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Let™s take another example. A consultant discussing sales train-
ing issues with the president of a multibillion-dollar company
should not expect him or her to have in-depth knowledge of the
specifics, such as the sales skill modules. Nor should the consultant
expect him or her to be aware of the merits of one particular pro-
gram relative to another. Senior managers within a company tend
to function as strategists with a global view, not as tacticians. They
view their division or their company from 100,000 feet. Since
senior managers need to work in a team atmosphere with the peo-
ple who have the view of the problem from 10 feet, it is highly
irregular for any senior manager of a medium-size or large com-
pany to make a unilateral decision without consulting and confer-
ring with these people.

WHAT WORKS BETTER
A more effective strategy for managing the decision process within
the account is to develop breadth and depth. Depth means a detailed
understanding of the customer™s needs and concerns”that is, a
detailed understanding of the problems faced by the people who
view them from 10 feet away. Breadth refers to the global view from
the customer™s perspective, an understanding of the “big picture”
concerns that keep senior managers in the account up at night. An
excellent salesperson is able to provide solutions at both the breadth
and depth level. Salespeople who master the breadth and depth
strategy manage the decision-making hierarchy more effectively,
which creates value.
Sales researcher Neil Rackham refers to the need for salespeople
to develop needs at three levels in the account:

∆ Focus of receptivity: These are the person(s) within the account
who are willing to meet with you.
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∆ Focus of dissatisfaction: Referred to as the “users,” these are
the people with the day-to-day problems to be solved.

∆ Focus of power: These are the decision influencers and deci-
sion makers.


When you meet with the people who are at the focus of dissatis-
faction, the idea is to “find a sponsor who will either introduce you
to or represent you at the focus of power.” Rackham goes on to cau-
tion the sales consultant not to be discouraged “if your sponsor will
not let you meet directly with the decision-maker.”1
It is not always necessary for you to be able to schedule a meet-
ing with a decisionmaker; it can be just as effective to have someone
else to schedule that meeting for you. Besides, in a large and com-
plex sale, there is probably no such thing as one decision maker.
Here™s a story that serves as an example of this.

A friend of mine, Steven, had a university-oriented
project that he knew would interest the chancellor of a
Midwestern state university (focus of power, focus of
dissatisfaction). Steven was unable to set up a meeting
with the chancellor. He had written letters and made
telephone calls, with no results, and he had contacted
almost everyone he knew.

Steven asked me if I knew the chancellor. I didn™t, but
I knew an associate dean (focus of receptivity) and
called him. The associate dean told me that he didn™t
know the chancellor well, but that he played racquet-
ball with a friend named Ted, who was a direct report
to the chancellor (focus of receptivity, but possibly also
focus of dissatisfaction and focus of power).
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create value



I asked the associate dean to arrange a meeting between
Ted (the direct report to the chancellor) and my friend
Steven. The associate dean set it up. When Steven met
with Ted, he probed to assess Ted in terms of his being
a focus of receptivity, focus of dissatisfaction, and focus
of power. Ted turned out to be a diamond in the rough.
He not only believed that Steven offered a solution that
created value for the university, but also offered to set
up a meeting of the chancellor, himself, and Steven to
discuss the project. From there, the sale proceeded well
for Steven.

ACTION POINTS
” Not reaching the decision maker doesn™t mean failure. What™s impor-
tant is that the decision maker is presented with your ideas in a
concise and articulate manner. You don™t always have to be the
messenger.

” Develop other relationships within the account. Develop relationships
with people in the account who are receptive to your approach or
knowledgeable about the problems the product may solve. Wide
and deep relationships within the account are useful, since people
and positions change over time.


9: Develop other areas in the
SALES TRUTH
account and let them influence the decision
maker.
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10:
sales trap
Rank Decision Criteria Relative
to Competitors
Many salespeople believe that you need to identify and rank the cus-
tomer™s decision criteria. This is a fallacy that misses the mark in cre-
ating value for the customer. Just because the customer ranks your
offerings as stronger than your competitors™ according to certain cri-
teria does not mean you will get the business. What matters is whether
the areas in which you™re stronger are the areas that the customer ranks
as the most important.

AN EXAMPLE
Three banks, Bank 1, Bank 2, and Bank 3, are com-
peting for a lending project. Bank 1 is perceived by the
client to be strong relative to the competition in terms
of rate, flexibility, and reputation. (Banks 2 and 3 are
perceived as weaker on these three criteria.) But what
happens if rate, flexibility, and reputation aren™t impor-
tant to the customer? Let™s say, for instance, that what
really matters to the client is the loan officer™s exper-
tise and the bank™s expertise. If this is the case, then
Bank 1 may very well lose the business to Bank 2 or
Bank 3 if Bank 1 is perceived as weaker in loan officer™s
expertise and bank expertise, since these are the areas
that matter most to the client.

SALESPEOPLE DON™T ASK CUSTOMERS TO RANK CRITERIA
My field observation studies reveal that sales consultants normally
do not ask the customers how they rank their decision criteria. They
should. Questions that they need to ask include:

∆ Which criteria are most crucial?
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create value



∆ Which criterion is most critical?

∆ Which are desirable?

∆ Which are relatively unimportant?


Even when the salespeople ask for this information, only 18 per-
cent of the time do they ask the customer to make comparisons and
indicate which critical criterion is more important than other criti-
cal criteria.2

WHY IDENTIFYING CRITERIA ISN™T ENOUGH
The standard advice given to salespeople has been to identify the
criteria upon which the customer will base the decision. In addition,
some managers recommend that these decision criteria should then
be prioritized.
This advice is faulty because it is based on two wrong inferences.

The first wrong infer-
TRADING OFF ONE CRITERION FOR THE MOST IMPORTANT.
ence is that the customer knows how to prioritize the criteria. Often
customers don™t think formally about how they rank criteria.
Therefore, you have to get them to think about it by asking ques-
tions such as, “Which one of these two criteria, delivery or price, is
the most important?” One critical decision criterion may be more
important to the customer than another critical criterion. In other
words, customers may be forced to trade off one critical criterion for
another because only one solution provider can meet their number-
one criterion.

The second wrong inference is that the customer will
OMITTED CRITERIA.
use all critical criteria in the decision-making process. In fact, the
customer may omit a critical decision criterion from the decision-
making process. For instance, the customer may not be able to dis-
tinguish among the various competitors on the criterion of service.
78 the 24 sales traps



Therefore, the customer will not be able to use this criterion in mak-
ing a final decision”not because it isn™t important to the customer
(it is), but because the customer doesn™t see how it will help in select-
ing between the competing alternatives. It™s not objective. Rackham
refers to these types of criteria as “soft” in his book Major Account
Sales Strategy.


DIFFERENTIATING OFFERINGS
If customers can™t see a criterion as objective, they can™t use it to dif-
ferentiate the sellers™ offerings. Subjective criteria, by definition, are
difficult to measure. Therefore, in addition to understanding how a
customer ranks the critical decision criteria, the consultant must
help the customer to quantify the subjective criteria. Don™t just rank
the criteria; make the criteria objective.
If the customer can™t quantify service, for example, he or she may
exclude it from the decision-making process. What does the cus-
tomer mean by service? Is it measured by the number of hours it
takes the loan officer to return telephone calls? Or by the number
of invoicing errors? Is it measured by the frequency of visitations?
It™s not enough to identify and rank the customer™s decision cri-
teria, because the customer still may not be able to use the results.
Sellers need to be able to demonstrate their ability to meet an objec-
tive critical decision criterion that the competitor can™t meet. This
entails turning subjective critical criteria into objective criteria.3
Customers need decision criteria that they can use to distinguish or
discriminate between the various competing options. They favor
objective, measurable decision criteria.
Objectivity sells better to customers™ superiors and subordinates
than subjectivity”at least if you can provide factual evidence. While
there may be some feeling and judgment left in any subjective cri-
terion, the salesperson should quantify the criterion as much as he
or she can.
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CRITERIA ARE IN THE EYE OF THE BEHOLDER
Jan Carlzon defines any interaction a customer has with your com-
pany as a “moment of truth.” Moments of truth, like beauty, are in
the eye of the beholder and can be almost anything. Jerry Fritz,
director of sales and customer service management programs for the
Management Institute at the School of Business at the University of
Wisconsin“Madison, says, “A moment of truth is when an airline
passenger pulls down her seat-back tray to find a coffee stain and
infers that the airline is sloppy about engine maintenance.”4
Moments of truth are customer perceptions of value. They are sub-
jective. So are buyers™ decision criteria. Decision criteria, as defined
by one of my colleagues, are “those important factors which cus-
tomers use to evaluate, compare, and choose between the options
that are available to them.”5 Decision criteria vary from customer to
customer, and a criterion that is crucial to one customer may be
much less important to another.6
Customers are increasingly looking inward for their decision cri-
teria. Their concerns focus more on themselves, their boss, and the
competitive issues they face than on their own customers. For exam-
ple, they see it as OK to define service in terms of how it affects them,
the buyers, and they fail to consider how it affects their customers.
Decision criteria now include their responsibilities to themselves and
to their stakeholders (employees, stockholders, customers, etc.).7

OBJECTIVE AND SUBJECTIVE CRITERIA
It™s helpful to divide decision criteria into two types: objective and
subjective. As discussed previously, these terms refer to whether a
particular decision criterion is measured quantitatively (objectively)
or qualitatively (subjectively) by the customer. Common subjective
criteria that are not necessarily industry-specific include:
∆ Reputation
∆ Flexibility
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∆ Convenience

∆ Accountability

∆ Service

∆ Dependability

∆ Reliability

∆ Customer service

∆ Industry expertise

∆ Quality


Objective criteria that apply to many industries include:
∆ Price

∆ Rate

∆ Fees

∆ Size

∆ Payment terms

∆ Contract length

∆ Specific terms and conditions

∆ Warranties

∆ Speed

∆ Paper capacity

∆ Guarantees
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STEPS TO CONVERT SUBJECTIVE CRITERIA TO OBJECTIVE
The consultative salesperson should use a three-step process to con-
vert subjective criteria into objective, measurable ones.

1. Seek the customer™s definition. Ask the customer to define a
particular criterion. For example, you might ask, “Allison,
what do you mean by service?” or “How do you define ser-
vice, Allison?” Listen for things that are measurable or spe-
cific. The customer™s definition of service might be defined
as four-hour response to service calls or pages. Four hours
is specific and objective. It can be measured. Hopefully, it™s
an expectation you can meet.

2. Quantify the customer™s definition. If the customer doesn™t
offer any specific definition that can be measured, then
you might offer one. For example: “Emily, you felt service
was critical in your decision process. Would a 98 percent
up-time on this product meet your standard for excellent
service?”

3. Find out how critical these new quantified criteria are to the cus-
tomer. Once a subjective criterion has been objectified, the
salesperson needs to know where it is on the customer™s pri-
ority scale. For example: “Emily, you stated that 98 percent
up-time would be considered excellent service, but tell me,
is this 98 percent availability more important than price, or
is it less important?”


Neil Rackham™s research established that people basically go
through three steps when they make a decision to evaluate a solution:

1. They list their decision criteria.

2. They prioritize their criteria.
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3. They select the alternative that meets these decision crite-
ria the best.8


Salespeople need to keep the third step in mind. Salespeople cre-
ate customer value by identifying how the customer measures the
decision criterion and then ensuring that the seller™s solutions meet
these criteria better than competitors™ solutions.

ACTION POINTS
” Ask buyers what their decision criteria are. Some people may not have
thought through their criteria. Experts are more likely to be able
to answer this question than first-time buyers. Many salespeople
forget this step.

” Discover how the customer ranks the criteria on a critical to irrelevant
scale. Ask, ask, ask.

” Explore the reasons for the customer™s ranking. Customers will often
change their criteria before they make a decision, so it™s important
to know why a particular criterion is of value to them. Value and
benefit questions are helpful here. For instance: “Why is 98 per-
cent up-time so important and critical to your operation? Why is
four-hour response time key?”

” Transform subjective criteria into objective criteria. Remember the
three steps in converting a subjective criterion into an objective
one: Ask the customer to define the criterion, ask about other
“measurables” that you know could be used, and ask how impor-
tant this new definition is to the client. Assist the customer with
your own ideas for measurement. (It™s always helpful if you ask the
customer, rather than stating measurement criteria). For example:
“Could you or do you measure quality in terms of Consumer
Reports rankings?” Find out how the customer compares this new
definition of the subjective criterion against other critical criteria.
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create value



For example: “Is the fact that Consumer Reports magazine ranks our
product #1 in quality and value more important to you than the
fact it is X dollars more expensive than product Z?”


10: Satisfy customers™ decision
SALES TRUTH
criteria the way they rank them to differ-
entiate your offerings.
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11:
sales trap
Providing Information About Products and
Services Creates Customer Value
Salespeople are sadly mistaken if they think that by communicating
information about products and services”such as new pricing, new
discounts, and product data”they are creating value. That™s a fal-
lacy based on outdated market information and old research. These
days, customers can get this information from the Internet. Current
research shows that concentrating on information causes the seller
to focus too much on solutions and not enough on customer prob-
lems, needs, and concerns.

WALKING BROCHURES
I call salespeople who give too much information “walking
brochures.” We™ve all been approached by the salesperson who dis-
penses a lot of information and talks at the customer, not with the
customer. The following exchange is between John, a consultant
with Solar Systems Solutions, and Andria, the manager of infor-
mation systems at World-Tech. John is calling on Andria and
hopes to sell her a new software package that Solar Solutions has
recently developed.
John (Consultant): Andria, you are going to be excited about a new
product that we launched fifteen days ago. You asked me nine
months ago if I thought we were going to bring something to
market that would integrate the hardware and software from
your manufacturing, marketing, and accounting departments.
Well, we are going to be introducing this solution to the mar-
ketplace on May 1. Apparently, our beta-test results have
exceeded our own expectation levels.
Let me tell you all the things it will be able to do for you. (A
twenty-minute monologue ensues, in which John provides Andria
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create value



with all the test results and tells her how this new software will
help her improve the communication effectiveness between her
departments.)

(as John has to stop talking to take a breath of fresh air)
Andria:
John, how much does this cost?

Well, it is not all that much when you consider what it
John:
will do for you. For example, just think about how quickly the
marketing organization will be able to update your sales force
regarding pricing changes. Because of this rapid notification
process, your customers will not be claiming that they weren™t
notified about price increases. Moreover, . . .

she needs to interrupt John) John, how much do you
Andria: (now
estimate that your solution will cost us?

John: Oh, approximately between $1.3 and $1.5 million, but the
value you will be getting will more than offset this price. Let
me tell you about another benefit of our product that I hadn™t
mentioned. . . . (John continues to ramble for another ten minutes.)

John, as you say, there sounds like there is some value
Andria:
in your new product, but it doesn™t have that much value to
me. Thanks for stopping by.

But . . .
John:

Good-bye, John!
Andria:


Salespeople like John think that by communicating information,
such as new pricing, new discounts, and product data, they are cre-
ating value. Most of the prospect™s and the seller™s time spent dis-
pensing information in this way is simply wasted. Salespeople who
focus on the product or service they™re offering are not learning
what “value” means to the customer.
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Here™s another example: The Dartmouth Group, Ltd., has
observed that sales reps who call on physicians tend to function as
talking brochures, i.e., they give rather than seek information.
Probably because they have industry expertise themselves, these
“doctor reps” spend too many minutes of the sales visit telling the
doctor why his or her patients will benefit from a new product instead of
probing to uncover the doctor™s needs. Dr. Richard Ruff of Sales
Momentum in Scottsdale, Arizona, says, “In general, salespeople
seem to be able to spend more time with doctors in sales calls when
they ask really good questions and keep the doctor involved in the
dialogue. Asking good questions enable the reps to identify oppor-
tunities for them to create value for the doctors.”9


NEW PRODUCT LAUNCHES
Another opportunity to create value for themselves, their compa-
nies, and their customers that salespeople miss comes about when
new products are introduced or launched. Research has shown that
salespeople who focus more on their new product aren™t as effective
as salespeople who focus more on the customer™s needs.10
Salespeople normally are excited about new products and can™t wait
to tell their customers all about them. However, there is a danger.
As Neil Rackham, the eminent sales researcher says, “My research
showed not that skepticism was better or that enthusiasm is bad; just
that enthusiasm can make the seller focus on products, solutions,
and answers, rather than on customer problems, needs, and issues.”11
Salespeople should not “let enthusiasm get in the way” of focusing
on customer concerns.12 This can be very difficult for salespeople in
the beginning. If they offer their demonstrations and solutions later
in the sales cycle, after they have thoroughly explored their cus-
tomer™s needs by asking more good business questions, they are
more likely to make a sale.
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create value



ACTION POINT
” Don™t let enthusiasm get in the way of creating value. Focus on cus-
tomer needs by asking lots of really smart questions instead of giv-
ing information in order to create value.


11: Salespeople need to create
SALES TRUTH
value, not communicate value.
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12:
sales trap
You™re Selling Value Versus Price
Have you ever heard any of these comments before?

1. “It™s hard for us to sell value. We™re the high-priced provider.”

2. “We™re the biggest in our industry, so we™re the leader in price.”

3. “Customers buy on price now. We™re not the lowest-priced player
in the market, so we lose a lot more business than we should.”

4. “Why doesn™t the company wake up? It™s not ˜the economy,
stupid!™ it™s ˜the price, stupid!™”

Every one of these comments is based on the price-value fallacy.
The price-value fallacy defines value in the seller™s terms, not the
customer™s. These comments are based on the faulty inference that
salespeople have to trade off price and value when they really don™t.
Worse yet, comments 2 and 3 are examples of how salespeople let
their companies define the value for customers.


VALUE IS IN THE EYE OF THE BEHOLDER
Value varies by customer. Companies seem to recognize that some
of their salespeople don™t generate value for their customers, but
these same companies often don™t recognize that they may be partly
responsible for this when they get their sales force hyped up about
value. As the old saying goes, “Beauty is in the eye of the beholder.”
Similarly, “Value is in the eye of the customer.”
Perhaps the single biggest challenge for salespeople is to per-
suade a prospective customer to pay a premium price for the goods
or services they™re selling. Most customers will not pay a higher
price for a product unless they perceive that the value outweighs the
price. Unfortunately, many customers do not see the added value
that justifies the price.
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create value



Why do some customers see the added value in a particular prod-
uct while other customers don™t? Often this difference can be traced
to the behavior of the salesperson. Let™s examine a relatively com-
mon sales scenario.

The buyer for ISP Co. has indicated that he needs a
proposal and that it should include the “best price”
possible. Sally, the salesperson from Router & Switcher,
asks the buyer a few questions, then returns to her
office to put together her proposal. A few days later,
Sally delivers the proposal. The buyer tells her he™ll get
back to her shortly. She asks the buyer what he thinks
of the proposal, and the buyer replies that Router &
Switcher™s price seems relatively competitive. A few
days later, Sally learns that a competitor has been
awarded the order. And, sure enough, that competitor
had a lower price.


The scenario in the preceding example is all too common. Some
salespeople blame their employer in this situation because they don™t
feel their firm™s products are price-competitive. Other salespeople
complain that their marketplace is now commodity-driven and that
their company™s products are not different enough to justify the
higher price tag. Management thinks the problem is that many of
their salespeople can™t sell very well. They point to the fact that 20
percent of their salespeople win more of these competitive situations
than the remaining 80 percent do. So who™s right?
Consider another example.

Heather, an office products consultant, has just com-
pleted her third sales visit with Jason, the chief finan-
cial officer of Omnitech. During this visit, Heather
learned that there was only one competitor that had a
lower price, and that that competitor™s product didn™t
90 the 24 sales traps



stack up as well as hers. Heather was feeling relieved
and excited”so excited, in fact, that she called her boss
and told him that she felt the company would be
receiving the $1 million contract by the end of the
quarter. He also shared in Heather™s excitement. Who
wouldn™t? You can do everything the customer wants.
You have the lowest price. It™s in the bag, right?

Wrong!

A few weeks later, Jason had to inform Heather that she
didn™t receive the business. Jason told her that it came
right down to the wire. Although Heather™s proposal
was less expensive than that of the company Omnitech
had selected, and although it seemed to Omnitech that
there were no appreciable differences between Heather™s
proposal and her competitor™s, Omnitech felt that
Heather™s implementation process was not as detailed as
that of her competitor. At the end of the day, Omnitech
was concerned with the risk, effort, and hassle that it
perceived might be associated with implementation
issues. These issues ran the gamut from morale, equip-
ment downtime during implementation, and the per-
sonal concerns of each of the members of the task force
that it might reflect on them if the implementation did
not go smoothly.

DISTINGUISHING PRICE AND COST
What went wrong? Heather did not distinguish between price and
cost. Unfortunately for Heather, her customer did. Customers view
price as a subset of cost, if not always consciously, then at least sub-
consciously. They perceive price as only one factor of cost. Other
factors are:
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create value



∆ The hassle of changing suppliers, vendors, or partners
because of the time it will take to get to know all the new
people on the scene

∆ The effort it will take switch suppliers in terms of time
demands on the customer

∆ The risks associated with making a change, such as con-
tractual conditions or political issues within the account


“If you think a large, complex sale is going to be too easy, it is more
likely to be too hard,” cautions Mike Navel, a training consultant who
works with a large pharmaceutical company. And, sure enough,
Heather lost the business to a competitor whose price was 7 percent
higher than hers.


PROBING FOR RISKS
In order to avoid the situation Heather found herself in, salespeo-
ple should probe for other cost issues. Is the buyer concerned that
your firm is a new manufacturer? (Risk relating to the reputation or
performance of the seller.) Is the buyer bothered that the product
looks so complicated that it will take too long to learn how to use
it? (Risk relating to the buyer.) Is the buyer concerned that the
buyer™s staff might never be able to learn how to use it? (Effort and
hassle for the buyer™s staff and career risk for the buyer.)
Other examples of risks are:

∆ Career risks to the client if the decision turns out poorly

∆ Product risks to the company if the product fails to live up
to its claims

∆ Emotional risk associated with poor prior experiences with
a company
92 the 24 sales traps



∆ Technology risk that the “new technology” will not be main-
stream two or three years from now

∆ Loyalty risk, in that a customer may feel disloyal if he doesn™t
give the business to his friend


Interestingly, although customers often say that price was the
reason they went with a competitor, in many cases the real reason
was some other risk factor.13

PRICE DOESN™T EQUAL COST
What could Heather have done differently? She could have recog-
nized that toward the end of the decision process, customers begin
to weigh risks other than just price against the benefits and value.
Heather should have probed for these risks rather than focusing on
price. She could have asked questions such as:

∆ Are there any particular concerns or issues besides price that
might factor into your decision that I haven™t addressed or
answered satisfactorily?

∆ Are you totally comfortable with our implementation strategy?

∆ Do you see any particular political barriers that might pre-
vent us from getting the business?

∆ Does our new technology raise any concerns in your mind
regarding its effectiveness or its leading-edge benefits?


To summarize, value is your solution™s benefit offset by its total
cost, as defined in the eye of the beholder, the customer. Therefore, sales-
people who want to create value would do well to (1) investigate and
explore their customer™s needs thoroughly, and (2) ask about poten-
tial risks, other than price, later in the sales cycle.
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ACTION POINTS
” Sell value versus total cost, not value versus price. In the value-versus-
cost equation, price is a subset of cost. It™s important to determine
which costs are important to the customer. Ask the customer about
perceived risks, extra effort, or hassles if the customer moves ahead
with the buy decision.

” Sell the decision criteria. The salesperson should ask the prospect to
define and agree to objective and measurable decision criteria in
such areas as service, reputation, expertise, convenience, depend-
ability, quality, image, productivity, responsiveness, flexibility, and
relationship. (For a full discussion, see Sales Trap 10, “Rank Deci-
sion Criteria Relative to Competitors.”)

” Help customers distinguish between price and cost. Today™s customers
look at total cost, including both direct and indirect costs. The
correct way for salespeople to look at price is to see it as one of
many factors the customer perceives. Other factors include bene-
fits, savings, and solutions on one side, and hassle, risks, effort,
extras, and price on the other.14


12: You™re selling value versus
SALES TRUTH
perceived total cost.
94 the 24 sales traps




13:
sales trap
Lower Your Price to Make the Sale
Real estate agents say that value in real estate boils down to location,
location, location. Salespeople say value in selling boils down to price,
price, price. In reality, it™s usually not necessary to lower the price.
Unfortunately, salespeople aren™t sure what to do when the customer
says, “I can™t buy because your price is too high.” They believe that
the price is in fact too high, not that they didn™t create enough value,
and thereby fall into this sales trap. They lower the price.
There™s a great temptation to lower the price to close the sale, but
that leads to sellers losing value. Are salespeople right to lower
prices? When customers say it™s price, is it really? Actually, no.
Research has shown that almost two-thirds of the time the customer
tells the salesperson that price is the reason for not buying, price is
not the compelling reason.15
Here™s an example:

Jennifer, an architect for Boards & Lumber, has bid on
the job to design the new corporate offices of Thunder
Bay Limited, to be located in Vancouver, British
Columbia. She is expecting to get the go-ahead from
David, the senior vice president of operations at
Thunder Bay Limited.

As Jennifer sits down in David™s office, she is anxious
but optimistic. But then she hears those dreaded words
“Jennifer, I have some bad news. We decided to go with
Able & Abler as our architectural partner. It™s nothing
personal, you understand, just business. Their price
was 12 percent less than yours,” says David.

Jennifer is almost speechless. “David, if we were to
reduce our price, would you re-evaluate your deci-
sion?” she asks.
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create value



“Unfortunately, our decision is made. I know how you
must feel. But everybody™s looking at ways to get bet-
ter prices today, so this is just another cost reduction
decision. I hope you understand. At any rate, good
luck. As you know, Jennifer, you win some and you lose
some.” And, with that said, Jennifer is dismissed with a
shake of the hand.

As you might expect, Jennifer is beside herself. She
can™t wait to get back to her office and read the riot act
to Lumber™s executive vice president, Vince Carrabba,
whom she had warned that her proposal to Thunder
Bay was “too pricey.”

“Vince, I told you so. You guys wouldn™t listen, would
you? David told me that price was the reason we didn™t
get the contract. Some days this whole place just makes
me mad. I have to take a break.”

Jennifer proceeds to her office and calls Cameron, her
colleague at the firm. She asks him to meet her for lunch
so that she can emote. At lunch she says, “Cameron, do
you realize that for the last three years I have been
earning less money each year because of our prices?”

Cameron, who hasn™t been losing much business
because of pricing”who has, in fact, increased his per-
sonal earnings substantially year after year”asks
Jennifer, “Have you ever thought it might be some-
thing that you aren™t doing or should be doing that is
causing you to lose so often on price? Have you con-
sidered that the customer may have needs other than
price that you haven™t explored fully? You can™t always
count on people to tell you everything, Jennifer. You
may want to reevaluate your probing techniques.”
96 the 24 sales traps



“Cameron, you™re starting to sound like Vince, so quit
it. My customers are just flaky,” she retorts.

IS PRICE THE PROBLEM?
In the above scenario, could Jennifer have been having a value prob-
lem? I think so. As Tom O™Neil, president of Office Works (a dis-
tributor for one of the world™s premier office furniture manufactur-
ers), says, “In today™s business world, our customers are looking for
the best value. If our salespeople cannot create value for their cus-
tomers, then why should we expect one of our customers to pay a
higher price for a similar product or service that one of our com-
petitors offers?”
I believe that Jennifer probably lost the sale because she did not
distinguish her offering from those of her competitors. Customers
will then take the lowest-price offering when they don™t see any dif-
ference between products. Price isn™t the problem. Price is the symp-
tom of a deeper problem. “Price is a polite way of bringing up
other concerns,” Neil Rackham says. “In the later stages of a com-
plex sale, a price objection may signal an unresolved consequence
for the buyer. The salesperson should help the customer identify
those concerns and worries, but can™t solve them. Only the buyer
can do that.” 16

CONSEQUENCE ISSUES
Let™s look at Jennifer™s example again.
In Jennifer™s case, David™s unspoken “consequence” issue may
have been that Jennifer™s company, Lumber & Board, was a new
company (only five years old) and its competitor, Able & Abler, was
much more established (over thirty-five years old). David may have
feared that Lumber & Board didn™t have the proven track record,
experienced staff, or creative ideas staff to handle the demanding
project. Reducing the price will do nothing to resolve any of these
consequence issues.
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create value



Sometimes the real issue is price. But before you start to negoti-
ate price, follow these three steps first.

STEPS BEFORE NEGOTIATING PRICE
Find decision criteria that not
1. INVESTIGATE THE CLIENT™S DECISION CRITERIA.
only are important to the client but also can help the client sepa-
rate your offerings from your competitors™. Remember, it™s not
what you perceive the criteria and differences to be, but what the
client perceives.
Ask yourself if your customer will be able to measure or determine
which decision criteria you meet better than, as well as, or worse than
your competition. Will the decision criteria that the client is using
permit him or her to distinguish among the options effectively?
For example, the customer may feel that product quality is
important. Since quality is a subjective characteristic, the salesper-
son needs to make sure that the client can determine which of the
competing product solutions is superior with respect to quality. How
does the customer measure the quality difference among the vari-
ous options? You may have to provide the client with some quan-
tifiable standards used to measure quality.
Describing the decision criteria in terms of measurable, objective
standards is important because customers are more comfortable
using objective criteria. If your definition of quality is better than
your competitors™, then the customer will be more likely to use your
definition. If the customer can™t distinguish between alternatives
because a criterion is too subjective, he or she is not likely to use that
criterion when making the final decision.
In Jennifer™s case, the client was interested in experience. Jennifer
didn™t explore the definition of experience with David. She accepted
the definition that experience meant years the company had been in
business. Lumber & Board was a new company (only five years old),
and its competitor Able & Abler was much more established (over
thirty-five years old). But wouldn™t David have been interested to
98 the 24 sales traps



know that Jennifer™s executive vice president, Vince, had thirty-three
years™ experience in drafting corporate center designs and that three
of his designs had won national awards? The dialogue might have
gone something like this:
Jennifer: I understand that experience is crucial in your decision
process. Just what do you mean by experience?
Basically the number of years that a company has been
David:
in business.
Well, that sure makes sense. When you say “number
Jennifer:
of years a company has been in business,” does that include
individuals within the company?
Well, yes.
David:

Wouldn™t you also want to know the experience levels
Jennifer:
of the people who will be working on your project? Like how
many years of experience they have, how many corporate cen-
ters they have designed, how many awards for design they
have won?
Of course, those are important issues also.
David:


In this example, Jennifer did two things:

1. She asked David his definition of experience: “Just what do
you mean by experience?”

2. She inquired if other factors relating to experience were also
important: “Wouldn™t you also want to know the experience
levels of the people who will be working on your project?
Like how many years of experience they have, how many
corporate centers they have designed, how many awards for
design they have won?” These factors would have helped to
differentiate her company from its competitor.
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create value



If Jennifer had explored David™s definition of the experience cri-
terion, she might have won the sale.

The second step is to ask yourself, are
2. LOOK FOR RISKS OTHER THAN PRICE.
there other risks to the customer besides price? You need to identify,
reduce, or eliminate any risk you can to help keep price out of the
discussion. That will help you avoid lowering the price if you don™t
have to. While the customer is comparing the various offerings
against his or her decision criteria, ask questions about what he or
she sees the risks to be in choosing your solution.
If the prospect measures risk in some quantifiable way”for
example, in terms of price, penalties, or delivery terms and dates”
you may have to enter into negotiations to resolve the customer™s
specific concern. However, before you negotiate, see whether reso-
lution of these particular concerns will result in an order. (Again, this
is so you won™t lower the price when it isn™t necessary.)
For example, you might ask the customer, “If it weren™t for our
price compared to that of our competitor, would you select us?” In
other words, Jennifer should have asked, “David, is price the only
thing keeping you from choosing Lumber & Board?”
The buyer may have other, deeper issues that need to be resolved,
such as:

∆ A wrong decision could affect my career.

The seller has a history of poor postsale performance.17



Addressing these issues by lowering your price is solving the
wrong problem. Dr. Fred Webster, author of Market-Driven
Management and professor of marketing at the Amos Tuck School of
Business at Dartmouth College, used to say that as businesspeople,
the most frustrating business experience we would ever encounter
would be the discovery that we had solved the wrong problem.18
100 the 24 sales traps



Negotiation of prices should always be the last thing a salesper-
son does in the sales cycle.

Even when you™ve made sure that the
3. SEARCH FOR CREATIVE SOLUTIONS.
only remaining obstacle to the sale is price, there are still creative
ways to avoid lowering it. If Jennifer™s problem was truly price, per-
haps she could have inserted a performance clause into her proposed
contract that would have made David and his staff feel more confi-
dent. Other creative examples might include:

∆ Providing additional implementation support

∆ Stretching payments out over a longer time period

∆ Decreasing the up-front retainer money


Top performers use creative solutions to reduce price concerns.
Top performers also have the advantage of experience and knowledge
of what™s possible, especially when it comes to meeting difficult cus-
tomer requirements. Of course, there are certain requirements that
even a top performer can™t meet or chooses not to meet. In this case,
the salesperson should be candid and honest about saying so.19

ACTION POINTS
” Identify and develop customer needs. Ask yourself, “Does the cus-
tomer view his or her problem as sizable enough to solve?” (For
a fuller discussion of this, see Sales Trap 3, “It™s Best to Offer
Solutions to Problems You See.”)

” Identify and develop ways to differentiate your offerings from the com-
petition. Customers can™t differentiate among their options unless
the criteria they™ll use to decide are stated in measurable, quan-
tifiable terms. (This is discussed in Sales Trap 10, “Rank Decision
Criteria Relative to Competitors.”)
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create value



” Identify and reduce perceived risks. Help customers define the per-
ceived risks. Then help them resolve those perceived risks.

” Negotiate creatively, but only when you have to. Avoid negotiating by
coming up with creative solutions that don™t have a financial
impact on the profitability of the sale.


13: You can often make the sale
SALES TRUTH
without lowering your price.
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14:
sales trap
It™s Possible to Sell Anything to Anybody
“She can sell ice to Eskimos” is the compliment, meaning that she™s
a good salesperson. She can sell anything to anybody is the idea. This
is a fallacy. A salesperson who persuades and pushes won™t sell any-
thing at all. If you believe this fallacy, you aren™t creating value for
your customers.
This fallacy is echoed in a myriad of books on the market, such
as How to Sell Anything to Anybody by Joe Girard and You Can Sell
Anything by Telephone! by Gary S. Goodman. In the real world, sales
don™t go through if the salesperson pushes too hard. It doesn™t fol-
low that if you push harder, customers are going to buy more.
There™s a simple reason for this: The buyer has to need the product
or service. In a high-ticket sale, prospects will not buy unless they
see value in what you™re offering.


PUSHERS AND PULLERS
This sales trap also ignores the analysis of top sales experts, who
believe that salespeople come in two basic personality types.
“Salespeople come in two types”˜pushers™ and ˜pullers,™” says sales
researcher Neil Rackham.20 Pushers are defined as those salespeo-
ple who dump a lot of information on their customers (see Sales
Trap 11). Says Rackham, “In the push style, the energy comes from
the persuader, who ˜tells.™ Because the push style is about telling, it™s
easy to practice and repeat. You get really good at a presentation
when you™ve made it 100 times. So push sellers gravitate to a stan-
dard pitch that becomes overpracticed and therefore hard to change.
The push style requires power, with expertise or knowledge being a
type of power.” 21
In the pull style, on the other hand, the energy comes from the
customer through the questions the seller asks. Pullers elicit infor-
103
create value



mation from their customers by asking lots of good questions, then
customize the solutions around what customers say they need. The
pull style takes more time, so it™s less suitable for short sales.22

Which style works better? The push style works in trans-
PUSH STYLE.
actional sales, characterized by:

∆ Customer perception that the risk of a wrong decision is low

∆ Low purchase price

∆ One visit to secure the order

∆ Maximum customer coverage at minimum cost


In sales of this type, customers have a casual attitude toward the
sale and say to themselves, “So what if my decision turns out bad?
I won™t lose much money. I won™t have invested a lot of time. My
decision has no serious or lasting consequences or risks for me.”
Let™s say, for example, that you™re approached by a telemarketer to
subscribe to a magazine. If you say yes, what will you have lost?
$19.95? Five minutes of your time on the phone? Let™s say you
decide you don™t like the magazine. Usually you can cancel imme-
diately without any payment. All in all, your decision is low-risk.
People in such situations often buy on impulse”and without need-
ing what they™re buying”because the buying decision is small-
impact, simple, and low-risk. The push style is perfect for these
sales because, although it doesn™t create value, this type of sale
doesn™t require a lot of value.

The pull style works well when the total perceived cost
PULL STYLE.
is high. (See Sales Trap 12, “You™re Selling Value Versus Price.”)
The pull style works in larger, more complex consultative sales. In
such sales, if the salesperson doesn™t do an effective job of pulling
104 the 24 sales traps



information from the customer, the value won™t appear to offset
the cost and no business will be transacted.
One consultant in the high-tech field recommends to consulta-
tive software salespeople that they “keep their briefcases shut” until
they know what information to offer based on the information
they™ve first pulled from the customer. The consultative method of
selling, the pull style, is necessary in today™s business world, because
a consultative salesperson is only as good as the value she or he can
create for customers. Unless she or he creates value, the salesperson
serves no purpose that couldn™t be fulfilled by less expensive means,
such as inside salespeople, customer service personnel, or distribu-
tion channels for goods and services.
“Changing from a push style to a pull style can be a challenge to
some people. But it is a challenge that they will have to win. In
tomorrow™s sales world, the era of the salesperson functioning as a
˜talking brochure™ is over,” says Neil Rackham.23
Research conducted by John DeVincentes and Neil Rackham
predicts a reduction in the number of outside salespeople that com-
panies will use in selling their products, because consultants only add
to the cost of doing business.24 Today™s clients don™t want to spend
money unless they see considerable value in doing so. Consultants
who don™t know how to create value by thoroughly exploring the
customers™ needs won™t sell much in the future.


ACTION POINTS
” Be a puller. Pullers create the best value for their clients by asking
lots of good questions. Pullers have a brighter future in selling
than pushers.

” Pushers are a dying breed. Pushers are walking brochures that com-
municate value instead of creating it. (See Sales Trap 11.)
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create value



14: Salespeople come in two
SALES TRUTH
types, pushers and pullers, and you can™t
sell anybody anything unless the buyer has
a need for it. Pushers are not as effective as
pullers because they don™t seek out the cus-
tomer™s needs as well.
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15:
sales trap
Offer Solutions Early
Here™s the conventional wisdom: Don™t wait too long before you
offer a solution to the customer because the customer will lose inter-
est unless he or she sees the value your solution will provide. This
thinking assumes that customers are eager for these solutions, so
salespeople must introduce them early in the sales call or sales cycle.
If this weren™t the case, why should the prospect want to see the
salesperson? The conventional wisdom doesn™t take into account
either real-world experience or research. Some salespeople even
offer potential solutions in the opening stage of a sales call or mid-
way through the investigative stage in order to demonstrate that
they can be of value to the customer. This is bad.
What™s wrong with getting the solutions out early? The sales-
person doesn™t have a clear sense of whether the solution he or she
will offer has sufficient benefit or value to the customer to offset the
price the customer will have to pay. The results, as in the following
situation, are all too common.

Chris Carter, a loan officer at Fidelity Federal, a
medium-sized southeastern bank, makes a sales call to
Princeton Printing Services, a potential client with a
growing printing and graphics business. This is Chris
Carter™s initial visit to Princeton Printing Services, but
he knows Pat, the senior manager, from a previous job.
The sales call lasts about an hour and a half. Chris asks
the following situation-type questions:

What made you decide to get into the graphics busi-
ness? Why did you select this particular location? Do
you have any other partners or investors? What kind
of revenues do you expect to be generating five years
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create value



from now? Where do you find your customers? Have
you benchmarked prices to your main competitors?
Who are your main competitors? How long have they
been in business? Where are they located? Would you
be hiring any of their people? Where would you find
people to hire here at Princeton Printing?

Chris then introduces the value of Fidelity Federal™s
solutions: “You know, Pat, Fidelity Federal has been
serving the small business entrepreneur for over thirty-
five years now. We offer many products, ranging from
cash management services to on-line banking solu-
tions. Most of our customers want more than just a
loan. They want other services as well. Let me explain
what we can do for you here at Fidelity Federal.”

Chris proceeds to describe the various banking services
and financing terms and leaves Fidelity Federal mate-
rials for Pat to review. At the end of the call, Pat
requests some additional materials, which Chris sends
right away.

In following up, Chris learns that the customer doesn™t
see the need for the additional banking services Chris
talked about. Pat only wants a loan. “I™m not sure why I
didn™t sell that account,” Chris says. “I thought Fidelity
Federal™s solution was right for him.”


What went wrong?
Chris introduced his value proposition too early in the sales
cycle, before he had probed to see how strongly the client needed
the additional banking services he was selling. Because the sales call
focused on fact and background questions, Chris failed to uncover
108 the 24 sales traps



and develop the customer™s needs. He also fell into the sales trap of
being a walking brochure, communicating value instead of creating
it. (For information on the problems of communicating value, see
Sales Trap 11, “Providing Information About Products and Services
Creates Customer Value.”)
Here™s what would have worked better:

After the pleasantries and after explaining the purpose
of the call, Chris asks Pat if he may ask him a few ques-
tions. Pat agrees, and Chris begins.
How many other printing locations do you
Chris:
have, Pat?
At the moment, we have three, but by the end of
Pat:
the year we expect to add two more.
Chris: I see. Are these three other offices within the city?

No, they are located in rural areas.
Pat:

Okay. Do you ever have any problems with the
Chris:
deposits from these offices being posted immediately?
Occasionally, there is a delay in our deposits being
Pat:
credited immediately because of posting errors. But, I
understand how things like that happen.
I understand. But, tell me, when these deposits
Chris:
aren™t posted quickly, does that ever lead to overdrafts?
Pat: Yes, that has happened, but I just use my credit line
to cover it.
Your solution seems to be to draw on your credit
Chris:
line. So, let me clarify my understanding, does that ever
seem to you like you are solving the wrong problem?
Yes, but what choice do I have? I don™t want checks
Pat:
to my suppliers to be returned.
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create value



Chris: Of course, you don™t. But tell me, how would it be
helpful to you if you were able to reduce these posting
errors and not have to draw on your credit line?
Well, I guess it would not only reduce my interest
Pat:
costs, but also be less hassle because I wouldn™t have to
track down the delays and the reasons behind them.
Would reducing posting errors and eliminating
Chris:
interest charges on your credit line be something that
you would like to explore a solution for?
I admit you have aroused my curiosity. How could
Pat:
you help me?
Well, Pat, we have a cash management service for
Chris:
those clients who have their loan business with us. . .
(the conversation continues).


If the value doesn™t outweigh the cost, customers won™t buy.25

ACTION POINTS
” “Keep your briefcase shut” until you™re sure the customer sees the value
in your solution.26 Wait until you™ve figured out how your solu-
tion may be more valuable to the customer than your competi-
tor™s, so that you can justify your price and the customer can justify
the cost.

” Does the customer see the value in solving the problem? If so, what is
it? The fact that the customer can™t initially think of much value
in solving the problem may speak louder than words. It gives you
the message that the customer may not perceive the same value
that is apparent to you in the solution.

” Know when to offer your solution. Two things must happen first: (1)
You should understand the customer™s needs thoroughly, and
110 the 24 sales traps



(2) the customer should recognize the needs as problems he or
she wants to solve.


SALES TRUTH 15: Offering solutions later, when
you have a better handle on the customer™s
needs, will improve your chances of making
a sale.
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create value




16:
sales trap
Let the Customer Control the Sales Call
In days gone by, you used to be able to open sales calls with lines
like “What are you looking for?” or “What can I do for you today?”
Asking the customer to tell you about his or her business is a strat-
egy that will get you into a heap of trouble in today™s high-pressure,
high-performance sales environment. Customers don™t have time to
do your research for you. You can get much of this information from
annual reports or from databases, saving both of you time. Asking
such questions adds no value at all. The idea that the customer
should control the sales call is a fallacy.

WHAT CAN GO WRONG
To illustrate what happens when the customer does the talking in the
sales call, consider the following example.

Steve Hillberg, a loan officer, called on a business owner
who wanted to expand his packaging business, which
was a leader in its industry. This packaging company
wanted to add more metal containers to its product line,
because it was turning away an estimated $25 million in
business each year. Steve™s purpose in making the call
was to offer creative financial ideas that the company
could use to improve its cash flow position while bring-
ing out its new product. Steve also needed to determine
whether additional lending opportunities existed.

“Tell me a little bit about your bank,” the customer
asked. By asking Steve to begin discussing his organi-
zation, the customer took control of the conversation.
Steve talked enthusiastically about his business for
nearly forty-five minutes of the one-hour-and-fifteen-
minute call. Steve explained the different divisions of
112 the 24 sales traps



his bank, ranging from trust and investments to lend-
ing and professional services and from E-banking to

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