"The Navigator" News Blog

Monthly Archives: December 2014

An 800 Year Old Problem Solving Principle Still Applies

Sales Blog,

I always chuckle when people, confronting a problem with multiple solutions or a mystery with several explanations, bend themselves into pretzels coming up with incredibly convoluted “solutions” to those problems.  Somewhere, William of Ockham is laughing with me.

Sir William of Ockham was a Franciscan friar in the early 1300’s, and he came up with the principle called “Ockham’s Razor,” sometimes spelled “Occam’s Razor.”  Ockham’s Razor suggests that, among competing hypotheses, the one with the fewest solutions should be selected.  Sometimes other, more complicated hypotheses may win out, but initially, the fewer assumptions, the better.

In other words, the simpler the solution, the more likely it’s true.  If you hear hoofbeats, think “Horse,” not “Zebra.”  This solution still applies – in business, in society, and in life.

For example – let’s say that sales of your product suddenly fall off a cliff.  The simplest solution is that another product or service is suddenly offering better value – but I see companies spend millions of dollars to produce research trying to find something different.

In my consulting practice, I (successfully) use Ockham’s Razor frequently.  When solving problems in your business, you should too.  It doesn’t mean that you automatically reject all other solutions – it just means that you start with the simplest and work from there.

Sir William would approve.

Better Presenting Through Storyselling

The Navigator News,

A few weeks ago, I boarded a Southwest flight to Minneapolis. As is my habit, I took the window seat. Soon, a woman in her mid-30s came along, pointed to the aisle seat, and asked, “Is this taken?” I told her no, and she sat down. Nervously, she smiled at me and said, “Don’t worry, I’m not weird.” “I’m sure you’re not,” I smiled. She continued, “It’s not like I’m a serial killer or anything.” Well, that’s an odd thing to say on a plane, so I said the only thing I could think of. “Of course you’re not. What would be the odds of two of us meeting like this on an airplane?”

If you’re anything like the live audiences I’ve told this story to, you’re laughing out loud right now. Good. The point of the story was to grab your attention and get a reaction. Depending on what speech I’m giving, it could have a few different uses. Right now, the point is to illustrate the power of story in customer dialogue. If your presentations fall flat, perhaps this article will help you find some ways to liven up your presentations.

All too often, our sales presentations are filled with facts, figures, and contentions that we hope add up to a buying decision on the part of our customer. All too often, they do not add up to a buying decision – because the customer isn’t involved, or our contentions aren’t ‘real.’ From the time I started selling, I started storytelling as part of sales – or “Storyselling,” if you will. It’s a natural in sales because we’re constantly meeting people and collecting stories. The bad part is that we only share stories over the watercooler with our co-workers or over a beer with our buddies. What if you collected stories and then used them as part of your sales dialogue? Here are three ways to use stories:

  1. For a little humor. The old saying, “If I can make a customer laugh, I can make him buy,” is at least partially true. Too many salespeople, however, take the low road. They tell jokes. First of all, jokes are hackneyed and false, even in the best of situations. Second, they’re lowest common denominator humor. Third, oftentimes, they can be offensive. We’re salespeople. Funny things happen to and around us all the time, and well-told, those stories will get a laugh out of your customer as well.
  2. To make your customer comfortable. Remember my mantra: “Comfortable Customers Buy.” There’s a built-in tension between salespeople and their customers, and one way to break that tension down is to tell a story that illustrates commonality, either between the salesperson and the customer, the customer and the salesperson’s company, or the customer and other customers of the salesperson.
  3. To show past successes. One of the best uses of a story is to show how the salesperson (or the company) has helped a past customers succeed in an area where the new potential customer has a need. These kinds of success stories can (and should) pepper your conversation – in introductions, in presentations, and in general dialogue with your customers. As they say, “Nothing succeeds like success,” and a success story can and will win business.

In a future edition, we’ll talk about how to tell a story that will sell – from constructing it to delivering it. For now, start thinking about the stories that you have to tell, and start writing them down.

Oh, and the woman on the plane?  She looked at me for about ten seconds.  Then she quietly picked up her bag….and changed seats.  I don’t think I stopped laughing until we landed.

A Negotiation Tip From a Fast Man

Sales Blog,

I was recently reading an article on the business challenges facing Formula One race drivers.  Most drivers in F1, since about the Seventies, have used managers for their business affairs.  These managers negotiate contracts, sponsor deals, appearances, and the like – and of course, they take commissions.  With top F1 drivers earning upwards of $40 million per year these days, that’s quite a sum of money.

One driver who was notorious for never using a manager was Austria’s Gerhard Berger, who drove in the ’80s and the ’90s.  Berger was very fast, very rich, and notoriously tight with a buck.  In this article, he was asked why he didn’t have a manager – to which he responded that he didn’t want to pay someone else to do his business for him.

“My negotiation was very simple,” he said.  “I went in with two figures.  What I wanted and what I’d take.  I walked away when the amount on offer was below what I’d take.”  Berger seldom walked away – not only because he was talented, but because he made the negotiation process as simple and painless for his teams as possible.

That’s the way negotiation should be, in my opinion.  No matter what anyone says, few people actually enjoy negotiation.  Negotiation means that the customer has to invent reasons not to do business with you – which is an unfortunate situation.  Berger never forced his teams into that position.

As a result, Berger drove for the top teams, he was well liked not only by the team members but by management, and he was extremely financially successful.  That’s not a bad result, is it?

Want to negotiate the right way?  Here are three simple tips:

1. Have a “Walk away” number – and walk away.  If you’re always going to sit at the desk, you have no power in negotiation.  If the terms are unacceptable, the negotiation ends.  And you’d be surprised at how often ending the negotiation restarts the negotiation on the other side of the table

2. Keep it friendly.  Never get into the trap of a hostile or adversarial negotiation process.  If I don’t win, I don’t play – and by “winning,” I mean a resolution that works for everyone at the table.

3.  Justify your discounts. If you have to lower your price, be prepared to remove some of the features and/or benefits from the offering.  Berger, for instance, would lower the number of personal appearances he’d make for lower salaries.

Negotiation doesn’t have to be unpleasant or difficult.  Follow this path and you can get past the negotiation to the sale – and that’s the fun part!

5 Changes You Must Master to Succeed in Today’s Selling Environment

The Navigator News

“I don’t understand it,” the salesman said. “I’ve been selling to that guy for fifteen years! I’ve taken him to football games, bought countless lunches, we’ve been to each other’s houses. And now,” the salesman wailed, “he’s buying most of his stuff from someone else! I mean, what the heck?”

This salesperson (let’s call him Bob) is a veteran salesperson who works for one of my clients. I’ve known him for years. Bob’s a very charismatic person, an absolutely fabulous rapport builder (to a degree that I’ve always envied), and he builds deeply personal relationships with his customers. He’s the kind of guy that if you met him out in public, you’d immediately tab him as a salesperson, and probably a great one. And you’d be right. Or at least, you would have been about ten years ago. Today, not so much, and there’s a big reason why.

The sales world has changed. It’s changed in a big way, and some salespeople are struggling to keep up. Bob went through my training a few years ago, and, to be honest, he wasn’t impressed. He told me that “Look, sales is simple. I just wing it. Customers buy from people, and specifically, people they like. My job is to be liked and be their friend, and if I can be that, they’ll buy from me.” Essentially, he viewed sales as a friendship contest – and to be fair, for much of his career, it worked for him.

Today, it doesn’t. My client (his employer) asked me to interview a couple of his key customers – customers who once made up a big part of his volume, and now only bought incidental items from him. In interviewing him, I found that the reason that customers had stopped their purchases was that Bob just wasn’t useful. Their comments basically boiled down to this:

“Look, I like Bob. We all do. He’s a great guy. If we didn’t like him as much as we do, we wouldn’t buy anything from him, but we feel a certain obligation. But the truth is that Bob isn’t much help to us. Whenever we have a technical question, he has to call someone else and have them get ahold of us. His competitor can answer questions on the spot, so we buy most everything from him.”

I found out that the competitive salesperson also spends a lot of time keeping abreast with industry developments that affect his customers; Bob asks about the son’s soccer team. The competitor is constantly refreshing his knowledge of the customer’s business and introducing new products and services; Bob makes sure to bring doughnuts for the women who work in the office.

When I took that information back to my client, he sighed and said, “So, what should we do about Bob?” You see, Bob has been a loyal employee for a long time, and his employer felt the same way as his customers. They like Bob (and so do I), but Bob no longer contributes value. Bob is now into the ‘mercy buy’ phase of his career. The orders he gets are ‘mercy buys,’ and his job is a ‘mercy job.’ I advised his employer that if Bob wants to remain vital in his sales career (and he’s not close to retirement age yet), he’s going to have to embrace some changes. If you resemble Bob in any way, you might need to embrace them, too.

  1. Embrace sales process. One thing that sharp salespeople do today is that they are always conscious of sales process, and they keep their customers involved in a sales process at all times. There’s no better way of building a relationship with your customer than to always be selling to them – requalifying them for new products or services, presenting, and constantly working to improve the customer’s condition. The “just wing it” salesperson is behind the 8-ball in this respect.
  2. Become a business resource. Bob’s competitor won business not because he was more likeable than Bob – in fact, both customers made it clear that in the “friendship sweepstakes,” Bob was in the lead by half a lap – but because he could be a business resource for his customers. Customers know that the competitor is good for more than buying a good lunch – he’s good for helping them solve their problems.
  3. Always have a call objective. Most of Bob’s sales calls were centered around simply reinforcing friendships and staying visible. Meanwhile, his competitors pick his pocket because they are going in with a call objective, working to constantly advance the status of their business relationships.
  4. Develop customer expertise. The most valuable knowledge is customer knowledge. Bob’s competitor worked to build his knowledge of his customers on every sales call. In fact, both of them remarked on the competitor’s ongoing questions. “It’s like he’s always trying to learn more about us,” one said. Bob is a friend who talks about the Chiefs football team; his competitor talks about the direction that his customers are going in.
  5. Make good use of the customer’s time. Both customers remarked on how time-efficient the competitor is. “He does something positive for us on every visit,” one said. “Granted, he’s not as personal. We like him, but he’s not our friend like Bob is. But we know that every time he’s here, something good will happen – and Bob stopped doing that long ago.” Your customer now expects a return on his time investment with you. How are you going to generate that?

By the way, it’s not only veteran salespeople who fall victim to this kind of selling and its consequences. I’ve had young salespeople with the sale ‘friends first’ focus, and they lose business for the same reason.

Today’s customer demands more than a buddy. The customer demands a resource – and if you can’t be that, your competitor will.

How to Master the Upsell

The Navigator News, ,

What is an upsell?

Well, it’s retail shopping season, which means that it’s ‘upsell season.’ I saw living proof of that just a few minutes ago. I stopped into one of my favorite bookstores. As is my habit, I picked up a new motorcycle magazine, and proceeded to the counter. And there…I played the new version of Twenty Questions.

“Do you have our discount card, sir?” she said. “No,” I replied. “Well, would you like to sign up?” “No,” I again replied (First of all, I refuse to pay to get discounts – secondly, I don’t have room for the cards of all the places that I shop). “Would you like to donate to something-or-other?” “No,” I again replied. “Would you like to also purchase…” By this time I was getting annoyed, and I said, “No, what I would really like to do is to exchange cash for a magazine. Do you still do that here?” A bit shaken, she completed the transaction – but she committed the biggest mistake in retail upselling. Let’s talk about that, and some other mistakes – then let’s talk about how to master the upsell in any part of selling.

The biggest mistake in retail upselling is this: Only one upsell per customer per visit. I don’t mind being asked if I’d like to purchase an additional item. Usually I don’t, but I recognize that the company is trying to maximize my purchase volume, and I’m good with that. But when customers have made their selections and are at the checkout, they’re typically ready to pay and go – and if your retail sales process is an impediment to the customer doing just that, you have a problem. So, if you’re in retail, one upsell per customer, please.

The next mistake the lady made is this: The completely unrelated upsell. The third (and final) upsell she tried was a children’s book. I don’t have children, either mine or in my immediate family – so the best kids’ book in the world is lost on me. Of course, she didn’t know this – but that’s the point. However, there’s something that she DID know. I like motorcycles, hence my purchase of Rider magazine. Had she said, “Hey, we also have the new issue of Iron Horse here (they had it at a checkout display) – want to grab that, too?”, it would have been a completely reasonable upsell.

But no, the upsells were designed for every customer, and were one size fits all upsells. These are also a mistake, unless you know for sure that everyone in the door has a common need. For instance, one of my clients manufactures superchargers for automotive applications. When customers call in for parts, it’s completely reasonable that, on every parts call, they ask if the customer needs some supercharger oil – because they usually do. In most cases, however, the one size fits all upsell is not valid.

So, how do you succeed in upselling? First, you understand that there are really only three types of upsell that can be successful – the tag-along product, the more expensive product, or the referral upsell. And you also should understand that the successful salesperson needs to be careful about using them – the ‘one per customer’ can apply well in any sales environment. I’m goinng to discuss these in terms of product, but they can work well in terms of services, as well.

The Tag-Along Product: A ‘tag along product’ is a product that is most likely purchased with another product, or that makes a nice ‘fit.’ “Do you want fries with that?” is the most classic tag-along upsell. Doing a good tag-along upsell requires a little pre-planning. Think about what products (again, or services) you upsell that are a nice fit with other services – particularly if they’re ones that the customer hasn’t thought of or might not normally think of. The best tag-alongs are the ones that complete the buying experience for the customer.

The More Expensive Product: Everyone understands this one. If you’re buying a single cheeseburger, do you want to upgrade that to a double? Want to upgrade that hotel room to a suite? Etc. This is probably the easiest of the upsells to master, since all you have to do is to understand the additional features and benefits of the more expensive product, and guide the customer in that direction. Be careful, though – this can work in reverse. I’m typing this on a new Hewlett/Packard ProBook that I just purchased a month ago for $800. The computer store salesman tried to move me up to the $1000 version – however, a close examination of specs, features, and benefits showed that my $800 selection was actually more computer than the $1000 version!

The Referral Request: Referrals are upsells, too. Typically my preference for referral upselling happens AFTER the customer has achieved satisfaction with their purchase, not at the time of purchase (as part of a business review) – but there are some instances where it’s completely appropriate to ask for referrals at the point of purchase – “Do you know of anyone else who might benefit from this,” etc.

Again, however, the key is to be smart and think on your feet. Nearly all of your customers will allow you one upsell per transaction. Some will allow you two. If you go for three, you’re going to annoy more than you sell. Pre-plan, think ahead, and make sure that your first upsell is your best upsell. That means that if you only get one, it was your best shot.