Customer defection is one of the most overlooked and least understood problems facing small businesses today. Our economic environment and continuing price erosion are problems in just about every industry. This is causing customers to re-evaluate their loyalties for what are perceived to be “lower cost alternatives.”

Lost customers means lost revenues, negative word-of-mouth and a negative impact on employee moral. I thought I’d take a moment to look at some of the things that we could do to not only recapture lost customers but also keep them more loyal in the first place.

Winning Winback Strategies
Recognize that all customers are at risk. Even satisfied customers can be persuaded to defect to the competition. Do not take any customers for granted.
Consider that customer winback strategies can be more effective than finding new customers. Many experts believe that winback success rates are far higher than recruiting new prospects.
Make sure you fully understand both the revenue potential and the cost of doing business with all of your customers. Initially this may be a massive undertaking but once complete it is easy to maintain and extremely valuable when protecting your customer base from being plundered.
Calculate every customer’s life time value (LTV) and second LTV (after they are won back). This is a powerful way to identify customers that you may want to win back and how much you should invest in wooing them.
Apply CPR to customers that are threatening to bail. This kind of CPR stands for Comprehend, Propose and Respond.
Make an effort to comprehend what their issues are. What do they want? Why do they want it? Try to separate the emotions from the pragmatic realities. Sincerely make an effort to understand their side of the story.
Propose a solution that is reasonable to each party. Not a one sided solution. Truly a win-win. Rolling over and just giving in to unreasonable demands may be the worse course of action. This is why it’s so important to understand the numbers. How does your business look WITH this client as well as WITHOUT them. Their departure may be the best thing for both parties but the way it is implemented can make all the difference in the world.
Then take positive and decisive response. This means action. Try to communicate at the highest levels of the organization. Be clear and concise in your offer. Put it in writing. Don’t be afraid to apologize or admit where you or your company was wrong. But don’t respond to threats. This is a sign of a bluff. I recommend dismissing them out of hand. Finally when you have proposed the best solution give them a deadline so the deal doesn’t stay on the table forever. This weakens your bargaining power.
Make Your Company Defection Proof
While everybody is talking about customer loyalty today few are taking real action. Preventing customer defection is surely the prime motivation for building customer loyalty, but it also gives us the ability to proactively develop strategies to improve our value and service in general. Once you become a convert to customer winback efforts you can learn to prevent defection in the first place. Here’s some ways to improve your position with current customers or customers that you HAVE managed to win back:
Identify all of your products or services that could possibly be of value to your customers.
Motivate your customers to use as many of your products or services as possible.
Prove to your customers that your products and services offer value that they can not find anywhere else.

• Keep track of every sale and sort in a database
• Personally communicate with customers at regular intervals
• Establish some form of satisfaction rating system
• Sell peace of mind more than just product or service solutions
• Admit when you’re wrong and pick up the pieces quickly and effectively

I hope these ideas help you to improve customer loyalty and lessen customer defection. If employed consistently I know that they will succeed in producing greater effectiveness for your business in this difficult economy.

What’s your story?

Who are you?Where do you come from?What do you believe in?When you seek to influence others, you face questions like these. Whether you are proposing a risky new venture, trying to close a deal, or leading the charge against injustice, you have a story to tell. Tell it well and you will create a shared experience with your listeners that will have profound and lasting results.I’m not talking about just providing information. People don’t need more information. They are up to their ears with information. They want a relationship with someone they trust and believe in. They want faith, hope and an answer to their problems. Faith and hope needs a story to sustain it. A meaningful story inspires hope that your ideas indeed offer what is needed to solve their problems.The Path to Faith
Genuine influence goes deeper than getting people to do what you want them to do. It means people pick up where you left off because they believe! The story is the path to creating faith. Whether you tell your story through lifestyle or words, the first thing people look for before believing in you is trust. Annette Simmons in her book, “The Story Factor” talks about the six steps in story telling that we can use to build trust:

1. Who you are story
2. Why you are here story
3. The “Vision” story
4. The “Teaching” story
5. “Values in Action” story
6. The “I Know What You are Thinking” story

Before being influenced by you, your listeners want to know, “Who your are and why you are here?”
If you don’t take time to answer this they will make up their own responses which are usually negative. It is human nature to mistrust others. You need to tell a story that demonstrates that your are different. That you are trustworthy. That you deserve their faith. A story lets listeners decide for themselves whether they should trust you. If your story is good enough, people -of their own free will- conclude that they can trust you.The “Who You Are” Story
Stories about “who your are” must reveal something about yourself. Make yourself vulnerable. If your story reveals that you have learned to recognize your flaws, then people will believe you can be trusted to deal head-on with tough problems.The “Why I Am Here” Story
This story must reassure your audience that you have good intentions. However, before you tell them what’s in it for them, tell them what’s in it for you. If you don’t they will suspect that you have a hidden agenda.The “Vision” Story
Once people know who we are and why we are here, they are ready to listen to what’s in it for them. This is where you can differentiate yourself. Like the story of the the man who came upon a construction site and asked each of three workers what tehy were doing. The first responede, “I’m laying bricks.” The second said, “I’m building a wall.” And the thrid said, “I’m making a cathedral.” Your job is to take your vision and transform it into the audiences vision. A real vision story connects with people in a way that shrinks today’s frustrations in light of the promise tomorrow.The “Teaching” Story
Use a story when you want to get your message across, especially when you need to show not just “what” needs to be done but “how” it should be done. For example, telling your new receptionist where the hold, transfer and extension buttons are will not make her a great receptionist. But telling her that the best receptionist you ever knew was Mrs. Smith, who could simultaneously calm an angry customer, locate your wandering CEO and smile warmly at the UPS man.The “Values in Action” Story
Without a doubt, the best way to teach a value is by example. The second best way is to tell a story that provides an example. A story lets you instill values in a way that is memorable and keeps people thinking. “We value integrity” means nothing. But a story about a former employee who hid his mistake and cost the company thousands of dollars or about a salesperson that owned up to their mistake and earned so much trust that their customer doubled their order, teaches your audience the MEANING of integrity.The “I Know What You Are Thinking” Story
Tell a story that makes people wonder if you are reading their minds. I really isn’t that hard to do. If you do your homework about the group you are seeking to influence, it’s relatively easy to identify their potential objections to your message. If you address their objection first, you disarm them.Clothing truth in the form of a story is a powerful way to get people to open their minds to the truth you carry. The naked truth sometimes must be dressed up to be seen. New ideas need room to grow. Tell it like it is. But consider telling it in the form of a story.

I was at Sea World not long ago and had the opportunity to watch a trainer working with a seal. Now I’m not speaking of the kind of Seal that you might find in the Navy, I’m referring to the wet, pudgy, cute, whiskered kind.

I watched as the trainer used her fingers and thumb to simply touch the nose of the creature. This was the seal’s “cue” or signal to perform the proper behavior. The seal then opened its mouth for inspection by the trainer. This was the seals “response.” The trainer then tapped the seal on the head and said “good.” This was her way of showing “acknowledgement” for the animal doing the right thing. She then tossed the beast a whole fish – “yuck!” However if you’re a seal and you’re reading this, you know just how tasty that smelly old mackerel is. This was the seals reward.What does this have to do with business improvement? Good questions. Have you ever noticed that buyer’s are kind of like seals?They are if you think about it. They automatically react to cues just as the seal did. This is what their training and conditioning has taught them. Their training tells them, “this sales person is here to sell me something therefore I must resort to what will protect my interest best: object to their pricing, terms, program or package.”Let’s face it securing the business often boils down to the lowest price, in one form or another. Are you cheaper than the competition? If not you may be up for a battle of the wills. No matter what price you quote, many customers will automatically say its too high, maybe way too high. Like the seal, that response is so deeply drilled into them that just about every rep they meet gets the same reaction. The trick is to get beyond the knee-jerk reaction and into a reasonable conversation about their situation, needs, budget, and time frames. Until you achieve that level of rapport, price itself simply isn’t the issue.Some of you know my sidekick on the Small Business Hour, Matt Walker. Matt is a comedian. When people find this out they, as you can imagine, often say, “hey Matt say something funny.”This irritates Matt to no end, which is why I enjoy it so much when it happens. However, Matt, being the friendly guy that he is always manages to spew out something hilarious. How does he do it? He’s always ready with a joke.As Matt likes to say, selling is like improvisational comedy: You must be ready to improvise because encounters with potential customers constantly produce reactions and situations that you could never predict. If you prepare long before you meet with customers you will be more effective face-to-face. While you’re still at the office, force yourself to make a list of 10 great, potential responses when you hear that your price is too high. I mean it — 10, and 20 would be even better. It may be what you say. Or it may involve a particular tone of voice or even your body language. Developing and using the responses will make your selling technique more flexible, resilient, and confident.Another facet of the price objection is the explosion of options every client faces these days. There are more varieties of products, and more vendors to buy from, than ever before. Multiply varieties and vendors and it’s clear that the total number of available choices has grown logarithmically. This tsunami of data can lead customers to making comparisons between options that aren’t strictly comparable. Yes, the solutions on offer aren’t equal, but the conditioned prospect can’t look beyond Price A vs. Price B.As I noted earlier, “Your price is too high” is an objection we all hear. In fact, if you aren’t hearing it, then your prices are too low, you’re leaving potential profits on the table, or you just aren’t making enough sales calls. There is no single, sure-fire, works-every-time solution to this problem, but there are lots of great ideas. The more arrows in your quiver, the more options for handling — and the greater selling success you’ll experience. Then you won’t have to worry about all those trained seals out there.I hope that this “Business Update” has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.comMark Deo

Getting ready to head off to do my radio show, it was a typical Sunday afternoon as I ran to answer the incessant ringing doorbell.

Who could this be on such a beautiful day?I peeked out the small window at the top of the door and saw no one. Likely a neighbor’s visitor realized they were at the wrong house. Just about to trudge back upstairs, the doorbell rang again. Hmmm… funny business here. I opened the door and at first saw no one until I looked down and there was this miniature human of about eight years of age with a small box tucked under one arm. He looked up at me with the archetypical big eyes of an eight year-old that wants something. I brace myself for the inevitable cookie, candy or magazine pitch. You know the old, “Good afternoon sir. Would you help me to win a chance to summer camp this year,” and so on.This kid stares me straight in the eye and says: “This your place?” Stunned I blubber, “Yea.””You’ve got nice plants,” he says.”Yea they’re not bad,” I stammer feeling dumb.”They’re kind of like a forest. Did you grow them yourself?” my amateur Botanist asks.”Yes it’s taken several years but we pretty much planted all of them ourselves.””Who keeps them clean?” he inquires.”Well we have a gardener and we keep after it. Are you wanting to do yard work for people, or something?” Now I’m beginning to wonder what this is all about. Next this kid says something that completely blows me away.”Nah, I don’t do manual labor. But I bet you get pretty tired doing all that planting.”I laugh and figure OK, I’ll play along. “Yea, sometimes we do get tired.”Suddenly this kid beams with a huge smile. He thrusts the nearly forgotten box directly in my face. “You need energy then. You need to buy some cookies.”Now I’m rolling on the floor laughing. “OK, you’ve got me kid, give me a box.”I hand him the cash, he turns to go, then stops and turns back around to look at me. “Have you got any friends that need energy?”Naturally I relieve the kid of his entire remaining inventory of cookies and realize I probably just met the next Bill Gates.
After my interaction with the eight year-old genius, I was again reminded that sales is not about jamming your product down somebody’s throat, or laying on a pitch so thick it makes the prospect gag for fresh air. It’s about getting people interested in YOU by being interested in them. Smart entrepreneurs, professionals and technical experts know that the true secret of success lies not in how great your product or service is, but rather, in how skilled YOU are in building genuine relationships with others. Many people view great salesmanship as great showmanship. This is sometimes true. Showmanship is characterized by the development of sophisticated and polished presentation skills that almost unfailingly dazzle (but do not always win the business). Using enthusiasm and showmanship can help us to encourage more interest in our product or service and build greater conviction. But the art of salesmanship is often times the concealment of salesmanship. Some might even say the art of salesmanship is the absence of salesmanship.

The art of salesmanship is the concealment of salesmanship and is often characterized by well-prepared, interactive questions that elicit the “right responses” from the customer. This creates greater interaction with and feedback from the customer. Of course leading questions usually reveal what you think the issues and problems are, not what the customer knows they are.It often takes a lifetime in sales before one has the confidence to say almost nothing and communicate effectively. And that, as the wise old sage said is the “true art of salesmanship, and of life.” When you’re coming at things from their perspective or point of view, you’re selling from legitimacy. The switch is on, and you can solve or understand any problem. When you’re not, it’s off.Reflect on your own growth regarding the art of salesmanship. Pick out a single habit or practice that you know could be improved regarding legitimacy and customer communication. Work on it every day until it’s much better. Then move on to some new weakness.Stand aside from the situation and ask yourself, “If I were this customer, and knew everything that he knows about my competitors, my products and the application of my products in his situation, would I buy from me?”If the answer is yes, welcome to the world of legitimacy. All you need to do is get up to speed on the knowledge and communication skills needed to transfer your understanding and wisdom to the customer.If the answer is no, you’d better start adding value until you can say yes, because the only alternative to legitimacy is the old ‘razzle-dazzle.’

This weeks business update comes from Abe WalkingBear Sanchez, a business expert based in Colorado. Check out his website at: www.armg-usa.com

Current Credit Customers Keep Buying and Buying and Buying

Miami
The four day national business conference featured about 40 business speakers. One of the speakers was a sales management expert; I was speaking on B2B credit management.

I was telling the “Sales Management” speaker that as a corporate credit manager I’d print out a list for each sales person of their past-due credit customers. I’d might as well have called it the “Avoid” list.

“Don’t sales guys understand that the most profitable sale is the repeat? That it costs 8 to 14 times as much to find and sell new customers as it does to keep and sell to existing customers?”, I asked.

“Unlike you, Abe, most salespeople like people and want to be liked in return. They avoid anything they think of as being confrontational.”, he said. It’s a good thing for the smart aleck that I haven’t hit anyone since I quit drinking.

Hold or Hide
Believe something and it’s true, at least to you. In business there still exists an out of date and misguided belief that past due credit customers are bad; that past due credit customers can’t / shouldn’t buy. This “risk management” view of credit and A/R management results in credit managers spending much of their time releasing orders from the “credit hold / do not sell” list, and leads to salespeople crossing streets to avoid an oncoming past due customer.

The only credit customers that should be placed on “credit hold” are those few who for whatever reason can’t pay or who are trying to avoid paying. The vast majority of past due customers are good for the money and will pay. There are good reasons why most past dues don’t pay within terms.

Past due customers not only represent potential lost sales, they also represent an opportunity to elevate customer service levels. Listen to past due customers they’ll also tell you how to improve on your business processes.

Why Don’t They Pay When Due?
Many credit customers become past due because they’re disorganized or lazy about their A/P function. Some are playing games with paying vendors and suppliers; mistakenly thinking that practicing cash management (using vendors/suppliers as a form of short term financing and not paying late charges) is a good thing. Many more past due customers don’t pay because something is wrong.

There are also customers who don’t have the ability to pay when due, but can and will pay in the near future. A small percentage of customers can’t pay and have no idea when they will be able to pay. These are prime candidates for a bankruptcy filing. The smallest percentage of past due customers are those who are trying to avoid payment altogether; the best thing to do with these “avoiders” is to write them off and assign them to an enforcer; a collection agent or attorney.

The reason for contacting past due customers is not to collect, that what the enforcers do, but to “complete the sale.” The goals being to keep credit customers current and buying, and to identify and control the small percent that represents a potential for loss.

Four Steps in Sales/Completing the Sale
The same 4 major steps are found in both sales and in completing the sale (past due A/R management).

Step One: Contact the Decision Maker
In sales the decision maker is the person who can say “yes.” In past due A/R management it’s the person who can tell you when you’ll be paid and just as importantly why you weren’t paid when due.

The best opening in a completion of the sale call is “Our records show invoice number so and so, dated __day of __ for ___dollars still being open, can you please help me with this matter? Shut up and listen.

Step Two: Determine Need / Desire / Type
In sales we ask questions about the customer’s needs or desire so that we know their “hot button.” In completion of the sale we ask questions about why the customer hasn’t paid so that we can determine the account type.

Step Three: Push the Hot Button
In sales we want to point out how our product/service meets or exceeds the customer’s expectation, their hot button. In completion of the sale we want to resolve why the account is delinquent.

If a customer is disorganized or lazy we become a friendly squeaky wheel.
If something’s gone wrong, we fix it.
If a customer has a short term cash flow problem, we work with them and encourage them and continue buying from us.
If a customer has no idea when they’ll be able to pay we need to cut off further credit sales and move at once to improve our position on the account (liens, notes, personal guarantees, returns, barters).
If a customer is uncooperative, lies and breaks payment or other arrangements we need to cut off further credit sales and then get them out to a collector.

Step Four: Close and Follow Up
In both sales and completion of the sale, we want to repeat the understanding and then calendar the account for follow up.

Telemarketing to a Captive Audience
One of the best credit managers I’ve ever met was a woman in Evergreen, CO. The first thing you noticed in her office was a bulletin board covered with pictures of children. There were black kids, white kids, Asian and brown children. They were her customers’ children.

“I love my job” she said. “I get to come to work and call my friends all around the country on my employer’s long distance service.” By coincidence all her friends worked for her employer’s customers in the A/P department.

Calling past due customers can be enjoyable, if you make it so.
Early and cheerful contact combined with fixing things that go wrong, and the identification of potential losses leads to reduced losses, better cash flow, more repeat sales and higher customer service levels and customer retention.

The Author
Abe WalkingBear Sanchez is an International Speaker / Trainer on the subjects of Profit Centered Credit / Sales and bottom line enhancement. A hard hitting and fast paced speaker, Abe brings life and energy to a critical business function whose true potential has yet to be realized by most businesses.

TEC (The Executive Committee), “Inc.” Magazine Annual Business Conference, CU (Denver), CSU (Ft. Collins), Texas A&M, NACM, IDA, AWCI, ARWI, PEI, BCFM, RAB, STAFDA, WIMA, ISD, Pet Industry Distributors Assn., Rain Bird, American Lock, Southern Wholesalers Assn., IBM, Touchstone/2000 Software are but a few of the groups, schools, companies and associations for whom Abe has conducted programs.

Abe can be reached through:
A/R Management Group, Inc.
P.O. Box 457
Canon City, CO 81215
(719) 276-0595
e-mail: Abe@armg-usa.com
website: www.armg-usa.com

Copyright 2004 A/R Management Group, Inc. www.armg-usa.com All Rights Reserved.

While preparing for the “Attract More Business” workshop I began to think about the two schools of thought in approaching customers. The more conservative alternative has always been to propose benefits to customers in an attempt at building value. The more recent approach encourages discovering the customers “pain” and emphasizing their problems rather than your company’s benefits. Both approaches seem to hold merit but I began to think about how I could reconcile the two, when a recent experience came to mind.

I was talking to a successful business owner who was interested in hiring our firm to do business improvement coaching and consultation. I couldn’t help but tune-in to the negative way he spoke about his current situation.”Business has really been in the tank lately,” he told me. “This economy has hurt us and I don’t think we have that edge over the competition anymore. It doesn’t seem that our people are working as a team or that they’re even pulling in the same direction.”I nodded gravely matching his look of somber seriousness. “Our marketing isn’t working as well as it has in the past and I don’t even know why I bother to advertise anymore,” he concluded shaking his downcast head over slumped shoulders.I asked him some more questions and he proceeded to paint a picture as dark and depressing as any Edgar Allen Poe story. It seemed that no matter what I asked this fellow he had a negative response. I began to notice a trend.Finally, he asked if we could help him. I told him I thought we could and that it would take six months and a specific amount of money to bring about the desired change. When he heard this he said, “Wow Mark, that’s a lot of money and six months is a long time.”This is what I told him: “I understand how you feel. You have a difficult decision to make. You have to decide which is worse. Is it WORSE for you to invest the time and money. Or is it WORSE for you to wait and see if it’s going to get better all by itself, knowing that it very well may get WORSE.”Which do you think this person chose?He called me not long after this and told me, “Mark, I gave this a lot thought and I can’t afford NOT to do this.”In other words he made the decision to purchase our services based upon comparing the risk of purchasing the service versus the risk of letting his situation get worse.Ordinarily I would encourage this person to purchase our services based on the benefits or the opportunities we would offer his company. But because I noticed this person was more focused on the negative elements in decision-making I switched my orientation from benefits to risk. To this person, reducing risk is far more important than improving performance or creating opportunities.This is not true for every person because each person’s decision-orientation is different. It takes strategic listening to discover the other person’s decision-orientation. Only when we discover this can we adjust our language and unspoken communication to fit the other persons perception and orientation. Some may have heard of “mirroring.” This technique is similar but a hundred percent more powerful.Many communication specialists today have made a clear connection between language and persuasion. In essence what they all agree on is that different people respond in one of two ways: positive orientation or negative orientation.Dr. J. Mitchell Perry talks about this in his book, The Road to Optimism. He says that these two types of people display opposite and opposing traits in decision-making. Those that make decisions that “capitalize on their strengths” or those that “compensate for their weaknesses.” The person who compensates for their weaknesses will usually be looking at “what is wrong” and the person who capitalizes on their strengths will usually be looking at “what is right.” This has a bearing on how we approach them.The person who compensates for their weaknesses is typically the type of person who will do everything they can to minimize risk. The person who capitalizes on their strengths will look for opportunities. Understanding your customer’s orientation is critical in persuading them to see things from your point of view.Decision-orientation is just an example of the kind of communication technique, which we will practice at our upcoming workshop, “Attract More Business.” There will be very little lecture at this event. It will be very interactive and focus on applying and practicing new marketing approaches so that they create a dramatic impact in your business.

Most of us have experienced that, “too close for comfort” feeling. You know what I mean. That’s when someone decides they will stand or sit just a little too close to us for our comfort. I spent a lot of time in Asia as well as in Europe and I quickly became aware of these cultural differences.

I noticed that the Japanese would never stand too close. They would never even touch my arm in a gesture even after we became very good friends. It seemed to them that getting physically close to a person implied some sort of personal, off-limits, intimacy – something which had to be earned.On the other hand, I found that the Europeans (Italians, Spanish and French) would often stand very close when speaking with me. They would touch my shoulder or hand when making a point and even put their arm around me. I would keep backing up until there was no where else for me to go. I was hoping they would get the hint. I wanted to say, “give me some elbow room!” It was a tough situation at first. If you tell this person to stay out of your space, feelings will be hurt and a potential business relationship could be lost. Initially, I felt they were invading my personal space but after a while I realized there was nothing strange about this. It was just their way.Don’t Get UsedOften times selling can be like this. The closer we stand to the customer, the more they want to back up. Why? – out of self-preservation. They want to protect themselves from being sold or from being forced or tricked into a decision. Some customers are even more strategic. They feel that if they can keep you at bay, play hard to get, then you will work that much harder to get closer to them. In the mean time they will play you for all you’re worth. While you’re working your tail off at trying to add value and build a relationship, they will be extracting all of your knowledge in an attempt to use it to “improve their current deliverables and price.”In other words they will use your information to “beat up” their current supplier to get an even better deal or better service. In either case all of your efforts to “get closer” to the customer have failed to get you the business. You thought that since the customer allowed you to “get close” that you were building a good relationship which would result in you getting the business. Sadly just the opposite is true. In most cases the sale is typically lost or gained in this very critical rapport step. The die is cast in the first meeting when seller and buyer are eyeing each other up. How can we ensure that we don’t get used?Rapport is a Two-Way StreetIt is interesting to note that while salespeople have a reputation for being manipulative, disingenuous and shady; it is the customer that seems to most often manipulate circumstances to their advantage. Think of how many times a prospect or a customer has told you they were interested and that they would get back to you yet they never did? Or how often they gave you strong buying signals, positive affirmations on your product or service or even a purchase commitment only to never return your phone calls or emails? If you’re like most, this happens more often than not.The bottom-line is that rapport is a two-way street. To be an effective salesperson we must be skilled at creating “influence.” Good “influencers” go beyond building rapport with the customer. They create an environment that helps the customer feel good about building rapport with the salesperson themselves! The biggest barrier to building rapport is what I like to call the “salesperson act.” This is where the salesperson focuses on building value by presenting features and benefits, looking for objections to “handle,” and side-stepping the customer’s questions about price. Remember rapport is a two-way street. Look for ways to get the customer to be comfortable with you. Let them see that you are, in fact different from all of the other salespeople that call on them. Hold the customer accountable to the same standards for which you hold yourself accountable.It’s All About PerspectiveWhen customers understand that we really are more interested in their viewpoint rather than making a sale they will tend to become more honest with us. How can we accomplish this? It’s quite simple really – by asking a series of strategically planned and well-thought out questions. Asking intelligent questions of the customer demonstrates that we have done our homework. It gives us the opportunity to show that we really do care, that we really have done some deep pre-approach and that we understand their pains, motives and political circumstances. It also demonstrates to the customer that we are wiling to take on the customer’s perspective. But most of all it gives us the ability to “take a step back.” The customer does not feel threatened. They do not feel as thought they need to defend themselves by manipulating you. They feel as though you are “willing” to be part of their solution. While this type of selling culture may be awkward and different for most, I can assure you it works.So if you’re looking for a way to “get closer” with your customers and clients, take a step back.I hope that this “Business Update” has been helpful. For more information on the Small Business Advisory Network, please feel free to contact me at 310-320-8190 or mdeo@sbanetwork.org.

What is your sales capacity?

How do you know that this really IS your capacity?

I think that most sales professionals grossly underestimate their capacity. There are a number of things that negatively affect our capacity. Here are a few:

1. The Forecast– Often our capacity is determined by our company’s quota or forecast. We should never let someone else determine our level of success. In my mind our company, quota or forecast should be our “baseline” rather than our capacity. We should set daily goals that exceed the forecast by 20 to 30%. In this way we can ensure that we blow away our quota.
2. Limiting Thinking– This is a killer for someone in the selling role. Even the most “positive” individuals can impose limitations on themselves. These have often been thrust upon us as children or life experiences cause us to feel that we are capable of only “so much” success. This is why I recommend that salespeople spend at least one hour every week reviewing their vision plan and long and short-term goals. This helps us to focus on the future possibilities rather than the failures of the past.
3. Misalignment of Goals– Often times our daily activities are out of alignment with our goals. If we are very clear on our vision for the future and the specific goals that we need to reach in order to get there, then we must ensure that our daily activities are a reflection of our vision and goals. For example I play classical guitar and one of the goals is to teach guitar when I am in my 60s. Additionally, part of my vision is to establish a scholarship for students of classical guitarist. My daily activities must include practicing the guitar for several hours if I am going to achieve this vision.
4. Mistaken Priorities– Another thing that can prevent us from performing to our highest capacity is mistaken priorities. In my coaching, I hear people say, “I’m working as many hours as I can Mark.” We need to ensure that we are working “smart”, however, and not just “hard.” It is most common for people to do the easiest things first. Often the hardest things are the most critical. Yet this just reinforces the procrastination that keeps us from achieving our goals. In order to expand our capacity I recommend that we do the “hardest” things first. This allows us to not only get the most difficult and often critical things finished on or before schedule but it builds motivation and confidence.

I encourage you not to settle for less than your true capacity.

You say you don’t know your capacity?

Then be willing to push the limits.

No one I know ever died from trying to hard!

Have a great week!

In his youth, futurist Roy R. Anderson believed that truth alone — when well argued — would convert others to his viewpoint. If his was indeed the best solution, than by force of sheer logic others should agree and follow his advice, putting thought into action.

Many of us have shared this misconception at some point in our lives. Frequently, we have been disabused of it abruptly and with some damage to our egos and careers. The challenge of changing minds has led strategic planner Pierre Wack of Royal Dutch/Shell to rank it as his No. 1 task: “The job of the strategic planner,” he says, “is to change the picture of reality in the head of the CEO.”(Emphasis added.)We’re all familiar with strong-minded managers; we’ve worked for them. Or are them. But the term “corporate culture” — the idea that organizations hold a collective picture of reality — is still a concept with implications we have only recently begun to explore. The CEO we wish to influence may have shaped the culture (as did the elder Watson at IBM, the younger Henry at Ford Motor) or he may merely embody it. Either way it’s there.Today, it may be the most powerful reason that advertising agencies should exist. And the best explanation of why some are better than others.And as Anderson found during his career at Allstate, facts and logic alone are not enough. They are usually necessary, but not often sufficient. Because to sell our ideas, and your products, we must overcome fixed perceptions of reality that all-too-often have little to do with either.To attest that this is no new thought, the quote below is from Aristotle’s Rhetoric. But more contemporaneously, sales training aimed at enabling us to overcome objections does only half the job. Thus, it leaves us frustrated and resentful as we are figuratively tossed out on our ear once again by the big customer whose order we crave. We counter every objection, but he doesn’t buy. And we wonder, Why?”One who attempts to move people to thought or action must concern himself with their emotions. If he touches only their minds, he is unlikely to move them to action or to change of mind — the motivations of which lie deep in the realm of the passions.”
AristotleThe answer lies in the passions, or what we call subjections. Here’s a short list that will show you what we mean:OBJECTIONSPrice
Delivery
Service
Quality
Performance

SUBJECTIONSTriviality
Image
Foreignness (to our experience)
Risk
AestheticsFacts and logic can overcome objections. But only creativity, which speaks to inner needs, can overcome subjections; for example, the concern that a decision may entail more risk than the corporate culture will forgive if the plan fails.As Mike Sloan, a Miami, Florida agency founder says, “Good ads take one of two approaches: an exercise in persuasive logic you can’t ignore. Or an exercise in charm so likable you want to buy the product or service…Great ads are made of superb logic and great charm.”Logic alone might be enough, were it not for the passions we have spoken of that must be charmed.Business relationships are based on utility. If we can be of use, we may be able to form the bond that cements a sale and makes a customer. If we’re of no use, all is lost right from the beginning.Second, business relationships must be characterized by trust. No matter how many contracts are drawn, they ultimately prosper or wane based on the mutually held conviction that the parties will do — not only as they’ve promised formally — but all that their role implies. It is the understanding of this implied obligation, and the grit to meet it always, that separates a trusted business partner from a mere vendor.A third vital element is energy. We trust and rely on those whom we believe to be most active in pursuit of our goals (and protective of our interests). Energy (the ninth sales call) is perhaps the most underrated single element in successful businesses.Finally — and by now almost minor in its role — is advantage (the objective elements of quality, price, performance, service, delivery and the like). This element of business relationships is what we all know best from training and experience. It is what we once thought, perhaps, was sufficient. It is, in reality, fourth in long-term importance, as technology continues to undercut its most essential parameter — time.Advantages once held for product life-cycles that spanned decades now disappear in months. (Look what happened with video games and VisiCalc!) Sophisticated marketers increasingly understand that the “technology game” varies little from product to product and that time is on the side of the lowest-cost providers.But IBM survives and quite nicely, thank you. Not because Big Blue makes the best, most powerful, fastest or cheapest computer. But because the company demonstrates a nearly- amazing capacity to deal successfully with such a wide range of subjections, and satisfy the demands of almost every corporate culture.How do we get there from here?
An honest answer: we know the way but we’ve never been there. In our defense few have, because the new paths are only now being blazed. Industrial advertising is often considered a sort of commercial analogue to bailing a boat — do just enough of it to avoid sinking. In this environment recommending that a client do more of it seems utterly self-serving and irresponsible.Yet advertising does not exist to prevent disaster, but to create prosperity. “We are in the business of changing things,” Paul Harper said. “We, as advertising men and women, are the great energizers of this marketplace.”Indeed, all advertising exists to energize the marketplace, and thereby contribute to increased sales and profits. As such, it is an integral part of selling.In fact, as far back as 1905 it was described as “salesmanship on paper.” There has never been a better definition.The truth is that selling is closer to the nub of things than even many of its advocates like to admit. Like protein and beauty, it satisfies real needs. Like hunger and aesthetics, it is a force beyond the control of politicians and philosophers.”Nothing is so powerful as an insight into human nature…what compulsions drive a man, what instincts dominate his action…if you know these things about man you can touch him at the core of his being.” — Bill BernbachThe marketplace is a Rorschach of human instincts. Chaos is both its limitation and its appeal. Diamonds! Or are they rhinestones? Or cut glass? Whatever, they sparkle in the sun, shrouded by the dust stirred by avid profiteers, indolent browsers, the craven, the hopeful, the young with their dreams, the old people to whom every layered display of goods for sale is both validation of a life’s ambitions, and unalloyed rebuke for all its failures.So the new paths we have spoken of evoke the past as they point to the future. For as technological parity returns us to a focus on the human psychology of salesmanship, it is the utility, and trust, and energy of honest businessmen that will provide the ultimate advantage. And these attributes — based on a new and far more profound analysis of the customer’s real needs and how they are affected by the culture in which he operates — must be conveyed with clarity, impact, and conviction.Conveyed, how?
By advertising.
By advertising that goes far beyond specifications. Far beyond its traditional role of creating awareness of a brand, and some comprehension of its features and benefits. Tomorrow’s advertising will do these things, yes, but almost incidentally.
The minor significance of the old trilogy — awareness, comprehension, and preference — has been demonstrated for years by the Ebbinghaus Curve of Forgetting, which falls off in insolent mimicry of the upward-bound course of these values under the positive pressure of advertising.Yes, what people learn they forget. The more ephemeral the knowledge, the more rapid its loss, and in an age of technological parity most knowledge seems, if not trivial, certainly less than crucial. We are not advertising nylon, or neoprene, or the transistor. We’re stuck with gradations and nuances, generic features and fragile benefits. Forgetting comes easy.So it is essential that we go beyond awareness. Success in the future will depend on opening much more than a sample case of today’s wares; it will necessitate opening up whole companies and merging cultures; of inviting the uncertain prospect in, setting him down and talking turkey.We call this process Access. A major step beyond Awareness, it conveys that you and your company are open and receptive to the needs of your clientele. It validates your utility and trustworthiness. It exemplifies the energy you devote to satisfying your customer’s needs.It overcomes the emotional objections. The end game. Partnership with your customers in a relationship marked by a depth of real rapport, ensuring that they are never likely to forget or forsake you.

HLDM. What is it? A new drug to counteract high cholesterol? The latest high definition, plasma TV technology? Not at all. HLDM stands for High-Level Decision Makers. And contacting HLDMs can improve sales performance probably more than any another selling tactic.

It comes as no surprise that most salespeople feel locked in at lower levels and are unsure of what to do to get to the hi-level decision maker (HLDM). Hi-level value added selling means selling at the highest levels in an account. It’s a philosophy of partnerships and value creation for the customer. Calling on the HLDM means talking to someone who has the ability to say “Yes” and “No” to your idea. Generally, it’s someone in upper management. They create budgets for ideas they like and pull the plugs on projects they feel waste resources.A recent study concluded that eighty percent of hi-level decision makers admit to getting involved in sales early in the decision process. Yet only 5% of all salespeople ever get to this decision maker. How could this be? Are these decision makers pulling the strings behind the scenes? How can sales professionals influence these decision makers?Why face the HLDM?
Calling on HLDMs shortens your sales cycle, gets you better treatment throughout the account, and creates additional pull for your idea. There’s less competition at the top because most salespeople are too intimidated to call on the HLDM. And when was the last time you heard an HLDM say, “I don’t think there’s enough budget money for this idea I really like.”In the sales and marketing classes that I teach weekly and in my consulting practice, I ask salespeople why they failed to call higher in their accounts. Here’s what I often hear: “I’m afraid I will offend my lower-level contact,” or, “They won’t see me,” and “I’m intimidated by the HLDM.” Lack of confidence, knowledge, or skills hold back most salespeople from calling on the HLDM. There are a number of myths surrounding these HLDMs:

• They’re difficult to get an appointment with.
• They’re eight feet tall and bigger than life.
• Every one of them has a Harvard MBA or law degree.
• They despise salespeople.
• They eat their young.
• They’re better than you.

HLDMs do not ascend to the top by being aloof. Many have sales or marketing backgrounds and appreciate the importance of a salesperson wanting to meet with key decision makers. Today’s organizations are flatter, making the HLDM more accessible. They will meet with you if you have something of value to discuss with them.Keep in mindThe first step in selling to the HLDM is to understand their personalities. They are more direct, so don’t take some of their behavior personally. They like to control meetings, processes, decisions, etc. Power is important to them. They take measured risks and make calculated decisions. They are visionaries who live their passion.Their successes are often tied to their ability to induce others to follow. Consequently, they are strong leaders. Time is one of their most important resources and they will measure your value by your sense of priority and efficiency.The things that irritate them most are excessive chit-chat, fire hose feature-benefit presentations, not understanding their business, canned presentations, and trying to close too early. They do not want to conduct business with salespeople who have “transaction” mentalities. They want to establish business partnerships with people who are more interested in making a difference than just making a deal.Speak on Their LevelRemember that HLDMs are not so much concerned with the best price or even the performance of your service or product. They are most concerned with how you and your company can help them reach their goals. They see past the transaction to the ultimate result. When you structure your presentation to a HLDM you want to make sure that you focus on THEIR goals. What’s in it for them? We can’t do this without fully understanding the needs of the HLDM. This requires some pre-approach. Try to find out as much about the HLDM as possible BEFORE you can for a meeting. What has been their biggest accomplishments at the company? What is their management style? What is their vision for the company’s future? Also plan to ask appropriate questions in the meeting with the HLDM. Build on the knowledge you gain in the preappraoch. HLDMs respect someone who has done their homework and who is passionate and inquisitive.Whether you are a small business owner/manager finding yourself in the selling role, or a professional salesperson making your living building relationships, effectively leveraging the HDLM can help you to achieve greater selling success. If you are interested in learning more about how improve your performance with HLDMs enroll in my Monday night Dale Carnegie Sales Class in Long Beach, CA.