sales Interaction

/1 Comment/in , /by

If there’s one guaranteed head-nod, bromide, platitude that most marketers and salespeople would agree to, it’s that trust in the seller positively affects buyer behavior. Conversely, companies we don’t trust are adversely affected by a lack of trust. Pure data to support this claim is tricky to come by, but it’s a commonsensical proposition most of us are willing to buy on the face of it. And rightly so.

And yet – the degree to which modern companies bleed trust (hemorrhage might be a better word) is astonishing.

And I’m not just talking about the egregious mistakes – auto emissions software, blown drilling platforms, rigged interest rates. I’m talking about the myriad little, every-day, seemingly trivial ways that add up—ending in a virtual bloodbath of lost trust. In no particular order, let me identify a few.

Customer Tales of Woe

In Goodbye Avis, Hello Uber, danah boyd chronicles death by a thousand cuts at the hand of Avis Car Rental. Her rental car got a flat tire at 10 p.m. in Los Angeles, just seven miles from Los Angeles International Airport (LAX). A customer service phone rep said he didn’t know how long it would take to get an exchange. He said he’d text her. An hour later, she had not received a text, so she called again. They said it would take four hours. Outraged, she pushed back. OK, they said, 90 minutes.

They then suggested she leave the car with the keys in it and get a taxi. She left the car but got a ride from friends to her destination. Avis texted that they’d arrive at 4 a.m. They didn’t. She called again, and Avis blamed the towing company. They said it would take 30 minutes. Ninety minutes later a tow truck arrived.

At 4 p.m. the following day she called to make sure Avis had gotten the car. Nope. They said she was still liable. Roadside assistance told her to call customer service, who said to call the LAX counter directly, who passed her call on to the manager, whose call went to voice mail. He didn’t return the call. And, it went on.

The Avis tale may sound exceptional. But I bet you have your own horror stories to relate that are just as bad. And you probably reacted the same way danah did—by changing suppliers, even though she’d been a loyal customer for years.

One Cut at a Time

Not all customer horror stories have 15 fails in a row in a 24-hour period. But it doesn’t matter. Like little cuts, they can add up, and each one adds its own traumatic toll.

  • I recently went to trade in a car. We had a deal until the salesman noted a discrepancy on the CarFax report. I said I’d fix it. It took six weeks to fix, but I did get it fixed. However, the salesman never called to ask how things were coming along, so I bought my new car elsewhere.
  • A friend went to a store at 5:55 p.m. The manager was inside, locking up for the evening. When my friend pointed to the “Hours: 8AM – 6PM” stenciled on the door and pointed to her watch, the manager shrugged his shoulders and turned away.
  • At my daughter’s recent wedding, I asked if we could borrow a golf cart for 20 minutes to ferry the bride and groom across the wet lawn for photos so as not to get her wedding dress wet. “Sorry, we can’t afford the liability,” was the answer we received.
  • A friend who does small group communication training sessions is routinely asked by large companies to purchase liability insurance to indemnify MegaCo Inc. against any possible harm or claim of harm from anyone for any reason arising out of his delivering a half-day communication training session. (Many of you face the same exact extortionate policy of your customers offloading “risk” to you and having you pay for the privilege.)
  • Some years ago I had a great first sales discussion with a client about doing training to increase trust in their sales process. At the end of the call, he said, “This is great, we have a deal. Now, I presume you’ll grant us our customary 15% discount?” This after having discussed how to help his salespeople to stop cutting prices.
  • I’ll never forget the brokerage office head who, on hearing about my upcoming talk on being a trusted advisor, said, “Hey, anything that’ll increase my share of wallet, I’m all for it!”
  • I constantly receive offers to write articles for my blog in return for links. Ninety-five percent of the time, they show no awareness of the subject matter of my blog, much less a sense for what quality levels of content might be expected.
  • Customer service scripts are increasingly being loaded with fake empathy and inappropriate apologies: “Oh, I am sure that must be terribly frustrating for you,” “Oh, I do apologize for the power outage you experienced. …” Don’t pretend-feel. An acknowledgement is critical, but apologizing for things you didn’t do is phony.
  • Yesterday a corporate online feedback site was generating error messages, sending me “not-deliverable” emails. Acting the good business citizen, I called the corporate 800 customer service number to tell them. The customer service rep told me, “The feedback page is not our department.” When at my suggestion she connected me to that department, they insisted on giving me an incident number so I could track my concern going forward. My concern?
  • On a United Airlines flight from Chicago to Charlotte, North Carolina, two months ago, two aircraft were taken off the gate due to equipment problems. The third aircraft finally left three hours late. I emailed the airline. I got back a generic apology and a voucher redeemable against future miles—no acknowledgement of the particular issue, much less suggestions about dealing with it. (That reminds me of my cable company: after showing up three hours late, they’re trained to quickly offer you a $20 rebate—a fair deal if your time is worth less than $7 per hour).

I could go on and on. And so could you. The cut-cut, drip-drip of such low-level, tedious violations of basic customer relationships adds up. It results in listless relationships at best and cynicism, surliness, and passive-aggressive hostility at worst. Finally, we customers jump ship when the opportunity presents itself.

This isn’t “just” about customer service. There is a steel cable linking all customer experiences—sales, service, whatever—with future sales. How everyone treats customers in all ways at all times is a big driver of trust and thus of revenue.

But you already get that point. The more urgent point is this: how can you be sure you’re not imposing such semi-conscious bloodletting on your customers? Here are two ideas.

1. Follow the 10% rule. At every customer interaction point, take 10% more time to close out the interaction in a trust-creating way.

  • If you couldn’t help someone after a five-minute call, then take 30 seconds to suggest an alternate vendor.
  • If you’re going to spend 15 minutes writing an exploratory letter, then spend another two minutes to find some value-add to include in it.
  • If a potential customer walks out the door after an inconclusive interaction, take a note about a content-specific way to follow up in two weeks with an email or phone call.

You think you don’t have 10% more time? Please. Consider how much you put at risk the other 90% of time you didspend by failing to leave a trust-based impression.

2. Personalize responses in some way. Buying is emotionally triggered, and that’s as true for B2B sales as it is for B2C. Don’t let your last impression be the customer seeing dollar signs in your eyeballs.

  • Responding immediately, or in some hugely fast way, is a powerful tool for showing you’re paying attention when someone reaches out to you. Just don’t automate the response. Fast and customized is a powerful combination.
  • If you are responding to an error, then over-respond. Don’t minimize it. Acknowledge, explain what must have happened, and—most important—say what you are going to do on your own to ensure it doesn’t happen again.

Sales don’t just happen during selling. They’re a predictable result of your entire mode of relationship with your customers at all times.

This post first appeared on RainToday.com

The Twelve Steps of Business Relationships

/1 Comment/in , /by

Usually when someone hears the words “12-step program,” they’re quick to judge it as something to get out of a rut. But what if you turned that perspective on its axis? What if you saw a program – particularly one with 12 steps – as something to advance you to a new level of life, thought and, well, relationships?

Below are 12 key steps to take when looking to grow strong, trust-based business relationships. Easy? Yes. Simple? Well, see for yourself.

—–

Rarely will you see someone fail in business who has thoroughly followed these simple suggestions. Those who do fail are typically people who are incapable of being honest – with their colleagues, their customers and their partners.

Other problems may temporarily deflect you, but the ability to be rigorously honest will prove immeasurably beneficial in all your business relationships.

Twelve Steps of Business Relationships

Step 1. Accept that you have no power over people, that all your attempts at control have failed. Trying to get other people to do what you want them to do is doomed to failure, no matter how good your intentions, how right your cause, or how much benefit it would bring the other.

People just wanna be free. Go with it.

Step 2. Recognize that by yourself, you can’t succeed. Your success will inevitably be tied up in the success of other people. Not only are you not driving the bus, you are just another passenger.

Step 3. Resolve that you’re going to stop trying to drive the bus, that you’ll start doing things to help other people, that you’ll focus on getting the group to succeed. When things don’t go your way, remember “your way” is what got you into this mess. Repeat steps 1 and 2.

Step 4. Make a list of all the stupid, controlling, selfish things you do to others. Be specific about whom you do them to, and what harm it does to them. Stop at ten people.

Now add to the list a few good things you do. You are, after all, worthwhile.

Step 5. Go share your list with someone you trust. Listen to what they have to say about it and learn from what they have to say. Don’t waste time arguing with them.

Step 6. Get yourself ready to stop behaving in those old ways. Think about it for a while. Make a list of the new things you’ll do. Envision yourself responding in new ways; rehearse new “lines.”

Hint: your list should probably include listening. Also, listening.

Step 7. Pick a time of your own choosing to begin the change. It could be right now, it could be next week, but not next summer. Write that date in your calendar. When it comes, step out of your old ways and start working the new.

Step 8. Think about the customers, co-workers, peers and partners you might have tried to control and what you did to them. Think of what you might have done better and plan to do better next time.

Step 9. Go back to the customers, co-workers and partners you’ve tried to control, and tell them you realize what you have done. Acknowledge your responsibility in those situations, and tell them specifically how you plan to behave differently in future.

Hint: Don’t do this if it causes upset or harm to the other person. And don’t confuse this with trying to get them to forgive you – see Step 1, above.

Step 10. At each day’s end, do a mental run-through of how you did in your new approach. Note where you fell short and what you could have done better.

Then let it go and get a good night’s sleep.

Step 11. Create a little mantra for yourself, to remind you that your job is to help others, not yourself. Get out of the instance, secure in the idea that better relationships will float all transaction boats.

Step 12. Having recognized how to apply these principles to your business affairs, give it a shot at home and in the rest of your life.  You saw that one coming, right?

How to Increase Trust in Organizations

/0 Comments/in , /by

I was grocery shopping one Saturday. It was 2PM, 96 degrees out – pretty hot for New Jersey – and I was in the checkout line. The cashier had started sliding my purchases through the register, when suddenly I noticed a bag left over from the customer before me. She had left and gone to her car.

The woman doing the bagging noticed it at the same time. She grabbed the lady’s bag and dashed out into the heat. She was making pretty good time for a woman in her 60s, and we all could see her out the window as she finally caught up, handed over the bag, and started back.

Then the cashier suddenly exclaimed, “Omigosh, she left two other bags as well!” Looking quickly at me and the woman behind me in line, she said, “Will you two please excuse me for just a minute? I’ll be right back.” And she too took off after the forgetful lady, with two bags in tow. She was in her 20s, and made very good time.

It occurred to me I could slide a few groceries over the line and into my bag and escape without paying. (I don’t do such things, but the idea did show up in my mind). Then the elderly woman behind me in line said, “You know, I don’t mind one little bit waiting for someone who’s doing a good deed like that.”  Neither did I, I said, neither did I.

When the cashier and the bagging lady came back, we both complimented them, and they blushed a bit and said thank you. (I sent a complimentary email to ShopRite’s HQ later that night with the store number, employee name and cash register number, all of which were on the receipt).

So my question is: how do you get employees to behave like that? I mean generously, based on principle, willing to take certain risks, confident to act in the moment. How do you keep from getting sullen employees who talk about “career-limiting moves,” who won’t lift a hand or take a risk to help another?

How Do You Induce Values-based Behavior in an Organization?

Earlier that same day, I had the opportunity to briefly visit a Sears store, a Macy’s store, and a Bed Bath and Beyond unit. Sears was awful – employees keeping their distance from customers, 100 feet away, pretending not to notice. Macy’s was a little better, but still sullen, under-staffed, and radiating not-helpfulness.

BB&B was a huge contrast. Several employees, busy doing other things, asked me if they could help. I asked two for help, and they both went out of their way to do so.

How does this happen?

The standard answer in most businesses, I’m afraid, is to focus on the wrong things: typically  incentives, communications, and procedures.

The more I see of business, the more convinced I become that the single most powerful way to create values-based behavior is none of the above – it is to do it yourself, and to talk about it with others.

The Usual Suspects

Incentives appeal to the individual’s rational economic or ego-satisfying needs. Fine and dandy, but if you’re trying to incent selfless behavior, the concept of rewards is just a tad self-contradictory.

There is probably (I’m guessing) more money spent on communications than on any other “solution” to issues of trust, ethical behavior, and customer-focus. Companies love to pronounce their values to their customers, and reinforce them internally in posters, newsletters, and blogs. The problem is, impersonal companies communicating about personal relationships is some kind of category mistake.

And procedures? The whole point of values-based behavior is that the employee extrapolates from principles in the moment. Rehearsing and drilling doesn’t help extrapolate values, it replaces that process with rote memory.

Role Modeling

Think of how we learn from our parents. Think of the sports or public figures we admire (there are still a few). In all cases, we are influenced by what they do – not by what they say they will do, or did do, or wish they’d done.

When it comes to values, I suspect BB&B has leaders in their operations organization who both walk the talk, and talk it too. People who lead by example, and who are convinced that values like customer assistance are valid only if kept sharpened by use.

I suspect Angie the cashier at ShopRite was hired partly because she exhibited values. I suspect that the folks managing her store make a point of being helpful and customer-focused, and engage customers about values like that. I suspect it didn’t occur to her that she shouldn’t take the risk of leaving her cash drawer and my groceries unattended – because her leadership would have trusted their customers and done the same thing – and she knew it.

We have overdone the behavioral, incentives-based, needs-maximizing best practices model of human resources. We have under-estimated the human power of changing humans. After all, the business of relating to other people is personal.

This post was originally published on TrustMatters.

The Business Case for Trust

/2 Comments/in /by

Be honest. When you think of growth and profitability, is trust the first thing you think of? I doubt it.

The things that often come to mind when we talk about a successful practice are much more likely to sound likesustainable competitive advantage, hardball, you get what you negotiate, be number one or two in your market, first mover advantage, lowest cost producer, or share of wallet. But trust?

Usually we think of trust as an element that is nice to have, something associated with genteel behaviors which we can afford when things are going well but which have to take a back seat when push comes to shove. However, for those in the consultative professions or other complex intangible businesses—nothing could be farther from the truth.

What A True Trust Relationship Looks Like

A lot of what passes for trust isn’t. Trust isn’t high client satisfaction ratings—it isn’t even “client delight.” It’s not loyalty, as measured by retention rates. And it certainly isn’t being “client-focused,” because a great deal of client focus is done solely for the sake of such things as increasing the seller’s profitability and share of wallet.

Trust is personal, not institutional; it’s emotional, not just rational. Above all, it has to do with the firm’s intent. Is your intent to help the client, or is it to make money by helping the client? Your client knows the difference.

In one study of 2514 buyers by Bill Brooks and Tom Travesano (You’re Working Too Hard To Make The Sale, Irwin Professional Publishing, 1995), 94% of buyers who bought on the basis of needs said they would “certainly” consider buying from another provider.

And 91% of benefits-based buyers said they would “probably” do so. But in stark contrast, 99% of those who bought on the basis of wants said they would “absolutely not” consider buying elsewhere. That’s a dramatic difference – and it’s the kind of difference trust makes.

Howard Schwartz was the head of the financial services practice at a consulting firm, when he got a call from his counterpart at McKinsey. “One of our clients has urgent need of a project. We have tried twice and failed to deliver satisfactorily. This work has to get done – would you folks do it?”

Howard couldn’t believe it—a front door invitation to a McKinsey client. He took the job and his team did great work. But when he asked the client to consider doing more work with them, the client said “Thanks very much, great job, but we would never leave the firm that was big enough to bring you in. We know they’ll always do what’s right for us.” “And,” Howard said, “I couldn’t blame them a bit.”

The Economics Of Trust-Based Relationships

What happens when you get 99% declarations of absolute loyalty–when clients say they’ll “never” leave you on principle? The economics are massive.

A Harvard Business Review article (Collaboration Rules by Philip Evans and Bob Wolf , 2005) by BCG suggests that the US GDP is comprised of roughly 50% transaction costs and that the primary strategy for reducing those costs is trust. 50% of an entire economy is pretty big.

Now, on a micro-level, consider what happens when a client really trusts you. Your advice is taken; your insights are sought. Decision processes are fast-tracked. The costs of auditing, legal, and tracking disappear.

Your recommendations are taken at face value. The likelihood of RFPs is greatly reduced. You get asked in at earlier stages of issues. Disagreements are sorted out in furtherance of a long term good. Information is shared between professional and client, and points of view are welcomed rather than suspected.

The payables clerk gets your checks out on time, and you’re upgraded to preferred provider status so “on time” means what it says. Pricing is accepted as “fair.”

Finally, client loyalty based on trust is far higher and stronger than loyalty based merely on things like business processes or pricing. Mechanically, this raises the firm’s profitability through reduced sales costs and higher margins. But, more importantly, it makes the firm far more effective in helping its client.

The Client Benefits Of Trust

What about the benefits to the client? Economic benefits are even greater and come at three levels. First, the direct costs per transaction with a trusted provider are lower.

Second, when a provider understands client needs, that supplier is likely to make more appropriate suggestions, to better anticipate emerging needs and to make better recommendations. Those benefits are indirect, but probably outweigh first level benefits.

The highest client payoff of all comes from the ability to trust immediately and completely the advice of a talented outside expert without spending any time or resources on tweaking, critiquing, hedging checking, auditing or second-guessing. At this level, professionals are as dependable as our most-valuable employees, yet with the added benefits of expertise and objectivity that come from being an outsider.

With that confidence in the pocket, a firm can afford to fast-track processes, make far faster decisions, and take bold actions without fear. The benefits go past mere cost reduction, and instead towards achieving significant revenue and strategic enhancements.

The business case for trust ultimately rests far more on effectiveness than on efficiency. A trust-based client relationship enables far more effectiveness in the marketplace for both parties than do conventional relationships built on negotiations, contracts, and other indicators of arms-length treatment built on self-interest alone.

The Economic Paradox

It’s tempting to ask, “If all that’s true, why isn’t everyone doing it?” The answer is, because most of us have a really difficult time being trustworthy.

If a client trusts their provider in the way described above, the provider will be highly profitable and high-growth. But, if the firm sets out to be highly profitable and high-growth by means of being trusted, it will not work. Intentions matter and intentions are critical to being trusted.

The only way to be trusted in the way I’m speaking of is to be worthy of trust—to be trustworthy. The critical element to being trustworthy is to have the client’s best interests at heart all the time. And that goes to intent.

To intend to place the client’s interests first raises some radical implications. For example:

  • The purpose of a sales call is not to get the sale, but instead to help the client;
  • Your focus should be on work that needs doing, not on work that you can do;
  • Your ultimate strategic goals should be client service, not competitive advantage;
  • You should share, not hide, your economics with your client, because transparency fosters trust;
  • You should write your proposals sitting next to your client.

The paradox is: If you are willing to let go of your own short-term, self-oriented goals, you will achieve those goals. Your influence is greatest when you’re not trying to influence. Your profit is highest when your goal is not profitability by client service.

Barriers To Trust

Can it be done? Absolutely. Many successful individual professionals know the lessons of trust very well. But at the firm level, we have been seduced by the “reigning belief systems” of business: in particular, the ideas that business is about competition, and that ever-further refinement of measurements, particularly around client relationships, helps the economics.

Just because you can run division-level client profitability studies every week doesn’t mean you should do it. Just because you can calculate client share of wallet and hit rate on sales opportunities doesn’t mean you should focus on it. Those efforts turn clients into objects, means to our own ends.

Too many firms are focused too much on short-term measures and competitive definitions of success. We need to remember that the best short-term performance comes from executing on a long-term plan or set of principles.

Trust is the goal. The powerful economics of trust are merely a byproduct.

This post first appeared on RainToday.com

The Art of Listening: Establishing Trust without Saying a Thing

/5 Comments/in /by

Buyer Psychology

Ask a client what they want, and they’ll tell you “expertise; credentials; someone who’ll meet my needs.” Ask them what their needs are, and they’ll tell you.

But ask really successful salespeople (or honest clients with experience in buying), and they’ll tell you how it really works. Clients only ask for credentials and expertise because they’re not really sure what else to do. In truth, they’d rather get in range with expertise, and then decide based on their trust in the seller.

Clients will tell you their needs because they think they’re supposed to, and because they’re afraid if they don’t, you’ll take advantage of them. But if you can engage them in honest discussion, they’ll admit their uncertainties and discuss, engage in, and evolve their views of what their needs are.

It all depends on why you’re listening.

If you’re listening to hear an answer to a predetermined question, then you will hear the “canned” definitions of needs that clients have prepared for you. You’ll hear their request for credentials and expertise at face value, and not hear the undertone in the question, or in the bored way they listen to your answer.

Because what clients really want to talk about is what everyone wants to talk about: Themselves. When someone says, “Tell me about yourself,” they’re just being polite – whether it’s on a date, at a social event, or in a sales call. The right answer is not to tell them about your vast experience with other clients – it is to get them talking about themselves. And to listen as they do so.

The Quality Of Listening

The usual form of listening is conditioned by sales models looking for answers and by flawed views of buyer psychology focused on surface dialogue. What is required is a different quality of listening.

The main reason for listening to prospects is to allow the prospect to be heard. Really heard. As in, actually being paid attention to by another human being.

This kind of listening is listening for the sake of listening. Listening to understand, period. No strings attached. No links back to your product. No refined problem statements. Because that’s what people in relationships, at their best, really do. They listen because they want to know what the other person thinks about whatever the other person is interested in talking about.

This kind of listening validates other people. It connects us to them. It provides meaning. And, among other things, it sets the stage for sellers and buyers to interact – if that is the right thing to happen next.

Authors Bill Brooks and Tom Travesano, in You’re Working Too Hard To Make The Sale, note that people greatly prefer to buy what they need from those who understand what it is that they want.

Read that over again, carefully. People prefer to buy what they need (stuff they’re going to buy anyway), from those who understand them on the basis of what they want (things in life they’d love to have – wishes, hopes, desires).

You don’t even have to give them what they want; it’s enough to understand them.

To bring it full circle back to listening: Relationships are the context for successful selling. Relationships are based on trust; they predispose us to engage in qualitatively different kinds of sales conversations. And listening – unrestricted, unbounded, listening for its own sake – is the way we develop such relationships.

And therein lies the paradox. The most powerful way to sell depends on unlinking listening from selling – and instead, just listening. Listening not as a step in a sales process, and not as a search for answers to questions. Listening not as a means to an end, but as an end in itself.

The point of listening is not what you hear, but the act of listening itself.

Making It Work

Here are 5 tips to listening this way. Number five is the most powerful.

  1. Ditch the distractions. You cannot multitask undiscovered. Being multitasked feels insulting. Close the door. Face away from the window. Blank the computer screen. Turn the iPhone over. Now, pay attention.
  2. Use your whole body. Lean toward the speaker – even on the phone. Use facial expressions. Use hands and arms, shake your head, and use “non-verbal” verbalisms. This improves your listening – and indicates you are listening.
  3. Keep it about them – not you. Use open-ended, not closed, questions. Let them tell their own story – don’t use them as foils for your hypotheses.
  4. Acknowledge frequently. Paraphrase their data, empathize with their emotions. Make sure you are hearing both correctly; make sure they know you are.
  5. Think out loud. The biggest obstacle to listening is your own thinking. Be courageous – postpone your thinking until they’re done talking. Be willing to think out loud – with the client. Doing so role-models collaboration and transparency, and that reinforces trust. I hear you. I value you. I respond to you, with no hidden agenda. I trust you. You can trust me.

That’s the message of listening.

This article was first published on RainToday.com

Living Inside a Pariah Company

/12 Comments/in , /by

Doggie at Door Exile iStock_000042122536_smallLast week I wrote a very critical blogpost about Volkswagen. I was, of course, hardly alone in doing so; the scandal has created tremors beyond even recent examples.

But in the days since, I’ve been trying to think in different terms – in particular, what must it be like to be an employee of VW in these difficult days? What is the view from inside the glass, looking up and out? What tensions must it cause people – and what can they do?

The Pariah Organization

My good friend Matt Nixon started writing a book last year, tentatively titled “Working for the Pariahs: Can Good People Stop Organizations Going Bad?”  He send me an early draft outline last year, and I’m re-reading it again now.

Matt has the credibility to write this book: an MBA, he spent over a decade in consulting (Accenture, Towers Perrin), then another decade as a VP at Shell Oil and later an MD at Barclays. He knows something about whereof he speaks. Combined with a classical English education and a wide network, the book makes for illuminating reading. [Matt – when are you going to finish this book?]

Matt suggests that being a pariah organization (think “outcast” and “exile”) is a phenomenon on the increase (just because you’re paranoid doesn’t mean they’re not out to get you, it’s really true).  He also points out that pariah-dom is about much more than individual moral failings – it is trackable at an industry level (another gut feeling ratified by data).

He provides some diagnostics and descriptive models to identify and predict pariah-like conditions in organizations. Particularly telling is his critique of “false metamorphosis,” the consultant snake oil of “transformation” that has been overblown. True change, he suggests, requires a lot more, and is a lot more uncommon.

But what about VW’s employees? As Matt notes from other pariah organizations, a great many people in such companies feel bewildered and unfairly treated.  They see themselves, and their company, as largely ethical, and remain quite positive about staying with the organization they are part of.

The overwhelming criticism of their organizations feels like torches and pitchforks.

At a time of crisis, Matt suggests employees go through a predictable sequence of emotions – shock, followed by anger and shame, swinging back to resurgent loyalty, and ending in a blend of guilt, responsibility, and denial. He talks as well about three “tribes” of employees: Loyalists, Mercenaries, and Heroes. The three tribes react differently to the four phases.

What Can Be Done?

I hope Matt finishes his book. It’s got some great insights for organizations and leadership. For me, for right now, I want to focus on what an individual at VW might be thinking about, what they can do, and what we can do to support them.

Human beings are delicate creatures. We process information that is critical of us in very self-protective ways. We will take advice from a friend that we would never take from a stranger.

As outsiders, this means we have to temper criticism with the recognition that exceeding few employees assume personal guilt. The vast majority feel very little personal accountability for the sins of the organization, and personalizing accusations doesn’t help them come to grips with any objective truth.

The increasing demand for personal civil and criminal accountability of leaders in pariah organizations is, I think, a good thing. But it must be tempered by some focus on responsibility – our criminal justice systems are easily inclined to focus on the underlings, and not the leaders. Indiscriminate demonization of employees is counter-productive. In the VW case in particular, the role of culture and corporate environment seems a strong contributor, rather than a simple case of “bad apples.”

As employees, the challenge is to see this as a “Santa Claus” moment: as in, “there is no…”  This did not happen in a vacuum; as Matt notes, the cult of leadership is partly to blame for obscuring the truth that corporate cultures “eat strategy for breakfast,” not to mention well-intended but impotent compliance programs. It’s critical to employees – for their own psychic health, as well as that of the organization – to be constructively schizophrenic.

They need to both feel secure in their own good intentions and, at the same time, be able to objectively see how things could have gotten to this point. As Henry Mintzberg angrily points out, this kind of phenomenon is best seen not as a scandal, but as a syndrome. And only insiders have access to the “real” story.

—————

Moral outrage has its place in the reform of business. So does shaming, by bringing business issues outside narrowly proscribed economic boundaries and into the social realm as a whole.

But blame and shame are two-edged swords, and very hard to control. At a social level, their overuse just promotes entrenched ill-will; look no further than the current state of US national politics.

At an individual level, blame and shame keep us from seeing and accepting reality, as it is. In a very real sense, as my friend Phil McGee puts it, “Blame is captivity – responsibility is freedom.”

As we look at the VW scandal/syndrome, we need to balance our outrage with a sense of respect for other individuals, and our defensiveness with a willingness to see things as they are.

The VW Trust Sinkhole: It’s Worse Than You Think

/6 Comments/in /by

copyright Nate Osborne 2013A. The Volkswagen Emissions Scandal.

Q. What do you get when you assign German engineering the task of developing a high-performance trust-and-ethics violation?

If you don’t know the basics of the VW emissions scandal, read up on it here. The basics: on the diesel engine models it sent to the EPA for US emissions testing, VW installed software to automatically  reduce emissions, then move back to high performance and high emissions after it was done being tested.

There are lots of issues this scandal raises; for example, the depressing fact that the majority of letters-to-the-editor in the Wall Street Journal regarding the its (excellent) coverage are complaints about the ineptitude of the EPA, rather than the venality of VW.

There are certainly interesting issues about the relative harm caused by this scandal vs. others.  Will more creatures be harmed by 40x stated emissions from 11 million cars than were harmed by the BP spill in the Gulf? Will VW’s 35% hit in the stock market be more expensive than damages caused by the systematic rigging of LIBOR rates? Will the hit to German engineering and branding exceed that to the oil industry of the Exxon Valdez?

Yeah yeah, maybe. But what I want to focus on is the scope and nature of the trust violation that Volkswagen engineered here – and to argue that it’s much worse most other violations, including the LIBOR scandal. Its only close competitor in venality is Enron.

The Scale of the Violation

In in industry that has a history of thumbing its nose at regulation and buying off (aka lobbying) regulatory efforts, this stands out. Software has long been available to tweak performance; but to have a company that aspired to being number one in the world to make it automated enough to install across millions of vehicles, designed specifically to intuit a regulatory testing environment, requires a level of coordination and group effort that goes way beyond an individual.

This was not a case of individual malfeasance with a few willing bad actors, like LIBOR or Bernie Madoff. This was not a case of a series of close calls that went wrong, a la BP or Barings. This, like Enron, was a coordinated case of several people in roles of leadership who clearly knew they were doing something illegal, and were doing it on a large scale.

Winterkorn himself can’t plead technical ignorance, a la Carly Fiorina; unlike her, he was not a marketing guy. In fact, before becoming CEO in 2007, he was the top executive in charge of “technical development,” encompassing engineering and innovation. Clean diesel was a strategic imperative, and something he knew a lot about. Ignorance won’t be easy for him to claim.

The Depth of the Venality

VW management had been denying there was a problem for going on three years. In 2014, VW insisted the disparities were due to technical issues, and renewed the claims as recently as early last month (August).

And that’s not all. Even after coming clean, VW pleaded with regulators to get its 2016 models certified, “claiming it had swelling inventories that it needed to get to showrooms.” Way to show contrition.

That’s not all either. Now-former-CEO Winterkorn finally did the right thing today, September 23, by resigning; why he did not do so immediately on September 18, can only be explained by a view that this scandal is only a PR problem, to be ‘managed’ like any other business issue. Way to show a commitment to ethical behavior.

And that’s not all. VW’s cheating directly contradicted its stated advertising, that “those old diesel realities [stinky, smoky, sluggish] no longer apply.” Way to shoot your strategic message in the foot.

In short: this involved a lot of people, doing a lot of complicated malfeasance, over an extended period of time, denying flatly what were doing, claiming that they were in favor of what they were actually harming, and demonstrating a callous disregard for national governments, their legal regulators, and their used-to-be-brand-loyal customers.

It’s like their famous ad of a few years ago, The Force: except how we find out that we were the kid, and VW management was controlling the engine all along.

 

This seems to me the leading candidate for Worst Trust Fiasco of the Century (so far). Any other nominations?

Stop Worrying About Closing the Sale

/4 Comments/in /by

You’ve heard the admonition “Always Be Closing.” Should you worry about it? For some of you, the answer may be ‘yes.’ But for many more – fuggedaboutit.

Here’s the truth: in some businesses, “closing” is a relevant art. Those businesses are typically highly transactional in nature (e.g. car sales), discretionary and small ticket price (cosmetics), or simple in nature (vegetable peelers). And even then (in the case of car sales), a great many of customers resent being “closed.”

But what about you? Does your business seek repeat customers? Are your benefits largely intangible? Do customer/client relationships matter? Is your ticket price higher? Is your product or service somewhat complex?

In those cases, “closing” is a dinosaur concept. You should distance yourself from it as far as possible.

Think about it. When was the last time you “closed a sale?” What’s your success rate in “closing” sales? Better yet, when was the last time someone tried to “close” you? Did it work? Was it a positive experience?

Here’s a guess at your answer. For a significant percentage of your sales, it’s hard to identify where “closing” happened – the decision just got made – or didn’t. When you do try to close, you often feel uncomfortable; worse yet, more often than not, it doesn’t work. When someone tries to “close” you, it generally doesn’t work–and when it does, you often buy despite the seller’s close, rather than because of it.

If that sounds familiar, you’re not alone. The business development role in those kinds of businesses is antithetical to “closing” as commonly understood.

You don’t need to get better at closing. You need to stop doing it.

The Cult of Closing

The concept of closing probably goes back centuries. Think of itinerant peddlers, carnival barkers, open-air markets. You can hear closing “lines” being practiced today on infomercials and in street fairs (not to mention automobile dealerships). Done well (think Ron Popeil), they’re part of the entertainment of buying.

By the early part of the twentieth century, the concept had gone mainstream. The concept of “always be closing” was taught in the well-regarded Xerox Sales approach and many others.

It lives on today. Here’s what Amazon’s search algorithm produces when the word “sales” is linked to a related term:

Sales 421,684

Sales price 80,996

Sales leads 26,337

Sales close 17,336

Sales meeting 15,201

Sales buyer 12,206

Sales pitch 11,688

Sales presentation 4,610

Clearly, the idea of “closing” is alive and well in sales. But that doesn’t mean it’s right for you. The higher your average sale price, the more complex the sale is, the more relationship-driven it is, and the longer it takes – the less “closing” is likely to help you.

What Closing Is

Did you ever notice that all sales approaches seem to use arrow diagrams? It’s because they conceive of sales as a process that is linear and rational.

Here is typical language, taken from an 8-step version of a product sales process model:

The sales person checks that, if they can meet the specification, then the customer will give them the sale (‘If I…would you…’ trial close). After dealing with any objections, the target solution is presented:

  • Show features that meet customer needs (in priority order).
  • Show additional advantages.
  • Describe benefits that the customer is really buying.
  • Explain how it works (but don’t over do it!).
  • Confirm that they are comfortable with all of this.

The customer now makes the final selection of the product to meet their specification and criteria and hence solve their problems.

The sales person summarizes benefits (Summary Close), asks for the sale (using their favorite close), discusses any logistics detail and reassures the customer that they have made a good decision.

There are two critical assumptions buried in this approach:

  1. The purpose is to get the transactional sale
  2. Buying is a sub-category of rational decision-making.

These assumptions are what make you as a professional squirm in your seat when trying to “close” a real-life professional services client.

Motives Matter

Why do (most) automobile salespeople try to close you?

  1. To qualify you as a lead, so they can focus on likely-to-buy customers.
  2. Because if you walk out the door, you probably won’t come back.
  3. Because they feel you need that little “push” to make a decision.

The first reason is all about them, not you; they come across as selfish and manipulative.

The second is only a disguised version of the first.

The third infantilizes you, the buyer; fine for the emotionally needy, but not for most competent buyers.

Of all the components of trust, the most important is low self-orientation. Think of low self-orientation as client focus for the sake of the client, not for the sake of the seller. Most client focus is the client focus of a vulture; when we find someone who actually seems to care about us as an end, not as a means, we are positively inclined to trust them.

This is the first major problem with closing: it is inherently seller-oriented. It is all about this transaction, here-now. It casts the buyer in the role of means to the seller’s ends. It makes the customer an object.

It’s bad enough when you’re buying a car. How much worse is self-orientation when you’re an accountant talking to a CFO? A publicist talking to an artist? A consultant talking to a CIO?

Motives matter. Closing is an inherently selfish perspective. To close is to put your needs ahead of the client’s. That doesn’t work.

How Clients Buy

The other assumption buried in “closing” is the belief that buying is about rational decision-making. (Ironically, the old-time closing techniques stay purely emotional–see infomercials for an example; the rational add-on is one from modern corporate sales models).

If they haven’t bought, so the logic goes, there must be a reason. If I can uncover the reason, I will remove the blockage to their buying. Repeated attempts to close (the ABC rule, Always Be Closing) make sense based on this logic.

But it’s not quite right. As Jeffrey Gitomer puts it, “the buying decision is made emotionally, and justified rationally.” Lawyers, consultants and accountants think this doesn’t apply to their clients, but it most often does.

In almost all cases, you know more about your service offering than the client does. That’s why they’re buying from you. But they don’t want to become experts in your area of expertise–instead, they want to find an expert they can trust. Their need is not to make a rational decision–their need is to feel comfortable with a rational decision they have to make.

Unfortunately, the “closing” model plays right into three of the largest problems professionals have:

  1. We talk too much about ourselves.
  2. We talk too much about our product or service offering.
  3. We push too fast to move to action steps.

When buyers buy, it isn’t because their objections have been met, or they have been persuaded by rational arguments. It’s because they’ve gotten comfortable with the decision. If they come to feel they trust you–that you have their interests at heart, you understand their concerns, you can be relied on, you will have a commitment to dealing rightly with the inevitable unforeseen circumstances–then they will hire you.

In Place of Closing

The very concept of “closing” is misplaced in professional services. It presumes a transactional, seller-centric, linear, rational model of decision-making about a product or service. Instead, what is needed is a client-centric model of arriving at a level of trust in the seller.

What does that look like? Probably a lot like what you do when you’re successful:

  1. A focus on the relationship, not the transaction
  2. Ample selling that applies competence to the problem itself, rather than talking about qualifications (I call it Selling by Doing, not Selling by Telling)
  3. A lot of listening–open-ended, plain old, paying attention for its own sake
  4. Envisioning–helping the client envision an alternative view of reality, in rich detail.

As always, with trust, there is a paradox. If you stop closing, you’ll close more deals. But only if you do it for the client’s sake. You actually have to care about the client.

 

An earlier version of this post appeared in RainToday 

Buddhist Capitalism vs Competitive Selling: the Power of Trust and Collaboration

/2 Comments/in , , /by

When you think of capitalism, you probably think of competition as a central, driving force. We have enshrined the value of competition in our antitrust laws. We view competition between providers as a way to increase innovation and reduce costs; in today’s parlance, competition is what yields creative disruption.  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 no less true for being musically suggestive.

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 (that’s not a joke – go read Mike Porter’s Five Forces model of competitive strategy). 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.

 

This post was originally published in RainToday.com