MAKE IT EASY FOR CUSTOMERS TO SAY 'YES'
Podcast: Play in new window | Download
Tips on how to make it easy for your customers to say YES by Mark Smith
- It’s really important that we build a customer service that builds loyalty and generates five-star reviews.
- Your business needs testimonials, case studies of paid proof of concept. Proof must be contextual to their business.
- Illustrate that whenever they have a conversation with you that they have an ever-expanding understanding of the solution.
- You have to show them how you’re going to work together.
- Position your offer so it contributes to achieving multiple goals.
- Keep in mind that almost every decision that somebody makes in a corporate environment is going to be weighed against the impact of their career.
- When everything else is identical, price becomes a differentiator and our job is to make sure that nothing is equal.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
MAKE IT EASY FOR CUSTOMERS TO SAY ‘YES’
MAKE IT EASY FOR CUSTOMERS TO SAY ‘YES’
Keep in mind that almost every sales decision that somebody makes in a corporate environment is going to be weighed against the impact of their career.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Doug: Well, welcome back listeners, to another episode of Real Marketing Real Fast. Today I’m going to start my introduction just a little bit different. I want to re-do a couple of testimonials of our guests. It’s been a pleasure to work with Mark each time we’ve had him involved in a joint project. He’s one of the most creative and innovative people I know, always achieving great results on time and within the agreed budget. His one of the nicest guys I’ve ever met. I can’t recommend Mark’s work highly enough, and I would use him and his company again in a heartbeat. That is a recommendation from the regional manager of Dell. I had a chance to talk to Mark before we interviewed and connected with him in social media, and he is a really sharp guy. There’s a ton of information we’re going to share with you, but just a heads up, I’ll give you a little bit of advance notice of one of the secrets that he’s going to share. That is the seven Ps of risk reduction.
What are the seven things that you can do to help your potential customer or purchaser of your product or service reduce the risks of doing business with you? Move you ahead of your competitors and make it easy for them to say “yes.” With that said, I don’t want to take any more Mark’s time. I’d like to welcome Mark Smith to the Real Marketing Real Fast podcast today. Well, Mark, I’m super excited to have you on the Real Marketing Real Fast podcast today. I just want to say thanks so much for taking time out of your schedule to talk to me and to talk to our audience.
Mark Smith: Doug, I’m delighted to talk to you. I’ll do it anytime that you want.
Doug: Well, it’s always fun to be in social media space and see who’s really social. That’s how you and I connected. I often say that it doesn’t work because people are using it for broadcast, but this isn’t the case between you and me.
Mark Smith: Right. You reached out to me and I said hell yeah.
Doug: Why don’t you share with our audience before we get a deep dive on the topic? What your superpower is?
Mark Smith: Gladly. My superpower is helping entrepreneurs become executives. I help them shift from the entrepreneurial mindset. That is where you do everything. You can’t do everything. You do, everything which creates a limit on your business to an executive where you do absolutely nothing. There’s more on executives to think list than on their to-do list. That’s a huge shift. I help people make that transition so they have the mindset, the skill set, and the toolset to run a business versus be the business. I do that primarily through my executive strategy summit. It’s a two-day event that I hold throughout the United States multiple times a year. We’ll talk more about that later.
Doug: That’s really cool. You’re so right. I remember starting my business where I did everything and now I look at, I’ve got a team. I have thinking days. I have thought about weekends where my wife and I will just go away and shut everything off. I find that’s a really good way to get clarity and to spend some serious time planning opposed to being in the office doing every day.
Mark Smith: Right on, Doug, the most important thing to remember is an executive creates a future that does not yet exist using methods that have not yet been invented with best practices have yet to be established. That requires a lot of thought time. You can’t create that new future if you’re stuck in today. Making that transition from doing everything to creating is a huge shift for a lot of people. It’s the difference between making a couple million a year and making hundreds of millions a year.
Doug: How do you help people make that leap? Because I find that most people are very uncomfortable with change. They want to stay with the status quo. Even if it’s not working, they just wanted to work at it harder or run faster, but they’re still going in the wrong direction. Clearly, if you’re not getting the results, something needs to change. How do you help people change their mindset to do that?
Mark Smith: Well, the first thing you have to do is realize that you have a blind spot. Are you familiar with Martec’s Law?
Doug: I am not, no.
Mark Smith: It’s a fantastic concept. It was created by Scott Brinker who is the VP of platforms for HubSpot. He was on my show. You might want to interview him for your show sometimes. He’s an excellent conversationalist. What he identified is that technology grows exponentially. While our ability to adapt to change is logged with [?.] Well, technology fundamentally doubles every 12 to 18 months in capacity. Our ability to change is about 10% year over year. What happens is the gap between what people are using the technology available widens to the point there’s a forced reset. We are on that really steep curve of technology where even the technology, the technologist are having a hard time hanging on and keeping up. What we have to first of all realize is there’s a massive gap between what’s possible and what we’re doing.
Once you understand that you have that gap, and you’ve got that mindset of saying, I’m going to close that gap as quickly as I can, then you can become a candidate to make the pivot into the strategic thinking. Unfortunately, most people believe they’re strategic thinkers and they’re not. Let me tell you what is the clue if you’re talking to somebody who says they’re thinking strategy and you know they’re not, it’s if you present an idea that doesn’t yet exist and they respond with, but.
Doug: That’s funny.
Mark Smith: When you hear that they’re stuck in tactics. The reason why is when I’m working with truly strategic thinkers, they say yes and they never say yes, but. Because they know they’re forging a path that doesn’t yet exist, versus people who are stuck in the tech they say yeah, but we’ve never done it that way. Yeah but we tried that and it doesn’t work anymore, yeah but I don’t know how we’re going to get that done well, those … That’s all stuck in strategy. That is not executive thinking.
Doug: Sure. That totally makes sense. I just recorded my hundredth episode and-
Mark Smith: Congratulations.
Doug: Thank you. I heard that once you make it past seven you’re actually in the podcast business.
Mark Smith: I’m at 86, so you’re just a few episodes ahead of my friend.
Doug: Well, it’s been a journey. What I hear was a bit of encouragement with people. I say you’ve got all these goals and things you want to do and I had no idea how to run and start a podcast. I hired different consultants. I joined some online forums and joined the guys at a Podcast Paradise. I learned from them about half of what I actually needed. Then I went forward. I didn’t know how to write a book, but I made a commitment to my publisher to write three books. At the end of the year had written two books, published one. Not even thinking of outside strategy, just looking at common stuff that people see every day. Just take the leap, just get started. You don’t need to know all the answers and how to get there.
They’ll come to you. People will come to you. The pieces will come to you and forget about that. Well, I don’t know how I’m going to write a book. I don’t know how I’m going to start a podcast.
Mark Smith: Right on, right on, and let me give you a quick little clue here. Executives don’t know all the answers, but they do know how to ask the right questions.
Doug: Find people that are smarter than you, that can fill in the gaps.
Mark Smith: You find the smarter tacticians. Just because you don’t know how, well, the problem to Doug, is that we’ve all been programmed and we’ve been rewarded with knowing how to do things. We went through 12 years of grade school and high school and however many years of college, and all of our grades were based on your ability to know how to respond to a question, versus knowing what question to create. Really the only folks that know how to create questions are philosophers.
Doug: I’m not going to do well in that arena.
Mark Smith: Indeed, we just have to make that transition from realizing that you’re not judged as an executive leader by your how power. You’re judged by your ability to round up a team that figures out how.
Doug: If I’m an entrepreneur listening to this and I’m wearing the marketing hat and a sales hat and the product delivery hat, what are some steps that you can take, or some ways that we can start to change our thinking to move in this direction from entrepreneur to executive?
Mark Smith: Well, first of all, understand that the prime directive of every executive is you hold the vision for the company and it’s not a democracy. Nobody else in the company gets to vote on what your vision of the company is going to be. There’s only one visionary leader, and then as part of that holding the vision, you also have to create the culture of the organization. A CEO’s domain is vision and culture, and then their job’s is to make sure the rest of the team executes to that vision and maintains that culture. Then the other players within the organization that you have to switch hats around when you’re an entrepreneur until you can bring on the team are responsible for different domains.
For example, the CFO is responsible for the money domain. The CIO is responsible for the data domain and the CHRO is responsible for the team domain and the CRO, Chief Revenue Officer is responsible for the customer domain, and the COO is responsible for everything else, all the physical assets as well as customer satisfaction. Once you understand that there are these various domains that large companies through hundreds of years have developed, these silos that make sense because of the brain set. The mindset required to operate each of those functions, and to look after, to curate each of those domains. Part of making that transition from an entrepreneur to the executive understands that you can’t wear multiple hats unless you know what the hat is supposed to be. Literally is a radically different mindset for each one of those C-Suite players.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
MAKE IT EASY FOR CUSTOMERS TO SAY ‘YES’
MAKE IT EASY FOR CUSTOMERS TO SAY ‘YES’
Keep in mind that almost every sales decision that somebody makes in a corporate environment is going to be weighed against the impact of their career.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Doug: Sure there is. I’ve had conversations with the CFO of my clients’ companies as we’re negotiating more cash for sales and marketing.
Mark Smith: Of course, once you understand the key performance indicators for each of those players, then you can do the right thing to make sure that you’re operational. Let me pop up a layer here. The challenge with most entrepreneurs is they’re good at one or two of the seven areas of business that you must master to run a successful business. A business that’s sustainable, scalable, profitable, and ultimately saleable. By the way, those are important in that order. If your business isn’t sustainable, I don’t care how profitable you are, it’s going to crash burn. It has to be scalable, otherwise, you’re not going to grow with the market up and down. Profitability is absolutely something we’re aiming for. Then saleability is important. Most entrepreneurs create a business that is unsaleable because they are the product. Creating a business strategy so that you can actually sell your assets in the future without necessarily selling yourself a job, which is what a lot of entrepreneurs end up doing, which is just not a good thing.
Doug: No, no.
Mark Smith: We have to understand there’s fundamentally seven areas that we have to master to run a business. The first one is we have to have products that create unique value for our target market, and every one of those words is important. Product development, product design, whether it’s a service or anything else, you have to understand how that works. Most entrepreneurs are really good at that because entrepreneurs are really good at organizing chaos.
Doug: Some are. I struggle with that sometimes.
Mark Smith: Well that’s what we do though. You organize the chaos of helping people find customers. That is chaotic for a lot of people. That’s an interesting thing that you have to also have a specific strategy for creating a product that also tracks the marketplace. That’s another conversation that you have to have, is how do you keep that product mix, the right mix, because part of our job as an executive is to direct the company, to lead the company, to guide the company to where the customer money will be in the future.
Doug: That’s a really, really good point. I’m going to send you a note on a book I wrote called hunger in paradise and he talks about very large companies like SAP and Lego and Netflix and Blockbusters and the challenges they’ve had in the marketplace and how all almost lost it because of that.
Mark Smith: We can’t fall in love with our products. We have to fall in love with our customers.
Doug: The first time I’ve ever heard somebody says that. Because everyone loves the product and wants to tell all the benefits of the product and the customers just and means to the end.
Mark Smith: Well, let’s make sure we put a pinpoint in them because I want to get back to that particular point. I want to finish up this particular topic. Then let’s go back to that point about the difference between falling in love with your customers and falling in love with your product. I’ve got some really good stuff for you around there that can help you make that pivot.
Doug: Sure.
Mark Smith: All right, so the second thing we have to have, the second pillar of business is marketing. Of course, you know that we have to find customers. The marketing has to trigger a relevant conversation, and every one of those words is critical. We want to make sure that what a marketing does is alerts people who can use us, who can find this valuable to reach out and contact us to initiate a conversation. That conversation ideally is in person for complex expensive products. It could be something where they just go and read and have an interaction with your website and purchase from you, but it has to trigger that.
Doug: Sure.
Mark Smith: Just a quick review, there’s fundamentally three forms of marketing, the search, outreach, and word of mouth. Search is having the right websites so that people can find you when they ask Google or Alexa or Siri what they’re looking for. The second one is outreach. That’s where we target who we want to work with. For most entrepreneurial organizations, that’s the best methodology. Advertising is an outreach methodology. Because we want to put it in front of the people that we believe are going to want to do business with us. The third one is word of mouth. A lot of businesses are word of mouth style of businesses. The challenge with that is that we don’t control the words coming out of her customers’ mouths, and it’s not scalable. If you have a word of mouth based marketing business, you are unsalable. Nobody is going to buy your business if it’s based on word of mouth. Sorry.
The way I look at word of mouth is this is a icing on the cake. It’s the candles on the cake. What we have to do is go back and create a good searching and an outreach methodology for our marketing. Notice that the search outreach and word of mouth spell so S-O-W. The way to remember that is that we reap in sales where we sow in marketing. That takes us to the third point, which is sales it facilitates a mutually profitable transaction. Both sides have to get paid and sales are the facilitator of that. Part of sales job is to reduce perceived risk. There’s a place I want to go eventually is how do we reduce that perceived risk. Because the difference between somebody buying from you and not is how they perceive it as being risky to do business with you based on my conversations and research.
Doug: No one wants to make a mistake.
Mark Smith: Nobody, nobody not one. All right, then the fourth pillar of business is customer service that earns loyalty. Loyalty doesn’t come from a transaction. It comes from taking care of customers post-transaction. If you take a look at all the reviews that people give post-transaction, there are no three-star reviews in the wild, because that’s … I got what I needed. We’ve seen fair trade. There’s nothing to talk about. Now the really juicy stuff is four-star and five-star reviews, and of course, a five-star review typically increases profitability by seven to 10% depending on the organization. It’s a leading indicator of larger sales in the future leading indicator, a trailing indicator of customer satisfaction. The thing that’s quite interesting is that five-star reviews are always above and beyond. They’re never just what you expected. That customer service is what creates the loyalty, earns the loyalty, and the way that you can test that, of course, is with five-star reviews.
Doug: That’s so true. I’m thinking when I give … When I leave reviews for people that ask, or even if I [inaudible 00:15:27] and I’m out someplace. They really have to do something exceptional to get a five-star review. If I show up at a restaurant and you feed me a meal that shows up on time and it’s hot, that not a five-star review, that’s the minimum level of acceptable service.
Mark Smith: Right on. That’s just what, that gets you three stars and that gets you nothing as far as loyalty. It’s really important that we build a customer service that builds that loyalty and generates five-star reviews. Here’s another podcast we’d have another time is how do you engineer five-star review? Well ends up there’s a process that you can go through to engineer a customer experience, to create a five-star review and that’s really cool. That’s the fourth business acumen that you must have. Then the fifth one is an infrastructure that scales with business cycles. Businesses can crash and burn in a good economy and in a bad economy because you can’t scale up fast enough or you can’t scale down fast enough, so you have to design systems that allow you to scale as your customers come and go if you’re going to be a sustainable business.
Then the sixth pillar is finance that controls cash flow and funds the future. Cash is king and most entrepreneurial businesses crash and burn because they run out of cash.
Doug: Sure.
Mark Smith: You have to have the systems in place to do that. If you’re swapping hats, you probably aren’t going to do a good job with that. You need to have somebody that helps, helps you look after that. The entrepreneur usually makes a lousy CFO.
Doug: I’m laughing because I’m in that category. I spend more time marketing.
Mark Smith: Well, that’s why you need to outsource your CFO function to a CPA who knows what they’re doing. A bookkeeper’s not a CFO. A bookkeeper keeps the books. The other aspect of that is creating a fund the future strategy. Now you work with a lot of VCS and you know that if you have a VC that comes in and fund your company, your business model changes.
Doug: Sure it does.
Mark Smith: The source of funds always dictates your business model. If you can control the source of funds where you are the one who decides where the money goes, you’re going to be able to maintain your business model and if you don’t control the source of funds, your business model is going to shift depending on who comes in with their money. That’s an important consideration that a lot of entrepreneurs don’t think about as they’re making the pivot to an executive. The seventh pillar is a culture that creates a valuable brand. As you know, Doug Culture is the baseline of branding because as Peter Cracker pointed out, culture eats strategy for breakfast. We’ve already talked about culture a little earlier about that. The CEO, the leader of the organization has to set that culture. Sure. Entrepreneurs have to be able to master those seven elements or know enough about them to be questions of the people that they bring in to run those various elements of the business.
Doug: That’s a really good point. There’s, they’ll be scared off the hanger. That’s a pretty extensive list but [inaudible 00:18:23] Mark said, you need, if you don’t have these skills, you need to ask the right questions for the people that are going to be part of your team indeed.
Mark Smith: When I work with my executives in a coaching capacity, frequently the problems that we have to undo the knots we have to untie are based on the fact that they brought in somebody who claimed they can take care of sales or marketing or operations or finance, and they advocated responsibility to those people without knowing how to control it or ask the right questions or look at the key performance indicators and then they get seriously hurt.
Doug: That’s a huge point that you could have a whole separate discussion on your right. I’ve been on both sides of that and you know I also say that as your company scales and grows, one of the other considerations is just because usually the people that you started within your team, they might not be able to keep up. You might need to replace them.
Mark Smith: Right on. You have to be able to bring people in and let people go based on the function for the business. Here’s a little insight that might be helpful for the listener and that is you have to hire people who don’t like to do jobs you don’t like to do.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
MAKE IT EASY FOR CUSTOMERS TO SAY ‘YES’
MAKE IT EASY FOR CUSTOMERS TO SAY ‘YES’
Keep in mind that almost every sales decision that somebody makes in a corporate environment is going to be weighed against the impact of their career.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Doug: That’s funny.
Mark Smith: Because quite frankly, if you like to do it, they’d be like you because of the mindset that the temperament, the way that they look at the worldview when they communicate, all those things are very different and in the work that I do with my clients and we dig deeply into how people process information so that you can communicate with them and understand why you don’t like them and how to respect them instead.
Doug: They’re a different personality style, analytical. I had analytics from my marketing but I don’t believe that way. You can have a great conversation, analytical person. It gets a bit boring for me and they’re a bit slow, but that’s a conversation we need to have
Mark Smith: Indeed. You have to work with them in a way that they get it because as a company you’re responsible for communication.
Doug: Sure.
Mark Smith: You are. If they don’t get it, it’s your problem, not theirs as the leader of the company, they don’t get it. It’s your problem.
Doug: I think that’s often overlooked. You know, I obviously can’t speak for our listeners, but I just think of the times when I’ve had, I have locally and I have team remote. I think the biggest learning curve I had was when it started the adding remote. I think I really helped my communication skills because we’re not sitting in the same boardroom across the table with a whiteboard. Now we’re sitting in different continents in different times zones and often different cultures having a conversation.
Mark Smith: That’s exactly right.
Doug: With different feedback mechanisms that you have to learn how to use right on.
Mark Smith: That’s a lot in a short period of time. Welcome to my fire hose, Doug.
Doug: Let’s take a deeper dive. At the end of the day we can, we can feel good and go to sleep saying knowing that we had called first at least one of them. Well, here’s the good news, here’s the good news. Listeners, you can always rewind and let Doug like most great podcast show notes.
Mark Smith: Absolutely. We transcribe the entire podcast because it’s good for the readers. I had one guy at the, one of the guys that trigger the [inaudible 00:21:39] I don’t listen to stuff online. I read your podcasts and went, “Are you serious?” Did he go, why? I said it’s like 8,000 words. Who reads that? He goes, I don’t like listening to podcasts. Like, who’s up here? Read all the show notes. Welcome to my audience.
Doug: That’s great. I love it. I’d do the same thing. You have a podcast, transcriptions, a lot of people to go back and pick up the important things, especially for information-dense podcasts.
Mark Smith: Where should we start? Do you want to talk about-?
Doug: Let’s talk about sales.
Mark Smith: Sales okay.
Doug: The reason why is that … I’ll bet that My… I hypothesize that our listeners are going to agree with you. The number one thing that entrepreneurs and executives asked me to help him with his deal flow. Help us get more deals.
Mark Smith: Actually I would say help me get profitable deals with companies in spaces I like to work in.
Doug: There it is. That’s getting even better granularity that’s more accurate. The interesting thing about sales is that the fundamental sales methodology that we use today was invented back in the late 1800s by John Patterson who headed up the national cash register.
Mark Smith: That’s funny.
Doug: Which was the original IT, the original information technology and he was selling a cash register to a shopkeeper who’s a way of keeping track of the money in a cigar box was a scrap of butcher paper and a pencil. He came in and said, “Look, you don’t have to sit or tend that cigar box. We actually have this machine that allows you to have an assistant manage the transaction so that you can actually sell to your clients.” The way this works is that every time there’s a transaction it rings a bell so you can look over and look at the flags that just popped up an audit per transaction and make sure that they’re putting the right amount of money in the till. That allows you to step away from the front desk and to run a more profitable business. Looks Like a compelling value proposition. We still even say, well, let me ring in your purchase today.
Mark Smith: Sure.
Doug: He had a methodology that he created was a 16-page book for the book sales arguments. That essentially was a pitch. Here’s why you need to buy the cash register here, they are the value propositions that became so effective. That was the Holy Grail of selling the 1930s. One out of six executives again, been through the NCR sales school and its still perpetuates today. The problem is that we’re no longer selling an easy sell to a single decider. In that particular case, the shop owner was the only person who said yes and nobody else was involved. Well today, most purchases have multiple people that must say yes before you can proceed. You mentioned it earlier. CFO’s have to approve the ad spend even though that’s a marketing function. The reality is that most of us sell for multiple deciders unless you’re selling a consumer packaged well at Walmart, most times there are multiple people involved. My life Molly has to say yes to most purchases that I make. It’s just the way that family dynamics work, right?
Mark Smith: You’re saying that. I think that’s often an error with the sales guys is they’re talking to the wrong to the wrong person.
Doug: They do. They believe that they can talk their way in and up. Well, here’s the challenge is when we have multiple deciders involved; each of them has a different yes set. Each one has a different vision of value. Each one is going to judge the purchase on a completely different set of criteria. In that particular case, it can … The presentation falls apart because we in that presentation say things that these multiple deciders don’t like, don’t agree with or isn’t in the correct position. John Patterson’s methodology creates more problems than it solves in today’s world. You got to let it go unless you’re selling to one person who’s making the decision and nobody else is involved.
Mark Smith: I’m thinking of the work we did with a big bank, a Hong Kong bank and they asked us to do their payment processing for an event they were doing in the UK and I said, “Why would I do that? You guys are a bank.” He said, “Do you know how long it’s going to take you to get IT to set this up?” I said I’m not setting up. I’m not setting up a PayPal for you guys share a bank, I’m a marketing guy. I’ll do the marketing, but you figure out the payment. They’re going, “It’ll take me two years.” He goes his event is in six months. There’s somebody who’s in the decision process IT and they clearly aren’t lining up with the sales and marketing vision.
Doug: That’s right. That’s a problem.
Mark Smith: Well, the challenge with multiple deciders was that when you’re selling to somebody, they even have to go and persuade the other people involved to say “yes” and frequently they don’t understand the mindset or the vision of the world that those other deciders are using. What we’re moving to is we have fundamentally a high consideration sales process for almost everything that we’re doing when we’re multiple people involved.
Doug: I might also say that it’s not only the person that you’re pitching or selling to the doesn’t understand how the deciders view it. I would say as someone who’s in sales that off tonight I have that same problem because I just see what I want and I think is good for the client. I don’t understand how all the different department heads might view that and how that makes the impact on their business and their decisions. What that means is it’s a complex sale. You have to dig in and understand the motivation of each player. Well, the good news is that you can figure that out within about 80% just based on role and the function in the organization because of every role and function as a specific temperament and specific goals that you can come pretty darn close most of the time.
I’ve teased that out. That’s a book coming out in 2019 called Executive Temperament. How to play the women in the C-suite where we identified the personality types, but each one of our executives involved. It’s going to be a fantastic book. You talk about that later on in this environment though. Our job as a salesperson is not to prove that we’re the best product. It’s to prove that we’re the lowest risk choice.
Mark Smith: Okay, a different mindset for sure.
Doug: Radically different mindset because I. They don’t care how good you are. If it’s risky to them or risky to their chain of command up, the answer is going to be good no and the reality, there’s a lot of crappy products out there that are sold continuously because of the lowest risk.
Mark Smith: Well, I’m not necessarily the lowest cost. I worked in a big IT projects with government and they hired while they hired a couple of big brands, so it was like an IBM and Yahoo Partnership. I said, well why? Why those guys? Well, no one gets fired for hiring IBM. That’s the risk consideration. They were exploring the most expensive, but they were the lowest risk to the person making the decision was not going to get canned from the boss.
Doug: That’s exactly right. In fact, my work with IBM as part of what allowed me to tease all this stuff out, to ask the question, why is it that nobody gets fired from buying IBM or A and T. Why is that? Well, there’s the reason why is because it’s about risk reduction. It’s not about the quality of the product that has to be there, but it’s that risk reduction.
Mark Smith: Sure. Absolutely.
Doug: Do we have enough time to talk about ways to reduce perceived risk?
Mark Smith: I think so. I think it’s a topic we need to cover.
Doug: All right, let’s, let’s talk about that then. Well, there’s fundamentally seven ways to help reduce perceived risk when we’re talking to prospects and the first one is really obvious. It’s proof.
Mark Smith: Sure. We do that through testimonials, case studies of paid proof of concept. A couple of things you have to understand is that proof must be contextual to their business. For example, we can’t use a transportation case study to sell to finance. They can’t make the leap. They want to know that you have expertise in their area and the proof must be relevant up to the decision chain. Unfortunately, most case studies and proof statements and testimonials don’t include all the other decision-makers, the business decision maker, the technical decision maker, the financial decision maker, the customer impact decision makers who all is involved depending on the product and service.
They have to have all those elements you contextual and relevant after the business change and ideally when it comes to proof you have a preponderance of proof that lots and lots and lots of proof to help them with that, but unfortunately proof isn’t enough. You got to have it, but it’s not enough. You have to go to the second P of risk reduction, which is a process. You have to show them how you’re going to work together. Here’s an important thing to understand. An executive will never agree to a project they don’t know how to manage, so especially if what were things you were doing, Doug, if they don’t know how it’s going to work, and what I mean by that is what are the steps we’re going to go through? What are the timelines? What are the milestones are? How do I manage this? How do I make sure that this project stays on track and I don’t squander my funds?
We have to show them how this is going to work. With that means is that project management the timeline and milestones become part of the sales process when you’re working with customers that had multiple decision makers so they can look at and go, “We’re going to pay attention to that.”
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
MAKE IT EASY FOR CUSTOMERS TO SAY ‘YES’
MAKE IT EASY FOR CUSTOMERS TO SAY ‘YES’
Keep in mind that almost every sales decision that somebody makes in a corporate environment is going to be weighed against the impact of their career.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Doug: That helps reduce risk because they’re looking at you as an entrepreneur, going, “This guy is not visiting a back of a napkin. He’s using a fill in the blank project management tool. He’s invited me to this suite. I can see how it works. I can see that people, the team, we can see our deadlines or goals and milestones.”
Mark Smith: Right on. All of that is such a critical aspect of showing them how it works. You don’t have to show them how the watch works, but you have to show them that they … Fundamentally how the pieces play together so that they can agree to this project. Processes are the second P is progress. We want to illustrate that whenever they had a conversation with us that they have an ever-expanding understanding of the solution. There’s a couple of things we can do to help them identify this progress and that is to start every conversation with what would make this a valuable conversation to you and pull everybody that you’re talking to either in the room or on the telephone, what’s going to make this a great conversation and make sure that you can hit on those points and if you can’t let them know in advance so they don’t walk away frustrated and say, I’m not prepared to talk about that.
Then point out that you’ve made progress from the conversations. Then you can say, you asked me to inform you about this. Did you need? And say what’s the best idea you got from a conversation? That throws cement on the fact that they know that you know what you’re talking about. This proves company viability, it that proves the fact that you’re a partner in helping them make progress.
Doug: Well I think it’s a way that you’re leading off as well. I know I worked on a large project and I’m very driven and goal oriented, so my, my job and my goal was to get it done and I did not lead up well and give progress updates. I had a deadline. I wanted to crush the deadline and the team felt out of the loop.
Mark Smith: That’s a challenge.
Doug: That wasn’t the conversation that that was … It will only have taken a little bit of time to provide some regular updates so they felt comfortable. I buy, hey man, we’re just making good time. We’re under budget. Things are just rocking. Without that communication and progress updates. You’ve got a client wondering, did they run off with my money? Are they really doing what they said?
Mark Smith: That’s a really good point, Doug. Progress updates are all about maintaining the feeling of the risk is in control. That’s right. All right, so the fourth P is a position. How do you change how they look at your offering? Now, ideally what we’re going to do is position this so that when you’re selling them contributes to multiple desired goals and ideally it’s going to contribute to the goals of everybody who has to say yes, so it has to say yes to the customer, to the marketing department it has to support the goals of the finance department and support goals of the CEO as a finance has to contribute to the goals of the sales department. You’re positioning this so as contributing to multiple goals. One of the ways that you can position this to reduce risk is to compare it with an existing commitment and an important thing to understand about the position is that revolutionary scares people away.
Radical scares people away except at the executive, the CEO level. They’re okay with radical just remember they’re creating a future that doesn’t yet exist.
Doug: That’s right.
Mark Smith: But for everybody else, revolutionary is risky. Evolutionary is what we want to do, so show them how it’s going to be just a little better. It’s going to be. It’s going to move. Some of the barriers, it’s going to take them a little closer they want to be so the positioning is really critical and people that come to, man brand new. It started a people going, no, no, no, that’s your, excuse me. Have all been learned by new ideas and new technology. You have to position it correctly to reduce that perceived risk.
Doug: Want to make sense what you said, that identifies across a number of areas. I was thinking about a complex sale that we had that using your words with a large sports radio station and our pitch was going to be probably significantly more than the competitors and I said, well the issue wasn’t just building them a website. It was providing a tool that the DJ’s could use because they’re not tech guys. It was opening up new Marketing channels and new advertising. Bringing them new revenue that they currently didn’t have. It wasn’t simply about delivering on one aspect, hey we need a website. No, you don’t. What you need is new revenue. You need a tool that’s easy to use for your deejays that’s easy for your listeners to log into. It became more than just what they asked for.
Mark Smith: Right on. That’s the concept of positioning. Great example Doug. All right the fifth P of how to reduce perceived risk is prestige. Keep in mind that almost every decision that somebody makes in a corporate environment is going to be weighed against the impact of their career. The way that we make serious bank in the corporate world is not true raises. That’s pretty small but through promotions. You have to be elevated in the organization and the only way you get promoted is that if you illustrate consistent good judgment. If you make a purchase, it doesn’t work out. That’s going to count against your good judgment. An executive will never promote somebody to their inner circle that might embarrass them because that illustrates bad judgment up to the food chain. The reality is that every purchase decision has a career impact and we got to call out the elephant in the room. It’s just … People got to get this in their brain. People are not buying your product or buying a path to a promotion. That should give you … That should just rattle your brain for a moment behind this.
Doug: I’m just smiling because I’ve been in those situations and you’re right, people are afraid to make the wrong decision. Come back to IBM for example. Great product, great service maybe not the right solution for a new startup.
Mark Smith: No.
Doug: But if the risk is less?
Mark Smith: Well theoretically if you have a storekeeper. Now keep in mind entrepreneurs only have one storekeeper. That would be their spouse or the bank or their investment but in a corporate environment hiring IBM is going to protect somebody against a bad decision because they’re relying on the consulting power of IBM, but for an entrepreneur organization you’re going to pay for that. If you don’t have to cover yourself because you don’t have that storekeeper. Prestige is the P, what’s the value to their career? How can it increase personal power? How does it add value to their physician? How can I create desirable uniqueness for them? What’s the PR value? All of those things are part of the prestige. If you work with somebody and say, I’m or I wouldn’t do this with an entrepreneur, but I would do with it anyplace else what, what is your career path look like?
All right, so what can we do to work together to help you make that career goal? Is this part of the consideration that your boss and their team are going to consider whether you are promotable or not through, powerful performance. If you pull that out, it changes the dynamic radically. Now, this is a pretty disruptive idea.
Doug: That’s what I was going to say that. That’s a pretty new thinking at least a for eye set to have that conversation. The prospect sitting across the desk from you is thinking that.
Mark Smith: Right. If you can state what the prospect is thinking and nobody else has talked about it, you’ve created a competitive advantage that is unmatched. Your competitors will never know what hit them.
Doug: That’s pretty cool.
Mark Smith: All right, excellent. I love it. The sixth P of how to reduce perceived risk is a price. No, I don’t mean having the lowest price because as we’ve been talking about prices usually only important if everything else is equal. When everything else is identical, price becomes a differentiator and our job is to make sure that nothing is equal. Instead what I’m talking about is show them how to radically lower the costs of how they’re accomplishing their objectives and that reduces perceived risk because if they can do what they’re doing right now for 15 or 20% less well it’s risky to continue to do it the way they’re doing it. Sure that’s bad judgment, like why are you spending that much money when you don’t have to?
Doug: That’s exactly right.
Mark Smith: Fundamentally, the way that we radically lower cost is by simplification, elimination, and automation. You talked about that with your deejay experience a little earlier in this conversation about showing them how to do something they couldn’t do before as a tool. That’s, well, let’s simplify and automate the situation. Simplify, eliminating the automated spell seat to an easy way to remember them. We got to do a sea change and that’s a fundamental methodology of reducing perceived risks if you let them do that. Another thing we can do is show them how to pay for it, whether it’s a reduced cost or show them where to find the funds and show them how to increase their cash flows. Since for the financial person, improving cash flows is fundamental to their key performance indicators. That’s one of the things that you can do in a price strategy. Fundamentally draw them a line to the money. Price is one of your seven Ps. Ready for the last one?
Doug: Yeah. Before we move to the last one. The other thing might be just inefficiency.
Mark Smith: Indeed. Absolutely true.
Doug: Your pricing for your new technology or solution might be more than they were anticipating spending. Like you said you can draw a line to profitability by saying this is, this is costing you. Your productivity would increase by 30%.
Mark Smith: That’s exactly right.
Doug: It’s a lost opportunity. Ready for the last one.
Mark Smith: No, no right. I think that’s really important to show them the cost. One of the strategies to accelerate deals is show them the price of waiting and show them the cost of not acting, and so that’s part of that concept. I love it. All right, so the seventh P and how perceived risk is a parachute. Parachute is the guarantee. It’s the thing that will allow them to survive and their career to thrive. If something goes way wrong and the way we handled that parachute is with a guarantee. Anything that you can control. You can uncover where they feel this risk by asking the question, what do you need to be guaranteed to agree to this? It doesn’t mean you have to guarantee it but that question will flush out their remaining fears. Then we can either address it or we can walk away from the deal because we can’t serve everybody, don’t want to serve everybody. I want other ways of creating a parachute is by offering insurance/ what can you insure?
Your parachute author should scare you and relieve your customer. A pretty example, here’s a parachute that might be a little frightening. Let’s say you’re selling on a computer product and you tell your customer, look, I know this is a high consideration deal; you’ve got a lot of people looking over your shoulder. If it goes wrong, it’s not good for your career, so I’m going to make sure that we have a protection for you. You’ve got a parachute for in case something crashes and burns. What we’re going to do is if we do not fulfill the agreement that we make, we’re going to rip out our equipment. We’re to bring a third-party consultant to figure out how to solve the problem. Before you even were to pay the difference between what you paid us and what it costs for you to install the right solution. Does that make you feel a little more comfortable? Now to most people selling this scared the crap out of them.
Doug: I totally get that.
Mark Smith: The reality is that feeling of that feeling of fear of what if things go wrong is the feeling the customer has.
Doug: Yeah. I’m thinking back of a case study I read about SAP and when they were failing, their numbers were declining in terms of their revenue, so their revenue. What was keeping them afloat were the people renewing their software and renewing the licenses, but they knew installations were declining. Yes, lucky enough the company figured it out and they got to turn it around, but people couldn’t leave because they were so committed to that software and if someone has come along and said, we’ll take it out, as you said to your point, we’ll install our stuff and if it doesn’t work better than what you’re currently using for less of money, go back to what you’re using they probably wouldn’t exist today.
Mark Smith: Right. We’ll pay for that installment. The reality if you stand behind your products like this and you do your work up front, you’re not going to fail. You know, Doug, I am 100% money back guarantee as a speaker. You’re going to love my speech or you don’t pay including expenses. I’ve only had to do it twice and what has happened along the way is number one that guarantee makes sure I only take engagements that I know I can knock out of the park.
Doug: For sure
Mark Smith: Because once I have returned the money when I had no business doing those features. Now I’ve been doing this for 28 years. Number two is that it keeps me dropping the F-bomb on the platform. Sorry. To wrap this up, the reducing perceived risk, seven Ps or proof process, progress, position, prestige, price, and parachute. When you use those everywhere you can you can do that in ad copy. You wouldn’t Market and your sales presentations you do in your conversations. More of those PS you can use in your conversation. The lower the perceived risk and the faster you can close deals.
Doug: Absolutely. Seeing your last point. I remember when I was working for someone else in sales and it was a commodity type business and they normally had customers sign long-term contracts and our sales manager said do whatever you can to get the business. That means even giving them credit for the supplier’s products that are currently on the floor.
Mark Smith: Sure.
Doug: We’d go in, we’d signed new contracts, we had followed our guys, they would come and remove all the competitor’s products, deliver them back to the competitor which they hated and then we would give them a credit for what we just took off the forest. They wouldn’t have to pay twice to make the switch.
Mark Smith: I love it. I love that idea. In fact, that’s a really great idea and that is offered to help your customer break up with their competitor.
Doug: I mean we said, “Hey, we’ll do it.” Because they don’t have that conversation.
Mark Smith: No, they don’t any. Breaking up with your competitor is a tough thing to do. In fact, if people say we like the people we have right now when we don’t have time to do this right now, unfortunately, but I do have an entire script on how to identify the value or the relationship with the competition. I’ve got so much stuff friend.
Doug: Well, time, permitting in sometime in the next year we’ll have to do this again.
Mark Smith: We can. Surely we’ll do it again. There’s a lot of stuff we’ve talked about today and thank you for letting me share some of the thoughts that I have about how entrepreneurs can make the pivot to the executive and the fundamentals of how can you increase in speed up your deal flow.
Doug: That’s really cool. There’s a tone of information here. I’m looking forward to going to the show notes and re-digesting the points that you shared as well.
Mark Smith: Well a delight to be on your show. Thank you. And a delight for your listeners. If you want to get a hold of me, it’s actually really simple, Marks on LinkedIn.com Marks, M-A-R-K-S on LinkedIn.com. That’ll take you directly to my profile, asked to friend me and we can connect there very easily. The second thing you can do is check out my executive strategy skills summit. executivestrategysummit.com is exactly as it sounds executivestrategysummit.com. You can also easily find me on Google if you Google Mark SA Smith. I have two middle initials. If you do Mark Smith you’ll never find me but Mark SA Smith, and you’ll see all of this stuff about the publishing a video every day on an executive strategy skill. I do an article every week. Podcast. My podcast is the selling disruption show. Sellingdisruptionshow.com, you can find it everywhere on all the platforms. Hey, I’m always open to a conversation, always. I’ll talk to anybody for 20 minutes. If you’re in a conversation with me, just introduce yourself. I’d be delighted to do that.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
MAKE IT EASY FOR CUSTOMERS TO SAY ‘YES’
MAKE IT EASY FOR CUSTOMERS TO SAY ‘YES’
Keep in mind that almost every sales decision that somebody makes in a corporate environment is going to be weighed against the impact of their career.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Doug: Absolutely. We’ll make sure we get this transcribed we’ll make sure we have all the proper links in the show notes. Two questions and I’ll let you go. First question as a Tim Ferriss question I ripped off from his last book and what’s some of the bad advice that you hear in this space?
Mark Smith: I think bad that advice is talk about your features and your advantages and your benefits of your product and you’re going to persuade your customers to buy. That just does not work anymore. You have to understand your customer’s motivation. When you understand their objectives and their priorities and the criteria then we can map their motivation to the product versus attempting to map the product to the motivation.
Doug: This is a radically different, I think … At least for me anyhow to the radically different approach of thinking that’s well beyond your product and you start to think about people’s careers career path and what it means to them and their business beyond just the transaction of fixing the X problem.
Mark Smith: Well we’re talking about, the hidden factors that impact every sales decision that people have just not been aware of.
Doug: Obviously not logged here. If you’re running a pizza company, it’s a pretty simple decision. There’s one person that’s going to make the decision that’s going to be my wife.
Mark Smith: Well, there’s some truth to that. Yet most of the people that are entrepreneurs aren’t probably listening to your podcasts, they’re just running their business.
Doug: Unfortunately that’s true. They don’t take time for personal development or I don’t know. Obviously, some people do. For me, it’s a huge investment. It’s the only way I can stay current.
Mark Smith: Indeed, well, when you sell a complex product as you do, then this is the type of thing we have to talk about. When you’re selling them something simple consumer package, good. Anything in the fast food restaurant, all of that is fast moving consumer goods. We use a radically different approach to sell that. That’s not what we’re talking about. What we’re talking about here is how do you sell high consideration products and services that involve multiple decision makers.
Doug: Yup, absolutely.
Mark Smith: That’s my superpower.
Doug: Well, there you go. I asked what your superpower was at the beginning and so unless there’s … That’s my preferred way to sell. I always find that the food line is shorter when you’re selling a six-figure solution than when you’re selling a four-figure solution.
Mark Smith: Right on.
Doug: If you’re going to sell, you might as well sell and go for the big win.
Mark Smith: Right on.
Doug: Thanks so much, Mark. I really super appreciate you coming on and sharing with our listeners today. As I said, we’ll get the show transcribed, is there anything you want to close with before we sign off for today,
Mark Smith: I do. Remember my friends that you as the executive, as the leader of your organization are the only one that sets the direction. Remember you’re creating a future that does not yet exist, using methods that have not yet been invented, where best practices that have yet to be established and what that means, my friend is and enjoy the adventure.
Doug: I don’t think I could have said that any better, so thanks for listening, for tuning in. Don’t be shy to leave a comment in the show notes when they’re published. Make sure you’re subscribed to us on iTunes. Let us know if there’s a topic you’d like us to cover. Thanks so much for listening today and we look forward to serving you on our next episode.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
MAKE IT EASY FOR CUSTOMERS TO SAY ‘YES’
MAKE IT EASY FOR CUSTOMERS TO SAY ‘YES’
Keep in mind that almost every sales decision that somebody makes in a corporate environment is going to be weighed against the impact of their career.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Get in touch with Mark:
- Web – Bija Company
Find out more about Mark:
Links to other related podcasts and or blog posts:
HOW TO IMPROVE YOUR SALES STRATEGY
LEARN HOW TO PROSPECT AND SELL FROM THIS SALES EXPERT