Prime your prospect and sell more effectively

Today we’ll reflect on the fascinating story of the demise of Kodak, the huge Rochester, NY company that filed for Chapter 11 bankruptcy in January 2012.  During its heyday as a growing profitable company, Kodak employed 145,300 worldwide, and in the 1990s it hit a revenue peak of over $16 billion and a market cap of about $30 billion.

Gregory at Medtronic 10-2010 CroppedToday Kodak has a market cap of $351 million and employs 7,300, destroyed by the inexorable move to digital, which was foreseen by everyone except the Kodak executives who blindly believed there would never be a substitute for film. Looking back, it’s easy to see why they could not let go. At its peak, about 70% of the U.S. film market was in Kodak’s hands, and its gross margins were about 70% as well. Kodak was making a ton of money.

The saddest part of Kodak’s story is that it had the key to renewed success right in its hands, as digital photography was originally a Kodak invention.  The digital camera was invented during the mid-1970s by Steve Sasson, a Kodak electrical engineer.

Other companies were able to make profound shifts in strategy based on changing market demands.  IBM, a major early developer of personal computing technology, watched profits drop as personal computers became less expensive, so they shed their PC business and moved into the technology consulting sector. But Kodak’s attachment to film blinded it to the need to make a strategic change.

Kodak’s story is now well known, and I mention it here only as a follow-up to Tuesday’s newsletter in which we looked at solid research experiments in priming, and I promised to help you see how priming can help you sell more effectively.

Let’s suppose you sell technology, insurance, wealth services, treasury services or other financial solutions.  On your next prospect call you might begin with a plain declaration of the reason for your call:

“My most important goal when I call on a prospect or a customer is to ensure they are taking advantage of the latest technologies and advances in their industry, so that they don’t incur a competitive loss by missing out on good opportunities, such as Kodak did when it stuck with film.”

Then go on to recap the story above in your own words. Your intent is to prime the prospect to contemplate the distasteful possibility of loss, a subject which I have written about on this site in the past.  (See this post from June, 2013 on why professional golfers putt more effectively for par than for birdie.)

Remember:  Customers’ fear of loss is about twice as powerful as their desire to gain!

Now your customer will be happy to answer your discovery questions, such as,

“What is it that is most important for you to achieve this year and what gets in the way?”

“How are you using these services now? There may be opportunities to bundle for better pricing, or consider more effective alternatives.”

“What information do you need to have immediately for better decision making?”

“What will happen if you do nothing?”

Now you are in the customer’s wheelhouse discussing subjects that matter to him or her, and as long as your questions are thoughtful and helpful, you have a far better opportunity for constructive dialog.

Selling is easy as long as you remember to…

 

Think Like Your Customer!

Sales Objections: Three words you must NEVER say!

The most important thing to remember in dealing with sales objections is that they almost always have a strong emotional component:  “Your rate is way too high…I had a bad experience in the past with your company…I don’t understand why I should have to sign a personal guarantee,” and so on.

So it’s important for you to take the emotion out of the conversation as deftly as possible. That’s why last week I wrote about pausing after the objection and the power this simple tactic offers you. Today I’ll share another tactic, eliminating specific words in your objection response that work against you.

Gregory at Medtronic 10-2010 CroppedLet’s begin by looking at the standard models for dealing with objections.  All of them begin with some statement from you of empathy and understanding. So for a price objection it might sound like,  “I can appreciate why this would concern you.  No one wants to pay more for something than what they feel it’s worth….” And so on. The idea is that you want the prospect to feel that you are being a consultative partner, willing to discuss his concerns, not an argumentative or defensive person who disagrees and disrespects the prospect’s feelings.

Here’s an example of what happened to me in a workshop I did last year on objection handling.  I used the price objection and asked each of the learners to give me an example of a response that showed empathy or understanding.  One of them said, “I can appreciate why you might THINK our prices are too high…”

Do you see what happened?  In effect, he was saying, “Your idea that our price is too high was a mistake on your part and now I’m going to set you straight.” There was no empathy at all, just the opening words to a fight.

More often than not, the learners are able to get through the empathy and understanding part, but then they destroy it with their next comment, like this: “But that’s because you aren’t considering how competitive that price is when compared to what other companies charge.”

“However, you have to factor in all the costs that support that price…”

“Nevertheless, when all factors are considered, you have to agree the price is fair and comparable to other providers.”

These three words, But, However, and Nevertheless, are emotional signals to the customer that say, “I pretended to see your point of view, but I’m actually discounting it and arguing with you anyway.”

To handle objections consistently well, you have to continue to empathize and explain your reasoning without appearing to be arguing with the customer, who must believe you are a thoughtful consultant trying to help.  Get rid of “But”, “However” and “Nevertheless.” Contrast these two sentences:

“Your point is well taken, but it fails to consider two other factors that are important.”

“Your point is well taken.  Let’s explore it further and see if we can come to an understanding.”

Which salesperson would you rather deal with?

The consultative salesperson does one thing others don’t, and you can do it too.

Think Like Your Customer!

Don’t Say Anything At All!

What’s the first thing you should do when the customer objects during your sales presentation?

Gregory at Medtronic 10-2010 CroppedWhen we began discussing objections we said that the first step in our model is to make a statement of empathy or understanding, for example, “I can certainly understand your concern.”  But there’s an earlier step you can incorporate after the objection and before you say anything at all, and if you can make yourself do it, you will find it to be incredibly effective.

Simply pause before you speak.  Don’t say anything at all!  This is a short hesitation (“one thousand one, one thousand two, one thousand three” is about right) and during this time make sure you appear to the customer to be interested and concerned, as opposed to scowling at him or looking flustered or exasperated.

Great communicators know how to use silence effectively and this is one of those occasions.  Let’s look at four helpful reasons why a pause after the objection is a good tactic:

  • When you fail to answer immediately, it gives the customer an opening to continue talking.  If he wants to continue to object, that’s just fine. Let the customer talk.  Remember that when the customer is talking, he is buying.  Allowing a brief pause after the objection gives the customer this great opportunity to continue.  In my own experience this is sometimes enough to quell the objection as customers will often talk themselves right out of it:  “It’s probably not that big a deal; I shouldn’t even have brought it up.”  Your silence allows the customer to self-discover.
  • It demonstrates to the customer that you have taken the objection seriously. It’s a sign of respect and helps maintain rapport. The customer will see that you are not being defensive or combative.
  • The next thing you say will be important, so it gives you additional time to think. Next you are going to make a statement of empathy. Think about how you want to phrase it.
  • The pause also tends to reduce the emotional tension in the conversation, restoring calm, which is just what you need. Objections generally have some emotion attached to them.  You want to restore the quiet, tension-free level that preceded the objection in order to advance your sale.  Some salespeople think it’s important to counter an objection with a snappy comeback, so you look prepared and informed.  Not so.  The risk of the snappy comeback is that you cause the customer to think you are arguing with him.  Be careful.

We have more to discuss on this subject and in a future post I’ll share three words you should never use when responding to an objection.

Meanwhile, remember to…

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Three easy tips to make your clients see you as a winner!

There’s a curious phenomenon in the world of professional sports:  when the team is winning, fans show up in droves, and when the team is losing, no one goes to the games. You’ve seen this happen everywhere.

Gregory at Medtronic 10-2010 CroppedPeople just love winners, don’t they?  They want to be around them, be friends with them and do business with them.  Ask yourself why realtors generally drive an upscale automobile, like a Mercedes or Lexus.  Clients don’t say, “I’m not going to do business with that realtor.  If he drives a fancy car, he’s probably going to charge me a lot of money.”  Instead, they think, “He must be very good at what he does. I want to do business with him.”

So today I’m going to give you three quick tips on how to position yourself as a winner, simply by making subtle but effective changes in your communication skills when dealing with clients. You have choices in the words you use, and every communication with your client affects the client’s perception about whether you are a winner or not.

Here’s a simple scenario.  Let’s suppose you’re a real estate broker and a buyer has put in a very low offer on a home you’ve listed for your client, and your client has counter-offered a small reduction in price.  But the buyer has remained adamant, sticking with his original offer.  Time to call your client with the news. How do you phrase your opening?

  1. Well, I’ve got some bad news.  They didn’t budge.
  2. Let me bring you up to date on my conversation with the buyer. Unfortunately, they’re holding firm on their offer.
  3. I’ve just gotten off the phone with the buyer. They’re holding firm on their offer, which is a bit of a problem, but I have some ideas.
  4. I’ve just gotten off the phone with the buyer, so let me bring you up to date. They’re holding firm on their offer, which gives us some new information. Now let me share some helpful ideas on next steps.

I’m betting that you see how much more powerful it will be if you chose D), so let’s go through the others to see the three tips:

  1. First, never start any conversation with someone you are working for or trying to sell to by positioning “bad news.” There is only “news,” and you have choices on how it’s positioned.  Start off the conversation in a down-mode and you’ll never get out of it.
  2. Get rid of other positioning words such as “unfortunately,” “sad to say,” “sorry to have to tell you,” and other negative first comments. Report facts neutrally, then show solutions.  Keep the client optimistic and confident in you.
  3. The opposite side of a problem is an opportunity. Quick:  name a problem.  Now tell me what is the opportunity that problem just gave you.  Here’s a quick example. Problem:  I’m overweight.  Opportunity:  This will be a great time to start eating a more healthy diet.

 

You can do this every time.

 

A friend of mine told me that at work, someone came out of the copy room and called out, “The printer is out of paper.”  My friend is a winner and he added, “He should have said, ‘The printer is out of paper.  Does anyone know where we keep the printer paper?’”

Remember that you have choices in the words you use.  Give some thought to your own “language inventory” and what you might change today.

 

Think like your customer!

What’s the first and best question a salesperson should ask?

Here’s a quick quiz for you. You’re calling for the first time on an important prospect, and after the opening remarks are concluded, you’re going to begin what sales trainers call “needs identification.” Since you’ll be asking questions now, what’s the first and most important question you should ask?

This is a tough one, so before you answer it, let me make it easy for you. Which is more important, what the prospect learns from you, or what you learn from the prospect?  If you are really thinking like your customer, you know it’s more important for the customer to learn something valuable from you.  After all, aren’t you always told that on every call you should add value to the customer experience?  If you think only of yourself, you may go wrong by trying to learn something from the customer to advance your sale, a very poor approach.

Gregory at Medtronic 10-2010 CroppedSo you want the prospect to learn something from you. Is it that the company has been in business for 50 years and is the leader in home furniture?  The marketing department wants you to say that. Or should it be that your high-speed drill with laser bit measurement is the latest in industrial tools?  The product manager wants you to say that.

The prospect doesn’t really care about those things. What the prospect wants is for you to solve a problem for him, help her make money, help him boost sales, help make her people more productive. Those are some of the areas where you really add value.  And you begin this process with one simple question.

The question is called by many names, but I call it “Optimal”. Always begin by asking the prospect to describe what optimal performance looks like or what is desired.  What is he trying to do or accomplish?  There are many ways to ask it, so here are some examples. Which of them fit your style?

“If you could wave a wand over your entire enterprise, what would you want people doing more of, or differently?”

“In a perfect world, how would your production team operate? What would you like them to be doing?”

On a scale of one to ten, with ten being perfect, what does ten look like?”

“What’s most important for you to accomplish this year?”

“Let me begin by asking you to tell me something of this year’s performance goals…”

Does your company have a protocol, process, or map of specific questions you should follow, or do you pretty much wing it?  Would you begin with a question like this? If not, you should, because the answer to it will begin to pinpoint all the prospect’s desires and needs, so that you never have to ask, “Where are you feeling the pain?” and “What keeps you up at night?” two of the dumbest questions you could ever ask.

The optimal question is then followed by four more questions to complete the process of self-discovery, so that at the end of your call, your prospect will have learned something of incomparable value from you. She has learned how to solve a problem without you telling her (or selling her) the answer!

Over the next four posts here, I’ll give you the next four questions, along with their rationale and examples of what they sound like.  They’re all designed to help you sell more effectively in a consultative manner, and they will force you to…

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Fingernails on a blackboard:  The worst question you can ask

It often happens that I sit in a training program, sales meeting or similar gathering and the leader sums up the content with this standard question, which I’m sure you’ve used many times yourself:  “Does anybody have any questions?”

Every time I hear this question I jump right out of my skin, and today we’ll talk about why it’s a poor choice and what you must do differently.

Gregory at Medtronic 10-2010 CroppedBut first let’s look at this problem from two points of view, first from the facilitator or manager, and then from the meeting participant. Say you’re the facilitator, and there’s a reason for that word, one who makes the learning easier for the group.  What you want to have in your sessions is learner engagement, dialog, discussion and the certainty that the learners understand, or have skill in the content delivered.

Accordingly, you LOVE questions!  The more the better. When the learners ask questions, they’re telling you they don’t fully understand, lack clarity or need additional information.  All skilled facilitators know this and encourage learners to speak out.

Now suppose you’re the sales manager wrapping up a meeting with an action plan for back-on-the-job performance. Do you want your team to leave the meeting with any uncertainty or misunderstanding about what to do? Of course not.  You’d love for them to ask questions, so you can be sure the whole team is on board and clear about the mission.

So now let’s turn to the meeting participant.  Think of when this has happened to you.  You’ve heard everything, paid careful attention and have the best intentions to perform, but you have just one little uncertainty.  You might ask a question to get some help, but you’re worried about being the first dope to speak up.  You don’t want your colleagues or the leader to think less of you.  I can tell you from experience that no one in a group meeting wants to “look dumb” or be embarrassed. So you half-heartedly put your hand up, then pull it back down.  No questions.

Get the idea?  So promise right now to strike from your canned presentation this horrible closing:  “Does anybody have any questions?”  And instead substitute the more welcoming, “What questions do you have about what’s been covered?

Do you see the difference?  The ineffective question assumes “You ought to understand this and there shouldn’t be any questions.”  The better approach is “I assume there will be questions and I would like to help you with them.”

Remember that skilled, polished communicators are intentional about the way they form sentences and position what they say.  Often their professional approaches are simply small changes in the words chosen, in order to bring about the desired effect.

You want questions?  Then say, “What questions do you have?”  You want the meeting to end and everybody in a fog?  Then say, “Does anybody have any questions?” Get it?

Good.  What questions do you have about what I just covered?

Think Like Your Customer

Fable Friday: “Thanks for the Feedback” tips

A friend of mine used to be a wine merchant, or wholesaler, selling to local distributors. He was good at it and made a ton of money.  He told me this story about developing young talent in the sales business.

“I would take a new guy on a call with me and let him handle most of the call.  Soon as we left the customer’s office and had driven out of sight, we’d pull over for some ‘curbside coaching,’ while the call was still fresh in our minds.

These guys were eager to learn because the income opportunities were so great, so I didn’t have to sugar coat anything.  They wanted to know exactly what to do to get better. Giving them feedback was easy.”

Gregory at Medtronic 10-2010 CroppedThere’s a simple rule to remember here:  the more desire the performer has, the more direct you can be with your feedback. Think of Olympic performers, college scholarship athletes and the like.  You don’t require a carefully facilitated conversation.

But this is not the case in most work and personal situations, in which giving and receiving feedback are such critical and delicate skills.

So I’m excited to see that Douglas Stone and Sheila Heen, the Harvard Law school lecturers who gave us the outstanding book, “Difficult Conversations,” a must-read for any negotiator, have come out with “Thanks for the Feedback,” a book directed not at those who give feedback, but on those of us who receive it.

I’m not going to steal or even paraphrase any of their fine work here, as I strongly recommend you read this book. But I do want to add to the discussion with some ideas I’ve written about here in different contexts, one of them being the way in which we handle customer objections.

Initially, it’s good practice to respond to feedback you have been given about your performance in work or in life the same way you should do so when you hear a customer object to your sales presentation.  Here are three useful communication tips:

1)       Pause before you say anything at all.  There are numerous benefits in taking your time before responding.  It shows your counterpart that you are not being defensive, that you are taking the comments seriously, that you are thinking about what to say next, and it allows the speaker to keep talking, all very desirable outcomes. Just count, “A thousand one, a thousand two…” before responding.

2)      Say “Thank you,” just as in the title of the book. No matter if you’re boiling with rage, smile and offer a pleasant thank you, just as if someone has asked, “How are the kids?”  Say, “Thank you for your thoughts. I appreciate your concerns and would like to talk further about these issues.”  Again, this mitigates any negative emotion in the conversation.  These words signal that you are willing to share and solve a problem, not be defensive or argumentative.

3)      Make a transition statement to continue the conversation that does not include these three words:  but, however, or nevertheless.  Imagine I say to you, “You did a great job on that call. I’m really happy with it, but there are a couple of things you could have done better.”  Now quick, what was the power word for you in that feedback? It was the word “but” which tells you I just discounted your good job.  Make sure you don’t use these words to begin your response.

Order this book today, and see how small changes to your conversational style will have a huge impact on how you work with others and how you…

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Fable Friday negotiation tip: “Does anybody else want two cents worth of licorice?”

In an old Spanky and Our Gang episode, the kids go into the general store and the first to be waited on by the old man behind the counter asks for two cents worth of licorice. So the old guy slides the ladder over, painstakingly climbs up to the top, finds the licorice jar, takes out the candy, puts the lid back on and climbs back down.  He bags the candy, takes the money and waits on the next kid, who asks for two cents worth of licorice.

So of course the guy has to go through all this again, but this time, just as he’s about to put the lid back on the jar, he calls down to the others, “Does anybody else want two cents worth of licorice?”  The kids shake their heads no, so he climbs down, rings up the sale and asks the next kid what he wants. “I want three cents worth of licorice.”

Gregory at Medtronic 10-2010 CroppedYou probably remember this old gag but I’m retelling it here to offer you a useful tip in negotiation.

Let’s suppose you are about to wrap up a complex financial transaction, say a big loan or major investment sale. Before you go back to your company and engage other resources to package the deal, make sure to ask one final question of your customer:  “Let me make sure before I leave today, that I have all the deal points that are important to you. Sometimes customers focus only on price and don’t consider everything. I want to know what else will be important to you other than price.”

Now you can see what might happen if you don’t ask this question. You go back and put everything together, which includes your margin for profit. The customer reads your proposal and then tells you he wants something extra, or some covenant removed, either of which might cut into your profit, or increase risk or delivery time.

You can even take this tactic one step further. Say to the customer, “I’m concerned if we don’t get all the issues on the table that are important to you now, there’s a risk that you may have concerns later on that will be difficult to address without reconfiguring the entire deal.”

Here’s a common example. In a term loan you will have included a prepayment penalty, since your pricing at origination is based on the loan being paid monthly to maturity. If the customer looks at the proposal and says he would like the option to prepay and doesn’t see why he has to pay a penalty, you can accommodate him, but you’ll have to change the rate, and now you’re back-pedaling rather than controlling the deal.

So as a good negotiation rule, try to anticipate what the customer may ask for and make a list of them.  After all, this isn’t your first deal.  Decide in advance how to pre-empt customer demands by explaining the business issues up front.

You don’t want to come down off that ladder, then climb back up it for three cents worth of licorice, do you?

Think Like Your Customer

Fable Friday: The power of words and a boustrophedon trainer’s tip

A few weeks ago I was conducting a training program in Seattle, and after reviewing the program objectives and agenda, I asked the learners to tell me what they wanted to get from the program.  (That’s a good idea if you’re a trainer. Tell them first what the course is about, then give them a chance to add their own needs.  Be “learner-centric.”)

Gregory at Medtronic 10-2010 CroppedWell, it was a big crowd, maybe 70 people sitting in three sections, one in front of me and one on each side. I started with the row of learners in the back and when I got to the end of the row, no one knew who should go next.  I said, “Okay, then let’s do a boustrophedon movement, and you go next,” pointing to the learner sitting directly in front of the last one to speak.

Now boustrophedon is not a word you hear every day, but I had some fun with it in this session because I shared the meaning with the learners. Boustrophedon is a method of writing in which lines are written alternately in opposite direction, from left to right and right to left. It derives from the Greek, literally “ox turning”, which refers to the movement of an ox while plowing a field (“bous” means ox, and “strophe” means turning).  You pass a collection plate in church in a boustrophedon movement. At the end of the row you pass the plate to the person behind you, and so on.

So why is this important in the context of this blog?  My last two posts have focused on the power of words, and their accurate usage.  The more words you have in your vocabulary, or inventory, the greater is your ability to select the perfect word when selling, negotiating, coaching or managing, and as we saw in the last two posts, words have powerful impact on the feelings of those you speak with.

Last week I got an email from a client, whose company negotiates with health care providers in behalf of insurance companies, who are their clients. He wanted to know what to do when the hospital says, “We don’t negotiate!”  Clearly, “negotiate” is a bad word in the mind of the hospital accounts receivable folks.  It’s the word that’s in the way, not rational discussion of the hospital bill.

So to my way of thinking, the right response is, “Okay, then let’s not negotiate it. Instead, let’s spend a few minutes reviewing this bill so I can get some clarity on how it was computed.”  There, now you’ve begun your negotiation!

All my life I’ve loved the magic and power of words.  I hope you get the bug too, because  the more words you know, the more clearly you’ll communicate.  Make an effort to learn a new word each day, and if you’re a trainer, include a fun word into every session as an example.

Here’s a good one.  “I went to pay for my movie tickets and was nonplussed when I found my wallet was missing.”  You were upset, confused, disconcerted.  This word is often misused as “unfazed, nonchalant,” so often that the opposite meaning is now recognized as a secondary definition in dictionaries.  You don’t ever want to misuse a word and then have to back-pedal with “the dictionary also shows this alternate meaning.”

And finally, do you know why autotonsorialists save a lot of money on haircuts? Words are fun, aren’t they?

Think Like Your Customer

A cool tip on how to watch your language

Last week we discussed the negative connotation of the word “politics” and yet how important are political awareness and sensitivity to selling, negotiation, coaching and managing. Once you understand political power you can do simple things to make your ideas more compelling to others. Today I’ll give you a cool tip.

Gregory at Medtronic 10-2010 CroppedPolitics is not the only word that evokes a negative connotation. One might argue that “freedom fighter” has a positive connotation and that “terrorist” has a negative connotation. It may also be that they’re the same thing, just called by different names.

So if I’m stumbling around for just the right word in a speech or private conversation, I know that I have choices of many different words I could use.  People who are politically astute use care in all word selection, because they know the power of the selected word can influence the emotions of the listener, and people buy based on emotion.

I do an experiment in my negotiation workshops in which I ask the learners to make lists of words they commonly use in negotiations in order to advance their cause. Why is this important? Negotiations are often delicate and it would be foolish to select words that may cause offense. Here are some of the words my groups have come up with:

Solution, fairness, your idea(s), resolve, reasonable, amicable, helpful, let me share, discuss, achieve, validate, and tell me about.

These words and phrases are like a lubricant to advance the conversation, maintaining the well-being, positive energy and engagement of your counterpart in the negotiation.

I then ask the group to give me a list of the words and phrases that do not work. Some of these will make you wince:

Problem, your problem, argue, argument, I need, disagree, audit, unacceptable, non-starter, deny, reject, disapprove, dispute, non-negotiable, useless, final offer, off the table.

Get the point?

I’ll bet you know people who don’t understand the distinction and are so full of themselves that they often use the second set of words in many sensitive conversations, where simple changes in word choices could make their position more compelling.  This week a friend of mine told me he couldn’t help it that he is “brutally honest,” as though one cannot be honest and kind, only honest and brutal.

These are the people about whom others will say, “He has no filter,” meaning they don’t understand the impact their words have on others’ feelings.  Don’t you be that person.  Choose your words carefully and watch your language. It’s an effective way to…

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