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!

Five tips on preparing for the commercial banking sales call

When I was a young commercial banker in the ‘70’s, we often went on joint calls to visit prospects.  One guy would drive and the other would look through the file for the first time and say, “So what are we gonna say to this guy?”  And that was about it for call preparation.

Whenever I tell this story in commercial bank workshops there’s always some nervous laughter because some of them know that’s about all they’re doing today, despite the fact that there is far more pressure on bankers to do a better job of preparing for any call, especially to a strong prospect.

Gregory at Medtronic 10-2010 CroppedYou hear the words, “value proposition,” “resonate”, “differentiate,” “provoke,”, “disturb” and so on, approaches intended to get the prospect’s attention so that you don’t sound just like the other banks’ calling officers.  But how often are you successful at it?  Maybe there’s something lacking in the way you’re preparing for your calls.

Here are five ideas. See if any of them remind you of your own approach, or more importantly if you are a manager, what you see your team doing.

 

  • You don’t put enough time into it.  If you’re calling on a strong company and you’re the new bank, two hours is the absolute minimum to prepare.  The resources are abundant for learning.  You just need to use as many as you can. Before the Internet back in my day, we had those Dun & Bradstreet and other reports that told us almost nothing.
  • You prepare for the wrong things. The primary skill set of most commercial bankers is lending, so they prepare to explore borrowing needs, despite the fact that the majority of businesses don’t use credit. Many lenders forget that banks are in the payments business. Every business has to receive money and disburse it.  They do it every day. Why not explore how you can help with it?
  • You were trained to be a banker, not a salesperson. This means you go into calls prepared to talk about business issues, but not to lead the prospect through self-discovery regarding what he is trying to do, how it’s working and how he feels about it.  And don’t forget that your manager got the job as the sales manager because he or she was a very good commercial banker, so the corporate calling behavior never changes.
  • When you do prepare, you focus on learning all you can about the prospect, instead of the industry and the market the company is in. Focusing only on the company limits your opportunity to discover those tidbits of information that your prospect will find more valuable.  Imagine calling on a company and saying, “Last year 1400 companies in your industry wasted an average of $50,000 because they failed to take advantage of two readily available tax breaks. I’d like to share that information with you today and learn how you are approaching it.”  I’d sit up and listen if I heard that from a banker, wouldn’t you?
  • You won’t call above your “sweet spot.” The bigger the company, the bigger each sale is, but you feel more comfortable calling on the $2 million rather than the $10 million company.  Since your goal in the first call is to conduct needs discovery, you’re going to be asking questions and getting the prospect to talk to you. Don’t worry about your “presentation” just yet. Reach up a notch and get out of your comfort zone.

Call preparation is easier when you…

Think Like Your Customer

Fable Friday:  Positioning Russian cars and other tips

At the height of the Cold War, when the Soviet Union was trying desperately to keep pace with the U.S. while boasting of its own superiority, they issued a challenge to the U.S.:  our Russian-made Zil automobile in a track race against your Ford.

Gregory at Medtronic 10-2010 CroppedWell, it was no contest, and after a few laps the Ford simply cruised away, leaving the inferior Zil far behind.  So what was the Soviet newspaper Pravda to do with this unhappy news? Here’s how they positioned it the next day:

“In a recent track race featuring the Soviet Zil and the American Ford, the Zil finished second, while the American Ford was next to last.”

Had the reader not known it was a two-car race it would be easy to think the Zil had prevailed.

Now I’m not suggesting that you should create disingenuous phrasing like this to delude your customers, but you should give some thought to the way you position the most common questions and statements when speaking with anyone you are trying to influence.

For example, if you are selling a product or a service, you might position the way you explain the price.  If your offer has some high price tag, position how much it costs for a small period of time.  That’s what health clubs and insurance companies do.  Suppose the product costs $300 to $400.  You will see ads that say, “For just a dollar a day, you can enjoy the peace of mind of having this unbelievable coverage…”

And if the investment you are selling has a rather modest return, you calculate the total benefit over a long period of time and position it that way: “After ten years your initial investment of $X will be worth more than $100,000.” And so on.

The same thinking applies when you must ask difficult questions of prospects or customers. You can position these also.  Let’s look at one.

“When are you planning to retire?” you ask, which may cause the customer to feel the question is a bit too intrusive or abrupt.

But here’s an easy model to fix this:

Step One:  What do you want to know?  What is your question?

Step Two:  Ask yourself, “What is the customer-centric reason why I am asking the question?”  Your reason must be one that benefits the customer.  How does he gain by responding?

Step Three:  In statement form, tell your customer the reason you came up with in step two.

Step Four:  Now ask the question.

So let’s work through the question, “When are you planning to retire?” Why would you want to know this?  Well, if you’re selling retirement plans, investment or wealth services, or insurance, you certainly want to know this.  But the key is, “What is the customer-centric reason?”  If you’re thinking like your customer, you know that a big fear is outliving your money.  People worry that if they retire at the wrong time they won’t have enough put away.

So let’s tell the customer this in Step Three:  “My experience has been that most people worry that they may not have enough put away to live comfortably, so my role is to help you make the right decisions now about how much and how often to invest, and of course that solution begins with knowing your planned retirement date, so may I ask when are you planning to retire?”

Positioning is easy if you just…

Think Like Your Customer

Product Knowledge Training? Time for my nap!

Perhaps the worst programs I ever attended when I was in sales were product training. Managers will often lament sales ineffectiveness by saying, “My people need more product training.How can they sell if they don’t understand the product?”  Well, okay, but it’s how the training is designed that matters.

Consider my own tag line, “Think Like Your Customer.”  The difficulty with much product training is that it focuses on the product and its features, rather than the information a top salesperson needs to know in order to sell it.  Strong salespeople think like their customers.

Gregory at Medtronic 10-2010 CroppedNext time you have a say in how product training is delivered to your sales team, follow these simple steps. Don’t let product reps come to you with a prepared deck. Instead, direct them to answer your questions, as follows:

Give us an elevator speech on the product. Very briefly, what is it and what does it do? “Rewards points are a customer incentive to encourage the use of debit cards because electronic transactions are cheaper than paper check processing.  They work just like frequent flier miles.” Just a paragraph in layman’s language will do.  Try to focus on facts that you think the audience will not be familiar with.  Good examples are the approximate fee for the service, some recent modification to the product, or a feature no other company has.  In stating the benefits, give us the ones you use when describing the product to a prospect, making sure they are very specific, “you’ll find this service helpful because it will save you the expense of…or the time it now takes you to…”

Who uses it?  Don’t give us, “Anybody who likes to travel,” or “all small business owners.”  We need specific descriptors of the target groups of users or prospects. Describe the market segment of the customer who might use the product, or the most likely candidate.  For example, a target group such as, “mid-life loyal customers who tend to use the Financial Center,” is superior to the first examples.  To answer this question fairly, look at the characteristics of the customers with whom you are currently successful.  Who seems to use this product the most?  Aside from their age, income and number or other demographic information, what are these people worried about?  What are their attitudes and feelings?  These types of descriptors are useful to salespeople.

Give us the best probes.  If you were there to talk to the customer yourself, what are the three to five most important questions you would ask? We’re looking for open probes that obtain information and get engagement.  For example, “How do you pay for everyday purchases?” or “What part does technology play in the way you run your business?” are far more powerful than, “Do you have this kind of product now?”

How does our product differ from our competitors?  We would like more specific information on differentiating features.  We want to know what we have that some competitor doesn’t. “Our turnaround time is only one day; most of our competitors take two or more,” is a good example.  Cite price differences where you know we have an advantage.  If product managers have put together spread sheets showing competitive fee structures, these would be most helpful.

Tell us the objections we will hear and how we deal with them. Having sold this product many times, you probably hear the same objections over and over, and no doubt have learned to deal with them.  Give us some pointers on what we can expect, and what we should say in reply.  If there are objections that you commonly hear from the field that are difficult to counter, it would be useful to hear of those also.

What’s our role in the selling process?  Do we make the sale ourselves, refer it to someone else, make an appointment for someone?   Do you want to coach us and have us follow up?  How deeply do you expect us to go in the sales process?  What works best?  Give us your feelings on this; it will help us to work with you in the most time-efficient manner.

Your salespeople are your customers in this kind of training, so…

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!

Fable Friday: Coach Bear Bryant’s sales tip

Many years ago, Coach Paul “Bear” Bryant shared this story of his early years at Alabama.

“I had just been named the new head coach at Alabama and was off in my old car recruiting a prospect, and I was having trouble finding the place.

Getting hungry, I spied an old cinderblock building with a small sign out front that simply said ‘Restaurant.’ I pull up, go in, and every head in the place turns to stare. Seems I’m the only white fella in the place. But the food smelled good, so I skip a table and go up to a cement bar and sit.

Gregory at Medtronic 10-2010 CroppedA big ole man in a tee shirt and cap comes over and says, ‘You probably won’t like it here. Today we’re having chitlins, collard greens and black-eyed peas with cornbread. I’ll bet you don’t even know what chitlins are, do you?’

I said, ‘I’m from Arkansas, and I’ve probably eaten a mile of them. Sounds like I’m in the right place.’

They all smiled as he left to serve me up a big plate. When he comes back he says, ‘You ain’t from around here then?’

I explain I’m the new football coach up in Tuscaloosa at the University and I’m here to find whatever that boy’s name was and he gives me directions to the school.

As I’m paying up to leave he told me lunch was on him, but I told him for a lunch that good, I felt I should pay. He asked me if I had a photograph or something he could hang up to show I’d been there.

I was so new that I didn’t have any yet. It really wasn’t that big a thing back then to be asked for, but I took a napkin and wrote his name and address on it and told him I’d get him one.

When I got back to Tuscaloosa late that night, I took that napkin from my shirt pocket and put it under my keys so I wouldn’t forget it. Back then I was excited that anybody would want a picture of me. The next day we found a picture and I wrote on it, ‘Thanks for the best lunch I’ve ever had.’

Now let’s go a whole buncha years down the road and I’m back down in that part of the country scouting an offensive lineman we sure needed, and he’s got two friends going to Auburn who tells me he’s got his heart set on Auburn too, so I leave empty handed.

Two days later, I’m in my office in Tuscaloosa and the phone rings and it’s this kid who just turned me down. He says, ‘Coach, do you still want me at Alabama ?’

And I said, ‘Yes I sure do.’ And he says OK, he’ll come.

And I say, ‘Well son, what changed your mind?’

And he said, ‘When my grandpa found out that I had a chance to play for you and said no, he pitched a fit and told me I wasn’t going nowhere but Alabama, and wasn’t playing for nobody but you. He thinks a lot of you and has ever since y’all met. You probably don’t remember him, but you ate in his restaurant your first year at Alabama and you sent him a picture that he’s had hung in that place ever since. That picture’s his pride and joy and he still tells everybody about the day that Bear Bryant came in and had chitlins with him…’

‘My grandpa said that when you left, he never expected you to remember him or to send him that picture, but you kept your word and to Grandpa, that’s everything. He said you could teach me more than football and I had to play for a man like you, so I guess I’m going to.’

I was floored. But I learned that the lessons my mama taught me were always right.

It don’t cost nuthin’ to be nice.”

So if you’re reading this, you’re most likely in some sales capacity and here’s where you may go astray. You’re always looking for an edge.  “Should I call this guy X number of times?   How many samples should I give out? How do I build my referral network? What benefit can I expect for my business by joining a service organization?”

It’s not you. It’s what you often hear from others. What’s the edge?  The tactic?

But the most successful salespeople I’ve ever met are the ones who never worry about this stuff.  They’re the ones who are always giving themselves away. “How can I help you succeed?” they ask. And they mean it.

I say, quit worrying about the tactics and the sales gimmicks.  Give to others, show your kindness and generosity.  Customers will flock to you. It don’t cost nuthin’ to be nice.

Think Like Your Customer

When the customer says, “I’m good, all set, don’t need anything, thanks for calling.”

One of the most famous quotes from the great Zig Ziglar was, “Every sale has to overcome these five obstacles:  no need, no money, no hurry, no desire, no trust.”

Notice that “no need” is the first one shown, as it’s the most difficult objection to overcome, and since I love the study of overcoming customer objections and the nuts and bolts of how to sell things, today we’ll explore how we get past the “I’m all set, don’t need anything” objection.  I imagine you’ve heard it many times.

Gregory at Medtronic 10-2010 CroppedWhen we all first learned to sell, we were told to identify needs, so as we conduct discovery about the customer’s needs, it’s natural to think that we will end up with either “Needs Met” or “Needs Unmet” and that will guide us to the best recommendations.  But this is not quite so, because in the prospect’s mind all his needs are met.

I need a place to keep my money? I put it in the bank. There. My needs are met.

I need to listen to music? I have a radio. No talking to me about your product.

I need to get from home to work?  Got a car.  Need is all taken care of. Good-bye.

But in reality, that is not how people buy things.  People will buy from you if you show them that while the need is being met, it is being met poorly and that “sweet spot” of needs poorly met, is where all sales take place.

Let’s look at a very simple example in which inside salespeople are required to call existing customers on the phone to either book appointments or sell a service or product on the phone.  Quite often the customer will say, “Yes, yes, thanks for calling. Appreciate it. But everything is good right now. No need to make a change. I’m all set.”

Should you just hang up?

What if you ask a useful question here? How about:

I’m happy to hear it.  Too often I speak with people who are unhappy with the way things are going but are unwilling to make any changes or explore new ideas. I’m sure you got to where you are right now by making a strong effort to always do what’s best. Would it be all right if I learned how you’re doing this right now, and perhaps explore a couple of ideas with you?

Then, after listening to the customer’s story, you say:

Here’s what I’ve learned over the years I’ve been in this industry. I was always perfectly satisfied with my cell phone, until I found out you can get one that also takes pictures.  Before that, people were satisfied with the phone on the wall of their home, until they found out they can get one that is portable. Things change all the time, usually for the better.  Wouldn’t it be helpful to find out what is new or different today? It may be there are ideas you aren’t using yet.

In other words, give the customer an example or story, about a need that was poorly met, in which people didn’t realize it. And by using a story or example, you avoid “accusing” the customer of poor decision-making.

Remember that no one ever said, “I wish I had an iPad,” before that device was created. Now the iPad flies off the shelves, because great marketers showed customers that their present needs were poorly met.

You can do the same if you just…

Think Like Your Customer