President Obama directly links transparency to economic performance.
In his inauguration address, he asserted “…those of us who manage the public’s dollars will be held to account, to spend wisely, reform bad habits, and do our business in the light of day, because only then can we restore the vital trust between a people and their government.”
Lately transparency has been in short supply.
Offices for sale. Ponzi schemes. The former mayor of Baltimore has just been indicted on charges that she accepted illegal gifts, including gift cards intended for the poor that she allegedly used instead for a holiday shopping spree.
Whether with respect to government, or to building client relationships, transparency is at the very root of trust.
That may seem obvious. Motherhood and apple pie. But for those of us with a career background in sales, transparency requires deprogramming. We were taught:
- Never share a weakness
- Never admit a competitor strength
- Never share cost information
- Always get as much margin as you can
- Don’t share information that could decrease your ability to close a sale
Oh yeah, and be customer focused.
What goes around comes around. In the long run, the truth inevitably bubbles to the top. You can get credit for saying it—or blame for resisting it.
As Charlie Green said in a HuffingtonPost piece, “If we see someone as being transparent, then nagging questions about motive disappear. We no longer speculate about, ‘What’s in it for him? What’s the hidden meaning? Why’d he say that? Is he lying?’ and so on. We accept the person at face value for what they say, even if–sometimes, particularly if–what they say reflects imperfection. That works in sales and in politics.”
Yet, we’re trained to go in and come back with information that will close the sale. Hunt it, kill it and bring it back to eat.
- What if, instead of dancing around an answer we don’t know, we just admit we don’t know?
- What if, instead of promising something we probably can’t deliver, we admit that and then tell them what we can do?
- What if, instead of offering “teaser” pricing and then covertly getting it on the back end, we share our cost structure?
These examples are counter-intuitive–downright treasonous in some circles.
Without the pretension, void of false promises and out on a limb – we are, admittedly exposed, naked and vulnerable.
But wouldn’t you rather buy from a seller who is willing to show you his cards, even if–perhaps because–you both know it might cost him the sale? That visceral reaction works in reverse when transparency dominates relationships (think Madoff, Blagojevich).
Transparency creates a powerful pull toward you. It also, by the way, lets you sleep easier.
Comments (0)Posted January 21, 2009
In an effort to turn the tide on sputtering revenue numbers, sales organizations will, no doubt, ratchet up the pressure on sellers to hit their quota targets.
Many will seek a fool-proof formulaic anecdote to remedy their ailing top line. The more science integrated into their turn-around plan, they posit, the more control over it’s success, or so they presume.
Some swear by sales benchmarking as the way to right the ship. With their SFA (sales force automation) application, Landslide Technologies ensures you can “govern the sales process in an effort to drive large deals through the sales pipeline in a consistent manner”.
Just use the SFA application to track your big deals and they’ll pump out new accounts like a canning machine on an assembly line.
Do benchmarks work or are they a desperate attempt to CYA at each level of the food chain in the event of a day of reckoning?
One recent article from a worldwide sales training company described benchmarking as “a sales rep’s GPS, helping to map out routes that were either successful or time-consuming in the past in order to devise a more efficient course”. Ok, so here’s their GPS system:
To simplify this already over-simplistic model: all things being equal, if you make more calls per day (CPD) or increase your close rate (CR) or increase the average size deal (ADS) or if you have more salespeople (SP), you will increase your AS (Annual Sales).
The author of the article lauds this wildly lagging indicator of performance stating, “their (sellers) improved time management efficiency as the result of this benchmarking model will free themselves up from dependence on marketing departments for leads, support and differentiators” (I couldn’t make this stuff up).
Feeling liberated yet? What a relief! Without burdensome leads, support and differentiators from marketing, sellers can work the levers on the benchmarking formula and land on their AS (don’t pardon the pun).
What’s sad is that, some of the largest sales organizations tell their team to abide by their version of the model – or else.
Don’t get me wrong, implementing a systematic way to track and measure sales activity is critical to sales success. Yet, too many sales organization have a knee-jerk response to sluggish short-term performance, by engaging in short-term solutions.
This approach can easily slide down the slippery slope of micromanagement. That’s a recipe for low trust and high turnover. What’s more, the measuring stick is only as good as the measurer.
Eventually, any pretense of quality selling activity will give way to “prettying up” the spreadsheet. “My that’s a good looking chart” says the visiting senior executive from corporate headquarters. Meanwhile, the rest of the team is thinking, “those numbers are all bogus; plugged into the Excel chart the night before to impress the brass”.
Garbage in, garbage out. Anyone can manipulate numbers and populate spreadsheet fields.
When I was managing the mid-Atlantic sales organization for Boise Cascade, the corporate leaders decided to split the sales force into hunters and farmers in an attempt to improve the “cost of sales” ratio (defined as gross sales divided by compensation).
We lost a $10,500,000 deal. Why? We severed the relationship between their rep and the procurement director and they, in turn, severed the relationship between our organizations.
We broke their trust, plain and simple.
Getting back to sales benchmarking … how do you measure lost accounts and missed opportunities because of relationship-based issues? They often don’t show up in the numbers, yet their impact is often an order of magnitude larger than what benchmarks track.
Harvey McKay, who authored the New York Times bestseller, How to Swim with the Sharks without Being Eaten Alive offered a tool that’s a better predictor selling success than all the mathematical formulas, spreadsheet algorithms and sales funnels combined. He assembled a list of questions he named the McKay 66. McKay suggests that relationship-oriented information is king (mostly centered around the client relationship – not their stated needs). He goes beyond the obvious surface questions for example:
- #39. On what subjects (outside of business) does the customer have strong feelings?
- #55. What is he/she most proud of having achieved?
- #58. What moral or ethical considerations are involved when you work with this customer?
Doesn’t it make intuitive sense that knowledge of answers to these kinds of intimate questions reveal more about our progress with a prospect or account than the number of dials, appointments or calls?
Selling always was and always will be, first and foremost, a referendum, not on process and statistics, but on the loyalty developed between sellers who can build relationships with buyers.
Comments (0)Posted January 13, 2009
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Comments OffPosted January 12, 2009
The phone’s not ringi
ng.
The deal’s not closing.
What went wrong?
If you’re in a selling role for any period of time, you know the feeling of an opportunity slipping away.
We’re inclined to accept the client’s explanation at face value or write our own stories about why we’re losing the deal.
We were too high. The competition had a capability we didn’t. The timing wasn’t right.
Often times, we know in our gut that these are only part of the answer. We often accept these as answers because they are concrete, tangible or quantifiable; we can package them and tie them in a bow – they are clean. The truth is often messy, intangible and more personal (thus why the client is reluctant to share them with you).
So what really did go wrong?
What if we pulled back up to a 30,000 foot view to ask a seemingly pedestrian question, what’s the role of the seller?
- Make a sale?
- Provide a ROI for the client?
- Reduce Costs?
- Improve efficiency?
- Meet customer needs?
Yes, yes and yes. But what is the common thread woven through all of these reasonable responses?
The seller’s role is to … create value.
Neil Rackham, author of Re-thinking the Sales Force and Spin Selling summarized his years of research, “The only single ‘truth’ that seems to be holding true for all sales forces is that they have to create value for customers if they are to be successful. Just communicating the value inherent in their products isn’t enough.”
Ok then, what’s value? How do we measure it and what’s its impact on sales revenue and profitability? Let me suggest this simple formula:
Benefits – Costs =Value
We tend to think of costs synonymous with the price we charge, for example – $1,250 plus tax while disregarding “hassle factor” costs. Likewise, we tend to think of benefits as those components that directly help the customer close a needs gap such as improve efficiency, reduce costs, or increase customer satisfaction. However, there’s a critical element that we often underestimate that stacks up on the benefits side of the value equation. We discount a critical but less apparent value, i.e. – the way we engage with the client prior to actually making the sale – the process.
The hassle factor and process “blocks” can tip the scale in either direction.
The diagram below illustrates how benefits, costs, and other “hidden” factors can impact value and ultimately determine buying decisions:
The left side of the scale measures costs and the right side measures benefits. If we project the value formula (benefits – costs = value), the scale tips to a “go decision” at the point where benefits outweigh the costs; anything short of that will result in delays, stonewalls, silence and end up in a “no-go decision”.
However, if we only consider the invoice price, we effectively assign a “hassle” cost of $0.
Aren’t these simply soft costs?
Think about the last time you switched cell phone services. Did you have to re-enter all your speed dials? Did you have to learn new controls? What other hassles did you deal with?
The stakes rise when the client’s decision impacts others. The more risk, the more weight given to the hassle and process factors.
Here’s a short list of “hassle” factor examples:
- If your plan gets implemented, someone’s job changes or gets eliminated
- The pain of changing systems, processes or people (conversion, training, learning curve)
- The challenges associated with obtaining “buy-in” necessary from others
- The other priorities that will suffer
- Office politics
Depending on the client’s perception, these hassle factors could equate to a toe, boot or busload of unhappy colleagues weighing down the cost side of the scale.
On the other hand, here’s some good news. The benefits aren’t always that apparent either. Consider “the process”, that is, the interactions, exposure and perception of you up to this point in the buying decision process. How do they envision their future relationship with you should they say “yes”? In other words, to what extent do they perceive you as trustworthy (have you demonstrated credibility, reliability, intimacy and low self-orientation)? (Hmm, not bad criteria prior to accepting a marriage proposal).
Here’s a secret: clients often won’t share or even be aware of the “hassle” and “process” components of the equation. They would rather use a less personal reason for dismissing your proposal than tell you they don’t trust you. Yet they are always part of the formula, even though you can’t use a calculator to tally them.
The value scale should help you understand why you may be stuck or deals don’t come to fruition. These are my top insights and I’d love to hear yours:
- The value blocks – be prepared to describe your offering in a way that relates to how the client will experience it, not just general benefits. Help them visualize how they use it in their environment. Paint the picture for them. It’s better to say, “When your customers call in with a complaint, would it be helpful if your customer service team has immediate access to a dashboard of critical information?” than to say, “Would you be interested in improving customer satisfaction?”
- The process block – Your perceived trustworthiness is relevant, real and can, at times, be the most heavily weighted of benefits (or show up as a hassle factor on the cost side of the scale). Apply the four trust principles as described in Trust Based Selling (Charles H. Green) – long term orientation, customer focus, transparency and collaboration.
- The hassle block –Listen, listen, and listen. Be aware of the cost factors that won’t show up on your bill that are floating around in the client’s mind. When appropriate, name them and claim them to get them out on the table. If they aren’t dealt with, they can be the elephant in the room that strolls over to the value scale and sits down on the wrong side. Flesh out those thorny issues and address them head on.
When we think about opportunities from the perspective of the value scale, we are forced to see things through the client’s lens. Therefore, we tend to be more customer-focused and less self-oriented. Looking at it from their vantage point can help us trade anger, frustration, self doubt and even price concessions, with a new understanding of how to approach the problem. Sometimes it even challenges us to ask the question, “Are we trying to solve the right problem”?
Considering the impact of the visible and “hidden” factors when considering buying decisions might just help tip the scales in your favor.
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