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Exceptional
SELLING HOW THE BEST CONNECT AND WIN IN HIGH STAKES SALES
JE...
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Exceptional
SELLING HOW THE BEST CONNECT AND WIN IN HIGH STAKES SALES
JEFF THULL
John Wiley & Sons, Inc.
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Advance Praise for Exceptional Selling “I am a Jeff Thull fan. In Exceptional Selling he zeros in on the key ingredient of sales of any sort: intimate mental and emotional connection with the customer—which leads to deep understanding, a successful sale and its successful implementation. I call this ‘connection bit’ the ‘missing 98 percent’ of the selling process, over looked by most sales trainers and salespersons alike. Jeff ’s book has something profound to teach each of us, regardless of profession, from the pizza parlor to the pulpit, starting with me!” —Tom Peters, Author of Re-imagine! Business Excellence in a Disruptive Age “As a CEO, I highly recommend this book as a guide on executive and financial level conversations. Jeff shows you how to gain access and establish relevancy and credibility with people that hold the power and make the decisions. It’s without a doubt the best way to step out of the crowd and connect with executives.” —Chris Capdevilla, CEO, LogicalApps “If you want to be an exceptional communicator, you must read Jeff Thull’s books. Exceptional Selling is a complete no nonsense approach to sales—how to get in, how to connect and how to win! It conveys a vital message: Open, honest, and straight-forward communication is the shortest path to long-term success.” —Frank Toffoloni, U.S. Director of Sales, Diagnostica Stago Inc. “Jeff has been sharpening the skills of my sales organizations over the past 20 years. His latest book, Exceptional Selling keeps him out front with sensible techniques that work. Top sales producers will quickly recognize how to improve their results; rookies will find the finest road map to success in the selling profession.” —Peter Muldowney, Chairman, Specialty Materials Division, Morgan Crucible Co. PLC—Retired “Exceptional Selling is a comprehensive and powerful framework for building strong relationships based on integrity and trust. Just as he has done for our financial advisors, Jeff Thull shows you how to communicate with confidence and create exceptional value for both you and your customers.” —Richard G. Averitt III, Chairman and CEO, Raymond James Financial Services
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“Get your Post-its® ready! From the very first chapter, I found myself tagging pages so I could present and put into practice the dozens of actionable takeaways. I highly recommend this book for any consultative sales team looking to make their product stand apart from the competition.” —Gary Robbins, Partner/Vice President, Frost & Sullivan “Exceptional Selling is the masterful continuation of Mastering the Complex Sale and The Prime Solution. At a time when we’re all searching for new ways to leverage our strengths, Jeff ’s ‘taking it to the street’ wisdom redefines communication strategies and sets a new benchmark for competitive differentiation. This book will dramatically shift your thinking and show you precisely how to achieve lucrative sales results.” —Nat Geissel, President, DMS Health Technologies “Jeff Thull has assembled a real street level guide that uncovers how true value is recognized, assembled, and realized. If you are a sales manager and your team is not having the kind of conversations outlined in this book, your sales opportunities will most likely be lost to someone who is.” —Brooks Hoff, Western Regional Sales Manager, Fluke Corporation “Jeff brings clarity to the sales process through his discovery and diagnostic methods that promise higher closing rates and help you convey, in cooperation with your clients, relevance and credibility to solving their problems. We’re all looking for that differentiation factor and Jeff shows you the way to gain new levels of respect and credibility from your clients that you may not have experienced in the past.” —Guy R. Manuel, President, Transcontinental Printing, Marketing Products & Services “Jeff Thull has done it again with Exceptional Selling—he truly provides a fresh and innovative perspective to the art of sales. By using logical and practical conversation examples throughout the book, Thull identifies and conquers common sales traps and defines successful keys to breaking down communication barriers. Geared toward the individual sales professional, Exceptional Selling is a powerful, applicable tool in the complex world of sales, and is a must-have in the library of any sales executive.” —Kerry Gilger, President and CEO, FYI Corporation “Exceptional Selling is a tremendous learning tool for sales professionals. Jeff ’s done a great job of expanding on the diagnostic selling concepts from his previous books by emphasizing the amplified role required of a salesperson to quarterback a complex sale—both externally and internally.” —Chris Ostrander, General Manager, Eaton Corporation
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“It’s finally here—a word-for-word, step-by-step guide from Jeff Thull for those of us in the sales trenches each and every day. I have worked with Jeff and Prime Resource Group for over 10 years and have literally begged Jeff to put all of his best strategies in a single resource. Exceptional Selling is that resource. Jeff ’s past two books were wonderful, especially from a macro seniormanagement perspective, but this book contains the keys to the kingdom that the ‘prime resource’ in any sales profession is looking for. I look forward to using this as a tool to help our team take results to a new level.” —David B. Patchen, Regional Vice President, Raymond James Financial Services, Inc. “Exceptional Selling clearly articulates the skills and habits that hold back many sales professionals from maximizing their potential impact. Jeff provides tangible and specific techniques that you can start to implement immediately that will truly differentiate yourself in the eyes of your customer. Additionally, the Exceptional Selling message translates well into the sphere of marketing communications and provides a significant counter tactic to the intense ‘commoditization’ being experienced in our crowded market space.” —Bruce S. Moloznik, Vice President of Global Marketing, Cookson Electronics Assembly Materials “The Diagnostic Selling methods in Exceptional Selling represent a step change from consultative sales in working collaboratively with clients to jointly understanding and addressing the needs for complex business performance solutions. They give commercial staff the skills, discipline, and confidence to effectively engage at senior executive levels in client organizations to create and capture increased business value.” —Ian Galliard, Global Manager, Sales Development, Shell Global Solutions International BV. “While reading Jeff Thull’s Exceptional Selling, I was struck with the thought that this book not only teaches an exceptional sales process but shows how a healthy mind-set provides the foundation for effective communication for solving any complex problem. If you have watched helplessly as disapproving purchasing agents, onerous requests for proposals, and uncommunicative customers continually commoditize your business, Jeff ’s exceptional book will give you a solid path to building a healthy mind-set for effective communication and a powerful ‘nonsales’ sales process for creating true value, both for you and your customers.” —John Hines, PhD, Business Manager, Georgia-Pacific Resins, Inc. “To serve the global financial community with enterprise software solutions requires exceptional credibility and precise communication skills. Exceptional Selling is a great guide on how to do exactly that. Read it, follow it and enjoy your success!” —Pierre Gatignol, President and CEO, GL Trade
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Exceptional
SELLING HOW THE BEST CONNECT AND WIN IN HIGH STAKES SALES
JEFF THULL
John Wiley & Sons, Inc.
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Copyright © 2006 by Jeff Thull. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permissions. Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993 or fax (317) 572-4002. Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. For more information about Wiley products, visit our web site at www.wiley.com. ISBN-13: 978-0-470-03728-7 ISBN-10: 0-470-03728-8 Printed in the United States of America. 10
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To Pat Thull, my lifelong spouse and business partner, for her guidance in building this company, her tireless and self less efforts to assure our customers receive the highest quality programs and professional services, for making Prime Resource Group an exceptional place to work, and for her insights and experience that have greatly enhanced the content of Exceptional Selling.
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Contents xi
Foreword
xix
Preface Acknowledgments
xxix
Part I: “W hat We Got Here Is a Failure to Communicate” 1 The More You Sweat, the Less You Sell
9
2 Nobody Buys a Value Proposition
31
3 You’ve Got to Get Your Mind Right
53
Part II: Taking It to the Street 4 Earning the Keys to the Elevator
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5 Diagnosis Trumps Presentation Every Time
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6 Cutting Through the Smoke and Mirrors
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7 It Doesn’t Pay to Surprise a Corporation
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Part III: Breaking Away with Exceptional Credibility 8 “Show Me the Money”
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9 Connecting at the Level of Power and Decision
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Epilogue
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Index
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hen I’m not looking after the Corporate Education Program at Duke University, I teach courses on social and organizational psychology in Duke’s Department of Psychology. Both aspects of my professional life have taught me that having a good conversation—in business or anywhere else for that matter—is not as simple as it might appear. In fact, it’s a major challenge, especially in the world of complex sales and multicultural business relationships in which Jeff Thull works. As Jeff was leading a seminar with our managing directors, it struck me that business today in general, and sales and business development professionals specifically, are not design or solution constrained; in fact, we are far more “diagnose” constrained. There is a great tendency to leap before we listen. I made that observation to our group and Jeff was so moved by its brevity and its accuracy that he suggested it would be the perfect insight for the Foreword to his new book. Thus, I find myself introducing you to a book that is a great read. Authentic and compelling customer conversations are the key to what Jeff refers to as “privileged access” and “privileged insight.” Privileged access is what we need to tap into the best sources of information within our customer’s organizations. To gain the richest insights, we often need to xi
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hold conversations at senior levels and it seems like everyone is trying to gain access there. The crass commercial reason is that the revenues are bigger up there. But more important is the fact that senior managers are the ones who best understand the critical issues in their businesses. Privileged insight is what we need to clearly understand our customers, their responsibilities, and their metrics. It is the only way we can create compelling offers and it is the reason customers will understand and embrace those offers. To create exceptional sales, we need to earn access and develop insight. One of the insights that I drew from Jeff ’s first book is that the best salespeople are integrators—they orchestrate all the pieces needed to solve customers’ problems in novel and intriguing ways. To be the integrator, you have to understand your customers and their issues and bring them to a deeper understanding of their situation. You also have to understand the solution capabilities your company offers and bring your customers to a deeper understanding of how those capabilities apply to their businesses. Somehow, you have to integrate all of that information in a collaborative effort with your customer to ensure that it yields a coherent and compelling exchange of value. How do you accomplish this? It is usually achieved through a structured series of conversations in which you listen to and talk with your customers at a higher level of understanding on both sides. Jeff ’s book is about how to conduct exceptional conversations. Instead of treating conversations as something we do all the time, frequently with no preparation before, no special consciousness during, and no particular analysis afterward, Jeff proposes that we become expert conversationalists and raise the bar of professional excellence. We should become so good, in fact, that the style and substance of our conversations create all of the credibility and relevance we need to win our customers’ confidence and their business.
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The strategies and techniques that Jeff describes in this book can help you improve your ability to communicate with customers in ways that will far exceed your expectations and theirs. You will be able to really hear what customers are telling you and add value to what you are hearing. I think of it as having “diagnostic ears.” Customers will actually want to tell you more, give you access, and invite you deeper inside their world. Finally, you will be able to convert what you are hearing into compelling solutions. Customers will clearly understand their situation and see how the value of your solution applies to the challenges in their business. Jeff ’s work can help you raise the tenor of your conversations on a number of levels.
Understanding Your Customer’s World How do we understand their world? Most sales books tell us to become better listeners. They’re right, of course, but the idea of being a good listener seriously oversimplifies what we need to be doing in successful business conversations. We need to listen beyond our customer’s words and look beyond nuances of body language. We need to understand the client’s meaning system—the whole set of assumptions, experiences, values, and beliefs that create the context for their perceptions, judgments, and decisions. Before we can listen at this level, our customers have to be willing to talk to us as equals. We need to establish peerto-peer relationships with them. How can this be done when everyone is competing for their attention? It’s not an easy task. As CEO of Duke Corporate Education, if I’m talking to you about the corporate educational curriculum we can provide to your business, I need to acknowledge that you know your business better than I
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do. At the same time, I need to have a point of view and be able to make some preliminary assumptions about your business or I don’t belong in the room with you. Since I live in the world of professional development and education, it is likely that I know education better than you do. At the same time, I better recognize and respect what you know about education or you are not going to engage and pay attention to any advice I’m going to give you. Establishing a mind-set of mutual respect is the secret to walking this fine line. We have to assume that our customers are experts in their businesses and, furthermore, that they know their own organizations far better than any outsider ever will. And then, from that context of respect, we need to establish parity by demonstrating our own expertise in the customer’s business. We also have to assume that our customers are knowledgeable about our solutions and capabilities, and again, from that context of respect, demonstrate our own expertise in those solutions. This is the most constructive and respectful way to approach a sales conversation. We don’t have to insult customers by telling them everything we think they don’t know, nor do we have to defer to them if they choose to treat us as inferiors. It’s a great way to set the stage for a clearer and more useful understanding of the customer’s world.
Getting to the Customer’s Real Problem Together I frequently see salespeople jump to the solution. In the rush to sell something, as soon as the customer mentions a
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problem, the salespeople start talking about how to solve it with their solution. They make premature judgments, and in doing so, they shut down or change the direction of their conversations and miss the richness of insight, perspective, and depth of knowledge that the customer could provide. The usual outcome is a dissatisfied customer—dissatisfied because he knows that the salesperson has stopped listening and won’t know enough about his situation to propose the best solution. The ideal sales conversation starts with actually hearing customers in their own terms and with their own meanings. As a conversation progresses, you migrate to a more structured discourse in which you are trying to make sense of what customers are telling you in light of the frameworks in which you are expert. You’re situating your expertise inside the customer’s world. This is what leads customers to begin to experience “ah-ha” moments and start to see their world in a new light. They begin to connect the conversation to their reality rather than some nebulous general perspective and give the access required to further explore the possibilities of a solution. Jeff shows you how the diagnostic conversation is the mechanism that will allow you to place your expertise in the customer’s context. This is not a shallow interview that presumes the first hint of a problem justifies the solution, but one that gets deep into symptoms, causes, and consequences. It has to be a true partnership, founded on a mutually agreed upon premise that guides an inquiry and journey that is shared and jointly conducted. Otherwise, you are simply selling. This is how customers and sales professionals avoid bias and predetermined outcomes. They construct meaning together and develop a broader perspective on and deeper understanding of the customer’s situation.
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Designing Solutions That Sell Themselves Solution design doesn’t really exist in many sales processes. Salespeople don’t design solutions; they most often present prepackaged and off-the-shelf solutions. Even when design has a place in the sales process, solutions tend to be created in a vacuum by the seller with the customer having little or no participation. And we wonder why customers are skeptical about the efficacy of our offerings and don’t leap to take advantage of them. This is a problem that we face in the business of education. Universities are based on specific disciplinary expertise. Students pass through the various disciplines and integrate them in their own minds. That’s the way the whole system is designed, and if you look at most executive education programs, they are also designed supplier-out, as opposed to client-in. That’s why education is not considered a strategic tool today—it’s expert centered rather than client centered. I believe the fact that we are aware of it and struggle to avoid it, that we are working at understanding and solving clients’ problems rather than declaring our expertise, has helped earn Duke’s Corporate Education Program its number-one ranking. Jeff ’s work is well aligned to a client-in perspective. He has virtually eliminated the unhealthy dependence on presentations that causes so much suffering among salespeople and their customers. Jeff ’s emphasis on establishing design parameters that are based on customer criteria and independent of solutions is also an important factor in designing solutions that don’t need to be sold. If you help the customer create the criteria that she needs to make a quality decision and then offer her a solution that meets those criteria, there is no “close” required. What usually happens
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is that your customer looks at you and says, “When can we get started?” That’s a great thing to hear a customer say. Sales professionals who are exceptional conversationalists as well as exceptional diagnosticians are like chess masters. They know the pattern of the board, the strategies of the game, and they know where they are, where they’re going, and their options at every instant. This not only takes innate talent, it also takes systems, skills, and discipline and, of course, a serious amount of practice. In this book, Jeff identifies the conversations that need to happen in a successful business relationship (the openings, the interactions of the middle game, and the end game, an outcome of mutual benefit), and describes the detailed dynamics of each of those conversations in a way that you can apply to your own customer conversations. He will help you raise the bar of excellence and achieve great results. BLAIR SHEPPARD, CEO Duke Corporate Education Durham, North Carolina, USA www.dukece.com
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s a boy, I was privileged to watch my dad sell. In the summer during school break, he would take me along on a few of his business trips. He sold granite that was used in the construction of multimillion-dollar commercial buildings. I accompanied him on trips to visit the architects who could specify his company’s granite for the buildings they designed. I remember being impressed with the conversations my father had with his customers. I didn’t recognize it at the time, but he wasn’t acting like the stereotypical salesperson, talking up the quality of his product, or with order pad in hand, pushing people to buy. Instead, he seemed to work with the architects as an equal, poring over blueprints and renderings. He talked with them about the aesthetics of their designs, what their firms were trying to accomplish with their projects, and the requirements and vision of the buildings’ owners. Together they would examine samples my father brought and discuss the color of the stone, size of the panels, and the finish. In retrospect, my dad created a very strong image in my mind of how professional salespeople sound and act, and how customers respond to them. In today’s world, I continually seek out and study high-performing salespeople, the best of the best. They xix
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think differently, behave differently, and produce exceptional results. I have been defining the skills of highperforming sales professionals, providing research, and most importantly, establishing systems, skills, and disciplines into a methodology that can be replicated to produce very profitable results. Considering the thousands of people whom our practice has worked with over the years, I have also encountered a lot of struggling salespeople. Over and over again, I’ve watched them engage in conversations with their customers in which they unknowingly shoot themselves in the foot and undermine their own best efforts. They’re so ingrained in their traditional and standardized approach that they have difficulty stopping to think about what they’re doing to themselves. Even today, with so much experience around us, the marketplace is cluttered with seminars, consultants, trainers, and books espousing antiquated approaches to selling. Many salespeople, unknowingly caught up in the conventional sales approach, continue their self-sabotage and end up alienating and shutting down customers. But by replicating the top-performing professionals you read about in this book, there are new, exceptional ways to sell that can set you apart and pull you ahead of the pack. And those of you who have been very successful and are looking to notch up your skills to continually compete effectively in an everevolving market will see that fine-tuning some areas of your approach can make a major impact on your results. In this book, you will also be warned about the pitfalls that can get us into trouble. Have you ever heard yourself say to a customer, “You’ve probably never thought of this, but . . .” or “We save companies like yours millions of dollars in wasted . . .” Both of these statements could very well be true, but they create what I refer to as “dangling insults.”
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They imply that the customer doesn’t think and wastes millions of dollars. While you believe you are enlightening your customers, they may be hearing a criticism. You can tell when customers and best-qualified prospects hear these dangling insults: They lean back, cross their arms, and shut down. The salesperson can keep talking, but the conversation is over. Sales conversations are rife with traps like these. This book exposes those traps and offers logical and proven alternatives that enhance the clarity, relevancy, credibility, and trust we are trying to create in our conversations with customers. In the chapters that follow, we drill down into the core of exceptional selling practices and expose three root causes of failure that can prevent us from succeeding: confrontation, comprehension, and compliance. You will see how ingrained reactions and traditional selling strategies and techniques combine to create an atmosphere of confrontation between salespeople and their customers. You will find it incredible how preprogrammed behaviors and reactions often get us into trouble. As an example, as salespeople, we’ve been indoctrinated to believe that if we can secure an appointment with the right people and put forth our best presentation, we can turn most opportunities into sales, that objections are meant to be overcome, and that with the proper grit and persistence, we should be able to close any account. However, the more we wrestle with indecisive customers, aggressive competitors, drawnout sales cycles, and unpredictable outcomes, the more dependent we become on these unquestioned behaviors. The reality that we are ignoring, however, is that our conditioning, along with traditional selling lore, promotes an adversarial style of communication that only exacerbates our
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problems and causes us to work harder and with less successful outcomes. In this book, we will look at specific examples of how salespeople consistently overestimate the customer’s comprehension of the problem to be solved, the solutions we propose, and above all, the customer’s readiness to make decisions. Think about how the complexity of our products and services has escalated, how the customer’s workload has increased, how their staff and technical evaluation resources have decreased, and how the pressure to perform has increased. This harsh reality becomes even more problematic. As complexity increases, customers require more outside expertise to make high-quality decisions, but for the most part, our customers understand less and less of what we tell them. And what are we doing in response? We are trained and encouraged to present relentlessly, to work hard to convince, to persuade, and above all, to be persistent. We lecture our customers about solutions that they don’t comprehend, can’t differentiate, and really aren’t sure they need. Then, we wonder why they buy a suboptimal solution or, as happens too often, don’t buy any solution at all, not from you or your competitor. Finally, in this book you will see how communication can fail when customers place pressure on salespeople with their buying processes in an attempt to control the sales process themselves. If our customers don’t have a complete comprehension of their problems and our solutions, compliance with their process has a high probability of suboptimal results. Yet, when prospects send us requests for proposals (RFPs), invitation to tender bids (ITBs), or requests for information (RFIs), and invite us to reply, there is this irresistible tendency to jump. Granted, the customer may have made considerable efforts in preparing the request, yet we have no idea whether this is a viable opportunity for the
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customer or our company, yet we willingly contribute limited time and resources. The goal is exceptional selling systems, skills, and disciplines to manage exceptional conversations for exceptional results for both you and your customers. You may have the world’s greatest solution, but if you can’t communicate with relevancy, build credibility and respect, and build clarity for your customers, your potential will be severely constrained. I’ve devoted my career to studying sales strategy and the behaviors that drive exceptional conversations and have consulted with individuals and executive teams involved in high-stakes sales environments. This book is loaded with conversation examples built around business-to-business sales scenarios. Don’t feel constrained by that focus. Highstakes or complex sales include any sale in which the customer requires personal assistance or guidance to make a high-quality decision. Fundamentally, the conversation is between two people and therefore these conversational strategies and techniques will work in business-to-business as well as business-to-consumer sales. As the scale of the decision increases, the number of conversations will increase, yet at the heart of any relationship is the one-to-one communications that we will focus on. The decisions may range in complexity from quick turnover transactions, to the most complex multimillion-dollar multi-organizational “value exchanges.” As you’ll see, it is a matter of scale and you can easily adjust that to match your situation. Further, this book can also help you become more effective within your own company. One of the commonly overlooked elements in a career in business-to-business sales is the fact that sales professionals often have to sell the same deals within their own companies that they sell to their customers. More often than not, the internal sale is
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even more difficult than the external sale. When sales professionals don’t approach their internal customers with the same processes and discipline, their deals and credibility often fall apart because they did not equip their colleagues and superiors with what is needed to make high-quality business decisions. You can use the lessons in this book to ensure that doesn’t happen to you. The bottom line is: This book is about creating conversations that achieve relevancy, credibility, and respect between individuals, no matter what the context. An overview of the book’s chapters is important so you will have a sense of its contents and how it is organized, especially for future reference. However, I don’t recommend using this as a guide to cherry-picking the text. The style and substance of exceptional sales conversations are based on the critical components of clarity, relevancy, credibility, and respect that you build throughout the sales process. You are given a guided path. Each step in the process supports and facilitates the next step. This book shows you how to be more efficient and more effective, but there aren’t any shortcuts to exceptional sales results. In Part I, we will explore the communication barriers that stand between salespeople and their customers. The fact is that most salespeople are working harder for diminishing returns because of fundamental and widespread miscommunication with customers. This miscommunication has two facets: errors in style, or how salespeople talk with customers, and errors in substance, what they choose to talk to customers about. In Chapter 1, “The More You Sweat, the Less You Sell,” we will examine the style facet. You will begin to understand why salespeople often have two strikes against them every time they engage a customer: they are relying on unconscious patterns that were already set in stone by the
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time they entered kindergarten; and they are working with a sales process that encourages an atmosphere of confrontation. You will see how these combine the pressure and stress of sales to sabotage our relationships with customers. In Chapter 2, “Nobody Buys a Value Proposition,” we will explore the substance facet of customer conversations. All sales, at their essence, are value transactions, but too often salespeople misunderstand the realities of value. They communicate in the simplistic, generic terms of value propositions, that is, in hypothetical terms that do not have the power to compel customers to connect and therefore act. Customers find these propositions indistinguishable from one another and often, undistinguished to boot. This is why customers act as if all salespeople sound alike and the only relevant differentiating factor between their offerings is price. In Chapter 3, “You’ve Got to Get Your Mind Right,” we get to the good news. You can make the greatest leaps in sales performance and raise your results from average to good or good to great by simply changing your mind. How we think precedes how we behave and our mind-set is without a doubt the critical foundation for success. We will analyze the five fundamental elements of the mind-set that opens the way to value achievement, as well as creating, expanding, and protecting customer relationships. In Part II of “Exceptional Selling,” we will travel through four series of conversations that result in exceptional sales. These conversations enable sales professionals to guide customers through the value life cycle as it applies to the customer’s unique situation and how the sales professional can create a robust dialogue that yields privileged insight into the customer’s world. In Chapter 4, “Earning the Keys to the Elevator,” we will detail the conversations a salesperson must undertake
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to identify and initiate optimal opportunities. You will learn how to conduct initial engagements that quickly and effectively gain executive sponsorship and privileged access to the customer organization. In Chapter 5, “Diagnosis Trumps Presentation Every Time,” you will see why sales presentations stunt customer relationships and sales results, and learn how to conduct diagnostic conversations that help customers fully comprehend the inefficiencies and performance gaps that are constraining their business results. In doing so, you provide the customer with the incentive to change. In Chapter 6, “Cutting Through the Smoke and Mirrors,” we will explore the problems inherent in designing solutions in a vacuum. You will learn how to work with customers to define solutions, and in doing so, capture an unparalleled opportunity to set yourself apart from your competitors, anchor the customer in your solution, and gain an inside track to winning the sale. This is where you see how to give your customer the confidence to invest. In Chapter 7, “It Doesn’t Pay to Surprise a Corporation,” you will see how salespeople sabotage themselves when they avoid discussing the challenges and risks associated with their offerings, and as a result, set the stage for mistrust and destructive surprises. In essence, they end up losing customers because they are afraid to lose customers. You learn how to conduct constructive conversations about negative issues and how to further enhance your customer relationships. In Part III, we will explore how to establish exceptional credibility and cement it with the ability to overcome two of the most difficult conversational challenges in today’s complex sales environment: the urgent need to quantify value and the demand that salespeople engage with customers at the highest levels of their organizations.
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In Chapter 8, “Show Me the Money,” you will see why customers do not respond to standard return on investment presentations and salespeople are intimidated by financial conversations. You will learn how to harness the most effective sales accelerant. You will also learn how to guide customers through conversations that enable them to quantify the cost of their problems, as well as to establish the expected return on solution and the appropriate investment to earn that return. Finally, in Chapter 9, “Connecting at the Level of Power and Decision,” you will see why salespeople lose their confidence and ruin their chances when they reach the C-level in their customers’ organizations. You learn the five rules of senior executive conversations and discover how to gain credibility with, sponsorship of, and guidance by the top leaders. That’s the big picture and enough said. Let’s get started learning the conversational mind-set, strategies, and skills that power exceptional selling.
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I
’m not sure how many people read the Acknowledgments in a book, but I would like to share some thoughts on exceptional performance as well as my personal thank-yous. Exceptional Selling has been published during my 25th year as a professional consultant / trainer / speaker and my 35th year as a business owner. I believe there are few areas where exceptional performance occurs as the result of a single individual’s effort. Even individual athletic pursuits involve considerable support from teachers, coaches, audiences, and in some cases, equipment makers. One of the top characteristics of Exceptional Sellers is that they have learned the value of their team of supporters and deeply respect and care for their well being. Before you go on to read my Acknowledgments, I’d like to suggest you write your own Acknowledgments, listing all those who have educated you, supported you, and coached you. Make sure your supporters know how much you appreciate each and every one of them. You don’t have to wait to write a book; send them all a copy of your Acknowledgments today! I’ve dedicated this book to my lifelong partner in business and marriage. Pat continues to support me, teach me, and coach me. There is no one who has had a larger impact on my success and my joy. xxix
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The number of people who have touched the writing of this book is in the hundreds. In 15 years, we have gathered an incredibly gifted group of colleagues within Prime Resource Group who continue to support, teach, and coach clients, and each other and have contributed their expertise to the development of this book and the on-going support of our clients. There would not be a Prime Resource Group without the exceptional clients we serve. Successful businesses have come to us, wanting to improve and replicate that success. In some cases, these are large enterprises such as Shell, Siemens, Raymond James, and 3M, but many are smaller companies or start-ups that do not yet have the global recognition. We have learned as much as we have taught in every engagement, and what we have learned is reflected in this book. Putting a book together is no small task, and I can guarantee it would never happen if it was a solo project. My thanks to John Willig of Literary Services who took this idea of a sales book that wasn’t about traditional selling to the publishers. Matt Holt, our editor and his team at Wiley, who did an exceptional job with us in Mastering the Complex Sale have done it again in positioning and supporting this book in the market. Thank you to Nancy Brenny, our marketing director, whose exceptional efforts and skills are behind the successful promotional efforts to spread our message. A special thank you to my executive assistant Gail Mueller, who has the uncanny ability to know everything important and take care of things before I think of them, many times, thankfully, even when I don’t think of them. I’ll go out on a limb and say her exceptional proofing skills have found every error in this book.
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I also want to thank Ted and Donna Kinni who worked with me on organizing and writing (please pardon my bias) another great book. It is one thing to have the ideas and the experience, it is quite another to put it into an informative and enjoyable read. Ted and Donna have that exceptional skill. Thanks to Blair Sheppard, a valued client and colleague, who has built Duke University’s Corporate Education program into the number one rated executive education resource in the world. His very impressive insights led me to request that he write the Foreword. My special thanks for his willingness to take the time to write a Foreword that I believe captures the essence of Exceptional Selling. I am honored by his generosity. I was also honored and deeply flattered when Tom Peters recommended my book The Prime Solution to his readers last December. His book, In Search of Excellence, came out during the second year of our business, and I’ve been an admirer and follower of his work ever since. I suggested to him that doing nice things for people opens the door to other requests; namely, I asked him if he would read Exceptional Selling and consider endorsing it. He did, and his endorsement means a lot to me personally and professionally. A special thank you to all the individuals who took the time to read the early manuscript; provide their comments, suggestions, and endorsements. A very special thank you to our children who continue to amaze, delight, and inspire me with their exceptional lives: Jennifer, Jessica, and Brian; two great sons-in-law—Favian and Stephen; and two most special additions to our family who joined us early this year and started a new chapter in our life—our two precious grand
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daughters: Aviva Rebecca and Adilynn Isabela (photos available on request). Finally, thank you to all the readers of my first two books, and those of you who have called or e-mailed your questions and thoughts, and those of you who will do the same with this book. It’s great to know how our work has helped you, and it’s great to get your suggestions. I’m looking forward to your responses to Exceptional Selling.
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I “What We Got Here Is a Failure to Communicate”
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o sales professional in their right mind would sabotage their own efforts, but nevertheless, undermining our credibility and alienating the very customers and prospects we count on for our livelihoods happens all too often. We usually recognize the “I can’t believe I said that— I should have known better” words that pop out in the heat of an emotional and high-pressure situation and if we had just stopped to think we would have never made such ridiculous and irrevocable statements. The far more common and harmful situations are those actions where we don’t even realize that we are losing or destroying the trust and credibility we worked so hard to create. From subtle inferences that customers hear as dangling insults to blaming customers for misusing your product, the challenge is recognizing all of the potential avenues of self-sabotage and developing the skills and disciplines that put us in control of our actions and the entire selling process. Many people operate with the attitude of “win a few, lose a few.” In other words, salespeople don’t expect to win every encounter. When they lose, they tend to attribute it to the wrong causes, such as “we just didn’t connect, he wouldn’t open up, I was misled.” Self-sabotage is rarely recognized or acknowledged by a salesperson and, as a result, generally remains unaddressed. Further, salespeople can’t look to customers to clue them in. Customers aren’t going to rationally discuss how 3
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you’ve insulted them or alienated them. Often, the customers themselves can’t articulate what’s rubbing them the wrong way or why they’re uncomfortable with the conversation and the thought of doing business with you. At times, however, the consequences of our actions are clearly visible in how the customer behaves. Have you ever found yourself working diligently on a promising and valuable opportunity when suddenly, with no plausible explanation, the engagement spins into a downward spiral? When someone is in trouble and the situation is starting to deteriorate, there are many changes that occur. For example: • Even though the customer was responsive and engaged during your presentation, they never returned calls and e-mails. • The sales cycle time was stretched out beyond reason. • Pricing pressure was relentless. • The company suddenly instituted budget cuts. • When it was time to sign agreements, phantom decision makers suddenly appeared out of nowhere. • Prospects and even customers were indifferent to your solutions even though the offer was clearly in their best interest. • They became easily, and fatally for you, distracted by the competition’s smoke and mirrors. All of these situations are indicators that you have likely self-sabotaged and undermined your best efforts. You know when it happens; one minute you are having a very open and engaging conversation and suddenly there’s a chilling response from the customer. It’s as if the temperature in the room dropped 40 degrees. All commu-
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nication stops. It reminds me of a scene in the classic film Cool Hand Luke in which the merciless warden coldly stares at his prisoner (played by Paul Newman) and drawls, “What we got here is a failure to communicate.” What is “a failure to communicate”? Anything that happens in a prospect or customer engagement that prevents an open, honest dialogue and a productive and collaborative relationship is a failure to communicate. Any time you lose a viable sale—one in which the customer makes no decision at all or chooses to buy a similar solution from a competitor when you knew your solution was clearly more valuable—counts as a failure to communicate. A viable sales opportunity can deliver value, not only to your customer, but also to you and your company. It has the potential to solve substantiated customer problems, create customer value that is tangible, achievable, and measurable, and produce a profit for your company that helps it meet its revenue targets and pass a lucrative check on to you. Of course, you want to make as many of these profitable sales as possible. But how many sales do you lose that you should have won? Whatever your win/loss ratio is, every viable sale you lose represents a failure to communicate. You can look at this as a substantial communication challenge or a great opportunity. One of the core competencies of professional selling is communication. Salespeople often are hired for their outgoing personalities and inborn communication skills, and they spend the vast majority of their time using both on their customers. Nevertheless, as we will soon see, failure to communicate effectively is the single biggest cause of substandard sales performance, missed targets, lost revenues, and career frustration. In the next three chapters, we’ll explore the traps of sales communication that lead to failure and examine the
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root causes and ramifications of the failure to communicate effectively with our customers, and then show you how to connect and win at a success rate you have not imagined was attainable before. When a conversation turns into a train wreck, the first way salespeople typically throw the conversation off track has to do with not conducting the conversation with mutual respect. In Chapter 1, we’ll examine the style of our conversations, how we approach our customers and how we may be undermining the mutual respect that’s required for a successful sales conversation. We tell ourselves, “The customer is always right” and “Customer satisfaction is our highest priority.” But record your next face-to-face or phone conversation and listen to yourself afterward. Put yourself in your customer’s place. Pay special attention to how you react under pressure or when a customer is not following your thoughts or expresses a view that is different from yours. Do you hear yourself saying something like, “But if you really thought about the value of the entire range of what our solution offers, you’d realize . . .” or, “I’m afraid you may have misunderstood me when I said that . . .” or even, “Actually, some of the more successful companies in your industry have already been implementing . . .” As we’ll see, these problems have been a long time in the making. They come from the way our brains are wired, from what we observed as children, what we saw in watching others sell, convince, and persuade, and only slightly from what we’ve learned in our formal sales training. Another way salespeople can throw a conversation off track has to do with relevance. In Chapter 2, we’ll explore how salespeople sabotage their conversations by what they are talking about, the substance of the conversation. The
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typical sales conversation is all about the seller: how our solution is superior, how our customer support is extremely attentive, and how our R&D operates at the leading edge. It’s very much about us, not our customers. We assume the customer understands the priority issues that need to be addressed and has a quality process for making a decision of this kind. We quickly find ourselves in a presentation mode and providing tons of information. More frequently than most of us would like to admit, the customer does not see the relevance of most of this information. Why and how we can miss the mark—because of respect and relevance, style, and substance—is the focus of the first two chapters of this book. The good news is that, unlike many of the other challenges that we face as sales professionals, the way we choose to communicate is one of the things that is entirely within our control. If we learn to recognize when we’re putting up barriers to communication, we can choose a more productive alternative. That’s the focus of Chapter 3. In Chapter 3, we’ll explore what I call the Diagnostic Mind-Set, a point of view or set of beliefs or our “stance,” which provides the foundation of a conversational, diagnostic style that is uniquely suited for exceptional communications. It’s the antithesis of a presentation mind-set. Diagnosis is more effective than presentation, first because it is collaborative and second, it’s always focused on the customer. Diagnosis is about observable symptoms of problems and the parameters of solutions, not opinions or blame. The diagnostic approach maintains and protects the customer’s self-esteem and engages the customer as a collaborative partner. This approach, Diagnostic Selling®, is the foundation of Prime Resource Group’s programs and you will get a heavy dose of this highly effective and rewarding process in this book.
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Most important, it differentiates you from your competition. In a world where every salesperson is presenting value, using similar or even identical words that customers have great difficulty sifting through, the sales professional who takes a more advisory-based approach to identifying and confirming value, will be viewed as having exceptional credibility. We will also see that, unlike many of the challenges that sales professionals must overcome, communication is a challenge that is entirely within our control. My goal is to expose both the subtle and the obvious sources of communication failure. I will also introduce you to powerful alternatives to conventional sales communication that can help you win your customers’ hearts, minds, and their business. Successful professionals achieve credibility by guiding their customers through value-driven business decisions. They win customer loyalty and trust through respectful, honest, and diagnostic-based communication. This is a proven alternative that Prime Resource Group has been developing and teaching to sales professionals and management teams for years. It can turn your results around or notch them up to the next level of professionalism. It will enable you to rise above the conversational clutter, establish exceptional credibility, and achieve extraordinary sales results.
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1 The More You Sweat, the Less You Sell
T
he most common forms of sales sabotage are stylistic. How we talk with customers can easily undermine our ability to position ourselves to succeed and win business. No one does this intentionally, but the fact remains, if you don’t know how to effectively structure and conduct customer conversations, what you talk about doesn’t make much difference. Customers aren’t going to hear you. They won’t care what you have to say. They may even work actively against you. Many sales professionals hear the word style in the context of communication and think of personality style or style in the sense of something cosmetic or trendy. Style in the sense I’m using it here is an expression of our mind-set, our 9
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stance, and our approach to our relationships with customers. It has a lot to do with the answer to the question, “How do you see your role as a sales professional?” Our conversational style has a huge impact on building credibility and trust. For years, I’ve cited a study that revealed that the number-one reason that patients change doctors was not based upon the doctor’s competence, but on the doctor’s bedside manner, that is, how well the doctor appeared to understand and respond to the patient. This is further reinforced by recent studies of malpractice lawsuits described in Malcolm Gladwell’s book, Blink (Boston, MA: Little, Brown and Company, 2005). Again, these studies found that the competence, or incompetence, of doctors had little to do with who got sued and who didn’t. What do you think was the most significant difference between doctors who were sued at least twice for malpractice and those who were never sued? “Interestingly,” writes Gladwell, “there was no difference in the amount or quality of information they gave their patients; they didn’t provide more details about medication or the patient’s condition. The difference was entirely in how they talked to their patients” (p. 42). How you speak with your customers has an equally powerful impact on your career. Your ability to constructively attract and engage a customer in a relevant dialogue requires a conversation style as well as substantive content. Style is a critical key in the creation of engaging and compelling business relationships. When customers are engaged, they learn. When what they learn is compelling enough to make them want to change, to take action, they will buy. I’m assuming that you are not all that surprised when I say your style of conversation has a tremendous impact on your performance and establishing credibility with prospects and customers. You know that. What you may not realize, however, is that the style you are using right
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now may very well be setting you up for failure in your critical conversations. It might be difficult to accept that you may be sabotaging your own career, but here are three reasons that could be true: 1. Contrary to the popular image of salespeople as “born communicators,” most people, and that includes sales, service, and support professionals, are not naturally effective communicators. Further, they tend not to know that about themselves. For instance, I see wellmeaning professionals get emotionally involved in their conversations with customers all the time. When they do, they unconsciously link the success or failure of those conversations to their self-image and emotional well-being. This raises their personal stake in conversations and they start feeling self-imposed pressure. As their stress levels shoot up, they fall back into old habits and thoughtless reactions that are not pretty and that they often come to regret. From the customer’s perspective, that’s strike one against a credible conversation. 2. The techniques promoted in the majority of sales training programs exaggerate our innate communication shortcomings. Salespeople have devoted countless hours to perfecting their presentation techniques and to understanding how to overcome objections and close sales. The problem is that much of this sales dogma was not designed for the collaborative effort required in sales today (Era 3 in Figure 1.1) and further alienates customers. That’s strike two against a credible conversation. 3. When salespeople get emotionally involved in the outcome of a customer engagement and start to try to drag the customer into compliance using outdated
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FIGURE 1.1
Three Eras of Selling
techniques, what they are really doing is confirming the customer’s negative assumptions and stereotypes about the sales profession. That’s when customers start to identify us with everything bad that a salesperson has ever done to them or that they have heard was done to others, and that can be strike three in an attempt at a credible conversation. Salespeople frequently have no idea why they struck out. One moment they’re passionately pursuing the sale, using all of the techniques they have been taught, and the next moment the customer is treating them like annoying insects. A fundamental communication disconnect has occurred. When customers believe salespeople have lost their credibility, they begin taking action to distance themselves and quickly shut down. Usually, salespeople are baffled by the customer’s unexpected response. They begin to see their customers as irrational, unreasonable, and sometimes, rude. They think the customer just doesn’t get it! They don’t understand what really happened.
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The last thing we want to be saying about our customers is, “I just don’t understand why they did that.” One of our goals here is to help you understand the behaviors and words that drive customers to cut off communication and what we can do to prevent that behavior. We also need to look at what customers do and say that can trigger counterproductive behaviors in us and what are the most productive ways we can respond and maintain our credibility.
The Emotional Mind-Set— The Root of Miscommunication Your emotional mind-set can either provide the foundation on which all successful communications are built, or it can be the primary instrument sabotaging your credibility. You embark on customer conversations with a pre-established view of the world or mind-set. Your mind-set derives from your personality and experiences and it manifests itself in the way you respond to others. It is also formed by the expectations and assumptions you have about the individual you are speaking with, the conversational flow, and the outcomes you hope to achieve. To be an exceptional salesperson, there is nothing more important, nor harder to master, than to get this mind-set right. Your awareness of the emotional mind-set with which you are entering a customer engagement is going to vary widely. You will be very aware of some of its elements and others will be hidden deep in your mind, just waiting to leap out at the most inopportune time. It’s the elements that you aren’t aware of that can become emotional blocks to open and honest communication with your customers and really hinder your successful outcomes.
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Who’s Talking Now? One effective way to recognize the sources and effects of mind-set in conversation and relationships is by looking at patterns of adopted beliefs and observed behaviors, like that parent and child in all of us. The parent is composed of borrowed attitudes, opinions, and prejudices—all those things we accepted and stored away without question in the first five or so years of our lives. Sometimes the parent is a critical parent, that part of us that tends to tell, preach, and enforce—and sometimes the parent is nurturing, that part of us that is very supportive and empathetic. The adult is our objective, reality-based self. The child is our subjective, emotional self. The adult is the ideal state for credible conversations, but the parent and the child pop up all the time and drive many suboptimal interactions. For instance, as you’ll see in the dialogue that follows, salespeople often respond as the child to their customer-parents: PROSPECT: Our company is planning to purchase an integrated CRM software package for our marketing, sales, and service staff. We understand you have one of the more flexible solutions, and we would like you to demonstrate your solution to our management team by the end of the month. SALESPERSON: We’d be glad to demonstrate our solution, but first I need to get a better understanding of your company’s needs and budget. I’d like to schedule some time to meet with several of the executives at your company. PROSPECT: We’d rather not take the time for that. We’d like to start with an overview first and if things look good, we can progress from there.
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SALESPERSON: It’s very difficult to present such a complex solution without understanding more about your situation, your requirements, and your budget constraints. PROSPECT: We have a reasonable budget in place, and we don’t have time to waste on meetings. Do you want to work with us or not? SALESPERSON: Certainly, when would be the most convenient time for the demo? What happened here was driven by emotion. The customer calls in and says he wants a product demonstration, a normal and often costly part of the complex sales process. The salesperson responds as an adult and seeks to ensure that a demonstration of his product can be tailored and is appropriate for both the customer and his own company. The customer responds like a parent; it’s going to be his way or the highway. The salesperson, overly anxious to please and scared to lose the sale, responds like a child by complying and, in doing so, commits to an expensive course of action that may very well have no chance of yielding a sale. If you read this and think that the salesperson had no alternative but to agree to the customer’s demands, you may be responding from your child, too. As we’ll see in later chapters, there are viable and effective alternatives that are less likely to trigger these parent-type reactions by customers and that will be more effective than compliance to customers who take the parent role. The request for proposal (RFP), by the way, is an institutionalized version of a parent-child or superiorsubordinate transaction. The customer sends out a parental command to bid a project, the “to-do” list, and many sellers automatically obey, often investing huge amounts of time, money, and other resources in the
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proposal process without question and without any real sense of their odds, all in hopes of winning the sale. Again, the idea that you have no alternative but compliance is seriously flawed. Another very common scenario occurs when salespeople unwittingly play the parent with customers and alienate them at the very beginning of the sale. I’ve often seen salespeople walk into a customer’s office very early in the meeting and in the guise of an “initial benefit statement” say something like, “You probably don’t realize how much defects in the silicon wafer fabrication process cost companies in your industry each year.” This is how salespeople have been taught to start their call in order to gain the customer’s attention. But what do customers hear? Many of them hear a parent or superior insinuating that they don’t know their own business. If you lead a sales conversation with a similar statement and your customer sits back in his chair and disengages, you can guess what just happened. Once the parent and the child manifest themselves in a business conversation, old patterns of reacting often kick in. These preprogrammed reactions can play out automatically and unconsciously, and what’s left of your connection and credibility with the customer quickly deteriorates. The Amazing Old Brain Another hidden element of an emotional mind-set that negatively impacts salespeople resides in what scientists define as the Old Brain. The Old Brain consists of two parts: the brain stem (or reptilian brain) and the limbic system. The reptilian brain is the most primitive part of the brain and controls our involuntary actions, such as breathing,
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sleeping, and our reflexes, such as the jerk that results when a doctor taps your knee with that little rubber hammer. The limbic system generates basic emotions, such as fear and aggression. Both parts of the brain operate automatically and unconsciously. The Old Brain is not big on interpretation and analysis. Scientists say that it reacts to situations and other people in just six ways: attack, submit, flee, reproduce, nurture, or be nurtured. It also decides how to react with lightning speed, faster than the more evolved cerebral cortex—the part of the brain that “thinks” in the more rational sense. So, while the cerebral cortex is thinking a situation through, the Old Brain is ready to act. Recently, scientists have begun to believe that more and more of our behavior is created unconsciously. Timothy Wilson, University of Virginia psychology professor and author of Strangers to Ourselves (New York: Reed Business Information, 2002), finds that we are always switching between the conscious and unconscious brain. He says our “adaptive unconscious” develops early in life, learns patterns that become fixed and inviolable, and plays a much larger role in our day-to-day behavior than previously believed. So how does this affect your conversations? Think about how quickly a customer’s gesture or tone of voice can trigger a negative perception, or worse, a negative reaction in you; how quickly a sale can get hung up on a trivial point in a contract; how quickly a customer can get upset and argumentative when you counter an objection by saying, “I’m sorry, but I think you misunderstood.” There is a good chance you are seeing the Old Brain and the adaptive unconscious at work in these situations. When people react negatively and things start heading downhill, conversations can quickly get out of control and they become ever harder to turn around.
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In this case, the Old Brain is in the self-protection mode. Note that the words “I think you misunderstood” places the blame on the customer. The implication is “What I said was clear, you just didn’t get it.” A more thoughtful response that nurtures the customer could be, “I can see the language I used may not be clear enough [our fault]; what part of the wording do you think should be revised?” Remember that the Old Brain and adaptive unconscious exist in all of us. They are emotion laden, they operate automatically, and many times we are not aware of the negative impact they can have on customer relationships and sales results. Stress Kills Credibility One more thing: Stress is produced when the emotional mind-set problems described previously manifest themselves. Stress is emotional reactions running rampant and it can easily power a self-reinforcing, downward cycle that destroys credibility and trust in conversations. When you react without thought to stress, it drives you back into a reactive mode and dangerous old beliefs. Stress can drop you back into quickly reacting versus thoughtful patterns of response. Stress can also close salespeople down. They start thinking about the consequences of not closing this sale, worrying about how they are going to salvage it, and what they are going to say next. They are so involved in their own problems that they aren’t paying attention to the customer and they stop listening. When the customer says something relevant, the salesperson either misses it or reacts seemingly out of the blue with disconnected thoughts. The conversation becomes even clumsier and new communication problems are created.
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Finally, higher stress levels cause salespeople to figuratively and perhaps even literally start sweating. The rule of thumb about sweating in sales is simple: The more you sweat, the less you sell. If you are feeling pressure, it probably means that you are working harder and, as we will see, when you’re under pressure, it often does more harm than good.
Key Thought When you’re feeling pressure, you’re doing something wrong.
Presentation and Persuasion— Commoditize and Alienate When salespeople work under pressure, what do they unwittingly do? They reach back into their subconscious and more aggressively apply the tools and techniques that they assume or have been told will help them win sales. Unfortunately, instead of solving their problems and salvaging the sale, these tools and techniques are, at best, ineffective and, at worst, can irreparably damage their credibility and trust with a prospect or customer. This is because of a flawed emphasis on two elements of conventional sales training: presentation and persuasion. Presentation and persuasion are not inherently flawed sales tools. When their aim is to convey information that the customer needs to reach a high-quality decision, they can be effective. To be effective, however, their timing, content, and intended audience must be perfectly aligned.
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Unfortunately, this is rarely the case. A presentation is an answer to a question; the worst presentations are answers to questions that haven’t been asked. This type of presentation confuses the customer.
Key Thought Do not answer an unasked question.
Take a look at your typical presentation. What questions are you answering? How sure are you that those questions are in your customer’s minds? In other words, how ready are your customers for your answers? Can your customers connect that answer to something relevant to their success?
Presentations Commoditize Solutions How knowledgeable are your customers when you initiate your sales process? Roughly three-quarters of the sales professionals we have polled place their customers at 60 percent or less in terms of problem and solution knowledge. Only 3 percent of sales professionals think that their customers score at 80 percent or above on the knowledge scale. This suggests that your prospects will almost always have a less-than-comprehensive grasp of their situation or the problem they should be solving. Ask yourself these questions: Do your customers know the true cost of the absence of the solutions you sell? Do they even know if they are experiencing the problems that your solutions are designed to resolve or the risks they are exposed to if they don’t buy that solution? If you are selling commercial insur-
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ance, for example, can your customers quantify the risks in their current coverage? Do they recognize the gaps in the coverage? Can they recognize excess coverage? Do they understand what they should self-insure? The answer to all of these questions is “probably not.” The solutions we sell are often more confusing to customers than the problems we solve. Ask yourself these questions: How often, if ever, have your customers purchased such a product or service? Can customers connect the value inherent in your solution to their situation? If you are selling software, for example, have customers established the right decision criteria necessary to make a sound decision? Do they understand the difficulties of implementation? Again, the more complex the sale, the more likely the answer to all of these questions is “probably not.” How do most salespeople address these issues? They standardize their approach and depend on presentations to educate their customers. But as we’ve begun to see, presentations have some major disadvantages in and of themselves. First, they transform salespeople into professors giving lectures, one of the least effective ways to transfer knowledge. Learning experts tell us that people retain only about 30 percent of what they hear. Even using the best adult learning techniques, including a well-developed multimedia approach, the experts still say that an audience only retains half of what they see and hear. Our experience suggests that these figures are conservative. When a presentation answers questions that have not been asked, relevance suffers and comprehension drops dramatically. There is no incentive to retain information that appears irrelevant. Second, consider the content of a typical sales presentation. Based on our research, all too many are devoted almost
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entirely (80 percent or better) to describing the salesperson’s exceptional company, the robust solution, and the positive future customers will enjoy once their companies buy it. Most often, presentations are loosely connected to the customer’s current reality and the only quantification metrics they contain are the price and the standard, highly suspect, ROI figures. Step back into the customer’s shoes for a moment. You’ve heard a number of these presentations. You’ve only understood or cared about a fragment of what you heard in each one. (Between the customer’s lack of experience and knowledge and the inefficiencies of the presentation format, that’s all they will absorb.) The presentations all looked and sounded alike. They aren’t specifically tied to your business; there is no reason to consider them credible. You’re frustrated and likely confused. What do you do? The same thing you do when someone tries to sell you a generic value proposition that makes everything look and sound the same . . . you commoditize. You cut through the haze and compare the bottom lines. If the prices all seem too high, or you never felt any urgency in the first place, you won’t buy. If you’re convinced you must act, you send everyone home to sharpen their pencils, and then you buy based on what you do understand—which more often than not ends up being the price. I constantly hear salespeople complain about “nodecision” customers and relentless price pressure. If they entered their customer’s world for just a minute, they might see how valid those complaints really are. It is hard to communicate how painful presentations can be to customers. A vice president of sales recently told me that he sat through a presentation from a vendor who hoped to sell a networking solution to his company. For 50 minutes of the 90-minute presentation, the sales team
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went nonstop. The only reason they stopped there was that the vice president finally interrupted with a question. Persuasion Alienates Customers The second flaw in conventional sales training is the concept of the salesperson as persuader. Ideas such as “Every prospect is a customer; they just don’t know it yet” and “Anybody can be sold” are classic articulations of the persuasion school. Words like overcome, persuade, persist, and convince are indicators of that school of selling. The problem is that we rarely stop to think about how customers perceive the tactics of persuasion that salespeople are taught and encouraged to use. They are going to see you as the “lecturing professor.” You are acting as if they are ignorant, only you have the power to set them straight, and they must listen and learn. Let’s step back into the customer’s world again. If someone is trying to push you into taking a certain course of action, even when you have misgivings about it, or if he is implying that he knows better than you, that he is smart and you are not, or that you just don’t get it, how would you react? When someone pressures you to take a certain course, it’s only natural to question his motives. Why is he pushing me so hard? Whose interests is he actually looking out for? Justified or not, the answers to these questions seem obvious to customers and that is why this type of behavior doesn’t build credibility or engender trust. In fact, I’ve had customers tell me that they have been so irritated and insulted by overly persuasive salespeople that even though they decided to buy, they purposely went out of their way to buy a similar solution from another source.
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Overzealous persuaders regularly trigger reactions like these that close down communications. They alienate customers. Here’s a common example: A customer makes a simple statement, “Your price is too high.” The salesperson thinks, “Objection! Must overcome!” So, he quickly reacts: “Not really, when you consider the exceptional durability of the components and our excellent support. This equipment will outlast anything on the market. We’re so convinced of this that we’ll give you a 10year, full service warranty—the best in the industry.” Now, the customer feels challenged. All he hears through his filter is, “You’re wrong. The price is right. You just don’t get it.” His self-esteem has been attacked and his response is quick: “The length of the warranty is not that important. The price is still too high.” The salesperson hears, “Your stuff isn’t worth it and you have some nerve asking for that much money.” Now, he’s wounded, his stress increases, his Old Brain kicks in, and out comes the critical parent, and possibly the lecturing professor, “The value we provide more than justifies our price. What you need to understand . . .”
Suddenly, the meeting has turned into a debate or worse, an outright argument. The interesting thing about this is how the unconscious mind and our past sales training baggage start reinforcing each other in a negative downward spiral. They are conspiring to hijack the conversation and most of the time we have no idea what’s happening.
Customer Expectations— Snake Oil and the Hard Sell Just as it takes two to tango, salespeople and customers enter conversations with preconceptions and expecta-
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tions, that is, their own mind-set. Unfortunately, the customer’s preexisting mind-set about buying, and especially about buying with a salesperson involved, is generally not optimistic. Customers tend to paint all salespeople with the same brush. To them, salespeople, no matter whether they sell advanced avionics or used cars, all come out of the same mold. There’s both good news and bad news in this. Key Thought Salespeople are guilty until proven innocent. First, the bad news: In 2004, when Gallup surveyed the U.S. public on the subject of trust in professionals, it found that the “least trusted” of all professions are automobile salespeople. The sales profession in general doesn’t rank much higher in people’s minds. In 2000, when Jobtrack.com surveyed students and recent graduates, it found that the second “least respected career” was sales. (Politicians were the least respected.) The portrait of salespeople that has emerged in the arts and media reinforces this poor image. Classics such as Sinclair Lewis’s Babbitt (1922), Arthur Miller’s Death of a Salesman (1949), and David Mamet’s Glengarry Glen Ross (1983) are typical representations. How often have you seen a salesperson cast as the respected hero in a movie, television program, or book? It would be convenient to be able to blame others for the poor reputation of sales, but the hard fact is these unfavorable portraits didn’t appear out the blue. Manipulative, dishonest people exist and often are allowed, and even subtly encouraged, to do whatever it takes, as long as they win business. Further, the sales function itself is often
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treated like the Wild West of the business world. Until recent years, sales hasn’t received much respect as a profession with a body of knowledge and a code of conduct. (That is starting to change. For instance, in 2004 I was invited to speak at an academic conference attended by professors from some 60 colleges and universities that had all established, or were in the process of establishing, curriculums and degree tracks for professional selling.) Finally, our customers’ negative perception of salespeople is based on direct experience. How often have you been pressured to buy a product that wasn’t right for your needs, been sold a product or service that didn’t live up to the hype, fallen prey to the bait-and-switch ploy, had to be rude to end a sales call, taken a survey that is just a come-on for a sales pitch? We’ve all had these experiences and over time, we’ve all built up defense systems designed to protect us from snake oil and the hard sell. Understanding the preexisting mind-set of the customer as you begin your communications will help maintain your emotional control. Your behavior will either confirm the customer’s mind-set or contradict the stereotype and set you apart. But the fact remains that your interaction with a customer is going to be affected by all the salespeople who came before you. If the customer hears you use the same line that the telemarketer or retail salesperson used on him last night or that the “persuader” used who called him the day before, he is going to associate you with them. If your main competitor came in yesterday and unwittingly angered the customer by refusing to talk about the price before a lengthy presentation and you walk in today and do the same thing, you are in for twice the anger and are highly unlikely to succeed. You could be operating with
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all good intentions; it doesn’t matter. Salespeople are guilty until proven innocent. Parents, Professors, Policemen Salespeople confirm customers’ negative sales stereotypes when they tell them what to do, when they lecture at them, and when they imply customers are wrong . . . in other words, when they act like critical parents, lecturing professors, or accusatory policemen. Remember, I am talking about negative stereotypes here. There are nurturing parents, inspiring professors, and heroic police officers, but adopting the negative behaviors of these roles in a selling environment is common and can have serious consequences. Even the positive aspects of these role models can create tension and conflict. Think about it. Who do parents, professors, and policemen deal with? Children, students, and criminals. Is that how you see your customers? Probably not. But, that may well be exactly how you are unintentionally treating them. How do customers react to these roles? It depends on how sensitive they are and what kinds of messages are running in their adaptive unconscious minds. Often, it’s a sequential reaction. When first confronted by a salesperson who is acting like a critical parent, a lecturing professor, or an accusing policeman, the customer may go into a compliant, subservient mode. But they won’t open up, won’t contribute to the conversation, and are a long way from trusting you. On the surface, they will seem to be listening. In fact, they may listen and nod along, accept your brochure, politely thank you, and promise to be in touch. As you have perhaps noticed, the odds are they won’t. Of course, it may not end that civilly. Things can easily get worse if you continue to be perceived as one of the
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negative versions of the parent, professor, or policeman, and the customer takes offense. An offended customer will often decide enough is enough and push back and now you’ve got an openly adversarial relationship. At that point, unless you know how to recover, you might as well show yourself to the door before the customer does it for you.
Solving the Style Challenge All right, you’ve heard all the reasons why the traditional conversational style in sales is miscommunication and hopefully, you’ve got a new perspective on why customers often act and react in seemingly irrational and counterproductive ways (Figure 1.2). It sounds depressingly bad, but I promised good news, too. The good news is that with that strong, negative image, it is very easy to differentiate ourselves by acting against type, by not exhibiting the behaviors that customers expect, or literally by doing the opposite of those expected behaviors. After all, when customers begin a conversation with negative expectations and then realize that those thoughts were not justified in your case, it accelerates the credibilitybuilding process and engenders trust.
Key Thought When in doubt, do the opposite of what a salesperson would do!
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Conventional Thinking
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Diagnostic Thinking
All prospects will buy.
Only certain customers will and should buy.
Never take “no” for an answer.
Always be leaving. Give the customer room to breathe.
Persistence pays.
Persistence in pursuing bad business wastes valuable resources.
A good salesperson can sell anything to anybody.
A good salesperson weeds out poor prospects and focuses on high-gain opportunities.
Customers know what they need; it’s my job to deliver it.
Customers can be unclear and even wrong about their needs; my job is to do a good diagnosis.
Never walk away when money is on the table.
Always walk away unless you know you can improve your customer’s business.
If at first you don’t succeed, try again and again.
If you don’t succeed in finding pain you can address, try again—with a different customer.
The customer is always right.
The customer requires professional guidance to complete a quality decision.
FIGURE 1.2 Conventional Thinking versus Diagnostic Thinking
To break these patterns and establish credibility and trust with customers: • We need to be professionally involved and emotionally detached in our conversations with customers. Sometimes salespeople and their managers push back when I tell them this. They believe they need to be enthusiastic and passionate about their solutions to win sales. That is simply not true. Look passionate up in your dictionary. Passionate means being dominated by and displaying strong emotion. More often than not, strong
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emotions interfere with honest, respectful, and professional communication. When you get too passionate, it is easy to cross the line and become emotionally involved. Think confident instead of passionate; think of the doctor role model. Doctors who are confident about their diagnoses, confident about their recommendations, and confident about their ability to treat you are professionally involved. You wouldn’t want a doctor getting excited about your affliction—that would be scary. • To be effective communicators, it is critical that we retrain ourselves and learn new conversational processes and skills. We have to stop presenting and start connecting. We need to change the content of our presentations, make them inclusive and interactive, and put them in their proper place in the sales process. We need to banish the alienating tactics of persuasion. We have to stop persuading and start collaborating in a process of mutual diagnosis and confirmation. • We have to confront our conditioning and break the stereotypes, distance ourselves from stereotypical sales images, and establish ourselves as valued business advisors. When in doubt, we want to do the opposite of what the stereotypical salesperson would do, and I will show you how. Before we start exploring the qualities that will enable us to structure and engage in credible conversations that can consistently meet the above goals, we also need to consider the substance of our conversations. Substance and style go hand in hand.
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2 Nobody Buys a Value Proposition
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he overwhelming abundance of information in today’s world secures the issue of substance as the second major challenge in credible conversations. What is the one strategy that must be at the heart of every conversation with prospects and customers? What do you use to position yourself during the initial contact, when you enter into your first conversations and throughout the rest of the sales process? What is the one and only thing that your customers really want to know? In the sales world, especially in business-to-business sales, the answer to these questions is one word: value. W hen I say this to an audience of sales professionals, I see nods all around and I can almost hear their thoughts: “Check. That’s exactly what I do; I’m very into selling value. I don’t have to listen to this part.” All salespeople are talking 31
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about value. Yet, at the same time, their sales cycle times are growing, the number of “no decisions” is increasing, and it’s tougher than ever to engage C-level executives. If we’ve got the value strategy in play, why aren’t customers responding? Certainly, it is not because customers aren’t vitally interested in value. The “V ” word is overused, usually misunderstood, and has been bandied about for years, but it remains top-of-mind in the business-to-business markets. The reality is that if you can’t position yourself and your company as a source of value, prospects will not want to talk with you. If you can’t create and clarify value, your customers will not take any action and are not going to buy. The issue of value is inescapable, every conversation with a customer must be a conversation about value, and every solution provider must remain vitally concerned with value. Today, and for the foreseeable future, the driving force of conversational substance and customer relevancy in the business world is value. It is at the top of the list of what really matters to customers in today’s business-tobusiness sales environment. Customers want to know how your offering is going to add value to their business and help their careers, and how it will reduce their company’s costs or generate additional revenues. Translation: What’s my incentive to change? They also want to be assured that your solution will deliver as promised. They don’t just want value added, they want value assurance. Translation: Show me how this dream will become reality and give me the confidence to invest in your solution. There is a big challenge attached to the value imperative. Value propositions and value added were first introduced in the mid-1980s when the idea of selling customer value was news and it set you apart. Today, the critical importance of selling value is blindingly obvious to everyone
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in the world of complex sales. Sales professionals fully realize the customer demand for value and, thus, their presentations and proposals are focused on value. The ubiquity of the concept and the creation of value in this environment in which every customer is demanding it and every seller is promising to deliver it have created a major communication challenge. In the quest to differentiate our companies in the customer’s eyes and to win complex sales, the more we focus on value, and the more we all sound the same. It’s a substantive communication challenge that most sales professionals are failing to meet.
Commoditization of the Value Proposition The roots of this problem are anchored in the widespread misunderstanding and misuse of value propositions. Companies create these propositions to articulate the value they plan to offer customers. These statements become the basis and guiding force of the collateral materials that marketers develop for the sales organization—sales messaging, brochures, PowerPoint decks, and so on. The salesforce dutifully takes all of this collateral and presents it to the prospect. They are selling value, right? Not exactly. The salesforce is presenting the value proposition itself, a generic statement of value that requires the customer to translate that value into terms relevant to their businesses and their job responsibilities. For example, “Our adhesive agent bonds at a lower temperature. It does cost three cents per pound more, but the resulting energy savings make this the most cost-effective, environmentally friendly product on the market.” That certainly sounds like value, at least in terms of the overall marketplace. However, we have no idea if our value has relevance with this customer.
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Often, the customer doesn’t either. In fact, the idea of depending on a value proposition to do the job is another example of the same error that we discussed regarding presentations in Chapter 1. It too frequently is an answer to a question that hasn’t been asked. This problem is magnified when value propositions are poorly conceived. The concept of the value proposition has been distorted and stretched well beyond its originally intended role. Given the emphasis that companies place on value propositions, you would think that they have been around since the dawn of business. Actually, a former McKinsey & Company consultant named Michael Lanning coined the term in a 1984 white paper. Lanning said that a business was a value delivery system and that this system could be articulated in a “value proposition.” Fourteen years later, in his book Delivering Profitable Value (New York: Perseus Books, 1998), Lanning defined a value proposition as: The combination of resulting experiences, including price, which an organization delivers to a group of intended customers in some time frame, in return for those customers buying/using and otherwise doing what the organization wants rather than taking some competing alternative.
This was solid thinking, very coherent and comprehensive. But as usually happens, Lanning’s concept has been misused and diluted in its real world use. I worked with a major company in the industrial automation business that fell into this trap. This company was very focused on selling what I call sources of value— these are the elements of the solution that are capable of creating value for the customer. When their salespeople talked to customers, they proudly described how their company manufactured a high-quality product, a product
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built so efficiently that it could be sold at the best price on the market. That’s a great thing: a high-quality product and a low price. You would think it couldn’t be beat, but, as we’ll see, that turned out to be an erroneous assumption. The second thing that happened was that value propositions evolved into value clichés. Instead of being specific about the customer problems they could resolve and the “experiences” they could deliver, sellers began articulating value in generic, ultimately meaningless terms, such as high-quality, fast, and world-class. How frequently are you using words like this? As a self-check, compare your value proposition and sales collateral to those of your top three competitors. Shuffle them and reassign them. Can you tell the difference? I’ll bet you can’t. (And if you can’t, what are the odds that your customer can?) In highly competitive industries, which are now the majority of industries, the value propositions and sales collateral of various companies are indistinguishable from one another; and, too often, undistinguished to boot. When you communicate value with words like “rapid response” and “limited breakdowns,” you are using the same words that all of your competitors are using. These are examples of what I call loaded words and customers use them, too. We’ll talk more about their negative consequences and how to deal with them later in the book. Now, let’s go back to Lanning for a minute. By 1998, when he wrote the book on value propositions, the concept had become so misused that he felt the need to add another clause to its definition. He added that value propositions were “not the trivialized and garbled notions that have been wrongly ascribed to this term.” The consequences of the trivialization of the value proposition have flowed directly down the strategic chain
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to you and your customers. A value proposition might or might not be relevant and credible to a specific customer. For that matter, it might or might not have any basis in reality. Nevertheless, the vast majority of marketing communications and sales professionals are relentlessly presenting value propositions.
“Blah Blah, Fluffy” How do customers react to this endless bombardment of value propositions? One of my favorite Gary Larson Far Side cartoons made this humorously and painfully clear. I don’t remember the exact wording of the cartoon and I know I changed the dog’s name, but the first frame shows a man arriving home to find that his dog has left a distinctly unpleasant deposit in the middle of his light-colored living room carpet. The first frame is titled “What the pet owner said” and it shows the man shaking his finger at the dog as he delivers a stern lecture: “Fluffy, you bad dog! What did you do, Fluffy, you ruined the carpet. You’re a bad dog, Fluffy!” In the second frame titled “What the dog heard,” we see the dog, wagging its tail, plainly overjoyed to see its master, and the caption: “Fluffy, blah blah blah! Blah blah blah blah, Fluffy, blah blah blah blah. Blah blah blah blah, Fluffy!” When we tell the “Fluffy” story in our seminars, it usually generates a good laugh. But I always remind my audience that laughter does indicate guilt. We are all guilty of over-presenting generic value and can immediately recognize this scenario in terms of our engagements with customers. Here’s how it usually plays out: We present our value and Bob, the customer, who has been through this countless times before, nods along. He answers
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and agrees when he is prompted. When we’re finished, Bob tells us how informative and helpful our presentation has been. He can see how our technology is beneficial. He says he’ll f loat this opportunity around the building and asks us to check back with him in a week to 10 days. (By the way, prospects have learned over the years that if they are positive during a presentation and suggest a next step, such as talking with others in the company about the new idea, salespeople will believe that the presentation has gone well and leave.) Customers know that it’s much easier to go into hiding after the salesperson leaves than it is to try to end things while the salesperson is still in the room. Meanwhile, we go back to our offices and tell our managers that we think it went very well. “Bob really gets it,” we say. “He’s taking it to the powers that be internally and we’ve got an 80 percent chance of winning this one.” But a week later, Bob isn’t returning our calls; he has disappeared.
Bob doesn’t call because we haven’t established relevancy and credibility. We might be offering distinctly superior customer value, but what are the odds that Bob will clearly recognize that? With a twist here and there, our competitors are telling Bob all of the same things. It’s all “Blah blah, Fluffy” to Bob. That’s why I’m suggesting that customers don’t buy value propositions. They don’t buy value propositions because the more complex the value proposition, the more difficult it is for the customer to translate value proposed into value achieved. They don’t buy value propositions in the sense that they don’t find them relevant; they don’t buy them in the sense that they don’t find them credible; and they don’t buy them in the very real sense of investing their hard-earned or, even more precious, their borrowed capital. Rightly or wrongly, customers dismiss value propositions as empty words. When they hear them, they shrug their shoulders and think, “So,
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what? You and who else? Every one of your competitors say they have a high-quality solution with a comprehensive service plan, but what’s that got to do with me?” Of course, some customers are going to buy. They have a problem or an opportunity that requires the kinds of solutions you provide. Some customers will make the value translation themselves and you are going to win a percentage of these sales. But these sales are going to be problematic, and you’ll also be working much harder than is necessary. Stand in the customer’s shoes for a minute. The biggest mistake we can make is to assume that customers recognize all of their problems, understand the financial impact of those problems, are able to establish problem priority in terms of resolution, and will be compelled to act. We then go on to assume that they understand all their requirements, know what to look for and what to measure and compare in a solution and, the biggest assumption of them all, they understand our value because it is superior. The reality is that our customers have heard from a number of qualified solution providers who all sound very similar. They have received little or no help interpreting the value. So, what do they do? Most of the time, they simply reduce the sale to something that they can easily get a handle on and use as a basis for comparison, like the purchase price or availability. Now, you might win this sale, but you can count on tough price negotiations and taking a painful hit in your margins. Salespeople usually act mystified by this pressure on price. They don’t understand why their customer doesn’t get it. They’ll say things to me such as: “I took them through the unique value our solutions provide and they still treat us like a commodity.” That is what happens when you present a value proposition and assume customers can
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and will interpret it on their own. You put the sale at risk and you put your margins at risk.
Key Thought In the absence of a quality decision process, the decision will degenerate to the lowest common denominator: price.
I don’t really think this is such a mystery to salespeople, because when I tell the “Fluffy” story, it becomes a running gag throughout the rest of the session. After that, whenever someone says something like, “Well, we tell the customer all about our six-sigma quality,” someone else in the room responds, “Blah blah, Fluffy,” and we get another good laugh.
The Burden of Proof Remember, you can’t count on customers to recognize on their own the value you bring to the table, to calculate what it’s worth, or accurately determine if they should pay its price. (If they could, there would be little need for salespeople.) That’s why, when you’re sitting across the table from a prospect, you’ve come to a place where a value proposition is not enough to win the sale and get your full price. You must help the customer connect the dots. The customer is the judge and jury in the sale, but you are the expert, the guide. The value proposition is nothing more than a capability, and your primary responsibility is to make it relevant in this trial. A generalized
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opening statement about value and a briefcase full of circumstantial evidence aren’t going to fulfill that burden. To solve this issue, we introduce you to what we call the value lifecycle, which is designed to bring extreme relevance to your conversations. I’m not saying that your company and other solution providers don’t have real value to offer. I’m positive that they do. There is probably more value in the marketplace today than has ever existed in the past. It is also highly likely that your company is going to extraordinary lengths to create customer value. Look at all of the technology companies. They regularly and diligently invest hundreds of millions of dollars and years of effort to create and bring to market innovations that are capable of delivering even more value to their customers. There is plenty of risk involved in the value creation gambles your company takes. Sometimes, the new offering simply doesn’t work as intended. Sometimes, the competition beats you to the punch. Sometimes, the customer’s need or desire for the offering disappears before it reaches the market or the market rejects it for a myriad of other reasons. Surprisingly often, however, value-rich new offerings do reach the market and the difference between success and failure comes down to a ridiculously short distance—the final three feet or the final meter. That’s the distance across the table when sales professionals meet with customers. Too often, that’s where value flounders in the marketplace. That short final distance is a critical step in the journey across the value gap. The value gap, which I discussed from the macro perspective in my book The Prime Solution (Chicago, IL: Dearborn Trade Publishing, 2005), is the chasm that exists between what value sellers believe they provide to their customers and what cus-
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tomers are willing to pay for—and the chasm that exists between the value the customer expects and the value that the customer ultimately achieves. The sale itself is only one step in that journey, but it’s obvious that if customers don’t buy your offering, they aren’t going to be achieving any value from it.
Translation Skills Required The top sales professionals we have interviewed in the past 25 years have been able to take that step. They are experts at creating relevant and credible conversations. They bring great clarity to their customers’ decision processes. These top professionals know how to translate their company’s value proposition—that general understanding of their ability to create and deliver customer value—into a unique, individualized value lifecycle that is customized and confirmed for each customer. Invariably, their ability to translate value proposed to value achieved for their customers has resulted in exceptional sales success. Once you know how to translate value, you are on your way to regular and predictable success in sales. If you can define value in stages that enable your customers to understand the absence of value and build confidence in their ability to acquire and achieve that value for themselves, you will compel them into action. When a value translation is done properly, the pieces of the customer’s puzzle come together and you get the credit. They understand how your offering relates to their world and can evaluate its worth. They are able to answer for themselves those nagging questions that are always undermining the conventional sales presentation: “So what? Who cares?”
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The biggest barrier to effective value translation is that salespeople don’t have the translation tools they require. It’s easy to see why: Most companies don’t recognize that sales professionals need to make value translations and, thus, don’t provide those tools. At the same time, sales professionals accept the standard collateral materials that their companies hand them and use them on customers. Bernard Baruch once said something that sums up the result: “If all you have is a hammer, everything looks like a nail.” In other words, if you are stuck using the same old sales tools, you are going to be stuck with the same old sales results. You aren’t going to be able to sell more effectively. Happily, it is not tremendously time consuming or terribly difficult to create your own translation tools. In fact, I’ve found that most experienced salespeople already have the raw material they need in their heads. They have picked it up in their engagements with customers and all they need to do is reorganize it and put it to work. (If you’re new to your position, you may have to ask a few questions to get this information, but it’s readily available from your company, colleagues, and customers.) You will be well on your way to becoming an expert value translator if you reorganize your value data into three separate categories that make up what I call the value triad: sources of value, uses of value, and absence of value (Figure 2.1). Sources of Value Sources of value or value capabilities are the most familiar to sales professionals. They are the elements of value inherent in your company and its solutions. They encompass the ability of the elements of your solutions (their features and
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FIGURE 2.1
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Value Triad
functions) to create value for customers or that enable customers to create value for themselves. They are the product and service attributes that you’ve probably been presenting all along. They represent the value that derives from your solutions and no doubt some of them are competitively superior in the marketplace. (By the way, one of my ambitions for this book is to help you transform and improve the substance and style of your sales communications such that you, and how you guide your customer, can become a source of value that your customers will find a differentiating factor in and of itself.) What are your offering’s most compelling value capabilities? List the top five and try to be as specific as you can about them. For instance, your company maintains a worldwide network of service technicians who will arrive on the scene, anywhere your customer is located, within eight hours.
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Uses of Value Now, let’s turn our attention to the customer’s world. In what way will they be able to use the value you provide or require the value you provide? Solution providers usually think about these questions less often, but if they know their customers, they have the answers they need. Uncovering customers’ uses of value or their value requirements is as simple as asking how existing customers use your products and services and what they were experiencing prior to using your solution. Look at the customer case studies and the success stories that are used to market your products and services. What did those customers do with the solution that they can’t do without it? What are your customers’ most compelling value requirements? List the top five requirements, again, being as specific as possible. For instance, your company’s mildewresistant plywood enables cabinetmakers in humid climates to offer an expanded warranty to their customers at no additional cost because it eliminates costly cabinet replacements.
Absence of Value Finally, let’s look at the absence of value. Because most salespeople spend so much time focusing on the value they can create for customers, they rarely consider this concept. Again, it is what we assume our customer has done or can do for themselves. The absence of value is what it looks like within organizations that don’t have your value-creating solutions in place and/or what it looked like in existing customer’s organizations before they implemented your solutions. What are the physical signs (the observable indi-
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cators) of the absence of your value? What costs did those organizations incur that your solution enabled them to eliminate? What revenues were customers not receiving that they now earn? The generic definitions of the absence of value are only the first step. W hen we make initial contact with prospective customers, one of our very first tasks is to verify that these generic absences of value actually exist. If we don’t, we are back to “Blah, blah, Fluffy” and no relevance. What are the observable indicators of absence of value among your customers? List the top five and again, be specific. For instance, “Stores that don’t use our antishoplifting security system have inventory shrinkage rates 10 percent above the industry averages.” The three elements just discussed are essential components of the value triad (see Figure 2.1). Value capabilities in and of themselves are inert unless and until customers can connect them to a confirmed absence of value and valid value requirements within their business. Take penicillin as an illustration. How valuable is penicillin to a person who has no infection? Penicillin’s value capability is of no value to you unless you also have an indicated absence of value (high fever) and a value requirement (fever is being caused by a life-threatening infection). As we get deeper into the book, you’ll be refining and applying the value triad—capabilities, requirements, and the absence of value—throughout your conversations with customers. For now, it’s enough that you have identified the components. You’ve started to get a handle on value relevancy and you’ve got a preliminary list of reality checks that you can use to quickly and accurately evaluate the true value of your sales opportunities.
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Leverage Your Value Triad The best sales professionals take the value triad another step and put it into motion. They leverage the capabilities, requirements, and absence of value through the interplay of two variable factors. The first factor is all about positioning and the second is all about perspective.
Across-the-Spectrum Positioning Value can be delivered anywhere along a spectrum. You can deliver value at the product level. That’s the level you’re working at when you speak with customers about features, quality, and acquisition cost. You can also deliver value at the process level. That’s the level you are working at when you talk about how your product or service will enhance the customer’s business processes, such as reducing downtime. Finally, you can deliver value at the performance level. That’s the level you’re working at when you discuss the impact of your product or service on the customer’s business results, as in “Our product will allow you to expand the market for your product.” All three levels in the value spectrum represent valid value capabilities (Figure 2.2). A basic rule of thumb is that the further along the spectrum toward the performance range that you develop your value, the more valuable and compelling it becomes. We need to remember that all three levels offer customers distinct value capabilities and that customers have corresponding value requirements at all three levels. It’s just good business to be able to cover the entire spectrum, all the time. Those who can’t or don’t do this substantially reduce their odds of success. Sales profes-
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Value Spectrum
sionals who can identify the indicators of value requirements for their customers throughout the spectrum and align those requirements with their value capabilities become a triple threat to their competitors and will stand out in their customers’ eyes. Speaking in Perspective Knowing where and how to position your offering on the value spectrum also has a lot to do with the job responsibilities and concerns of each person you are talking with. In other words, each individual’s situation determines what is of value to him or her personally, and what level(s) of the value spectrum you should be working on. W hen salespeople neglect the customer’s perspective, they put both their credibility and relevancy at risk. This is one of the primary reasons why salespeople have a difficult time working with C-level executives in customer organizations. For instance, CEOs don’t really care about the actual rate of the mean time between failure of the
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component you sell that fits into a subassembly within one of their company’s best-selling products. However, what the CEO does care about is the consequences of that low rate on the company’s results in terms of customer satisfaction, market share, and earnings. The CEO certainly will be open to a productive conversation on those topics. We talk more about perspective later in the book, as well as devoting a chapter to C-level conversations and C-level selling, but for now, start to picture the customer’s organizational structure as an elevator. As you enter the elevator and move between floors, your perspective is going to change. If you reposition your value based on those changes, you’re going to be able to shape your conversations with customers much more effectively.
Imposing Order on the Value Translation Let’s look at the substance of sales conversations with some thoughts on how to sequence your value. Value has a lifecycle and, as a sales professional, you can use it to bring order to the sales process and the conversations you have with customers. In doing so, you can quickly prioritize your sales opportunities, always keep your efforts focused on the optimal customers, and enhance each customer’s comprehension of the value he requires and the value your solution is capable of delivering. The value lifecycle starts in the same place we started this chapter, with the value proposition. As we have already seen, most value propositions are not designed for presentation directly to customers. Rather, value propositions typi-
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cally are directed at a broad segment of prospective customers and, in that sense, they provide only the first checkpoint in the sales process. As you identify, research, prepare, and make initial contact with an individual prospect chosen from this field of opportunities, the value proposition begins to evolve into a value assumption. A value assumption is just what it sounds like: It’s a preliminary hypothesis that the value capability you have can be matched up to relevant value requirements within this customer’s organization at a defined potential financial risk to the customer in the absence of your value. This assumption is one that you and the customer agree on as a premise for further discussion and investigation. (If you don’t or can’t agree, you need to consider that the odds of a successful sale may not be worth the additional investment, and it may be advisable to move on to more viable opportunities.) The agreement is that there will be a mutual contribution of resources to investigate to what degree the hypothesis holds true. You are saying to the customer that there is a possibility of value, not a surety of value. You are willing for the hypothesis to be true or not true. This is a critical difference between the typical sales approach that sounds something like, “We have provided blah blah value for many companies like yours and I’d like to have the opportunity to show you how we can do the same for you.” The value assumption is a critical component in your credibility, your differentiation, and your relationship. When a mutually agreed upon value assumption is reached, it marks the beginning of the customer engagement, and it’s time to begin the process of validation. The first step in validation connects directly to the one area that has the greatest power to compel customers to act—the absence of value, or the problem/opportunity. The absence of
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value is where the customer’s dissatisfaction resides. As we’ll see in greater detail in a later chapter, this is the customer’s negative present, and it is where and when customers make the decision to change/buy. When the consequences of the absence of value are identified, quantified, and deemed worthy of addressing, you have reached a new plateau on the value lifecycle, which I call value required. This is where the customer’s value requirements are confirmed and their incentive to change is established. This next checkpoint in the value lifecycle is also based on confirmation. This time, though, it is focused on your solution. You and your customer are now working to establish the parameters of an effective solution—its characteristics, delivery timing, the appropriate investment, and so on. This is the value expected stage of the lifecycle, where the customer’s value expectations are confirmed and their confidence to invest is established. There is only one step left after that—value achieved. Now, your solution is delivered and implemented; the value is measured and reported. Of course, that doesn’t end your communication with the customer. It simply signals the start of a new engagement in which you run through the cycle once more and, if appropriate, deliver a new, enhanced level of value. This lifecycle of value is the track that the most successful sales professionals follow as they translate value capabilities into value requirements, value expected and, finally, value achieved for their customers. The time to complete this process will vary according to the complexity of the sale. If it’s 20 minutes or 20 conversations, if you follow this track, you ensure that your conversations with customers have substance by rigorously clarifying value through each stage of the value lifecycle (Figure 2.3). If value doesn’t exist for either the customer or the seller, the
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FIGURE 2.3
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Value Lifecycle
checkpoints along the track ensure that you will quickly discover that fact and be able to move to a more viable opportunity. Better yet, as long as the opportunity remains viable, you are making value real for your customers and, as a result, you are on the inside track to win the business.
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3 You’ve Got to Get Your Mind Right
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n our studies of exceptional sales professionals, the numberone characteristic that they have in common is that they think differently than their less successful colleagues. We discovered that their thought processes have far more in common with successful professionals in other disciplines who depend on credible communication, such as doctors, lawyers, psychologists, and so on, than they do with other salespeople. In addition, the qualities of top sales professionals run a close parallel with the qualities of top leaders: creativity, insight, change management, integrity, respect, and many others. What they taught us is that the foundation of their mind-sets is, first and foremost, an intense focus on bringing value to their clients. In other words, they believe and 53
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behave as if their success is an automatic by-product of their clients’ success. Further, their mind-set is driven by five principles: value relevancy, change leadership, mutual self-esteem, mutual self-interest, and emotional maturity. Change your mind-set, improve your results. The easiest way to overcome the outmoded sales approaches and reactive patterns that put our communication and relationships with customers at risk is to drop that mental baggage at the door and approach sales with this new mind-set. When we stop thinking and acting in those ineffective modes of sales behavior, our customers are more likely to stop reacting with stereotypical buyer behaviors. Changing your mind-set is truly the foundation for credible conversations and exceptional sales success. You can make the greatest leaps in performance and raise your results from average to good or good to great by changing your assumptions and perspective, and behaving accordingly. Sure, the ability to communicate effectively with customers requires systems and skills, but all of that is built on the right mind-set. As we’ll see in Part II, once you “get your mind right,” to borrow another line from Cool Hand Luke, the mechanics will make sense and the words will flow naturally. I’m not talking about a sales lobotomy here. This really is not a difficult adjustment for most professionals. Awareness is the first step in the process. For example, the compulsion to have an immediate answer for everything is securely implanted in our minds during our school years, and is further supported by conventional sales training. However, this creates a significant barrier to listening and understanding our customers’ situations. Many of the salespeople I work with, especially women (who tend to be more empathic and better listeners, in general), are already aware of and uncomfortable with selling behaviors that smack of negative manipulation and
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persuasion through verbal pressure. They’ve seen them backfire too many times and have witnessed the negative reactions they produce in customers. Once you become aware that something you’ve been taught is inadvertently threatening your credibility, it doesn’t take brain surgery to correct the problem. It is simply a matter of changing the thinking, the mind-set, and the behavior. Awareness enables us to recognize negative reactions. For instance, why not pause before you respond to customers? Think for a second or two instead of blurting out an answer. This gives you a chance to process information, and it tempers the more primitive, semiautomatic reactions that explode out of the Old Brain. A pause suggests you are listening and considering your customers’ words, and in turn, it makes customers listen more carefully to your responses and gives what you say more intellectual weight. Silence is a sign of wisdom. It’s okay to think. Besides, people tend to have a very interesting reaction to a listener who does not respond quickly; they continue to speak and further clarify what they are trying to say. Chapters 1 and 2 gave us a good idea of how not to think and behave with customers, but dropping those bags leaves us empty-handed. Now, we need to figure out how we should be thinking and communicating in order to establish exceptional credibility and extraordinary sales results. Our ability to execute in sales is rooted in the mind-set and skill with which we understand our products and services, the value of our solutions and how to guide our customers to understand that value. The more effective we become as a decision process guide, the more likely customers are to support our efforts—that is, the more likely they are to grant us the privileged access and reveal the privileged information we need to execute successfully.
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FIGURE 3.1 Upward Reinforcing Cycle: Relevance and Credibility → Trust → Access and Insight → Relevance and Credibility → etc., etc.
This creates a cycle of sales success that reinforces itself. Relevance and credibility build trust; trust builds access and insight; access and insight build relevance and credibility (Figure 3.1).
Diagnosis—The Mind-Set of Success The communication mind-set that best supports our ability to create success for our customers is summed up in the concept of Value Diagnosis. Value provides the substance of our conversations with customers and Diagnosis describes the style of those conversations. We’ve already introduced the essential role that value plays in sales. Now, let’s introduce Diagnostic Selling®.
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The Diagnostic mind-set that provides the foundation of the conversational style that is best suited to sales is the antithesis of a presentation mind-set. Diagnosis is more effective than presentation because: • It is always focused on the customer. Diagnosis is about the symptoms the customer is experiencing and the solutions that best address those symptoms. If you are diagnosing properly, you aren’t talking about your company, your solutions, or yourself. • It is about the observable symptoms of problems and the parameters of solutions, not blame. Diagnosis maintains and protects the customer’s self-esteem. • It engages the customer as a collaborative partner. Instead of a one-sided presentation, you and your customer are taking a journey of discovery and reaching conclusions together. Diagnosis brings salespeople and customers together in collaboration to solve problems and co-create compelling business outcomes. • It promotes ownership. When customers collaborate, solving their problems and developing solution alternatives, the likelihood that they will take ownership of the conclusions that it yields increases and, therefore, they are more likely to act on them. • It differentiates you from your competition. In a world where every salesperson is presenting value, using similar or even identical words, the individual who takes a more thoughtful, tangible, and advisory-based approach to identifying and confirming value is exceptional and stands out from the pack. Together, value and diagnosis enable sales professionals to reframe their interactions with customers and create
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productive, honest, and cooperative conversations—the kinds of conversations that define our most profitable business relationships, that promote learning and change, and that result in high-quality decisions and successful sales built on integrity. Value Diagnosis gives us professional footing with customers; opens the way to the achievement of mutual value; and creates, expands, and protects customer relationships. Key Thought Diagnosis is something you do with your customer, selling is something you do to your customer.
The mind-set that supports Value Diagnosis is characterized by five traits and capabilities: 1. 2. 3. 4. 5.
Value relevancy Change leadership Mutual self-esteem Mutual self-interest Emotional maturity
Value Relevancy—Connecting the Dots Creating value with customers is like helping them work a connect-the-dots puzzle. As we’ve seen, the value of your solutions is only rarely obvious to the customer. Instead, they see random elements of your solution and random problems in their business or their job. It’s the sales pro-
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fessional’s job to help the customer connect those elements and create a coherent image of value. The more value elements you can help your customers understand and connect, the more inextricably linked you and your solutions become to the customer’s organization. These connections link your solution capabilities to your customer’s requirements. These links should go deep into the various functions and levels of the customer’s organization. In doing so, they create a web of relevant value. Generally speaking, there is a fixed process to working the customer’s connect-the-value puzzle. First, we should be identifying the people in the customer’s organization who “get the call in the middle of night,” that is, those who most severely experience the consequences of the absence of our value. Second, we should help these people focus on the elements that represent the physical indicators, or the proof of what they’re experiencing in the absence of value. Third, we should help them focus on the elements that represent the solution capabilities required to address their problems. The creation of value relevancy isn’t necessarily as linear as just described. As we watched the best sales professionals in action, they tended to move around fluently, yet randomly, within their process. They always made progress, but they were not marching in a straight line from here to there. When we first saw this, it seemed inefficient, it was difficult to understand, and even a challenge to reproduce through learning in our workshops. As we studied it in more depth, we realized that the best and most experienced salespeople were operating like a skilled physician with a diagnostic map in mind. As a city map connects all the roads into a navigable network, this diagnostic map enables sales professionals to know where they and their customers are located at all times. As a result, no matter what customers might say
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or ask, the salesperson knows where on the map they are pointing and can respond appropriately and without losing value relevancy. As we looked at why this works so well, we recognized that these maps represent the same kind of diagnostic strategies that physicians are taught and have in mind when treating patients. Interestingly, when we studied why the best sales professionals don’t approach their work in a more linear fashion, two excellent answers to this question emerged: 1. Sales professionals can be dropped into opportunities at any of an infinite number of points in the customer’s decision process. Sales professionals also have less-than-complete control over the information flow in a sale. So, they pick up the information they need to make their value relevant as the opportunity evolves. They don’t use this information prematurely, but they do process and store it. 2. Good sales professionals know the major conditions that can derail their sales campaigns. To ensure that they are not wasting their time, they test early and often to ensure that those conditions are not evident (Going for the No). These tests will often take them to widely dispersed points, but because they have a clearly defined diagnostic map, they can quickly determine value relevancy and know where they are at all times.
WHY DO YOU LOSE SALES? Review the sales you proposed and did not win during the past 12 months. List the reasons why. If the classic 80/20 Rule holds true, you should
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find that 20 percent of the reasons you lost sales accounted for 80 percent of the sales you lost. Create a short list of those reasons. Build questions into the front end of your sales process that will reveal the existence of these elements and consider their potential impact on completing the sale successfully.
There is one more issue that we need to discuss before moving on: As soon as you discover that too large of a percentage of your value is not relevant, you should be thinking seriously about moving on to another sales opportunity. You can continue to monitor this prospect for future consideration, or you may decide that this sale will never happen. If there is no value relevancy, chances are there is not going to be a sale, certainly not now and quite possibly never. This idea makes salespeople uncomfortable; it goes against their training to walk away, or even step back temporarily, from a customer. Do yourself a big favor and purchase the Eagles CD Hell Freezes Over and listen to their great song: “Get Over It.” If I contacted a prospective customer, began working through the sales process, and then discovered that the indicators of the problems that my solution addressed didn’t exist, or experience told me that this customer’s problems were not severe enough to compel them to change, I’d suggest that it may not make sense to move forward. I would promise to follow up as conditions change and move on to another opportunity. Voluntarily ending an engagement that has no value relevancy is a valid conclusion, builds credibility for the future, is certainly exceptional, and is a professional course of action. (It’s also a good idea to discuss this course of action with your colleagues and manager. There is nothing wrong with confirming your diagnosis with a second opinion.)
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Salespeople who insist on pushing the sales engagement in the absence of value relevancy are playing into sales stereotypes. Without the anchor of relevancy, they end up out of control, working themselves into a sweat, and squandering valuable resources. Even if they fight the odds and actually sell the customer a solution that has no value relevance, they will soon be dealing with the consequences of a bad sale. Conversely, if you do establish a strong base of value relevancy, you’re in the right place at the right time. You would be properly positioned to shorten the decision cycle time, win the sale, and get your full price. Change Leadership—No One Likes Change If value relevancy expresses the sales process in the rational terms of observable and quantifiable gain, change leadership is about expressing it in emotional terms. Let’s start by accepting the fact that most people don’t want to change. It would be great if they did believe that continual change and improvement is important, but with a rare exception here and there, prospective customers aren’t sitting at their desks impatiently waiting for you to tell them they are not doing a good job and relieve them of their capital in order to help them improve. Further, the decision to change is the customer’s decision. When customers do decide to change, we have found that more often than not the decision to buy has also been made. Every so often a salesperson experiences a sale like this. They occur when something somewhere in the sales engagement triggers a customer’s decision to change. Suddenly, there is open access, information is flowing, and there are few if any objections to overcome. The customer starts asking questions like, “What should we do next?”
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“What do we need to do to get started?” That is the response when a customer is guided to a decision to change as opposed to being pushed into a decision to buy. If customers don’t want to change and that decision is the customer’s alone, how do you produce sales like these? Many salespeople try to create change with more effort and glitzier approaches. They’re missing the point. In doing so, they fall into the “work harder” trap. We should be working smarter, not harder. The smart way to create change in other people is to develop their awareness of the elements that create discomfort and dissatisfaction with staying the same—that is, focus on the emotional side of change. We can sum up the typical customer’s emotional state with three simple axioms: 1. Buying requires changing. 2. Change is difficult to accept. 3. Avoid change until it is clear that staying the same is more difficult. When you think about sales from this perspective, it immediately becomes clear that successful selling is also about managing the customer’s emotional acceptance of change. So, to the degree that the facts merit it, the sales professional’s initial job is to ensure that the customer’s negative present state actually exists and that he or she fully understands it. Once that is firmly established, the sales professional’s next job is to help the customer design a solution capable of transforming that negative present state into a positive future state (Figures 3.2 and 3.3). This all dovetails neatly with the work of value relevancy. Indicators of problems and the absence of value establish and clarify the customer’s negative present and
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FIGURE 3.2 Psychology of Change Matrix: Showing Arrow to Negative Present and Yielding Incentive to Change
provide the incentive to change. Solution criteria and parameters support the customer’s positive future and provide the confidence to invest. As sales professionals, it’s our job to bring customers a change process, a critical foundation for an effective sales process, which we’ll discuss at greater length in Part II. We have to provide all of the information that the customer needs to make an informed decision to buy/change. To create a sale, the sales process has to reveal that the cost of staying the same is too high not to change. It has to be experiential—we can’t just tell customers what to think (that’s presenting); they have to be involved in order to reach conclusions and gain insights on their own. We have to guide our customers through the process. Customers should always be fully involved, but they aren’t qualified to lead. You surely have greater knowledge of your solutions than the customer, who, in most cases, has
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FIGURE 3.3 Psychology of Change Matrix: Showing Arrow to Positive Future and Yielding Confidence to Invest
only been exposed to the marketing materials. Further, given the probability that you have been selling your solutions to numerous companies in your customers’ industries, your insights regarding the problems experienced in the absence of your solutions should also be more extensive than your customers’. There is no one better qualified than the sales professional and his or her team to guide the change process.
WHY REQUESTS FOR PROPOSALS RESULT IN BAD SALES Unless you are actively involved in helping a customer develop a request for a proposal (RFP), winning an RFP-driven sale is akin to winning the lottery. First, the RFP represents the customer’s wish list and it documents their decision process. Second,
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“WHAT WE GOT HERE IS A FAILURE TO COMMUNICATE” if you pursue the sale according to the RFP’s instructions, the customer becomes the de facto leader of the buying process. Wrong process, wrong leader. We must recognize that the RFP is part of a buying process more than it is part of a well-thought-out decision process. What are your odds of winning a sale with an ill-informed process and inexperienced leadership?
Mutual Self-Esteem—We’re All Okay Successful sales professionals maintain and protect their self-esteem and their customer’s self-esteem at all times. What does self-esteem have to do with sales? It is the iceberg that sinks an incredibly large number of them. The right place to start this discussion is with the self-esteem of salespeople. I can’t count the number of instances that I have seen in which salespeople misguidedly surrender their self-esteem in the quest of a sale and, in the process, lose their way and the respect of their customers. Further, if you can’t respect and protect your selfesteem, I don’t think you can respect and protect the self-esteem of others. The sales profession is intently focused on outcomes, and this is rightly so. The only way salespeople and their companies prosper is if they win sales. Sales professionals associate winning sales with giving customers what they want. However, problems can develop when salespeople link their self-esteem too tightly to complying with the customer’s request. In other words, they think that if they do what the customer wants, the customer will like them. And if the customer likes them, the customer is more likely to buy from them. This thinking taps into strong conditioning that often goes all the way back to childhood. We grew up being told that we must do what people in authority ask
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us to do, that they will like us if we do it, and that our life will then go much better. It started with our parents telling us to clean our plates, clean our rooms, and play nice with others. When we did that, our lives went better. It advanced to our teachers telling us to answer questions, hand in our assignments, and obey the rules. When we did that, our lives also went better. As you see, our self-esteem became dangerously tied to compliance. Now the customer is the perceived authority. If you overemphasize doing what the customer asks you to do, you are more prone to make concessions. Customers are always making demands of salespeople. They want a quote, a demo, a proposal, a presentation, whatever. But what if it’s not the right time to quote, demo, propose, or present? What if you don’t know enough to quote or present? What if the customer doesn’t know enough to judge a proposal? Now you are faced with a dilemma. Do you cave in, comply, and compromise the quality of your process, or do you take the time to act as a credible advisor and guide the customer to the appropriate next step? If your self-esteem is tied to the customer’s approval, you comply. When you comply with inappropriate or ill-timed customer requests, you put a great deal at risk. You risk sounding like everyone else. You risk commoditizing your solution. You risk becoming an unpaid consultant. Then you lose the sale and what happens? Your self-esteem takes a hit and you have two options. You can blame the customer for taking advantage of you and begin a vicious downward cycle as the same scenario plays out again and again on future opportunities. Or you can recognize compliance for what it is—an automatic reaction to conditioning—and the next time, you can be prepared to guide the customer along a more mutually productive path. As professionals, we need to be careful about the source of our self-esteem. An unbalanced dependence on compliance
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can and will hurt our results. It’s better to link your selfesteem to your professionalism, the process, and the quality of your execution. That is the common ingredient for all successful professionals. Professionals protect their self-esteem by respectfully refusing to participate in sales that devalue their offerings and abilities. When a customer asks for a demo, they reply, “I’ll be glad to provide that for you. Let me walk you through how I would prepare for that demo. One of the first things I would want to understand is. . .” As always, we need to exercise balance when it comes to self-esteem. We have to treat the customer’s self-esteem with the same respect and sensitivity that we accord our own. Unfortunately, the mishandling of the customer’s self-esteem is even more common and even more detrimental to sales success. When salespeople inadvertently damage their customer’s self-esteem, they risk losing the cooperation and participation that is so important to the sales process. As we’ve begun to see, conventional sales techniques are one of the biggest offenders in this regard. Think about how salespeople have been taught to describe their companies to customers. “We’re number one at this; we lead the industry at that.” So what is the positioning with which they are taught to approach customers? “You likely have a problem here and we can solve it for you.” Doesn’t sound so bad? One executive, a client at a major consulting company, told me a story about a sales meeting they had with two brothers, the founders and leaders of a major Asian company. These two men had started with nothing and built a multibillion-dollar conglomerate. The team from the consulting company walked into the meeting and gave a presentation that was driven by how they could make these men successful. These two billion-
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aires listened politely and then, basically, kicked the team out of the building. What did the two brothers hear? Probably something like this: “You’re not actually doing that well. We know much more than you do and it’s a good thing we are here because we can help you do so much better.” The team, like all salespeople who mean well, were inadvertently attacking the customer’s self-esteem.
IS IT TIME THE PAIN?
TO
GET BEYOND
In 1984, we introduced Diagnostic Selling® and the concept of creating pain, helping the customer understand the depth of their problem rather than presenting features and benefits. For the past 10 years or so, many people have been talking about getting to the customer’s pain as a way to propel the sale forward. But as with many concepts, including the value proposition, it is too often the right approach poorly executed. The way most salespeople are doing this is, again, a very Era 2 approach. They are asking the customer questions like: “What’s keeping you awake at night” and “What types of pain are you experiencing in your manufacturing process?” How hard should you be hitting the customer’s pain? The danger is that you are insinuating that the customer doesn’t know what he’s doing. How will the customer, who may have had an active hand in creating the pain, respond? If you “get to the pain” without being sensitive to self-esteem, you can easily alienate the customer and destroy the relationship.
Our challenge is to make customers fully aware of their situation without insulting them. You have to help
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customers understand the implications of their negative present and at the same time preserve their self-esteem. We can accomplish this by conversing in a way that defuses potential insults. Recently, I was called in to meet the executive team of a software company, who also happened to be the founding management. These men were all in their early 30s. They had built this $100 million-plus company from scratch in five years and were about to go public. This was also their second successful company. Instead of walking in and focusing on their problems, I sat down and reviewed their accomplishments. “I am a little bit humbled sitting in front of you guys,” I started. “You are all multimillionaires. Here you are in your second business and it’s going extremely well. Actually, I’m feeling a lot of pressure; there is always the possibility that I could mess this up.” They all laughed and one executive joked, “Not any more than we have.” This proved to be the opening to a frank, highly effective, and honest discussion about the challenges their salesforce was facing. We’ll go into how to protect self-esteem in greater detail in Part II, but for now, let’s summarize where we are by saying that the mind-set of mutual self-esteem will enable us to eliminate inadvertent insults. It will help us design conversations that help customers focus intently on problems and costs without accusations and blame, separate problems from people, and eradicate the attitude of superiority that so many sellers promote. Mutual Self-Interest—We’re All in It for the Value Mutual self-interest, the next quality of the Diagnostic mind-set, flows naturally from mutual self-esteem. It enables us to reconcile and serve the dual responsibilities that every sales professional eventually struggles with, that is,
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the simultaneous responsibility to serve your customer and your employer while looking out for yourself. An attitude of mutual self-interest frankly acknowledges that we are all in it for the value. Our employers must be able to capture value from a sale; our customers must achieve value from our solutions. Both must generate profits. As sales professionals, we pursue these goals. Whenever they become contradictory, such as when we discover that one or the other party to the sale cannot be properly served, the sales engagement should be over. Most salespeople are trained to disregard this reality. At the same time salespeople are told they are consultants and trusted advisors to their customers, they are being trained to behave like stereotypical salespeople and avoid questions that could yield “no” answers. They are taught to avoid any statement or question that could end an engagement, such as opening a first call by saying, “I’m not sure if it’s appropriate that we talk.” They fear that might give the customer an opportunity to say, “No, it’s not appropriate.” Salespeople are trained to never leave, to persist and never give up until they win the sale. They are supposed to be always going for the “yes,” “always be closing,” even as they are being shown the door. What does this attitude communicate to customers? To customers, the salesperson who is always going for the “yes” is thinking, “I don’t care whether this is an exact fit or not. My job is to sell this product and I’m going to stay right here until you buy it.” Mutual self-interest dictates that sales professionals turn conventional selling on its head. Sales professionals should always be “going for the no.” We want to identify as quickly as possible if there are any conditions that exist that indicate that both our customers and our companies won’t succeed. So, in this sense, we are always open for and going for the no. We are open to
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the possibility that this is not a viable opportunity and that better opportunities exist elsewhere. This is why I said that the best sales professionals will “always be leaving” and never need to be shown the door. I know that on the surface this may sound frightening. Salespeople are always reluctant to leave a potential sale as long as there is even the faintest glimmer of hope. They will go so far as to put a terminal sale on artificial life support, continually roll over their forecasts and pour resources into a dying case instead of disengaging professionally. It always comes back to odds and opportunities. What are the odds you can actually close a sale in which the customer will not achieve value? What are the odds you are going to be rewarded for bringing home business on which your company can’t generate a profit? What opportunities are you missing while you struggle to keep this opportunity alive? The answers are obvious and that’s why the best sales professionals protect and ensure the self-interest of both buyer and seller. They are always driving toward the optimal opportunity. At the same time, they are demonstrating their integrity by their willingness to “go for the no” and to disengage whenever it becomes clear that the interests of both buyer and seller are not aligned. Emotional Maturity—Cool, Calm, Collected The final element of the Diagnostic mind-set is emotional maturity. As we saw in Chapter 2, a sales engagement is not the right place to get our emotional needs met, or to give our emotions free rein. Salespeople should be professionally involved, but emotionally detached. This quality is the key to rational and effective communication.
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I know that you are constantly being encouraged to jump into sales with all of your heart and soul and I’m not saying that you shouldn’t care about winning sales. I am saying, however, that those emotions can hurt your performance if they aren’t tempered and kept in their proper place. Think about pilots, air traffic controllers, doctors, and firefighters. In their professions, emotional detachment is a critical necessity. In my keynote speeches, I sometimes talk about Aloha Airlines Flight 243, the plane that lost an 18foot section of its passenger compartment in midflight on its way to Honolulu in 1988. Screams and wind noise are all that could be heard on the tapes as the pilot put the plane into an emergency dive in order to reach an altitude at which the passengers could breath. If you listen to the tapes, you can hear professionalism in the face of disaster. The co-pilot calls Maui Tower, declares an emergency, gives the plane’s location, and requests clearance for an emergency landing. The controller in the tower clears the path and requests emergency equipment. They work together, thinking ahead to what will be required on landing—stairs, slides, assistance for passengers, ambulances. You hear the controller say, “Aloha 243, granted immediate clearance to runway 29 left. Can you state fuel levels and souls on board.” It’s all cool, calm, and collected. But the people on the plane were passengers when they took off and now they’re “souls.” The fuel on board tells the controller how long they can stay in the air and how big an explosion to expect if they can’t land cleanly. They are talking about mothers and children, friends and colleagues, but they are professionals and their language reflects the need to keep their emotions in check. They have been conditioned to deal with crisis situations. Untrained and undisciplined teams would let emotions run rampant.
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Hopefully, we will never face a life-and-death sales situation, but as salespeople, we often find ourselves in emotionally challenging circumstances and most of us don’t have the benefit of the training that an emergency worker, a police officer, or a surgeon receives. Nevertheless, we can’t let our emotions get in the way of our work. Emotional maturity enables us to not flinch when we face customer challenges. It keeps us in the moment and away from that mental autopilot that kicks in when we feel insulted or threatened. It allows us to interact with integrity and discuss and solve problems as mature human beings.
Summary Value relevancy, change leadership, mutual self-esteem, mutual self-interest, and emotional maturity. These are the primary elements of the complex diagnostic mind-set and they create the foundation for successful value diagnosis, which is the basis for all of our communications with prospects, customers, and colleagues. In Part II, we see how these fundamentals supercharge customer conversations throughout the sales process.
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II Taking It to the Street
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B
efore we can engage customers in a relevant and compelling value-driven diagnostic dialogue, we need to spend a little time talking about systems. Just as form follows function in good design, the sequence and phrasing of credible conversations is determined by your system or process. Right now, we know three things about this system: 1. It must be your system. We can’t work within the customer’s system or a competitor’s system and expect to win the sale. Customers are rarely experienced enough or have the specialized knowledge required to create an effective decision process; competitors have their own system and are going to stack the deck in their favor. 2. It can’t be the traditional prospect-qualify-present-close system. That system doesn’t meet the demands of today’s complex sale; it inhibits our ability to differentiate ourselves from the competition, encourages commoditization, and leaves the customer ill equipped to make a quality decision. 3. It must support the twin imperatives of conversational substance and style. Our sales system has to enable us to connect our value capabilities to the customer’s value requirements; it must enable us to uncover, clarify,
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and communicate those connections clearly and compellingly. When we reengineer the conventional sales process and alter its fundamental structure to reflect those demands, it looks something like this: The sales professional locates a prospective customer and makes some preliminary assumptions about the problems the customer is experiencing and the value his company could deliver relative to those problems. He contacts the customer to discuss those assumptions and determines if the customer is willing to invest the time to prove or disprove the value assumption and discuss the ramifications and potential solutions. If the customer agrees to proceed, the salesperson works with the customer to diagnose the customer’s situation in greater depth, determining the extent of the risks and their costs. If the costs are serious enough to act on, it’s time to conduct a similar inquiry into potential solutions and determine their parameters, alternatives, and costs. With the problems and the solution defined, the salesperson prepares a discussion document for review followed by a formal proposal, and if it is accepted, implements the solution and ensures that the customer receives the value that was promised. What are the salesperson’s goals in this process? They are: (1) to quickly and effectively identify the customer who has the highest probability of purchasing the offering; (2) to provide the customer with the incentive to change; (3) to provide the customer with the confidence to invest; and finally, (4) to ensure that the value promises made are fulfilled. That’s the four-step, sequential process to complex sales success: Discover, Diagnose, Design, and Deliver. I call it the Prime Process and it is the subject of my first book, Mastering the Complex Sale (Hoboken, New Jersey: John Wiley & Sons, 2003).
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This process provides a much-needed structure and synchronization for our sales conversations. Too often, salespeople approach conversations with customers in a scripted manner that is closer to presentation than conversation. (You’ve probably seen books of sales scripts, such as 101 Sure-Fire Sales Closes.) The results are usually disastrous. It’s a lot like a second-rate actor’s approach to a screenplay. He memorizes the words, but never puts his imprint on the role because there is no clear understanding of the larger picture, what is being said, why it is being said, and how it should be said. In business as well as in movies, a memorized script sounds canned and it triggers the customer’s autoimmune system. Another problem with scripts is that they are too often poorly rehearsed. If you place too much reliance on a script, when the customer zigs, you won’t know how to respond. You’re not prepared to be unprepared . . . and that’s a fatal flaw in the sales world. Instead of scripts, the Prime Process offers a conversational strategy. It’s a robust strategy that helps us define conversational structure, sequence, and phrasing without tying us down. It gives us a mental map to follow without imposing a fixed route. In his book, Failure Is Not an Option (New York: Berkley Publishing, 2000), NASA Mission Control Director Gene Kranz described the necessity of having a mental map in the world of test pilots. Test pilots, he said, are always trying to stay ahead of the airplane; they are trying to get ahead of the power curve. They work hard to “anticipate what could happen rather than just reacting to what was happening at the moment.” That is the mark of a professional in any field of endeavor and in Kranz’s case, his efforts to get Mission Control ahead of the power curve helped land Apollo 11 on the moon and saved the crew of Apollo 13. In sales, this mental map serves us best when we reach moments of truth . . . when we are one-to-one
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with customers. It enables us to turn them into moments of magic instead of moments of misery and alienation. The conversational strategy supported by the Prime Process also creates an all-important outward focus on your sales (and marketing) efforts. That outward focus is the customer and the customer’s customer, instead of ourselves, our products and services, and our company. This is a huge competitive advantage in the complex sale. If you are having a conversation with a customer about the customer’s world, you aren’t raising questions about yourself. When the customer is busy thinking about his own situation and criteria of a solution that can resolve it, common customer questions that sidetrack sales engagements are minimized. You won’t be hearing or having to respond to as many tough, out-of-sequence questions, such as “How much does this cost?” and “Why should I pay that when this competing solution is less money?” If you are having a conversation with a customer about the customer’s world, you can plan the engagement to develop information in a logical sequence and answer critical questions as they appear in the customer’s mind. For instance, you can ensure that customers fully understand the magnitude of their problems before they begin considering solutions. This bridges one of the most common and troublesome communication gaps in sales and enables us to make sure that our customers are rationally and emotionally prepared to buy. If you’re having a conversation with a customer about the customer’s world, you are also more likely to be perceived as a unique and savvy advisor. Customers are used to the same old sales stuff. If you don’t use it, you stand apart from the competition and create differentiation. In the customer’s mind, you understand their business and the others don’t. Better yet, you stand apart from the standard sales
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stereotypes in general. Any business executive with whom you work is probably buying from untrained salespeople far more often than from sales professionals. The vast majority of personal purchases—home theaters, new cars, replacement windows, telephone services, and so on—fall into this category. In high-stakes sales, you don’t want to give the customer any reason to stereotype you. So with a strategy in hand that sets us apart, let’s move into the four chapters of Part II. They describe the structure, sequence, and phrasing of the conversations that will successfully carry us through the four phases of the complex sale: Discover, Diagnose, Design, and Deliver. This is where the rubber meets the road.
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4 Earning the Keys to the Elevator
T
he initial contact with a prospective customer is the most critical and no doubt the least forgiving stage of the sale. You are considered guilty until proven innocent and you must strike the relevance and credibility cords simultaneously and instantly (within 15 seconds) out of the box. At this stage, the slightest lack of due diligence in terms of preparation can easily result in a full-blown sales engagement that is doomed from the start. The smallest misstep in the initial contact can also result in a closed door, which in many situations can translate into a serious setback or even the loss of one of a very limited number of viable prospects and a huge hit to revenue. Given the consequences of a bad start, it’s no wonder that salespeople spend more time worrying about and avoiding first calls than they invest in preparation. 83
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This fear often manifests itself in a psychological performance barrier of “call reluctance.” George Dudley, founder of Behavioral Sciences Research Press and coauthor of The Psychology of Sales Call Reluctance (Dallas, Texas: Research Press, Inc., 1999) has studied call reluctance as it applies to initial customer contact for two decades. He reports that roughly 90 percent of salespeople suffer from it. Half of all salespeople have severe reluctance issues that require immediate attention says Dudley. Another 40 percent have minor, but chronic reluctance that affects their performance, but does not overwhelm it. You can use behavior modification techniques to overcome call reluctance, but in many cases, the real problem is the sales process, not the salesperson. Do 9 out of 10 salespeople fear first contact because of psychological maladies or is it more likely that they fear first contact because they are taught that its purpose is to get an appointment? This creates an unrealistic expectation and if the goal is not achieved, the salesperson is deemed to have failed. Thus, fear of rejection is built into the process. Again, the traditional sales approach to initial customer contact and qualification that salespeople are trained and encouraged to use is fundamentally flawed.
How Qualified Is Qualified? Qualification, the way it is most often conducted, is problematic because it is quite shallow and relies too heavily on external profiles, benefit statements, and value propositions. For instance, if a company creates safety solutions for
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offshore oil rigs, every company that owns or operates offshore oil rigs looks like a qualified customer. For marketing or advertising purposes in which you must address a large audience, this generic “every company is qualified” approach may work, but when it is applied to a single, targeted customer, it quickly loses its validity. Face-to-face selling isn’t mass marketing. I like to ask our clients to picture what the results might be if we applied the generic or external profile qualification approach of most sales processes to the process in a doctor’s office. The doctor walks in, he looks over the patient, and something like this goes on in his head: “Let’s see, male, age 45 to 60. Check. Overweight. Check. Smoker. Check. Okay, we’ve got a qualified angioplasty customer here, let’s give him the presentation.” It’s ludicrous, of course, but amazingly, salespeople essentially do the same thing to prospects every day. They primarily judge prospective customers based on external characteristics and miss the much more relevant internal qualifiers.
Contact Without Proper Preparation Is an Exercise in Futility The effectiveness and quality of the initial contact with the customer depends on the information that the salesperson has developed in the qualification process. If qualification in most complex sales is woefully inadequate, the initial contact can hardly be better. Let’s go back to the oil rig example. The salesperson for the safety solutions company calls a “qualified” oil rig company, asks who buys safety products, gets the name of the corporate safety director
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(the presumed decision maker who usually buys these solutions), and calls her office. If and when he reaches the director, he launches into an introduction: Hello, Ms. Williams, how are you today? My name is Joe James. I’m an account executive with Petro-Safety Technologies. We are a leader in oil rig safety solutions and we have developed the most advanced safety programs in use by companies like yours. Our programs will improve your safety record and save lives. I would like to get together with you and explain some of the more successful programs that we have created and how they can make your business a better place to work.
That’s a pretty standard first call used by many salespeople and, on the surface, it sounds professional enough. The salesperson is doing what he has been taught. He is attempting to create interest by presenting the benefits and value his company has brought to other customers. He believes that Ms. Williams will be interested in hearing that. But what does Ms. Williams hear and how does she interpret this call? For starters, she’s pretty sure that Joe doesn’t really care how she is today and she is actually rather annoyed by people who ask. She knows he’s a salesman; he introduced himself the same way the three telemarketers who called last night did. She knows she’s dealing with someone who thinks he has all the answers—his company is “a leader” and his programs are “the most advanced”—and that makes her suspicious. Worse, she may feel insulted. Joe threw a few dangling insults in there when he talked about improving her safety record and saving lives and making her company a better place to work. There is nothing wrong with her safety record, thinks Ms. Williams. No one has ever
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died on the job here! W ho does this guy think he’s talking to? W hen you get right down to it, Joe doesn’t really know who he’s talking to. He doesn’t know anything more about his prospect than the doctor who “qualified” the overweight, middle-aged, male smoker. Based on that external qualification, would the doctor say, “Mr. Smith, there is no doubt you have an above average risk of heart attack. Have you considered the many benefits of angioplasty?” At this point, you can’t blame Smith for running for the door or Ms. Williams for questioning the wisdom of taking this call any further. Furthermore, Joe is clueless as to what Ms. Williams heard in his words and the real reason she is ending the call. W hat’s worse, he sees it as another rejection by a capricious customer and his reluctance to cold-call rises another notch.
The Research Conversation—Forget About Solutions and Decision Makers Effective preparation and credible initial conversations lead to successful sales and they start with symptoms, not solutions. The best way to sound like everyone else is to start your sales process by talking about your solutions. That’s a prescription for a suboptimal sales engagement. We have to forget about our solutions and finding the ever-elusive decision maker for a few moments. A critical prerequisite to calling on anyone who has the power to influence or decide is to make a preliminary determination of the existing symptoms. Like doctors, we have to diagnose before we prescribe. I often hear sales
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managers tell their people to “have your arrows in your quiver” before they meet the customer. They are usually talking about having features and benefits ready to present. W hat they should be talking about are symptoms to look for. The arrows that are far more capable of striking home with corporate customers are symptoms or indicators, that is, the physical evidence that exists in the absence of the value your solutions deliver. The first conversations we should be having with customers are not sales conversations. They are discovery conversations. We shouldn’t be presenting or selling anything right now; we should be equipping ourselves with the elements that will make us credible and our value capabilities relevant. Those elements are the symptoms, the physical evidence of the absence of our value. We conduct these conversations with people who are closest to the action—people who are working at the point where the absence of our value manifests itself. They are the “victims” of the absence of our value.
CYNIC’S SIDEBAR “But they won’t talk to me!” That’s a pushback I often hear when we are teaching sales professionals the art and science of discovery conversations, but it’s simply not true. It’s based on the typical customer reaction to conventional sales approaches. Let me ask you a question: Do you think that prospects are evasive and unwilling to grant access and answer questions because they have determined that the best way to make a quality decision is to keep vendors at arm’s length, or are they reacting with defense mechanisms they have built up through years of dealing with incompetent salespeople?
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When I ask this question, the response is usually the latter option. This suggests that if we act like salespeople, customers will shut down. However, as long as you are not selling, people will talk to you. We’ve made several thousand of these discovery calls to potential new clients for our company. We’ve made them with our clients’ salespeople and we’ve made them on behalf of clients. We are never covert; we are always open, honest, and straightforward. We never ask for the names of decision makers or spend more than a few seconds talking about ourselves and our offerings; we ask for facts and consequences. “Do you see this happen? Does that ever occur? What are the results?” Typically, people are very open. Often, they are flattered to be asked. They not only answer questions, they will also refer you to other people who have information on the subject. Try it and see. The quality of responses will surprise you.
Let me clarify this idea with an example. You sell process manufacturing software that can drive output defects down to the optimal Six Sigma level. Most salespeople would take the standard route in this sale and call the corporate vice president of manufacturing in prospective customer companies, who quickly refers them to the IT manager who very likely isn’t looking for “new software.” But make a few phone calls to the victims, the people who have to deal with the consequences of output defects. One call may be to a quality control manager in a plant in Texas. You ask him about the plant’s current process defects, such as how many, what types, and how much defective product gets through to customers. You listen to his observations. The next call may be to one of the company’s salespeople. You ask her how the defective product that
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reaches customers impacts her sales efforts. You listen. You learn that defective products caused by software glitches do slip through quality control and that she recently lost a big account when the product produced in the Texas plant did not function properly when used in a customer’s manufacturing process. Follow the symptoms to value relevance. That is how you start. You are speaking peer to peer. It is relaxed and informal, but nonetheless professional. You are seeking guidance and experience indicates that you will very likely receive the help you are asking for. Next we will discuss guidelines to conducting these conversations in an effective way. Who Do You Call? Who you call for these discovery conversations depends on the various places where the symptoms of the absence of your value can be observed. There are, however, three resource pools in and around your customer companies to draw from: their employees, their vendors, and their customers. We’ve already discussed the first pool. The employees closest to the symptoms are the most likely candidates. Typically, these people may have little or nothing to do with the decision to buy your solution. They should, however, be able to shed direct light on the situation and its conditions. The vendor pool consists of employees, often salespeople at noncompeting companies, who provide products and services to the prospective customer. In the previous example, the process software salesperson could call the account executive at an equipment manufacturer who already does business with the customer in order to gain insight into the customer’s operation and symptoms.
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Finally, you can check for the absence of your value with your customer’s customers who often represent the most valuable source of relevance. They can tell if they are noticing the absence of your value. As a quick example, a client of ours makes an ingredient that prevents the formation of the harmless, but unappetizing clear liquid that consumers sometimes find when they open the lid of a yogurt container. A simple way to identify prospects who might value this ingredient would be to go to a supermarket and find the brands that contain the liquid. Then, speak to the dairy manager and ask how well the brands sell, how often customers return these products, and if they switch brands based on the liquid. The information generated by questions such as these has the potential to create and retain revenue and customers for your customer. Nothing focuses a prospect’s attention as quickly as that. No Selling These discovery conversations are not sales calls. We need to learn about this company’s reality—its internal characteristics, what it is they are experiencing, the potential consequences, and the customer’s viewpoint on those consequences. Think like a lawyer during the discovery phase of a case. The lawyer’s purpose at this point is the objective discovery of facts and evidence. She is not presenting her case in front of a judge. This same purpose should be directly reflected in the questions you ask and don’t ask during these calls. You should be solely focused on the existence of the symptoms of the absence of your value. You shouldn’t be asking about who buys your offerings or who might be interested in learning more about them.
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Be Open, Honest, and Straightforward Research calls are not covert missions into enemy territory. We are fully disclosing what we are doing to the people we call. We are open, honest, and straightforward. We explain exactly what we are doing, why we are doing it, and what we will do with the information we gather. It could open like this: Jos, I’m Wayne Stanley with Six Sigma Software and I’m not sure if it’s appropriate that we should be talking, but I’d like to run what I am trying to do by you and see if you can decide if it makes sense and if you might be able to help me or not. Do you have a moment to speak? [They say yes, we proceed.] We work with companies like yours in the area of process manufacturing and I am thinking about calling your vice president of manufacturing about our software. Typically, before I do that, I like to talk to a few quality control people like yourself in the organization to see if you’re encountering any of the issues or difficulties that we work with customers to address. That will help me determine if it might make sense to speak with your management about the issue. I’d like to ask you a couple of questions and see if there might be some application here.
This all comes back to a professional mind-set. There is no reason to sneak around. If we provide value and our prospects have a potential requirement for that value, there is no reason why they would not be willing to discuss it in a straightforward, open, and honest way. In fact, in over 95 percent of our research calls, the people we contact are willing to help. Did You Discover Relevancy? The purpose of discovery calls is to ascertain value relevancy. If the calls don’t reveal the existence of the symp-
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toms your solutions address, the customer is not a qualified prospect at this time. The obvious conclusion is that it is time to move toward a more viable opportunity. More typically, we do find the symptoms of the absence of value and we are in the process of formulating a value assumption regarding this prospect. We have determined that there is a basis to initiate a conversation with a suitable executive and the information that we have obtained is going to provide the relevancy and credibility we need to begin that conversation successfully.
The Engagement Conversation— The Quest for Access and Sponsorship The engagement conversation is the first official customer communication in the sales process. In it, we introduce the value assumption that we’ve developed in our previous conversations and discuss it with the appropriate executive. Its goal is to earn the “keys to the elevator,” that is, to achieve conceptual buy-in on the value assumption, gain the sponsorship of the executive for our diagnosis, and receive access to individuals within the customer’s company who we will speak with to continue our process. You want to have this conversation with an executive who has the power to drive the change process within the customer company. This is someone who owns the cost of the problem and whose job performance metrics are impacted by the consequences of the absence of your solution. As you might expect, the substance of the engagement conversation is also anchored in symptoms. We want to discover if the executive recognizes the relevancy of our value assumption and whether she wants to take the next step into the decision process. Thus, the engagement
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conversation must enable the executive to answer three questions: Who are you? (That’s positioning.) Why me? (That’s relevancy.) Is this something I want to take further? (That’s priority.) This is a significant departure from the traditional approach where the first contact is all about you. “Here is who we are. Here is what we do. Here is why what we do is really great and I would like some of your time so I can tell you all about it.” This is all value proposition, features and benefits, and capabilities and solutions. The salesperson is simply setting up the presentation. We’re going to turn this on its head. Our introductions should be about customers and should raise questions in their minds about their business, their situation, and their performance. We need to create engagement conversations that are actually engaging. Crafting Your Introductory Statement The opening of any conversation is a critical moment. It must be well-researched, highly relevant, carefully prepared, and thoroughly rehearsed because if you misspeak here, you may not get a second chance. I recommend you open every engagement conversation (whether it be in person, on the phone, or via mail or e-mail) the same way. Here is an example of the format: Sam, Jeff Thull with Prime Resource Group. I am not sure if it’s appropriate for us to talk, but we work with executives of enterprise software companies like yourself that from time to time find themselves frustrated with the accuracy of the forecasts they receive from the field. I was listening to your recent analyst call, and quite a few questions came up about
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the volatility of your pipeline. Do you have a moment to speak on the phone?
This takes roughly 20 seconds to say, but it covers a lot of ground. Let’s break it down: • Sam, Jeff Thull with Prime Resource Group conveys professionalism and completeness. If you leave out your name and your company’s name, it raises the listener’s suspicions. I know some people consider it polite to make small talk and ask the ubiquitous, insincere sounding “how are you today?” but it’s more effective to demonstrate respect for the customer’s time by moving quickly through the introduction. • I am not sure if it’s appropriate for us to talk . . . is the disclaimer that says you don’t presume to know the customer’s mind and it is the customer’s right to determine if the call makes sense. It effectively negates sales stereotypes about cold calls. • . . . we work with executives of enterprise software companies like yourself . . . speaks to relevancy and positioning. The customer now knows who you are and should be thinking, “That’s me.” • . . . that from time to time find themselves frustrated with the accuracy of the forecasts they receive from the field. We now introduce more specific relevancy, the symptom we find our best prospects experience frequently. • I was listening to your recent analyst call, and quite a few questions came up about the volatility of your pipeline. This is extreme relevancy, Sam’s specific and likely memorable analyst call. In this example, “the volatility of
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your pipeline” is the symptom that has the highest probability of connecting with this customer as well as the symptom that I explored in my initial discovery conversations. • Do you have a moment to speak on the phone? The customer is ready to decide to take this to the next step but is given the opportunity to say no and end the call. There is actually a dialogue going on within this short monologue. Every four or five seconds you are addressing, in sequence, the questions that are popping up in the customer’s mind and you are buying the next four or five seconds. Who is this guy? Does he sound professional? Is this call appropriate? Is this about me? Is this an issue I’m experiencing? Should I continue this conversation? When we provide customers with the information they need to answer these questions, they invariably agree to continue the conversation. The key to this call is that the prospect recognizes that this call could not have been made to anyone else. That’s relevancy!
CYNIC’S SIDEBAR “Are you crazy? I can’t suggest that the call is inappropriate.” Salespeople really tend to push back on the idea of saying, “I’m not sure if it is appropriate. . . .” They see it as an indication of weakness or lack of preparation, and they struggle to avoid it. They’ll ask, “Why would I call if it’s not appropriate?” Note we didn’t say it wasn’t appropriate—we said “I’m not sure.” It’s actually the parent in their brains nagging at them: “Why are you calling if it’s not appropriate?
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You know better than that. What’s wrong with you? You are interrupting an important person.” One reason I insist on the phrase is that a few years back we worked with a Fortune 100 client who was preparing to sell to the CEOs of the 625 largest hospitals in the country. We surveyed a sampling of the CEOs to better understand how they responded to sales calls. None of the CEOs complained about getting sales calls. What they did complain about were calls that weren’t relevant and over 75 percent actually used the words “not appropriate.” By the way, in the over 4,000 engagement calls that our company’s salespeople have made over the years, we’ve never had a single caller say, “Why are you calling if you’re not sure it’s appropriate?” Further, salespeople who use the phrase regularly tell me that the people they call are more relaxed and willing to talk after hearing it, which is, by the way, exactly what it is designed to do.
Moving Toward a Diagnostic Agreement When the executive agrees to continue the engagement conversation, whether it’s during the same call or at a later date, it’s time to test your value assumption. As an example, let’s listen to a computer chip fabrication equipment salesperson calling on the COO of a major chipmaker. The salesperson says something like this: Based on my research, I have made a couple of assumptions about your customers’ demands for triple-etched chips. I’d like to run them by you and get your thoughts. If they are on track, we can decide if we should take a deeper look. If they don’t line up, that will be good to know as well. Are you comfortable with that? [You are introducing the call’s agenda and indicating your willingness to leave.]
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[The prospect says yes and we continue.] I’ve talked to a few of your sales managers to determine if they were getting any bid requests for triple-etched chips and how they were responding to them. They mentioned that because your company doesn’t have that capability, they are currently passing on about two to three of those bid requests per person per month. We talked a bit further and they estimated that it works out to about $10 million per month worth of bid requests. If I take your normal conversation rate of 33 percent, that works out to about $3 million per month. [COO is impressed. This guy did his homework. Doesn’t sound like a typical sales call. Let’s continue.] What I’m wondering is, relative to all the other issues you are dealing with, is the potential $36 million gain in revenue worth looking into any further to see to what degree it’s actually there and to what degree, if any, we would be able to help you capture it? [Going for the no, again. If this isn’t a priority, this company isn’t a viable opportunity at this time.]
For the moment, let’s assume the COO says, “Yes.” The salesperson continues: What I would suggest is that you recommend a few of your top people to me. These are the people I like to call your brain trust, who represent the functions that are impacted by this situation. Usually, I speak to a key person in manufacturing, sales, marketing, quality, and finance. I have conversations with these individuals, get into more detail with them, and figure out what this situation is costing you and how realistic it would be for your organization to capture this business. Then, I’ll come back to you with a recommendation. Would that be helpful? [Permission to gather the information needed to move the sale forward and, most important, to return to the C-level.]
When the COO agrees, the salesperson has achieved several important outcomes. The customer has accepted the value assumption as a premise worthy of diagnosis. The cus-
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tomer has acknowledged the salesperson’s expertise and has sponsored the diagnosis, which is the next stage of the process. The salesperson has earned the keys to the elevator. In other words, he is now an adjunct member of the executive staff. He can call on the executives and managers specified in the diagnostic agreement and say, “I spoke with the COO yesterday and discussed the triple etching problem. I volunteered to gather more information and report back, and you’re one of the people he wanted me to talk with. Do you have a minute?” It’s going to be tough for him to refuse. By the way, when the executive gives you the names of the people to contact, ask about their mind-sets and backgrounds. Everything you learn will help you prepare for meeting them.
INVOKE
THE
20-SECOND RULE
It’s very common for customers to ask questions as they become involved in the engagement conversation or throughout the entire process for that matter. Often, these are questions that may threaten to derail your process, tempt you to start presenting, or require answers that the customer is not yet prepared to fully understand. You must answer these questions particularly early in the sales engagement. Honest, open, straightforward—that’s the mind-set. If you refuse, by saying something like, “It’s very difficult to answer that without knowing . . .” or answer a question with a question, like, “Why is that important to you?” customers will see you as a stereotypical salesperson and the trust level will start to drop quickly. When you answer, however, it’s time to invoke the 20-second rule. Answer the question very succinctly and follow it immediately with a continuation of the diagnostic conversation with your next diagnostic question. If you answer the question
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There is one last step to the engagement conversation. Give the executive with whom you are meeting a little homework. You ask the executive to provide additional information that will assist you either in your preparation for meeting his staff or the next meeting with him. With that agreed to, you then want to give the executive something to accomplish prior to your next meeting. It could be to keep track of issues that pass their desk and are related to the issues you will discuss when you get together. The point is to keep the executive personally involved and thinking about this issue. Salespeople rarely do anything like this, but it serves a variety of purposes. One, it turns that first meeting into a “let’s roll up our sleeves” session. Second, it tests to see whether this customer has a sense of urgency beyond simple interest. Third, it’s memorable and helps keep your call and the issues “front of mind.” The executive will remember this conversation, and you, the next time you walk in the door.
When Customers Come Knocking— A Word about Prospects That Come to You Thus far, we have been discussing engagements that are initiated by the sales professional, but we also often get cus-
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tomers via “qualified” leads generated from marketing efforts, customer call-ins, and bid requests. What happens when, as is often the case, the customer comes to the salesperson? The problem is that it is highly unlikely that the customer who initiates a sales engagement with you is any better prepared to consider your solutions than the customer you call. They probably are aware that they have a problem and have a general idea of the kind of solution that can resolve it. However, as we have repeatedly seen, the more complex that problem is, the less likely it is they have a complete understanding of either their problem or the potential solutions. They are likely taking the traditional approach to buying, that is: “I think I need to do something like this, please explain your solution and I’ll make my decision.” The fact that they may have been talking to multiple vendors only exacerbates the situation. Instead of being more aware of solution alternatives, they are probably suffering from information overload and confusion. Let’s not forget that it is also highly likely that this person is not the executive that you would typically approach if you were initiating contact with this company. At the same time, the salesperson who gets this “hot” prospect is probably itching to schedule a meeting and start presenting. This appears to be a customer who “gets it.” They appear to be in the market for the type of solution you provide and they want to know what you have to offer. It’s difficult to resist such a plum and the urge to dive right in, but you must. First, you have no idea if the customer represents a viable opportunity, much less is ready to change. Second, neither you nor the customer is properly prepared. So, when a new prospect says, “We need an XYZ solution and we’re going to be talking to five vendors including
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you. We’d like to schedule a time for you to give us an overview of your solutions,” instead of complying and moving to set a presentation appointment, the better answer is: “I’d be glad to do that and I appreciate the opportunity. I’d like to walk you through how I normally prepare for that type of overview; it will take about 10 minutes. Is this a good time or would you like to schedule another time to go over that?” The next 10 minutes should be spent discussing your discovery process and pinpointing the people you would have conversations with to make an initial determination that enough value relevancy exists to pursue this sale. You are laying the foundation for the same diagnostic agreement you would construct with any other prospective customer. In this way, you get the customer moving through your decision process. A key consideration here is that truly viable customers are impressed by and attracted to this approach. It’s likely that every other salesperson they talked to was ready to start presenting on the spot. In contrast, you are asking questions that they may not have considered and are talking about the elements you need to explore to ensure that they will eventually be able to make a quality decision and achieve the maximum value from their purchase. Here again, you are generating more credibility through the questions you ask. Customers who hesitate to work with you should be carefully scrutinized. If a customer refuses to work within a sensible and high-quality approach, you probably will not be able to differentiate your solutions from the rest of the competition and you are likely entering a no-win situation. In fact, when customers are unwilling to answer questions, they are usually telling you something very important. They may not be ready to take a serious look at the problem
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or, if they are serious, they may well be working closely with a competitor and need some ammunition to support their choice. When customers’ behaviors do not match their words, it should be recognized as a strong warning sign. Key Thought You can’t lose something you don’t have.
CYNIC’S SIDEBAR “No way am I walking away from a live one.” Some salespeople resist the idea of walking away from a request for a proposal (RFP) or an invitation to present. A few, when I question them about this reaction, provide a long list of reasons for pursuing the “opportunity,” not the least of which is “If I don’t propose, I have no chance to make the sale.” For instance, if you pursue 40 suboptimal opportunities per year and close 25 percent, the numbers might sound good. But are you optimizing your performance? You aren’t taking into account the lost opportunity cost. If you replaced just half of the 40 suboptimal opportunities with higher probability sales, your results could skyrocket. Our most successful client companies and their most successful salespeople go to great lengths to clarify their rules of engagement. If those requirements are not met, they will not pursue what they know to be low-percentage prospects. They all will admit that they probably miss an opportunity here and there that might have turned into a
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Key Thought You’re either part of your system or somebody else’s.
Progressing Toward Change— Discover’s Role in Change Psychology Once you have reached an informal diagnostic agreement with the customer, you are ready to move to the next stage of the sales process. You have established the value assumption as legitimate and worthy of inspection. You have been given the endorsement of the executive to move through the customer organization and report back. You’ve received the keys to the elevator. You’ve done something else, too. You have started to move the customer through a spectrum that I call the Progression to Change (Figure 4.1). When we initiate contact with customers, we have no idea where they are sitting on this progression. The highest probability is that they are located at “satisfied” or
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FIGURE 4.1 Progression to Change or What the Customer Is Thinking in Each Stage
“neutral.” (There will always be the rare exception, such as the customer who says, “Your timing is amazing, I was just thinking about . . .” but, of course, we don’t want to build a plan that depends on exceptions.) The objective of the Discover phase is to identify someone who has a high probability of progressing to “critical” and advance them through the progression to “aware” or “concern.” In the Discover conversations, the sales professional is raising the customer’s consciousness with regards to the incentive to change. In the aware stage, the customer begins to realize that “this is something that could be happening to me and I want to check it out.” If the customer is experiencing the telltale symptoms, they will advance to the concern stage and want to gain an understanding of how bad this is. They are open and ready to work with you to answer that question through the next stage: Diagnose.
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5 Diagnosis Trumps Presentation Every Time
W
hen you give your customer a presentation/proposal, being optimistic, you are expecting them to make a decision. Where in the Progression to Change do you want your customer to be before you give them your sales presentation or proposal? The most common answers I get from salespeople are “aware” or “concern.” Most salespeople will accept a customer who is thinking, “This could be happening to me and I want to check it out.” Unfortunately, this is a prescription for failure in sales. In fact, it is most likely that this customer will not buy at all. A customer’s awareness that he might have a problem is a state of mind that can earn a salesperson the keys to the elevator, but it is not compelling enough to create a decision to change/buy. Indeed, customers who are willing to 107
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make the level of financial investment and the organizational commitment required to undertake major change, on the existence of a problem that “we might have” or a solution that “we might require,” are few and far between. Yet, as soon as most salespeople receive permission to engage customers, as soon as their customers hit “aware” or “concerned” on the Progression to Change, they start presenting. (This is not particularly surprising, since this customer is showing interest and the conventional sales process encourages salespeople to present early and often following the old adage of “when in doubt . . . present.”) For a smaller percentage of sales organizations, the fact that customers must be psychologically prepared before they decide to buy will not come as startling news. This is why these sellers have incorporated various forms of needs analysis in their sales processes. When the needs analysis is conducted thoroughly and with rigor, it can help prepare customers for change. Typically, however, salesforces use it as a thinly veiled excuse to present. In sales, the needs analysis is almost always narrowly focused on the external profile of prospects. In other words, how the seller’s solution can meet the needs of customers who match the profile. Even more disturbing is the fact that it requires customers to define those needs on their own, as in “Is a 24/7 service response time important to you? Most of our customers find that is an indispensable feature of our program.”
HOW SEVERE IS YOUR SOLUTION BIAS? Here’s a short self-exercise that can help you discover if you might be falling into the solution-bias trap. Ask yourself, “What are the decisions my customers need to make as they go from not having my
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solution to having my solution?” Take 10 minutes to create a list of those decisions. Do not read any further until you have finished your list. After it’s completed, examine each decision and ask yourself, “What is this decision about?” Mark the decisions that are about the solution with an “S” and mark the decisions that are about the problem with a “P.” Count up the number of each. Typically, when we conduct this exercise in our seminars, two-thirds or more of the decisions are solution oriented. In other words, salespeople are working with customers almost exclusively from a solution (or their own) perspective, not from a problem (or the customer’s) perspective. Further, they aren’t just working on solutions in general; they are working on their solutions.
There is a major risk here. When the sales engagement is focused mainly on your solution, most customers are not going to be able to find enough compelling reasons to undertake the degree of change that the sale represents. They may have an understanding of your solution, may even recognize how it differs from your competitor’s solution, but a most serious question, “Why should I change?” remains unaddressed and unresolved. In fact, most engagements that end in “no-decision” stem from this exact root cause. When customers do not understand the risk of doing nothing and are faced with the risk of change, they tend to end up in the “do nothing” category. The Decision to Buy Lives in the Negative Present The best way to manage this risk is to move customers through the Progression to Change before you begin the discussion about solutions. The further we move customers along this progression, the more ready they become to change. Thus, our goal is to move them to the state of
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crisis. Crisis is defined as the point of decision. It is the point where the customer decides, “I don’t want this to happen to me any longer.” This is the point where customers decide to change; it’s where they decide to buy. There is very profound selling insight in this. It is the realization that customers can decide that they have a problem without having a solution in mind. In fact, they can decide they have a problem even if no solution exists. They can also calculate how serious that problem actually is without having a solution in mind. And, they can decide that they can’t live with a problem without having a solution in mind. This contradicts the conventional sales approach, which says, “I have to tell you all about my solution to make you want to buy.” How do you move a customer to the crisis stage? Crisis lives in the negative present in the Psychology of Change matrix, not in the positive future. So, you must focus on the customer’s present situation, not your solutions or the future state that customers will be able to attain with the help of those solutions. You must raise customers’ consciousness of their current state as fully as possible. This creates relevancy and if the situation is unacceptable, it creates the incentive to change and compels customers to act. This work requires a primary and intense examination of the customer’s situation—that is, diagnosis. Diagnosis Requires an Expert Most salespeople believe that they are already paying adequate attention to the customer’s negative present. They think that they are “getting to the customer’s pain.” But when they ask customers to define their own problems, they are, in fact, falling prey to the implicit and erroneous assumption that customers understand the scope and severity of all of their problems and all of the opportunities they are not acting on.
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Here’s how it plays out: In essence, salespeople are saying to customers, “My solutions address these kinds of issues. Do you have concerns in these areas?” When customers answer in the affirmative, the salespeople may ask a few additional clarifying questions, but quickly launch into their presentations. But at the end of the presentation, when they attempt to close the sale, customers hesitate. They say they like what they see, but they aren’t ready, or they need approvals, or they don’t have the budget right now, or any one of a hundred other excuses. The real reason customers don’t buy is that they don’t actually understand the scope of their problems or the consequences of those problems. They don’t know why they should change. So, they don’t. The irony is that they very likely do recognize the merits of your solution, so there are no objections to handle. Key Thought Do not allow the customer to self-diagnose.
This is the danger of encouraging and accepting selfdiagnosis. It is what happens when you allow and/or encourage the customer to define his own problem and the customer doesn’t have the expertise required to make the diagnosis. This is like a doctor asking a patient, “What’s wrong?” The patient says, “I was bitten by a mosquito the other day and I’m not feeling well. I saw a segment on the news last night about several cases of West Nile virus in the area and the symptoms sounded like my symptoms. It’s probably what I’ve got and they said I need penicillin.” “That’s serious,” replies the doctor. “Let me write you a prescription.” Of course, this would never happen. Even a
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doctor treating another doctor would doublecheck the diagnosis before prescribing a treatment. But scenarios like this get played and replayed every day in sales engagements. A customer calls in and says, “We just lost a big customer because our service department didn’t know what our sales department was promising. I read your white paper that pointed out how your customer relationship management (CRM) software will solve that problem. We need to take a serious look at how this would work and perhaps get a system in place.” How does the salesperson respond? “There’s no doubt that our CRM system will solve that problem for you,” he says. “I’d be glad to arrange a demonstration. How does next week on Tuesday look?” How does the salesperson know that CRM is the right answer? He doesn’t . . . until he conducts his own diagnosis. Quality diagnosis requires an expert. In the complex sale, that expert is you along with other members of your team. Expert diagnosis not only provides the data needed to evaluate and stimulate change, it also creates exceptional credibility in the customer’s mind. While the rest of the competition is talking about their solutions and the success they have generated for other customers, you will be leading the diagnosis, asking questions, identifying symptoms, surfacing critical issues, demonstrating your business savvy, and opening customers’ eyes to their current reality.
The Nature of Diagnosis—Cyclical Conversations That Cover All the Bases When you start your diagnosis within the customer’s organization, you are building on the foundation of access and sponsorship you established in the Discover phase. That doesn’t
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mean you can or should hold that over the cast of characters with whom you will be working within that organization. Their cooperation is essential to your mutual success. You need to protect their self-esteem. Although we tend to be on our best behavior with those we see as critical to the buying decision, it is too easy to be less respectful of individuals lower in the organization. We must treat each of them with the same respect and care that we accorded our sponsor.
THE CAST
OF
CHARACTERS
Once you leave your sponsor’s office and move into the customer’s organization, you will begin working with new contacts, members of what I call the cast of characters. The traditional salesperson is looking for that elusive individual who has the power to make the decision to buy, but you are starting with the people who have first-hand knowledge of the symptoms of the problem and can help detect and quantify the absence of value. A properly chosen cast will reflect the functions in which the absence of the value you provide manifests itself. As an example, a client company of ours provides compliance automation software that is designed to help public companies ensure compliance to financial regulations, such as the Sarbanes-Oxley Act in the United States and their counterpart regulations in Europe and Asia. Their obvious contacts are the executives in finance and IT who buy financial software. However, in order to create a viable cast of characters, they have extended the cast membership to include managers of the various business processes that their software will monitor. In this way, they gain direct insight into the vulnerabilities and exposures specific to each process. In their case, the financial impact of their software extends well beyond the obvious processes that are
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The diagnostic conversation itself is, as we will soon see, a fairly straightforward one, but in more complex sales, you will redesign the diagnostic conversation to fit each unique position in the cast and repeat it as often as necessary to uncover the full dimensions of the customer’s problem. It is a cyclical conversation in two senses. First, depending on your sale, you will have the conversation with a variety of different people—that is, the cast of characters. We need to hold this dialogue with those individuals who are observing the absence of value. We also want to talk with managers whose job responsibilities give them ownership of a significant aspect of the problem. They know how the problem impacts their segment of the business and are part of the mosaic you must create to fully define the problem. Each of the sale’s cast members is responsible for a different function within the customer’s organization and each will have a different perspective on the problem, different kinds of information to offer, and different motivations. Accordingly, while the diagnostic conversation has a generic framework, this is not just a matter of rote repetition. You will have to craft a unique but related conversation with each cast member. Key Thought One opinion does not make a consensus.
These new cast members have not been privy to your previous conversations. Thus, they probably are not yet at
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the aware or concerned stage of the Progression to Change. It’s your responsibility to move them through the progression relative to their job responsibility. In fact, the diagnostic conversation is specifically designed to help each cast member fully comprehend the negative present or the potential negative future, as required. This process serves another purpose: It anchors the cast members. In a sense, we are allowing the cast members to develop their own acute awareness of the situation and personal ownership of the problem/opportunity. In the event that they are called on later in the process, they will clearly understand the nature of the problem and the need to resolve it. Second, you will often find yourself cycling through a diagnostic conversation repeatedly with a single cast member. Typically, problems will have multiple impacts within functions. A full investigation of each impact requires a dedicated cycle through the diagnostic framework. A good illustration of these points is provided by a client company that sells a sophisticated, turnkey information system designed for large automobile dealerships. This is an integrated system that includes modules for accounting, sales, service, parts and inventory, used car sales, warranty reimbursement, management reports, finance, and so on. Establishing the parameters of the absence of value that such a system provides, requires the salesforce to talk with and coordinate diagnostic conversations with a variety of functional managers within the dealership—the sales manager, the controller, the service manager, and the parts manager, to name just a few. For instance, the used car manager has a “wish list” of fast-selling vehicles that he wants on his lot. When a customer comes in for service with such a vehicle, our client’s system will prompt the service manager to inform the customer that there is a
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strong demand for her particular model and if she is interested in trading it in on a new model, she would receive a very high trade-in allowance on the new car. What’s the absence of that capability costing the dealer? You must have a conversation with the used car manager to establish the wish list, the service manager to see how frequently that model is in for service, and the new car manager to establish the estimated profits on the new car sale. The diagnostic process for the dealership system also requires multiple conversations with individual cast members. The stream of used vehicles is only one issue of concern to the used car manager. He also must get a steady stream of new customers. The dealership system can create customized marketing communications and send them automatically. What are the consequences and costs of the absence of that value? It requires a new conversation to diagnose for that. The point here is that your solutions, the problems they address, and the opportunities they create, will dictate the direction and depth of the diagnosis. Whether this requires one or one hundred conversations, you must pursue them all until you’ve uncovered all the facets of the problem and established a credible, compelling portrait of the customer’s negative present. The more detailed this portrait becomes, the greater the customer’s incentive to change. The Diagnostic Conversation—What’s Happening? Why Is It Happening? How Bad Is It? Is It Bad Enough to Act On? No matter how many times you repeat it, there is one fundamental format for the diagnostic conversation. Because complex solutions typically address complex problems, on the surface, this conversation often appears more daunting than it actually is. But while there are many nuances to the conversation, Diagnosis is a relatively simple process.
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The diagnostic conversation is a dialogue with the customer that progresses from job responsibility to indicator to cause to consequence to priority. The job responsibility of the person you are diagnosing is what makes the diagnosis relevant. The indicator is the physical symptom (the evidence of the condition or problem affecting the job performance); it tells us and our customer what’s happening. The cause is the problem’s origin; it tells us why it is happening. Consequence is the problem’s impact and its severity; it tells us what and who is being affected and how bad the problem is. Priority is the problem’s position relative to other issues in the customer’s business; it tells us whether and when the problem is worth resolving from the customer’s perspective—job responsibility, indicator, cause, consequence, priority. That’s it. This dialogue is driven by questions. Questions are the levers for change. The answers we get to the questions tell us the viability of the business opportunity we are pursuing. Those same answers provide customers with the insights they need to move through the Progression to Change. The following is an example of the power of question-driven diagnosis. We once worked with a pharmaceutical company that created a new version of an ACE inhibitor, a commonly used medication, priced 25 percent below competing products. The salesforce introduced the economical drug to doctors during their regular calls, but it wasn’t selling well. We accompanied a sales rep on a call and watched what was basically a two-minute presentation. Pharmaceutical salespeople get an audience with doctors by giving them free samples. The doctor has to sign for the samples and during that two-minute process, the sales rep attempts to convince the doctor to write prescriptions for his company’s medications. During the call we were on, the rep pitched the doctor on the cost savings of the new drug. The doctor didn’t even
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bother to look up. We saw it as a lack of mutual respect by the doctor and a demoralizing experience for the rep. After the call, our consultant said to the rep, “The doctor didn’t seem to be too intrigued. Do you think she’s going to start writing that?” “Probably not,” said the rep. “Why would she?” we asked. “Well, it would save her patients some money.” “Aren’t the insurance companies paying?” “She probably has some patients who aren’t covered by insurance.” “How many?” “I don’t know exactly,” said the rep. “I suppose it could be 10 percent to 15 percent of her patients.” “But would the doctor really care about the cost? She’s not paying the bill. What would the doctor care most about?” Then the rep said, “If patients have trouble paying for meds, they often try to stretch their prescriptions. If they don’t take their pills as prescribed, it impacts the doctor’s care plan and the well-being of the patient. That’s what a doctor should care about.” Suddenly, we had the tangible reason why a doctor should prescribe this drug and we quickly created a diagnostic strategy for the next call. The next time the samples were delivered, the doctor came to sign the receipt, but when she asked the rep “What’s new?” the rep replied, “It may be nothing and even if it is something, it probably would only apply to a small percentage of your patients.” A minor miracle occurred; the doctor looked up. This wasn’t what she expected to hear. “Do you ever notice any of your patients stretching their ACE inhibitor prescriptions?” continued the rep. “Yes, it happens,” said the doctor.
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“Does a certain patient come to mind that has recently stretched his or her prescription?” asked the rep. The doctor nodded and the rep continued, “Is it putting the patient at risk?” “It could,” said the doctor. Then, the rep asked, “Is that patient insured?” “Likely uninsured,” said the doctor, who is now picturing a tangible example of the prescription-stretching problem. “Well,” said the rep, “I’m wondering if our new ACE inhibitor, which costs 25 percent less, would make it more affordable for uninsured patients. I’m thinking they might use their meds as you prescribe them and ensure the integrity of your care plan. Do you think it might help this patient?” “I like the possibilities,” replied the doctor, and the rep suggested, “Why don’t you choose one or two of these patients and write this for them and we’ll see if it helps?” The doctor did prescribe the drug. We taught the same strategy to the rest of the company’s reps and the new drug’s market share doubled within 60 days. This was a short, simple diagnostic dialogue, but no matter whether your sales engagement is two minutes long or two years long, a well-constructed diagnostic conversation can achieve the same impact and level of return for you. The Flow of the Diagnostic Conversation Every time we begin a diagnostic conversation with a new cast member, we have to establish our relevancy and build our credibility once again. You should start by bringing each individual up to speed. Here’s how a typical conversation with a new cast member might go. After the introductions, the salesperson is talking with a safety training manager at an oil company:
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SALESPERSON: Did your CFO have a chance to give you much background on what we need to discuss? CUSTOMER: Yes, she dropped me an e-mail that said you would be calling to discuss our offshore safety programs. SALESPERSON: That’s good, let me give you a little more background. It began with a conversation I had with your risk manager about the number of safety incidents last year, and that number led me to think that your liability costs might be on the high side. I recently verified that with your controller. We ran that by Ann [the CFO] and offered to take a closer look at some of the issues behind that. She thought that would be helpful, and I suggested as the next step I ought to meet with some of the key people, and your name came up relative to your role in safety training. I’m thinking you’ll be able to give me a little more insight into the training process for your offshore workers. You’ve established the reason why you are there (the physical indicators and tangible relevancy), why you were given access (value assumption accepted by the CFO), why it’s related to the cast member’s specific responsibility, and a sense of the information you hope to find. Start at the Process Level We’ve developed what we call the A to Z question and have found it to be one of the most efficient questions you can ask to open a diagnostic conversation. It asks the individual to consider a specific business process that is within his or her job responsibility and pinpoint an area of concern within that process. For example, you might ask the safety training manager:
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Let me start out by asking you this: As you look at the entire process of creating an effective safety training program for your offshore employees, starting with identifying the primary behaviors that are creating the risk and ending up with an accident-free environment, even though it’s all been going well for you, which part of this process concerns you the most?
If you break down the A to Z question, you’ll find five important parts: 1. As you look at the entire process of creating an effective safety training program for your offshore employees . . . focuses the field of inquiry on a job process the manager is responsible for, continues the relevancy of the conversation, and asks the manager to begin to think about the process. 2. . . . starting with identifying the primary behaviors that are creating the risk . . . is when you state the “A” of the question, the first step in the process, and where you want the customer to begin his or her review of the process. 3. . . . and ending up with an accident-free environment . . . is when you describe the “Z” of the question, the optimal outcome of the process. 4. . . . even though it’s all been going well for you . . . is the critical “acknowledgment.” Here you’re protecting the customer’s self-esteem by acknowledging their achievements. This prevents customers from feeling as if you are assuming they have a problem and/or are inept at doing their jobs. 5. . . . which part of this process concerns you the most? is the question that harvests the thought process you have just guided your customer through. It is the springboard into an in-depth Diagnosis.
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By studying the job processes that your customers are responsible for and the steps in the process, you will have a good idea of what kinds of answers your A to Z questions will elicit. These answers represent the major challenges that your customers typically experience. You should also understand how your solution and the absence of your solution affects the customer’s process, specifically, which steps in the process your solution impacts. One of the keys to effective A to Z questions is focusing on a job responsibility that your solution can impact and choosing the A and Z points such that the scope is broad enough to give your customer the freedom to explore a wide range of the process, but not so broad as to make the range overwhelming and too hard to pinpoint a concern.
CYNIC’S SIDEBAR “These people are going to stonewall me!” In fact, cast members not only tend to cooperate, they are very open to discussing problems that directly affect their job performance. Further, you have called on them with the keys to the elevator in hand, the sponsorship of a powerful executive, and are discussing an area that is of concern to the sponsoring executive. Occasionally, however, you will find yourself sitting across from a cast member who refuses to cooperate. Often they will have good reason not to . . . perhaps they are frightened that they will be blamed for the problem, they are in denial that it exists, or they believe that any change will make their jobs more difficult. Don’t worry about it. You’ll never
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get all the votes in an election and the highest percentage of sales do not require unanimous decisions. Remember . . . remain cool, calm, and collected. Stay professional and maintain an emotionally detached mind-set. First, one opinion does not make a consensus. You are working with other cast members, and if a problem actually exists, the evidence can be verified elsewhere. Second, you can always find another cast member who can speak to the issue at hand. Third, when you report back to your sponsoring executive, you can let the sponsor know that the cast member wasn’t comfortable with the situation and wasn’t able to provide much information. Usually, senior executives are fully aware of the “problem children” in their organizations and will simply discount their testimony, while your credibility quotient rises.
Key Thought People never say what they really mean first.
Loaded Words and Subprocesses People never say what they really mean first. Let’s say that there are four common answers to the safety training A to Z question we asked earlier and the training manager says, “Well, I’m concerned that our new people just aren’t getting up to speed quickly enough and thoroughly enough.” This is one of the answers we anticipated, but it doesn’t contain the level of detail we need to diagnose the problem. What, for instance, is “quickly enough” and “thoroughly enough?” Words like “quickly” and “thoroughly”
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are examples of loaded words—words that can have multiple meanings. If you don’t clarify and define these words, you can be working with your own interpretation rather than the customer’s. Let’s say that “quickly enough” to the customer is 15 days, but you didn’t hear that and you create a proposal that promises to “ramp up your new hires within 30 days.” Well, that’s twice as long as it takes the customer now and you’ve just created a barrier to the sale. You need to transform loaded words into crystal clear communications. In this example, I’d start with just one of the loaded words (and as a general rule of thumb, the least emotionally charged one). I’d ask a clarifying question, such as: “We have heard that concern from other customers. Can you help me understand what ‘quickly enough’ would be in your situation?” Again, the phrasing is important: • I’ve heard that concern from other customers. Be professional, not aggressive. Use a buffer to take a step back and maintain a conversational pace. A buffer can be a compliment, a repeat of the loaded word, or as it is used here, a statement of truth. • Can you help me understand what ‘quickly enough’ would be in your situation? This question is aimed at clarifying the loaded word.
OPERATOR’S SAFETY TIP When we clarify, we don’t ever want to challenge customers with confrontational language such as “Could you be more specific?” or “What do you mean by that?” These questions accuse the customer of not speaking clearly. Instead, we should be asking for their help, as in “Can you help me understand . . .” or “Could you help me with . . .”
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Key Thought You must always protect the customer’s self-esteem.
Probing the Symptoms When you and your customer have reached the level of process or subprocess where the detailed symptoms of the absence of value exist, it’s time to begin asking indicator questions. Indicator questions are used to check the customer’s experience and/or knowledge of problem symptoms. They enable you to drill down into an issue to confirm that symptoms exist, and to determine their causes, consequences, and priorities. For example, if the training manager responds to our question about the loaded word with, “It’s taking longer than two weeks to get these people behaving safely,” we should ask a series of indicator questions, such as: • Could you tell me more about . . . ? An indicator designed to extend and expand the conversation and elicit more information. Could you tell me more about the behaviors you are looking for? • Could you give me an example of . . . ? An indicator designed to establish a specific example of the problem. Could you give me an example of the unsafe behavior? • When did you first notice . . . ? An indicator designed to establish duration of the problem. When did you first notice the training program was not creating safe behaviors?
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• What seem to be the key contributing factors to . . . ? An indicator designed to surface the problem’s causes. What seems to be causing the lack of safe behavior? We should always let customers identify causes first. However, if they don’t mention a cause that you know is likely, you can then ask a more direct question about the cause, such as, Is it possible that ‘xxxx’ could be a contributing cause to the lack of safe behavior? • How has this affected . . . ? A question designed to establish the problem’s business consequences. What are the main impacts of unsafe behavior on the operation? Again, we want to see what is on the customer’s mind first and then, if necessary, surface impacts that may have been left out. Is it possible that ‘xxxx’ could be causing that to happen? • Have you had a chance to look at what this might be costing the business in terms of . . . ? An indicator designed to surface the costs of the problem. Now, you can take the customer into your cost of the problem formula and develop a complete picture of the financial impact. As you read this list, there are two points worth noting. First, our indicator questions should always start by asking for observations rather than opinions. Observations don’t imply problems or blame as opposed to opinions, which tend to put people on the defensive. Opinion questions are necessary and useful, just ask them later in the conversation. Second, it’s important that we don’t include judgments in our indicator questions. “Have you noticed any shortness of breath?” is an indicator that doesn’t assign a value to the existence of shortness of breath. However, “Do you think your weight makes it difficult to breathe?” is a loaded question. If you insult the customer with your questions, they won’t answer them. One of the real challenges of the diagnostic con-
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versation is protecting the self-esteem of your customers at the same time you lead them to the realization that they have a crisis that must be resolved. So, let’s go back to the safety training manager and ask him, “What are you seeing as some of the consequences of these folks not being ready in terms of safety?” “Well,” he replies, “I’ve got to put them out on the rigs and I am not comfortable with that. They go out there and do stupid things.” Stupid is a loaded word. So, we want to clarify it and say, “What is one of the types of behavior that would make the ‘stupid’ list?” “Oh, they’ll plug tools into nongrounded outlets and, if there are flammables nearby, we’re asking for trouble,” says the training manager. “We had a fire on one of our North Sea rigs recently, and we were lucky to get it under control.” This conversation between the salesperson and the training manager could and should go on and on as the salesperson drills down to causes, consequences, costs and priorities, but by now, you understand what we are doing. All diagnostic conversations follow a similar framework, and we are always moving from indicators to causes to consequences to financial impact and priorities. Our objective is to uncover observable, relevant, and quantifiable information, all of which will guide a quality decision process.
CYNIC’S SIDEBAR “This all sounds really good, but what do I do if I go in there and they don’t have any of these indicators?” It’s amazing how frequently we get asked this question. A salesperson asked me this question during a recent online seminar and it struck me that it was
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TAKING IT TO THE STREET yet another reflection of the conventional sales mind-set. This question is actually asking, “I can see that this approach will work if customers really have problems, but what do I do if they don’t have real problems?” This question only makes sense if you believe your job is to sell each and every prospect. It’s amazing how conditioned we are to believe that not selling to a prospect who doesn’t have the problem we solve is somehow an unacceptable outcome. Remember the diagnostic conversation is meant to confirm the reality of the absence of value. If there are no indicators, there is no absence of value. If there is no absence of value, there can be no value and the customer doesn’t require what you are selling. Would a surgeon operate if the patient didn’t have symptoms?
Priority Is the Final Determination That Leads to Crisis The diagnostic conversation is always attempting to move customers toward “crisis” on the Progression to Change. This is the point at which the diagnosis is complete. It starts at the beginning of the diagnosis with aware when customers acknowledge that the indicator is something that could happen to them. The goal of the A to Z question is to advance them to concern, “it is happening to me,” which raises the question, “How serious is it?” The indicator drilldown is designed to answer that question. When the customer realizes that “it’s happening to me to this degree,” we help them place a dollar value on this condition (an essential conversation that we’ll discuss at length in Chapter 8), and establish the priority of the situation. If it is decided that “we
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FIGURE 5.1
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The Levers for Change
have to stop this from happening,” and “we have to take action now,” we have met the criteria for “crisis” (Figure 5.1). When our customers reach the crisis mind-set, they have made the decision to change/buy. The next logical question is “What do we change to?” This signals the beginning of the Design phase of the complex sale and the topic of the next chapter. Since it is highly likely that you are the only salesperson whose approach and process have helped the customer develop the insights needed to understand the problem, you have achieved exceptional credibility and, most likely, have a privileged position as you take the customer into the Design phase. You’ve set the relevancy, competence, and credibility bars for your competitors, and the odds that they will be able to match or exceed what you have achieved is highly unlikely. Typically, at this point, customers are thinking, “You understand us better than anyone else. You took us to places we never thought of going before. You brought us to a better understanding of our problem unlike anyone
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else.” The corollary to this is: “You and your company are probably our safest assurance for getting this done right.” This is a substantial competitive advantage as you move forward. You have a customer who is not only predisposed to buy, he or she is predisposed to buy from you. It also means that the customer is predisposed to provide you with unlimited access and candor in the forthcoming Design conversations.
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6 Cutting Through the Smoke and Mirrors
C
ustomers face a new and equally daunting challenge after they travel the Progression to Change and have developed the incentive to change. Now, they must decide on the solution that will best resolve their situation. As sales professionals, our job now becomes one that is best characterized as orchestrating the design of that solution. It’s our job to enable our customers to think through the optimal solution to the required change. If we want to win this sale, we must help them develop the confidence to invest. I’d like to step back from this task for just a minute and ask you a question: How often have you left a customer feeling like you have reached a meeting of the minds about his requirements, and then the next time you 131
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spoke, the customer was off in another direction entirely? It’s a pretty common occurrence. What usually happens is that another salesperson has called on the customer and convinced him that her company’s solution is the one that best answers his needs. Suddenly, the customer needs an adjustable whickersnacker on his manufacturing line and, unfortunately, that’s a feature that your equipment doesn’t include. It’s as if customers are floating above the sale in a balloon. Every new blast of a competitor’s hot air pushes them in another direction—usually a direction that takes them away from deciding to buy from you. It’s up to us to anchor the customer’s balloon with the relevancy we’ve developed in the Diagnose phase, but we can’t accomplish that task through conventional means. In fact, conventional selling is the cause of the problem. When we present our solutions, we move customers down a specific path. When our competitors present their solutions, they move customers down a different path. How do our customers perceive these presentations? Often, they feel like they are wandering through a labyrinth of smoke and mirrors. How can they evaluate competing solutions? They can’t . . . unless we tether the balloon with stakes of relevancy and equip them with the information and insight they need to cut through the smoke and mirrors and choose the optimal solution.
Staying on the Inside Track by Co-Creating Solution Parameters It’s ironic. Salespeople tend to depend too heavily on the customer’s view when it comes to problem diagnosis and
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not enough when it comes to solution design. Salespeople ask needs analysis questions that allow and encourage customers to diagnose their own situations and then, with this flawed diagnosis in hand, they return to their offices and, without consulting their customers any further, proceed to design the solution proposal. Then they return to their customers with what is essentially a unilaterally prepared proposal that, in their opinion, reflects the customer’s needs. You can guess how the story goes from here. Customers have had little or no input into the design of the solution, are unprepared for what they hear, and, unsurprisingly, start stalling or worse, objecting and challenging the proposal. Salespeople hear these objections and, with all due respect, beg to differ. Confrontation ( better known as handling objections) ensues; proposal revisions are requested, sales cycles increase, and sales results suffer. Exceptional sales professionals, however, work through the Design phase with their customers. They co-create the parameters of the solution. The best way to prepare customers to purchase your solution is not to create a glitzier presentation than the competition. It is to work with customers to define the design parameters of a solution that can best solve their problem. There are important advantages to this strategy, including: • Customers can provide important insights regarding the optimal solution. They know, for instance, the capabilities of their own organization, a critical factor in the successful implementation of many complex offerings. • Design parameters supply customers with the questions that need to be asked in order to cut through
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competitive smoke and mirrors. By acting as coauthors of the design parameters, customers also become anchored in the solution and don’t get blown off course as easily. • Salespeople capture an unparalleled opportunity to set themselves apart from their competitors and gain an inside track to winning the sale by taking a leading role in the creation of the rules on which the solution decision will be made. It’s much easier to win the game if you’ve had a hand in establishing legitimate solution criteria.
Focus on Parameters, Not Features and Benefits You’ll notice that I’m talking about solution parameters, not solutions themselves. I’m not talking about specifying the features and benefits of your product. The proper focus in the Design stage of a sale is on the solution decision, not the solution itself. In design conversations, the third set of customer dialogues, sales professionals help customers navigate the solution design which, in turn, prepares them to navigate the selection process. This is a collaborative and highly interactive effort aimed at helping customers sort through the myriad issues involved in achieving value in order to arrive at a set of optimal solution criteria. W hen we show customers how to evaluate solutions in light of their unique situations and specify all the information required to make a high-quality decision based on tangible value, we’ve enabled them to invest with confidence.
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CYNIC’S SIDEBAR “Our solution is the optimal solution. I should be selling it, not wasting my time with decision parameters!” You need to put yourself in the customer’s shoes here. At this point in the sales process, the customer has the incentive to change. He has made the decision that he must do something. But two big questions remain: What should he do, and with whom should he do it? When you focus on your solution and ignore the solution decision, you are combining these two very different questions and, at this stage in the sale, placing too much emphasis on the latter question. The customer hears: “Our solution is the best and only way to solve your problem.” Even if that statement is true, how does he know it? The customer has no credible assurance that what you are proposing will actually solve the problem. Do you believe everything that salespeople tell you? Do your customers?
Think of yourself as the architect of the solution. Architects don’t start designing a new home by creating drawings and presenting them to their clients. First, they question and listen to their clients, always working toward a clear understanding of the client’s building program. A building program defines the client’s objectives and goals—physically and emotionally. The program defines the scope of the project. Then, the architect discusses the alternatives for accomplishing the program, the costs, and the timing. All of these things go into the design; all are determined in collaboration with the
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client. This is exactly what we should seek to do in our sales efforts.
The Design Conversation— Guiding Customers on a Journey into the Positive Future When customers come to the point in a sale where they fully understand the absence of value, they are mired in the negative present. In the design conversation, it’s our responsibility to continue their journey through the Psychology of Change and lead them forward through the negative future and finally into the positive future. The positive future is the emotional and physical state we promise our customers that our products and services will deliver (Figure 6.1). The Design conversation enables customers to achieve these states by: • Clarifying expected outcomes. In Design, we help customers define the business, performance, and personal outcomes they expect to achieve with the solution. • Choosing the optimal solution alternative. We help customers analyze and rank the various ways in which the desired outcomes could be accomplished, and select the best approach. • Identifying the resources required to implement the solution and achieve its value. We help customers identify the appropriate financial and organizational resources to invest to achieve their desired outcomes.
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Psychology of Change Highlighting the Positive Future
• Establishing the time frame in which the outcomes will be achieved. We help customers set an end date for value achievement in order to determine solution scheduling. • Finalizing the decision criteria that will be used to select the optimum solution provider and measure the value delivered by the solution. So when a customer who recognizes the full extent of his problem asks a sales professional a question such as, “Well, what should we do about this?” the right answer to that question is not an answer at all; it is the opening to another series of questions. The correct reply is: I think there are several ways we could go to explore the options. As a next step, I’d like to get a better understanding about the outcomes you’d like to see. With that in mind, we’ll
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identify the main ways we could achieve those outcomes and analyze the advantages and disadvantages of each. After we decide on the best possible alternative, I’d like to have us consider the combined resources we’ll need to implement the solution. Finally, we’ll see what the calendar tells us about the implementation schedule. All of these things will shape the optimal decision path for you to follow.
Outcomes, alternatives, resources, timing, and measurement criteria—these are the solution parameters we must help the customer define to win his or her business. How do we establish these parameters? Let’s explore this question by examining each dialogue in the Design conversation in more detail (Figure 6.2). Great Expectations Aren’t Always Realistic One of the more common complaints I hear from salespeople is that they have a difficult time managing their customers’ expectations. The simple reason that this problem occurs so often is that the conventional sales process mistakes needs for expectations. Needs do not equal expectations. In fact, it’s possible that a customer can have expectations
FIGURE 6.2
Design Conversation (Part 1)
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that bear no relation to his needs at all. That is why salespeople can design a solution that meets the customer’s needs and still find themselves with an unhappy customer. The solution to this dilemma is to articulate the outcomes that our customers expect (and should expect) and create a portrait of that positive future. These outcomes are business outcomes, not solution-related features and benefits. Key Thought Needs do not equal expectations.
Ask the Customer We should start this process by asking customers about their expectations. Then, we help them explore and adjust each of those expectations to reflect an achievable outcome. For instance, if a salesperson was selling test equipment to the head of a hospital lab, he could say: “We might start by going over the outcomes we’d like to see. Let’s look into the future. What should your results look like once you have a new system in place?” “The main issue we’ve got to deal with is those erroneous test results,” says the customer, “You helped us determine that false negatives represent 15 percent of our test results and we can’t live with that.” “That is above the average for false negatives. What figure sounds right to you?” “I don’t want any false negatives,” declares the customer. “We can’t afford them.” “Certainly, that would be ideal and I wish it was possible,” says the salesperson, who knows that no equipment on earth can achieve perfect results. “Unfortunately, the
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state-of-the-art hasn’t progressed that far yet. The best equipment on the market is delivering rates of 2 percent and the average across the board is 7 percent. Where in that range do you expect your results to fall?”
In this case, the customer’s expectation was exaggerated, but it might just as well be too modest. (In that case, you help him adjust his sights for greater value. When that occurs, you have an opportunity to expand the customer’s expectations and perhaps the sales opportunity.) The point is, when you hear an expectation that is either out-of-scope or unrealistic in the course of talking about outcomes, you can either help re-scope the project to accomplish that expectation, or if it’s unrealistic and not a sound use of capital, you can help the customer lower his sights. This is valuable knowledge that salespeople who are designing the solution unilaterally will not have, and which confers a competitive advantage on those salespeople who can apply it in their proposals. Introduce Critical Outcomes as Necessary While we should always start by asking customers to define their expectations, we also have to recognize that they may not be knowledgeable enough to cover all the outcomes themselves. In that case, we need to introduce additional outcomes. We can pinpoint those outcomes by looking back to the indicators, causes, and consequences that were identified in the diagnosis, and ensure that each of the major elements of the problem is addressed in design decision parameters.
OPERATOR’S SAFETY TIP We should not allow any expectation to be set that cannot be connected to an indicator and its consequences.
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This assures that there will be a cost of the problem associated with the consequence, and that will support the investment required to resolve the consequence. An expectation without a corresponding consequence and financial impact has the potential of requiring a high price without any means of justification.
We can introduce the design parameters in our dialogue with the customer and protect the customer’s selfesteem at the same time by using assumptive questions. Assumptive questions are worded in such a way that the customer’s awareness and expertise remain unquestioned. For instance, linking back to the oilrig safety training example in Chapter 5, if the customer doesn’t mention the need for reinforcement training once new hires are on the job, the sales professional can and should introduce that issue. He might ask, “When you spoke with your team regarding on-the-job reinforcement, what were one or two of the behavior elements they felt were the most critical to focus on?” Here the question introduces the reinforcement process with the assumption that the customer has already discussed it and come to some conclusions. If she has not, she is flattered that you assumed she had and she is comfortable opening the topic for discussion. Surface and Align Competing Expectations When we talk about outcome expectations, we are often talking about the expectations of more than one individual. We may not need to include the expectations of every cast member we worked with in the Diagnose stage of the sale. Some of these people have critical knowledge of the absence of value, but need not participate in the solution decision. Alternatively, we may well need to expand the cast at this point to include the expectations of other individuals who will have a say in the solution. This would include anyone
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who will be responsible for the implementation as well as those who will be impacted by the solution. Further, we should be confirming expectations with more than one source. For instance, we should be asking the training director about his expectations and discussing expectations with the head of human resources. We need to assure there is alignment and if we find any disconnects or new and unique expectations, we need to clarify them with the respective members of the cast of characters. The assumptive question would work well for this also. You could ask: “When you spoke with Linda (the human resources director) about her thoughts on the timetable for the implementation, were they about what you expected?” Unfortunately, these conversations do not take place within your customer’s organizations as frequently as they should. The assumptive question will again compliment the customer and introduce another important topic for discussion. We also need to recognize that outcome expectations vary with perspective. When we are working with multiple individuals within the customer organization, we will discover contradictory expectations. Part of our work here is to align those competing expectations by either reconciling or, when that is impossible, prioritizing them based on the greater requirements of the customer. Finally, if you are truly proactive, you can use the expectations dialogue as an opportunity to begin sowing the seeds for successful solution implementation and even service recovery. We’ll discuss this in greater detail in Chapter 7, but for now, we should be keeping in mind the challenges inherent in the delivery of our solutions. If, for example, downtime is a critical issue for the customer of a manufacturing controls company, we can help the customer set attainable expectations long in advance of any breakdown.
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Key Thought You have competitors; your customers have alternatives.
Once you’ve helped your customer create a portrait of the positive future, the next logical question is “What’s the best way to get there?” Typically, there are a variety of solution alternatives available to the customer. First, there are all of the competing solutions in the marketplace. Second, in many cases, the customer can do all or part of the solution internally. Third, even when you are in the enviable position of selling a product or service that no one else can provide, it’s highly likely that your company can deliver that solution in a variety of ways. There are always options to be considered.
THE UNASKED QUESTION “Could you bring me up to date with some of the things you have worked on to resolve this situation prior to now?” It’s fascinating how few salespeople ask their customers this critical design question. We jump in proposing solutions to problems that the customer has been struggling with and perhaps for quite some time. We immediately say we can fix that. Here’s another great example of self-sabotage. Who’s to say that the customer hasn’t already spent considerable time on the issue, perhaps even made previous attempts to solve the problem? I don’t believe we intentionally ignore the past, but not asking about it implies that whatever our customers have done previously has no value to us, or they don’t
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The primary difficulty with the alternatives dialogue is imposing some structure on the often bewildering number of options that exist. A good way to think through and organize options for customers is in terms of frames. One useful frame is based on the source of the solution. For example, often a customer can source a solution internally, externally, or in some combination of both sources. Thus, a software developer could say to a customer who has a programming staff that she could use to build an in-house solution, “As I look at the set of alternatives available for completing this project, you could develop the solution inhouse, engage an outside resource, or decide to split the project looking for a best-of-both-worlds approach. Could you bring me up to speed on some of the internal discussions you and the team have had regarding these alternatives?” You could also use another assumptive question here. The assumption could be that since they are speaking with you, they have thought through and eliminated the option of doing the project internally. You could ask. “Because we are talking about the possibilities of my company providing a solution for you, I’m wondering if you could
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help me understand a few of the reasons you’ve decided not to take on this project internally.” Other common frames are the “good, better, and best” frame and the “small, medium, and large” frame. So if you were selling a safety solution, for instance, you might say to the customer: “There are various ways in which you could approach achieving your outcomes. You could look at conducting a single learning event to introduce the new behaviors to employees. A second approach would be to add a series of reinforcement sessions that would each focus on single behaviors and cover all of the desired behaviors over the next six months. Another option would be to add a training and coaching element that would engage your line managers in the responsibility of embedding the desired behaviors in their teams. What direction would you say your internal conversations or previous experiences would tend to take you?” “Well,” says the customer, “historically we haven’t gotten enough traction on new behaviors when we’ve tried the quick hit approach, and there is a lot of conversation about how serious this is and how we have to make the new behaviors stick. So, I think we need to include the managers and make sure they are equipped to see this through. So I think the overall support around here would be toward the third option.”
An alternative frame that encompasses competing solutions is always a sensitive issue, but in reality, it may well be unavoidable. Too often, salespeople are taught to “manage” competing alternatives by pretending that they don’t exist. This is the setup for the hot air balloon scenario. If you don’t bring a viable competing alternative to the customer’s attention, you can be sure someone else will—most probably, a member of the competitor’s sales organization.
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In discussing all of the primary alternatives with customers, we are teaching customers the questions they need to ask the vendors of alternative solutions that will enable them to sort through the competitive smoke and mirrors. Now, when a competitor starts pitching that whickersnacker, the customer won’t be so easily seduced. Keep in mind you are suggesting that these questions should be asked of all potential vendors, including you. Further, the customer’s state of mind at this point in the engagement lessens any risk inherent in the discussion of competing solutions. As I mentioned earlier, at this point in the sales process, customers have made the decision to change/buy implicitly, and because you helped them reach that decision, they are predisposed to buy from you.
CYNIC’S SIDEBAR “If I can’t avoid mentioning the competition altogether, I’m certainly not going to say anything nice about them.” I’m always surprised when I hear salespeople taking potshots at their competitors. They may be our competitors, but they are viable alternatives for our customers. Typically, our competitors are more similar to us than we are comfortable admitting. They do the same work that we do, sell and serve the same customers, and at the end of the day, when they are not in the hotel room across the hall in whatever city we’re working, they return to the same kinds of homes and families that we have. So, you have to consider that any remarks made about a person like yourself with a solution very similar to yours could be describing you just as well.
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From the customer’s perspective, there is even less value in speaking poorly of the competition. First, it confirms negative sales stereotypes. Second, you aren’t talking about the customer’s competition; you are talking about one of their alternatives, perhaps an entirely viable alternative that they are already considering. If you unfairly misrepresent that option, you risk losing the customer’s trust and reducing your credibility. Always speak respectfully and fairly of the providers of competing solutions. We gain more advantage teaching customers the questions that expose competitors’ weaknesses than we ever could by pointing them out directly. By the way, if you speak well of the competition, customers will tend to be more open with their thoughts about the competition.
As with expectations, when you discuss alternatives with the cast of characters, you will uncover differing solution preferences. The difference is that addressing these preferences in the Design stage, before the they are committed to ink in a proposal, allows you to discuss them in an informal setting and before they can disrupt or misdirect the final decision. For instance, if you know one cast member is dead set against Alternative B and that Alternative B is the optimal solution, you can discuss it one-on-one and use the conversation to shape his outlook and thoughts. For example, if a prospect says: “There’s no way we can use the B approach,” all too many salespeople will take the traditional sales approach and react with the old “feel, felt, found” technique: “I know how you feel, many people have felt that way, but let me share with you what they found when they looked further into the approach.” Talk about a multifaceted dangling insult and serious attack on the customer’s self-esteem! Listen to the undertones:
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• I know how you feel . . . in other words, I expected you would say something stupid like that. When you’re upset and someone says to you: “I know how you feel,” what’s the first thought that goes through your mind? That’s right—“No, you don’t!” So that’s a real good start at miscommunicating. • . . . many people have felt that way . . . implies you are not alone in this group of uninformed people. You are actually saying there are a lot of people who see it the way this person does, but nonetheless you are suggesting they are still wrong. • . . . but let me share with you what they found when they looked further into the approach . . . implies I’m about to tell you why you are wrong and what you should believe. This is really suggesting that other people who are smarter, more informed, and so on, see this different from you, and if you were like them you would see it differently, too. Instead of the feel, felt, found, let’s compliment the approach he’s favoring by saying something like this: SALES PROFESSIONAL: There are a number of concerns regarding the B approach and I know a lot of people have been successful coming at this from the A approach as you’re suggesting. One of the things I’m wondering is when your group did the simulations on the emissions, were they comfortable that the levels would be within a range that prevents regulatory penalties? (You’re asking this because you have an exclusive modeling program that can help the customer predict the emission outcomes from either approach.) This is part of your
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quality design process that you are ready to introduce and the customer responds with: CUSTOMER: I appreciate that you think we’re that sophisticated around here. I wasn’t aware that there were simulations available for this type of thing. SALES PROFESSIONAL: Well, yes. We have a couple of engineers who specialize in this and if it would be helpful I could arrange to have them help you get a reading on this. Here we have complimented the approach he is considering (it does have its pluses) and we’ve raised a concern regarding the A approach by complimenting his thoroughness. He is now introduced to an element that he wasn’t aware existed, your ability to simulate the emissions. Let’s now go further into the alternatives dialogue and sift through the advantages and disadvantages of each alternative. In addition to the positive future, there is always a negative future. W hen we explore the disadvantages as well as the implementation challenges of alternatives, we are discussing the negative future. We want to partner with our customers in this task instead of letting them discover and draw conclusions on their own. Let’s drop in on an ongoing conversation about alternatives for a CRM system that illustrates this: “Since you’ve ruled out an in-house solution,” says the salesperson, “why don’t we look at the two remaining alternatives in a little more detail? Since you’re leaning toward a proprietary system, let’s start there.” “Okay,” says the customer, “I like that route because we could fully integrate it with our current systems.”
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“That’s true, a proprietary system belongs to you and it would be fully integrated. You also mentioned earlier that one of your outcome expectations was to keep this thing f lexible so that when your requirements change, you would be able to reengineer it easily if it didn’t deliver the new results you’ve targeted. How does this alternative measure up there?” “Hmmm, that’s a good question,” says the customer. “We have our doubts about the ultimate payoff and we certainly don’t need any more legacy headaches right now. Our sunk costs will be high, too. In terms of commitment, maybe it’s not the best alternative.”
OPERATOR’S SAFETY TIP Avoid questions that include implicit challenges. When you ask customers, “What will you do when X occurs?” you are implying that they haven’t fully considered the alternative. It’s confrontational. Instead, assume that the customer has already thought it through by asking an assumptive question, “When your group discussed the possibility of X occurring, were you comfortable that this alternative gives you enough flexibility to respond?”
These are abbreviated dialogues, of course, but the point is to pose questions that our customers may not be thinking of so that they come to understand how their requirements and beliefs relate to the advantages and disadvantages of the primary solution approaches, and the risks that each entails. We also help them to understand that there are no free moves. Every alternative has its benefits, its shortcomings, and its costs. Even doing nothing at all has a so-called opportunity cost associated with it. W hen you head in one direction, you are more than
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likely giving up something that comes with the alternative direction. Once again, there are no free moves. Key Thought There are no free moves.
As this dialogue continues, we work with the customer to narrow down and eliminate alternatives until, finally, we identify the best fit for the customer’s situation. This is the ultimate outcome of the alternatives dialogue. I understand that building this level of comprehension involves more work on the front end of the design process. The payoff, however, is that it will save you lots of grief on the back end of the sale in terms of objections, competitive challenges, and “no decisions.” Resources and Timing Once the customer has an optimal approach in mind, the Design conversation addresses the next two questions: What will the customer need to do to get this solution in place, and when are the expected results desired? These dialogues are focused on resources and timing. Both resources and timing are critical issues with regard to winning the sale, successful implementation, and the establishment of a positive, long-term relationship with customers. Yet, salespeople tend to avoid or underestimate one or both of these issues because they are afraid that by acknowledging the often difficult realities of implementing and achieving the full value of their solutions, they might discourage the customer and lose the sale. They ignore the fact that customers don’t exist in a bubble
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and if they have done any research or reading at all, they probably already have some sense of the difficulties. They also miss the likelihood that if their solution has some inherent difficulty in any of these areas, a competitor will happily bring it to the customer’s attention. So, in avoiding conversations about resources and timing, salespeople miss an important opportunity to inform customers, defuse potential problems, and build their own credibility. Further, they increase the risk that unpleasant surprises will pop up in the post-sale process and harm their relationship with the customer. One way or another, our customers are going to travel through the negative future. It is better to escort them than it is for them to undertake the journey alone or with our competitors. Resources The resource dialogue is focused on the people, process, and financial elements that the customer will have to invest to realize the full value of the solution. In the CRM example we have been building, people issues would include training. How much of the customer’s staff need to become proficient with the new software? Who should receive this training? Process issues include technology and access. What equipment will the staff need to use the software? Who will have access to what information? Of course there is always the critical issue of investment. Because of the special sensitivities that all financial conversations share, I’ll detail those aspects of the Design conversation in Chapter 8. For now, it’s enough to understand that when we discuss investment in the Design conversation, we are not simply discussing the price of our products and services. In keeping with the intent of the Design phase, we are talking about the total investment re-
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quired of the customer, including all internal and external costs associated with achieving the value of the solution in addition to the purchase price. Internal costs would include items like site modifications, training new staff, or integrating the solution into their existing systems and procedures. External costs could include additional equipment to handle the new output of your machine or perhaps, if you are providing services to construct a new web site for your customer, they will have to purchase a new server to handle the new capacity.
CYNIC’S SIDEBAR “Why should I care how much customers need to spend internally to make this work? I’ve got enough to worry about just getting them to buy my solution!” The fact of the matter is that customers need to know their full investment to make this solution work. They need to look good for deciding to buy it. They will try to figure this out as a matter of due diligence. You basically have two choices: 1. Let them do it themselves and get the information from wherever they can (which could include your competition), which will lengthen the sales cycle. This also could result in inaccurate information that could scare them off. 2. Continue to be the trusted advisor and guide them through this critical part of a quality decision process. Keep in mind, you wouldn’t be this far along in the process if the Diagnosis and Design wasn’t pointing to your solution all along.
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There are two related financial dialogues we need to undertake at this point in the Design conversation. The first establishes the level of financial return the customer should expect from the solution. The second establishes the level of investment such a return would justify. These figures, and they should be fairly exact figures, along with people and process considerations, complete the resources dialogue. Timing The next solution parameter is timing. Typically, discussions of timing are far too restricted. The customer says something like, “If we decide to go ahead with this, when can we get started?” The stereotypical salesperson responds by offering the next available installation date. Perhaps he even points out the backlog in a ploy designed to create an urgency to close. The problem is that start dates don’t provide customers with any solid information about when they can expect to achieve the value they are buying. Instead, the salesperson should be helping the customer establish when to expect the desired outcomes. You might say, “We would be available to start within two weeks of your approval. One way to target the start date is to look at when you need to start seeing the outcomes we’ve discussed and work back from there.” By focusing on the desired timing of outcomes, we can suggest a decision date and from there, a projected schedule that ensures that the sales proposal will meet the customer’s timing expectations.
OPERATOR’S SAFETY TIP When it comes to questions, many salespeople ask questions from the salesperson’s perspective, not from the customer’s perspective. For example:
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“When do you see yourselves making a decision on this?” In other words—“When are you prepared to give me an order?” The same question from the customer’s perspective would be: “When do you want to have the solution up and running?” Front-end the answer with your lead time and implementation time and you have the answer to when they need to make a decision. You can then ask the question: “Given the normal lead time and the implementation time, that would suggest a start date of xxxx. Do you see that as a reasonable date?”
Selection Criteria and the Discussion Document—A Solid Foundation for a Compelling, Credible Proposal The quest for solution parameters yields specific selection criteria. Solution parameters give us the overall picture of an ideal solution. W hen we help our customers translate them into specific criteria, we are creating the means by which they can select between vendors, and measure the results achieved after the solution is up and running. These criteria will guide customers in what to test, measure, and compare when evaluating competing proposals. It will give them the questions they need to ask the competition, that the competition ideally will be hard-pressed to answer. They provide anchors for the customer’s decision team, consistent measures for evaluating the solutions that they will be offered, and when all of the criteria are met, they provide the confidence to invest (Figure 6.3). Like the indicators, causes, and consequences of problems, it’s highly likely that selection criteria have emerged
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FIGURE 6.3
Design Conversation (Part 2)
from various sources across the customer’s organization. So, before we build a formal sales proposal, we should review the criteria with each individual and ensure that the entire cast of characters agrees that the criteria accurately reflect their desires. That is the purpose of the discussion document. A discussion document is the equivalent of an architect’s design sketch that incorporates the solution parameters and the selection criteria. We discuss it with the cast members, asking them to review and approve it. It is the end product of our Design conversation and a tool for confirmation. On the surface, this might seem like more work than it’s worth. After all, didn’t the cast members themselves provide these criteria? Yes, but how often have you presented a solution based on criteria provided by one department within the customer’s company only to have it shot down by the members of another department? It’s a frustrating and common occurrence. The discussion document is the best way to surface hidden conflicts in the selection criteria. In this sense, the document serves as a tool for aligning the customer’s decision team. By proactively identifying sources and areas of misalignment among the cast members, you can
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either fine-tune the selection criteria or work to shape the thinking of out-of-alignment cast members. As you read Chapter 7, you will discover another important reason for establishing selection criteria and preparing discussion documents. Soon, you will be preparing and presenting your proposal. Your competitors will be walking in with proposals prepared in a vacuum. They are like magicians pulling a rabbit out of a hat. Ta-da! The customer will be thinking, “I wonder where that came from?” You, on the other hand, will be delivering a proposal that is aligned and connected to the customer’s decision criteria and their expectations. The customer’s decision team recognizes the role that they and their colleagues played in authoring the discussion document. They will be nodding along as the proposal progresses from point to point, thinking, “Yes. . . . Yes. . . . Yes.” Which proposal would you accept?
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7 It Doesn’t Pay to Surprise a Corporation
C
losing has long been looked at as the be all and end all, the final element in the conventional sales process. There are entire books and seminars devoted to manipulating customers into pulling the trigger. In the high-stakes sales environment, however, if the customer is hesitating or refusing to buy, it’s more likely that the sales engagement has been mismanaged. The problem is not in the close itself. If we are managing the sales process properly, closing should never be a substantive issue, just the next step in a well executed, collaborative process. The reason why closing a sale receives such special emphasis and becomes a focus of training is because conventional selling quickly moves to the presentation/proposal stage and, in doing so, positions the proposal as a document 159
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for consideration. This misguided focus on presentation insists that salespeople first propose solutions for the customer’s consideration and then deal with the ensuing questions and objections. As we’ve already seen, when customers have not had the opportunity to thoroughly understand their situations and participate in the design of a solution, they don’t have the foundation they need to make a sound decision. How do businesspeople naturally react in such circumstances? At best, they are cautious and noncommittal. They might be complimentary about the merits of the solution, but again, they don’t know why they should buy it. So, salespeople call on their “closing skills” to push customers into making a decision. At worst, customers actively resist when they are surprised by new, unconsidered information. They raise objections. Now, salespeople struggle to overcome the objections. No matter how delicately they respond to their customers, these reactions are inherently confrontational and counterproductive. They are jeopardizing their credibility, their relationship with the customer, and certainly they are putting the sale at risk. There are fundamentally only two reasons why customers do not buy: 1. They don’t believe they have a problem (or they do have a problem, but it’s not serious enough to do anything about). In our terms, they don’t have the incentive to change. 2. They don’t believe the solution proposed will work. In this case, they have a problem and they want to take action, but they do not have confidence in the proposed solution. In our terms, they don’t have the confidence to invest. Instead of leaving our customers’ reserve and resistance unaddressed until the end of the sales process, we should be
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using a process that manages these issues in real time. Our process should be front-loaded in terms of customer consideration. That’s one of the primary goals of the journey we’ve been taking. Let’s reflect on where we should be at this point in the sales engagement. Ideally, we have established relevancy and gained privileged access to key individuals in the cast of characters. We’ve identified and explored the actual indicators of the absence of value, as well as their causes and consequences. We’ve worked with the customer to determine the financial impact of those consequences. We’ve guided the customer through a Design conversation that addressed how these indicators can be impacted, eliminated, or altered by a viable solution. In the process, we have developed rapport, credibility, and trust. Everything the customer needs to know to make a high-quality decision is in place. Everything we need in order to successfully complete the sale is in place. The last thing we would want to do now is surprise the customer with previously unconsidered issues. Key Thought No surprises.
CYNIC’S SIDEBAR “There’s no point in bringing up tough issues unless and until they can’t be avoided.” Business customers do not look kindly on surprises. It is always easier to deal with and defuse negative issues (unanticipated costs, implementation hiccups, unrealized value promises, etc.) if customers are prepared for them ahead of time.
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Closing Is Not the End of the Sales Process Another fundamental flaw in conventional selling is that the postsale process tends to be treated as anticlimatic and is often addressed in a haphazard, piecemeal fashion. In this scenario, you either win the sale or you don’t, and you move on to the next opportunity. If you win, maybe you look to up-sell the customer or get a referral or two for future sales. This lack of coordination and coherence is, of course, completely counterproductive to the reality of today’s high-stakes sales environment. If the sales process is focused solely on making the sale instead of the customer’s value achievement, there is no foundation for an extended relationship. This represents the abandonment of your most valuable source of new business. You might be able to sell ’em and move on if your prospect pool is infinitely large. In reality, however, business-to-business markets are specialized and often very limited. Worse, for many salespeople, the markets are shrinking. For instance, on September 29, 2005, the Wall Street Journal ran a front-page story reporting Ford Motor Company’s decision to shrink its supply base from 2,500 vendors to 1,000. Ford will give the lucky survivors
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of the purge long-term contracts and a larger share of the $90 billion it spends on global purchases annually. Everyone else will be on the outside with far fewer opportunities to earn Ford’s business. Keep in mind that Ford has been working on this consolidation process since the late 1980s, when it had over 13,000 vendors. Thus, as markets shrink and/or become more competitive, existing customers, who are already a valuable source of sales, become even more important. The “sell ’em and move on” mindset may work for some, but it is not going to be a viable option much longer. Instead, we need to adopt a broader perspective and a sales process that can support multiple goals: short-term goals, such as winning the sale and ensuring that the value the customer is expecting is actually delivered, and longterm goals, such as creating new value delivery opportunities and positioning yourself and your capabilities to enlarge the customer relationship. This duality is inherent in effective Deliver conversations.
The Deliver Conversations— Fingerprints, Graceful Recoveries, Mutual Feedback, and New Opportunities The Deliver conversations are a direct reflection of the need for an extended sales process that supports both customer demands for value assurance and our need for closer ties to customers. Sales professionals need to “own” the relationship with the customer and orchestrate the cast of characters in their sales organization, as well as the customer’s organization. The ability to do this implies taking some accountability for solution implementation, measuring and reporting value achievement to the customer, expanding the
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existing relationship, and developing solid references and viable referrals to create new customer relationships. Of course, before we can own a relationship, we have to finish establishing it. Proposals and Presentations, Finally If a proposal shouldn’t be a document of consideration, what should it be? This may sound anticlimactic, but it should be a document of confirmation. The purpose of a proposal is to document the series of decisions that have already been made. In effect, to support the rationalization of a decision that has already been made. It should confirm everything we’ve done with the customer to this point. The proposal should reprise all of the elements of the incentive to change and the confidence to invest that we’ve already established with the customer. It connects all of the elements of value in a single, formal document. Key Thought The purpose of a proposal is to reinforce decisions that have already been made.
Here are some guidelines for creating and delivering your proposal: 1. No surprises. The proposal is the official version of the discussion document that we prepared at the end of the Design phase. That pencil sketch isn’t going to change much. Instead, it is being rewritten in ink. The power of this proposal isn’t in its multimedia graphics or its flowery prose, it’s in the fact that our customers have actively
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collaborated in its preparation and already agree with its conclusions. While there should not be any surprises in the proposal, it will contain incremental information. We are adding a link in the chain of logic that started with the value assumption. This new and final link is the solution we are offering the customer—its characteristics, cost, implementation schedule, and return on investment. (Up until now, we have focused on parameters and criteria. Now, it’s time to identify and describe the specific solution we are offering to fulfill those requirements.) Each facet of your solution should be fully aligned with the material developed during the Diagnose and Design conversations. Now, we have a series of problem indicators with their attendant costs that lead to design criteria that lead to a specific solution that meets and fulfills those criteria. Again, nothing in this material should be a surprise to customers. When they hear or read this proposal, customers will be thinking, “This is what we were hoping for. This solution addresses our situation and matches our criteria exactly.” 2. Use the customer’s fingerprints. Fingerprints is a word I often use when talking about this stage of the engagement. We want to make sure that the customer’s fingerprints are all over the proposal. How do you accomplish this? Use the customer’s exact terminology and ideas as often as possible. Eliminate the verbal distinctions that separate you from the customer. Everything is us and we—that is, you and the customer working together. The more your proposal reads like a document that might have been produced within the customer’s organization, the higher the comfort level. This is not a small point, especially in highly competitive, low differentiation markets. Don’t make customers translate your terms into their language. Confronted by basically identical solutions, customers will choose the solution
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that sounds most relevant and familiar. For instance, my firm’s programs are based on a foundation of “systems, skills, and discipline,” but we recently worked with a client who used a foundation of “roles, actions, and attitude.” These are analogous concepts. So, we wrote our proposal and materials to reflect their view. The client’s team was delighted to see their ideas brought to life and later commented that it was a significant consideration in awarding us the contract. There had been no mention of the client’s foundational concepts in our competitors’ proposals. I am not suggesting that we, or you, can simply parrot customers’ words and win sales. Rather, it means that you and your customers work together to understand the problem and the design criteria, the customers comprehend them to a degree that enables them to articulate them, you listen, and then weave their words and thinking into the proposal. That’s much more sophisticated than mere mimicry. It is true collaboration. The best word to describe it is synergy. You are combining the best of your company’s experience and knowledge with the best of your customer’s, and you are describing the desired results in terms the customer is familiar with. 3. Solicit prepresentation feedback. Inevitably, there will be times when the final decision or approval is going to be made outside the cast of characters you have met with. In these cases, you should solicit feedback on your proposal from a member of the senior decision team before the formal presentation. It’s negligence if you don’t. After all, one of the main goals of an effective decision process is to surface and eliminate sticking points before they can knock the sale off track. Typically, the best way to accomplish this task is to enlist the help of a member of the existing cast of characters. Seek out one who fully supports your solution and ask, “Who on the final committee are you most comfortable with personally?” If the person says “Mary Williams,” for
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example, you reply, “One of the things that my clients have found helpful at this stage of the process is to have someone like Mary take a look at our discussion document and provide some feedback as to any adjustments we should make before you bring it before the whole committee.” Why would the cast member want to help? Because she also has a stake in the outcome of this project and will want her superiors to see her as an effective and efficient manager who is on top of the buying decision process. She doesn’t want to get hit with questions she can’t answer from the executive group making the final decision. 4. The participative presentation. The typical sales presentation is often a sterile event. The sales team delivers a canned performance while searching for the smallest hint of approval from its audience. The customer’s team sits back, poker-faced and noncommittal, silently acting as judge and jury. Often, there is very little interaction between the customer and the sales team, and what does exist tends to be stilted and formal, as if real communication is somehow prohibited under the rules of engagement. This would be an unfortunate way to end a sales engagement. With the open and trusting relationships we have established, there is no reason to drop back to conventional selling. When we present proposals (yes, the appropriate time for a presentation has finally arrived), we need to apply the concept of the customer’s fingerprints once more. Our customers have worked with us to establish the material being reviewed, so why shouldn’t we invite them to continue to take an active role in the process? By asking members of the customer’s team to participate in the presentation, we reinforce ownership in and passion for the solution. We also continue to eliminate any barriers between our customers and ourselves. The solution belongs to everyone present rather than being something that you are trying to “sell” to the customer.
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Customer participation is particularly effective in the problem diagnosis and design criteria sections of the presentation. These are areas to which the customer’s team members can speak with an insider’s authority and credibility. Members of the customer’s team are usually more than willing to cooperate—it gives them a chance to demonstrate their expertise to their superiors, and highlights the work and time they have invested in creating the solution. You should always discuss their participation ahead of time and even coach them on the delivery process. Remember, the “no surprises” rule. For instance, if you have worked with Ron, an IT manager, to establish an implementation schedule for your CRM solution, you might contact him before the final presentation and say, “Ron, given your contributions around the design of the implementation plan during our meetings, I think it would be great if you would walk us through an explanation of the whys and the wherefores of that. Would you be comfortable doing that?” If Ron agrees, you work with him on the outline and content of “his area” of the proposal. Later, during the presentation, as you introduce the topic of implementation, you would also introduce Ron, saying, “Ron was instrumental in working out an optimal implementation schedule. He was kind enough to agree to brief you on the proposed schedule,” and then hand it off to him. There is another very important reason for enlisting members of the customer’s team in the presentation. In some cases, you may not be able to present your proposal to senior management. Instead, a customer team will hear your presentation and then, in internal meetings, summarize the competing proposals to an executive committee or senior management before making their recommendations. The greater the team’s ownership in and comprehension of
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your proposal, the better the odds are that your proposal will stand out in these sessions. 5. Anchor the larger solution in the presentation. It’s always easier to sell one piece of a solution than a full package. The initial cost is lower, implementation is less complex, and, there is less change involved. At the same time, we have to be careful not to lose the larger sale. Perhaps you are selling an initial survey that would set the stage for a full-blown consulting contract or an inventory software module that links to a whole enterprise solution. Whenever the sale you are making today is only one piece of the broader solution you hope to provide, you can and should be setting anchors in the presentation to create a secure position for the future launching of the larger solution. We need to identify the links between the solution we are discussing today and future sales. Often, these links appear in the “outcomes” section of the presentation. As we talk about the value the solution delivers, we can also mention opportunities for future added value. For instance, “This inventory program fulfills your primary design expectation by allowing David’s staff to order materials in justin-time quantities. It is also designed as a foundational piece that supports the purchasing module that will enable you to project and quantify the investment of these transactions on a biannual basis. Once we’ve recorded some inventory history in the database, that module could help David’s staff revalue and renegotiate the terms of your supplier contracts.”
Key Thought When you are presenting a piece of a larger solution, don’t confuse selling with installing.
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In other words, be clear that there are larger issues that your customer is facing and will likely want to move to resolve, and that this solution represents one step in that effort. At the same time we are selling and installing the short-term value, we need to be positioning and anchoring our long-term capabilities. When Things Go Wrong Unlike earlier eras of business-to-business selling, today’s high-stakes sales environment requires that salespeople remain accountable to the customer after the sale is concluded and during the solution implementation. This means that even though the customer may have been handed off to your implementation and support teams, the best sales professionals embrace an extended sense of accountability for the value their customers achieve from the solutions they have been sold.
CYNIC’S SIDEBAR “Solving the customer’s problems after the sale isn’t my job. I’m a salesperson, not a customer service rep.” This is a statement that shouts ignorance in today’s marketplace. First, in almost half of all cases, salespeople are responsible for providing support to their customers. When Customer Relationship Management magazine asked its readers, “How do your salesforce and support staff interact?” in a July 2005 online reader poll, 45 percent of respondents reported that there was “no separate support role” defined in their companies. Second, even if your company does pro-
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vide support as a separate function, the condition of the customer relationship remains a critical priority for you, the sales professional. You own the account and the relationship, and have the ultimate responsibility for the customer’s success and well-being. Further, if customers can’t get your help after a deal is signed, what makes you think that they will ever give you another sale, be a reference, or provide a referral?
You need to understand and acknowledge that things will go wrong when customers implement and use complex solutions. It is a fact of life. If we accept this fact and live by the dictum “no surprises,” we should begin preparing our customers for problems before they occur. In other words, we should be discussing the major risks and common challenges that our customers encounter and the systems we have in place to resolve those situations before the sale is complete. (Remember the negative future.) If the prospect has had previous implementation problems with solutions like yours, you can surface and discuss their experiences during the Diagnose and Design conversations. The Design conversations are also a natural spot to reintroduce, or introduce, common implementation and use problems and ensure that the customer is aware not only that they may occur, but how to react and who to call if and when they do. I know it’s tempting to sidestep potential problems, but you will save yourself an awful lot of grief by being straightforward with the customer. If things are going to get rough, make sure they know it and know what it looks like when it happens. By the way, no matter what problem resolution procedure you suggest to a customer, no matter who they are supposed to call for help, if they don’t get the
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help they expect, the next call they make should always be to you. You are going to get these calls anyway. So, it only makes sense to tell your customers up front, “If there is ever any issue or concern that is not resolved to your satisfaction with one phone call, I am your next phone call. I don’t want you to have to go through multiple calls to get help.” One valuable dividend of the proactive discussion of potential problems is that it can often become an expectation that sets you apart from the competition. If you can discuss the implementation issues common to the solutions in your industry, you continue to enhance the credibility and transparency built during the previous stages. If you prepare your customer to ask similar questions of competitors, if your competitors are less forthcoming, or, as is typical, if they downplay the likelihood of such problems, the customer will begin to question their credibility. Another dividend accrues during the implementation. If we do this preparatory work well and an anticipated problem does occur, the customer is prepared—not happy, but at least prepared. So, the call for help will often be a little less emotional. It could go like this: “You know how we discussed the possibility that our employees would resist using the new program. Well, it’s happening. So, let’s schedule that informational e-mail program you suggested.” In this way, the customer experiences a little less surprise, a little less panic, and a little less recrimination. He or she also sees you as someone who was prepared to resolve a problem before it even occurred, further enhancing your professional reputation and relationship. The second insight of service recovery is the realization that problems, anticipated or not, are highly stressful to customers. When we discuss a potential problem during the Design conversation, it’s abstract and everyone is
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cool, calm, and collected. When your high-priced machinery is spitting out malformed parts, the customer’s production schedule is blown, and his major customer is threatening to cancel his major contract, you’ve suddenly got a highly emotionally charged situation on your hands. This certainly isn’t the time to say, “I’m sure it’s not that bad,” or “Sounds like we’ve got an operator error here,” or “I tried to sell you the quality control module, but you wouldn’t listen.” Whether they are accurate or not, these kinds of responses will only add fuel to the fire. We can’t be rushing for cover or shifting blame. We need to maintain our own perspective. Our job is to orchestrate the resources needed to resolve the situation. Key Thought Professionally involved, emotionally detached.
This is the time to exhibit the same emotional stamina and diagnostic skill that you used to win the sale. Now, more than ever, the starting point of problem resolution and recovery is the “professionally involved, emotionally detached” mind-set. We must begin by stepping up and acknowledging the customer’s frustration. We can do that in just a few sentences: “We certainly don’t want to hear that. That is very disappointing. We need to do whatever we can to get this resolved.” We don’t need to take the blame, we don’t need to flinch. Nobody has to be the parent or the child. Problems happen, they are anticipated, and we are going to fix them. Next, we shift immediately into a Diagnosis mode. We need to know what is happening before we can act to
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resolve the problem. You could say, “I want to get an understanding of what is going on and figure out whatever we need to do to marshal the resources to address the problem. Could you describe . . .” and head right into it. All the same rules of diagnosis apply. We must protect the customer’s self-esteem, clarify loaded words, and dig down to causes and consequences. Then we need to respond—tell the customer the plan of action and execute that plan. It might seem counterintuitive, but a graceful recovery is often more memorable than a flawless performance, and that is certainly true of problem resolution. If you learn to do it well, you can transform disappointed, angry customers into loyal, lifetime clients (Figure 7.1).
FIGURE 7.1
The Diagnostic Mind-Set on Problems
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Confirming and Communicating Value Delivery The typical feedback conversation is full of “Blah blah Fluffy” and many traditional salespeople use feedback as a thinly veiled excuse for up-selling. Thus, the conversation tends to be vague and to be blunt, a worthless exercise for the customer. It shouldn’t come as much of a surprise then that customers usually try to avoid feedback conversations or, at best, pay them as little respect as salespeople. This represents the loss of a major opportunity. Feedback conversations are intended to measure and confirm value delivery. There are several important reasons for discussing “how we’re doing” with our customers, including: • Ensuring customer awareness of the “value delivered.” If no one recognizes value, for all intents and purposes, it doesn’t exist. • Protecting the customer relationship from competitive threats. If customers can measure and appreciate the value delivered, they are more likely to ignore the advances of your competitors. • Expanding the customer relationship. In a time when customers are aggressively shrinking their supply bases, valued vendors are in a great position to increase business. • Gaining new customers. Customers who recognize value delivered are amenable to referrals and recommendations. All of this depends on your ability to conduct a relevant and credible feedback conversation. Happily, it is a relatively easy conversation because we’ve already established preset value criteria in the Diagnose and Design conversations. We know the specific symptoms that our solution
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was supposed to alleviate and we know the specific outcomes it was supposed to produce, so we should be able to ascertain the progress that has been made and be very concrete about the value delivered. We don’t need to ask the customer a nebulous question, such as, “How are things going?” or “How would you rate your satisfaction on a scale of 1 to 5?” Instead, we can say, “Our target was to lower the employee injury rate by 70 percent compared to last year. How did we do this past quarter?” Effective feedback is a two-way street, mutually constructive, and it can be subjective. At the same time we protect the customer’s self-esteem, we want to communicate what’s gone well and what hasn’t, no matter where the responsibility lies. A good way to start is to focus on the positive. If you are discussing an implementation, you might ask the customer a subjective question, such as, “What do you think went especially well?” But we should always bring the conversation back to specifics. Once we have fully discussed the customer’s responses, we can add any “went well” details that the customer may have missed. Many of us aren’t naturally complimentary of others, so we should remind ourselves that this is a good time to recognize the customer’s efforts and achievements. The second question we should ask our customers is, “Is there anything we could have done differently?” This is a relatively painless and blameless way to start discussing negatives. As shortfalls in value delivery begin to appear, you can move back into Diagnose and begin the process of addressing the problems. If you see shortfalls or potential improvements that the customer doesn’t recognize, now is the time to gently introduce and address those. The feedback conversation is concrete and empirical in nature. You don’t want to limit yourself by asking the customer to answer questions such as, “How are things going
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with the new equipment?” and accepting responses such as, “Oh, I think it’s going pretty good. Everybody seems pretty satisfied with the new training.” Instead, we are discussing targets, the progress toward achieving them, and concrete suggestions for improving results. It’s likely that the value your solution delivers is ongoing and feedback conversations should be scheduled regularly. It is amazing how often salespeople will wait to discuss the value delivered in multiyear customer contracts until just before renewal. W hat kind of message do you think that sends to customers? We want to make sure that value continues to be delivered and that our customers continue to be aware that it is being delivered. One good way to ensure this is to specify value measurement and reporting timetables in the proposal. The ultimate goal, one that the most advanced companies are already hitting, is to report value in real time as it occurs. This important factor can differentiate you from your competitors. Expanding the customer relationship with additional solutions is an entirely acceptable topic to introduce during the feedback conversation. Like the sales process itself, you don’t approach it in the usual manner. Salespeople typically say something like, “You know, now that this is up and running smoothly, I wanted to mention that we also have a refresher training program for veteran employees that I think would dovetail really nicely with this. And I thought now that things were settled down it would be good to set up some time within the next couple of weeks to show you how that works.” Instantly they are back to the same old sales pitch. Instead, we should continue to focus on symptoms and return to the Diagnose stage. We could say something like, “I was thinking about a couple of things you said the last
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time we were together. You mentioned you had some concerns about accident rates among long-time employees. I’m wondering, have you still been experiencing that?” Or, if the topic hasn’t come up before, you might say, “One of the things we see a lot with people in your situation is after they get this up and running they are still faced with high accident rates among veteran employees. Have you noticed that? I am wondering if it makes any sense to take a look at that in the same way we took a look at the new employee problem.” In either case, we are using symptoms to initiate diagnosis and then, we follow the decision process as before to expand the relationship with the customer. A Name Isn’t a Referral The last of the Deliver conversations is the referral conversation. Most salespeople pay little attention to the gathering of referrals. If they ask at all, they are simply asking for a list of names. “Do you know anyone else who would be interested in our solution?” the salesperson asks. What they are really doing is asking the customer to picture another customer, diagnose that customer’s situation, and predict whether that customer will buy. As you might expect, that’s an unrealistic request with a high risk of failure, and most people decline this request. The best time to initiate the referral conversation is in conjunction with and toward the end of a feedback conversation. As you are finishing that conversation, your customer should be at a peak in terms of value delivery awareness. Now is the time to ask one or both of two questions: “Is there anyone else in the organization who is experiencing similar symptoms to what you had?” and “Is there anyone you know from other companies who may be experiencing these same symptoms?”
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These questions do not ask the customer for a complete diagnosis. Instead, we are asking for a factual observation. The symptoms may or may not mean your solution is the appropriate solution. It’s our job to determine that, and we shouldn’t ask our existing customer to make that judgment. These questions generate more and more thoughtful referrals. Moreover, if you’ve been employing the diagnostic process, your customers will be less afraid that their colleagues will be subjected to hard sales pitches and more willing to share names, and these names will have a higher probability of being viable prospects. When a customer gives us the names of prospects who are experiencing the symptoms our solutions address, we should ask a few more questions. In fact, we are actually relaunching into the Discover conversation and a new sales cycle. We can and should ask the same kinds of preliminary research questions that we used before we formally contacted this customer. When we contact the new prospect we repeat the same conversations that we discussed in the previous chapters of this section, using the same skills and the same mind-set that enable us to win the high-stakes sale. We’ve now come full circle in the process. We’ve completed one sale and are prepared to undertake many more. But before you set out, I’d like to offer some insight and advice regarding two conversations that salespeople are finding particularly challenging in today’s environment.
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III Breaking Away with Exceptional Credibility
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I
n my second book, The Prime Solution, I described how the value requirements of our corporate customers have steadily grown through three phases of evolution over the past decades. As customer requirements have expanded, so have the demands on sales professionals. Our ability to understand and meet those demands determines the degree of credibility that customers assign to us. The more credibility we earn, the more exceptional our sales success will be. The minimum level of expected credibility, that is, the minimum level at which customers expect salespeople to operate, has certainly risen. Salespeople who do not meet the ever-rising minimum standard are quick to disappear. This is not particularly surprising; sales success is easy to measure and substandard results torpedo salespeople in today’s highly competitive and operationally lean sales environment. The majority of salespeople are meeting the standard of expected credibility, that is, they understand their business and the products and services they sell. However, expected credibility only represents the table stakes in today’s world of sales. They have earned the right to engage the customer, but their chances of winning the sale are determined by the luck of the draw. If they are unfortunate enough to be competing against a more credible player, their chances of winning start dropping precipitously. I’m reminded of the many poker tournaments now 183
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being televised. You don’t have to see many final tables to realize that the same small group of professionals repeatedly earns seats. A random amateur or two usually finish in the money, but how often do they win the final pot? More significantly, how often do you see any of the amateurs make the cut and earn a spot at the final table in another tournament . . . and another? Success in selling is not all that different. If you want to win your share—or, let’s be ambitious, more than your share—of the complex sales you undertake, you need to execute at a higher level. You need to be able to operate well above the standard for expected credibility. Sales professionals who win an out-sized number of sales are almost invariably operating at a higher level of customer credibility. They are themselves an added value in their customers’ eyes. They have earned exceptional credibility, that is, demonstrated their depth of knowledge of their customers’ businesses by doing many of the things we discussed in this book. They understand that, from the customer’s perspective, a sale is a business decision-making process driven by the value customers obtain from their purchases. They bring a diagnostic-based mind-set and expertise to the sale that supports that process. Customers see them as exceptionally credible and reward them. Exceptional salespeople create their own luck through a combination of opportunity and preparation. We’ve covered the fundamental elements of value diagnosis—the process of Discover, Diagnose, Design, and Deliver—and the mind-set, conversational flow, and skills that support the process. I’ve purposely reserved discussion of two categories of customer conversations until now: financial conversations and executive conversations. These are the conversations that salespeople find quite intimidating and challenging. Not coincidently, these two conversa-
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tions are also crucial in the high-stakes sale. If you want to earn exceptional credibility and exceptional results, you must master them. The material that you have learned thus far will give you the foundation and the confidence to do just that. The need to assist our customers in the quantification of value in the complex sale is urgent. Corporate customers became immune to self-serving return on investment (ROI ) and total cost of ownership (TCO) models, and stopped throwing money at speculative solutions when the market melted down in 2001. Today, and for the foreseeable future, our customers are demanding much more than vague value promises and biased spreadsheets. They want to know what the absence of value is costing them. They want to know the true cost—the total cost of the solution, the monetary gain the solution will deliver, and how it will support their corporate strategies. And finally, they want to know the appropriate investment that must be made to realize that gain. These are customized, quantitative conversations and, as we’ve seen, the majority of our customers do not have the expertise needed to conduct them. As sales professionals, it’s our job to guide customers through these calculations. This is the subject of Chapter 8. The need to engage with customers at higher levels of their organizations is also urgent. Our customers’ organizations are leaner and thriftier than ever. At the same time, we are answering their demands for value and our own competitive challenges with ever more complex solutions. Both trends are driving decisions to higher levels of power in the chain of command. We must have executive sponsorship to successfully sell in the high-stakes arena. We need access to multiple individuals inside the customers’ organizations to track the many variables that go into the decision
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equation. We need to report our results to someone who sees the big picture and has the power to act on our findings. The capabilities that enable us to hold conversations at the highest levels of power and influence that our solutions require are the subject of the book’s final chapter. In Part III, we explore the internal and external barriers that salespeople encounter as they conduct financial and executive conversations. We learn the principles and structure of these conversations, and we discover how to master their challenges in order to earn exceptional credibility and exceptional sales results.
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n business, money talks loud and clear. Corporations communicate the success and failure of all of their business activities in Euros, dollars, or whatever their respective currencies may be. Operations, and even the value of employees and customers, are expressed in financial terms. The buying decisions of executives are “dollarized,” too. But just as customers typically do not have a quality decision process, they even more frequently cannot accurately determine the financial impact of a situation and its proposed resolution. If we bring that capability to an engagement, we enhance their decisions and our own credibility. So, if we want to sell exceptionally in business-to-business markets, we must become fluent in this language and develop models and our ability to make the required calculations. 187
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Not only is money a primary determinant in our customer’s decision process, it can also serve as a highly effective motivational force. It is a sales accelerant. All of our customers live with problems or conditions that could be improved, but only when they recognize that the cost of a particular situation has become too high to ignore and that they can address the problem economically, will they act to resolve it. Cost of the problem, return on solution, investment to resolve, and total “value of ownership”—these are the financial figures that have the power to motivate customers to consummate sales and to expand their relationships with vendors. By bringing financial clarity to their view, you greatly reduce the perceived risk of the decision by quantifying the risk of doing nothing as well as the risk of changing and the rewards for changing. There are other benefits of developing an expertise in financial discussions. Financial acuity adds to your credibility with the customer and creates a benchmark that your competitors must meet. When the customer has a balanced view of the financial ramifications of a decision, you face less price pressure (as long as you follow the dictum of “no surprises”). Finally, a thorough and accurate financial analysis provides the baselines and the targets that enable you to monitor the performance of your solution, communicate the value at risk, the value delivered, and ultimately, expand the customer relationship. The many benefits notwithstanding, most salespeople are neither comfortable nor skilled at translating value propositions into compelling financial terms. This is evident in the customer challenges that salespeople are consistently struggling to overcome and that create adversarial situations that pit salespeople against customers: long sales cycles, objections around the price, reluctance to commit, and pressure to reduce price.
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Barriers to Financial Conversations The conventional sales paradigm is responsible for a lion’s share of the blame for the inability of salespeople to guide customers through credible, effective financial conversations. The fact that the financial challenges we listed earlier continue to trouble a vast majority of salespeople is the best evidence that conventional selling does not take a constructive view of financial analysis. The only financial metrics that most salespeople are taught to identify are the ability of customers to buy ( How big is your budget?) and the willingness of customers to pay ( What is it worth to you to solve this problem?). These are self-serving and rather inane questions. Customers don’t have budgets to solve problems they didn’t know existed or to buy solutions they didn’t know they needed. Even when customers do know they have a problem, asking them, “How much is this costing you?” or “What would it be worth to solve this?” requires that they self-diagnose their situations, design their own solutions, and value all of that properly. If customers could accomplish these tasks without our help, our products and services would be commodities and we wouldn’t have jobs. One major barrier in this quest for financial expertise is the lack of recognition that this is a skill that is urgently needed in the high-stakes sale. Further, even if we helped a customer establish the full extent of a problem, a question such as “How much does this cost you?” is simply too broad and multifaceted to answer without breaking it down into manageable chunks. The second barrier to effective financial conversations lies in the mind-set of salespeople. Often, it’s self-talk that creates a seemingly insurmountable internal barrier to open, honest financial analysis. Many salespeople resist talking about money because they have been taught that it’s
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not polite. Their parents scolded them if they asked about other people’s money, and that prohibition lingers in their minds. Other salespeople resist because they believe the language of finance is intimidating and somehow beyond their abilities. They don’t feel qualified to quantify cost, return, and investment. Still others avoid financial conversations because they feel as if they are doing something underhanded and manipulative when they use cost to drive action.
CYNIC’S SIDEBAR “Customers are not going to share that number with me!” Whenever I hear this pushback from salespeople, it reminds me of an exchange that occurred in one of my seminars. In no uncertain terms, a salesperson told me that his prospects would never share a particular cost figure with him. “Is there a reason you don’t think they will?” I asked him. “Because they believe I am just going to use that number against them,” he snapped back. “Will you?” He paused, got a strange look on his face, and then replied, “Well, yeah, it’s my job.” This is a clear case of transference. The salesperson sees himself using financial information he thinks he shouldn’t have as a weapon against the customer in the traditional closing process. He assumes that the customer will see it the same way. Well, what if his job was to serve as a business advisor and help customers understand the financial implications of their situations and make a decision based on an accurate financial picture? Would the customer answer the question then? Of course. So, the issue is not whether customers will answer
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financial questions. Instead, we should be more concerned with why customers won’t answer and what we can change in our own mind-set and behavior to change their responses. If we are following a decision process that builds trust and credibility, if we are providing valuable information that the customer has never considered before, and if we are always protecting the customer’s self-esteem, any hesitancy that the customer has about confiding in you will become less and less of a barrier with each new step in the process.
Customers themselves represent the third barrier to effective financial conversations. There will always be a few customers who are reluctant to share financial data because of past experiences. They have answered financial questions and had salespeople use it as fuel for a hard sell or to jack up their pricing. Or the numbers themselves may represent sensitive competitive information that the customer is afraid to release to any outsider. Or, and this will always be the case to one degree or another, the customer doesn’t know the answers to financial questions. To conduct effective financial conversations with customers, we need to consider all of these barriers and construct our conversations in ways that address and resolve them.
Financial Conversations— Cost, Return, Investment One of the most misguided instructions salespeople receive is “never give the customer the price before you’ve completed your pitch.” The idea behind this is that customers will walk away if they hear your price before they
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hear everything they are going to get for their money. I don’t agree. You should never be afraid or unwilling to tell a customer your price, or at least, provide as honest an estimate as you can at the moment the question is asked. The right question is not whether the price is reasonable or not. The right question is “Does the customer’s situation warrant our level of solution in financial terms?” The financial conversations that we conduct during the sales engagement are all aimed at answering that question. They are designed to inform our customers and ourselves: • What is the absence of our value costing the customer? • What return (net financial impact) can the customer reasonably expect from the solution? • How much should the customer invest to achieve their desired results? When we help a customer answer these questions, the price of our offering becomes a simple fact that can easily be evaluated. It either meets the customer’s predetermined investment criteria or it does not. Before we examine how the conversations answer these questions, we need to address a few principles that carry through all financial conversations. The first principle is that the numbers we establish with our customers don’t have to be exact, but they do have to be believed. In business, costs and returns have myriad variables and are often impossible for a financial lay person to calculate exactly. Instead of using this as an excuse not to put a number on the major elements of the sale, we should accept the fact that estimates are fine . . . as long as they are credible. A second principle, and one that also helps build the credibility of our numbers, is that the customer must have
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confidence in the method we use to obtain the numbers. That means that the formulas or models that we use to calculate cost, return, and investment must be conceptually sound and logically unassailable. Also, we must be willing to take the time to explain the basis of our numbers to our customers, and ask them for their feedback. When they have confidence in the model, they will have confidence in the numbers the model yields. If they don’t have confidence in the model, we need to alter it to fit the customer’s world before we put it to use. Our models must be transparent and our customers must be able to see every variable and how they relate to the final number. This lack of transparency is no doubt the largest reason customers are highly suspect of the majority of ROI models in use today. The third principle is that the customer must “own” the resulting numbers. Many sellers use averages and industry databases to calculate costs and returns. While these can be very valuable to customers as benchmarks, they are neither immediate nor overly relevant in light of the customer’s unique situation. Figures that magically appear at the touch of a computer key are not very credible. If you are going to calculate cost, return, and investment, your model must use the customer’s numbers and your customer must participate in the process.
No Cost, No Problem The most important financial conversation, and the one that provides the basis for all that follows, is the cost of the problem. If you can’t establish the cost of a problem, you don’t have a problem. There is a world of difference between the fact that a customer has a problem and the fact that a customer has a problem that he believes is costing him approximately $2.5 million annually. The former fact
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may interest the customer, but only the latter has the power to create change. Key Thought If you don’t have a cost of the problem— you don’t have a problem.
Ignoring the cost of the problem or reporting it in nonspecific terms (“We’ve discovered that order entry errors cost companies like yours $2.5 million each year”) or asking the customer to establish the cost (“How much do you think this problem is costing you?”) is risky business. If you don’t establish a credible cost of the problem, customers are far less likely to buy. Your conversion rate will be negatively impacted and you will have to work harder to earn the same money. Even when customers are going to buy without a credible cost of the problem, they are more likely to object to your price. Your company’s margins and your commissions will suffer.
CYNIC’S SIDEBAR “The customer told me that the problem is huge and his company can’t live with it any longer. Why beat a dead horse?” Far too many cost of the problem conversations begin when the salesperson asks, “That sounds as if it is impacting your business quite a lot. How much do you think this problem is costing you?” “Well, it’s hard to say,” replies the customer, “but I know it’s significant and I know we need to
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do something about it. That’s why we are talking to you.” End of conversation. The customer knows he’s got a bad problem and can’t live with the cost. The salesperson knows he can solve the problem and jumps in with both feet. What happens next? Somewhere down the road, at the end of a masterful presentation, the salesperson gets to the price and pushes the contract across the table. “We can solve your problem within 90 days for $320,000. We just need your approval right here and we can get on this immediately.” “What?” the customer pushes the unsigned contract back and says, “No way could we spend that much money.” The salesperson, shocked at the apparent loss of a sure thing, responds, “You seemed quite sure that this was a big problem that had to be solved.” Now the customer delivers the punch line. “We know we have a problem, but it’s not that big a problem!” When the cost of the problem is a figment of the customer’s imagination and the cost of the solution is laid out in black and white in a legally binding contract, more often than not people retreat to the less painful of the two alternatives. It is very likely the customer can live with the problem he hasn’t quantified, rather than paying the price you are asking. At this point, the salesperson is up to his neck in quicksand. What can he do to rescue himself and the sale? Not much, except cut the price.
So, how do we establish the cost of the problem in a way that overcomes the many barriers to financial conversations and fulfills the demand for a credible cost estimate? Let’s start by placing the conversation in the decision process. The cost of the problem conversation occurs during the
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Diagnose phase of the sale. As we discussed in Chapter 4, that’s when we explored the indicators, causes, and consequences of the customer’s problem. The next logical step in this diagnostic progression is costs. In almost every complex sale, there are multiple consequences stemming from the customer’s situation or problem. There are costs associated with each consequence—idle assembly lines, accidents, rework, lost labor, waste, and so on. Each consequence has one or more costs and it’s our job to help customers identify, calculate, and tally those costs. As we think about the financial implications of consequences, we need to identify the proper cast members to engage in cost of the problem conversations. ( Just as no one person in the customer organization sees the entire problem, no one person knows the entire cost.) We can do this by focusing on two questions: “Who gets the call?”—that is, who is affected directly by these consequences—and “Whose budget is affected?” or, who pays the penalty? Often, these cast members will be the same people we worked with to establish the consequences. Sometimes, however, we will need to follow the trail elsewhere. When you engage the appropriate cast members in cost of the problem conversations, you can follow a generic four-step pattern: 1. State the purpose of your call and name the indicator you’re focused on. 2. Describe the consequence(s) of the indicator that you’ve called to discuss. 3. Break down each consequence by asking the cast member to describe what happens in his part of the business when it occurs. (As necessary, expand the breakdown of consequences based on your experience and knowledge.)
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4. Ask the customer to put a dollar amount on the cost of each element within each consequence. Here’s an example of how the cost of the problem process might play out on a sales engagement at a tissue manufacturer that is experiencing an increase in off-spec production. The consequences of the problem include offspec material that needs to be downgraded and resold, the labor costs to fix the line, lost production time, and delays in shipments to customers. We work with Bert, the plant manager, to determine the costs of the first three consequences, but he isn’t clear on the cost impacts that involve customers—“the head of sales gets those calls.” So, we call on James, the head of sales. We could ask James what the cost of defective product is in sales, but it’s likely he won’t have a number on the tip of his tongue. The vast majority of customers won’t. Instead, we need to help him break down the cost of the problem. If we break a large answer down to its individual components, it’s easier to understand, comprehend, measure, and estimate. Let’s listen in on how one piece of that conversation, focusing on the cost of shipment delays, might go: SALESPERSON: James, I want to find out more about how the shipping delays caused by off-spec production affect sales. I’d like to start by walking through what happens when you have to call a customer and tell him his paper shipment will be delayed. JAMES: It’s not a pretty sight. The customer goes ballistic, then reminds me of the penalty clause for late deliveries in our contract. SALESPERSON: How is that penalty structured? JAMES: We give them a 5 percent discount on the next order.
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SALESPERSON: So, in dollar terms that would work out to be . . . JAMES: Let’s call it $2,500 each occurrence. SALESPERSON: Okay. Does anything else happen when a shipment is delayed? JAMES: You bet. We have to send a sales team, an account manager, and one tech support guy to do damage control with the account. Two guys spend a whole day straightening things out and holding hands with the customer. SALESPERSON: What would you say that costs you? JAMES: Hard to say. It varies. SALESPERSON: I would imagine it does. But just a ballpark estimate would help me put this into perspective. JAMES: Well, it’s tough to estimate; there are quite a few variables. SALESPERSON: Oh certainly, that makes sense. But just to take this conversation a little further, if you had to guess, what number comes to mind? JAMES: Maybe $1,000 for each person. But the worst part is we could lose the customer. [Here’s another dimension of the cost of the problem we will postpone pursuing for the moment.] SALESPERSON: When I was talking with Bert at the plant he felt that these delays are happening three to four times a month. Is it fair to say that we’re talking about four days of selling time each month? JAMES: Yes, we certainly are. SALESPERSON: I don’t know if this is valid, but four days a month is about 20 percent of a salesperson’s time. Would it make sense to say that this issue could be costing 20 percent of a typical sales quota?
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JAMES: I think that’s very realistic. The only option to solve that one is to add more salespeople. SALESPERSON: What would be the average amount of revenue a salesperson is expected to generate? JAMES: I have an exact number on that. I get reminded of it frequently. We’re talking about $2 million in annual revenue. SALESPERSON: Is it fair to take 20 percent of that, about $400,000, and say it’s costing that much to be distracted from your sales activity? JAMES: Oh, I think management will push back on that one a bit, but I think they’d have to agree to half of that. SALESPERSON: That sounds like $200,000 plus the penalties and staff time. Is there anything else that happens when you call the customer about the delay? JAMES: Yeah. That’s strike one and strike two. Strike three and you’re out. SALESPERSON: You mentioned that earlier, but it also seems quite drastic. How frequently have you lost a customer over delayed shipments? JAMES: Well, I would say it happens at least once a year. SALESPERSON: Out of how many customers where you’ve missed deliveries? JAMES: That’s out of 15 or so. SALESPERSON: What would you say is the average revenue on one of those accounts? JAMES: The average is just shy of $600,000 per year. SALESPERSON: So, let me see if I have the numbers right. It sounds like that one phone call about a delayed delivery can cost upward of $4,500 if you don’t
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lose the customer and well over $240,000 in lost revenue ($600,000 divided by 15 plus the $200,000 in lost sales time) if you do. Does that sound realistic? JAMES: You know, I guess it does. I don’t think we’ve really put the numbers together before—probably didn’t really want to know. SALESPERSON: Well, it’s not something we normally like to think about. Let me ask you about one other aspect of the off-spec production, the downgrade issue. What happens to the product you’ve downgraded? . . . [The conversation continues to explore the second consequence.] Like James, more often than not, customers are intrigued and fully engaged by cost of the problem conversations. Customers do want to add clarity to their decisions, and the financial aspects are the most critical in their minds. There really is little reason for them to refuse to participate. There will be rare cases where customers aren’t as forthcoming as we might like. When you encounter a customer who appears reluctant to participate, be particularly sensitive to self-esteem issues. Use buffer statements such as, “I know this isn’t an easy question,” or “Most people find this one hard to answer.” Follow it with “But it would really help me understand . . .” or “But I think knowing the answer would really help you decide if it makes financial sense to look into this type of solution any further.” Break down the question even more if you can and start with activities instead of costs. If you’re asking about the cost of plant downtime, take it to the level of the production on a single machine. The simpler the question and the easier the measurement or calculation, the more likely you’ll receive an answer.
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We need to make it safer for the customer to answer our questions. If you ask, “What does that cost you?” and the customer says, “I don’t know,” use a buffer and follow up by asking, “Yeah, that’s probably a tough number to get exact, but what would be a rough estimate of the cost?” If you still get the same answer, ask, “If you had to guess, what would your guess be?” Remember when you ask a number question, the customer will always have a number answer in his head. When the subconscious mind hears a number question, it automatically calculates the answer and sends it to the conscious mind. The conscious mind then decides whether to release the number. For example, if I ask a customer, “How many employees are there in your company?” He automatically hears the answer internally. Our job is to create an environment that’s safe enough for the customer to share that number with us. When you have all the data you require from these conversations, you’re ready to complete your cost of the problem analysis. Create a cost of the problem report that lists the incident, the consequences, the actions taken to respond to them, and their costs as they’ve been given to you or estimated by you and your customers. At the end of this report is the sum of these costs—the total cost of the problem (Figure 8.1). Financial Return on Solution The second integral financial conversation in the complex sale defines the financial impact that the customer expects from the solution. This is a conversation that occurs during the Design phase of the sale (as discussed in Chapter 6). Its aim, like all of the Design conversations, is to help eliminate the smoke and mirrors that lead customers to poor
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FIGURE 8.1
Cost of the Problem Worksheet/Report
buying decisions and provide the anchors that keep them from getting blown off course by competitors. Unfortunately, customers have good reason for treating sellers’ financial return estimates with skepticism and cynicism. Return on investment is perhaps the least accurate of all the figures that customers hear from salespeople. They are less than comprehensive figures that are selfserving to sellers and misleading to customers. At worst, they are as wildly overinflated as the claims we hear from brokers flogging penny stocks from boiler rooms. The best way to counter this situation is the returnon-solution conversation. In this conversation, customers participate in the calculation of return-on-solution and it is built on numbers that they can verify. The return-onsolution conversation tallies the gains (cost savings and/or
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new revenues) that will be generated by the solution and the total cost of the solution in order to estimate the net financial impact of the solution on the customer’s business. Return-on-solution conversations start with the outcome expectations we established with the customer in the Design phase. Like the consequences in the cost of the problem conversation, each outcome has cost reductions and/or new revenues associated with it. Further, to help the customer identify those solution gains, we may well have to break the outcomes down into smaller components and deal with a variety of cast members. The conversation format and mind-set remain the same as for the cost of the problem, it is only the financial focus and the input that change. In fact, each element in the return-on-solution conversation corresponds to a cost that has already been identified in the cost of the problem conversation. It is also likely that we will be working with the same cast members. Because of the similarities, instead of using a conversational example, I’d like to talk about the two major elements of the return-on-solution conversation. Solution Outcomes Generate Income In the case of cost reductions, income is generated from the money the customer will not have to spend in the future. In that sense, it is an indirect gain, but it is fairly simple to establish. If, for instance, we know that the solution will eliminate 50 percent of the current defects and we know (from the cost of the problem conversation) that these defects cost the customer $1 million annually, we can calculate that the gain should be $500,000 annually. In the case of new revenue, income is more direct, but also often more nebulous in terms of estimation. If our customer can guarantee his customers a defect-free product, what does that translate to in terms of increased business with existing customers and how many new customers can our customer
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expect to win at the expense of competitors who can’t meet these new quality levels? On one hand, we don’t want to overlook any of the dollars that our solutions can produce. On the other hand, we must assign credible numbers to these questions. We need to calculate them conservatively and, as always, with the full participation of our customer. For example, a manufacturing manager can help establish the return generated by a more efficient production process. A sales manager can help establish the revenues generated by new accounts and enhanced retention rates. The involvement of cast members is essential if we expect them to defend the numbers with their colleagues and support them during the presentation of the final solution. As always, however, quantification is a bit of a balancing act in which the customer is the final judge of what’s reasonable and believable. Solutions Have Costs, Too The second major element in the return-on-solution conversation is the cost of the solution. Customers are going to pay money to you for your solution, but there is no doubt that they are also going to pay out additional monies to use your solution. Too often, salespeople purposely and/or inadvertently gloss over these costs in a misguided effort to win a sale. As we’ve seen, the negative surprises associated with this habit will always outweigh the short-term advantage. Further, if you are making your customer aware of less-than-obvious costs and your competitor is not, you are building trust, creating traps for the competition to fall into, and your customer will soon see you as a more valuable partner. The purchase cost of the solution is usually clearly defined and gets plenty of attention. But, there are two areas of solution cost that are less often fully calculated: implementation costs and usage costs. How much employee training
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does it take to fully implement the solution and how much will that cost? Do we need to construct a special environment for the solution and how much will that cost? Does the solution require ongoing maintenance and at what cost? These are just some of the questions that could make up the total cost of the solution and must be included in your calculations. As in the cost of the problem conversation, you must make sure your return-on-solution model is sound. The final element of the return-on-solution conversation is a return-on-solution report. As in the cost of the problem, we need to lay out the outcome expectations and the gains associated with them. We also need to add in the major factors in the purchase, implementation, and use of the solution, and the costs associated with them. The last step is to subtract solution costs from the solution gains. The remainder is the return-onsolution. Right-Sizing the Investment The third financial conversation that is integral to highstakes sales defines the level of investment that the customer can appropriately make to obtain the full value of the solution. The goal of the investment conversation is to establish the threshold at which it makes sense for the customer to buy a solution. You already know what return the customer can expect from the solution. The customer’s required return on investment tells us the final figure we need. For instance, if we know that the return on the solution is $135,000 annually and that the customer must make a 30 percent annual return on capital invested, we can calculate that a total solution investment of $450,000 or less would meet the customer’s investment requirements.
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CYNIC’S SIDEBAR “Customers are not going to tell you what they want to spend!” Actually, you’re right. Customers won’t tell you how much they want to spend, especially if we ask them questions that are solely aimed at uncovering that fact. But this is another case when asking questions about the variables in a formula, rather than asking questions about the final answer to the equation, will pay huge dividends in openness and trust. We aren’t asking customers how much they want to spend, we are helping them determine the amount it would make financial sense to spend to eliminate a problem or gain an opportunity. We know how much the problem is costing them. We know how much their solution design will return. Now, we are asking them for their internal investment requirements. With those known, the amount they can invest and still meet their financial requirements is a simple calculation. Once customers arrive at and accept that figure, you may not know how much they want to spend, but you do know how much your customers’ financial criteria says they should be willing to invest for your solution.
Monetized Results Lead to Executive Conversations The final issue in financial conversations is reporting the results. This is an interesting issue because cast members at different levels in an organization have different financial perspectives. We began our journey with a sponsoring executive, we’ve worked through the organization, and now, we’re ready to report back.
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The danger of reporting financial results to the wrong people is well illustrated by a company I worked with that provides blood testing to hospitals. Its tests cost 10 percent more when using a new reagent, but the results of the tests were of substantially higher quality as a result. In fact, the new reagent lowered false positives enough that it returned the additional expense over 50 times in the reduction of misdiagnoses and associated costs. The company’s salespeople were dutifully reporting these figures to the laboratory managers they called on and not one of the managers would pay the additional 10 percent for the reagent. W hy not? In addition to the fact that the salespeople were presenting prematurely, they were reporting the financial figures to the wrong people. The lab managers didn’t bear the cost of erroneous test results, but they did have to pay for the new reagent. In other words, they didn’t bear the cost of the problem, but they would bear the cost of the solution. The moral of the story is even though we worked with the lab managers to calculate the financial aspects of the situation, they were not the right people to hear and act on those figures. We needed to return to our sponsoring executives to get the most impact from the numbers we had uncovered. As we discussed in Chapter 4, we want to begin our engagement with higher-level executives who have financial and operational accountability for the aspects of the business that are most affected by the absence of our solutions. We want to go as high in the organization as necessary to reach this person, but no higher. This is someone who cares about the financial performance of the unit and would probably have the funding authority for a solution as well. This is the person we have targeted during the
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Discover process for the initial engagement as the sponsoring executive and to give us the keys to the elevator. This is the person we will report back to with our financial findings. Of course, working with these executives is a challenge in and of itself and that is the topic of my final chapter.
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he nature of high-stakes sales has always required sales professionals to connect with operating managers and functional executives within their customers’ organizations. Most salespeople are comfortable operating at these longestablished levels. But recently, for more salespeople than ever before, the level of power and influence at which they must connect with customers to win the sale has risen dramatically. What used to be bought primarily on its technical, operational, or clinical merits has fallen under intense financial scrutiny. The ability to sell to executives at ever higher levels and into the C-suite itself has become a nonnegotiable prerequisite of success in the high-stakes sale. There are two primary trends driving sales professionals up the elevator. The first is the increasing complexity of 209
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products and services we are selling. Increased complexity creates a variety of challenges for our customers: their buying decisions require that they understand situations that are cross-functional, organizational, and often across national boundaries; their purchases require broad-based, internal consensus and alignment to successfully implement; they are buying solutions that have whole business impacts and strategic C-level implications; and often these solutions carry substantially higher purchase prices and total costs that are “extra-budgetary” and require extraordinary approval authority. The second trend is the changing nature of our customers’ organizations. They are growing leaner as their leaders are driven to increase productivity, cut costs, and outsource everything except for core competencies. Middle layers of management have shrunk and, often, disappeared altogether. That has left frontline managers responsible for execution and day-to-day issues, senior executives responsible for strategic issues, and little in between. As a result, buying decisions are being consolidated and transformed from technical/operations-based decisions into financial/ purchasing-based decisions. In the process, the balance between price and value often migrates to the price side of the equation. When this occurs, senior executives become critical in the decision-making balance. Our goal is to help executives reach more balanced decisions. These decisions should be initiated, monitored, and ultimately approved by senior executives, but they will be executed by teams of operational managers. Add these factors together and you can see why sales professionals are under so much pressure to connect further up the customer’s hierarchy of command. This means that if you are already working with executives, it is likely that you will soon be dealing with more senior executives. If you
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aren’t dealing with executives yet, it is likely you will be in the near future. Salespeople and their managers are quickly discovering that selling up the ladder is a major challenge. This realization hits with full force when sales executives tell their salesforces, “Start selling to the C-suite.” Salespeople follow orders and a great majority of them hit a wall (or, more accurately, a ceiling). I know, because my company’s phones ring when these professionals start looking for help. Many sellers tried (and are still trying) to skirt the issue by adding their own executives to the sales mix. In a May/June 2004 article titled “Future Force,” 1to1 Magazine reported, “Salespeople generally lack the credibility and experience to sell at the executive level where high-impact decisions are made.” It described Cisco Systems’ solution to the problem: “an executive sponsorship program that assigns account involvement responsibility to each of its vice presidents and directors. Critical to the success of the program, which involves executive briefings as well as a rigorous schedule of customer calls and on-site client meetings, is the fact that Cisco executives are compensated based on their personal involvement in the customer-oriented programs.” Cisco isn’t the only company that has added executives to its sales team. In a series of surveys published as The Customer-Selected World Class Sales Excellence Ten Year Research Report, The HR Chally Group found that there was a substantial increase in the numbers of executives at selling companies who were actively participating in engagements. In 1993, buyers reported that only 8 percent of vendor companies utilized their executives in sales efforts. By 2000, the number of vendors using executives to sell had risen to 22 percent. Connecting at the level of power and influence by including your company’s executives in the sales team is also
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critical in today’s high-stakes sales. Unfortunately, all too many salespeople use this trend to abdicate their responsibility and introduce executives into poorly prepared engagements. This seriously dilutes the positive potential of the executive-to-executive relationship. When salespeople look to their own executives for a quick fix, some serious drawbacks quickly emerge. Executives are the most expensive of all employees; whether it is formally accounted for or not, the cost of sales rises when executives get involved. Further, executive time is limited; if they are selling, who is leading your company? Finally, although executives may be comfortable talking peer-to-peer with their colleagues at customer companies, salvaging a poorly prepared sale engagement is extremely difficult. Thus, as high-stakes sales are driven up the elevator, sales professionals have no choice but to follow. That means, as professionals, we must understand why it’s difficult to engage executives and master the strategy and tactics of the executive conversation.
Barriers to Executive Conversations The systemic barrier to executive conversations is that most salespeople have not been properly trained to deal with the higher levels of the customer’s corporate hierarchy. I have seen far too many salespeople try to sell to senior executives using the same approach and even the same content that they use to sell at the customer’s operational and functional levels. We’ve already seen that the conventional sales process is antiquated and ineffective. Worse, it was neither intended nor designed to work at this higher level. Senior executives are even less interested in our products and services than operational managers. They won’t understand
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the usefulness of features and benefits that are described in operational terms. They simply do not see or, for the most part, care about the lower level implications of solutions. Senior executives are responsible for the big picture, not the details. This point was driven home at a recent conference at which a vice president of sales of a multibillion-dollar private company told me her CEO was “fed up” with vendors who wanted to tell him about their solutions. He told her, “No one wants to listen to my problems!” As clichéd as this sounds, it is a powerful comment on the willingness of senior executives to engage in relevant sales conversations and the inability of salespeople to respond.
CYNIC’S SIDEBAR “Just get me in front of the decision maker and I’ll make the sale!” No, in all probability, you won’t make the sale when the key decision maker is a senior executive. Traditional sales systems teach salespeople to get in front of the key decision maker and run through the entire sales process, but senior executives rarely, if ever, make decisions in this way. They do give permission for the process to begin, delegate the responsibility for information gathering, make recommendations, and consider and approve solutions that represent a consensus of the cast members responsible for its success. They don’t have time to sit through the salesperson’s process and/or presentation. When a salesperson tries to force an executive to sit through the process, the salesperson either gets directed back down the elevator (never to return), or out the front door.
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The personal barrier to executive conversations exists in the negative self-talk that poisons so many salespeople’s minds. Typically, salespeople become less and less confident and more and more uncomfortable as they travel up the elevator. One aspect of this condition may go back to childhood. Many of us were told never to bother important people. If those admonitions are echoing in a salesperson’s head when he or she attempts to contact and/or speak to a CEO, he or she is not going to be very comfortable with the task at hand or positive about the outcome. Another aspect of negative self-talk is the respect for authority we are taught as children and the resulting intimidation many of us feel in the presence of authority figures. I received a very clear reminder of the power of that inhibition when I worked with the consulting division of a major company. We were teaching the highly professional and expert salesforce of this division how to call on CEOs at petrochemical companies globally. They were getting comfortable with dealing with executives at that level except when it came to high-level executives within their own corporate family. Orchestrating these sales involved the buy-in of senior executives in their own company. The salespeople were visibly shaken by the idea of talking to an executive who resided three or four levels above them in their own company’s hierarchy. One salesperson told me, “Here’s what is going through my mind when you ask me to go talk to these guys: ‘I rarely speak with my boss’s boss; their boss wouldn’t give me the time of day.’ ” If this is an accurate reflection of your mind-set going into an executive conversation, your own beliefs are going to be working against you all the way.
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CYNIC’S SIDEBAR “Forget about it. CEOs won’t give me the time of day.” The reality is that senior executives do talk to salespeople. Peter Muldowney, a former CEO who has run a number of companies including a billiondollar corporation where he had 21 business units reporting to him, serves as one of our “CEOs in residence” during our Mastering Executive Relationships® workshops. During a recent workshop, one of the participants insisted that CEOs wouldn’t see him. The salesperson claimed that he had to bring an upper level executive with him to gain an audience with the CEO of a customer company. Peter’s response was simple and direct. “I don’t care what your title is,” he said. “If you have something that is going to help my business, I will talk to you.” Peter is not the exception. When my firm surveyed the CEOs of major hospitals, we asked them how large a problem would have to be for them to want to know about it and assign it for resolution. The average response was $50,000. These leaders of multimillion-dollar health-care organizations said they would listen to a salesperson who had identified a potential $50,000 impact and assign someone to help see it through. We are absolutely not saying that CEOs will sit through the entire sale with you, nor are we saying that they will participate in the details of every project or initiative they set in motion. We are saying that there is no doubt they will see you and sponsor you within their organizations (often on the basis of a quick phone call) if you can quickly establish relevancy and credibility.
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Finally, there are environmental barriers to connecting at higher levels of power and decision. It is more difficult to contact senior executives. Corporate leaders have less time for anybody. They are often impossible to reach directly. If you start calling CEOs and hang up unless they are available to take the call personally, chances are pretty good that you will never get the opportunity to speak to a CEO. (The odd thing is how many salespeople follow that exact stratagem when attempting to establish contact with senior executives.) An ancillary barrier is one of our own making: In attempting to engage executives using poorly designed sales strategies, salespeople are teaching customers that speaking to them is often a waste of time. A few executives respond to this lesson by simply refusing to take sales calls; most respond by severely limiting their exposure. Thus, salespeople have less and less time to connect with executives, and the intimidation and pressure they feel as a result grows with each call. This can easily create a self-reinforcing downward spiral that makes executive conversations ever more difficult to conduct successfully. Add it all up and it is clear that the key to effective executive engagement is a problem that has fixed parameters and can be solved. We need to approach the issues of conversational style and substance with the executive in mind. We need to craft executive conversations that will enable us to enter customer organizations at the highest level necessary to support the engagement and the sale. We need to position our findings throughout the process in ways that continually engage senior leaders and motivate them to take action. We’ve already described several executive conversations in Part II. Now, I’ll describe the principles that will assure your ability to engage executives in conversations no matter where they occur in the sales process.
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The Executive Conversation— Rules for Engaging Rulers Executive customers shouldn’t have to, and usually won’t, bother to translate our technical talk into their language. Yet, I think many salespeople shoot themselves in the foot by talking to executives in the language of the product or service they sell. If we want to craft compelling executive conversations, it is important to speak to executives in their own language. The specifics of this language vary industry by industry and, to a lesser but still significant extent, company by company. Generally, I’ve found that salespeople know the language of their markets and they are often quick studies when it comes to corporate dialects. The language they do not speak very well, however, is the language of executive decision making. Because our sale is contingent on our executive customer’s business decision, we need to consider how executives approach decision making and adapt our conversations to that paradigm. In short, we need to stop thinking and speaking like salespeople and start thinking and speaking like businesspeople. What do executives want to know before they buy? One good way to think about their decision criteria is in terms of five rules:
1. The Issues We Propose to Address Must Be Relevant in the Larger Context of the Business The first major issue that concerns executives is whether or not they should be talking to you at all. They want to know if the issues your solutions address have any relevance in their business and therefore, we’ve got to begin
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by establishing that relevancy based on their level of responsibility. When we move up to the customer’s executive suites, we can’t describe problems in the same terms as we do at the operational level. For instance, if I’m selling manufacturing equipment, one of the symptoms that occurs in the absence of my solution might be oil on the plant floor, as in lower quality or over-used machines that leak oil. The significance of the oil on the floor changes as we move up the command hierarchy. A line supervisor sees the hours of downtime when the equipment freezes. A plant manager sees a dip in daily production levels. In the C-suite, these consequences are not likely to have made a significant impact unless you can translate them into more relevant terms (Figure 9.1). The senior vice president of sales and marketing doesn’t see 50 plants with 50 leaking machines, he or she sees higher prices that, in turn, equal lost orders. In the CFO’s office, that means higher quarterly operating expenses and lower net profit. In the CEO’s office, the same problem can be translated into lower earnings per share, a fact that will surely capture the attention of any CEO in a public company. (This isn’t to say that we call a CEO and talk exclusively about raising earnings per share. Rather, we would quickly, in a minute or two, discuss our value chain and how the oil on the floor connects to earnings per share.)
FIGURE 9.1
Impact of Oil on the Floor
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The rule of relevancy requires that we identify the business issues on the executive’s dashboard and translate our value capabilities into those terms. If we can’t establish positional relevancy, it is possible that we are trying to sell too high in the customer’s organization. As we saw earlier, our goal is to work as far up the customer’s chain of command as we need to go, but no further than that. We shouldn’t be driving toward the C-level unless we have something relevant to C-level job measurements. If we don’t have something that directly impacts their jobs, we simply won’t be able to successfully engage executives and we shouldn’t try. The Real Key Executive—The Executive Assistant We fulfill the rule of relevancy at the beginning of the complex sale. It’s the goal of the Discover phase. We discussed this at length in Chapter 4, but there is a related issue here that is worth taking a short detour to consider. Executive conversations rarely start with executives. They start with executive assistants (EAs). The odds that you are going to pick up the phone, call in, and talk to a C-level executive are barely measurable. You are going to talk to an EA. Executive assistants usually know the executive and the executive’s job better than anyone else. Good EAs are indispensable to busy executives, which is one reason why they often move with the executive from company to company and even into retirement.
CYNIC’S SIDEBAR “Executive assistants are gatekeepers who keep me away from the boss.” If you are still thinking of EAs as gatekeepers who have to be circumvented or otherwise manipulated to gain access to an executive, I don’t know if you
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Executive assistants serve as expeditors, sounding boards, role models, and mentors for savvy sales professionals. Most importantly, they allow us to test our value hypothesis before we get in front of the executive whom we believe will give us the keys to the elevator. So instead of treating EAs as human voice mail systems, we should be engaging them in high-quality, credible conversations as eagerly as we would engage a key decision maker. I’d open a call with an EA essentially the same way I would speak to a vice president of sales: EA: Hello, Ted Taylor’s office. This is Gail. JEFF: Hi, Gail, this is Jeff Thull with the Prime Resource Group. I am calling for Ted, but I am not really sure if it’s appropriate that I speak with him and perhaps you could help me. Do you have a moment? EA: Sure, I’d be happy to help. JEFF: We work with the senior vice presidents of sales of companies like yours and in listening to your last quarter’s analyst call I noted that Ted was taking a lot of questions about the volatility of the sales pipeline. That makes me want to ask you if, around forecasting time, you find him walking around his office mumbling and talking to himself?
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EA: [laughing] Well, I’m not going to confirm any mumbling, but, as you said, it is an issue. JEFF: Well, I’ve made some assumptions about your business situation and I’d like to run them by you and if they appear to be relevant perhaps it would make sense for Ted and I to talk. Or do you think I should talk to Ted straight away? EA: Well, he never takes unscheduled phone calls from anyone but customers. What are some of the assumptions you’ve made? I am creating relevance with this conversation. I am explaining to Gail that I’ve done my homework, I’ve confirmed that one of the major symptoms we address actually exists, it is a symptom that Gail sees also and I’m moving on to the next step. If Gail agrees that my value assumption is relevant, I will send her a package containing two envelopes: one will be addressed to Ted and contain a letter with a summary of my value assumption; the other envelope is addressed to Gail and contains Ted’s envelope and a letter to Gail that recaps our conversation, thanks her, and prepares her for a follow-up call. In this conversation with Gail, I’ve established mutual respect, credibility, and relevance. I’ve also learned something about how the senior vice president of sales works with salespeople. Any competitor who doesn’t bother to engage Gail in a similar conversation is already extremely behind.
2. The Statement of Value Assumption Must Be Valid The rule of validity demands that we demonstrate to executives that the situations or problems that our solutions address exist. First, this means that the problem is actually
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occurring in the customer organization. Second, it means that the potential cost of the problem is significant enough to require investigation. And third, it means that the nature of the problem continues to require executive involvement. To keep an executive engaged, the consequences of a customer problem or missed opportunity must encompass significant people, process, and financial issues. If one or more of these do not exist at a level that requires the executive’s involvement, it is likely that your sales engagement will either be ended or delegated down the ladder without executive backing. However, if we can show that significant consequences exist, we satisfy the rule of validity, as well as confirm and specify the relevancy of the situation. (This incentive for change is built from a portrait of the customer’s negative present.) Validity is incontrovertibly established during the problem diagnosis, but typically, executives are not directly involved in most, if not all, of the Diagnose phase. So, aside from any diagnostic conversations we have with executives during the process, we must also conduct an important executive conversation at its conclusion—a reporting conversation that confirms validity and results in permission to continue with the decision process. Here are some tips for that conversation: • Be succinct. You are briefing your executive as a staff member. You should be able to and must reduce the indicators, causes, consequences, and cost of the customer’s problem to a single sheet of paper. • Stick to the facts. We are not acting as salespeople. Instead, we are reporting the current reality to the executive. It’s counterintuitive, but we can often get the biggest impact by allowing facts to speak for themselves. (Remember, if the facts don’t support the incentive to change, we’re leaving.)
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• Make sure your report speaks the executive’s language. There is no reason to discuss the oil on the floor with the executive. Put the facts in terms that relate to the upper management perspective. Again, we don’t want to violate the rule of relevancy. • Ask for the executive’s feedback. We need to know how the executive is responding to the report. Can she provide additional insight? Have we missed any bases? Is this issue worth pursuing? 3. The Problem and the Solution Must Be Actionable The rule of actionability demands that we address whether and how the customer’s situation can be viably resolved. Actionability is determined in the Design phase. As with validity, executives will likely participate in little or none of the Design phase. So, the nature of the executive conversation is again a report. This report should follow all the same guidelines we discussed in Rule 2. In addition, when we report to the executive, we want to be sure to cover the people, process, and financial considerations of solution design. Solutions require change and the executive needs to be assured that this is a change that can be successfully managed. We want to explain how people’s behavior will be impacted and changed, how processes will be altered and adjusted, how the change will be managed, and how the financial impact is supportive of the investment required. (When we show executives that the problem and solution are actionable, we give them the confidence to invest.) 4. The Solution’s Value Must Be Measurable The rule of measurability is critical to senior executives. With limited resources to invest, their ability to measure
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and quantify issues, allocate funds accordingly, and track the returns is a constant concern. We are constantly developing the answers to measurability questions. In the Diagnose phase, we quantify the cost of the problem by measuring the impact of the absence of our solution (and create the incentive to change). During the Design phase, we quantify the cost of the solution and expected return in order to build the executive’s confidence to invest. In the Deliver phase, we report results in order to expand the relationship and win new opportunities. In each instance, we need to summarize these results to executives. They are “sanity checks” that ensure the engagement is still on course. 5. There Must Be Consensus and Alignment Around the Findings, Conclusions, and Final Decision The final rule of consensus and alignment is one that salespeople miss most often in executive engagements. Typically, executives will not implement and/or directly utilize the solutions they buy. Further, they are very aware that they must depend on other people to carry out the solution’s implementation and to utilize the solution in a way that captures its full value. Any savvy executive also knows that the consensus and alignment of his managers and other employees are critical prerequisites of successful change. Thus, we need to demonstrate that consensus and alignment exist throughout each of our executive conversations. Consensus and alignment require that a working majority of the cast of characters agree about the relevance, validity, actionability, and measurability of the problem and solution before the salesperson arrives at the executive suite with any recommendation or proposal. It isn’t necessary or even likely that agreement will be unanimous. However, it must be strong enough to support the decisions. Further,
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we should also be alerting executives to those cast members who may be obstacles when it comes time to maximize the value received from their purchase. The larger and more complex your sale, the more important the creation of this constituency becomes in the executive’s eyes. An executive will not approach a solution if he doesn’t believe his organization can achieve its promised value. We should always remember that executives have come up on the short end of value promise more often than not and they are rightly skeptical and vigilant about our promises.
A Final Word on the Sequence of Executive Conversations Most often, executives simultaneously play two roles in highstakes sales. First, they act as cast members, with their own job responsibilities and personal perspective. That is, we ask them to provide direct input into the “nuts and bolts” of the decision and work with them to develop the information we need in the diagnosis of the problem and the design of the solution. At the same time, however, executives act as sponsors. In this role, they are only indirectly involved in the mechanics of the sale. When we work with sponsoring executives, our role in the sale changes. This new role can be challenging for salespeople to manage and it bears additional examination. When executives act as sponsors, their direct participation is required only at key milestones, such as the sponsorship decision, the sanity checks that communicate findings, and value reportage. But in between, they are positioned outside the action. You aren’t “selling” to them at all. In fact, you are more like one of the executive’s staff members than a salesperson.
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The best way to master the sequence of these sponsoring executive conversations is to approach them as if you had accepted a senior staff position for a specific project. Think of your sales process as a project that you have been assigned by your new boss in the customer’s company. You received the project assignment in the Discover phase. You keep your boss informed of the progress of the project by summarizing and reporting the salient facts during the Diagnose and Design phases. You submit a final recommendation, manage the implementation, and report on the results in the Deliver phase. If you do this work well, you receive a new assignment (see Figure 9.2). The conversational pattern you would follow in this sequence is the same pattern a project manager would follow in reporting his results. In each sponsoring executive conversation, you are responsible for keeping the executive informed. You discuss where we are in the process, what we have accomplished, what we expect to find there, and what we will most likely do next. You are getting the sponsoring executive’s feedback and reaction to what has been discovered, diagnosed, designed, and delivered. In essence, you are providing and receiving guidance as you both progress through the engagement.
FIGURE 9.2
“Access Strategies”
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If you start to picture yourself in this new role and if you can adopt its mind-set, discipline, and skills, you can achieve a goal that salespeople are often given, but are rarely prepared to achieve. You can begin to evolve into a trusted advisor and a valuable business partner. In response, your executive customers will begin to treat you as a Prime Resource and your sales success will multiply exponentially.
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Epilogue
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o close our discussion on Exceptional Selling, by now you’ve come to see that your conversations with customers don’t have to be adversarial in nature or even constrained by the conflicts of interest that the traditional sales mind-set and approach create between buyers and sellers. We don’t need to manipulate or push customers, nor do they have to protect themselves from us. In fact, the vast majority of customers are looking for the same thing we are—an open, honest, and straightforward conversation that is based on mutual trust and respect, and that results in the achievement of one another’s success. The path to that goal starts with mind-set. We can approach conversations with our customers with a mind-set that is committed to ensuring value relevancy, minimizing the risk of change, protecting the self-esteem and selfinterest of both parties, and demonstrating emotional maturity. In doing so, we can change our patterns of response, leave behind the dictates of conventional selling and transform our customers’ responses to us. This new mind-set clears the way for customer conversations that reach new levels of candor and clarity. Credibility and relevance will rule in our relationships with customers. 229
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EPILOGUE
I’m not saying that if you master the mind-set and these conversations that you will win every sales opportunity you undertake. That’s not a realistic goal. I am saying that you will have exceptional success. Exceptional success means the early recognition of the viability of your opportunities— whether they are low or high—and the optimal use of your resources. Exceptional success means winning every sale that you should win. That’s every opportunity where your customers’ decisions to buy your solutions represent highquality sales—sales that deliver value to both parties. I am also saying that your business will increase in other ways. Exceptional sales professionals are always in demand. If you transform your communication with existing customers, you will expand the amount of business you earn from them. Further, the number of recommendations and referrals you receive will increase exponentially. It’s my final wish that you not only become one of the best at what you do, but that your customers come to recognize you as a unique resource that clearly stands apart from the competition. You will stand apart not so much by what you sell as by how you sell. With that said, I’d like to leave you with the following definition of exceptional: • Far beyond what is usual in magnitude or degree • Surpassing what is common or usual or expected • Having or showing intelligence or ability well above average • Not like others of the same type That is as good a definition as you will find of an exceptional sales professional. May all of your customers and colleagues describe you as exceptional.
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Index Absence of value: cost of, 20–21, 192 customer’s customers and, 91 negative present, 49–50, 136 observable symptoms, 90 validation process, 49–50 value triad, 43, 44–45 Access: engagement conversation, 93–100 privileged, and insight, 56 sponsorship and, Discover phase, 112 strategies, 226 in upward reinforcing cycle, 56 Actionability, rule of, 223 Adaptive unconscious, 17–18 Alignment, rule of consensus and, 224–225 Aloha Airlines Flight 243, 73 Alternatives: optimal solution, 136 solution parameters, 138 your competitors versus customers’ alternatives, 143 Architect analogy, 135 Asian company example, 68–69 Assumptive questions, 141, 142, 144 A-to-Z questions, 120–122, 123, 128 Automobile salespeople, trust survey result, 25 Awareness: changing your mind-set and, 54–55 customer’s Progression to Change, 105 Balloon analogy, 132, 145 Barriers: to executive conversations, 212–216 to financial conversations, 189–191 Benefits/features, parameters versus, 134–136 Blah Blah, Fluffy, 36–39, 175
Blame-assigning, 57 Budgets, 189 Building program analogy, 135 Call reluctance, 84 Cast of characters: anchoring, 115 cost of the problem conversation, fourstep pattern, 196–200 diagnostic conversation, 113–115 discussing design alternatives with, 147 expectations of stonewalling from, 122–123 Causes of problems, in diagnostic conversation, 117, 129, 155 CEOs. See Executive conversations Change: emotional state of typical customer, 63 leadership, 58, 62–65 mind-set, 54 Progression to Change, 104–105, 107–108, 115, 128, 131 Psychology of Change matrix, 64, 65, 137 resistance to, 62–65 Child/parent roles, 14–16 Cisco Systems, 211 C-level conversations/selling. See Executive conversations Closing, 159–160. See also Deliver phase Collaboration, 11, 57, 166 Commoditization of solutions, 20–23, 38 Communication style, 3–8, 9–30 answering unasked questions, 20 conventional thinking versus diagnostic thinking, 29 definition of “failure to communicate,” 5 emotional mind-set as root of miscommunication, 13–19
231
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INDEX
Communication style (Continued) negative stereotypes, 24–28 Old Brain, 16–18 parent/child roles, 14–16 persuasion alienating customers, 19, 23–24 presentations commoditizing solutions, 19–23 self-sabotage, 3–5 solving challenge of, 28–30 stress and credibility, 18–19 Communication substance. See Value Competition: feedback as protection from competitive threats, 175 hot air balloon scenario, 132, 145 mind-set as differentiation, 57 nature of industries today, 35 talking about competitors, 146–147 your competitors versus customers’ alternatives, 143 Complexity of products/services, 209–210 Complex sale, four phases of, 78–79, 81, 184 Concern: advancing to, with A-to-Z questions, 128 on Progression to Change, 105 Confidence versus passion, 29 Confrontational language, avoiding, 124 Consensus and alignment, rule of, 224–225 Consequences of problems, 117, 129, 140–141, 155–156, 196 Conversational style, 6, 10. See also Communication style Conversations in selling. See Prime Process Cool Hand Luke, 5, 54 Cost(s), 191–208 of absence of value, 192 internal/external, 153 of the problem, 193–201, 202 solutions, 204–205 total cost of ownership (TCO), 185 worksheet/report, 202 Credibility: achieving, 8 financial acuity adding to, 188 relevance and, 229–230 in upward reinforcing cycle, 56
Crisis mind-set/stage, 105, 109–110, 129 Criteria, decision, 137, 155–157 Customer(s): CEOs (see Executive conversations) checking for absence of your value with customers of, 91 conversations with (see Prime Process) demos, 68 employees closest to the symptoms, 90 feedback (see Feedback) focus on, 57, 154–155 gaining new, 175, 178–179 inappropriate/ill-timed requests by, 67 as judge/jury, 39–40 language in proposals, 164–166 objections, 160–161 organizations, changing nature of, 210 Progression to Change, 105 prospects who come to you, 100–104 qualification of, 84–85 resistance to change, 62–65 self-diagnosis and, 111 world of, having conversation about, 80 Customer relationship management (CRM) as example, 112, 149–150 Customer-Selected World Class Sales Excellence Ten Year Research Report (HR Chally Group), 211 Decision criteria, 137, 155–157 Decision process, lowest common denominator, 39 Deliver phase, 159–179 closing a sale, 159–160 contextual framework of Prime Process, 78–81, 184 customer objections, 160–161 Design conversation and, 142, 156 feedback confirming and communicating value delivery, 175–178 solicit prepresentation feedback, 166–167 fingerprints, using customer, 165–166, 167 larger sale, not losing, 169–170 measurability, rule of, 224 no-surprises dictum, 164–165, 168, 171 presentation, participative, 167–169 problems, 170–174
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Index proposals, 160, 164–170 as document for consideration, 159–160 as document of confirmation, 164 referral conversations, 178–179 sale process continuing after closing, 162–163 sequencing executive conversations, 226 tough issues, avoiding versus dealing with, 161–162 Demo, customer requests for, 68 Design phase, 131–157 architect/building program analogy, 135 assumptive questions, 141, 142, 144 avoiding implicit challenges in questions, 150 cast of characters, discussing alternatives with, 147 choosing optimal solution alternative, 136 clarifying expected outcomes, 136 competing expectations, surfacing/aligning, 141–151 competitors, 143, 145, 146–147 contextual framework of Prime Process, 78–81, 184 costs, internal/external costs, 153 critical outcomes, introducing, 140–141 decision criteria/parameters, 135, 137, 156 discussion document, 156–157 essential questions, 138, 156 executives, role of, 223, 226 expectations, connecting to indicators and consequences, 140–141 feel-felt-found approach, 148–149 frames, 144–145 good-better-best, 145 hot air balloon scenario, 132, 145 investment expectations, 156 measurement, 156, 224 needed question, 143–144 needs versus expectations, 138–139 no free moves, 150–151 perspectives, 142, 154–156 Progression to Change, 131 Psychology of Change, 137 relevancy, 132 resources/investment, 136, 151, 152–157 return on solution conversation, 201–205
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selection criteria, 155–157 self-esteem, protecting customer’s selfesteem, 125–127, 141, 147–148 signal for beginning of, 129 small-medium-large, 145 solution parameters, 132–136, 155–156 time frame, 137, 154, 156 Diagnose phase, 107–130 A-to-Z questions, 120–122, 123, 128 cast of characters, 113–115 causes of problems, 117, 129, 155 consequences of problems, 117, 129, 140–141, 155, 196–197 contextual framework of Prime Process, 78–81, 184 cost of the problem conversation, 195–197, 224 crisis stage, 109–110 cyclical nature of, 112–130 decision to buy living in the negative present, 109–110 Design phase and, 132 Diagnostic conversations, 116–130 Discover phase and, 112–113 drilling down, 125–127 executive conversations, sequencing, 226 expertise required, 110–112 flow of, 119–120 getting to customer’s pain, 110–111 indicator questions, 125–126 indicators, 117, 125–130, 140–141, 155–156 job responsibility, 117, 129 levers for change, 129 loaded words/subprocesses, 123–124 priority, 117, 128–130 probing symptoms, 125–128 Progression to Change, 107–108, 115, 116 sequencing executive conversations, 226 solution bias, 108–109 starting at process level, 120–122 Diagnostic agreement: informal, 104 moving toward, in engagement conversation, 97–100 Diagnostic mind-set, 56–74 advantages, versus presentation, 57 versus conventional thinking, 29 defined, 7–8 exceptional credibility and, 184
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INDEX
Diagnostic mind-set (Continued) Prime Resource Group’s Diagnostic Selling, 7–8, 56, 69 shift to diagnosis mode, potential problem in Deliver phase, 173–174 Discover phase, 83–105 contextual framework of Prime Process, 78–81, 184 engagement conversation, 93–100 crafting introductory statement, 94–96 executives and, 93–94 giving executive homework, 100 moving toward diagnostic agreement, 97–100 sales process and, 93 suggesting call is inappropriate, 96–97 20-second rule, 99–100 executives, 93–100, 207–208, 226 goals/purpose, 92–93, 219 preparation for initial contact, 85–87 prospects who come to you, 100–104 qualification, 84–85 research conversations, 87–93 versus sales calls, 91 targeted persons, 90–91, 208 Discussion documents, 156–157 Doctor analogies: bedside manner, 10 diagnosis, 111-112 qualification approach, 85 role model, 29–30 Dogma, sales, 11 Drilling down, 125–127 Dudley, George, 84 80/20 rule, 60–61 Emotional, detachment, 173 Emotional involvement in outcome of customer engagement, 11–12 Emotional maturity, 58, 72–74 Emotional mind-set and miscommunication, 13–19 Emotional stamina, 173 Emotional state of typical customer, 63 Engagement conversation, 93–100 crafting introductory statement, 94–96 executives and, 93–94 giving executive homework, 100
moving toward diagnostic agreement, 97–100 sales process and, 93 suggesting call is inappropriate, 96–97 20-second rule, 99–100 Environmental barriers to executive conversations, 216 Eras of selling: Era 2 approach, 69 Era 3 effort required, 11 overview, 12 requirements of corporate customers, 183 Exceptional credibility/selling, 181, 183–186, 229–230 Executive Assistant (EA), 219–221 Executive conversations, 209–227 access strategies, 226 barriers to, 212–216 engagement conversation (quest for access and sponsorship), 93–100 assigning homework, 100 crafting introductory statement, 94–96 diagnostic agreement, moving toward, 97–100 questioning appropriateness of call, 95, 96–97 20-second rule, 99–100 monetized results leading to, 206–208 rule of actionability, 223 rule of consensus and alignment, 224–225 rule of measurability, 223–224 rule of relevancy, 217–221 rule of validity, 221–223 senior staff position, salesperson assuming role of, 226–227 sequence, 225–227 trends driving sales professionals up the elevator, 209–210 value spectrum, perspective on, 47–48 Executive sponsorship, 185–186, 207 Expanding customer relationship, 175, 177 Expectations: alignment of competing, 141–151 clarifying expected outcomes, 136 Design conversation, essential question, 138
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Index guilty until proven innocent, 25 needs versus, 138–139 poor reputation of sales, 24–28 Expected Credibility, 183–186 Expert, diagnosis requiring, 110–112 Failure Is Not an Option (Kranz), 79 Far Side (Larson), 36 Fear of rejection, 8 Features/benefits, parameters versus, 134–136 Feedback: confirming/communicating value delivery, 175–178 ensuring customer awareness of value delivered, 175 executive, 223, 226 expanding customer relationship, 175, 177 focus on symptoms, 177–179 gaining new customers, 175 prepresentation, 166–167 protecting customer relationship from competitive threats, 175 two-way, 176 Feel-felt-found approach, 148–149 Financial conversations, 152–155, 187–208 barriers to, 189–191 cost, 193–201 of the problem, 193–201 of the solution, 204–205 credibility and, 188 design phase, 153–155 executives, and monetized results, 206–208 investment level, 154, 205–206 principles, 192–193 return on solution, 155, 201–205 Fingerprints, customer, 165–166, 167 First contact. See Initial contact Fluffy story, 36–39, 175 Ford Motor Company, 162–163 Frames, 144–145 Gallup survey (2004) on trust, 25 Getting to the pain, 69, 110–111 Gladwell, Malcolm (Blink), 10 Goals, short-term/long-term, 163 Going for the no, 60, 71 Good-better-best frame, 145
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Hospitals: example, financial conversations, 207 survey of CEOs, 97, 215 Hot air balloon scenario, 132, 145 Inappropriate/ill-timed customer requests, 67 Inappropriate sales calls, 96–97 Indicators, 117, 125–130, 140–141, 155–156 Initial contact, 83–87 example of traditional first call, 86–87 guilty until proven innocent, 83–84 importance of preparation, 85–87 Insight, in upward reinforcing cycle, 56 Insurance, 20–21 Investment: design and, 152–154, 156 return on (ROI), 185 right-sizing, 205 Invitation to Tender a Bid (ITB), xxii Job responsibility, 117, 129 Knowledge scale, placing customers on, 20 Kranz, Gene (Failure Is Not an Option), 79 Language: confrontational, 124 customers’, in proposals, 165–166 executives’ in your report, 223 loaded words, 35 loaded words/subprocesses, 123–124, 127 value clichés, 35 Lanning, Michael (Delivering Profitable Value), 34, 35 Larger sale, delivery presentation, and, 169–170 Leaner customer organizations, trend toward, 210 Learning/retention, 21 Lecturing professor stereotype, 23, 27–28 Leveraging value triad, 46–48 Limbic system, 16–17 Loaded words, 123–124, 127 Lost opportunity cost, 103–104
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236 Lost sales: as communication failure, 5 delivery presentation, and larger sale, 169–170 reasons for, 60–61 voluntarily ending engagement, 61–62
INDEX
Oil on the floor example, 218 Old Brain, 16–18, 24, 55 101 Sure-Fire Sales Closes, 79 1to1 Magazine, 211 Optimal solution alternative, choosing, 136 Outcomes, critical, 140–141 Ownership: of numbers; principle of financial conversations, 193 promoting, 57 total cost of (TCO), 185
Performance level, 47 Perspectives: customer versus salesperson, 154–155 expectations varying with, 142 leveraging value triad, 47–48 Persuasion, alienating tactics of, 23–24, 30, 55 Pharmaceutical company example, 117–119 Politicians, survey on trust, 25 Positioning, across-the-spectrum, 46–48 Positive future, Design conversation and, 137, 143 Preparation, importance of, 85–87 Presentations. See Proposals/presentations Price, 22, 38, 191–192 Prime Process, 78–81, 184. See also Deliver phase; Design phase; Diagnose phase; Discover phase Prime Resource Group, 8 Prime Solution, The (Thull), 40–41, 183 Priority of the problem, 117, 129 Problems: actionability, rule of, 223 with delivery, 170–174 after the sale, 162–163, 170–172 Process level, 46, 120–122 Professor stereotype, 23, 27–28 Progression to Change, 104–105, 107–108, 115, 128, 131 Proposal, Requests for (RFPs), 15, 65–66, 103 Proposals/presentations, 164–170 anchoring larger solution in, 169 answering unasked questions, 20 commoditization of solutions, 20–23 customer difficulty with, 22–23 diagnosis versus presentation, 57 as document of confirmation, 164 as documents for consideration, 159–160 guidelines, 164–170 participative presentations, 167–168 persuasion alienating customers, 23–24 purpose of, 164 Psychology of change matrix, 64, 65, 137
Pain, getting to the, 69, 110–111 Parameters versus features/benefits, 134–136 Parent/child roles, 14–16 Penicillin example, value triad, 45
Qualification of customers, 84–85 Quantification of value, 185 Question(s): answering unasked, 20, 34 assumptive, 141, 142, 144
Mastering the Complex Sale (Thull), 78 Mastering the Executive Sale workshop, 215 Measurability, rule of, 223–224 Mental maps, 79–80 Middle management, trend away from, 210 Mind-set, diagnostic, 7–8, 53–74 change leadership, 58, 62–65 emotional maturity, 58, 72–74 exceptional success and, 54, 229–230 financial conversations and, 189–190 mutual self-esteem, 58, 66–69, 70 mutual self-interest, 58, 70–72 principles, 54 value relevancy, 58–62 Muldowney, Peter, 215 Needs versus expectations, 138–139 Negative present, 50, 109–110 Negative self-talk, 214 No, going for the, 60, 71 No-decision customers, 22 No free moves, 150–151 No-surprises dictum, 164–165, 168, 171
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Index A-to-Z, 120–122, 123, 128 avoiding implicit challenges in, 150 essential, in Design phase, 138, 156 indicator, 125–126, 127–128 needed, 143–144 perspective of, customer versus salespeople, 154–155 Referrals, 178–179 Relevance: credibility and, need for, 37 Discovery and, 92–93 in upward reinforcing cycle, 56 value, 58–62, 92–93 Reptilian brain, 16–17 Requests for Proposal (RFPs), 15, 65–66, 103 Research conversations, 87–93 Resources: critical issue of investment, 152–154 Design conversations, 151–155 essential question, 138 identifying requirements, 136 internal/external costs, 153 questioning from customer perspective, 154–155 timing, 154 Return on investment (ROI), 185 Return on solution, financial, 201–205 Rule of actionability, 223 Rule of consensus and alignment, 224–225 Rule of measurability, 223–224 Rule of relevancy, 217–221 Rule of validity, 221–223 Sales: call reluctance, 84 conversations (see Prime Process) dogma, 11 evolution of (three eras), 11, 12, 69, 183 installing versus selling, 169 movies about, 25 poor reputation of, 24–28 presentations: content of typical, 21–22 Prime Process (see Proposals/presentations) scripts, 12, 79 stereotypes, 27–28 survey on trust, 25
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Sanity checks, 224, 225 Scripts, sales, 79 Selection criteria, 137, 155–157 Self-diagnosis, 111 Self-esteem, mutual, 58, 68–69, 141, 147–148 Self-interest, mutual, 58, 70–72 Self-sabotage, 3–5 Sequence of executive conversations, 225–227 Sequencing value, 48–51 Silence as sign of wisdom, 55 Small-medium-large frame, 145 Solution: actionability, rule of, 223 bias, 108–109 parameters, 132–136 Sponsoring executives. See Executive conversations Stance, 7 Stereotypes, negative sales, 21, 23, 27–28, 30, 62, 81 Stress: credibility and, 18–19 customer, 172–173 Style. See Communication style Symptoms, focus on, 177–179 Synergy, 166 Systems, 77–81, 104 Technology companies, 40 Thinking, conventional versus diagnostic, 29 Time frame/timing, 137, 154, 156 Total cost of ownership (TCO), 185 Trends, 209–210 Trust: credibility and, 3 Gallup survey (2004), 25 in upward reinforcing cycle, 56 20-second rule, 99–100 Unasked questions, 20 Up-selling, 175 Upward reinforcing cycle, 56 Validity, rule of, 221–223 Value, 31–51 absence of: cost of, 20–21, 192 customer’s customers and, 91
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238 Value (Continued) negative present, 49–50, 136 symptoms, 90 validation process, 49–50 value triad, 43, 44–45 burden of proof, 39–41 clarity of, 43 overuse of word, 32 sources of, 34–35, 42–43 spectrum, 46–48 translating, 41–45 uses of, 44 validity and, 221–223 viable sales opportunity delivering, 5 Value-achieved stage of lifecycle, 50, 51 Value-assumption stage of lifecycle, 49–50, 51, 104, 221–223 Value assurance, 32, 163 Value capability, 45, 77, 88, 94, 219 Value delivery: confirming and communicating, 175–178 system, 34 Value Diagnosis, 56, 184 Value-expected stage of lifecycle, 50, 51
INDEX Value gap, 40–41 Value imperative, 32 Value lifecycle, 40, 48–51 Value-proposition stage of lifecycle, 48–49 commoditization of, 33–36 defined, 34 history of concept, 32–33 term coined, 34 trivialization of, 35–36 value lifecycle and, 48–49 Value relevance, 58–62, 90, 92–93 Value-required stage of lifecycle, 50, 51 Value requirements, 44, 45, 46, 47, 49, 50, 77 Value strategy, 32 Value triad, 42–45 defined, 42–45 leveraging, 46–48 Vendor pool, 90 Wilson, Timothy (Strangers to Ourselves), 17 Working harder versus smarter, 63