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.

How to Blink

I can’t find a book on how to blink.

I went on Amazon and found a book called, “Blink.” It has nothing to do with blinking. Malcolm Gladwell, you fooled me!

I think I know why there is no book on blinking: no one needs an instruction book on how to blink. It’s a reflex. We just do it.

Maybe that’s why there are so many books on sales. It’s not a reflex. People have to learn.

But what if we could make parts of the sales process a reflex? A reflex is an action that is performed in response to a stimulus without conscious thought. Imagine what an awesome salesperson you could be if you were selling without even thinking! Can we really teach people how to make sales a “reflex”?

No.

And that’s what every good salesperson knows: there is no response you should give to a client without conscious thought. Because the first thing you have to do is listen. Active listening requires effort. It requires concentration. It requires analysis.

In short, selling cannot become a reflex. It’s a complex activity. And it’s hard.

So beware of anyone who tries to sell you the “secret” of selling (N.B: if it’s advertised it’s not much of a secret) or a “fast-path” or “sure-fire” way to sell. Each sale is as unique as the buyer.

What you can do, however, is develop good habits. While not as automatic as a reflex, a habit may be the next best thing. Here are three that will improve your results as a sales person:

• Do what you said you’d do when you said you’d do it. If you get in the habit of always following through on your commitments, you’ll build trust with your clients. Trust grows accounts.
• Shutup. Stop trying to sell and listen more. Get in the habit of asking questions, not making statements. You can’t provide a solution unless you understand the problem. When clients perceive you are trying to understand their issues and help them succeed, it builds trust with your clients. Trust grows accounts.
• Admit the truth. If you made a mistake, admit it. If the competition is better at something, admit it. If you get in the habit of being truthful and transparent with your clients, you’ll have greater credibility. Credibility builds trust with your clients. And, guess what? Trust grows accounts. 

The Lady of the House

I remember the first time I got a phone call from a salesperson asking to speak with “the lady of the house.” (Remember those days? When your telephone hung on the wall and rang?)

Though I married the “lady of the house” 31 years ago, this was already an outdated opening line. It echoed of black-and-white TV shows from the 1950s where a vacuum cleaner salesman in a suit and fedora was standing on someone’s front porch selling door-to-door. Today, asking for “the lady of the house” would be properly derided as sexist, perpetuating negative stereotypes of women.

From a sales perspective, though, the question had logic: I want to speak to the buyer, the person with the problem that my product can solve. The vacuum salesman wanted to sell to the key decision-maker on buying household appliances.

It’s a fundamental principle of sales that I find many salespeople today don’t appreciate, namely, that having a conversation with a client employee is not “selling” unless that employee has the authority to make a decision and buy. If you’re pitching your product or services to anyone other than the person who can and will make a purchase decision, it’s a waste of time.

“Can” and “will.” And you need both criteria.

“Can” means the individual is empowered to commit the organization to enter into a deal. That individual controls the P&L, has a budget and/or manages the “buying process,” such as a procurement professional.

“Will” means that, given the appropriate criteria, that individual will make a decision to do a deal. They are ready to buy. The criteria may be meeting specific requirements or determining that your value proposition (better/faster/cheaper) has merit.

More simply put, you can’t close a deal with someone who can’t and won’t make a buying decision!

So when putting together your power map of the client organization, be sure you’ve identified who the “buyer” is. Validate why that person is the “buyer." Maybe it’s been made clear in an RFP. Maybe you’ve tried to sell to this company before. If you’re not sure, ask. “Can you tell me what the process is for us to get this to signature?” (Read “The Five Hows of Sales” for other questions to ask yourself. http://dealwhisperers.blogspot.com/2012/02/five-hows-of-sales.html) Knowing you are selling to the right person will save a lot of wasted time and allow you to focus on understanding the client’s goals and building your relationship so you can collaborate on how to make the client successful.

  

And, for the record, “the lady” of our house did not buy our most recent vacuum cleaner. I did.

Look What She Made Me Write

One of the most important attributes a person needs to be successful in business is the ability to make a decision.

One of the most important attributes a person needs to be a successful leader and role model to others is the willingness to be accountable for that decision.

So I was disappointed when I heard the song Taylor Swift just released. Ms. Swift has, for several years now, tried to be an example of and promote empowerment among young women. As a father with a similar mindset for my three adult daughters, her messages and actions often resonated well with the guidance I provide to them. From her public persona, Ms. Swift shows strength and decisiveness and a keen acumen for managing her own career, providing a good role model for young women, whether in entertainment or business.

But her new single, “Look What You Made Me Do,” undermines the very notion of empowerment and decision-making. The message of the song is that the actions of others have forced Ms. Swift to change, become tougher, and seek revenge. What could be less empowering than to take action because someone else “made” you act? It undermines the core of free will and personal independence to claim someone “made” you do something.

A decision is choosing an option and deciding to act on it. Or not. Regardless of the situation, one always has a choice. Do something (whatever “something” may be) or do nothing. Choosing not to act is a decision to do nothing. Strong, independent people make decisions based on a perception that one choice is better than another. Strong, independent people can't be "made" to make a decision.   

I don’t usually use this forum to critique music and the arts, but her message comes at such an interesting time where our culture seems to have lost the notion of “accountability.” And Ms. Swift has such a powerful impact on that culture that, well, look what she made me write!

Our newspapers and televisions are, almost daily, full of examples of people in government, entertainment or industry who try to shift the blame for their bad decisions or comments to others: “I don’t recall,” “I was taken out of context” and “It’s not true” (until facts emerge to show it is true and the story changes). These are among the phrases that have become routine responses to the question “Why did you do that?” or “Why did you say that?”

In the 70s, a television character named “Geraldine” (played by comedian Flip Wilson) would find herself in a scandalous situation and defend her actions by saying, “The Devil made me do it!” The line always evoked a laugh because Geraldine had, by that time, made so many bad decisions that attributing them to “the Devil” was ridiculous. Geraldine had made her choices but refused accountability.

One can debate the true message of the song because Ms. Swift sings about how the bad behavior of others has made her stronger, so there arguably is a message of empowerment. Maybe. If that’s true, a better title would have been “Look What I Decided To Do.” That title better evokes a theme of independence in making choices. Yes, it’s not as catchy. I suppose that’s why I am in sales and not a songwriter.

A Fistful of "No"

Derek Jeter can’t say no. At least, not the right way.

During the ceremony at Yankee Stadium to retire his jersey number (2), Jeter’s nephew, Jalen, asked if, when he plays for the Yankees, he could wear his uncle’s number. Jeter said, “No.” The exchange was recorded in a widely-viewed video.

As soon as Jalen started to whimper, Jeter realized he’d made a mistake and tried to explain that no one can wear his number because it’s being retired. Too late. The emotional tide for Jalen had turned.

Because he doesn’t have children, Jeter didn’t know the proper way to say “no” to a child. It’s a powerful word that literally can change emotions in a heartbeat. That’s why saying “no” the right way to a client can make all the difference in how you work through difficult issues. I have found, for example, that instead of saying “no” I can often solve the issue by giving the client the option to see what “yes” would look like. For example:

Client: “Can you cut the price by 10%?”

Me: “Yes, I can, if we make some adjustments to the proposal. I’d have to reduce the number of managers I am using on the engagement, which may increase the risk of a delay. That means we’d have to revisit our milestone commitments. I know you said hitting the schedule was the most important concern for you, but if price outweighs timing we can figure out what a revised schedule looks like.”

Rather than hearing “no” in this exchange, the client, instead, is hearing “I have to weigh my priorities.” The client actually gets to choose which direction to go in, and giving options is a powerful way to work through an issue.

But, I have learned, sometimes you do just have to say “no.”

During an engagement I had with a large telecommunications company, we were negotiating rates for our consultants. The client was pressing for a rate reduction for a specialized group of technology experts. We said we couldn’t cut those rates. The client persisted. They wanted everyone at the same rate. My colleague, Russell, who had been the delivery lead for this client for several years, was getting frustrated. Russell was of a size that he could have had a successful career as an NFL linebacker had he not chosen consulting.

I tried to show them what “yes” would look like. They ignored me and pressed their demand. I tried to reason with them. Russell sat by quietly fuming, growing frustrated by their persistence and my inability to just deliver the answer. Finally, Russell had enough. He raised his arm and brought his fist crashing down on the table and bellowed, “No!”

That’s all he said. The client was startled, then relaxed. It was the answer the client was waiting to hear. Russell’s decision to deliver a fistful of “no” ended the discussion.

The lesson I learned that day was that delivering a “no” requires tailoring the answer for both emotion and custom. I had the experience to know different ways to deliver a “no.” Russell was familiar enough with this client’s usual negotiation style to know which way would actually be effective.

Everybody is Selling!

Imagine a company spending millions of dollars to research, develop and produce a valuable and well-respected product, then spending millions more to market it, and then putting the entire customer relationship in the hands of a 12-year-old on a bike.

Sounds like a pretty stupid way to do business, doesn’t it? Well, that’s how the billion dollar newspaper industry worked for decades. The newspaper’s relationship with its customers was through untrained young kids flinging the paper onto subscribers’ porches/lawns/bushes. And if the kid didn’t do a good job, there was no “governance” process where they sat down with the customer and explained why they failed their service delivery commitment. The customer simply canceled their subscription and went to the competition.

A lot of technology companies today are not too far removed from that short-sightedness. They spend millions pursuing work with their clients. When they land a huge systems integration engagement or managed services contract, they send in a delivery team untrained in how to handle a customer relationship. I am not talking about the account executive or the project manager; I mean the developers facing off with the client day in and day out.

Years ago, when I was a newspaper editor, I recognized the absurdity of how the industry cut costs in delivery. The lesson I took from that into my role in sales has been a powerful tool in winning business: when you work for a services company, there is not a “sales department.” Everybody is selling! From the CEO who appears on the financial talk shows to the first-line developer who works in a cube alongside the client, every interaction is a sales discussion. Each one builds on your company’s reputation for reliability. If my first-line delivery team is with the client enthusiastically solving problems every day, my job is so much easier. The praises of the quality of my team echoes through the halls to the C-suite and the conference room where I am pitching my proposal.

Investing in sales and relationship management training for the people who actually deliver what you sell pays tremendous dividends: better referrals, better overall customer satisfaction, easier to sell new business, easier to resolve conflicts. Sure, you can save some money by just training your people how to throw the newspaper on the lawn. But when your product lands in a mud puddle, don’t be surprised when your client switches to the competition.

Ryan Gosling Stole His Wife

Last Friday night, my friend and his wife and decided to go out to dinner. He came downstairs in jeans and a t-shirt with plans to get a pizza. He didn’t even shave. After all, they had been married for over 25 years. How much effort did he need to make? It’s the same woman he sees every day!

His wife, on the other hand, was beautifully dressed, as usual.

Outside, a car horn honked. In the driveway was a red Ferrari and Ryan Gosling was behind the wheel. He knocked on the door. My friend's wife opened it and Ryan Gosling handed her a bouquet of flowers. Ryan Gosling offered to take her to a 5-star French restaurant.

Off she went.

Twenty-five years of marriage and, in one day, Ryan Gosling stole his wife.

Fortunately, not a true story. But it can happen to you with your clients.

You have a relationship for 3, 7 maybe 10 years and it’s gotten comfortable. You’re on autopilot. The work gets done, maybe not with the same zest and sizzle as in the first year or two. But no one’s complaining. Suddenly, the competition knocks on the door. The competition gets a meeting. The competition starts whispering sweet nothings in the client’s ear, such as “data analytics,” “robotic processing automation,” or “lower cost of ownership.”

Next thing you know, the competition has your client in the passenger seat and they’re driving away.

Incumbency is one of the two hardest things to sell against. (I’d be interested in comments on what you think the second is.) And complacency is the Achilles heel of the incumbent service provider.

Remember: if you don’t treat your old client like a new client, they soon will be an old client.

How you handle dates with your significant other is up to you. Just watch out for Ryan Gosling!

No More Threes

I never expected a professional basketball player to be the inspiration for a lesson in client service.

In business there’s an old adage: you get what you measure. For example, if a company is measuring how many days it has gone without a safety incident, efficiency may suffer. Workers may do things more slowly or with undue care because moving quickly and having an accident would ruin the company’s safety record. So the company measures safety and it gets safety; but at the expense of efficiency.

When negotiating contracts with clients, I see this challenge arise when we are developing the service level agreement. This is the part of the contract that lays out how the parties will measure the performance of the services, such as system uptime; how fast we respond to issues; or number of transactions processed per day.

I take a great deal of care discussing service levels with clients because sometimes what the client asks to measure will not reflect how well the delivery team is doing. The client may complain that the services are inefficient, and that may be because we’re measuring safety! So I strive to focus the measurements on what matters most to the client’s desired business outcomes.

This week I smiled when I read a story about a decision NBA player Moe Harkless made in the last days of the season. Harkless plays for the Portland Trailblazers and has a contract with certain performance incentives. One of them is a payment of $500,000 if his 3-point shooting percentage is at least 35% for the season. On April 4, Harkless decided: No more threes. Why? His percentage for the season stood at 35.05%. One missed 3-pointer would take his average below 35% and cost him a half-million dollars. That’s an expensive brick!

Consider that Harkless was not being measured on number of games won. So the Trailblazers could lose a game without consequence to Harkless because that’s not how he’s measured. Once he hit 35% he’s met his service level. And the owners got what they measured, 35% 3-point accuracy, even though what they really want is wins! The 3-point clause did not make Harkless less competitive, however. He switched to driving to the basket. He was still going to take shots; just no more threes.

So before you and the client leverage some form contract or previous deal to measure delivery performance, have a conversation. What matters to the employees? What matters to leadership? What determines business success? Measure those things that will help your client feel like they are “winning” in their business. Because they’ll get what they measure.

I'm Not Gonna Say Anything!

Warren Beatty was in a quandary.

At the Academy Awards ceremony last Sunday night Beatty, the Oscar-winning actor/director/producer, was on live TV giving out the biggest award at the biggest event for the industry he has been a part of for over 50 years.

And he didn’t want to do the wrong thing.

By now what happened with the Best Picture award is old news. (If you’ve been asleep since Saturday, Beatty and his “Bonnie and Clyde” co-star, Faye Dunaway, announced the wrong movie to win the Oscar.) What’s interesting to look at from a business perspective is how his split-second decision changed the way the mess unfolded.

Beatty knew something was wrong from the moment he read the card in the envelope. In fact, he looked to see if, perhaps, there was another card. Then he paused and contemplated how to handle the situation.

I don’t know what I would have done under the same circumstances (do any of us?); but we do know how his decision took what could have been an uncomfortable moment for him and a few people backstage, and turned it into an epic blunder impacting him, the production teams of “La La Land” and “Moonlight” and causing cringes throughout the entire audience, including millions of people watching on TV.

Think about it: he knew the card was wrong. It had Emma Stone’s name on it, not the name of the producers. Why would Beatty know that’s wrong? He has one of those cards! He won Best Picture as producer of “Reds” in 1982.

What could he have done differently? In the moment he could have said, “I’m sorry, this is confusing. The name on this card doesn’t seem right.”

Someone would have come out from backstage, maybe the now much-maligned accountant who handed him the card, and said, “Sorry, wrong card.” Then the right name would be announced. The right people would have come on stage. The right people would have dealt with the mishap. And Beatty would be viewed as a hero for stopping what would become the greatest embarrassment in movie award history. (I’d say “award history” in general, but Kanye West coming on stage to challenge Taylor Swift and Beck is still pretty high up there.)

However, rather than raising his hand and potentially looking foolish doing something that no one at the Academy Awards has ever done (that is, stop the ceremony and say, “I think there is something wrong here…”), he decided, in that moment, “I’m not gonna say anything!” He punted. He showed the card to Faye Dunaway, who gleefully announced “La La Land” as the winner.

The rest is awkward television history.

Interestingly, Beatty still gets the blame, though Dunaway actually announced the winner. As well he should. He saw a mistake and chose not to say anything. And it became a bigger mistake.

A valuable lesson in decision making to make us better business people in serving our clients: If you see something wrong, say something right. Bad news doesn’t get better with time, and mistakes don’t get solved by passing the problem on to someone else.

Shut Up and Wait

Too often, sales people don’t know when to stop selling. There is an old adage for this (as there often is for practical advice): “If you’re still talking after the client says ‘yes,’ you’re buying it back.” The idea is that once the client agrees to move forward, there is no need to keep explaining why they should move forward! In fact, you might undo their decision.

I have found a related behavior among sales people, and that is the desire to get to a final answer in the room. While working on an important issue, we try to persuade the client to consider our point of view and the client disagrees. Our perspective is so obvious we can’t believe the client is not agreeing! We try again and again to persuade, and the client holds firm.

If the answer to the problem is that obvious, and the client is a rational business person, the client will eventually agree.

They just want to agree in private.

If a client puts a point of view on the table, and is suddenly asked to take it back, often there is a fear of losing face. Especially if they are so clearly wrong. The next step for the salesperson is to design a way for the client to back off their position and not hurt their standing or status. In sales, this is called “building a golden bridge” to allow the client a glorious retreat.

If you don’t know how to build a golden bridge, here’s some simple advice: make your point, and then shut up and wait.

Often the client will go into a caucus with the team, come back and agree with you. The time alone allows the client to rationalize a change in position. Perhaps they will seek other changes in the deal to balance their decision and give legitimacy to the change.

This occurs in personal relationships as well. A discussion can get emotional and people lock in on positions. Once the situation cools down, and everyone can think rationally, the answer becomes clear. The key is to make it easy for people to agree with you and solve the issue. If we focus on being “right” or “winning the argument” a client (or significant other) will remember our behavior solving the issue more then they will remember the solution.

Don’t strive to be the smartest person in the room; strive to be the best problem solver in the room.

Beware of False Prophets

Sometimes the salesperson gets sold.

It happens slowly, beginning with a “great meeting” with a senior executive at the client. This executive shows genuine excitement with the opportunity you present. He is the “industry guru” for this function: the “pharma data” guru,” the “logistics” guru or the “government compliance” guru. If he gets behind this deal, it will become an “industry utility,” a potential joint venture, a billion dollar business. He tells you he can “get it done.”

You rush back to your leadership and breathlessly tell them about this deal that will change the industry! “Mr. Big at XYZ Co. says he can push it through the company! He can’t wait to get started!”

In your excitement, you don’t do your due diligence around Commitment and fail to dig into the key questions to qualify the deal:

• Does he have the authority to say “yes” for this level of financial commitment? (Come on! He’s a senior executive! He just needs to bring the CFO up to speed about what it means for the company.)
• Has he addressed all internal approvals? (Don’t worry! Mr. Big said he has the authority to push this through.)
• Does he own operations and/or the P&L? (Are you kidding? This is a cost saving opportunity the COO will jump at!)
• Has he followed the company’s typical buying process, including procurement? (No problem! He can handle procurement! No need for a competitive bid! He’s buddies with the CEO.)

Beware of the False Prophet.

The False Prophet is the seemingly “plugged-in” executive at the company who, usually with good intentions, personally gets involved with the deal and seems to have a power to make lower-level executives (who speak of him with reverence) jump because of his authority. The False Prophet will have you spending money on “pilots” and get you to set expectations within your own company of a huge deal coming “in the next 30 days.” And those 30 days never seem to end as delays and new stakeholders and new questions arise.

By the time you realize that your deal is a pipe dream, you’ll have spent your whole business development budget, have no agreement on pricing or scope, and have your management asking you, “Tell me again how you thought you would get this deal done?”

Here’s a quick piece of guidance: New executives can’t make old companies take big risks in new ways.

What that means is this: established companies have a process on how they buy goods and services. Your job, as a salesperson, is to know that process and who controls it. If you don’t know how your client buys you won’t know how to sell. And if a new client executive gets excited about your market-making idea and says he can get it done on his own authority without following the process, it’s time to do your homework on him. In fact, you may be able to add value by educating him about his own company’s policies and procedures, and you will make a trusted ally. More importantly, you will avoid allowing a False Prophet to lead you astray of your sales plan.

Something is Wrong

Years ago I heard a story about my grandfather, Henry Dieffenbach, and how he handled a dispute between my aunts, Helen and Eleanor.

Helen and Eleanor were teenagers at the time and they were fighting over whose turn it was to do the dishes. Again.

My grandfather, who was a piano player for silent movies in New York City in the 1920s, was on his way out to work for the evening show. He had heard them fight before, many times. This would, in fact, be the framework of their relationship for their whole lives.

Henry listened to Helen and Eleanor bickering. Then he made a decision. He reached over, lifted the dishes out of the sink, walked to the basement doorway and threw the dishes down the stairs.

“Now no one has to do the dishes,” he said. That got their attention. And then he went to work.

Tuesday night I watched the election results with surprise, like most everyone else. We had been told by the experts what we should expect and the outcome was exactly the opposite. What happened?

Half the country threw the dishes down the stairs.

The easy answer is for one side to say the other side doesn’t know what they voted for. They got conned. But tens of millions of intelligent, well-informed people voted Tuesday and half of those well-informed people had something to say: No one is listening to our concerns. No one is addressing our problems. We want to be heard.

So rather than one side dismissing the outcome as the result of a bunch of ignorant "deplorables" surging on our electoral process, maybe we should acknowledge: Something is wrong.

I’ve been a part of and settled many disputes in my career and what always fascinates me is how blind one party can be to its own faults while blaming the other side. That drives the other party crazy. People usually behave in a rational fashion to fulfill their own self-interests. In the case of the election, no one voted to make America worse. They voted to make America better… for themselves. What we now have is the result of 59 million people saying, “No one is paying attention to me, so I am voting for change.”

Set aside the news highlights of the bad behavior, comments and t-shirts from some of the rallies. Those highlights don't tell everyone's story. And don’t ascribe all voters’ decisions to the worst things a candidate said. Interviews I watched with voters Wednesday showed normal, caring, middle-class and working-class people who said, “We’re tired of struggling for decent jobs, paying high taxes and not being able to afford a better life for our children.” One 65-year-old former factory worker said, “I didn’t like the choice I had to make, but I wanted to send a message.” He was not alone in his sentiments, and that message came crashing down on us all on Tuesday. Now it’s up to all of us to get to work and answer that request for help.

Your Eyes Are Bigger Than Your Stomach

My friend, Mike, called me several months ago for some advice. He was working on a potential $200 million outsourcing deal with a large manufacturing company. (Yes, I know, the word “potential” is a spoiler!) The company wanted to reduce operational costs by outsourcing a critical business function to Mike’s company. This was a sole-source deal, which means there was no competition for the work. The deal was Mike’s for the taking!

The work Mike’s company was going to do involved gathering test data and reporting it to a regulatory agency. In the course of the discussions, Mike’s company realized that all companies in this industry had to gather this test data and report it to the same agency.

One of the senior executives in Mike’s company got what he thought was a great idea: let’s use this first client to create an “industry utility,” meaning a service open to other companies in the industry so they could drive down their costs. The conversations with the client quickly escalated to forming a joint venture.

Mike wanted some advice on how to structure the joint venture.

I said, “Mike, no two words will waste more of your time than ‘joint venture.’ In my career I have never seen a joint venture result in the benefits the parties sought, assuming they ever got it formed in the first place.”

Mike said, “No, no, we’re both aligned with this. It’s going to be a billion dollar business!”

“Mike,” I said, “The client asked your company to help them reduce costs. Here’s my advice: Don’t sell the client the deal you want. Sell the client the deal they need. Because even if you’re successful selling them the deal you want, the client will quickly try to find a way to scuttle the deal because they never wanted it in the first place!”

Mike insisted I didn’t understand and hung up.

Needless to say, the deal never came to fruition. The parties got into such a tussle about whose executives would run the joint venture and what the ownership percentages would be that they lost sight of the original deal. In the end, the client’s leadership found another path to cut costs and Mike lost a $200 million deal.

When I was a kid and complained my stomach hurt because I ate too much, my grandmother used to chastise me: “Your eyes are bigger than your stomach.” Sometimes in sales this is true as well. A client asks us for help and, before we know it, we are proposing a program we think will solve all their problems! Our eyes get bigger than what the client can stomach.

The moment we start proposing work that the client didn’t ask for, we have shifted from close advisor to self-interested sales person. And that tinge of self-interest destroys all the trust we worked so long to build. Focus on the deal that helps the client, not the one that helps you. That is how you will build lasting, trusted relationships.

You Were Always Going to Lose

“We decided to go with another vendor.”

Ouch! Those dreaded words. To a sales executive they are like a punch in the gut. After all the time and hard work on a proposal, you suddenly feel like the other guy at the end of the romantic comedy that the girl didn’t choose: “But you said you loved me! What did I do wrong?”

A good sales executive should know well in advance the chances of winning. If the likelihood of being selected is less than 50%, you shouldn’t be surprised when you lose. You were always going to lose!

And why you lose is not the inverse of why you win. In other words, if you did the opposite of everything you did on that path to failure, it doesn’t mean you would have been on a path to success. The reason why is simple: There was never a real chance to win. So different decisions would have changed nothing. Bidding on work that could be decided by a coin toss is a waste of company resources. That money and effort should have been spent on a deal you can win.

This is what makes rigorous deal qualification so important. Assess where you stand on:

• Relationships
• Trust
• Prior performance/reputation
• Competition

Those are the Big Four. Note that price is not on that list. Less disciplined sales leads often blame price for their failure to win. The truth is if you’re weak on one of the Big Four, your chances of being chosen are much lower even if you have the lowest price.  Who would buy from a company with the lowest price if it had a poor reputation for performance? Bad work doesn't get better because it's cheap.  

What can we do differently? Here are a few starters:

• Qualify with the help of an objective executive who will question your hype.
• Set expectations. If you’re going after a deal that’s a long shot, tell leadership, “This is a long shot.” Take the pressure off yourself. (And if you’re up against an incumbent, it’s always a long shot.)
• Be realistic. If your company had a major failure with this client, even though the CIO is saying “that’s all in the past,” you’re a stalking horse. The client will keep you bidding to the end to drive down price.

Finally, keep asking yourself “why?” Given all of the circumstance surrounding the proposal process, why would the client pick you? If you can’t think of a truly compelling reason, pack your bags and find a better deal to chase. You don’t want to end up all teary and heartbroken, like the losing guy in the rom/com.

Or We Could Do It the Right Way...

The legendary comic actor W.C. Fields famously said, “Never work with children or animals.” But not because he didn’t like them; because they are unpredictable.

Fields, who started his career in vaudeville as a juggler in front of live audiences, knew that unpredictability is not a welcome ingredient for a successful performance.

The same is true in sales. When making a presentation to a client, or going into orals or “yellow pad” sessions for an RFP, unpredictability or spontaneity are potentially disastrous. The path to a successful sale is built on rigorous preparation: mastery of the substance, understanding the process and lots of rehearsals with your team to find out strengths and weaknesses.

During a presentation for a software product some years ago, the company I worked for at the time put a highly-experienced technical lead at the front of the room to execute the demo. One of the client’s executives watched with interest, and then interrupted the presentation to ask: “Well, couldn’t you also do it by bringing the data through those other fields instead?”

Our technical lead paused, clearly displeased by the interruption, and said, “Well, yes. We could do it your way. Or we could do it the right way.”

In W.C. Fields’ world, that was the equivalent of the trained dog relieving itself on the people in the front row.

We did not recover from that gaff but I learned an important lesson early in my career that is part of my preparation for any major presentation: rehearse under stress. Before meeting with the client, put the presenters up in front of the room and subject them to a barrage of difficult questions. Get emotional. Yell. See how they react. Clients can always be unpredictable in their behavior, but I can’t have surprises from my sales team!

So I want to see how my team will deal with the worst I can throw at them. Will they wither? Falter? Or will they maintain composure under fire. We can’t always predict what clients are going to say. But as a sales strategist, I make it my goal to know how my sales team is going to respond.

You Can Only Sell Ice to Alaskans Once

A young sales professional once said to me, “You could probably sell ice to Alaskans.”

I said, “That might be true, but it could be the last sale I ever got in Alaska.”

People who are new to sales often have the perception that getting someone to buy something that they don’t need (like ice to Alaskans, get it?) is the hallmark of an effective sales person. Certainly, having the ability to make money selling useless products and services is a rare skill, but it’s not a sustainable business practice. Once buyers realize they have made a bad purchase, they will never buy from that sales person again.

Ultimately, clients buy from sales people whom they trust, and building a trusted relationship is the hardest task to accomplish in business. To build a strong, trusted relationship, a sales person first must sell himself, namely, that he is someone with integrity; someone with competence; and someone who cares as much about the client’s success as he cares about his own. This requires an uncommon level of character, experience and empathy to build a solid reputation in the industry. Once established, that reputation becomes the pre-sale: before walking into the room, clients already have expectations that they are going to deal with a trusted business partner, not a huckster.

Clients may forget the details of the last deal they did; but they will always remember how that sales person made them feel in doing that deal. And if they feel they were not treated fairly, such as being sold ice in Alaska, the client will freeze out that sales person from any future deals.

The Difference Between Gold and Silver

This past week I had the opportunity to hear a presentation by Charlie Houchin, who won a gold medal in the 4x200 meter freestyle relay with the US team at the 2012 Summer Olympics.

Charlie achieved the highest level of success anyone can reach in that sport. The world doesn’t recognize anything higher than Olympic gold.

So I asked Charlie: what’s the difference between gold and silver? To be the best at what he did, better than a whole field of outstanding athletes, what made him unique? Was it effort? Attitude? Talent?

Charlie’s answer surprised me at first: he said it’s “technique.” He explained that every athlete competing in the Olympics works hard, spends long hours practicing and had a highly competitive attitude. Those are table stakes. Without those elements an athlete won’t ever compete in the Olympics. To win, however, the athletes have to have the ability to execute the proper technique for the sport as close to perfection as possible.

When I thought more about Charlie’s answer I realized I should not have been surprised. In the language of sales, he was referring to “best practices.” The sales team that will win the gold medal is the one that executes as closely to best practices as possible. The difference is, in sales, there’s no silver medal! You either win the deal or go home with the other losers.

I don’t know the proper technique for swimming a leg of the 200-meter freestyle. But in a competitive engagement I know to focus on best practices in:

·         Preparation for the engagement

·         Building and managing a high-performing team

·         Establishing a strong, trusted relationship with the client

·         Achieving success for the client first

Adherence to those best practices in deal-making is the difference between us getting the gold (winning the deal) and silver (nothing).

Grow Your Client Like a Lobster

A rabbi on YouTube got me thinking how client relationships are like lobsters.

Renowned psychiatrist Rabbi Dr. Abraham Twerski posted a short video on how to deal with stress. Rabbi Twerski describes how a lobster grows inside of a rigid shell until the shell becomes constrictive. The lobster feels pressure, discomfort, sheds the shell and grows a new, larger one, which it will eventually outgrow and repeat the cycle.

Rabbi Twerski relates the growth pattern of the lobster to stress that people deal with daily. He notes that stress, like outgrowing the shell, is inevitable; but working through it leads to personal growth. The same is true of our client relationships.

Unlike the old adage, the client is not always right. The client is often wrong, and so is the service provider, and both can be wrong at the same time. Because they don’t want to make waves, however, undisciplined service providers will buy their way out of the dispute with concessions. They rationalize throwing money away saying they are "investing in the relationship."

The cost they assign to it is the amount credited back to the client. The real price is actually much greater because the relationship has failed to grow. In fact, it shrank a bit. The client lost a little trust, a little respect, because the client knows that the service provider had validity in its positions. This behavior also establishes a pattern with the client that, whenever there is a dispute, the service provider will buy its way out regardless of fault.

Instead, use conflict as an opportunity to test and improve your client relationships. The measure of the quality of a client relationship is not how the parties work together when things are going well; it’s how they work together to resolve disputes. In fact, when a relationship successfully endures stress, it grows larger and stronger. More senior people get engaged, maybe for the first time. The parties may see each other in a different light: vulnerable, facing the risk of failure. If we can be transparent, honest and unemotional in our resolution of a stressful situation, we will emerge from under our smaller shell and be ready to grow into a larger one.

To quote Rabbi Twerski: “If we use adversity properly, we can grow through adversity.”

Here is a link to the video: https: //www.youtube.com/watch?v=3aDXM5H-Fuw

Why Are You in the Woods?

“This is what the client is demanding. They have been saying this for months. I know we don’t usually do it this way, but if we say ‘yes’ now we might get the deal closed and make our quarterly numbers.”

These are words of deal desperation. We’ve all heard them. Some of you may have even said them. The last chance plea to management to agree to some wild concession that will make the deal happen and the world will be beautiful again.

But did you ever notice those words often come from the same source? The same sales lead ends up in the same situation, quarter after quarter, asking for a big concession to get the deal done?

It’s like the golfer who is standing in the woods, lying 3 on a par 4. He says to himself, “I have to hole it from here to make par.” Never mind that he has to hit between three trees, over a trap and roll uphill to the flag. He’s swinging for the hole instead of just trying to set up his next shot, which he will undoubtedly have to take.

And when he misses, he is frustrated that he’s still in the woods and blames everyone and everything without answering the real question: Why are you in the woods? How did you end up in a situation where you need to be successful on one desperate shot to make your number? Did you make a plan for the hole? Or just take out a driver and swing as hard as you could?

In sales, it’s called a “closing plan.” The best sales people make a strategic plan for getting the client from proposal to signature. Understanding buyer values/business requirements, building trusted relationships, generating options and setting expectations as to what is possible and what is not.

A client who wants a fixed fee or “not-to-exceed” price, for example, needs to know that such a price is possible provided the scope of work is defined and fixed. Allowing clients to change scope and not telling them immediately that every change can impact price is a fast path into the woods. You’ll be talking to your management about doing 20% more work for the same price and begging for a concession to get the deal done. Maybe you’ll get lucky one time; but without a change in behavior and better planning, your partners will soon find another player who doesn’t make the game seem so painful and frustrating.

I Hate My Client

“If you don’t walk into the client’s building every day, excited about the opportunity to help solve their problems and make them successful, then you should leave this company.”

I had the privilege of leading a sales training program with Paul Rudolph, a former colleague with over 25 years of experience in sales and client service. That was one of his opening lines to a group of experienced employees.

Not new employees. Experienced employees.

Because Paul knew that new employees are not jaded. They are excited. They have great expectations. They are filled with great ideas.

Experienced employees, who have been on a client account for three years or more, are tired. They are frustrated. And if you were to ask what they thought of their job, many might say, “I hate my client.”

Paul’s point was if you’ve reached a point where you don’t understand the purpose of being a service provider, then go do something else. The client is our lifeblood and the essence of our business was striving to take the client’s breath away with our attitude and performance. Every day.

Often, a long-term relationship between an existing client and a service provider can devolve into what feels like a bad marriage: the parties feel stuck with each other, can’t communicate well and wish there was a way out. In other words, the romance is gone.

To be successful in the services business means to be in the romance business. Keep the spark alive, always making the client feel special, important and loved. Because right outside the door is the competition, with a smiling face, joyful heart and readiness to make this relationship feel amazing.

If you don’t treat an old client like a new client, they’ll soon be an old client.

Does Donald Trump Look Under the Table?

Several times in my career I have been asked to help resolve a particularly difficult situation because the team said they needed “a tough negotiator.”

The notion of the “tough" negotiator has a cache to business folks, fostered by the likes of William Shatner on Priceline commercials, performing karate moves to get the deal he wants. My response has always been to say, “If you’re looking for a tough negotiator, you called the wrong guy. I am a disciplined and collaborative negotiator. I’m not tough.”

Frankly, I don’t know what it means to be a “tough” negotiator. I imagine what people equate with “toughness” is an undisciplined, stubborn, positional negotiator. One who thinks “win-win” means they win twice, and the other side loses twice. One who lacks the creativity and confidence to dig deeper and find hidden opportunity for collaboration in an engagement that would create more value. I have encountered that style at large manufacturing and retail companies that treat all vendors like they are selling commodities. All that matters is price. That shortsightedness is costing them dearly in the marketplace because it limits a service provider’s ability to bring innovation that might provide the client a competitive edge.

The latest poster child for “tough” negotiators is Donald Trump, who fancies himself as a master deal-maker. Mr. Trump has obviously had success. What we don’t know is how much more success he could have had using a different negotiation style. From his outward appearances, Mr. Trump seems to favor a bullying kind of style, one that drives the other party to concessions so he gets what he wants. He proudly stated that he would build a wall between the U.S. and Mexico and get Mexico to pay for it because he’s that good as a negotiator. If I were the president of Mexico, I would prepare my team for that discussion with one key caveat: we will never agree to pay for the wall.  I don’t know what Mr. Trump’s style is once he gets in the room. Perhaps this is an act he puts on and is highly collaborative at the negotiation table, sort of a one-man “good cop/bad cop.”

The potential problem with Mr. Trump’s style is it does not engender trust in the discussions, leading to lost value in the deal. People often talk of not leaving money “on the table.” I prefer to say “don’t leave money under the table.” It’s easy to see the money on the table. It takes a special deal team to bring trust to a relationship so that both parties work together to find the hidden value in the deal. That requires appreciation for the other party’s interests; creativity in generating options and legitimacy in the asks of either side.

“Tough” negotiators don’t care about the other party’s interests. “Tough” negotiators have only one set of options; their own. And with a “tough” negotiator, legitimacy or fairness in demands is always a test of the other party’s BATNA.

So while it might seem impressive to hear of “tough" negotiators who “break” the other side in a negotiation, ask yourself: where does such behavior leave the relationship? Has is maximized the value the parties could have built together? And next time, will the other side look forward to an opportunity to do business again? Or will they use it as a chance to “get even” based on their previous experience?

This Kid Just Keeps Failing

The other day I met with a young man named Tom who is graduating from college next May. He is interested in a sales career in the technology industry and has some job interviews next month. Tom asked if I would provide some help in preparing for those interviews.

Tom spent last summer selling technology services to small business owners. Every sales call was a cold call: walk in, strike up a conversation and see if he could sell them on the value of his offering. Turns out he’s pretty good at it. He closed over 30 deals in the 8 weeks he worked there and was one of the top performing salespeople in his office.

I started peppering him with questions he should expect such as “Why are you interested in our company?" and “Where do you see yourself in 5 years?”. I switched to the “weakness/strength” and “challenge and recovery” questions.

I said, “Tell me about a time you failed and what you did about it.”

Without hesitation, he replied, “I failed 39 times a day.”

“Oh?” I said, waiting for an explanation.

“In the eight weeks I was selling over the summer, I usually got turned down about 39 times before I finally got someone to say ‘yes,’” he explained. “At first, it was pretty draining because the experience was so negative.”

“So what did you do?” I asked.

“I turned each ‘no’ into a positive experience. I decided to start each day with 39 ‘nos’ to count down because it’s rare for me to have more than that before I get a ‘yes.’  So each time a potential customer said ‘no’ it meant I was one step nearer to getting that ‘yes.’ That made me look forward to every new business I walked in to pitch. Each failure was getting me closer to my goal.”

Perseverance is not an idea or principle we talk much about these days. Perseverance requires focus, commitment and a positive attitude which, in our world of instant everything and immediate results, just takes too long. But those who truly aspire to greatness in their chosen fields know that there’s a lot of failing to get through before achieving success.

Don't Get Caught Naked

A colleague once asked me how much negotiation contingency I have in my deals.

I asked, “What is negotiation contingency?”

“It’s the money set aside for making concessions,” he said. “For example, if a client said they wanted a lower price, how much do you budget for price reductions?”

“Oh,” I replied. “Zero.”

Needless to say, he was quite surprised. “You mean to tell me that you never make a concession on price?”

“No,” I said. “I never make a concession on anything. What I make is an exchange; an exchange of value.”

Many sales people make the mistake of thinking offering discounts or cutting the price is the fastest path to signature. They will rationalize it, saying they are “investing in the relationship.”

But what’s the return on that “investment”? In other words, if a sales person gives a discount on price, they better have gotten something in return. Otherwise, that’s not an investment. That’s giving money away and it’s called being a sucker.

Giving free money to anyone is not good business.  Reducing price without getting something in return is called a “naked concession” and it’s rarely a good thing to be caught naked in any context! Naked concessions signal to the client a lack of respect for one’s own business. They also create a lack of trust, and we need trust to build lasting relationships. How is a client to trust us if we say, “This is our best price” and then reduce the price because “they needed this concession to seal the deal.” Obviously, we were misleading them about our “best price” because we gave them a better one when pressure was applied!

In deal-making, you have to get when you give. Trade value. Work with your team and develop a list of options for the client which will allow you to reduce cost and therefore lower the price. For example, can the client perform a task instead of us to reduce cost? Can we reduce scope? Can we reduce risk? Can we extend time? If we don’t show the client the value we put on our products and services, then the client has little reason to value or respect our products and services.

"Light Fuse. Move Away." Rules For Improving Client Relationships

I was looking at a pack of firecrackers a few weeks ago and noticed the very clear and simple instructions on the back: Light Fuse. Move Away.

Those instructions are so fundamental it seems ridiculous to put them on the wrapper. In light of the injuries suffered recently by some professional athletes, however, maybe the idea of moving away from a lit pack of explosives is not obvious to everyone.

And this is not just true for firecrackers. Other products have similar “you’ve got to be kidding me”-type instructions on them to help people who may be deficient in common sense. For example:

• Iron: “Do not iron clothes on body”
• Frozen dinner: “Defrost”
• Bottle of rum: “Open bottle before drinking”

The same problem exists among professionals who are trying to generate new clients or grow the relationships they already have: we often lose sight of the obvious.

So if you want to keep your existing clients, generate more clients/referrals or build better client relationships, here are three fundamental “Care Instructions” to follow:

1. Keep your word: If you make a commitment, whether to return a phone call, set up a meeting or successfully deliver a $50M ERP integration, deliver on your commitment. Nothing erodes trust faster than not doing what you said you would do.
2. Be transparent: Don’t be afraid of sharing with the client how your business operates and how client decisions impact your success. If the client doesn’t care about your success it speaks volumes about the quality of your relationship and you have a lot of work to do to improve it.
3. Show appreciation: It never ceases to amaze me how often a vendor will complain about a long-time client: “They’re so demanding! They’re so difficult!” Yeah, but they keep you in business! If we don’t treat every client like a new client, they’ll soon be an old client. The competition is always ready to take your client away.

And this last bit of advice on the tag of a mattress: “Do not attempt to swallow.”