Thursday, December 15, 2016

Beware of False Prophets

Sometimes the salesperson gets sold.

It happens slowly, beginning with a “great meeting” with a senior executive at the client. This executive shows genuine excitement with the opportunity you present. He is the “industry guru” for this function: the “pharma data” guru,” the “logistics” guru or the “government compliance” guru. If he gets behind this deal, it will become an “industry utility,” a potential joint venture, a billion dollar business. He tells you he can “get it done.”

You rush back to your leadership and breathlessly tell them about this deal that will change the industry! “Mr. Big at XYZ Co. says he can push it through the company! He can’t wait to get started!”

In your excitement, you don’t do your due diligence around Commitment and fail to dig into the key questions to qualify the deal:

  • Does he have the authority to say “yes” for this level of financial commitment? (Come on! He’s a senior executive! He just needs to bring the CFO up to speed about what it means for the company.)
  • Has he addressed all internal approvals? (Don’t worry! Mr. Big said he has the authority to push this through.)
  • Does he own operations and/or the P&L? (Are you kidding? This is a cost saving opportunity the COO will jump at!)
  • Has he followed the company’s typical buying process, including procurement? (No problem! He can handle procurement! No need for a competitive bid! He’s buddies with the CEO.)

Beware of the False Prophet.

The False Prophet is the seemingly “plugged-in” executive at the company who, usually with good intentions, personally gets involved with the deal and seems to have a power to make lower-level executives (who speak of him with reverence) jump because of his authority. The False Prophet will have you spending money on “pilots” and get you to set expectations within your own company of a huge deal coming “in the next 30 days.” And those 30 days never seem to end as delays and new stakeholders and new questions arise.

By the time you realize that your deal is a pipe dream, you’ll have spent your whole business development budget, have no agreement on pricing or scope, and have your management asking you, “Tell me again how you thought you would get this deal done?”

Here’s a quick piece of guidance: New executives can’t make old companies take big risks in new ways.

What that means is this: established companies have a process on how they buy goods and services. Your job, as a salesperson, is to know that process and who controls it. If you don’t know how your client buys you won’t know how to sell. And if a new client executive gets excited about your market-making idea and says he can get it done on his own authority without following the process, it’s time to do your homework on him. In fact, you may be able to add value by educating him about his own company’s policies and procedures, and you will make a trusted ally. More importantly, you will avoid allowing a False Prophet to lead you astray of your sales plan.

Thursday, November 10, 2016

Something is Wrong

Years ago I heard a story about my grandfather, Henry Dieffenbach, and how he handled a dispute between my aunts, Helen and Eleanor.

Helen and Eleanor were teenagers at the time and they were fighting over whose turn it was to do the dishes. Again.

My grandfather, who was a piano player for silent movies in New York City in the 1920s, was on his way out to work for the evening show. He had heard them fight before, many times. This would, in fact, be the framework of their relationship for their whole lives.

Henry listened to Helen and Eleanor bickering. Then he made a decision. He reached over, lifted the dishes out of the sink, walked to the basement doorway and threw the dishes down the stairs.

“Now no one has to do the dishes,” he said. That got their attention. And then he went to work.

Tuesday night I watched the election results with surprise, like most everyone else. We had been told by the experts what we should expect and the outcome was exactly the opposite. What happened?

Half the country threw the dishes down the stairs.

The easy answer is for one side to say the other side doesn’t know what they voted for. They got conned. But tens of millions of intelligent, well-informed people voted Tuesday and half of those well-informed people had something to say: No one is listening to our concerns. No one is addressing our problems. We want to be heard.

So rather than one side dismissing the outcome as the result of a bunch of ignorant "deplorables" surging on our electoral process, maybe we should acknowledge: Something is wrong.

I’ve been a part of and settled many disputes in my career and what always fascinates me is how blind one party can be to its own faults while blaming the other side. That drives the other party crazy. People usually behave in a rational fashion to fulfill their own self-interests. In the case of the election, no one voted to make America worse. They voted to make America better… for themselves. What we now have is the result of 59 million people saying, “No one is paying attention to me, so I am voting for change.”

Set aside the news highlights of the bad behavior, comments and t-shirts from some of the rallies. Those highlights don't tell everyone's story. And don’t ascribe all voters’ decisions to the worst things a candidate said. Interviews I watched with voters Wednesday showed normal, caring, middle-class and working-class people who said, “We’re tired of struggling for decent jobs, paying high taxes and not being able to afford a better life for our children.” One 65-year-old former factory worker said, “I didn’t like the choice I had to make, but I wanted to send a message.” He was not alone in his sentiments, and that message came crashing down on us all on Tuesday. Now it’s up to all of us to get to work and answer that request for help.

Tuesday, October 4, 2016

Your Eyes Are Bigger Than Your Stomach

My friend, Mike, called me several months ago for some advice. He was working on a potential $200 million outsourcing deal with a large manufacturing company. (Yes, I know, the word “potential” is a spoiler!) The company wanted to reduce operational costs by outsourcing a critical business function to Mike’s company. This was a sole-source deal, which means there was no competition for the work. The deal was Mike’s for the taking!

The work Mike’s company was going to do involved gathering test data and reporting it to a regulatory agency. In the course of the discussions, Mike’s company realized that all companies in this industry had to gather this test data and report it to the same agency.

One of the senior executives in Mike’s company got what he thought was a great idea: let’s use this first client to create an “industry utility,” meaning a service open to other companies in the industry so they could drive down their costs. The conversations with the client quickly escalated to forming a joint venture.

Mike wanted some advice on how to structure the joint venture.

I said, “Mike, no two words will waste more of your time than ‘joint venture.’ In my career I have never seen a joint venture result in the benefits the parties sought, assuming they ever got it formed in the first place.”

Mike said, “No, no, we’re both aligned with this. It’s going to be a billion dollar business!”

“Mike,” I said, “The client asked your company to help them reduce costs. Here’s my advice: Don’t sell the client the deal you want. Sell the client the deal they need. Because even if you’re successful selling them the deal you want, the client will quickly try to find a way to scuttle the deal because they never wanted it in the first place!”

Mike insisted I didn’t understand and hung up.

Needless to say, the deal never came to fruition. The parties got into such a tussle about whose executives would run the joint venture and what the ownership percentages would be that they lost sight of the original deal. In the end, the client’s leadership found another path to cut costs and Mike lost a $200 million deal.

When I was a kid and complained my stomach hurt because I ate too much, my grandmother used to chastise me: “Your eyes are bigger than your stomach.” Sometimes in sales this is true as well. A client asks us for help and, before we know it, we are proposing a program we think will solve all their problems! Our eyes get bigger than what the client can stomach.

The moment we start proposing work that the client didn’t ask for, we have shifted from close advisor to self-interested sales person. And that tinge of self-interest destroys all the trust we worked so long to build. Focus on the deal that helps the client, not the one that helps you. That is how you will build lasting, trusted relationships.

Friday, September 16, 2016

You Were Always Going to Lose

“We decided to go with another vendor.”

Ouch! Those dreaded words. To a sales executive they are like a punch in the gut. After all the time and hard work on a proposal, you suddenly feel like the other guy at the end of the romantic comedy that the girl didn’t choose: “But you said you loved me! What did I do wrong?”

A good sales executive should know well in advance the chances of winning. If the likelihood of being selected is less than 50%, you shouldn’t be surprised when you lose. You were always going to lose!

And why you lose is not the inverse of why you win. In other words, if you did the opposite of everything you did on that path to failure, it doesn’t mean you would have been on a path to success. The reason why is simple: There was never a real chance to win. So different decisions would have changed nothing. Bidding on work that could be decided by a coin toss is a waste of company resources. That money and effort should have been spent on a deal you can win.

This is what makes rigorous deal qualification so important. Assess where you stand on:
  • Relationships
  • Trust
  • Prior performance/reputation
  • Competition

Those are the Big Four. Note that price is not on that list. Less disciplined sales leads often blame price for their failure to win. The truth is if you’re weak on one of the Big Four, your chances of being chosen are much lower even if you have the lowest price.  Who would buy from a company with the lowest price if it had a poor reputation for performance? Bad work doesn't get better because it's cheap.  

What can we do differently? Here are a few starters:
  • Qualify with the help of an objective executive who will question your hype.
  • Set expectations. If you’re going after a deal that’s a long shot, tell leadership, “This is a long shot.” Take the pressure off yourself. (And if you’re up against an incumbent, it’s always a long shot.)
  • Be realistic. If your company had a major failure with this client, even though the CIO is saying “that’s all in the past,” you’re a stalking horse. The client will keep you bidding to the end to drive down price.

Finally, keep asking yourself “why?” Given all of the circumstance surrounding the proposal process, why would the client pick you? If you can’t think of a truly compelling reason, pack your bags and find a better deal to chase. You don’t want to end up all teary and heartbroken, like the losing guy in the rom/com.

Thursday, August 4, 2016

Or We Could Do It the Right Way...

The legendary comic actor W.C. Fields famously said, “Never work with children or animals.” But not because he didn’t like them; because they are unpredictable.

Fields, who started his career in vaudeville as a juggler in front of live audiences, knew that unpredictability is not a welcome ingredient for a successful performance.

The same is true in sales. When making a presentation to a client, or going into orals or “yellow pad” sessions for an RFP, unpredictability or spontaneity are potentially disastrous. The path to a successful sale is built on rigorous preparation: mastery of the substance, understanding the process and lots of rehearsals with your team to find out strengths and weaknesses.

During a presentation for a software product some years ago, the company I worked for at the time put a highly-experienced technical lead at the front of the room to execute the demo. One of the client’s executives watched with interest, and then interrupted the presentation to ask: “Well, couldn’t you also do it by bringing the data through those other fields instead?”

Our technical lead paused, clearly displeased by the interruption, and said, “Well, yes. We could do it your way. Or we could do it the right way.”

In W.C. Fields’ world, that was the equivalent of the trained dog relieving itself on the people in the front row.

We did not recover from that gaff but I learned an important lesson early in my career that is part of my preparation for any major presentation: rehearse under stress. Before meeting with the client, put the presenters up in front of the room and subject them to a barrage of difficult questions. Get emotional. Yell. See how they react. Clients can always be unpredictable in their behavior, but I can’t have surprises from my sales team!

So I want to see how my team will deal with the worst I can throw at them. Will they wither? Falter? Or will they maintain composure under fire. We can’t always predict what clients are going to say. But as a sales strategist, I make it my goal to know how my sales team is going to respond.

Tuesday, July 12, 2016

You Can Only Sell Ice to Alaskans Once

A young sales professional once said to me, “You could probably sell ice to Alaskans.”

I said, “That might be true, but it could be the last sale I ever got in Alaska.”

People who are new to sales often have the perception that getting someone to buy something that they don’t need (like ice to Alaskans, get it?) is the hallmark of an effective sales person. Certainly, having the ability to make money selling useless products and services is a rare skill, but it’s not a sustainable business practice. Once buyers realize they have made a bad purchase, they will never buy from that sales person again.

Ultimately, clients buy from sales people whom they trust, and building a trusted relationship is the hardest task to accomplish in business. To build a strong, trusted relationship, a sales person first must sell himself, namely, that he is someone with integrity; someone with competence; and someone who cares as much about the client’s success as he cares about his own. This requires an uncommon level of character, experience and empathy to build a solid reputation in the industry. Once established, that reputation becomes the pre-sale: before walking into the room, clients already have expectations that they are going to deal with a trusted business partner, not a huckster.

Clients may forget the details of the last deal they did; but they will always remember how that sales person made them feel in doing that deal. And if they feel they were not treated fairly, such as being sold ice in Alaska, the client will freeze out that sales person from any future deals.

Friday, May 20, 2016

The Difference Between Gold and Silver

This past week I had the opportunity to hear a presentation by Charlie Houchin, who won a gold medal in the 4x200 meter freestyle relay with the US team at the 2012 Summer Olympics.

Charlie achieved the highest level of success anyone can reach in that sport. The world doesn’t recognize anything higher than Olympic gold.

So I asked Charlie: what’s the difference between gold and silver? To be the best at what he did, better than a whole field of outstanding athletes, what made him unique? Was it effort? Attitude? Talent?

Charlie’s answer surprised me at first: he said it’s “technique.” He explained that every athlete competing in the Olympics works hard, spends long hours practicing and had a highly competitive attitude. Those are table stakes. Without those elements an athlete won’t ever compete in the Olympics. To win, however, the athletes have to have the ability to execute the proper technique for the sport as close to perfection as possible.

When I thought more about Charlie’s answer I realized I should not have been surprised. In the language of sales, he was referring to “best practices.” The sales team that will win the gold medal is the one that executes as closely to best practices as possible. The difference is, in sales, there’s no silver medal! You either win the deal or go home with the other losers.

I don’t know the proper technique for swimming a leg of the 200-meter freestyle. But in a competitive engagement I know to focus on best practices in:
·         Preparation for the engagement
·         Building and managing a high-performing team
·         Establishing a strong, trusted relationship with the client
·         Achieving success for the client first

Adherence to those best practices in deal-making is the difference between us getting the gold (winning the deal) and silver (nothing).

Monday, April 25, 2016

Go to Bed!

My wife, Anne, and I have raised five wonderful children, so we have had a fair amount of experience negotiating with toddlers and teenagers.

The scenario that resonates with most parents is the ritual of trying to get a small child to go to bed. It starts with the sing-songy voice of, “It’s beddy time!” and a reply of “I want to stay up!” (Insert stock picture of toddler with arms folded and a defiant face.) It often ends with a parent’s order: “Go to bed!”

Looking back, I missed a great opportunity for an enriching personal experience. Because, rather than saying, “Well, you have to go to bed,” I should have said, “OK, what do you need?”

Clients often express themselves in this way, by announcing what they want as opposed to what they need. Like the classic story of the customer who walks into the hardware store and says, “I want a drill.”

The salesperson replies “What kind of drill?” The customer looks confused. The customer doesn’t know anything about drills! So the salesperson introduces the customer to a wall of drills. What the salesperson should have said was “For what purpose?” Because the customer doesn’t need a drill; the customer needs a hole! So the customer has really come to buy a tool that will give him the right hole. When asked, “For what purpose,” the customer would have described the project and could have quickly purchased the right drill.

So when my child announced, “I want to stay up,” I should have asked, “OK, what would you do if you stayed up?”  Now I can find out something about my child: imagine the possible answers! They may give me clues to even deeper needs that have escaped my attention:

·         “You could to read to me” (I’d like to spend more time with you)
·         “I could have a snack” (I am still hungry)
·         “I could get a drink of water” (I’m thirsty)
·         “All of the above” (I’m four years old and am developing a sense of identity and I don’t like being told what to do all of the time!)

Looking back, I suspect that last bullet point was at the heart of many of the issues we had to work through with our children. We responded to their “wants” with our conflicting “wants”—such as “I want you to get enough rest otherwise you’re cranky” or “I want to get my one hour of quiet time with your mother” —instead of addressing their developing “needs” as they were maturing:

·         I need to be heard
·         I need to make my own decisions
·         I need to feel respected
·         I need space to grow

I have learned over the years to pause, listen, and ask questions when I hear “wants” to reveal the client “needs.” In this way, I can provide professional services that exceed expectations and build lasting relationships.

·         I want a price reduction (I need help fitting this into my budget)
·         I want references (I need to know how you work with clients)
·         I want your best people (I need confidence that you will be successful)

So, after almost 25 years, I am pretty good at teasing out client “needs” from the “wants.” Funny that, only now, I am realizing that those lessons were there for me to learn long ago in the form of a defiant toddler in pajamas.

Thursday, March 3, 2016

Grow Your Client Like a Lobster

A rabbi on YouTube got me thinking how client relationships are like lobsters.

Renowned psychiatrist Rabbi Dr. Abraham Twerski posted a short video on how to deal with stress. Rabbi Twerski describes how a lobster grows inside of a rigid shell until the shell becomes constrictive. The lobster feels pressure, discomfort, sheds the shell and grows a new, larger one, which it will eventually outgrow and repeat the cycle.

Rabbi Twerski relates the growth pattern of the lobster to stress that people deal with daily. He notes that stress, like outgrowing the shell, is inevitable; but working through it leads to personal growth. The same is true of our client relationships.

Unlike the old adage, the client is not always right. The client is often wrong, and so is the service provider, and both can be wrong at the same time. Because they don’t want to make waves, however, undisciplined service providers will buy their way out of the dispute with concessions. They rationalize throwing money away saying they are "investing in the relationship."

The cost they assign to it is the amount credited back to the client. The real price is actually much greater because the relationship has failed to grow. In fact, it shrank a bit. The client lost a little trust, a little respect, because the client knows that the service provider had validity in its positions. This behavior also establishes a pattern with the client that, whenever there is a dispute, the service provider will buy its way out regardless of fault.

Instead, use conflict as an opportunity to test and improve your client relationships. The measure of the quality of a client relationship is not how the parties work together when things are going well; it’s how they work together to resolve disputes. In fact, when a relationship successfully endures stress, it grows larger and stronger. More senior people get engaged, maybe for the first time. The parties may see each other in a different light: vulnerable, facing the risk of failure. If we can be transparent, honest and unemotional in our resolution of a stressful situation, we will emerge from under our smaller shell and be ready to grow into a larger one.

To quote Rabbi Twerski: “If we use adversity properly, we can grow through adversity.”

Here is a link to the video: https: //

Wednesday, February 10, 2016

Why Are You in the Woods?

“This is what the client is demanding. They have been saying this for months. I know we don’t usually do it this way, but if we say ‘yes’ now we might get the deal closed and make our quarterly numbers.”

These are words of deal desperation. We’ve all heard them. Some of you may have even said them. The last chance plea to management to agree to some wild concession that will make the deal happen and the world will be beautiful again.

But did you ever notice those words often come from the same source? The same sales lead ends up in the same situation, quarter after quarter, asking for a big concession to get the deal done?

It’s like the golfer who is standing in the woods, lying 3 on a par 4. He says to himself, “I have to hole it from here to make par.” Never mind that he has to hit between three trees, over a trap and roll uphill to the flag. He’s swinging for the hole instead of just trying to set up his next shot, which he will undoubtedly have to take.

And when he misses, he is frustrated that he’s still in the woods and blames everyone and everything without answering the real question: Why are you in the woods? How did you end up in a situation where you need to be successful on one desperate shot to make your number? Did you make a plan for the hole? Or just take out a driver and swing as hard as you could?

In sales, it’s called a “closing plan.” The best sales people make a strategic plan for getting the client from proposal to signature. Understanding buyer values/business requirements, building trusted relationships, generating options and setting expectations as to what is possible and what is not.

A client who wants a fixed fee or “not-to-exceed” price, for example, needs to know that such a price is possible provided the scope of work is defined and fixed. Allowing clients to change scope and not telling them immediately that every change can impact price is a fast path into the woods. You’ll be talking to your management about doing 20% more work for the same price and begging for a concession to get the deal done. Maybe you’ll get lucky one time; but without a change in behavior and better planning, your partners will soon find another player who doesn’t make the game seem so painful and frustrating.

Thursday, January 7, 2016

I Hate My Client

“If you don’t walk into the client’s building every day, excited about the opportunity to help solve their problems and make them successful, then you should leave this company.”

I had the privilege of leading a sales training program with Paul Rudolph, a former colleague with over 25 years of experience in sales and client service. That was one of his opening lines to a group of experienced employees.

Not new employees. Experienced employees.

Because Paul knew that new employees are not jaded. They are excited. They have great expectations. They are filled with great ideas.

Experienced employees, who have been on a client account for three years or more, are tired. They are frustrated. And if you were to ask what they thought of their job, many might say, “I hate my client.”

Paul’s point was if you’ve reached a point where you don’t understand the purpose of being a service provider, then go do something else. The client is our lifeblood and the essence of our business was striving to take the client’s breath away with our attitude and performance. Every day.

Often, a long-term relationship between an existing client and a service provider can devolve into what feels like a bad marriage: the parties feel stuck with each other, can’t communicate well and wish there was a way out. In other words, the romance is gone.

To be successful in the services business means to be in the romance business. Keep the spark alive, always making the client feel special, important and loved. Because right outside the door is the competition, with a smiling face, joyful heart and readiness to make this relationship feel amazing.

If you don’t treat an old client like a new client, they’ll soon be an old client.