Archive for October, 2011

Slow Down to Go Fast

Monday, October 31, 2011 by:David Zahn
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Customers attending any industry conference, trade show, networking event or even a sales presentation are often wise to arrive in battle armor. Sales people seem to have become increasingly aggressive about their approaches. It is as if the collateral damage they leave in their wake is inconsequential because they have been told that sales is a “numbers game.” Call on enough people, talk to sufficient numbers, attempt to close enough sales and the business will take care of itself.

Salespeople listen closely – nothing can be further from the truth. Doing things incorrectly and faster just means you fail more spectacularly and quicker.

The Problem

What often happens is that a person tasked with selling a product forgets that for them to succeed, another person has to decide to make a purchase or buy.  Sales Managers and business owners refer to a “sales cycle.”  The assumption is that the selling organization can somehow control the timing and progress of the decisions being made by the buyer.

The reality is that the buyer makes the decisions, ALL of them. The selling organization’s representative can only aid and try to provide the buyer with the information, demonstrations, testimonials, etc. required to bridge the gap between a buyer’s current situation and a future situation that includes the selling organization’s products and/or services.

However, the seller will try to arm-twist, cajole, or persuade a buyer that they really need the product they are hoping to sell and will launch into a detailed discussion about the features, technical specifications, and warranties that their product offers that are improvements over their competitors.  However, missing in the discussion is the Buyer and his/her needs, how they make decisions, what their requirements are for making purchases from vendors or suppliers.  Instead, the seller engages in a dance designed to limit choices, reduce decision-making to forced options, and narrow down criteria for the purchase to their own preferences.  And, in so doing that – they actually CREATE problems for themselves and grind the forward progress of the process to a halt. 

Now, objections are raised, complaints are formulated, and doubts emerge.  Conflict that would not otherwise be raised becomes a part of the process BECAUSE the seller neglected to understand how buyers move through the process of making a purchase.

The BUYING Process

A good summary of the process buyers use to make decisions to purchase is covered in the recent book authored by Kevin Davis,  ”Slow Down, Sell Faster!: Understand Your Customer’s Buying Process and Maximize Your Sales” (Amacom; January 2011).  Some of the highlights of the process are captured in an article that appeared in the website, Eyes on Sales (www.eyesonsales.com).

According to Davis, the seller needs to align their presentation with the buyer’s needs.  For example:

  • Don’t focus on what the seller wants to accomplish, but what the buyer’s needs are, how their business can be improved, or issues that can be addressed that require a change.
  • Mirror the presentaton of material to align to the stage or step of the sales process (selling features when the buyer is still seeking to clarify their issues and identify the potential solutions).  Features become relevant ONCE the buyer is in a comparison mode between options.  Introducing them sooner without discussing the business issue to be addressed become confusing and lead to objections.
  • In fact, by using features too early, it serves to REDUCE the need to talk with you (the buyer has the information they need and has formed an opinion of what your company can do – often incorrectly, because the seller has not fully demonstrated the breadth and depth of the company’s ability to help prospect’s scope their needs.
  • Have a chance to fully understand the business issues (from the buyer’s perspective, not your own), identify other departments, functions, etc. impacted, and what has been tried previously to address it (if anything).
  • Quantify the value of the business issue being solved (NOT the cost of the product or service) through the use of a solution provided by the selling organization.

In the final analysis, Davis suggests, “”Focus on differentiating how you sell, build more trust by slowing down your sales process. When you do that, you can speed up your customer’s buying process. And that’s why when you sell slower your customer buys faster!”

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Are the Daily Deal Discount Sites Worth it?

Monday, October 24, 2011 by:David Zahn
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During the recession, many of us discovered and began to use services that offered large discounts for restaurants, retailers, service providers, etc through website offers. In some instances, the discounts were limited to only the first “x” users who consented to pay upfront through the website offering. The frequently mentioned sites are; GroupOn, LivingSocial, and Dealster.

For the Consumer

The excitement of gaining a huge discount for a product or service one ordinarily uses makes terrific sense for the consumer.  Whether it is a meal at a favorite restaurant, a reduced cost for a movie theater’s showings, or getting a year’s gym membership for the cost of six months; the idea of saving money on something that was already in the shopping intent of the consumer often provides that last bit of incentive to make the purchase and not put it off.

Additionally, the risk of trying something new is greatly reduced through participation in these website daily deal offers.  For instance, paying $50 for a meal at a new restaurant may be harder to justify than spending an equal amount or less at a place one is familiar with from previous experiences.  However, if the cost of a meal at the new restaurant is reduced to $25, the “downside” to having a bad meal is not nearly as likely to dissuade someone from trying it.  Especially when the new restaurant may in fact provide a wonderful experience, the possibility of having a terrific meal at a greatly reduced price is attractive and compelling enough to generate interest.

A list of some of the common daily discount sites can be found at http://tomuse.com/group-buying-sites-coupon-deals-discount-savings/

For the Business

The business looks upon the daily discount as a potential way to generate new business.  First, the business does secure the initial purchase (albeit at a greatly reduced profit margin, however, when the business is not currently operating at full capacity, the “loss” may not be at a loss at all, but rather an instance of “half a pie is better than no pie”).  Second, the power of advertising through the discount websites may “remind” other customers of the business that choose not to participate in the daily deal, but may choose to purchase at a later date at full margin.  Third, the hope from the business’ perspective is that the consumer who participates in the discount may return for a subsequent visit and remain a loyal customer.  Even at the full margin.  The benefit of “trial and repeat” serves both the customer (they include a new restaurant in their repertoire of choices) and the business (they get the initial sale and all future sales.

Of course, there is a “flipside” to this offering of discounts.  The business is at risk that the people who will choose to take advantage of the deal or offer may be the existing and loyal customers to begin with.  So the business is offering half-off discounts to customers that were previously paying full margin and had every intention of continuing to do so – only now are only being asked to pay less for the service or product.  The business loses half of their profit on existing customers who participated, and may have the jeopardy of not attracting more (or enough) new customers to make it worthwhile for the business.  In essence, the business has only subsidized existing sales without adding an incremental business.

Results

A recent website posting (http://www.retailcustomerexperience.com/article/185303/What-Whole-Foods-gained-from-its-LivingSocial-deal?utm_source=NetWorld%20Alliance&utm_medium=email&utm_campaign=emna_rce_10102011) examined the results of a recent Whole Foods attempt at using a daily discount.  Their results as quoted on the website are impressive:

  • Customers could purchase $20 for $10.
  • Coupons sold on the site at 115,000 per hour accoding to company spokesman, Andrew Weinstein.

What Whole Foods gained from its LivingSocial dealWhat remains to be seen is if there will be incremental sales that the offer generates in the coming months.  Some experts are doubtful that given the “niche” that Whole Foods maintains, that new customers can be incented to try their shopping for groceries in that store.  

Ben Sprecher, Founder and VP, marketing for Incentive Targeting, a company involved in tying daily deals to loyalty card programs had this to say on RetailWire.com about the issue:

“Whole Foods is, in essence, placing a $10 – $15 million bet (1 million deal cap times $10 discount each, plus LivingSocial commissions of up to 50 percent) that the publicity, new shopper acquisition, basket lift, and change in long-term shopper behavior driven by this program will outweigh the costs, the tragedy is that, at the end of the day, it will be impossible for Whole Foods to tell what the real ROI and impact was.

Will $10 off $20 entice new shoppers to the store? Will those new shoppers come back? Will existing shoppers buy more, or simply subsidize their current purchases? And are there even enough shoppers out there who haven’t heard of Whole Foods (or haven’t tried it), but who are subscribed to LivingSocial and who can be tipped over by a $10 discount?”

It Starts With the Customer

Tuesday, October 18, 2011 by:David Zahn
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The experience is one that gets replayed over and over in homes, offices, and anywhere your cell phone is turned on.  You are busy focused on one task or another and the ring of your phone interrupts your train of thought.  In fact, as I am writing this article, a series of calls came in from different people at a company I recognized from a previous exposure. I had met a representative of the company at an industry conference and had spent about 3 minutes waiting in line for coffee.  I vaguely recalled that the person represented either a mailing list of business executives or an internet search of social networks for business leaders; I am not completely sure whether it is one, the other, or both.  In any case, the idea of increasing my list of prospects and potential customers is always of interest.  So, while I was busy doing all the tasks that were on my “To-Do List,” I recognized that it would be worthwhile to at least check out the service/product before just dismissing it without a review.  So, while mildly annoyed at the interruption, the caller had accomplished what she was seeking – a person who was curious about what she was selling and someone who had a need for it.  However, the decision to proceed would be contingent on further investigation, discovery, and analysis.  I was going to require more than just this phone call to decide to purchase.

The Start of the Call(s)

The call began poorly.  As I started with the usual greeting I use for business calls, the other person on the line (an automated voice?) said, “please hold the line for our next sales person.”  I hung up.  I don’t see the need to wait for a person who called me to join the call.  Perhaps a minute later the phone rang again.  This time, there was a person who demanded to talk to the person responsible for sales.  Not asking for a particular person.  Not even suggesting that he had something that had helped others and that might be of interest to me to accomplish something (generate leads, target prospects, grow revenue, reduce sales cycle time, etc.).  So, I told him he had the wrong number and hung up.  When starting the phone call with “I need to talk to….” I immediately thought to myself that he didn’t NEED anything.  The customer is the one with the need.  I don’t owe him anything.  For me to pay attention, he has to offer something that I value.  If his start to the call was to demand to talk to someone and he hadn’t taken the time to even find out who that may be in the company, I didn’t see a need to continue the call.

Finally, the person I had met previously called and after introducing herself, she laughingly commented how hard it is to reach me.  I swallowed back what I wanted to say, and continued the conversation.  I exchanged pleasantries and we compared notes on the conference experience.

The Call

The customer is the reason for the call, stop frustrating them with your needs.

So, after the few moments of walking down memory lane with the woman I had met at the conference, she tried to transition the call to her purpose for calling.  She asked, “So, David – what can I help you with today?”  Now, remember, she called me.  So, I responded – “why don’t you tell me what you can do?”  I really didn’t know what she could provide for me and I certainly did not have any insight into how she might be able to assist me or my company.  In essence, she had called me and was saying, “You don’t know me, my product, or my experience – do you want to buy from me?”

Even when I tried to explore what she had to offer and tried to connect her offering to my business, she could only talk about products she sells – but not how it would help me accomplish my goals.  She had something in her pocket or briefcase and could not seem to give me a reason to buy from her OTHER than she wanted to make a sale.  Growing impatient with this approach that was not going anywhere; and wanting to return to the “To Do List” I had originally been working on when the phone rang, I asked the person to put some information in the mail and that I would review it and get back in touch if there was interest.

What I received back in response was an invitation to participate in a webinar the company conducts periodically.  So, what I now understood is that since she had a prospect who had an interest, but not a clear understanding of how to use the products, she would invite me to attend another SELLING EVENT – even though I was telling her I have interest and was ready to be sold right then and there.  Of course, she then warmly invited me to call her with any questions (to which I wondered, why would I do that given how this call had gone).

 The Autopsy

The salesperson failed.  Miserably.  Made me do all the heavy lifting and put up obstacles to allowing me to progress through the stages of buying (NOT the phases of selling).  While the conversation was reasonably pleasant, and we did share some memories of the conference we had mutually attended; the call ended without any progress toward my resolving my need, the sale occurring, or the seller securing a new customer.  All that was needed was to realign the focus of the call away from the seller and on to me, the customer. 

 

A Searing Pain

Monday, October 10, 2011 by:David Zahn
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Using the benefit of the Columbus Day holiday, I went in search of a vacuum in the hopes of finding a sale on home appliances at local retailers. I was in a buying mode, and really did not want to wait for a delivery to arrive with my vacuum in a few days after placing an order online. Rather, I wanted to touch the units to test the weight, walk out of the store with a box, and begin using the machine on my carpets immediately.

Starting at Best Buy

First step, go to local electronics and appliances store.

Walking into the store, the familiar blue golf shirts that denote who is an employee were few and far between.  However, the banners hanging from the roof marked where I could find the vacuums, so I headed in that direction.  I began to quickly see that the prices ranged from $75 to as high as $500 or more.  As I scanned the signage next to some of the products and read the box text, I could see why some of the products would be worth more than others, but still had some questions.

So, I went in search of a blue-shirted employee.  I waited over 5 minutes before I even saw one anywhere near the section I was in.  Unfortunately, that person was helping a customer.  But good fortune seemed to be smiling down on me as a tie-wearing person with a name tag walked toward  he section.  Intercepting the person’s path, I asked if I could ask a question.  I was told, “I don’t know anything about the appliances, you will have to wait for someone else.”  Now, I want to be clear here – I had not identified what my question was (it might have been, “can I pay cash for this?”  Or, “can someone help me carry 5 vacuums to the cash stand?”).  The “manager” did not offer any help, suggest that he would go secure someone for me to talk with, or do anything to recognize that I was prepared to spend hundreds of dollars.

With that response, I told the person (who had already breezed by me and likely did not hear me) that I would just walk across the street to Sears and shop their store instead.

From Bad to Worse

So, I managed to locate the vacuums on the second floor and was quickly greeted by a black-shirted woman who was in the middle of vacuuming up a rug that had been sprinkled with confetti.  Quickly sharing that I wanted a vacuum that was an upright, under $200, bagless, and preferably did not mandate changing filters, she quickly shared that she works for Dyson (a brand of vacuum) and then proceeded to try to talk me into a $350 machine that required changing bags.  My exasperation showed and she then turned to an actual Sears employee who went into a practiced speech that was haltingly delivered about Amps, Volts, and something he called Wind Amps.  I interrupted and asked what the difference was between the three. 

All I wanted to purchase - that took over 3 hours.

Now, I am not an expert in electrical matters, but I knew I was being duped when the answer I got was – basically, they are all the same.  I immediately thought to myself – Huh?  No they are not.  I then asked how I know what the wind amps are since it is not listed on the box anywhere.  His answer was that the manunfacturers don’t want you to know it.  But people go online and look it up and know.  He then claimed to point out the “better models.”  When I asked what made them the “better ones” – he answered, “that is what people buy and no one has complained.”

His answers of “generally” or “basically” and then answering with double-talk left me feeling a dull pain right between my eyes.  I left that store and actually called a friend on my cell phone who then looked online at Consumer Reports and directed me to the top 3 rated machines within my price range, type of vacuum, and brand preferences.  I went back to Best Buy, not because they deserved my order, but because they had done less to annoy me. 
As far as Sears goes – it is a shame that a retailer has fallen so far that they have no training, no management, no customer service, and even in the face of a customer that WANTED to buy – they could not close the sale.  It is no doubt that they have fallen on hard times because they have lost the immediacy of retailing and meeting customer needs.  Sending me to shop online for answers rather than having the insights themselves is feeding the enemy for many brick and mortar retailers.   

No wonder they are irrelevant!

Best Practices Are Not

Monday, October 3, 2011 by:David Zahn
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In speaking with clients there is a pervasive theme that many seem to subscribe to in setting goals, strategies, and objectives. The ‘holy grail’ for these clients is the determination and definition of industry, “best practices.”

Unfortunately, aspiring to incorporating the industry’s best practices is a losing strategy that is focused on the wrong basis of comparison. Rather than comparing oneself to a competitor’s last effort, the more appropriate comparison is to the CUSTOMER’S wants for the future.  By focusing on what is currently in place and available in the market, the best one can do is to mimic another.  By virtue of being second to provide something to the market, the payoff can ONLY be to split the available market.  Furthermore, because one is mirroring what another has already incorporated into their approach, the possibility exists that the competitor is already considering how to either improve upon it or even replace it with something innovative and revolutionary.  By aspiring to reach the “best practice” level, the best one can achieve is an evolutionary change.

So what to do?

Rather than benchmarking against what other competitors are doing, the more appropriate benchmark is against customer wants, needs, or desires.  Seek to uncover from your customer:

  1. What frustrates you about the way services are provided, products are delivered, or ordered?
  2. What kind of product features do you wish you had?
  3. What outcomes are you trying to accomplish?
  4. What do you currently think is “just the way it is” or “the way it has always been?”
  5. What do you have to” put up with” in order to complete the business transaction?

By reframing the vision of how to improve competitive positioning by focusing on the customer and outcomes over trying to match what a competitor is already doing and has become associated with providing – the company can blaze a new path that it alone is known for and has no competition in providing.

Caveats

It is not always easy to get a clear answer by asking customers the above questions because they are not the kinds of questions that are commonly asked.  Therefore, you may have to provide prompts or allow the customer to really think about it before responding.  Because many customers accept the standard offering without really questioning “what could be” – they have not invested much time in thinking about product improvements.

However, if allowed to watch how someone uses or interacts with a product (and what they need to do on their own to support the use of the product, get ready to use it, steps taken after the use of the product, etc. it is possible to gain some ideas on how the product can be improved or the experience of using the product can be more pleasant/effective/beneficial.

Lastly, the history of product innovation contains many examples of creative entrepreneurs that recognized needs or product ideas that were not at all based on existing paradigms (competition or customer), but rather were insight-driven as a result of advances in technology, manufacturing, or took advantage of unique synergies.  Some of the most obvious are:

  • The automobile is not a better horse and carriage
  • The internet is not an improved telephone
  • The combustion engine within the automobile leverages the synergies just as a web browser harnesses the synergies of what the internet offers.

Each of these looked at a way of improving the customer’s capabilities by looking past “best practices” and competitive benchmarking and envisioning approaches that were complete changes to product or service offerings.