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When Customers Demand to Know the Price Up Front

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Q. What should you say when the potential customer says, “Before we start discussions, I need you to tell me your price.”

A. Tell them your price.

What a concept.

I know, I know. Most of you reading this disagree with me, and you’re in good company. Many respected sales writers suggest just the opposite. But on balance – with all respect – on this point, I think they’re wrong.  Here’s why.

Offering Price Up Front – Pro and Con

The case against answering an upfront question about price boils down to two arguments.

  1. You haven’t had a chance to anchor price to value.
  2. By answering an up-front price question, you encourage price-based buying.

By both of those arguments, you have lost control of the conversation. And that, most writers say, is a bad thing.

But that’s precisely the problem. If you approach sales by trying to be in control from the very outset, you’re already in trouble. Customers have never liked being controlled, and in this day and age they like it even less. And increasingly they don’t have to put up with it.

Aretha Franklin Selling

There’s basically one argument in favor of answering the question, and it’s simple: R-E-S-P-E-C-T.

If you respect someone at first meeting, they are positively inclined toward you. They tend to then trust you, and in turn treat you with respect.

If you refuse to answer the question, you are disrespecting the buyer, in at least one of several ways.

  1. You are trying to control them – and nobody likes being controlled
  2. They expect you to try and evade the answer, and you just confirmed their suspicions
  3. They think you have something to hide

Any way you cut it, a refusal to answer a direct question, whether it is a direct refusal or an ‘artful’ (read ‘obfuscatory’) refusal, is a statement that you either know more than the buyer, or do not grant the buyer the privilege of asking their own question, or both.

And buyers resent it.

The Positive Effect of Respect

Most buyers approach most sellers with a certain degree of caution – they expect the seller to try and control them.  And, most sellers oblige them by trying to do exactly that. Which means the initial conversations are about dancing around questions, jockeying for advantage, each challenging the other.

But what if, right at the start, you opted out of that game? What if you could immediately convey to the buyer that you are not trying to control them, that you’ll answer any question they have, that you’re actually there to help them, rather than manipulate them to your ends?  What if you could do that convincingly?

Then they’d be more likely to trust you. If they trust you, then they’ll listen to you. And if they’ll actually listen to you, your odds of making a sale go up.

Establishing Respect by Answering the Price Question

Buyer: I want to know more about your XYZ offering, but first I need to know your prices.

Seller: OK, sure. It’s $8000 for the annual plan, or $1,000 per month for 12 months.

[Pause.  And seller, do not fill in the pause]

Buyer: Um, OK; so, it’s a better deal for the annual?

Seller: It depends on what you want; 2/3 of our customers do choose the annual plan, but 1/3 choose monthly.

Buyer: Other than cash flow, why would I choose the monthly plan?

Seller: For half of them it’s just cash flow; but others are intending to switch CRM plans within the year, so they value the flexibility.

Buyer: How does the offering relate to our CRM?

Seller: [discussion continues about product features, value, etc.]

Note there is no scripted answer to this dialogue, other than the first response: “It’s $8000 for the annual plan, or $1,000 per month for 12 months.” After that, everything is a response driven by the customer’s questions.

This is not rocket science – but it is science nonetheless. Call it the science of human relationships. When someone does a favor for us – like showing us respect – we unfailingly return the favor, by showing respect in turn. In sales, the currency of respect is listening.

If you listen to your customer’s question, and answer it directly, you are paying the currency of respect. The customer quickly gets the message – ‘This person is not trying to control me, they are respecting me. I’ll ask a few more questions, and if I continue to get that respect, I’ll show them respect in turn, by listening to what they have to say.’

If your service is competitive, this form of sales interaction will get you over the finish line. You end up with better sales results than if you had tried to control the dialogue in the first place.

The paradox: you end up getting better results by resolving to give up control over the customer than if you had tried to control them in the first place.

 

 

A Better New Year’s Resolution

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It’s that time of year again. Resolutions come in full swing and we all start to assess how we can improve on the last year. It just so happens that I wrote a pretty good blog post at this time eight years ago, and I haven’t improved on it yet. Here it is again.

Happy New Year!

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My unscientific sampling says many people make New Years resolutions, but few follow through. Net result—unhappiness.

It doesn’t have to be that way.

You could, of course, just try harder, stiffen your resolve, etc. But you’ve been there, tried that.

You could also ditch the whole idea and just stop making resolutions. Avoid goal-failure by eliminating goal-setting. Effective, but at the cost of giving up on aspirations.

I heard another idea: replace the New Year’s Resolution List with a New Year’s Gratitude List. Here’s why it makes sense.

First, most resolutions are about self-improvement—this year I resolve to: quit smoking, lose weight, cut the gossip, drink less, exercise more, and so on.

All those resolutions are rooted in a dissatisfaction with the current state of affairs—or with oneself.

In other words: resolutions often have a component of dissatisfaction with self. For many, it isn’t just dissatisfaction—it’s self-hatred. And the stronger the loathing of self, the stronger the resolutions—and the more they hurt when they go unfulfilled. It can be a very vicious circle.

Second, happy people do better. This has some verification in science, and it’s a common point of view in religion and psychology—and in common sense.

People who are slightly optimistic do better in life. People who are happy are more attractive to other people. In a very real sense, you empower what you fear—and attract what you put out.

Ergo, replace resolutions with gratitude. The best way to improve oneself is paradoxical—start by being grateful for what you already have. That turns your aspirations from negative (fixing a bad situation) to positive (making a fine situation even better).

Gratitude forces our attention outwards, to others—a common recommendation of almost all spiritual programs.

Finally, gratitude calms us. We worry less. We don’t obsess. We attract others by our calm, which makes our lives connected and meaningful. And before long, we tend to smoke less, drink less, exercise more, gossip less, and so on. Which of course is what we thought we wanted in the first place.

But the real truth is—it wasn’t the resolutions we wanted in the first place. It was the peace that comes with gratitude. We mistook cause for effect.

Go for an attitude of gratitude. The rest are positive side-effects.

 

Trust and The Mentalist

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Some of you may be familiar with the CBS TV series The Mentalist, starring Golden Globe nominee Australian Simon Baker.  The lead character, Patrick Jane, is a consultant to law enforcement agencies who uses his carnival-honed powers of observation and human nature to appear almost clairvoyant.

In a recent episode, Jane makes three trust-related comments. While prepping his co-worker (and lover) Teresa Lisbon how to behave in an under-cover job in prison, he gives her three pieces of advice.

Jane’s insights show he’s a pretty good judge of trust as well. (Or at least the writers are).

Trust Advice from Patrick Jane

Most TV shows treat trust in fairly broad-stroke, big picture kinds of ways. For example, a cop might tell a fellow officer, “I can’t work with someone I can’t trust,” after having been lied to by the second officer.

But that’s relatively mundane. What’s interesting about the Patrick Jane character is that he grasps some subtleties about trust.  He “gets” the advanced version of trust, if you will – as is totally appropriate for the character’s persona.

Advice Tidbit Number One.“Tell them one Big Lie, not lots of little ones.”

On the face of it, truth and lies are the province of credibility – the first of the four elements in the CRI/S Trust Equation. But many truths and lies, over the course of time, affect reliability, the second element.

The drip drip of lies, even small ones, is a double-whammy. One “mistake” can be excused or forgiven. But a pattern of lies is more than the sum of the individual untruths.  It is the difference between a series of lies told, and a teller of lies – a liar.

Advice Tidbit Number Two. “If you want to get someone to lower their guard – lower your own.”

Trust relationships are based on an iterative series of risk gestures.

Consider a handshake. The one who proffers the hand to shake is the trustor, the one who first takes the risk. The other person is the trustee; if they return the handshake, the level of trust goes up a tiny fraction.

What this is about is vulnerability. Being vulnerable makes one available to relationships – and trust is above all a relationship. Note the one taking the risk is the one initiating trust; this runs counter to the usual image of trust as being about risk mitigation.

 

Advice Tidbit Number Three. “If you want someone to trust you, ask them for a favor – even a small one.”

The reciprocal exchange of risk gestures is the template of trust creation. While we usually think of doing someone else a favor as risky, Jane is quite right that the asking of a favor is also a form of risk.

If done sensitively, sincerely, and infrequently, asking someone a favor is a form of flattery. It shows the asker has such respect for the other that he is willing to suffer the embarrassment of refusal. It is a form of risk-taking. It demonstrates vulnerability.

Vulnerability drives risk, which initiates the formation of trust. There is no trust without risk.

Caught Between the Grinding Wheels of Sales

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

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

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

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

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

What You Must Remember

Here’s the thing. Three things, actually.

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

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

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

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

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

Putting the Basic Things Together

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

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

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

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

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

Escaping the Grinding Wheels of Sales

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

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

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

So – don’t do that.

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

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

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

Answering Objections

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

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

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

Leadership Lessons from a Horse’s Mouth

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Today’s guest post is from June Gunter, Ed. D. and CEO of TeachingHorse, LLC.

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I am the Co-Founder and CEO of TeachingHorse, LLC. TeachingHorse provides leadership development and coaching through experiential learning with horses. Working with horses, people learn how to build trusting relationships, practice authenticity, and remain calm and confident in the face of uncertainty.

Several of my clients are on the path of becoming trusted advisors. Their work with horses has been a great way for them to practice developing intimacy and reducing their self-orientation.

Most of the clients I work with do not have issues with credibility or reliability. They are skilled experts with long track records of success – but they are staring squarely at a new reality. The complexity of the issues they are being asked to address is unprecedented. The information available to them is unreliable and changes quickly. The demand for innovation means that previous performance and expertise are only the equivalent of an entry fee and will no longer win the race.

It is the capacity to create trusting relationships that is often the defining factor in selection of both leaders and advisors.

Enter Horses

So what do horses have to teach leaders about being trusted advisors? To begin with, horses don’t care if you have an RN, MBA, MD or have CEO after your name. Horses will never ask you if you have reputation for being dependable or reliable. So we can just take credibility and reliability out of the equation for now.

For horses to place their trust in leaders, they must know four things about them.

  • One, that leaders are paying attention, and can detect even the most subtle shifts in the environment.
  • Two, that leaders can give them clear direction on how to respond to the shifts.
  • Three, that leaders are able to follow that direction with focused energy, providing guidance on the pace with which to respond.
  • Four, that leaders display congruence of their inner and outer expressions. Ultimately, horses must know that the leaders have their best interest as their source of motivation at all times.

It all starts with saying “Hello.” One of the first things we teach is how to approach a horse in a way that creates confidence. It is a process of mutual decision-making that begins with taking a step towards the horse. If they continue to look relaxed and comfortable with your presence, take another step closer. If they look anxious or unsure, stop, take a deep breath to ground yourself, and then take a small step back. This reassures the horse that you are actually paying attention to the signals they are sending, that you are willing to respect their experience and make adjustments to honor their choice. With this simple process, the horse learns that you are not a threat.

Blue Leadership

One of the horses I work with frequently is a large white draft horse named Blue. She weighs about 2000 pounds. Blue is a fabulous teacher. In one particular session I was working with a board of directors for a healthcare organization. The participant saying hello to Blue was a petite woman, maybe 5 feet tall, with no horse experience.

As she began moving closer to Blue, I could hear her say tentatively, “Hi Blue.  Are we good?  Can I come a bit closer?”  I stopped the woman in her tracks and said, “What question do you have of Blue right now?”  She replied, “Is it safe for me to take another step closer?”

My reply to her was, “As long as that is your question, neither one of you is safe. It is not Blue’s job to convince you that you are safe with her. It is your job to show Blue that she is safe with you, just as if she was a patient in your hospital.”

I could sense that what I said resonated deeply with this person. Her energy changed completely. The woman lifted her head and squared her shoulders. You could feel the conviction running through her veins. At the same time, her eyes filled with respect, appreciation and love. She looked at Blue and said, “I got you girl. You are safe with me.”

Much to her surprise, Blue lowered her head, a signal that a horse is feeling safe, and Blue took the last few steps that closed the gap between them. With the woman’s hand now placed gently and confidently on Blue’s forehead, the connection between them created a palpable hush over the entire group.

I asked the woman what changed. She said, “I did.” And she was right.

As it turns out, this person is a gifted nurse leader. She tapped into a deeply held value that can get lost in the hustle and bustle of executive life. She moved her attention from self to other with a commitment to earn trust.

In the face of uncertainty, fear takes over when too much of our attention is on the self. Turn your attention to those you are leading or serving with a clear intention to act in their best interests. Trust will grow.

 

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For more information about leadership development with horses contact June Gunter at [email protected].

Books we Trust: Jacob Morgan’s The Future of Work

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Future of WorkJacob Morgan is the author of the newly released, The Future of Work: Attract New Talent, Build Better Leaders, and Create a Competitive Organization (Wiley). He is also the principal and co-founder of the future of work consulting firm Chess Media Group and the FOW Community, an invite only membership community dedicated to the future of work and collaboration.

I first met Jacob a few years ago before he started working on his book The Collaborative Organization, previously reviewed on this blog. Jacob has a new book coming out called, The Future of Work which promises to get readers to think differently about how they work, lead, and build their organizations. Most of us get that the world of work is changing but many of us still don’t realize why it’s changing, how exactly it’s changing, and what we need to do about it.

The book is very well-researched (I read it in manuscript) and has some great corporate stories. Its release date is today, September 2.

Charlie Green: Jacob, your previous book was endorsed and supported mainly by CIOs, CMOs, and folks that one could say lean more towards the IT or technical side of things. That’s quite a stark contrast to this book, where you’ve lined up impressive testimonials from CEOs and respected business leaders. How did you get these guys involved and why did you up the ante?

Jacob Morgan: Getting CEOs was challenging. I started the process quite early on, but the CEOs that endorsed this book (from companies like KPMG, SAP, Intuit, Whirlpool, and others) are all strong believers in changing how work gets done. They all their own initiatives along these lines. My previous book was also more geared towards a specific audience; mainly those who were running collaboration efforts or were interested in collaboration. It wasn’t a broad book that someone might see at the book store and say, “Ah, I need to read that.”

The Future of Work is much more appealing to a broader audience, I wanted to write something that was relevant to employees and managers alike. We all have or need jobs which means that we all need to be thinking about the future of work!

CG: I’ve heard you say numerous times that “work as we know it is dead.” What exactly are you referring to? Clearly we still need to work.

JM: What I mean is that the common notions that employees are cogs, managers are slave-drivers, and that work is drudgery, are all dead. By the way, these are actual synonyms that you will find if you look up the words in a dictionary. We spend more time working than doing anything else in our lives so it’s about time that we start thinking differently about work.

CG: Well then, just what does the future of work actually look like?

JM: I get asked this question a lot. It obviously includes a LOT of different things. But broadly speaking on the employee side we will see things like flexible work, freelancing, decreased employee tenure, and a shift towards focusing more on projects and tasks vs career paths. For managers we will see greater use of collective intelligence, an acceptance of vulnerability in the workplace, and mindset change from “employees should serve managers” to “managers should serve employees.” Organizations will become more distributed, they will shift to the cloud, and will have to measure success by more than just profit.

CG: I’m sure some companies out there are thinking, “things are going fine for us, we’re making a ton of money, no need to do anything differently.” What would you say to do those companies?

JM: I don’t think those companies realize what they are talking about. What’s going on today is unique. It’s not just the fact that change is happening that’s important, it’s the fact that the rate of change is increasing. That means that being a late adopter is tantamount to being out of business.

There are five trends driving the changes we are seeing today: globalization, millennials, new behaviors, technology, and mobility. We’re also seeing a complete shift in who guides and dictates how work gets done. This used to be very top down but now employees are starting to drive the conversation. I always tell companies, “if your organization doesn’t think about and plan for the future of work, then your organization has no future.”

CG: Jacob thanks for sharing with us. The Future of Work: Attract New Talent, Build Better Leaders, and Create a Competitive Organization is available on Amazon and wherever books are sold.

JM: My pleasure!

 

Accountants Not Getting Trust

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I’m starting to believe that the biggest obstacle to increasing trust in business is the conceptual confusion that exists around trust itself. We literally cannot agree on what we are talking about.

The latest case in point: Public Company Accounting Oversight Board (PCAOB) Chairman James R. Doty, keynoting on the subject of Integrity at the Seventh Annual Auditing Conference:

Item 1. “[Doty said] the worst thing a firm can do is to blame a problem on an individual, rather than recognizing it occurred as a result of the way the firm was operating.”

Apparently issues of trust and integrity in business are institutional.

Item 2. “[A] student asked, ‘What drives people to act unethically in the accounting profession?’ Chair Doty responded that a similar pattern is evident in other professions, as there are some who should not have become professionals because they have to deceive. However, other people get on a slippery slope when they know they are approaching the limits of professional practice, then step over the line, and then rationalize their behavior.”

Apparently issues of trust and integrity in business are personal.

Well, Mr. Doty – which is it? Is integrity an issue of institutions, or of personal character and ethics? Does it depend on whether the business in question is an accounting firm? If so, why? And above all – what problem are we trying to solve here?

Because the solutions are very different. You can’t expect a decent solution if you can’t first decide which problem you’re trying to address.

Personal vs. Institutional Trust

The right answer, had anyone asked Mr. Doty, should have been, “Both – and here’s how they fit together.” But this rarely happens; instead, too many business speakers on trust blithely go on talking about very distinct problems as if they were one. No wonder we make so little progress.

Here is the right answer, in two principles:

Principle 1. Integrity and trust must be personal traits: Citizens United notwithstanding, human beings do not “trust” policies, regulations, or ultimately even audits. They trust – or do not trust – that people are acting in trustworthy ways. The role of regulations et al is to articulate boundaries and principles underlying that behavior.

This principle is violated by focusing solely on rules and regulations, as if the regulations were a substitute for management itself. The result is what we see in the financial industry – a morally bereft place that confuses ethics with cat-and-mouse games. The regulators (and the auditors too!) are as much at fault as the regulated, because they focus only on the behaviors – not on demonstrated lack of character.

Principle 2. Integrity and trust are greatly influenced by corporate environments.  If unethical behavior is tolerated, of course it will increase. But the same is true if unethical behavior is simply treated as a cost-benefit calculation. And if ethical behavior is not modeled, people will (rightly) conclude it’s all hypocrisy.

This principle is violated by a calculus of economically matching the punishment to the crime. Industries who cynically compute violations as analyses of the cost of doing business are at fault, but even more so are regulators and legislators who set up that system. It is also violated by managers and leaders who don’t walk the talk. All corporate “values” lose their juice if not modeled; but in no case is this more important than in trust.

Solutions

A proper view of trust and integrity in business would squarely locate accountability on individuals. The penalties for violating rules should be in the range of 3X the ill-gotten gains, not 1X or less. Auditors may or may not be considered accountable for integrity and trust, but they shouldn’t think they can address these issues solely through risk assessment, monitoring and communications – not unless they address whether or not managers are clearly accountable (cf the recent GM mess), and whether or not the sanctions imposed on them for misbehavior are absolutely clear (e.g. swift termination for ethics violations, period).

Trust in business rests on trust-based organizations. Trust-based organizations are organizations in which people a) trust others, and b) are themselves trustworthy.

  • Organizational policies which encourage personal trusting and trustworthiness help create trust.
  • Organizational policies which eliminate personal responsibility and risk-taking destroy trust.
  • Management structures and policies which enforce accountability for trust-based behavior – including disproportionate sanctions for violations – are necessary. Management-by-policy-alone, however, is defaulting to mistrust.

Trust is both personal and institutional: but it’s critical to get the interface right. It starts with simple, clear thinking.

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

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

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

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

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

Myth Number One: You Don’t Have the Time

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

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

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

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

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

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

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

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

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

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

Myth Number Three: Trusted Relationships Take Time to Create

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

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

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

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

Myth Number Four: Relationships are Built on Quantity of Time

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

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

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

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

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

CARFAX, Cops, and Car Dealers: The Good, the Bad, and the Ugly

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It began with a trip to an Audi dealership. I liked what I saw, and was ready to buy. Then the dealer ran the CARFAX report.

I’d had a side-bump accident two years prior that popped the driver-side windows and door panels, and knew that would cost me some trade-in value.

But I wasn’t prepared for, “CARFAX says the front airbag deployed. That’ll cut your trade-in value by $3,000.”

I knew that was a mistake – I was there, and no airbags had gone off. There wasn’t even front or rear damage. But, the dealer said, “Sorry, we don’t write the reports.”

I said, “OK, I’ll go fix this – I’ll be back.” And thus began my quixotic adventure.

NJ State Police – the Bad

CARFAX was easy. Despite their apparently being phone-phobic, I quickly got in touch via email with a real person, literate, prompt, and customer focused. She confirmed the problem came straight from the NJ State Police accident report. The trooper who filled out the report had made a mistake. “If you can get the police to change the accident report, we’ll immediately alter the CARFAX report,” she said.

Fast forward: five personal visits to the Totowa NJ State Police substation, and as many calls. The police were usually polite (only one cop yelled at me), but never came out from behind the bullet-proof glass window. And their response was always the same: leave the information here and we’ll get back to you tomorrow.  They never did.

I gave them insurance reports, which indicated no front end damage or airbag repair. I gave them a signed statement from the repair shop owner, who stated the original airbag was still in the car, so it could hardly have deployed two years prior.

Finally they got me in touch with the trooper himself (via phone, 3 days after having left a message). Very politely, he said, “Look, as far as I know you could be in cahoots with the repair shop. And though I don’t remember this particular incident, I pride myself on being very careful and not making mistakes. So I very much doubt I made a mistake here. And so I’m not going to change it.”

What about the flagrant physical contradiction of the original airbag still being in the car? “Sorry, how do I know I can believe what you’re telling me, and anyway I haven’t got time to check it myself. So I’m not going to change it.”

I spoke to his commanding officer. “It’s really a decision for the individual officer, I’m not going to overrule him,” he said.  Never mind that business about the laws of physics.

CARFAX – the Good

At this point, I went back to CARFAX out of frustration. I described the situation, and they not only empathized, but clearly took me seriously. “If you can send along the kinds of reports you indicated, we can add a contra-note on the file.”

So that’s what I did. And that’s what happened. Underneath the “airbag deployed” checkbox on the CarFax report there is now a line saying, “Airbag deployment reported in error. Other independent documentation shows the airbag did not deploy.”

In plain English: the police blew this one and won’t admit it.

Thank you, CARFAX.

(By the way, if you’re curious, here’s what a sample CARFAX report looks like).

Car Dealer – the Ugly

Car dealers all resent the bad reputation they have – but they keep on earning it. Three things were clear to me when I walked out the door of the Audi dealership:

1. I knew I was going to get the CARFAX report changed to reflect reality
2. They doubted anyone could beat CARFAX or the cops
3. They figured they’d never hear from me.

And so they defaulted to an old rule-of-thumb in the car sales business: there are no “be-backs” (as in, “I’ll be back”). I had said I’d be back, therefore I was an obvious liar, and a no-sale, and there would therefore be no point in wasting a perfectly good 60 seconds on a phone call to me.

And so I defaulted to an old rule-of-thumb of my own: when people disbelieve me or refuse to give me the time of day, I do business with their competitor. I like my new Hyundai.

The Movie

What’s sad about the car dealership is that if the salesman had placed one simple call to me – “Hey, how’s it going with the CARFAX thing?” – it would have kept me engaged. I would have returned, and I would have bought. So by refusing to invest 60 seconds in a phone call, one salesman lost a good deal, a nice commission (I am not very price-sensitive), and a shot at a lifetime (profitable) customer.

The NJ State Police, by contrast, are downright scary. The trooper was polite, and clearly competent. But he had been allowed to elevate the importance of his “personal honor” to the point where a) he valued his ‘track record’ over the truth, and b) the organization had no recourse when he made a mistake.

“Honor” without accountability is a disastrous combination. You end up with all the para-military trappings, and none of the justice (aka customer focus) legitimizing it.

I’m an older, educated, white male. Imagine if I’d been a young, black guy. (And if you have trouble imagining, you’re not paying attention.)

On the other hand, CARFAX is a legitimate customer service hero – at least in this case.

For one thing, they show that you can deliver great customer service even via email contact – you just have to be smart, dedicated – and care about end-users.

But most importantly, they showed a commitment to truth and honesty, even if it meant going up against an important information provider. They (correctly) realize that their long-term success depends on the credibility of their information, not on sucking up to a powerful but circle-the-wagons self-absorbed police organization.

My suggestion: reward providers who do good for customers – they’re the ones working to make business work for society.

And for those who are selfish, short-term oriented, and anti-customer – call them out.

I’ll be sending links to this post to DCH Millburn Audi, and to the NJ State Police.

PostScript: As a result of sending links to the NJ State Police, I heard from an internal “Integrity Control Officer” assigned to investigate concerns brought to the force’s attention. He listened to my story, with some skepticism but with an open mind.

In addition to interviewing me, he spoke to the insurance company, and requested a photo of the car taken by the adjuster (why hadn’t I thought of that?). He was satisfied by both that there had been no airbag deployment; he therefore officially instigated a reversal of the mistaken accident report.

I thanked him for his objective work, and we emailed a bit about how to prevent such incidents happening in the future. He spoke to the trooper and his supervisor, and told me that “I think we are all on the same page now.” I choose to believe that. Case closed.

 

Brain Science: Reductio ad Absurdum

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Neuroscience is the hot new kid on the science block. And not without reason; the ability to map the brain’s inner workings offers huge medical potential.

But along the way, neuroscientists – and their fans in business and society in general – frequently commit a basic error that wouldn’t pass muster in a philosophy 101 class. It’s called the error of reductionism, and its most recent incarnation is in the pages of the NYTimes.

Why Powerful People Lack Empathy

The article cites interesting research showing that powerful people lack empathy. The question is why? The authors (associate professors of psychology at McMaster and University of Toronto) say this:

Why does power leave people seemingly coldhearted? Some, like the Princeton psychologist Susan Fiske, have suggested that powerful people don’t attend well to others around them because they don’t need them in order to access important resources; as powerful people, they already have plentiful access to those.
We suggest a different, albeit complementary, reason from cognitive neuroscience…when people experience power, their brains fundamentally change how sensitive they are to the actions of others.  [emphasis added]

Note: they cite one answer to the question “why,” and then proceed to offer a different answer. Or, what they claim is a different answer.

The Error of Reductionism

Suppose I described a television series plot to you. You might ask me why a certain character acted a certain way. And I might answer in several ways, including reference to the character’s personality, or a parallel plot line, or the motivations of another character interacting with this one. All of those might be good explanations, or answers to your ‘why’ question.

But suppose I answered in terms of the changing phosphors on the television screen when you watched the episode in question. Suppose I “explained” the character’s action by enumerating the sequence of LEDs firing in the back of the TV set. (I’m sure I’m wrong on my TV technology, but you get my drift).

You wouldn’t for a moment accept that as an “explanation.” By reducing a phenomenon to some underlying set of physical phenomena (typically chemistry or physics), you succeed in an powerful act of translation – but not of explanation.

You don’t “explain” history by reciting events. You don’t “explain” a French movie by translating it into English. You don’t “explain” genetics by mapping the human genome. And you don’t “explain” why powerful people are cold by pointing to parts of the brain. Such mechanical knowledge is critical to medical intervention, to be sure – but the broader world isn’t asking a medical question, it’s asking a human one.

Reductionism in Business and Society

When the likes of the New York Times and Harvard Business Review go all gaga over our increasing ability to “understand” or “explain” complex phenomena – and are committing the reductionist fallacy – well, Houston we have a problem. And it’s deeper than just scientists being un-educated in the liberal arts.

There is a strong inclination toward the reductionist fallacy in business in general. The wish to break things down, deconstruct, compartmentalize, and quantify is deeply embedded in management theory. Delegate, establish metrics, and manage by the numbers.

This is fine when we’re dealing with supply chains. It reaches absurd levels when we try to “manage” complex human behaviors, social interactions, leadership, corporate culture and the like. The reductionist tendency closely correlates with behavioralism; in training, we see it in the focus on skills to the exclusion of beliefs and mindsets.

We’ve seen a massive failure of the reductionist tendency in the world of education. The No Child Left Behind movement is, more than anything else, about teaching to tests; the mastery of thousands of specific components, in the mistaken belief that if you map enough details, the whole will emerge from the sum of the parts.

It’s not true. Sometimes you lose the forest for the trees. Sometimes the soul is not to be found in the electron. Sometimes the explanation is not to be found by reciting the brain chemistry at play. We require something more to qualify as an answer to the question “why.”