Is Cold Calling Dead? More Importantly Who Gets to Kill it?

Is Cold Calling Dead?

Cold calling is dead, at least as we know it, according to Forbes contributor Ken Krogue. Wait a minute, perhaps not. Matt Heinz, President of Heinz Marketing, blogger and author, holds the contrary view in his post If you think Cold Calling is Dead, You are Doing it Wrong. As it happens, for every article heralding the end of traditional cold calling there is another extolling the virtues of the very same thing, providing you just do it right. Most only seem to disagree in the headlines.

Who Decides if it is Alive or Well?

When I speak at sales conferences and workshops, I often ask the assembled group of professional sellers ‘Who really enjoys cold calling?’ Inevitably, I will see one or two defiant hands reaching high and I have made it a habit to seek them out during a break to find out more. They are invariably resilient, optimistic and interesting people. However, I am not sure I am asking the right crowd.  If I asked a room full of business buyers ‘how many of you enjoy receiving a cold call?’ then I suspect I would see either no hands or a similarly small number. In fact a study on buyer preferences commissioned by IBM revealed that cold calling is 97% ineffective. As buyers, we simply do not like the intrusion.

It is difficult to believe that businesses would continue with any activity that only works three times in a hundred let alone an activity that is not welcomed by more than 9 out of 10 of prospective customers.

Is it the Right Question?

Those three positive connections must seem pretty good to the caller after ninety or so curt and dismissive responses. I have heard it called ‘living for the yes’ a euphoric high as a result of affirmation after a truck load of human rejection. I have nothing but admiration for those that do it, do it well and manage to stay positive dial after dial. However, it seems to me that we are asking the wrong question of the wrong people.

The Connected Buyer

We are living in the age of the connected buyer. Sophisticated business buyers that use online resources and their professional social network to make their purchasing decisions. These, often senior decision makers, prefer to find their own information and validate with social proof through those they trust. Connected buyers are in control of their buying process and are simply not interested in being invited into a sales process at the wrong time through a cold call.

The Right Question

Whilst my audience of business buyers is hypothetical, all the evidence is that they want cold calling to stop. This is why they screen their calls and don’t return messages. It is also why receptionists, office managers and assorted colleagues tell sellers that the target of their call is ‘with someone right now’ when they are not. Business buyers have wanted cold calling to end for a very long time, Seth Godin introduced the term interruption marketing in the 90’s and it wasn’t a new problem then.

For sellers, cold calling may be dead. Or it may not. For business buyers and decision makers though, its demise, whenever it was or is, will not have been soon enough.

The Business Buyer Manifesto

As our own business grows, I find myself more frequently in the role of a business buyer. It is a stark reminder of why we do what we do at Artesian.

CC Bloom Syndrome

A meeting with a potential supplier, only a few days ago, was a classic example of what will now be forever known to me as  CC Bloom Syndrome, a behavioural trait described by Forrester’s Scott Santucci in his blog post Closing the Divide Between Sellers and Executive Level Buyers: A Plea ! Three colleagues and I sat through a forty five minute demonstration peppered with questions and answers. Our time had been well spent and having done a great job, the pre-sales consultant handed back to the seller. At this point we were asked how we would now rank their product against others we had seen.

The preceding highly interactive session had revealed much about our specific needs. We’re an interesting company, in a growth space, tackling a new market, well funded and introducing new systems and processes around old ones that we are outgrowing.  I didn’t understand why he didn’t have more questions about, errr, us. Instead, like the character CC Bloom in the film Beaches, we were asked Anyway, that’s enough about us, over to you, what do you think about us?

The first five thesis of the Business Buyer Manifesto

Our seller hadn’t appreciated that the world has changed. He hadn’t figured out what our business, a business that has social selling at its core, would want from a seller. Irony upon irony.

In a world where the dynamic between buyers and sellers has changed dramatically there are at least five new imperatives to observe, to underpin each and every customer interaction. I make no apology that the tone is inspired by the Cluetrain Manifesto one of the most prescient pieces ever published on the future of business.

  1. It’s the Buyers Process. I am not part of your sales process, you are part of my buying decision. Like many B2B buyers according to research from the Corporate Executive Board, by the time I contact you I am 57pc of the way through my decision. That’s right, if it was  a sales process, then how did I get more than half way through it without you?
  2. Buyers Needs are increasingly Transparent. We are all busy but I will have done some research on you, your products and your competitors. Many of my needs as a business buyer are identifiable from news about my company, from my LinkedIN updates, my tweets and blogging. It is all out there so return the favour.
  3. Do the Right Thing. I don’t need an introduction to your existing customers, I can  find them, their views and what it is to work with you today because all of these things are on-line. I will not  take any single view, rating, recommendation at face value. Connected buyers are more sophisticated in their use of social media than that. We are looking for patterns. Ask yourself, have you been doing the right thing for your customers? I will be.
  4. Be Authentic. Like most B2B buyers, according to a Forrester survey, I  have read three pieces of content for each carefully created corporate marketing piece you offer me. And, as a connected buyer I place more trust on the views of my extended network anyway. Don’t position, posture or handle my objections with pat techniques or scripts. Instead, be open and honest. I am not looking for perfect, few of us are. But I demand authentic.
  5. Exercise Leadership. Much is said about power shifting from seller to buyer but the new reality is parity, not control. I understand that wherever there is change there is sales. Sellers that exercise leadership help us challenge the status quo, provide answers and offer direction. You should be good at this stuff, you have been on this journey before.

Social Sellers

The social seller then is not waiting for a key word in the conversation so that she can launch into a sales pitch. Instead she is looking to understand, to learn, to help and to lead. The social in social selling is less about the media, the tools and the platforms and more about recognising the 5 imperatives. To serve the buyer and proactively interpret their need as a result of being immersed in their customers world.  Understanding, openness and authenticity earns trust and builds reputation that gives social sellers the right to take a leadership role taking them and their customers to a place of mutual success.

For those that continue to ignore the changing dynamic between buyer and seller, the Cluetrain will keep stopping … perhaps they should take a delivery.

Social Selling: Why 2014 is the Right Time

Social Success

According to a 2012 study from the Aberdeen Group, those that have adopted a social approach to selling are achieving far betters results than those that have not. Look at quota attainment, customer rentention even forecast accuracy and social sellers come out on top.

As we enter another New Year, social sellers are proving to be more successful.

What is Social Selling

Outwardly, Social Selling is about making use of social platforms to communicate with their prospects, customers, channel and colleagues. However it is not tools that define a social seller, instead it is how (and why) they use the tools that sets them apart.

Social Sellers have a Presence

According to the 2013 B2B Lead Generation Report by Holger Schulze, over 90% of B2B buyers begin their buying process online. Those sellers that have a presence and are contributing will be engaging with their customers far earlier than those that are not.  Those sellers that do not have a profile on the major social platforms  will not be noticeable by their absence. They will just be absent.

Social sellers maintain a professional on-line presence so that they, not just their companies, can be found when their prospects begin their buying process.

Social Sellers Make a Contribution

Maintaining a presence is just the start for a social seller. They want to be active in the communities they serve, educating, sharing, moving the conversation forward. Those that sell payment services spell out what new regulation might mean; those that sell unified communications explore how telepresence impacts an increasingly mobile workforce.

There is more to a Social Seller than their products and services. They are  focused on the challenges and opportunities that their customers care about.

Social Sellers Listen

Listening is the subject of countless books, is one of Dale Carnegies ways of influencing people and one of Stephen Covey’s habits of highly effective people. All social interactions begin with listening and the new world of social platforms is no different. By listening Social Sellers gain insights into their customer and understand their priorities. They listen carefully so that when their customers are ready to buy – they are ready to help.

Social Sellers Lead

Selling, in my view, has much in common with leadership. As sellers, we need to engage our buyers by knowing what their opportunities and challenges are. We can then offer a fresh and external perspective on how to meet them.  Sellers are  catalysts for change but buyers naturally have their own ideas of what works well, and it’s not easy to challenge the status quo.

Change comes from being a leader, from offering your customers new ways of thinking about their business. I have some issues with the  The Challenger Sale: Taking Control of the Customer Conversation by Matthew Dixon and Brent Adamson, not least of which is that I don’t believe sellers have a right to take control of the customer conversation. However, the key to Matthew Dixons and Brent Adamsons text is that sellers have a responsibility to challenge the established position.

Social sellers have lifted their game beyond understanding their own products and services. Instead, they understand their customers markets, invest in the issues their customers face and demonstrate thought leadership.

The Bottom Line:

Social Sellers are seeing early success. They are retaining their customers and making their numbers. They are not achieving this by simply being on LinkedIn, following Stephen Fry or Tweeting about their flight delays. They are  adapting to a new environment. They are adding value, building trust and creating meaningful relationships. What’s more they are unconstrained by limitations of time and distance because they are using online social platforms to extend their reach into new communities previously unaccessible to them. Most importantly though, they are establishing themselves in a new environment, an environment where their customers are already comfortable. Social sellers are getting ahead whilst those that refuse to see that their customers live in a new world are falling behind.

By the end of 2013, the voice of the social buyer grew stronger and louder. Were you around to hear them so that you can change in 2014?

Selling Trust: Social Selling in the Insurance Industry


Selling Trust

Trust

 

When I was asked to speak on social selling to a group that comprised senior executives from the insurance industry recently, the immediate and obvious subject was trustAfter all, It is difficult to think of an industry more dependent on trust.

With this in mind, I reached out to my network for ideas and I was directed towards three great reference points.

Firstly Stephen Covey

Stephen Covey, who I was privileged to see speak at Leaders in London many years before his sad passing, often spoke of the high cost of low trust. In fact he maintained that trust in all businesses was not just important but essential.

Secondly Amazon.love

The subject of trust is also at the centre of an email from the desk of Jeff Bezos shared by Brad Stone,author of a new book the Everything Store. One of the many revelations about Jeff Bezos is that he is somewhat preoccupied with the public perception of Amazon. Bezos wants Amazon to be a company that people trust and love rather than one that people fear and hate. Bezos wants to be an Apple, Costco, Nike or Google not a Microsoft, Goldman Sachs, JP Morgan Chase or Wal-Mart. Interestingly the justice department and JP Morgan Chase are currently haggling over if $13 billiion is sufficient for losing the trust of its customers during the 2008 financial crisis

Thirdly the 3i’s Study: Insurance, Intermediaries and Interactions

The IBM Institute of Business Value  study, Insurance, Intermediaries and Interactions (Dec 2012) took input from 8,500 consumers and 1,300 intermediaries in 17 countries. What they discovered was that trust in the insurance industry has been low since the studies were started in 2007. In fact, in the current study, 56% answered no when asked do you trust the insurance industry? Eek ! Interestingly no one in the industry is surprised by this and whilst is has increased (slightly) in the 2012 study no one in the insurance industry is happy about it.

The Price of Trust

The study also identified that trust is highly correlated to loyalty. The people in that room, all experts in insurance, could assess what churn, the consequence of a lack of trust, costs them far better than I ever could. However, I think it would be difficult to argue with Covey’s wisdom that there is ‘a high cost to low trust’.

Trust is Personal

What interested me though is that whilst customers don’t trust the industry, they do appear to trust people. Three quarters of respondents in another IBM study, Trust, Transparency and Technology (these studies are also exercises in alliteration) said that they did have trust in their personal insurance adviser. Consumers don’t trust the insurance industry but they trust the people they buy their insurance from.

In fact, more than half of those studied still buy from a person. In a time when there is less and less human interaction in business (think Amazon) it remains a foundation for insurance because of all the forms of interaction, we trust human interaction the most.

Personal Interaction has Changed

However, it can’t have escaped anyones attention that the way we interact has changed. Interaction is digital. Insurance customers are using social platforms as part of their buying process. More than 70 percent of study respondents use one or more social networks. They might ultimately buy from a person but the purchase is just one of many interactions. Like many complex products, there are a lot of interaction points. Websites, aggregators and increasingly, social media are replacing many of those face to face interactions.

Customers might not be concluding their final transaction on-line but they spend 60% (and more) of their time being influenced here.

Insurance Customers are better Informed

Consumers are not just interacting differently either. They are better informed than ever before. Before the Internet, complicated products and the difficulty in getting information (and sometimes in complying with regulation) kept insurance a sellers’ market. Now that insurance customers can easily find each other, and exchange experiences and ideas, the rules are changing. To create customer trust through interactions, insurers and intermediaries need to adapt. These are old rules but new tools

Who is responsible for trust?

So who (insurer or intermediary) is responsible for building and maintaining trust? Whilst much of maintaining a personal relationship  is something that intermediaries have been doing well for a long time  it would seem that it is not that simple.

The 3i study refers to a rare experiment in behavioural insurance conducted in 2011. The experiment was carried out at the Institute of Insurance Economics in Switzerland. One of the findings of the study was that customers see a perceived lack of quality as a reflection on professionalism and training i.e the fault lies with the intermediary and the insurer. With issues of reliability, customers see this as a reflection entirely of the insurer. Even a great intermediary cannot sell a poor product.

The experiment shows that the personal side of being a trusted adviser is only one part. Maintaining professionalism, knowing customers personally and treating them personably is something the vast majority of intermediaries have been doing for as long as they have existed. But intermediaries cannot do this alone. In fact the report concludes with a recommendation for insurers.

Insurers have to provide support. That can happen through training, through a corporate culture of customer first, through good and consistent products and messaging, and, last but not least, by giving intermediaries the tools and data they need to serve their clients well.

It would seem that even in a highly intermediated market trust is everyone’s responsibility.

Death of a (Maverick) Salesman

‘The only thing you got in this world is what you can sell and the funny thing is you are a salesman and you don’t know that’, Arthur Miller, Death of a Salesman, 1949

Sellers Beware

In Daniel Pink’s To Sell is Human, Pink suggests that buyers and sellers have moved from caveat emptor to  caveat venditor.  Sellers are no longer the first point of contact when buyers want to know about our products and services. Google is. Sellers are not even going to our web pages. They are going to their networks.

According to a study from the Corporate Executive Board, buyers are almost 60% of the way through their decision before they even speak to a seller. They don’t need sellers until much later in their purchase cycle. They are better connected through social platforms like LinkedIn and Twitter than they have ever been before and they trust each other before they trust sellers.

Today, buyers have reviews, ratings, and comparison shopping at their fingertips, sellers have more incentives to be fair and honest. Seller behaviour must be about doing the right thing or “seller beware.”

Behaviour versus Performance

Think about what this means in terms of measuring not only the performance of a sales team but their behaviours.

Artesian Maverick Quadrant

In the diagram above is a set of quadrants that demonstrates how sales managers have historically managed their team. On the y axis is performance, on the x axis behaviour.

In the good performance/good behaviour quadrant are performers. If we do anything with performers it is about them helping and coaching others to their level. They set the benchmark for the rest of the team.

In the poor behaviour/poor performance are non-performers. These are likely to be going through some performance improvement plan.

An enlightened sales manager will work with TryersTryers are doing all the right thing but not getting the right results. With expert coaching, time and attention their performance usually follows.

The Maverick has left the building

Finally, there is the Maverick quadrant. These sellers exhibit good performance but poor behaviours. Let’s face it, Mavericks, have historically been tolerated. Their contribution to the quarterly numbers is tough to resist. In any case, their performance will eventually drop at some point so sales managers  play a waiting game.  When it plummets, and given that the Maverick’s underlying behaviour – it will, they are unceremoniously exited.

However, the damage has already been done.

If we are lucky, their short-termism was only making them unpopular with their co-workers. The Maverick will often be heard hurumphing around the office complaining about the ‘sales prevention department’ which was variously finance, services, sales support or whoever it is that has identified a flaw in their latest ‘deal’.

Equally as likely though, they are mis-selling or overselling and creating a legacy of customer problems and problem customers.

Few customers keep these problems secret. With complete control of a sales cycle though, sellers could steer around the debris. In a socially enabled world, not so much. And empowered customers are sharing it with their network. Their always-on, global network. A tweet or a LI status update can reach tens of thousands of prospective customers. Competitors too. It is also a permanent record. Some of that buying cycle (the 57% invisible to the seller) can be used to find out what existing customers think. Good selling behaviour leaves behind a trail of satisfied customers and positive comments. Poor behaviour also leaves a trail. The maverick can no longer be tolerated. Caveat Venditor.

Better Selling Is …

In To Sell is Human, Pink also demonstrates that the networked age requires more not less sellers. More of us sell than ever before and those that don’t have to persuade, convince and compel as part of an increasingly creative and collaborative workplace. Pink calls it non-sales selling. We all need to be better sellers. However better can no longer be defined by the numbers. It can not be determined by performance alone. Instead, it must be measured by how we conduct ourselves, by our behaviours.

In short, to be better sellers we must be better humans.

Social Selling: Is it Really New?

Social Selling in the 60’s

I find myself speaking a lot on the subject of Social Selling but whilst the technology, the media and platforms are new, much of what we mean by Social Selling is not new at all. As a living and breathing example of this let me refer you to businessman Harvey Mackay who I heard interviewed recently by Dan Pink in his excellent podcast series Drive Time.

Mackay was born in 1932 so was in his 70’s when FB was invented. He has, and I hope he doesn’t mind me saying this, been around the block. A few times.

In his first job as a young seller he nervously approached  an older colleague called Mr Carpenter for some advice. Mackay asked  ‘How long after you start calling on a sales prospect do you stop?’ Mr Carpenter, apparently one of the most experienced in the company (Mackay referred to him as an ‘old grisly’), replied. ‘it depends on which one of us dies first’.

I am not sure I would describe Mr Carpenter as a Social Seller (because I don’t have the data not because of his obvious persistence) but I have no doubts about Mackay. Mackay is, by any reasonable definition, a Social Seller.

Where have all the Sellers Gone?

In 1959, Harvey Mackay purchased an insolvent envelope manufacturing company with just twelve employees, three outdated folding machines and one printing press. Today, his company, Mackay Envelopes produces 4 billion envelopes a year, has $100m revenues and employs over 400 people in what I think we can all agree is a highly commoditised and difficult market.

However, he is not only the founder and CEO of Mackay Envelopes, he is also a New York Times best selling author and columnist. In fact he has sold more than 10 million books.

If you met him today  and asked for his business card though, it would say none of those things. It would not say President, CEO or Author. It would say ‘Harvey Mackay, Envelope Salesman’. This is as much borne in pride for his profession as it is humility. In a world of Account Executives, Product Advisers and Outcome Managers, Mackay is a salesman. This is because, for Harvey Mackay, being a salesman is a noble profession. It means being in service to his customers.

The Social Imperative (is what is really new)

Fifty years before the invention of LinkedIn or Twitter, Mackay realised that before you could have a network of trustworthy and valuable contacts, you first had to build a network of people who value you and whose trust you have earned. His book, “Dig your well before you are thirsty” is a testimony to this approach.  For me some of the examples are definitely ‘of their time’. Social mores have moved on somewhat. That being said, what Mackay intuitively knew was that selling required an unrelenting customer centred focus and a strong sense of ethics.

It would be difficult to argue, fifty years on, that Mackay plays anything but the long game. And  played it successfully. HIs approach is one of doing the right thing. Mackay focused first on his own behaviour and the results followed. He is a master of aphorism and he articulates this as ‘Conduct  your business as if your Mother is watching’

So there is nothing new in this approach. Successful sellers have always been social in the way they conduct business. What is new is that a customer centered, buyer-centric approach is no longer optional. The shifting dynamic between buyer and seller has moved the power more and more towards buyer. Buyers are better informed and better connected than they have ever been before. The increasing use of social platforms, ratings sites and online reviews continues to enable and empower buyers and forces sellers to do what they should always have been doing. What Harvey did.  And if you think it is just B2C, think again. Take a look at Glass Door as only one example. As Dan Pink puts it in to Sell is Human, it is no longer Caveat Emptor. It is Caveat Venditor. Seller Beware.

Separated by Decades, United by Purpose

Harvey Mackay and the Social Seller have much in common. Whilst they are separated by decades, they both agree that success means being a better seller and a better human. In a world where power has shifted from seller to buyer they both have to conduct their business as if their Mothers are watching.

The future of Sales is to Stop Selling

Buy One, Not Two, Half Price

I am currently working with a business that goes to great lengths to help their customers buy less of their product. That’s right, their sales reps will spend time getting to know you, understand your business, demonstrate how they can help and then do what they can to shrink the order size. Less is less.

They have big ambitions and visionary leadership as their sector, the water industry, deregulates. What is most interesting to me though are the lengths that the sales team will go to, to help their customers save water. Of course, they are also selling products and services to achieve this but it is clear that the conversations, the processes, the products are utterly driven by customer and environmental savings.

Do the Right Thing

The other thing that makes this business remarkable is the level of employee engagement. According to the latest Gallup survey seventy percent of American workers are disengaged. Not so with this business. Talk to the team for more than a minute and their enthusiasm is inescapable. They believe in their leadership, their business and most of all their customers. A common phrase in all my conversations with them was ‘doing the right thing’. One young and ambitious seller ended our discussion with the observation that she had moved jobs three times in the last five years but she wanted to stay here ‘forever’. They are on a mission and she is along for the duration.

Serving Not Selling

I also spend a great deal of time in the financial services sector. This industry is, quite rightly, going through profound change not least of which around legislation and compliance. Those that sell in this business can effectively no longer be incentivised through commissions. Instead, they are managed around their behaviours. The sector is being forced to find new ways to track and report that they are doing the ‘right thing’ for their customers. There’s that phrase again.

Speak to their sellers (though none of them will have sales in their job title) and they will  tell you that they are glad of it. It would seem that they wanted to do the right thing by their customers all along and old systems of commissions and targets got in the way. In fact that might be a bit of an understatement.

Of course, sellers that do not really sell is nothing new. The pharmaceutical sector has  been run in this way for years. Sellers create awareness and educate in a role that is part marketing and part sales. To many quota carrying professional sellers this probably looks like an easy ride. No one is promising a set of steak knives as first prize and unemployment as second. In reality though, their days are long, they have customers to serve and they are being asked to do more with less like the rest of the business world. Easy is what someone else’s job looks like until you have to do it.

Selling, Just Stop

Whilst  commissions and compensation plans based solely on shifting product are illegal in some sectors,  I don’t see this changing everywhere anytime soon. Nevertheless, legislation is sometimes where we see new social norms emerge. In an age of information parity and increasingly connected buyers, we are seeing smart sellers putting their customers agenda at the centre of their business even if it means selling less. Increasingly we are seeing the sales agenda (and yes Challengers too) focus entirely on ‘doing the right thing’. 

Novelist William Gibson is quoted as saying that “the future is here, it is just unevenly distributed”It looks like the future of sales could be about helping customers buy and to stop selling.

Social: The Fifth Age of Selling

Professor Derek A. Newton of the Darden School at the University of  Virginia is credited with suggesting that there are four ages of selling. The ages start with music man and move through animated catalogue, magic formula and finally problem-solver.

The music man (or woman) was most successful before the first world war but you will still bump into them from time to time. For them it’s all about personality and charm. Like them and you will like the product or service they are selling. Whatever it is, it will cure what ails ‘ya without knowing the first thing about ‘ya or your ailment.

As industrialisation made complex products available and affordable to the masses the music was drowned out by the monotone of the animated catalogue. There was nothing this walking brochure didn’t know about the features and functions of their vacuum cleaner and why it was better than the competitors. Knowing so much about their product left little room for understanding their buyers. After all, everyone needs one right? and there’s has more functions and features than anyone else’s.

Times though kept changing for the our sellers. Families changed as did business buyers. Consumer buying decisions no longer fell exclusively to Dad and the corporation was growing in complexity too. Sellers reacted with process, a magic formula. A seller need only walk all the people involved in the purchasing decision into a funnel and then through a series of steps before they would inevitably drop out the other end with their wallet open.

The dominant form of selling today, at least where there is any complexity requires Problem solvers. These are more like consultants delivering value well beyond their predecessors. This is epitomised in selling approaches like SPIN, a research based selling approach from Huthwaite.

Focus

What is surprising about this evolution is how long it took to focus on the buyer, the customer. It was all about seller for the music man, all about the product from the walking catalogue and all about the process for the magic formula. In fact it wasn’t really until we saw the rise of problem solvers that we even noticed the buyer. We finally noticed that there was a customer in the room at all. Even then it was, on occasions, a narrow focus. It was about their relationship with the seller or a limited  set of needs based entirely on the sellers products and services.

The Fifth Age: Social Selling

Today, buyers are better informed than they have ever been before. According to Forrester buyers will consume three pieces of   content that they found themselves for each piece they get from a vendor. They are better connected too. Social tools connect them with those that have similar problems and with those that have already tried to successfully or unsuccessfully solve them. And they trust each other more than than they trust sellers. In fact research from the Corporate Executive Board in partnership with Google suggests that buyers are nearly two thirds of the way through their buying process before they even contact a seller. 

The final age of selling is upon us and it has put the buyer in the drivers seat. The buyer has wrested back control of their decisions. Social Selling is really Social Buying.

The Sales Process; SPIN or SPIV

Redrackam

Last year I posted and tweeted a fair amount on the subject of sales process. Many, it seemed to me, were all too focused on the success of the seller with scant regard to the buyer. I argued that even more enlightened and consultative approaches have a problem of perspective. Buyers don’t believe they are ever in a selling cycle, they are in a buying cycle. Here, I am inclined to agree with thinkers like Brian Solis, Gary Vay-ner-chuk (sic) and Doc Searls, author of the Intention Economy: When Customers Take Charge, a work that describes a future that turns Customer Relationship Management upside down into Vendor Relationship Management.

With some ‘spare’ research time over the festive period I took a deeper look at the grandfather of consultative selling, SPIN.

SPIN, the grandfather of consultative selling, is based on extensive research by Huthwaite International and was first published in 1987 by Neil Rackham, Huthwaite’s founder, sales process veteran, NY Times best seller and regular speaker on sales and marketing. Anchored in objective studies, it has stood the test of time. It remains relevant well after it’s late 80’s origins when it probably challenged sales professionals with assertions that included high pressure selling results in less, not more, success.

ABC

The clarion call of traditional selling approaches is ‘ABC: Always be Closing’. Photocopier and vacuum cleaner sellers in the 80’s were brow-beaten (some just beaten) by their managers with repeated questioning that boiled down to ‘did you ask for the order?’. The assumption was that those bold enough to push for the order, will get it more often than those that wait for the right moment. Close harder and faster as a seller, the theory goes, and you will sell more. Huthwaite, however, saw no such correlation when they conducted studies in closing techniques like the assumptive close (‘when would you like to take delivery Sir?’) In fact on larger and more complex products and services, they saw a negative correlation between successful sales and the use of closing techniques. What’s surprising is that it needed any evidence to prove what most of us know instinctively; that few go back for more strong-arm selling.

Instead, Rackham proposes obtaining commitment or advances that progress the sale by degrees through stages that include investigation (the customer) whilst demonstrating capability (of the seller). Instead of applying pressure or leaving with unclear objectives (at the other extreme) he suggests a balanced approach. He proposes obtaining the highest realistic commitment the customer is able to give. Successful sellers, Rackham cautions, never push a customer beyond these achievable limits.

In fact Rackham turns the focus around. Instead of ‘asking for the order’ as quickly and as forcefully as possible he argues that closing is entirely dependant on the earlier stages of the customer engagement, notably putting an onus on the seller to rigorously investigate the customer and their needs in an extended prospecting and business value development phase.

NEEDS ARE A MUST

Needs evolve through distinct stages. They start as a fall from being fully satisfied but perhaps only marginally. We are discontent – but only moderately so. We will not act at this stage unless our dissatisfactions or desires more are more clearly understood.

This is the journey from implied needs (the process is not quick enough or takes too long) to more explicit ones (we need something more reliable because 50pc of our sales are on-line and increasing) Implied needs might be buying signals in smaller sales but certainly not in larger ones. Rather, they are a starting point. They need to be uncovered and developed. In fact, in the absence of explicit needs both buyer and seller have not done the math. They don’t understand what Rackham calls the Value Equation. This, stated simply, is that the seriousness of the problem must be greater than the cost of the solution. If it isn’t there will be no change to the status quo, no decision, no action, no purchase, no sale.

ANYWAY THAT’S ENOUGH ABOUT YOU

At some point, all sellers will want to talk about themselves, their company and their product. Actually, many can do this a little too early and a little too often. SPIN is about reducing this to a minimum, about demonstrating competence in solving the customers problems and addressing their needs. More specifically, rather than talking about product features (what SPIN calls advantages) which only meet implicit needs the seller spends the time identifying benefits that will address explicit needs.

Rackham’s research demonstrates that those talking about features and benefits are less successful. He illustrates this with a familiar scenario, the new product launch. Just before it is released the sales team receive extensive training in all the new features, flashing lights, bells and whistles. Unsurprisingly, this is what the sales team excitedly take out to their customers. What happens next is that sales invariably don’t meet expectations. Sometimes they tank. Everyone is surprised that their wunderkind hasn’t worked out. Then, as they shake their collective heads in confusion and disappointment there is often an unexpected upsurge. Customers have started buying again because the shine has worn off the product and focus has retuned to customer needs.

QUESTIONS QUESTIONS QUESTIONS

Rackham proposes a framework for asking the right questions to uncover implied needs and to develop them into explicit ones;

Firstly situational questions like ‘what are your revenues?’ and ‘how large is your sales team?’. These are all good background for the seller but of least interest to the buyer. Indeed they will quickly fatigue of this type of question.

More interesting questions might be ‘How is that working out for you?’, ‘Are you finding it easy to get the information you need? or ‘Does your budgeting process complete on time or frequently overrun?’. Obviously, these are questions that reveal business problems and uncover implied need. So far, so good but it would appear that many professional sellers stop here at a point.

Here, Rackham encourages sellers to drill into the need with implication questions to make the implied needs more significant and more urgent. At this point the seller should have the value equation at the forefront of their questions piling up implied needs until they far outweigh the cost of their solution. Implication questions uncover what other sales approaches call consequential pains. An example might be;

Q. How long does it take to pull the management report pack together?

A. No time at all really, we ask one of our finance analysts to do it.

Q. Do you know how long they spend on it?

A. They tend to pull it together in a single week, it’s not really a problem.

Q. All week?

A. Yes, I think so. Other things tend to go to the back of the queue in the last week of the month so I know it is only a week but all week.

Q. But they do at least get it done in a working week and in time for the management meeting?

A. Well, I have heard that they can end up working some of the weekend to complete it. It’s important to our management team and they know it.

Q. Really, how much of the weekend?

A. Well, now you come to mention it, they have started referring to it as the ‘TOYS Report Pack’ for ‘takes over your Saturdays’

Q. [Laughs] Can it involve more than one Analyst?

A. Yes, I think so. And now I think about it a little more maybe the S in TOYS could stand for Saturday or Sunday or both!

Q. [Laughs again] Is there a high turnover in Analysts?

A. There can be, it is a high pressure role because we run our business on information. I guess frequent working weekends does not help either.

At this stage the discussion has opened up into one about the cost of staff retention, the importance of management information and the implications of deferring less urgent, but still important finance activity. We can sometimes be oblivious to the business problems that surround us, we grow used to them, we mentally discount them like we do the creaky door or leaking tap until someone points them out to us afresh.

The problem with this is that implication questions focus on problems and leave customers feeling negative. The seller then should move on to need payoff questions such as ‘Is it important to solve the problem?’, ‘What would you do with the extra information if you had it?’ or ‘How would a faster machine help you?’. These are focused on the solution and what the customer’s world would look like if it were fixed. As the discussions about need payoff progress the buyer is also describing the benefits. What’s more, says Rackham, the buyer is more predisposed to your solution because they have shared their own perspective on the benefits of the sellers solution. The process of exploding implied needs into explicit ones would not be out of place in a consulting project with it’s focus on process and identifying the value of moving from the ‘as is’ to the ‘to be’.

There is a shift in SPIN selling from seller to buyer which is to be applauded. For example, it takes a completely contra view to objection handling. Some sales methods perhaps based on ‘bad medicine’ principles assert that the more objections a buyer raised, the more likely they are to buy. After all, they argue, each objection is a mini-selling opportunity. SPIN is about ensuring the dog didn’t eat your homework on the customer’s explicit needs. That way there are far fewer objections and those that remain are dwarfed by the need payoff.

SPIN OR SPIV?

Apparently Rackham preferred the term ‘value’ over ‘needs payoff’ but that would have made it SPIV selling. The term spiv has negative connotations, at least in the UK, so it didn’t make it into the final text. I am not sure spin has a positive connotation in the UK either thanks to Malcolm Tucker and Alastair Campbell.

It was interesting to get a perspective from my 21 year old Son who was listening to the audiobook in the car with me at one point. As he got out he commented that the author seemed to regard people as ‘cattle’. I am sure Rackham would emphatically reject this conclusion but it provides an insight into how those outside of the community of professional sellers react to language that objectifies buyers. In one jarring statement, Rackham describes how he has no problem with the use of closing techniques on unsophisticated customers. I emphatically do have a problem with this. Assuming and acting on commitment where there is none is wholly unacceptable.

One of the values (or need payoffs?) of approaches like SPIN is the very fact that they are a process. A prospective buyer is, by definition, faced with uncertainty. A sales process brings structure to their decision making, guiding them step by step through a universe of possibilities towards certainty and, ultimately, an outcome. All good. The problem for me is that even enlightened approaches like SPIN don’t go far enough. As buyers become more social and power shifts from process to people and from corporations to individuals  then the process will inevitably become increasingly buyer and not seller centred. Terms like objection handling and closing will be confined to productions of Mamet’s Glengarry, Glen Ross.

SPIN is intended to drive out the explicit and quantifiable need of buyers and Rackham regards good sellers as problem solvers. This is commendable but it is no longer optional. As buyers become more social and power shifts from process to people and from corporations to individuals then the process will become increasingly buyer centered and, as sellers, we have no choice in the matter. Increasingly, in the networked age, processes like SPIN will not seem consultative enough. In fact, we will know we are there when the role of seller is indistinguishable from that of a consultant. It can’t come soon enough.

Sales Cycles Suck

Sales cycles are a preoccupation for sales professionals? Where is the deal in relation to the cycle? Is the prospect progressing through the cycle as forecast? Organisations invest thousands of man hours in training and countless more in implementing them. There are more than two hundred and fifty titles on Amazon alone that cover the subject. They can be strategic, complex, intuitive even scientific. Take a detailed look at the range of books on offer and you would be forgiven for thinking that most sales cycles are broken. The majority of materials are all about simplifying, mastering, rethinking, shortening and taking control of them. In other words, sellers feel that theirs are too difficult, too long or out of control.

The problem, however, is more fundamental. They suck. They generalise behaviours on the assumption that if you put prospective buyers in a wide funnel at one end and take them through a series of qualifying and processing steps that they will pop out the other end and the cash register will ring. Sounds logical enough but they assume that it’s all about the seller. The buyer is reduced to a target, an object, a mark. If you are not offended by that you should be.

I for one, don’t want to be in their sales cycle. If I am in any cycle, I am in my buying cycle.

A rep from an alarm company once called me after I chose his competitors product.  As far as he was concerned, he had the better product, a competitive price, had answered all my questions and managed all my objections. He had run the perfect ‘sales cycle’ and yet I hadn’t behaved in the way that he predicted. He had probably forecast me at 100% to his manager. His frustration was palpable. I went with a slightly more expensive option even though the products were broadly comparable. It made no sense to him and he told me so. The trouble was his competitor had been recommended to me by a trusted friend. It aced anything he could say or do and it wasn’t on his sales cycle. However, it was on my buying cycle.

Professional sellers often argue that they don’t mind being in someone else’s sales process at all. In fact many claim they actually like it. However, probe further and it becomes clear that this is out of a respect for their own craft. It’s rather like a musician being asked up from the audience to guest with the band. They like being sold to because they get the rules, understand the techniques and can take an informed and objective view of someone else’s performance.

Most of us though find them awkward, unsatisfactory and disagreeable. They are are built from the sellers perspective. They are all about closing and commissions. The buyer is someone with a business problem that needs a solutions but this is incidental to the fact that they are a budget holder and can make a purchasing decision. Not that a sales process is a bad thing. Not at all. It is only sensible to make sure that expensive resources requires to implement sophisticated solutions are allocated to the right buyers at the right time. However, any sales approach that doesn’t have the buyer at it’s centre is fundamentally flawed. Unless the sales cycle is unambiguously built around the needs of the purchaser to the extent that at it’s core, it is indiscernable from the buying cycle. It a sales cycle that sucks.