Tuesday, March 27, 2018

No Cinderellas in Sales


This weekend the men’s NCAA basketball championships semi-finals will feature an improbably entry, much to the delight of millions of fans: a Cinderella story. For the first time in history, a team initially seeded at 11, Loyola University of Chicago, has made it to the Final Four.

What I enjoy most about March Madness are the upsets. Seeing “underdogs” with passion and drive upset the established seeding and throw everyone’s brackets out of whack. The concepts of teaming, practice, focus and achieving a singular goal (closing the deal) are all relatable to sales people.

But there are no Cinderellas in sales.

Despite how badly a sales team may want the business, how passionate they are about bringing their service or product to the client to solve a problem, big deals are won by the top seeds.
I have been the “bottom seed” a few times and if desire was the winning element, I’d get the deal every time. Here are three lessons I learned from being at the bottom:

  • Clients buy risk reduction. Unlike other disciplines, the technology services industry is not a place where businesses say, “Hey, let’s take a chance on these new guys” when the deal involves heavy lifting. No one wants to get fired for making a bad choice.
  • Get famous somewhere else. If you don’t have the credentials for this deal, figure out how to get them. Either focus on a vertical (retail) and make your name there, or focus on the sweet spot of your business (data analytics) and build market awareness of your expertise. Those become your springboard to other verticals, other services and bigger deals.
  • Focus on service. In the end it’s references that can swing a decision in your favor. Even if you have had a few hiccups on delivery, good customer service (integrity and communication) will save the reference. In fact, having a reference acknowledge to a potential client that there were problems (and there are always problems) but you made everything right is a powerful reputation to have. You’ll become known as the top seed.

That said, I am cheering for Loyola, the Cinderella, even though I have Kansas to win. Maybe it’s my Jesuit education; maybe it’s the charm of Sr. Jean, their 98-year-old chaplain. I really think it’s wanting to be further inspired by a group of young men who have worked so hard to accomplish something they were never expected to do.

Wednesday, February 14, 2018

A Bad Marriage

I can’t remember the first time I heard someone say it, but I have heard it dozens of times since then: a bad deal is like a bad marriage.

The comparison is a convenient though imprecise one. Given this is Valentine’s Day, I thought an article that connects sales and romance would be appropriate.

How is a deal like a marriage?
·         Emotion plays a large role in the decision to make a commitment.
·         Once the deal is done, there is a “honeymoon” period.
·         The relationship can last for years if each party is willing to work at it.
·         A fruitful relationship will produce offspring/follow-on deals.
·         Money is often the most difficult topic to address.
·         Good listening skills will always improve the relationship.
·         Termination of the relationship can be expensive and emotionally draining.

How is a deal not like a marriage?
·         A successful deal has multiple relationships of executives on both sides. Multiple relationships are generally not a good thing in a marriage!
·         The balance of “power” is not the same. In a deal, one side is typically “serving” the other’s needs. A marriage should strive to be a relationship of “equals” who treat each other with love.
·         In a successful deal, each party understands its “responsibilities” and service levels are clearly defined. In a marriage, roles and performance are often a topic of discussion!
·         A successful deal is typically negotiated with an end or outcome in mind. A successful marriage is “'til death do us part.”
·         In a deal, the service provider is always aware that the competition is “just outside the door.” In a marriage, that is called a “stalker.”

So, though not exactly alike, what are some of the shared characteristics of a bad deal and a bad marriage and what can we do to improve both?
·         Frustration with the other party’s behavior: Communicate. In a deal this is called “good governance.”
·         Failure to meet expectations, whether realistic or not: Be flexible and understanding. Maybe the other side oversold, but it doesn’t mean the relationship won’t flourish.
·         Seemingly “irrational” reactions: Ask and listen. Often one party’s reactions are driven by our own behavior and we don’t recognize or can’t admit we are the source of the issue.
·         A desire to terminate the relationship: Seek help and problem solve. If the parties believe there is merit in the relationship, bring an objective party into the conversation to offer options on how to improve it.

Happy Valentine’s Day and good luck with all your relationships!

x

Thursday, January 18, 2018

I'm Allergic to Nuts!

One of the advantages of owning an Italian restaurant is that just about everyone who comes in wants Italian food. It would be an odd thing for a customer to sit down in an Italian restaurant, look at the menu and say, “I don’t like anything I see. Can you make General Tso’s Chicken?” Customers choose the type of restaurant they want to go to, so it’s much easier to sell to them.

Sales people don’t have that advantage. When talking with a potential client, the first task is to understand what the client wants and what the client needs. (Those two things are not always the same, by the way.)

Before I start selling innovation, I need to understand if the goal is to bring technology advancements into business operations. Maybe the goal is to drive efficiency. Maybe to improve performance.

Many salespeople will guess what the client wants most, and they conclude (often mistakenly) that it is price. So they lead with a discussion on price, sometimes offering discounts right out of the box! Why would anyone begin by discounting price without even knowing if price is the key buyer value? It’s like throwing a plate of pistachio-encrusted tuna at the customer and say, “Eat this! This is delicious!” You may get an angry response, such as: “You idiot, I’m allergic to nuts!”

Here’s a simple way to test if you understand what is driving your client’s appetite: ask questions. And then ask more questions. And listen. A good opening question that can generate a lot of valuable insights if you listen to the answer is: “If this were to go exactly as you want it to, what would success look like?” The client might say:
·         Success would be all of our legacy data is successfully migrated to the new platform. We’ve tried twice and failed.
·         Success would be greater efficiency in our operations so we can sunset applications.
·         Success would be ease of scalability and flexibility in the solution because we anticipate rapid growth in the next five years.


Sure, they want it at the best price possible. No one wants to overpay. But once you dig in more to these goals of dependability, efficiency and flexibility, price becomes secondary. To lead with a pricing discussion without understanding the buyer values would be… nuts.

Wednesday, December 13, 2017

Here Comes Santa Claus...

Yes, it’s that time of year when boys and girls all over the world anxiously await the arrival of that special person in the suit who will bring them gifts and joy to finish out the year.

No, I am not talking about Saint Nick, the jolly old elf. I’m talking about the company executive who shows up in December to give away discounts to clients to close deals and make sales quotas.

You know, “Help.”

“Help” is a noun, not a verb, as in “here come ‘Help.’” It’s a term used by deal makers when their management decides they need to get involved to “help” push the deal “over the line.”

In fairness, sometimes a deal team can use an objective perspective to close out some nagging issues that the parties can’t seem to resolve. In December, however, Help usually arrives as a result of a gaping hole in the sales forecast that needs to be filled with some fast closings.

When I worked for a software company, where December 31 was the end of the fiscal year, the rumblings about Help would begin soon after Thanksgiving. If I heard that Help was coming to see me, strains of the theme to “Jaws” would start playing in my head: a pounding rhythmic pulse of foreboding.

The client, on the other hand, hears, “Here comes Santa Claus, here comes Santa Claus…” That’s because for the client, Help was an executive with a big bag full of goodies that the executive couldn’t wait to give away. And then the executive would crow about being the one who closed the deal.

If all it takes to close deals is giving away money, management should send an ATM into the negotiations instead of an experienced deal maker.

The problem with Help is: not only does the client get a bunch of money in exchange for nothing in return (which trains the client that it can get a bunch of money in exchange for nothing in return), but sometimes Help results in a bad deal.

All deals need time to develop. The more the parties talk, the more they learn about each other’s real underlying interests, challenges and goals for the transaction. Sometimes, as the deal takes on its shape, the parties find out they are misaligned and decide to hold off for a while. When Help forces a deal by throwing money at the client to get a signature, all the ingredients for success may not be mixed in and the engagement may suffer.

When making a cake, for example, one usually mixes everything together and then bakes it for 45 minutes at 350 degrees. You can’t say, “We don’t have time. Let’s fire it up for 10 minutes at 1,000 degrees and we’ll worry about sugar later.” That’s a recipe for a bitter outcome. Given the right amount of attention and time, a good deal will rise and a bad deal should fall. Unless it gets Help.

Tuesday, November 21, 2017

Thanks for Nothing

I’ll never forget the Thanksgiving week when I almost saved $9 million.

It was the Tuesday before Thanksgiving, 15 years ago, and I was negotiating with a software company for a license to one of their products. The price on the table was $18 million.

The salesperson called me and said, “If you sign before Thanksgiving, I’ll cut the price by 50%.”

Wow! What a deal! You’d think I’d have gone back to my chief operating officer and said, “My brilliant negotiation skills saved you $9 million! We just have to sign the contract tomorrow!”

I did not. I told the COO we would not take the offer. The contract was not ready and I would have had to call in all kinds of favors internally to make the deal happen in 24 hours during a holiday week. Instead, I told the COO: “The sun will rise and the sun will set on Thanksgiving and we’ll still pay $9 million next week. That is, if we want to do the deal.”

The salesperson was furious when he found out I wouldn’t sign right away. “You should be thanking me for saving you so much money!” he yelled.

“Thank you?” I said. “You just showed me how much you were overcharging me! And you revealed that when you said this was your ‘best price’ you were not being truthful. Thanks for nothing.”

In the end, we did not sign the deal. As a result of the salesperson’s behavior we reevaluated our needs and decided to go with another product.

It was a rookie mistake on the part of the salesperson. Offering a drastic discount does not motivate a client. It raises suspicion. A client starts to ask, “How many other deals have we done where I didn’t get that discount? How long have I been overpaying this vendor?”


The salesperson was clearly trying to meet some internal sales deadline. He must have thought a fading opportunity strategy was the best path to influence. His error was acting in self-interest. His goal was not to give, but to get. And nothing will destroy trust faster than a party’s self-interest. To paraphrase the great English sales strategist, Bill Shakespeare: self-interest is the green-eyed monster that mocks the relationship that both parties should seek to build.

Tuesday, October 17, 2017

How to Blink

I can’t find a book on how to blink.

I went on Amazon and found a book called, “Blink.” It has nothing to do with blinking. Malcolm Gladwell, you fooled me!

I think I know why there is no book on blinking: no one needs an instruction book on how to blink. It’s a reflex. We just do it.

Maybe that’s why there are so many books on sales. It’s not a reflex. People have to learn.

But what if we could make parts of the sales process a reflex? A reflex is an action that is performed in response to a stimulus without conscious thought. Imagine what an awesome salesperson you could be if you were selling without even thinking! Can we really teach people how to make sales a “reflex”?

No.

And that’s what every good salesperson knows: there is no response you should give to a client without conscious thought. Because the first thing you have to do is listen. Active listening requires effort. It requires concentration. It requires analysis.

In short, selling cannot become a reflex. It’s a complex activity. And it’s hard.

So beware of anyone who tries to sell you the “secret” of selling (N.B: if it’s advertised it’s not much of a secret) or a “fast-path” or “sure-fire” way to sell. Each sale is as unique as the buyer.

What you can do, however, is develop good habits. While not as automatic as a reflex, a habit may be the next best thing. Here are three that will improve your results as a sales person:

  • Do what you said you’d do when you said you’d do it. If you get in the habit of always following through on your commitments, you’ll build trust with your clients. Trust grows accounts.
  • Shutup. Stop trying to sell and listen more. Get in the habit of asking questions, not making statements. You can’t provide a solution unless you understand the problem. When clients perceive you are trying to understand their issues and help them succeed, it builds trust with your clients. Trust grows accounts.
  • Admit the truth. If you made a mistake, admit it. If the competition is better at something, admit it. If you get in the habit of being truthful and transparent with your clients, you’ll have greater credibility. Credibility builds trust with your clients. And, guess what? Trust grows accounts. 

Friday, September 29, 2017

The Lady of the House

I remember the first time I got a phone call from a salesperson asking to speak with “the lady of the house.” (Remember those days? When your telephone hung on the wall and rang?)

Though I married the “lady of the house” 31 years ago, this was already an outdated opening line. It echoed of black-and-white TV shows from the 1950s where a vacuum cleaner salesman in a suit and fedora was standing on someone’s front porch selling door-to-door. Today, asking for “the lady of the house” would be properly derided as sexist, perpetuating negative stereotypes of women.

From a sales perspective, though, the question had logic: I want to speak to the buyer, the person with the problem that my product can solve. The vacuum salesman wanted to sell to the key decision-maker on buying household appliances.

It’s a fundamental principle of sales that I find many salespeople today don’t appreciate, namely, that having a conversation with a client employee is not “selling” unless that employee has the authority to make a decision and buy. If you’re pitching your product or services to anyone other than the person who can and will make a purchase decision, it’s a waste of time.

“Can” and “will.” And you need both criteria.

“Can” means the individual is empowered to commit the organization to enter into a deal. That individual controls the P&L, has a budget and/or manages the “buying process,” such as a procurement professional.

“Will” means that, given the appropriate criteria, that individual will make a decision to do a deal. They are ready to buy. The criteria may be meeting specific requirements or determining that your value proposition (better/faster/cheaper) has merit.

More simply put, you can’t close a deal with someone who can’t and won’t make a buying decision!

So when putting together your power map of the client organization, be sure you’ve identified who the “buyer” is. Validate why that person is the “buyer." Maybe it’s been made clear in an RFP. Maybe you’ve tried to sell to this company before. If you’re not sure, ask. “Can you tell me what the process is for us to get this to signature?” (Read “The Five Hows of Sales” for other questions to ask yourself. http://dealwhisperers.blogspot.com/2012/02/five-hows-of-sales.html) Knowing you are selling to the right person will save a lot of wasted time and allow you to focus on understanding the client’s goals and building your relationship so you can collaborate on how to make the client successful.
  

And, for the record, “the lady” of our house did not buy our most recent vacuum cleaner. I did.