Archive for May, 2011

Who is Driving The Bus?

Friday, May 27, 2011 by:David Zahn
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In the best-selling business book, Good to Great, by Jim Collins – a key phrase and concept that is introduced and reinforced is the importance of management remaining in control and having the right person with the appropriate skills steering the bus (directing the future of the business). While the visual of a bus careening out of control down a highway may feel akin to how many businesses are managed, it need not be that way.

A successful colleague of mine shared a story recently that pointed out the importance of having the steering wheel in her hands and a knowledge of the roadmap to get to the destination desired.  Five years ago, she entered the world of entrepreneurship and opened her business with a partner.  At the time, real estate was at the peak and she paid an exorbitant amount per foot to set up her business.  Given that she was an “unproven risk” to the leasing agent, the contact was heavily slanted to protect the interests of the landlord.  Now, five years later – the dynamic has changed.  The business has continued to grow, has never missed a payment and is an ideal tenant.  Further, the real estate market has changed so that comparable leases today would be about 60% of the per square foot costs currently being charged.

Remember that the landlord is self-interested.

Preparation

My colleague did her research by starting to compare opportunities a full year before her lease was up.  She did her homework on traffic patterns, where competitors were established in relation to her current business and at future sites, she determined competitive square footage costs for new and existing structures, and made sure to identify historical industry performance of current customers continuing to frequent businesses post-move to assess the impact to her business should she decide to relocate.

Beginning the Dialogue

Rather than just plan to box up all of the contents of her business and assume that she was going to have to move, she reached out to the current landlord to start the discussion well ahead of when the decision would need to be reached.  Here is where she was confronted with the first roadblock.  Numerous phone calls and emails went unreturned.  Months of attempts to went without a response.  In the meantime, she continued to educate herself and develop relationships with prospective landlords should she ultimately decide to move.

The Conversation

Finally, the leasing agent for the landlord returned her call and attempted to put her off with the following:

  1. We are a very large, national firm with numerous properties to manage (as if that has any relevance to my colleague’s business or should be a factor in how she pursues her business relationships?).
  2. We have a lot of leases to negotiate that come due before yours – we have plenty of time (they may have plenty of time, but my colleague did not care to wait and was not going to be “forced into a decision” to stay because there was no time to take alternative action).
  3. When the time is right, we will contact you with our lease and we can discuss it then (actually, she knew what the “going rate” is for real estate and there was very little to discuss or to negotiate.  All she needed to know was what was the cost and the discussion was going to a real short one.  Further, she decides as the customer when she is ready to buy – not the landlord who is selling).

The lease has not been signed for the new term just yet as my colleague is still working on securing some additional details from the prospective new landlord and will wait to see what offer the existing landlord provides.  However, given how she has been treated to date – the probability of her moving has increased dramatically because the landlord has allowed a level of conflict to enter the discussion and has forgotten who has the leverage in this relationship given the change in real estate values.

The business lessons are woven throughout this exchange. 

  1.  Neither party should ever take the other for granted or assume that the other party will accept the previous parameters of a contract that is not reflective of the current environment.
  2. Refusing to talk with the other party allows for competition to gain an advantage by forming relationships that otherwise would never have developed.
  3. Deciding to attempt to strong-arm the other party in a negotiation just invites confrontation and unnecessary conflict.
  4. Time can be an ally or an adversary in negotiations.  Not recognizing how to use it to your advantage can backfire.

The best business owners can learn a lot by remembering that the bus and all the passengers are under their control and knowing the roads and highways that will get them to their ultimate destination need not be left to chance.

Not All Advice Should Be Followed

Monday, May 23, 2011 by:David Zahn
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One of the outcomes of enhanced bandwidth, negligable costs of setting up websites and blogs, and proliferation of online media sites hungering for content is that it is real easy for nearly anyone to post their ideas online for people to read.  For the most part, experts tend to use online outlets responsibly and to provide suggestions, recommendations, and tips/techniques that are helpful.  However, every once in awhile, really poor advice gets posted – wrapped up in an affiliation with a reputable site that gives the whole process a black eye.  Recently, one such post was given prominent distribution and tacit endorsement by the site Eye on Sales (http://www.eyesonsales.com/content/article/10_sales_tips_that_ink_contracts/).   Ordinarily, this site shares real insights and expertise by experienced, knowledgeable, and thought-provoking professionals. This time, they failed miserably.

However, because of the ease with which people can post – every now and again, it is “caveat emptor” when it comes to interpreting the advice offered.  There are some real clunkers floating in cyberspace.

Be aware of advice more suited to the circus than the boardroom.

The  Issues

The article includes such “Tidbits” as:

  1. You are the expert, not the client.  From having worked with numerous clients over 25 years of consulting and having been a client for years before that; there is nothing that can be more off-putting than an arrogant salesperson TELLING a client they are not as well-informed about an issue as they are.  In fact, the OPPOSITE is true.  As an outsider, a salesperson will NEVER know as much as the client about his or her business.
  2. Referring to how Goldman Sachs differentiated themselves and were successful, the author shares, “Their massive success comes equally from ego.”  Well, that is hardly an endorsement to use!  Any sales professional that begins to think they are better than their client will not last long.  The failures are legion of companies that began to believe theur own PR.  The choices available to clients are often many, and clients are far more savvy than they were decades ago about their choices.  Act like you are above it all, and the business will quickly evaporate.
  3. Become a necessary evil. The prospects for success with this strategem are miniscule.  Starting from a point of not being WANTED, but tolerated at best is an invitation to be replaced at the client’s first opportunity.  Becoming necessary or seen as essential is worthwhile.  Being seen as an evil used because there is no alternative is downright short-sighted and counter-productive.
  4. Act as if you don’t need the business. While there is certainly something to be said about being confident, appearing successful, not presenting oneself as being desperate and on the verge of collapse if a sale does not happen; the idea of acting like you don’t need business is sheer lunacy.  I would opt for acting like the CLIENT can’t succeed WITHOUT doing the business.  Make the case that it is vital or essential for them to use the product or service through case study or testimonials, ROI, or other means to demonstrate how important it is to buy what is being sold.

The sad fact is that the comments offered may be followed by those without the experience or judgment to know better.  The possibility of it having dire consequences exists – but the author will not have to live with the consequences of providing advice that contributed to another’s downfall.  Unfortunately, there is no legal offense committed when an author shares an inexpert opinion and others jump off the cliff they were led to by someone who should know better – and if they did not, then they should have had the good sense to not share their ignorance so broadly where it could hurt others.  Let the author choose to run his business as he purports – but don’t act like a carnival barker inviting others into the big tent of their own creation!

Diagnose, then Prescribe

Tuesday, May 17, 2011 by:David Zahn
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Ask any salesperson or business owner about the importance of having an elevator speech (those 30 second or 1 minute descriptors of what someone does for a living capable of being delivered while one is sharing an elevator ride from the lobby up to the destination floor) and you will get nearly universal agreement about the need to have it memorized.  Careful pruning and word choosing goes into doing it correctly they will maintain, and any word or thought that does not directly contribute to the outcome must be eliminated.

Purpose

Of course, therein also lies the issue with the elevator speech for some.  Exactly what is the outcome being sought?  What purpose does this pithy and targeted message have?  Does the salesperson want to “close” the sale by the time the elevator reaches the tenth floor?  Is the executive hoping to land the next account before the person s/he just met at the cocktail party finishes the finger food just jammed into his/her mouth to free up a hand to shake?

If the objective of the interaction is not clear, the chances of any of the chosen words being impactful will be no better than chance or random luck.  However, unsuspecting strangers and would-be prospects are constantly being bombarded with sales pitches extolling the virtues of products and services, when their only “crime” was being polite and asking someone, “so what is it you do?”

Before prescribing, one needs to diagnose

Stop “Shoulding” on Me

We all have had the experience of meeting someone for the first time and after sharing some small detail about an interest or concern of ours, we are immediately confronted by the “expert” tellng us what we need to do, or what we should do.  Of course, the unasked for advice is often unheeded as we look at the person uncomfortably and wonder, “if you don’t even know me, or what I am dealing with, how can you make a recommendation?”  Or, we wonder to ourselves, “does this boob think I havene’t considered that self-evident answer?”  We all long for the day when we could request that people “stop shoulding” on us with their unsolicited and inappropriate counsel.

Backwards Logic

From the person looking to make a sale, the solution is often very clear and obvious.  Of course, the solution happens to be the one they are selling.  So, the salesperson goes into attack mode and begins to enumerate all of the features and advantages of their product.  And that is where the downward spiral picks up speed from the perspective of the prospect (who does not even know that they are a prospect.  They thought they were minding their own business and attending a social function and making small talk).  The features talk is very product-focused and assumes that the recepient of the message can convert that to a usage opportunity.  Some more advanced techniques employed by salespeople is to convert the feature into an advantage.  An advantage is when the salesperson attempts to link the product to how it may potentially help the recepient.  Of course, this is too often done without ever asking the recepient of that would be something they would value or havce acknowledged as worth pursuing.  It is speculative on the part of the seller to assume that the prospect would gladly seek that advantage.  Yet, that may not at all be what the prospect is pursuing.

Benefits and Diagnosis

The better approach is to approach the conversation from a business needs and opportunities diagnosis viewpoint.  Just like a Dr. is expected to ask questions of a patient before making a recommended presecription, so too should the salesperson ask questions and assess the issues from the perspective of the prospect.  As a Dr. asks, “where does it hurt, when did it begin, what have you tried, has it felt like this before, etc.” or other questions designed to get the situation clearly identified.  By talking the business issues and bringing the prospect into the dialogue interactively, the prescription will be much better aligned to the actual situation and not a perceived situation based on partial insight.  The prescription will be more trusted and likely to be employed by the patient/prospect because it was created through a joint discussion and both the Dr/seller and patient/prospect participated in creating it.

The words of the elevator speech may be necessary to quickly communicate how the business owner/salesperson helps business – but the sale does not occur UNTIL the prospect participates in the dialogue.

Don’t Delete This!

Wednesday, May 11, 2011 by:David Zahn
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Everyworkday morning there is a business ritual that occurs in every office.  For some, it happens even before the first cup of coffee has been consumed.  It is the official start of the day for many – the checking of emails.  Unfortunately for many of the senders of the emails, it is quickly followed by the second ritual of the day – the clearing out of the emailbox of unwanted emails!  One after another, the emails are deleted, often without ever being opened.  To prevent that from happening, requires taking some time to think about one’s goals and objectives before creating the email piece. 

Goals

There are two goals that you as the email sender likely have in mind.  The first is to get the email opened and read.  The second is to have the reader take an action as a result of the email.  Any email that does not include some call to action (make a phone call, click on a link, visit a website, respond to a request, etc.) is an email that will rarely succeed in furthering the sales effort.

Preparation

Generic emails that are not specific, targeted, even addressed to the person by name will not be acted upon (unless being deleted is the action).  It is imperative that the sender of the email do some homework ahead of time BEFORE sending the email.  If the email is not relevant, it will not resonate with the receiver and will not be successful.  The email must demonstrate at least a cursory understanding of the prospect’s industry, pressures, issues, or something that is a pressing problem requiring an immediate action or it will be deleted or passed over without further thought. 

The Subject Line

We have always heard that we shouldn’t judge a book by the cover.  And yet, that is often what happens when the subject line does not strike a chord with the reader.  The subject line with some cute play on words, obscure reference, use of jargon that is not readily recognized, overly long, etc. will only serve to confuse the reader.  Given how time impoverished the reader likely is, the common sift used is to look for reasons to skip, ignore, or delete the email.  Therefore, use a subject line that is clear, easily interpreted, and states the purpose in as few words as possible (especially given that many emails are now being read on mobile devices).  Consider if you would take time out of your morning (or whenever the email is to be read) to open the email if it was delivered uninvited to your computer.

The Body

The time the reader devotes to making a decision on whether to read the email or not is often less than three seconds.  If the email does not state a purpose, contains confusing sentences, has typos, or other issues; it is far too easy for the recipient to decide to delete it rather than fight through it and try to decipher what was the intention.  Asking the reader to “know what you mean” or expecting them to figure it out for you is not likely to lead to positive actions.

The content needs to be current and reflective of their situation.  Do the research needed to know what the company is experiencing and integrate that insight into the email to demonstrate that you understand and have something to share that can or will help them deal with their issue.  Using Google Alerts to identify recent issues and important considerations being pursued by the prospective client will help target the email to their most current issues.

Keep the email short and succinct.  People do not have the time to wade through paragraphs of content.  Three to five sentences is often a good target.  Get the prospect to want to learn more by calling for details, clicking on a link to download a whitepaper, or register for a webinar, etc.  The email is a success if it gets the prospect to take an action.  It is not ideally suited to qualify a prospect and close the sale in one fell swoop.

Speak the prospect’s language – but without overuse of jargon.  The email is not the time to talk about yourself or your company’s history.  There has to be a “payoff” or a benefit for the reader.  If it is not identifiable, it will not be acted upon.

Be aware that many email service providers will block certain images, allow for certain words to be blocked at user’s discretion.  Therefore, it is a consideration as to whether to include embedded images, words like “free” or words that may have a sexual meaning as these may get blocked and put into the prospect’s SPAM folder.

Testing

Just like with any other marketing or sales approach, it is advisable to refine which messages, subject lines, signatures, or other details are leading to better (or worse) performance.  The more scientific the approach, the more one can project the likelihood of success.

Tenacity

Sending a single email and hoping it lands at exactly the right time to generate business is a poor strategy.  It often takes numerous exposures before the message and/or the sender become recallable to the receiver.  Do not give up after the initial attempt and assume the prospect does not want to do business.  It is often after the fifth or eighth email that the prospect will choose to react.  Prematurely stopping the email sending will miss all of the opportunities to convert that prospect.

Mix calls with email with direct mail.  By using a combination of approaches, the strength of the email will become stronger as you and your company become a larger focus for the prospect by familiarity and for being seemingly ubiquitous.

Email is an inexpensive way to reach clients, but it need not be done poorly.  Follow the rules above and watch the results improve and the sales begin to increase.

A Sale Deconstructed

Thursday, May 5, 2011 by:David Zahn
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Every business requires it.  It is the oxygen that feeds the organization’s soul.  We are talking about sales.  A company without sales is a company that is destined to fail.  No customers equals no business.  The cause and effect is really that direct and simple.  And yet, nearly every company is focused on how to improve their sales effort.  In some organizations, there is more time and attention paid to that skill than to any other. In other companies, it is assumed that creating a better product or service will cover for a weak sales effort.  Still other companies believe that a competent marketing effort will cure all that ails the selling endeavor and lead prospects and customers to the company.

As fundamental as it may seem, it is necessary to look at the components of a sale in order to understand where it goes wrong and what is needed to fix it.  Holding a microscope to the sales effort will show the following:

  • Prospect/Buyer
  • Pain
  • Power
  • Vision
  • A vision
  • Budget

A Prospect/Buyer

Far too many companies have not done a sufficient job of targeting, segmenting, or isolating who would be the target customer for a product or service.  Without recognizing the WHO of the sales effort, there will likely be a lot of false steps as efforts to reach or communicate with the prospective buyer.  A product that is designed to meet the needs of a manufacturing floor supervisor would not be well positioned if advertised in McCalls magazine.  Similarly, a product that is promoting healthy hair would not be likely to generate interest in a trade publication directed to Financial Planners.

Pain

The sales effort has to identify and be focused on an issue that the prospect is currently seeking to address or resolve.  To continue the example above, offering a super enhanced hair conditioning product that adds luster to a bald man is not going to lead to high sales potential.  The bald man is not interested in luster providing hair conditioning products in most instances.  However, offer that same man with a product that saves his existing hair, adds volume and hides his thinning scalp, and the SAME product may suddenly become very desirable.  The sales effort must be aligned to the issues the prospect is currently seeking to resolve in order for a sale to occur.

Power

The prospect must have the ability to make a purchase.  Far too many sales efforts fail because the activity is directed at people who cannot actually make a purchase.  The person who is actually going to decide what product to buy should be addressed in the sales effort or there can be no successful accomplishment of a sale.

Vision

The prospect must be able to see a way to resolve the issue through the product or service.  If the offer being provided does not “fit” or “meet” the need or solve the problem being addressed, then the sale cannot move foreward.  A large part of the selling effort must be on clarifying the solution’s ability to meet the prospect’s problem.

Budget

Lastly, the sale cannot happen if there is not sufficient budget available to make the purchase.  Whether it is due to a business having to decide between a new computer system and repaving the parking lot, or a Mom having to decide between burgers or pork chops, the reality is that in most purchase occasions, there are limited funds that are being competed for across numerous wants and needs.

Looking at the sales role under the microscope

The sales cycle very often stalls and companies are uncertain as to the cause.  In ALL cases, it can be directly related to one or more issues not being properly addressed by one of the above components of the sales process.  Return to the steps above and confirm each has been properly met; and the sales closing rate will spike up immediately.  While it is easier said than done, it really is that simple (though not easy).