Imagine a meeting of Major League Baseball team owners as they collaborate to improve their financial results. You're in the room. A scrawl of operating statistics covers several flip charts. Alternatives ranging from increasing ticket prices to cutting fan perks are discussed. But at the end of the 10-hour meeting, one option prevails: beginning next season, the pitcher’s mound in every stadium will be moved a modest six inches closer to home plate.
Great excitement follows. Owners can take the results to the bank, and players and fans won’t even notice! How? The executives figure that the shorter distance will make it possible to play a full game in just under three hours, down from the current average of three and a half. They reason that six fewer inches of throwing distance cuts the decision time for a hitter to swing, resulting in more strikeouts. More strikeouts mean less playing time, and less playing time means shorter operating hours for stadiums. (There were about 33,000 strikeouts in 2008.)
Eyes light up as numbers are eagerly keyed into pro-forma spreadsheets on flickering laptop screens. The thirty-minute per game reduction will save millions of dollars of operating expenses for every team. Lower labor and utility costs! Faster fixed charge coverage for expensive stadiums! The savings will drop right to the bottom line!
If you think the boundary-changing idea sounds preposterous, think again. This principle behind this imaginary gambit isn’t fantasy in e-commerce. The difference is that the boundaries are abstract and the money is real—to those receiving it. Want proof? This year, banks are projected to earn $38.5 billion in overdraft charges by shifting a long-assumed boundary called “I accept the charges.” How? According to a recent editorial in The Washington Post (Overdrawn and Uninformed, 9/22/09): “. . . from time to time, you may have found yourself inadvertently making a debit card purchase that exceeds your remaining funds. Alas, the way you may have found out about the overdraft was a notice from your bank, days later, informing you that you owe a $30 service fee. The bank just automatically floated you a small loan and charged you for it without giving you a chance to accept or reject the offer.”
Missed the boundary change? Don’t worry. Thirty-four billion dollars in 2009 overdraft fees suggests you’re not alone. The bank extracts money through a silent, virtual [i]ka-ching,[/i] with binary 1’s and 0’s flowing to complete the seamless transaction, absent the faces of Jackson and Hamilton. And that’s just the point. Customers don’t attempt to intervene because the experience fails to excite the same area of the brain that real money does—a phenomena that author Jonah Lehrer describes in his book, How We Decide. A small transaction-boundary shift yields a $38.5 billion reward—a sensational feat that now has the attention of Congress.
Elsewhere in e-commerce, changing abstract boundaries also keeps fiscal 1’s and 0’s moving from payer to vendor. Ever receive a charge on your credit-card statement for a "trial offer" you didn’t really want? It’s probably because you didn’t remember to “opt out” after you “opted in.” Was there a clear boundary for the transaction?
Opt in/opt out. It’s today’s tool of choice for e-commerce boundary changers. Remember Facebook's Beacon Debacle, in which a man purchased a diamond ring (for his wife?) from overstock.com, and 720 Facebook friends were informed about the transaction? As Christopher Caldwell wrote in The New York Times (“Intimate Shopping,” 12/23/07), “Facebook designed Beacon so that members would be able to “opt out” by clicking a pop-up window. But these windows were hard to see and disappeared very fast. If you weren’t quick on the draw, your purchases were broadcast to the world, or at least to your network . . . Privacy advocates urged that Beacon be made an “opt in” program, which members would have to explicitly consent to join . . . Facebook agreed to this approach. The Beacon fiasco gives a good outline of what future conflicts over the Internet will look like. Whether a system is opt-in or opt-out has enormous influence on how people use it.” No joke. And how much revenue can be generated, as well.
Of course, boundary changing has as much to do with our (presumably) private information sold to others as with the flow of money. Did you “accept” the data-collection cookie that resides on your hard drive? Better check the Terms of Use. “Increasingly, there are no limits technologically as to what a company can do in terms of collecting information . . . and then selling it as a commodity to other providers,” said Representative Edward Markey in August, 2008.
These examples prove that dollars can be taken and lost in the blurry zone between asking for specific approval to complete a transaction, and simply assuming assent for things that formerly required it. Whether it’s baseball or banking, with scalability, a little boundary shift goes a long, long, way.
Friday, September 25, 2009
Wednesday, September 16, 2009
Pfizer's Ethics Violations Hurt All of Us
"At Pfizer I was expected to increase profits at all costs, even when sales meant endangering lives. I couldn't do that," said John Kopchinski, the sales representative who blew the whistle on Pfizer’s illegal marketing practices of Bextra, a now-discontinued medication approved for arthritis and menstrual pain.
Mr. Kopchinski was fired from the company in 2003. In hindsight, he won’t miss his job. He’ll receive over $50 million from the US government for his efforts to prosecute the $2.3 billion fraud settlement from his former employer—the largest such settlement in US history.
Paying $2.3 billion for “fraudulent marketing" should cause every marketing professional and salesperson to break into a nervous sweat. Why? Because murky ethics aren't limited to Pfizer. They're amazingly common. They begin innocuously, then escalate. According to Mr. Kopchinski, what started as “aggressive promotion” of Bextra mutated into illegal practices. As he put it, “the ethical line kept moving.”
I’ve seen it over and over. Ethical risks are shrouded in code-speak: “we’re a ‘revenue-focused’ organization,” or “our company champions an ‘aggressive sales culture.’” Sound familiar? Anyone who doesn’t take heed from Mr. Kopchinski’s ethical-line observation faces the same risks. In Pfizer’s case, the problems didn’t begin with stereotypical predatory salespeople and percolate upward—they began at the top. Lies float, and so do corporate leaders who don’t set a good example--belly up. As sales effectiveness consultant Christian Maurer wrote this week on LinkedIn, “the fish starts rotting at the head.”
How can bright people working for well-regarded companies commit such ruthless dishonesty, when they wouldn’t think of robbing a cabbie at gunpoint—arguably a far less-heinous crime? By insulating the perpetrators from the victims. Here’s how (please see the embedded links):
Sales commissions: According to the NPR health blog, a “$50 bounty (was) paid to reps when they got doctors to add Bextra to the standard care for patients before and after surgery. These care protocols would direct patients to take Bextra, often at high doses, a few days before a knee operation, for instance, and then afterward to control pain.”
Telemarketing scripts directed to physicians: Salespeople were coached to tout greater efficacy and safety for Bextra compared to Vioxx, a competing painkiller from Merck. The US Food and Drug Administration never approved these claims.
Sales culture: OK. Let’s call it by its real name—intimidation. "If you don't aggressively sell your products . . . you're labeled a non-team player," Kopchinski said, adding that only by promoting Bextra for unapproved uses could he achieve management’s revenue goals.
You can see the evidence in clear black and white, and it’s all creepy. What was Pfizer’s management thinking? Caught with its pants down, Pfizer cut a check for $2.3 billion. Everybody—just shut up, leave the chicanery behind, and let’s move on! Problem resolved. But is it? At the same time that jolly Pfizer managers were gloating over PowerPoint slides showing escalating sales curves, people were suffering or dying from taking medications for unapproved uses. Bad ethics don’t get much worse than that, and even a $2.3 billion mea culpa won’t enable the company to sweep its dark tactics under the rug. A plan to sell cigarettes in elementary schools might have appeared more benign.
Which brings Pfizer’s indiscretions to the everyday salesperson. We’ve all experienced what happens when “baggage” is brought into a sales meeting. A salesperson is often considered guilty before he or she proclaims innocence. It’s understandable. Along with evaluating the performance and features of a product, prospects scrutinize a salesperson’s motivations and integrity. But as Pfizer’s deceit has shown us, prospects now need to look further, and to question whether the top management of a vendor's company has a moral compass. The answer to that question could reveal buyer risks that were previously unimagined.
For more on the topic of marketing ethics, please see:
Goofus and Gallant Make CRM Decisions, and
On My Honor as a Salesperson: Why Sales Ethics Matter
Mr. Kopchinski was fired from the company in 2003. In hindsight, he won’t miss his job. He’ll receive over $50 million from the US government for his efforts to prosecute the $2.3 billion fraud settlement from his former employer—the largest such settlement in US history.
Paying $2.3 billion for “fraudulent marketing" should cause every marketing professional and salesperson to break into a nervous sweat. Why? Because murky ethics aren't limited to Pfizer. They're amazingly common. They begin innocuously, then escalate. According to Mr. Kopchinski, what started as “aggressive promotion” of Bextra mutated into illegal practices. As he put it, “the ethical line kept moving.”
I’ve seen it over and over. Ethical risks are shrouded in code-speak: “we’re a ‘revenue-focused’ organization,” or “our company champions an ‘aggressive sales culture.’” Sound familiar? Anyone who doesn’t take heed from Mr. Kopchinski’s ethical-line observation faces the same risks. In Pfizer’s case, the problems didn’t begin with stereotypical predatory salespeople and percolate upward—they began at the top. Lies float, and so do corporate leaders who don’t set a good example--belly up. As sales effectiveness consultant Christian Maurer wrote this week on LinkedIn, “the fish starts rotting at the head.”
How can bright people working for well-regarded companies commit such ruthless dishonesty, when they wouldn’t think of robbing a cabbie at gunpoint—arguably a far less-heinous crime? By insulating the perpetrators from the victims. Here’s how (please see the embedded links):
Sales commissions: According to the NPR health blog, a “$50 bounty (was) paid to reps when they got doctors to add Bextra to the standard care for patients before and after surgery. These care protocols would direct patients to take Bextra, often at high doses, a few days before a knee operation, for instance, and then afterward to control pain.”
Telemarketing scripts directed to physicians: Salespeople were coached to tout greater efficacy and safety for Bextra compared to Vioxx, a competing painkiller from Merck. The US Food and Drug Administration never approved these claims.
Sales culture: OK. Let’s call it by its real name—intimidation. "If you don't aggressively sell your products . . . you're labeled a non-team player," Kopchinski said, adding that only by promoting Bextra for unapproved uses could he achieve management’s revenue goals.
You can see the evidence in clear black and white, and it’s all creepy. What was Pfizer’s management thinking? Caught with its pants down, Pfizer cut a check for $2.3 billion. Everybody—just shut up, leave the chicanery behind, and let’s move on! Problem resolved. But is it? At the same time that jolly Pfizer managers were gloating over PowerPoint slides showing escalating sales curves, people were suffering or dying from taking medications for unapproved uses. Bad ethics don’t get much worse than that, and even a $2.3 billion mea culpa won’t enable the company to sweep its dark tactics under the rug. A plan to sell cigarettes in elementary schools might have appeared more benign.
Which brings Pfizer’s indiscretions to the everyday salesperson. We’ve all experienced what happens when “baggage” is brought into a sales meeting. A salesperson is often considered guilty before he or she proclaims innocence. It’s understandable. Along with evaluating the performance and features of a product, prospects scrutinize a salesperson’s motivations and integrity. But as Pfizer’s deceit has shown us, prospects now need to look further, and to question whether the top management of a vendor's company has a moral compass. The answer to that question could reveal buyer risks that were previously unimagined.
For more on the topic of marketing ethics, please see:
Goofus and Gallant Make CRM Decisions, and
On My Honor as a Salesperson: Why Sales Ethics Matter
Monday, July 27, 2009
Perfect Pitch: A Tribute to Billy Mays, 1958-2009
Think you can sell ice to Eskimos? What about making a sales pitch in front of strangers for toilet bowl cleaner, picture hooks, laundry detergent, or putty. Go ahead. Step right up. See if you’re a better salesperson than Billy Mays, who died this week at age 50.
Billy’s commercials for Mighty Putty, OxiClean Detergent, and Kaboom are as close as a sales process gets to haiku. He builds rapport and trust, identifies a problem, pitches a solution, and motivates action—all within a two-minute commercial. Straight up, straightforward—and straight for the jugular. Whether he’s talking about toilets or dirty laundry, with his staccato delivery, Billy doesn’t tiptoe around anything.
Selling solutions that aren't glamorous, for problems that aren't pretty is much, much harder than it looks. And while it’s tempting to analyze Billy’s effectiveness by looking at the components of his sales pitches, his commercials are best appreciated without being encumbered by details. Billy connects with emotions, not with intellect. Who wouldn’t buy bonding putty that sets instantly, with the strength to pull a tractor trailer? I saw it in the commercial! And Billy just tripled the offer to six sticks!
What separates Billy Mays from other great salespeople isn’t his mastery of sales techniques. It’s not his effective deployment of people, processes, and technology. It’s his ability to delight the buyer. On that measure, he has few equals.
Whether we’re marketing gardening tools or ERP software, Billy Mays offers sales lessons for all us. In the meantime, a haiku tribute to Billy Mays, who could sell ice to Eskimos:
Top sales producer.
An opening. Hard sell. Close.
Buyer spends money.
Billy’s commercials for Mighty Putty, OxiClean Detergent, and Kaboom are as close as a sales process gets to haiku. He builds rapport and trust, identifies a problem, pitches a solution, and motivates action—all within a two-minute commercial. Straight up, straightforward—and straight for the jugular. Whether he’s talking about toilets or dirty laundry, with his staccato delivery, Billy doesn’t tiptoe around anything.
Selling solutions that aren't glamorous, for problems that aren't pretty is much, much harder than it looks. And while it’s tempting to analyze Billy’s effectiveness by looking at the components of his sales pitches, his commercials are best appreciated without being encumbered by details. Billy connects with emotions, not with intellect. Who wouldn’t buy bonding putty that sets instantly, with the strength to pull a tractor trailer? I saw it in the commercial! And Billy just tripled the offer to six sticks!
What separates Billy Mays from other great salespeople isn’t his mastery of sales techniques. It’s not his effective deployment of people, processes, and technology. It’s his ability to delight the buyer. On that measure, he has few equals.
Whether we’re marketing gardening tools or ERP software, Billy Mays offers sales lessons for all us. In the meantime, a haiku tribute to Billy Mays, who could sell ice to Eskimos:
Top sales producer.
An opening. Hard sell. Close.
Buyer spends money.
Tuesday, June 23, 2009
Is "Call on the CXO" a Winning Strategy for Salespeople?
Here are some tired and no longer true sales tenets:
Why are these passé? Because the statements rely on these increasingly tenuous assumptions:
Besides, selling isn't a numbers game. It's an intelligence game. But if these sales-ism's aren't true, then how do top sales producers develop, use, and manage selling networks?
Meet "Mr. Barcode"
I stumbled into part of the answer to this question in the early '90's, when I sold barcode technology. My prospect, a Fortune 100 manufacturer, purchased on a departmental level, but I wanted an enterprise-wide sale. I didn't know where to begin my campaign. Operations? Information Technology? Materials Management? Finance? As I placed calls into various departments, my inquiries were rewarded with a consistent answer: "When we have questions about barcoding, we go to Jim. We call him 'Mr. Barcode.'" I didn't know Jim, but encouraged by the moniker his colleagues assigned, I called him.
Jim was an unassuming man who worked in a windowless office in the middle of a cramped cube farm on the fifth floor of the Information Technology building. He had no decision-making authority, and his position was so low it didn't merit a spot on a published org chart. But today, a Social Network analyst would call Jim an Information Broker, a role of crucial importance for salespeople. I quickly learned why: no department made a barcode-related decision before he was consulted. I also learned that Jim already had many connections to my company's engineering team, and that by encouraging more connections, I improved the probability of achieving my goal. With Jim's involvement, along with some luck, our team won an enterprise-wide SAP project the following year.
What makes this story remarkable isn't that low-ranking Jim played such an important role. It's that most enterprises worldwide have many Jim's—and sales executives pay little or no attention to reaching them. Why? Because finding Jim's isn't easy. Their titles don't convey their importance. Their identities aren't readily mined from data warehouses. They don't hang out together in the same bars. Most significant, these key influencers are not self-anointed—they achieve their status through peer recognition. For a salesperson selling into a large enterprise, that fact alone makes identifying a Jim a task of near-monumental proportion.
Finding the First Mouth
But once identified, the rewards can be great. A paper by Raghuram Iyengar, Christophe Van den Bulte, and Thomas W. Valente Opinion Leadership and Social Contagion in New Product Diffusion, and discussed in an article The Buzz Starts Here: Finding the First Mouth for Word-of-Mouth Marketing explains how Social Network Analysis can be applied to this challenge.
The researchers conducted their work for a pharmaceutical company and found their Jim, referred to as Physician No. 184, on a Social Network Map. "Researchers had tracked how prescriptions of a new drug spread from one physician to another, depending on who talked to whom and referred patients to whom. Mapped out on the screen, the story became clear: The medical community was actually divided into two sub-networks split apparently by ethnicity, with one sub-network dominated by physicians with mostly Asian names and the other with mostly European names. Connecting the two, like a spider suspended on a thread between two webs, was the dot for Physician No. 184— a doctor the company's marketing department and salespeople barely knew (my emphasis).
The article shared further insight: "Not only did the study indicate that word-of-mouth had been affecting physicians' prescription behavior . . . but it also showed that converting the right individual could have a dramatic impact. And for executives in the conference room, it revealed something else: They had been overlooking some of the networks' most important social hubs. 'That was the biggest a-ha! for the company,' said Van den Bulte. Physician 184 'was not the most important in the number of connections he was getting, but he was vitally important in linking the networks.'"
And there's more. Whereas traditional market research asks people "Are you an opinion leader?," network research asks "Whom do you turn to for advice about ...?" According to the article, "the different approaches can produce widely different results...asking people how important they are is not the best measure of how important they really are. Just because people think they're important doesn't mean it's true. And some people are actually more important than marketers believe, or even they themselves believe."
Great opportunity awaits salespeople who develop relationships with Jim's and Physician 184's. But the first challenge is in knowing who you're looking for. So put titles and organization charts aside. If your sales team finds that concentrating effort on getting C-level appointments doesn't bear fruit, and that it's frustrating to "get around gatekeepers," maybe it's time to ask some questions beyond "how can we better reach the CXO?" Those questions could start with "what do the selling networks of top sales producers look like?
Like the study that discovered Physician 184, your best path to a sale might be through people your competitors don't even recognize.
"Focus your efforts on reaching C-level executives."
"Get in front of a decision maker."
"Get around the gatekeeper!"
"It's a numbers game. The more calls you make, the better your chances are for a sale."
Why are these passé? Because the statements rely on these increasingly tenuous assumptions:
- C-Level executives are influential
- Job titles reliably predict whether an individual will be valuable in the sales process
- An organization transfers value through formal hierarchies
- Within an organization, decision rights are consistent, enforceable, and understood
- Sales is the most important connection point between vendor and prospect
Besides, selling isn't a numbers game. It's an intelligence game. But if these sales-ism's aren't true, then how do top sales producers develop, use, and manage selling networks?
Meet "Mr. Barcode"
I stumbled into part of the answer to this question in the early '90's, when I sold barcode technology. My prospect, a Fortune 100 manufacturer, purchased on a departmental level, but I wanted an enterprise-wide sale. I didn't know where to begin my campaign. Operations? Information Technology? Materials Management? Finance? As I placed calls into various departments, my inquiries were rewarded with a consistent answer: "When we have questions about barcoding, we go to Jim. We call him 'Mr. Barcode.'" I didn't know Jim, but encouraged by the moniker his colleagues assigned, I called him.
Jim was an unassuming man who worked in a windowless office in the middle of a cramped cube farm on the fifth floor of the Information Technology building. He had no decision-making authority, and his position was so low it didn't merit a spot on a published org chart. But today, a Social Network analyst would call Jim an Information Broker, a role of crucial importance for salespeople. I quickly learned why: no department made a barcode-related decision before he was consulted. I also learned that Jim already had many connections to my company's engineering team, and that by encouraging more connections, I improved the probability of achieving my goal. With Jim's involvement, along with some luck, our team won an enterprise-wide SAP project the following year.
What makes this story remarkable isn't that low-ranking Jim played such an important role. It's that most enterprises worldwide have many Jim's—and sales executives pay little or no attention to reaching them. Why? Because finding Jim's isn't easy. Their titles don't convey their importance. Their identities aren't readily mined from data warehouses. They don't hang out together in the same bars. Most significant, these key influencers are not self-anointed—they achieve their status through peer recognition. For a salesperson selling into a large enterprise, that fact alone makes identifying a Jim a task of near-monumental proportion.
Finding the First Mouth
But once identified, the rewards can be great. A paper by Raghuram Iyengar, Christophe Van den Bulte, and Thomas W. Valente Opinion Leadership and Social Contagion in New Product Diffusion, and discussed in an article The Buzz Starts Here: Finding the First Mouth for Word-of-Mouth Marketing explains how Social Network Analysis can be applied to this challenge.
The researchers conducted their work for a pharmaceutical company and found their Jim, referred to as Physician No. 184, on a Social Network Map. "Researchers had tracked how prescriptions of a new drug spread from one physician to another, depending on who talked to whom and referred patients to whom. Mapped out on the screen, the story became clear: The medical community was actually divided into two sub-networks split apparently by ethnicity, with one sub-network dominated by physicians with mostly Asian names and the other with mostly European names. Connecting the two, like a spider suspended on a thread between two webs, was the dot for Physician No. 184— a doctor the company's marketing department and salespeople barely knew (my emphasis).
The article shared further insight: "Not only did the study indicate that word-of-mouth had been affecting physicians' prescription behavior . . . but it also showed that converting the right individual could have a dramatic impact. And for executives in the conference room, it revealed something else: They had been overlooking some of the networks' most important social hubs. 'That was the biggest a-ha! for the company,' said Van den Bulte. Physician 184 'was not the most important in the number of connections he was getting, but he was vitally important in linking the networks.'"
And there's more. Whereas traditional market research asks people "Are you an opinion leader?," network research asks "Whom do you turn to for advice about ...?" According to the article, "the different approaches can produce widely different results...asking people how important they are is not the best measure of how important they really are. Just because people think they're important doesn't mean it's true. And some people are actually more important than marketers believe, or even they themselves believe."
Great opportunity awaits salespeople who develop relationships with Jim's and Physician 184's. But the first challenge is in knowing who you're looking for. So put titles and organization charts aside. If your sales team finds that concentrating effort on getting C-level appointments doesn't bear fruit, and that it's frustrating to "get around gatekeepers," maybe it's time to ask some questions beyond "how can we better reach the CXO?" Those questions could start with "what do the selling networks of top sales producers look like?
Like the study that discovered Physician 184, your best path to a sale might be through people your competitors don't even recognize.
Tuesday, June 2, 2009
Race and Gender Impact Employee Customer Service Bonuses
Are customer satisfaction surveys a fair and unbiased tool for for assigning employee bonuses?
No, according to a study published in the Academy of Management Journal, An Examination of Whether and How Racial and Gender Biases Influence Customer Satisfaction. According to the lead author, David Hekman, assistant professor of management at the University of Wisconsin, surveys “are highly reliable—but they are reliably wrong.” The authors believe that customer satisfaction surveys are biased because they are "anonymous judgements by untrained raters that usually lack an evaluation standard."
Hekman conducted several experiments to measure customer satisfaction. In one experiment, subjects watched videotaped interactions between a bookshop sales clerk and customers, and were asked to imagine they were the customer and to rate the bookshop’s service performance. Three actors played the part of the sales clerk—a white male, a black male, and a white female. All used identical settings and scripts.
The subjects shown the white male clerk rated the bookshop’s service 19% higher than subjects who viewed the other two actors.
If we use customer satisfaction measures to assign bonuses, can we assume we’re not compounding race and gender bias? If this assumption isn't correct, how can we make survey-influenced compensation systems fair? Could other attributes not measured in Hekman's study—for example, weight, age, and appearance—create similar results?
No, according to a study published in the Academy of Management Journal, An Examination of Whether and How Racial and Gender Biases Influence Customer Satisfaction. According to the lead author, David Hekman, assistant professor of management at the University of Wisconsin, surveys “are highly reliable—but they are reliably wrong.” The authors believe that customer satisfaction surveys are biased because they are "anonymous judgements by untrained raters that usually lack an evaluation standard."
Hekman conducted several experiments to measure customer satisfaction. In one experiment, subjects watched videotaped interactions between a bookshop sales clerk and customers, and were asked to imagine they were the customer and to rate the bookshop’s service performance. Three actors played the part of the sales clerk—a white male, a black male, and a white female. All used identical settings and scripts.
The subjects shown the white male clerk rated the bookshop’s service 19% higher than subjects who viewed the other two actors.
If we use customer satisfaction measures to assign bonuses, can we assume we’re not compounding race and gender bias? If this assumption isn't correct, how can we make survey-influenced compensation systems fair? Could other attributes not measured in Hekman's study—for example, weight, age, and appearance—create similar results?
Friday, May 22, 2009
Tell the Truth--Is an Educated Consumer Really Your Best Customer?
“An educated consumer is our best customer.”
That slogan stood out when Sy Syms, CEO of Syms Corporation, said it in television ads in the 1980’s. Customer empowerment wasn’t a popular notion back then.
Fast forward to social media-enabled 2009. A new book, Get Content. Get Customers. , by Joe Pulizzi and Newt Barrett, challenges the Syms ideal. According to the book, “the more informed a consumer or buyer is, the more difficult it is to sell them.” Could both statements be correct? While they don’t directly contradict, they do point in different directions. In sales, there’s no such thing as an irrefutable truth, and in my experience, there’s truth in each one.
Not everyone agrees. In metro Washington DC, where I live, major corporations employ high-dollar lobbyists to fight the risks educated consumers pose, as anyone who tracks policies of the Federal Trade Commission or Food and Drug Administration can attest.
When is an educated consumer not the best customer? When she wants to know facts about the soil that grew the carrots she ate in last night’s salad. Or when she wants to learn about the living environment of the chickens or cattle that are now in the grocery meat case. Better for the producers that she sticks to knowing generic fat, carbohydrate, and protein content, along with “sell by” date. For other foods, the lobbyists insist she also doesn’t need to see the word “imitation” on some products, that she doesn’t need to know anything about the farms her food comes from, or what pesticides were used for their production. (For a more detailed discussion about why food manufacturers benefit from disconnected supply chain information, see author Michael Pollan's blog.)
Beyond food, The Wall Street Journal reported three related articles just this week:
FDA Says Video for Pain Drug is Misleading
SAT Coaching Found to Boost Scores—Barely
Laws Take On Financial Scams Against Seniors
What value do uneducated consumers bring to the companies profiled in these articles? Bernie Madoff won’t be reading this blog, but it’s not hard to guess how he would weigh in on this question.
Closer to where my clients live in the B2B selling world, I floated the statement from Pulizzi's book to a few sales groups on LinkedIn and received some excellent thoughts. The consensus was that it’s preferable to sell to informed prospects. That’s good, because—like it or not—prospects are better informed than ever. But a few of the responses I received were circumspect. Informed prospects aren’t necessarily any more open minded or are better decision makers than uninformed prospects. One salesperson commented about the difficulties that occur when a prospect is well informed on price, but has a poor grasp of the complexities of the product he or she is buying.
So when it comes to prospect knowledge, information is a two-edge sword. I’ve left some sales meetings in frustration, convinced my uninformed client wouldn’t recognize a good solution if it flew in and hit him in the head. In other situations, my client did homework and told me (correctly) that he could procure reliable refurbished or off-brand equipment for one-third the cost of my proposal—information that a sane commission-driven salesperson wouldn’t typically volunteer.
But today, with social media, the information genie is already out of the bottle. It’s more fruitful to debate what to do about managing prospect information than it is to debate whether informed-slash-educated prospects are better to deal with than those who aren’t.
Here are some questions to ask:
How well-informed is your average prospect? When you begin your formal sales process, what do they already know? What don't they know that they definitely need to know?
Where do your prospects congregate online (and offline) to get information?
For information outside of your company’s direct control, what risks and opportunities are present? What misinformation exists, and what is the impact on your sales strategy? Do you have a plan to counter significant misinformation?
What information do your prospects seek? What motivates them to seek the information, and how do they value it? Which risks are they mitigating and which opportunities do they want to capitalize on?
What information is available to them? Who contributes to that content? Who “owns” the content?
How will your prospects use the information they obtain? What portends a next step or action? What will break the buying process, and do you have ways to mitigate the risks?
Back to Syms. Whether an educated consumer really is the best customer depends on what you sell and how you sell it. Above all, be agile. If your sales process can’t adapt quickly to changes in information power, you will be debating about whether it’s better to sell to educated customers. But with social media, events move quickly. By then, it might be too late.
That slogan stood out when Sy Syms, CEO of Syms Corporation, said it in television ads in the 1980’s. Customer empowerment wasn’t a popular notion back then.
Fast forward to social media-enabled 2009. A new book, Get Content. Get Customers. , by Joe Pulizzi and Newt Barrett, challenges the Syms ideal. According to the book, “the more informed a consumer or buyer is, the more difficult it is to sell them.” Could both statements be correct? While they don’t directly contradict, they do point in different directions. In sales, there’s no such thing as an irrefutable truth, and in my experience, there’s truth in each one.
Not everyone agrees. In metro Washington DC, where I live, major corporations employ high-dollar lobbyists to fight the risks educated consumers pose, as anyone who tracks policies of the Federal Trade Commission or Food and Drug Administration can attest.
When is an educated consumer not the best customer? When she wants to know facts about the soil that grew the carrots she ate in last night’s salad. Or when she wants to learn about the living environment of the chickens or cattle that are now in the grocery meat case. Better for the producers that she sticks to knowing generic fat, carbohydrate, and protein content, along with “sell by” date. For other foods, the lobbyists insist she also doesn’t need to see the word “imitation” on some products, that she doesn’t need to know anything about the farms her food comes from, or what pesticides were used for their production. (For a more detailed discussion about why food manufacturers benefit from disconnected supply chain information, see author Michael Pollan's blog.)
Beyond food, The Wall Street Journal reported three related articles just this week:
FDA Says Video for Pain Drug is Misleading
SAT Coaching Found to Boost Scores—Barely
Laws Take On Financial Scams Against Seniors
What value do uneducated consumers bring to the companies profiled in these articles? Bernie Madoff won’t be reading this blog, but it’s not hard to guess how he would weigh in on this question.
Closer to where my clients live in the B2B selling world, I floated the statement from Pulizzi's book to a few sales groups on LinkedIn and received some excellent thoughts. The consensus was that it’s preferable to sell to informed prospects. That’s good, because—like it or not—prospects are better informed than ever. But a few of the responses I received were circumspect. Informed prospects aren’t necessarily any more open minded or are better decision makers than uninformed prospects. One salesperson commented about the difficulties that occur when a prospect is well informed on price, but has a poor grasp of the complexities of the product he or she is buying.
So when it comes to prospect knowledge, information is a two-edge sword. I’ve left some sales meetings in frustration, convinced my uninformed client wouldn’t recognize a good solution if it flew in and hit him in the head. In other situations, my client did homework and told me (correctly) that he could procure reliable refurbished or off-brand equipment for one-third the cost of my proposal—information that a sane commission-driven salesperson wouldn’t typically volunteer.
But today, with social media, the information genie is already out of the bottle. It’s more fruitful to debate what to do about managing prospect information than it is to debate whether informed-slash-educated prospects are better to deal with than those who aren’t.
Here are some questions to ask:
How well-informed is your average prospect? When you begin your formal sales process, what do they already know? What don't they know that they definitely need to know?
Where do your prospects congregate online (and offline) to get information?
For information outside of your company’s direct control, what risks and opportunities are present? What misinformation exists, and what is the impact on your sales strategy? Do you have a plan to counter significant misinformation?
What information do your prospects seek? What motivates them to seek the information, and how do they value it? Which risks are they mitigating and which opportunities do they want to capitalize on?
What information is available to them? Who contributes to that content? Who “owns” the content?
How will your prospects use the information they obtain? What portends a next step or action? What will break the buying process, and do you have ways to mitigate the risks?
Back to Syms. Whether an educated consumer really is the best customer depends on what you sell and how you sell it. Above all, be agile. If your sales process can’t adapt quickly to changes in information power, you will be debating about whether it’s better to sell to educated customers. But with social media, events move quickly. By then, it might be too late.
Wednesday, May 13, 2009
Will a "Slow Sales" Movement Save Us from Ourselves?
“Sell more, with fewer resources, faster. Oh, while you’re at it, bring me the broomstick of the Wicked Witch of the West.”
How’s that for a quartet? If you haven’t seen these challenges in a PowerPoint slide at your latest management meeting, you probably will. Most of us are already experienced delivering at least three of them.
We responded even before the banking meltdown. We absorbed higher sales quotas, targeted prospects better, made our lead generation more efficient, and shortened sales cycles. What’s unclear is whether we’re rocking uncomfortably from the ripples we’ve created. Time and again, we learn that our sales efforts have a negative impact on customer relationships. Our prospective customers often don’t trust salespeople, don’t like them, and don’t want to communicate with them. Are we pushing too hard? Should we cool our jets? Maybe the time has come for a Slow Sales movement.
Decades of Fast Sales dictums have yielded tactics that clash with long-term strategic goals:
“Close the Sale” versus “Build a Relationship”
“Generate a Quick Win” versus “Improve infrastructure to gain long-term improvements in customer loyalty”
“Win the monthly individual sales incentive” (and hoard tacit knowledge) versus “share knowledge so the entire sales organization can benefit”
“Make the quarterly revenue goal” versus “maximize the total value of the customer”
The Slow ideal has found a growing audience willing to question whether our obsession with collapsing timeframes serves our longer-term interests. The Slow Food Movement began as a counter-force to government and commercial entities that promoted convenience food and economies of scale without regard for sound nutritional and environmental practices. Educators have recognized a parallel danger. Peggy Orenstein wrote in The New York Times (Kindergarten Cram, May 3, 2009) “maybe the current economic retrenchment will trigger a new perspective on early education . . . Call it Slow Schools. After all, part of what got us into this mess was valuing achievement, speed and results over ethics, thoughtfulness and responsibility.” In education, it takes a brave person to question outcomes that are sacrosanct to many. But Ms. Orenstein reframed the question: it’s not about how can a child’s development be sped up, it’s “why are we so hellbent on doing so?”
Similarly, in sales, we must change the overarching questions we’re asking. The problem is, “how do we sell more, better, faster?” sounds better at the Achiever’s Club golf outing than another question I recently heard, “what steps do we need to take with each prospect and when should we take them based on the natural progression of our prospect’s purchase process?” That long-winded question sounds way too kind, and many sales executives would feel silly asking it. But by asking and answering that question we’re possibly more likely to achieve strategic sales success than by relentlessly pursuing tactics to satisfy the first one. Fast Sales rarely comes without high pressure and customer pain—two conditions that damage, rather than improve, financial results.
The promoters of the Slow Food movement exposed exploitation after recognizing a long-simmering win-lose relationship between top producers and end consumers. Large food manufacturers such as Monsanto, ConAgra, and Archer Daniels Midland could meet their financial objectives while at the consumer end of the value chain, people became overweight and undernourished. But Slow Food and Slow Sales are an imperfect comparison. The Slow Food movement encompasses ideals I haven’t seen on the white board for any sales planning meeting I’ve attended: equitable distribution of products and resources, and responsible stewardship of the planet.
Not that we’re unconcerned and mercenary, but in sales, one simple financial reality explains our preoccupation with speed: Net Present Value. Assuming the cost of capital is constant, the present value of a dollar in revenue today is worth more than in any future period. That cold fact drives strategic decisions. Sometimes customers benefit—sometimes they don’t. So through the Net Present Value lens, the juxtaposition of “slow” and “sales” might mean a situation to avoid rather than an inspirational movement.
But the same way fast food brings us Type II diabetes, and high-achieving preschoolers bring us win-at-any-cost adults, tactics to secure short-term revenue bring unwanted side effects that could take more than one generation to fix. Some progressive companies understand this, and not surprisingly, have embedded Slow Sales ideals into their brand. For example, “At Oboz we build shoes for outdoor use—shoes with meaningful innovation, solid performance and recognizable quality. We are also stewards of our rich natural heritage and believe that a business should contribute to the greater common good.”
If that lofty goal conjures up images of American consumers (who want affordable quality footwear, available in local retail outlets) holding hands in the woods with citizens of producing countries (who want jobs, unpolluted air, and clean lakes), it’s probably a mirage. Would Oboz voluntarily curtail sales growth to avoid sourcing materials from non-compliant vendors (a common dilemma in eco-manufacturing)? There are no easy answers, and tradeoffs must be made. But kudos to Oboz! At least I sense this issue has a spot on the white board in the company board room.
Like other Slow movements, Slow Sales requires taking some unpopular stances, and asking uncomfortable questions that put tried-and-true in the cross hairs of change. For some companies, that means looking at selling in a fundamentally different way by regarding a purchase transaction as a point on a timeline, rather than the end-game of a sales process.
Slow Sales won’t work for every company. It requires a long-term planning horizon, and companies that don’t have the resources to go the distance will trade one set of risks for another. But as with food and education, Slow might provide the best way to deliver value that can sustain both producer and consumer now, and in the future.
How’s that for a quartet? If you haven’t seen these challenges in a PowerPoint slide at your latest management meeting, you probably will. Most of us are already experienced delivering at least three of them.
We responded even before the banking meltdown. We absorbed higher sales quotas, targeted prospects better, made our lead generation more efficient, and shortened sales cycles. What’s unclear is whether we’re rocking uncomfortably from the ripples we’ve created. Time and again, we learn that our sales efforts have a negative impact on customer relationships. Our prospective customers often don’t trust salespeople, don’t like them, and don’t want to communicate with them. Are we pushing too hard? Should we cool our jets? Maybe the time has come for a Slow Sales movement.
Decades of Fast Sales dictums have yielded tactics that clash with long-term strategic goals:
“Close the Sale” versus “Build a Relationship”
“Generate a Quick Win” versus “Improve infrastructure to gain long-term improvements in customer loyalty”
“Win the monthly individual sales incentive” (and hoard tacit knowledge) versus “share knowledge so the entire sales organization can benefit”
“Make the quarterly revenue goal” versus “maximize the total value of the customer”
The Slow ideal has found a growing audience willing to question whether our obsession with collapsing timeframes serves our longer-term interests. The Slow Food Movement began as a counter-force to government and commercial entities that promoted convenience food and economies of scale without regard for sound nutritional and environmental practices. Educators have recognized a parallel danger. Peggy Orenstein wrote in The New York Times (Kindergarten Cram, May 3, 2009) “maybe the current economic retrenchment will trigger a new perspective on early education . . . Call it Slow Schools. After all, part of what got us into this mess was valuing achievement, speed and results over ethics, thoughtfulness and responsibility.” In education, it takes a brave person to question outcomes that are sacrosanct to many. But Ms. Orenstein reframed the question: it’s not about how can a child’s development be sped up, it’s “why are we so hellbent on doing so?”
Similarly, in sales, we must change the overarching questions we’re asking. The problem is, “how do we sell more, better, faster?” sounds better at the Achiever’s Club golf outing than another question I recently heard, “what steps do we need to take with each prospect and when should we take them based on the natural progression of our prospect’s purchase process?” That long-winded question sounds way too kind, and many sales executives would feel silly asking it. But by asking and answering that question we’re possibly more likely to achieve strategic sales success than by relentlessly pursuing tactics to satisfy the first one. Fast Sales rarely comes without high pressure and customer pain—two conditions that damage, rather than improve, financial results.
The promoters of the Slow Food movement exposed exploitation after recognizing a long-simmering win-lose relationship between top producers and end consumers. Large food manufacturers such as Monsanto, ConAgra, and Archer Daniels Midland could meet their financial objectives while at the consumer end of the value chain, people became overweight and undernourished. But Slow Food and Slow Sales are an imperfect comparison. The Slow Food movement encompasses ideals I haven’t seen on the white board for any sales planning meeting I’ve attended: equitable distribution of products and resources, and responsible stewardship of the planet.
Not that we’re unconcerned and mercenary, but in sales, one simple financial reality explains our preoccupation with speed: Net Present Value. Assuming the cost of capital is constant, the present value of a dollar in revenue today is worth more than in any future period. That cold fact drives strategic decisions. Sometimes customers benefit—sometimes they don’t. So through the Net Present Value lens, the juxtaposition of “slow” and “sales” might mean a situation to avoid rather than an inspirational movement.
But the same way fast food brings us Type II diabetes, and high-achieving preschoolers bring us win-at-any-cost adults, tactics to secure short-term revenue bring unwanted side effects that could take more than one generation to fix. Some progressive companies understand this, and not surprisingly, have embedded Slow Sales ideals into their brand. For example, “At Oboz we build shoes for outdoor use—shoes with meaningful innovation, solid performance and recognizable quality. We are also stewards of our rich natural heritage and believe that a business should contribute to the greater common good.”
If that lofty goal conjures up images of American consumers (who want affordable quality footwear, available in local retail outlets) holding hands in the woods with citizens of producing countries (who want jobs, unpolluted air, and clean lakes), it’s probably a mirage. Would Oboz voluntarily curtail sales growth to avoid sourcing materials from non-compliant vendors (a common dilemma in eco-manufacturing)? There are no easy answers, and tradeoffs must be made. But kudos to Oboz! At least I sense this issue has a spot on the white board in the company board room.
Like other Slow movements, Slow Sales requires taking some unpopular stances, and asking uncomfortable questions that put tried-and-true in the cross hairs of change. For some companies, that means looking at selling in a fundamentally different way by regarding a purchase transaction as a point on a timeline, rather than the end-game of a sales process.
Slow Sales won’t work for every company. It requires a long-term planning horizon, and companies that don’t have the resources to go the distance will trade one set of risks for another. But as with food and education, Slow might provide the best way to deliver value that can sustain both producer and consumer now, and in the future.
Subscribe to:
Posts (Atom)
