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Category: Sales

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Leadership Marketing Personal Development Sales

How Economics Betrays Business Leaders Every Day

I hear even highly-respected consultants and business leaders express dangerous misconceptions about price and discounting. I suspect it’s because so many people took basic economics to heart without digging deeper into the underlying assumptions or learning the true role of pricing. No thanks to economics, we often mis-

apply the supply/demand relationship we learned in our introductory Econ courses. You could not make a bigger mistake.

The demand curve is a foundational concept in economics. The law of demand states that lower prices incentivize higher demand (in units). The principle is correct, but only under artificial conditions. Rather, my decades of work in pricing and value have driven a conclusion that most businesses grossly mis-apply supply/demand analysis in the real world.

I’ve met multiple sales people, sales leaders and CEOs who rationalize indiscriminate discounting. Presumably, they are relying on a misunderstanding of the demand curve. This is far more than mere misinterpretation of the law of demand; it kills businesses.

Let’s review: the demand curve represents aggregated behavior of for a commodity: as price falls, additional customers appear, willing to pay the lower price.

Does dropping your price really help win that deal?

The demand curve correctly states assumes that value for your offer is different for each individual. Prospective customers compare any given price against perceived value. As price drops, demand increases when a customer who formerly perceived inadequate value now perceives a positive value from purchasing. Unfortunately, when you capture a sale from that marginal user who perceives borderline value, you simultaneously just trained all of your higher-value users to expect discounts.

While the perceived value of a product or service can – and is – often individual, it isn’t fixed. Value is a perception, and perceptions change. Perceptions of desirability of an outcome, adequacy of substitutes, and environmental/extraneous considerations change constantly. In fact, this is why the sales profession exists.

Drop your price without knowing your value? Stop it!

The demand curve assumes that your product or services is a “fungible” commodity: all units of the same product or service are identical replacements for each other.. That is, it assumes that you have no differentiation. This is ridiculous. For instance compare the price of a one ounce pure gold bar from a no-name mint vs. a one ounce Krugerrand. The demand function you learned in school ignores differentiating features, branding, distribution, availability, support/service, durability, etc. This was done so that the math works more easily. While there is some great advanced economics work that incorporates differentiation, you probably never learned about it. Pity.

Another way that the real world differs from economic models: Customers don’t have perfect information. When your customers don’t know about all alternatives, don’t fully understand value-in-use, or all the ways that your offer provides value to them and their company, they don’t make “economically efficient” decisions. Imagine a prospect who hasn’t figured out that ROI for a contemplated purchase is over 500%. Discounting isn’t the missing selling behavior…it just creates a discount-accustomed buyer. Or worse, makes them question any value which they had placed in the service. Worst of all, there was no reason to discount, and that every dollar of price drop came out of the seller’s profit line.

For these reasons, you should shift a marginal customer who perceives inadequate value to tip in your favor. This avoids the collateral damage to your existing customers willing to pay your existing price.

Your price isn’t just the effect, it’s the cause.

Your price isn’t just a cost figure a customer weighs against your offer’s value. Because of the confusing plethora of differentiation in the real world, consumers use price as an indicator of value. Your price declares your value — or your lack of it. Imagine: you are the incoming CEO of a company that outgrew its peers for decades at a price premium and without discounting before you entered the job. When you encourage sellers to start discounting to “win” deals, what do you think you’re doing to the brand?

My work on value and price

Bottom line: discounting to gain sales is only a smart choice if you, your marketing group, your customer service people, your product group, and your sellers are all powerless to grow customer perceptions of value. I help under-powered clients.

When I work with clients, we usually find that their offers are priced well below the customer’s true value. This doesn’t necessarily mean we raise prices, but almost always helps them see that discounting is merely shipping profit dollars out the door to their customers.

Don’t be “that guy”. Or “that woman”.

The only kind of value there is: customer-perceived value. It’s impossible to have value that the customer hasn’t validated yet…you don’t have value; just a value proposition. Customer-focused conversations and interactions which get your prospects to validate value is the difference.

I’m happy to help you on your journey to understand how you can capture the value your company earns in the form of pricing power. Comment below or reach out to me directly to discuss in more detail.

To your success!

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Personal Development Sales

How to Sell in an “On-Demand” World

When I was growing up in a big family during the 80s and 90s, we would gather around the TV once or twice a week to watch whatever sitcoms were popular.  It might have been Roseanne, Full House, Family Ties, Grace Under Fire, or the like.

We grabbed our snacks and whatever seat was available.  It was a family ritual, because that day and time was the only opportunity to watch the show!

Now, because of streaming services like Netflix and Hulu and online platforms like Youtube, we can watch shows whenever we want.  Our TV has become “on-demand” and we expect to be entertained whenever we want to be.

Buying is Now “On-Demand”

The internet has fundamentally changed more than just how people watch television.  It has changed how we access and use information in general.  This has had a big impact on the buying process, and it’s why the sales process also has to evolve.

The buying process used to be full of information asymmetry: The sellers has a lot more information than the buyers.  And therefore the buyers didn’t have easy access to the insights they needed to make the best decisions.

They were at the mercy of salespeople.  That’s why “interruption sales” techniques worked.  The buyer had to act when they had a salesperson giving them more or better information.  If you were a buyer, there was a legitimate chance that the person cold calling you might actually have a solution that you didn’t know about.

Since buyers can now get all of the information they need with a simple Google search, the playing field as been leveled.  They can now move through their buying journey at their own pace and when they want.  The buying process has become “on-demand” as well.

In fact, transactional sales where the traditional sales techniques worked is rapidly being overtaken by automation and AI.  Why should a buyer be at the whims of a salesperson when they can go to a robust web platform, get their questions answered, and place an order?

Buyers Buy When They’re Ready

Salespeople don’t have the control like they did in the past.  They don’t have the same ability to push and pull prospects like they did in the past.  The modern salesperson has to recognize this shift in the dynamic between buyer and seller.  It’s no longer effective to simply urge the buyer to operate on the seller’s schedule.

That doesn’t mean that the salesperson isn’t valuable.  In fact, they’re more important than ever.

But their role has shifted.  Now, it’s critical that they provide guidance for their prospects and customers as they go through their own buying journey.  Research shows that buyers are doing a lot more research before they ever engage with a salesperson.

In this world, salespeople don’t find success by pushing and bothering their prospect.  Instead, success comes when they position themselves as a guide: as a Sales Sherpa™ to lead them through the unknowns and obstacles in the buying journey.  They want to be seen as someone who can help give context and meaning to all of the information out there.  Buyers don’t necessarily know how to make sense of all of the blog articles, white papers, and review videos available “on-demand” to make the best buying decision.

3 Ways to Leverage the On-Demand Sales Landscape

To stay relevant in the on-demand economy, modern salespeople need to become the go-to resources for their prospects and customers.  Here are three ways you can find success in this environment:

1. Position Yourself as an Expert

If you are just a brochure-deliverer and order-taker, you aren’t adding to your prospects’ buying journey.  You want to position yourself as an expert in your field that can answer their questions.  Consistently add to your knowledge base and personal network so you have access to the connections your buyers need.  And offer that information freely and openly so that you are seen as a knowledgeable advisor.

2. Invest in Relationships for the Long-Term

When you first approach a prospect, they might not need what you are offering.  That doesn’t mean that they will never need your products and services.  The goal is to ensure that you are the person they contact when they are ready to make a purchasing decision.  Don’t dismiss a potential contact just because there isn’t an immediate and obvious need.  Cultivate the relationship over time so that you’ve built up trust with them when they’re ready to buy.

3. Stay Top-of-Mind

It’s important that you remain top-of-mind with your network so that you are a natural choice when people are looking for what you offer.  The goal is to create a consistent presence that keeps you on their radar. Use digital platforms like LinkedIn, Twitter, or Facebook to share content from your field.  Use offline relationship building opportunities like conferences and networking events to re-connect with people on an interpersonal level.  You don’t have to be their best friend, but you want to regularly remind them that you are there and available to help.

Categories
Best Practices Entrepreneurship Human Resources Management Marketing Negotiations Sales Skills Women In Business

Being High From Happiness

 “Happiness can be elusive. When you need happiness the most and you can’t find it within yourself, make someone else happy. It’ll find its way back to you.” -Greg Williams, The Master Negotiator & Body Language Expert

Are you happy when you’re high? Depending on your interpretation of ‘high’, that may or may not have the same connotation to you as others.

Being high can stem from a myriad of sources. It can stem from the consumption of alcohol, tobacco, or illicit drugs. It can also stem from a more natural source.

If you seek a natural high, one that’s unencumbered by a false sense of spirited motivation, you can experience the true sense of happiness. The challenge becomes where to find, corral and keep that sense of happiness so you can call on it when needed.

No one can be on a natural high all of the time. But, if you evoke it without false insemination, you are on your way to unlocking one of the keys to a successful life; that key is happiness.

Here’s the point. One day none of what you think is important will be important. None of the challenges you have will be important either. That day will occur when you’re no longer able to influence your thoughts or those of others. That’s the day that you will have transitioned from this life into another realm of being. So, make yourself as happy as you can, while you can. And, when you can’t make yourself happy, make someone else happy. That act will come back to you in the form of happiness … and everything will be right with the world.

What does this have to do with negotiations?

When you negotiate, be extremely protective of your mind (i.e. the way you think and feel) and your thought process. If you’re able to contemplate happiness in the face of adversity, happiness may not appear to be that daunting. That will allow you a freer thought process, one that’s not encumbered by dread.

It’s the thoughts fueled by negativity that causes our negotiation efforts to become derailed at times. The thought of being happy can keep your thoughts on the right track. It may sound quirky but, try it. Act happy when experiencing dread during a negotiation. At a minimum, it will cause the other negotiator to wonder what’s occurring. That may give you the time needed to assemble a more robust rebuttal.

Think happy thoughts, be happy. You really don’t have anything to lose and you might discover something that’s unique about your negotiation abilities than you previously realized.

Remember, you’re always negotiating.

What are you thinking? I’d really like to know. Reach me at Greg@TheMasterNegotiator.com

To receive Greg’s free 5-minute video on reading body language or to sign up for the “Negotiation Tip of the Week” and the “Sunday Negotiation Insight” click here http://www.themasternegotiator.com/greg-williams/

#HowToNegotiateBetter #CSuite #TheMasterNegotiator #ControlEmotions #Psychology #Perception #rejection #leadership #HowToImproveYourself #Happiness

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Best Practices Entrepreneurship Human Resources Investing Management Negotiations News and Politics Sales Women In Business

How To Best Combat Misinformation and Disinformation in Negotiations

“Misinformation can be disinformation. Know the difference between the two to better address the inherent intent of its dispenser.” -Greg Williams, The Master Negotiator & Body Language Expert

Someone once said, “All is fair in love, war, and #negotiations.” If that’s true #misinformation and #disinformation are armigers that some negotiators use as weapons of mass destruction.

In order to best combat misinformation and disinformation in negotiations, you must know the difference between the two before you can address either. The question is, to what degree are you prepared to deal with this type of ploy?

Misinformation can be daunting when deciphering the truth. Coupled with disinformation, the truth can become darn near undetectable. Observe the following to make the distinction less elusive.

1. Misinformation Versus Disinformation

Understand that there’s a difference between misinformation and disinformation. While the distinction between the two may have similar appearances, their usage is what really sets them apart.

Misinformation is erroneous information delivered to intentionally or unintentionally alter your thought process. It can also be used as a way to insulate one’s self (e.g. I didn’t mean to misquote that information). Later in the negotiation, that tactic can turn into a trap that detracts from the user’s credibility, if used too frequently.

Disinformation is the intentional attempt to spread false information for the purpose of deceiving you. That makes its usage more dangerous in a negotiation. It also speaks to the character of its user. If you know the user’s intent to persuade you, you’ll have insight into which of these modalities he may use to accomplish his objectives.

2. Know Character of Negotiator

When you know someone’s character, you can more accurately assess and determine their intent. Thus, knowing a negotiator would not venture into the territory of disinformation could lead you to be more understanding if he misquotes information. On the other hand, if you know you’re dealing with a devious individual, one that doesn’t have a relationship with the truth, you’d be wise not to grant him forgiveness when he misquotes information. In such a case, you may have just caught him in a lie that he’s aware of. Let him stew in this dilemma and assess what he does. Doing so will also give you great insight into the possibility of the information being disinformation or misinformation. You can further address the type of information that’s being passed to you by referring to a higher authority that refutes what’s been delivered. You can do this, even if the authority and/or information you cite is not real. It’s called bluffing.

3. Identify Timing and Intent

After addressing steps 1 and 2, assess the intent of the information that you’ve been given. Do so with the thought of what impact it’s intended to have on you, what actions are you to engage in as the result of the information. Also, consider the timing of its deliverance. If you assess that it’s intended to evoke a particular action or thought, assess what the overall intent might be and where such actions might lead. If you sense that something’s not right, don’t continue. Instead, question what you should be paying more attention to.

While misinformation and disinformation may offer challenges during a negotiation, being mindful of how to combat them can lessen their potency. Once you adopt a heightened mindset when dealing with them, your negotiation efforts won’t be fraught with the degree of dismay that otherwise might exist. Thus, by adopting these strategies when dealing with information, you’ll have a better perspective about the information you deal with … and everything will be right with the world.

Remember, you’re always negotiating!

After reading this article, what are you thinking? I’d really like to know. Reach me at Greg@TheMasterNegotiator.com

To receive Greg’s free 5-minute video on reading body language or to sign up for the “Negotiation Tip of the Week” and the “Sunday Negotiation Insight” click here http://www.themasternegotiator.com/greg-williams/

#NegotiatingWithABully #Bullying #Bully #negotiations #Negotiator #HowToNegotiateBetter #CSuite #TheMasterNegotiator #psychology #CombatDisinformation

Categories
Best Practices Management Personal Development Sales

You Can’t Test Your Way to (Sales) Performance

In the sales performance space, there is a growing disconnect between performance focus and learning focus.

If my email and voice mails are any indicator, there is an explosion in learning technology options crowding into the sales enablement world. An important part of my business is learning about these powerful tools for knowledge dissemination, especially as they apply to sales forces.

Learning and training tools are more accessible, more available, more efficient and more effective than ever before. There has never been a better time to be involved in the adult learning industry. However, adult learning is the least interesting part of my business. My true business is achieving lasting results for my clients.

There are two big differences between a learning focus and a results focus:

  1. Improving sales performance requires far more than knowledge acquisition.
  2. Knowledge acquisition isn’t the weak link in the chain.

My own company, The Miller Heiman Group, is innovating in many areas including improving the learning portion of the “sales performance improvement” chain. The chain metaphor fits: knowledge transfer without behavior change achieves little of lasting commercial value. If all my firm became known for was innovation in learning, we would fail our clients. “Watch this space” for exciting innovative performance management tools, though.

Sales performance improvement is far more than “training…poof!”

A great instructor can teach all of the techniques of a golf swing—grip, stance, backswing, body motion, hand action, hip turn, follow-through, etc. – in a couple of hours. That couple of hours won’t land anyone on the pro tour, though. That’s even if the student scored 100% on a post-training assessment; confirming that they acquired every atom of the instruction.

Similarly, sales performance is about adopting new selling behaviors; working to turn them into “muscle memory”. Teach those behaviors and test for comprehension all you want, but without coaching and guided practice, little or no performance change will result.

Alarmingly, many learning professionals claim that “training effectiveness” should be measured by testing for effective knowledge acquisition. The trap: testing for knowledge acquisition is easy via (electronically-administered) tests. This is a classic application of John Tukey’s quote “Far better an approximate answer to the right question than a precise answer to the wrong question…”. Testing for comprehension is so much “the wrong question” it verges on criminal: sales training comprehension alone won’t deliver the results sales leaders need. Sales training simply isn’t that kind of simple “know it = do it” material.

The pitfall to “teach-and-test only”:

Knowledge acquisition isn’t the weak link in the chain.

Training events are easy… compared to getting your sales teams to consistently adopt sales methodology behaviors. Behavior adoption requires observation and effective coaching over an extended period. Think about the time to train you to swing a golf club vs. the time it takes to achieve proficiency — then excellence. Also, think of the difference that great coaching can make in ramp-up time.

Sure, training and testing have their place. Training introduces and describes desired behaviors. Testing confirms understanding. Knowledge and understanding are important steps along the adoption path. It’s difficult to coach effectively without a clearly communicated set standards and expectations.  Thus, there is a chain of events –with training and testing for comprehension as one link.

In my experience, a training event ends where the most powerful work starts. That’s where behavior coaching begins, where new habits are formed, and where lasting results are embedded…where a performance initiative becomes consequential.

The “weak” link in the chain is building new habits with your people. I call it the weak link not because of a lack of coaching tools, or ineffective ones. Rather, weak refers to the reality that people and organizations generally struggle with change. Unsurprisingly, changing behaviors is the most common failure point in a sales performance initiative. Organizationally, behavior change requires that you plan, communicate, involve, lead, and commit. Individually, sales leaders need to develop, observe, diagnose, coach, and persist. Once behaviors are instilled, the methodology becomes sustainable. I use the chain metaphor because if a coaching/sustainment piece is missing, the whole initiative risks missing on the desired outcome – and the investment has limited return.

A stronger chain

To achieve strong results, put together all of these elements:

  1. Great sales methodologies…yes, and teach them effectively. I’m aligned with the most successful B2B methodologies in the world, and can tell you why. My company is now a leader in learning innovation, and I’m proud align myself with them.
  2. Great coaching and training tools that help front-line sales managers (one key point of differentiation between success and disappointment) become effective behavior coaches. My clients can access a full set of rich coaching and sustainment tools, plus my commitment to integrate those tools into working solutions that result in meaningful outcomes.
  3. A great execution and change plan individualized for your organization. Just buying “butts in seats” from any training company — no matter how good their material is — runs the risk of assuming away this critical component. This link in the chain doesn’t come from a training company.

Understand: testing for material mastery is not a predictor of outcomes. Not even remotely.

The overwhelming differentiator in successful sales performance initiatives is effective behavior change, not behavior description. Make sure you have a clear change management path before you decide to “train your people”. Be sure you understand how your learners will be coached into becoming performers.

I’ve seen some e-learning tools claiming to perform automated coaching – verifying behavior change. Now that’s a cool concept, and I’m eager to see those technologies mature. In the meantime, feel free to contact me if you’d like to discuss behavior change and organizational change management that works. For you, your organization, and your aspirations.

To your success!

Categories
Best Practices Culture Management Personal Development Sales

The Responsibility is Too High

After making a purchase, it’s common to receive a survey asking about your experience. For the most part, companies are seeking to either, see how they can improve or how the customer feels about their business. It’s your chance to express your opinion. Companies put a lot of weight on surveys which means a lot of responsibility for the customer, so careful thought should be given.

Surveys can be about facilities, logistics, or salespeople. The question you should ask before diving in is… What is this survey pertaining to? There’s something the business wants to know. By understanding what they are evaluating your answers will be helpful.

When it comes to a salesperson’s survey, most customers do not know how to answer them correctly. A survey of the person who worked with you is not the time to complain about the company. The survey is about the salesperson. You would be blaming the wrong person for your unhappiness. Here’s what happens.

The salesperson’s survey is going to his manager. It does not get to the management or ownership of the business. Unfortunately, many businesses will ask questions on the salesperson’s survey about their experience overall, but don’t be fooled. Whatever you answer will affect the salesperson.

If you are upset with how your last visit went, don’t blame the person you are working with now. When you do, you are rating your current salesperson for what happened. Or if you think it took too long for the service department to get your item fixed don’t blame the salesperson. Unless he’s the one fixing your item, he doesn’t have control over the amount of time it took. He also doesn’t have control over how the cashier treated you. Your opinion will not get to those who can do something about it.

Stay on topic. The survey is about the person who helped you, your salesperson. In some cases, they get paid less. If their normal commission is 25%, it can be cut to 15%, because of someone or something outside the salesperson’s control.

Another example would be if your delivery was late or your items didn’t come in on time. It’s not the salesperson’s fault. They weren’t the ones delivering it to you or the one who will go and pick up the item. Don’t blame the salesperson.

Here’s an example I heard from a single mother with two children. She sold a $187.00 chair to a customer, telling him he has to put it together and that the sale was final. The customer stated he would be able to do it.

When the customer took it home, he decided he didn’t like it. The sale was final, but he wanted to return it. After the store told him no, he decided to blame the salesperson stating she lied to him so the store would allow him to return it, which he did. The customer filled out the survey on the salesperson and rated her a zero. On a scale from 1 to 10 a zero is horrific. But, the customer was happy because he was able to bring the chair back.

The outcome for the salesperson was devastating. As expected, she did lose the commission of $3.37. Okay. The score of zero meant she did not get her $1000.00 bonus that month, all because of a customer. Now you see the importance of filling out a survey correctly.

A problem with surveys is you are not given a key explaining what the scores mean. Some scales are from 1 to 5, or 1 to 10. Without understanding the ratings how can you accurately pick a number? There is a practice widely used and that is; if you score anything lower than the highest rating the salesperson fails in the eyes of the company.

You might notice when you take your car in to be serviced the attendant presses you to take the survey and give him a perfect score. What they are telling you is anything lower than the highest number will affect them negatively. They could lose money, privileges, promotion, even their job. If you are upset with how your car was washed, don’t rate the salesperson who didn’t wash the car. Anything on that survey goes against the service attendant.

Here is the company’s view from your survey. Using a system of 1 to 10 for their rating, it’s not uncommon for the scale to represent:

A score of 9 or 10 is good – it helps the salesperson

A score of 7 or 8 doesn’t hurt or help the salesperson

A score of below 7 is like giving the salesperson a zero

My practice is to give the salesperson the highest score. I don’t want the burden of taking food away from a family. If I have something to complain about I write it in the comment space. I handle a problem with a salesperson by making comments on the survey so their manager will see, but I still give them the highest rating.

I take every survey I am given. Most people only fill out a survey when they are unhappy, which means that one bad survey can blow it for a salesperson. It takes fifteen good surveys to outweigh one bad one. If you were happy with your experience, take the survey and help them out.

Receiving a survey is a huge responsibility, so take it seriously. Score it by only addressing the overall topic. If you are unhappy with the situation or the salesperson give them a high rating, putting in the notes what you didn’t like. Your comment will get to the manager of the salesperson who can address it with them. If you are happy with your experience, send in the survey with the highest grading to counteract those who don’t know the significance of the ratings.