Monday, May 14, 2018

Beyonce and Me!

I was in Times Square last week and, while walking down 42nd Street, I passed a young man hawking discount tickets to one of the area’s tourist sites. In a voice feigning enthusiasm, he recited, over and over, “Madame Tussauds wax museum. Get a $6 discount. Madame Tussauds wax museum. Get a $6 discount.”

From the few minutes as I approached, and then passed him, I didn’t see anyone stopping to buy a ticket. I turned around and walked over to him and asked, “Are you compensated on the basis of how many of these tickets you sell?”

“Yes,” he said. “I’m paid hourly and on commission.”

“Why would I want to go to Madame Tussauds?” 

“We have over 150 celebrity figures!” he said.

“Do people know that’s what’s in the wax museum?”

He shrugged.

“I’ll bet a lot of people don’t even know what Madame Tussauds is,” I said. “There are a lot of international tourists in Times Square. You need to tell them why they should go to Madame Tussauds. Get them excited about what the experience will be all about! Try yelling out, ‘Get your picture with Beyonce! Get your picture with the Avengers!’ Your customers need more information so they believe that this is something they shouldn’t miss! Get them thinking, ‘Wow! A picture! Beyonce and me!’”

He laughed and shook my hand. “Thanks for the tip.”

It’s the most important question to answer in sales and the easiest to overlook: “Why?”

Why should a client buy from you? And why you instead of your competitor? Why is your company different? Why is your offering different? Why will they get better service/innovation/value from you as opposed to someone else?

The client needs to fix a problem, meet an interest or improve its environment. In order for the client’s mind to reach the conclusion: “I choose you!” there has to be a foundation of why “you” are the best choice. If the client doesn’t know why to choose you, then it will be obvious why they don’t!

On my way back to the office, I tried to ask the ticket vendor how the new technique was working, but he was in the middle of a sale. He gave me a smile and a wave.

Monday, April 30, 2018

The Strong Don't Survive

“We’re glad you’re here. We need a tough negotiator.”

I have heard that opening line a few times in my career and, frankly, I don’t know what it means to be “tough” as a negotiator. People mistakenly believe that when dealing with a difficult party the answer is to be “tough” in response. I have always found the right strategy for dealing with challenging business people is to be inquisitive, understanding and grounded. Build a shared goal and develop a sense of trust. Trust gets deals done, not muscle.

The key is being able to assess a situation and develop a strategy to build that trusted relationship. Every deal is different because the people, personalities and problems are different. This is how I learned that old, often-quoted saying is wrong: The strong don’t survive. At least, not without the ability to change the direction and allocation of strength.

In my experience, the adaptable survive. In fact, if you’re highly adaptable you don’t just survive, you thrive. A lot of “strong” companies are being upended or going out of business because of the technical innovations of the last 25 years. The ones that can adapt to change are still thriving.

Adaptability in sales and negotiation means being able to adjust your attitude and communication style for the right balance of relationship and substance, depending the deal.

When I am negotiating to buy or sell a house or a car, I am positional. My goal is to sell for as much as I can or buy for as little as I can. Relationship is not as important as I don’t expect to have an ongoing relationship with someone once I buy their house and they move.

When I am negotiating for vacation, I am personable. If my wife and I are trying to agree on where to go for a holiday, I don’t approach it with a need to “win” in the negotiation. I need to focus on relationship, be amenable to her ideas and mutually agree on where we will go. If I negotiate “tough” and get my way, I likely will be on vacation by myself!

When negotiating for a large, complex technology deal with a client, I am collaborative. The goal is to solve the client’s problem, meet its operational needs or maybe deliver a new system. I can’t treat it like selling a house because the relationship does matter. A lot. We are going to be working together for a few years so we need to build our relationship. I can’t treat it as if the issues are non-material, like a vacation. The client has legitimate needs and concerns and so do I. 

In the end, the deal has to meet the client’s interests or else the effort is wasted; and I need to push for my interests so the deal is successful for me, my team and my firm. Being “strong” or “tough” won’t get me to a mutually beneficial outcome. The ability to assess, adjust and execute enables us to succeed.

Tuesday, March 27, 2018

No Cinderellas in Sales

This weekend the men’s NCAA basketball championships semi-finals will feature an improbably entry, much to the delight of millions of fans: a Cinderella story. For the first time in history, a team initially seeded at 11, Loyola University of Chicago, has made it to the Final Four.

What I enjoy most about March Madness are the upsets. Seeing “underdogs” with passion and drive upset the established seeding and throw everyone’s brackets out of whack. The concepts of teaming, practice, focus and achieving a singular goal (closing the deal) are all relatable to sales people.

But there are no Cinderellas in sales.

Despite how badly a sales team may want the business, how passionate they are about bringing their service or product to the client to solve a problem, big deals are won by the top seeds.
I have been the “bottom seed” a few times and if desire was the winning element, I’d get the deal every time. Here are three lessons I learned from being at the bottom:

  • Clients buy risk reduction. Unlike other disciplines, the technology services industry is not a place where businesses say, “Hey, let’s take a chance on these new guys” when the deal involves heavy lifting. No one wants to get fired for making a bad choice.
  • Get famous somewhere else. If you don’t have the credentials for this deal, figure out how to get them. Either focus on a vertical (retail) and make your name there, or focus on the sweet spot of your business (data analytics) and build market awareness of your expertise. Those become your springboard to other verticals, other services and bigger deals.
  • Focus on service. In the end it’s references that can swing a decision in your favor. Even if you have had a few hiccups on delivery, good customer service (integrity and communication) will save the reference. In fact, having a reference acknowledge to a potential client that there were problems (and there are always problems) but you made everything right is a powerful reputation to have. You’ll become known as the top seed.

That said, I am cheering for Loyola, the Cinderella, even though I have Kansas to win. Maybe it’s my Jesuit education; maybe it’s the charm of Sr. Jean, their 98-year-old chaplain. I really think it’s wanting to be further inspired by a group of young men who have worked so hard to accomplish something they were never expected to do.

Wednesday, February 14, 2018

A Bad Marriage

I can’t remember the first time I heard someone say it, but I have heard it dozens of times since then: a bad deal is like a bad marriage.

The comparison is a convenient though imprecise one. Given this is Valentine’s Day, I thought an article that connects sales and romance would be appropriate.

How is a deal like a marriage?
·         Emotion plays a large role in the decision to make a commitment.
·         Once the deal is done, there is a “honeymoon” period.
·         The relationship can last for years if each party is willing to work at it.
·         A fruitful relationship will produce offspring/follow-on deals.
·         Money is often the most difficult topic to address.
·         Good listening skills will always improve the relationship.
·         Termination of the relationship can be expensive and emotionally draining.

How is a deal not like a marriage?
·         A successful deal has multiple relationships of executives on both sides. Multiple relationships are generally not a good thing in a marriage!
·         The balance of “power” is not the same. In a deal, one side is typically “serving” the other’s needs. A marriage should strive to be a relationship of “equals” who treat each other with love.
·         In a successful deal, each party understands its “responsibilities” and service levels are clearly defined. In a marriage, roles and performance are often a topic of discussion!
·         A successful deal is typically negotiated with an end or outcome in mind. A successful marriage is “'til death do us part.”
·         In a deal, the service provider is always aware that the competition is “just outside the door.” In a marriage, that is called a “stalker.”

So, though not exactly alike, what are some of the shared characteristics of a bad deal and a bad marriage and what can we do to improve both?
·         Frustration with the other party’s behavior: Communicate. In a deal this is called “good governance.”
·         Failure to meet expectations, whether realistic or not: Be flexible and understanding. Maybe the other side oversold, but it doesn’t mean the relationship won’t flourish.
·         Seemingly “irrational” reactions: Ask and listen. Often one party’s reactions are driven by our own behavior and we don’t recognize or can’t admit we are the source of the issue.
·         A desire to terminate the relationship: Seek help and problem solve. If the parties believe there is merit in the relationship, bring an objective party into the conversation to offer options on how to improve it.

Happy Valentine’s Day and good luck with all your relationships!


Thursday, January 18, 2018

I'm Allergic to Nuts!

One of the advantages of owning an Italian restaurant is that just about everyone who comes in wants Italian food. It would be an odd thing for a customer to sit down in an Italian restaurant, look at the menu and say, “I don’t like anything I see. Can you make General Tso’s Chicken?” Customers choose the type of restaurant they want to go to, so it’s much easier to sell to them.

Sales people don’t have that advantage. When talking with a potential client, the first task is to understand what the client wants and what the client needs. (Those two things are not always the same, by the way.)

Before I start selling innovation, I need to understand if the goal is to bring technology advancements into business operations. Maybe the goal is to drive efficiency. Maybe to improve performance.

Many salespeople will guess what the client wants most, and they conclude (often mistakenly) that it is price. So they lead with a discussion on price, sometimes offering discounts right out of the box! Why would anyone begin by discounting price without even knowing if price is the key buyer value? It’s like throwing a plate of pistachio-encrusted tuna at the customer and say, “Eat this! This is delicious!” You may get an angry response, such as: “You idiot, I’m allergic to nuts!”

Here’s a simple way to test if you understand what is driving your client’s appetite: ask questions. And then ask more questions. And listen. A good opening question that can generate a lot of valuable insights if you listen to the answer is: “If this were to go exactly as you want it to, what would success look like?” The client might say:
·         Success would be all of our legacy data is successfully migrated to the new platform. We’ve tried twice and failed.
·         Success would be greater efficiency in our operations so we can sunset applications.
·         Success would be ease of scalability and flexibility in the solution because we anticipate rapid growth in the next five years.

Sure, they want it at the best price possible. No one wants to overpay. But once you dig in more to these goals of dependability, efficiency and flexibility, price becomes secondary. To lead with a pricing discussion without understanding the buyer values would be… nuts.

Wednesday, December 13, 2017

Here Comes Santa Claus...

Yes, it’s that time of year when boys and girls all over the world anxiously await the arrival of that special person in the suit who will bring them gifts and joy to finish out the year.

No, I am not talking about Saint Nick, the jolly old elf. I’m talking about the company executive who shows up in December to give away discounts to clients to close deals and make sales quotas.

You know, “Help.”

“Help” is a noun, not a verb, as in “here come ‘Help.’” It’s a term used by deal makers when their management decides they need to get involved to “help” push the deal “over the line.”

In fairness, sometimes a deal team can use an objective perspective to close out some nagging issues that the parties can’t seem to resolve. In December, however, Help usually arrives as a result of a gaping hole in the sales forecast that needs to be filled with some fast closings.

When I worked for a software company, where December 31 was the end of the fiscal year, the rumblings about Help would begin soon after Thanksgiving. If I heard that Help was coming to see me, strains of the theme to “Jaws” would start playing in my head: a pounding rhythmic pulse of foreboding.

The client, on the other hand, hears, “Here comes Santa Claus, here comes Santa Claus…” That’s because for the client, Help was an executive with a big bag full of goodies that the executive couldn’t wait to give away. And then the executive would crow about being the one who closed the deal.

If all it takes to close deals is giving away money, management should send an ATM into the negotiations instead of an experienced deal maker.

The problem with Help is: not only does the client get a bunch of money in exchange for nothing in return (which trains the client that it can get a bunch of money in exchange for nothing in return), but sometimes Help results in a bad deal.

All deals need time to develop. The more the parties talk, the more they learn about each other’s real underlying interests, challenges and goals for the transaction. Sometimes, as the deal takes on its shape, the parties find out they are misaligned and decide to hold off for a while. When Help forces a deal by throwing money at the client to get a signature, all the ingredients for success may not be mixed in and the engagement may suffer.

When making a cake, for example, one usually mixes everything together and then bakes it for 45 minutes at 350 degrees. You can’t say, “We don’t have time. Let’s fire it up for 10 minutes at 1,000 degrees and we’ll worry about sugar later.” That’s a recipe for a bitter outcome. Given the right amount of attention and time, a good deal will rise and a bad deal should fall. Unless it gets Help.

Tuesday, November 21, 2017

Thanks for Nothing

I’ll never forget the Thanksgiving week when I almost saved $9 million.

It was the Tuesday before Thanksgiving, 15 years ago, and I was negotiating with a software company for a license to one of their products. The price on the table was $18 million.

The salesperson called me and said, “If you sign before Thanksgiving, I’ll cut the price by 50%.”

Wow! What a deal! You’d think I’d have gone back to my chief operating officer and said, “My brilliant negotiation skills saved you $9 million! We just have to sign the contract tomorrow!”

I did not. I told the COO we would not take the offer. The contract was not ready and I would have had to call in all kinds of favors internally to make the deal happen in 24 hours during a holiday week. Instead, I told the COO: “The sun will rise and the sun will set on Thanksgiving and we’ll still pay $9 million next week. That is, if we want to do the deal.”

The salesperson was furious when he found out I wouldn’t sign right away. “You should be thanking me for saving you so much money!” he yelled.

“Thank you?” I said. “You just showed me how much you were overcharging me! And you revealed that when you said this was your ‘best price’ you were not being truthful. Thanks for nothing.”

In the end, we did not sign the deal. As a result of the salesperson’s behavior we reevaluated our needs and decided to go with another product.

It was a rookie mistake on the part of the salesperson. Offering a drastic discount does not motivate a client. It raises suspicion. A client starts to ask, “How many other deals have we done where I didn’t get that discount? How long have I been overpaying this vendor?”

The salesperson was clearly trying to meet some internal sales deadline. He must have thought a fading opportunity strategy was the best path to influence. His error was acting in self-interest. His goal was not to give, but to get. And nothing will destroy trust faster than a party’s self-interest. To paraphrase the great English sales strategist, Bill Shakespeare: self-interest is the green-eyed monster that mocks the relationship that both parties should seek to build.