Sales Influence
Finding the Why in (How People) Buy
Victor Antonio
Sales Influence
Finding the Why in
(How People) Buy
(Volume I)
By
Victor Antonio
1st Edition
Sales Influence Publishing
3
Sales Influence
Sales Influence Edition
Copyright © 2011 by Victor Antonio
Published by Sales Influence Publishing
All Rights Reserved. No part of this publication may be produced in
any form or by any means, mechanical or electronic, including
photocopy and recording, or by any information storage and retrieval
system, without the permission in writing from the author or publisher;
exceptions are made for brief excerpts used in published reviews.
This publication is designed to provide accurate and authoritative
information in regard to the subject matter covered. It is sold with the
understanding that the publisher is not engaged in rendering legal,
accounting, or other professional services. If legal advice or other
expert assistance is required, the services of a competent professional
should be sought.
This Sales Influence Publication Edition is by published by
Victor Antonio, Chief Sales Officer
11770 Haynes Bridge Road,
Suite 205-501
Alpharetta, Georgia 30004
www.SalesInfluence.com
Printed in the United States of America
First Printing: February 2011
Library of Congress Cataloging in Publication Data
Antonio, Victor
Sales Influence – Finding the Why in (How People) Buy
ISBN Pending (U.S.A.)
1. Business 2. Sales
Finding the Why in (How People) Buy
Victor Antonio
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Sales Influence
Victor Antonio, Founder of Sales Influence
From living on food stamps and
welfare to becoming the CEO of a
high-tech
Antonio
company,
is
proof
Victor
that
the
American dream of success is
alive and well. A poor upbringing
in one of the roughest areas of Chicago didn't stop Victor
from earning a B.S. in Electrical Engineering, then an
MBA, and building a 20-year career as a top sales
executive and manager.
Prior to being CEO, Victor was President of Global
Sales and Marketing for a $420M company, and Vice
President of International Sales in a Fortune 500 $3B
corporation.
He was selected from over 500 sales
managers to join the President’s Advisory Council in 1999
and 2000 for excellence in sales and management.
He has conducted business in Europe, Asia, Australia,
Latin America, the Caribbean, South Africa, and the
Middle East.
Finding the Why in (How People) Buy
Victor Antonio
Today he trains salespeople to achieve quicker-selling
results with his program Sales Influence.
Victor is a
dynamic trainer who specializes in taking apart complex
subject matter and breaking it down to simple, applicable,
everyday strategies for sales success. His workshops are
loaded with sales strategies backed by research in the field
of consumer behavior.
What makes this program different from others? Sales
Influence isn’t about “how to sell”, but about “how people
buy” and the thought processes that drive their decisionmaking behavior. When you understand how people buy,
it’s easier to sell to them. That’s a new approach to selling!
For more information go to: www.SalesInfluence.com .
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Sales Influence
Finding the Why in (How People) Buy
Victor Antonio
Table of Content
Chapter 1: The 2.5x Price Magnifier
Chapter 2: Value Attribution – The Discount Deception
Chapter 3: The Tupperware Effect and Why We’re
Influenced to Buy
Chapter 4: How to Prime the Prospect to Say Yes
Chapter 5: DBM Factor – Increase Your Close Rate by
10% to 20%
Chapter 6: How to Sell Your Side of the Story
Chapter 7: How to Get Bigger Tips and Higher
Commission
Chapter 8: How People Lie in a Social Setting
Chapter 9: How to Sell Without Using Closing Strategies
Chapter 10: Customer Penetration and Up-selling
Chapter 11: How to Prevent Price Point Erosion
Chapter 12: Show and Sell – Why Displaying Your
Products Can Increase Sales
Chapter 13: Price Strategy – When to Consolidate or
Partition Pricing to Win Deals
Chapter 14: Lowering Sales Resistance – The Contrast
Principle
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Sales Influence
Chapter 15: How to Sell More Using Decoy Pricing
Chapter 16: Verbal Gifting – The Ultimate Rapport Builder
Chapter 17: The Endowment Effect – Getting Your Clients
Loaded
Chapter 18: Sales Positioning #1: Redefining the Need
Chapter 19: Sales Positioning #2: Highlighting a Need
Chapter 20: Sales Truth Serum for Buyers Who Lie – How
to Get Accurate Information
Chapter 21: Nodding – Pumping the Prospect for More
Information
Appendix A: The Up Side of a Down Market: 10 Reasons a
Recession is Good for Selling
Appendix B: Seven Ways to Spot a Sales Phony
Appendix C: Improving Your Sales Performance Model
Finding the Why in (How People) Buy
Victor Antonio
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Sales Influence
Chapter 1
The 2.5x Price Magnifier
In 2009, when gas prices in Atlanta unexpectedly rose to
almost $3 a gallon, the media constantly reported on the
dramatic decrease in the amount of driving people were
doing.
Increasing gas prices were modifying consumer
behavior.
Interestingly enough, when the prices later rose to $4 a
gallon, aside from the complaint of high gas prices, it really
didn’t make much more of a difference, since consumers
had previously altered their behavior and were already
driving less. Nonetheless, the media continued to dredge
up and report any story, no matter how tangential, on how
Finding the Why in (How People) Buy
Victor Antonio
the increase in gas prices was affecting the daily lives of
Americans.
The gas shortage was further exacerbated by this
constant media bombardment showing images of gas
stations running out of gas. Viewers quickly got into their
cars and went to the nearest gas station to fill up or top off
their gas tanks, fearing that if they didn’t, they wouldn’t be
able to go to work the next day, or worse, drop off and pick
up their children from school.
This mindset created a multiplier effect.
If drivers
would have allowed their gas tanks to remain only partially
full, as they usually do, there would have been more gas to
go around. But the thought of not having gas triggered the
“scarcity” fear button in most, and we couldn’t help
ourselves. We had to keep our tanks full regardless of how
it affected our neighbors.
Even more disturbing was our disregard for how much
we were paying for a tank of gas. Our willingness to pay
was shifted upwards, and although we grumbled, we did it
willingly in lieu of altering our behavior. In some regions
the price for gas rose to almost $4 per gallon. Even then,
we still went out and filled our tanks with gas that a few
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Sales Influence
weeks earlier was half the price. No matter! We needed
gas, and we were willing to pay the going price and top off
our tanks unnecessarily to reduce our risk of running out.
In the span of a few weeks, we went from rational,
reasonable-price-paying gas consumers to irrational, buyat-any-price consumers.
Then, as gas prices began to drop, something very
interesting happened.
The media weren’t reporting gas
price decreasing with the same fervor as they did when the
price was increasing. In fact, by the time gas dropped
below $2 a gallon, the media had all but forgotten about the
“gas
problem”
America
was
having,
and
had
schizophrenically moved on to the next crisis to report.
Why?
Because normalized gas prices were no longer
grabbing America’s attention.
The anger at the oil
companies and the scarcity hysteria that came to represent
this crisis had subsided. We all went back to having our
gas tanks partially filled. The genie we call “scarcity” was
back in the bottle.
As a country and as Americans, we went on one heck of a
rollercoaster ride in terms of pricing. What’s fascinating is
Finding the Why in (How People) Buy
Victor Antonio
how our minds were able to quickly rationalize the need to
pay higher prices in order to ensure our safety and security.
And when the prices returned to normal, we went back to
having our tanks partially filled as if it had all been a bad
dream.
This psychological drama we experienced may best be
explained by the work of Daniel Putler, a former researcher
for the U.S. Department of Agriculture. Putler is a rare bird
indeed; he tracked and studied, of all things, egg sales in
California. In his studies, Putler discovered an interesting
dynamic in the buying habits of consumers when egg prices
fluctuate.
He noticed that when the price went down, consumers
bought more eggs. No surprise there. Economists would
say that there is a symmetric relationship between the price
of eggs and consumers’ willingness to purchase them at
that price. Said another way, when price goes down, it
follows that consumer buying would go up symmetrically.
So symmetry exists when one thing goes up and the other
goes down in equal magnitude.
What Putler also observed was that when the price of
eggs went higher, consumers cut back on their buying by
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Sales Influence
two and a half times (2.5x the increase). He found that
consumers overreact when they see a price increase. Putler
had encountered the rule of asymmetry in egg sales.
Asymmetry exists when one thing goes up (or down) and
the other goes in the opposite direction, but with greater
magnitude.
Putlier found what economists have known for quite
some time: price increases act as judgment magnifiers.
Buyers are more averse to the pain of loss than they are
receptive to the pleasure of gain.
Taking Putler’s finding beyond eggs, consider your
personal satisfaction with cash in your pocket. If you were
to find a $50 bill, you’d feel really happy. But if you lost
$50, you would feel two and one half times worse
compared to your joy of having found a $50 bill. This
aversion to loss (i.e., not wanting to feel the pain of losing
something) causes people to make irrational decisions.
In the case of gas prices going up, we could have
reacted by not buying gas at all. In fact, folks who didn’t
have to drive to work did just that; they stopped driving
altogether and found alternative means (e.g., walking,
riding a bike, car-pooling, taking a metro train). The pain
Finding the Why in (How People) Buy
Victor Antonio
of paying a dollar or two more for gas caused them to
overreact and not buy gas at all.
One could argue that paying a few dollars more for a
gallon of gas isn’t that much, and it still outweighs the
inconvenience of using other alternatives to get to work.
As rational as that may sound, people often are irrational.
The increase in price may cause them to react just as Putler
predicts – asymmetrically.
Raising Your Prices
What do abrupt price changes in gas and eggs have to do
with selling other items in today’s market?
This
phenomenon may explain a client’s irrational behavior
when we change the price of our product by a small
percentage. If you give a client a price break, she may feel
some joy or sense of satisfaction, and may buy even more
from you.
But beware the asymmetric effect of a price increase!
If you do raise the price of your product, keep in mind that
the client may overreact and experience two and a half
times the dissatisfaction with you (or your product) and
may choose to go elsewhere.
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Sales Influence
Clients suffer from both memory distortion and an
aversion to loss. They tend to forget quickly when you
give them a great price or discount, but they won’t forget
the 2.5x pain and discomfort you caused them when you
increased the price. And they also tend to want to avoid
feeling the pain of losing something – in this case, a good
price.
In short, price discounts may work in your favor for the
short term, but they do have negative long-term
consequences – namely precedence. Once you give a client
a discount, the client will come to expect a discount every
time she buys.
On the other hand, a price increase may have a 2.5x
magnifying effect on how customers will react to your new
pricing, and thus work against you.
An increase of X
percent may cause clients to reduce their order sizes,
thereby impacting your bottom line. Giving a discount is
easy; raising your prices is risky.
Putler’s egg example is a good reminder of how
businesses should weigh the pros and cons of raising a
product’s price. It may turn out that raising your product’s
price by 5% may reduce your overall sales volume and
Finding the Why in (How People) Buy
Victor Antonio
impact your bottom line revenue by a 12.5% drop (i.e., 2.5x
multiplier) and that would be EGGScruciatingly painful.
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Sales Influence
Finding the Why in (How People) Buy
Victor Antonio
Chapter 2
Value Attribution – The
Discount Deception
University of Ohio conducted an interesting study that you
might find of value, especially if you’re a proponent of
giving product or service discounts.
The school had a
theatre department that sold season passes for ten shows
that were put on during the semester. The folks at the
university wanted to test the effect of discounted ticket
prices on the show’s attendance for that particular semester.
When a person approached the box office to buy season
tickets for $15, he was offered one of three types of season
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Sales Influence
passes. Out of the 60 students in the test group, one group
was sold a season pass at full price.
The second and third groups were sold season passes
with discounts of $2 and $7, respectively. The two groups
receiving the discounted passes were told they were
receiving a promotion discount from the theatre company.
All three groups had access to good seats.
The folks at the University wanted to see if offering
discounted passes, as opposed to full price passes, would
make a difference in the attendance for the ten shows. The
results were as one might expect; those who paid full price
showed up more often than those who received discount
passes.
On first glance, you might attribute this attendance
effect to sunk cost; those who paid full price wanted to
recoup their investment (i.e., get the most out of their
passes by going to the performances) after having spent
$151.
1
“The Psychology of Sunk Cost, “ by Hal Arkes and Catherine Blumer, published in
Organizational Behavior and Human Decision Processes 35 (1985)
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Victor Antonio
The proverbial fly in the empirical ointment was that
those who received the $2 and $7 discount missed equally
as many performances. If the sunk cost was truly in effect,
those who received only a $2 discount should have
attended a few more shows than the group who received a
$7 discount. But that didn’t happen.
What happened is something called Value Attribution,
which simply describes our inclination to superimpose or
imbue a thing with certain qualities or characteristics based
on our initial perception2.
Our initial impression of a thing causes us to view that
very thing in such a way that is consistent with our initial
impression. Simply stated in the case of the discounted
season passes, if it’s a cheap ticket, then it must be a cheap
show. Therefore, buying something cheap causes us to
devalue or view the object as having little to no value.
In selling, the tendency sometimes is to provide the
client a hefty discount as an inducement to buy our product.
But given the University of Ohio’s study, it’s worth
2
‘Sway: The Irresistible Pull of Irrational Behavior’, Ori Brafman and Ram Brafman,
2008, Doubleday, New York, NY
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Sales Influence
pausing for a moment to reflect on how the buyer might
view your proposal.
We’ve all been in a situation when someone offers us
such a good deal that we wonder, “What’s wrong with this
picture?” So it should come as no surprise that your buyer,
upon receiving a very low price (big discount), may think,
“Why are they selling it so cheap? What’s wrong with it?”
Even if the buyer does make the purchase, he may
choose not to use it, thinking it’s not worth much since the
price was so low.
For example, I remember buying a
leather jacket that was selling for only $55. At the time I
wondered why it was so inexpensive. Was it the quality?
Something must be wrong with it!
Whatever the reason, the result was that I hardly used
the jacket, and after a few months I decided to donate it to
Goodwill. What happened? From the very moment I made
the purchase, I had already devalued the jacket in my mind.
That perceived devaluation guided my behavior in such a
way that I never used the jacket.
Now imagine how my attitude, hence my behavior,
toward the jacket would have been different if I had paid
Finding the Why in (How People) Buy
Victor Antonio
$250. I’m sure I would have used it more often, and it
would probably still be hanging in my closet today.
Buying something at a price that’s too good to be true
may set up in the buyer's mind a discount deception. Just
as with the season ticket passes or my leather jacket, the
buyer may choose not to use the product even after the
purchase (i.e., devaluing the item from the beginning).
Value attribution is about controlling perception, and
the last thing you want is a buyer to associate you or your
company with selling cheap products or services.
The
unintended consequence of heavily discounting a product
may be that the buyer, sensing little value, chooses not to
buy any other products in the future. Be careful!
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Sales Influence
Finding the Why in (How People) Buy
Victor Antonio
Chapter 3
The Tupperware Effect and
Why We’re Influenced to
Buy
Many of us have been invited to a Tupperware party or
something similar at one time or another. We all know
what’s going to happen when we get there; someone is
going to sell us something at the party. And even though
our cabinets runneth over with more plastic goodies than
we’ll ever need in a lifetime, we always come home with
more Tupperware. How does this happen? How is it that
we always wind up buying something, when rationally we
know we don’t need any more?
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Sales Influence
Well, the mystery behind this compulsion is about to be
revealed. First, let’s recreate a scenario and then let’s take
a closer look.
Scenario:
Your friend Ann calls you and invites you to a
Tupperware party she is hosting at her house. You find
it hard to say no, so you agree to be there.
You show up and there are old friends and soon-to-be
new friends at the party, snacking on hors d'oeuvres
and sipping on wine, all the while having polite
conversation.
Your friend Ann then clinks her wine glass politely with
a spoon to get everyone’s attention, as she prepares to
introduce the Tupperware representative (a friend of
Ann’s, I’m sure).
The rep begins by introducing herself, and then
courteously asks all in the room to introduce themselves
so that everyone can get to know a little more about
each other.
The rep then asks how many people already own
Tupperware. Many of the guests raise their hands. The
Finding the Why in (How People) Buy
Victor Antonio
rep then asks these guests to share a bit of their
experience with the Tupperware products, and how they
use them at home to make their lives more convenient.
When everyone has had her turn, the rep then talks
about the new products Tupperware has developed,
passes a few samples around, and then closes by
thanking everyone for taking the time and supporting
their friend Ann.
Ann formally closes the presentation to the gathering by
saying, “I’m passing out this form for anyone who is
interested in buying any of the items we discussed. And
we also have more drinks and hors d'oeuvres, so please
help yourselves.”
That’s it! No hard sales pitch or in-your-face sales pressure
to buy. Next thing you know, you notice folks around you
starting to fill out their forms. You feel this need to buy
something and soon you, too, are filling out a form and
signing up to buy a few of the Tupperware items even
though you had told yourself you wouldn’t.
Sound
familiar? What happened? Why did you feel compelled to
buy something?
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Sales Influence
What we’ll do now is dissect exactly what happened
and how it happened. If you’ve ever watched one of those
crime shows, you’ve probably seen the lead detective, after
reviewing the crime scene, recreate (or re-enact) exactly
what happened based on the evidence.
Not only will we re-enact what happened, we’ll also
highlight the rules of social compliance that were used on
you, and the social dynamics that compelled you to buy.
Here we go:
1) When you walked in, you were greeted by your friend
Ann.
Rule of Liking: We are more likely to be persuaded by
people we like, know, and trust. We favor buying from
people we like – in this case our friend, Ann.
2) You were then offered free hors d'oeuvres and wine.
Rule of Reciprocity: When someone gives you
something for FREE, you feel a sense of obligation to
return the favor in kind – in this case, by buying
something after eating Ann’s food and drinking her
Finding the Why in (How People) Buy
Victor Antonio
wine. The only way to purge yourself of the guilt you
feel when you’ve eaten someone’s food is to find a way
to return the favor.
3) The rep then asked willing guests to share their
experiences with their Tupperware products.
Rule of Social Proof: When we see others doing
something, we take our social cues from them and we
are inclined to do the same. When the rep asked those
who had purchased in the past to share their
experiences, what she was doing was providing you, the
buyer, with “proof” that others love the product and so
you should, as well. At this point you start thinking,
“Hmmm, I don’t have that bowl set; maybe I should get
it. I mean, I’m sure I’ll find a use for it.”
4) And, if you were one of those people who volunteered to
share your experience with the group, then you were
influenced by the following rule.
Rule of Consistency: If you make a public statement,
you will behave in a manner that is consistent with your
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Sales Influence
public statement. By saying that Tupperware is great,
you’ve pretty much painted yourself into a mental
buying corner. You will look like a liar if you don’t buy
some of their newer products after stating how satisfied
you are with their current products.
5) And finally, the pièce de résistance, a hint of guilt, “The
rep…closes by thanking everyone for taking the time and
supporting their friend Ann.”
There are other subtle dynamics at work in this example,
but we’re highlighting the four major rules (plus guilt) at
work.
It’s worth noting that each rule, in and of itself, may or
may not be enough to sway someone to make a buying
decision, but the cumulative effect of these sales influence
moments is powerful and effective in moving people along
the path of purchase.
So here’s the question for you, “How can you use one
or all four of these rules to improve your sales closing
ratio?” Here’s one idea. For social proof, you may want to
Finding the Why in (How People) Buy
Victor Antonio
consider using testimonials, or even case studies, from
satisfied clients to help sway the buyer in your direction.
Visualize yourself in front of your client ready to do
your presentation. Review what you’re going to say and
what you’re going to show. And then ask yourself, “Where
can I use these rules and what can I show or do to drive
home my key selling point?”
Good luck!
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Finding the Why in (How People) Buy
Victor Antonio
Chapter 4
How to Prime the Prospect
to Say Yes
As a kid growing up in the inner city of Chicago (see the
photo of my childhood home on the previous page), it
wasn’t unusual to see vagrants and drug dealers loitering
about the streets day or night. I’d often see them go up to a
stranger to “bum” a cigarette and say, “Hey man, you gotta
smoke?”
The stranger would nod yes and, fearing for his safety
or not looking to agitate the situation, would hand the
vagrant a cigarette and a lighter.
After lighting the
cigarette, taking a few puffs, and returning the stranger’s
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Sales Influence
lighter, the vagrant would thank the stranger and then ask,
“Hey man, do you have any extra change in your pocket
you can spare so I can get something to eat?”
More often than not, the stranger would dig into his
pocket and pull out a few coins and hand them over before
continuing on his way.
If the vagrant didn’t know the stranger was a smoker, a
much safer approach was to ask him for the time of day,
“Hey, Mister, can you tell me what time it is?” And then
he’d follow up with the “spare change” request.
This was life in the neighborhood (a.k.a., The ‘Hood). I
didn’t think much of this technique until I began studying
influence and persuasion techniques.
One in particular,
called the Foot-In-The-Door (FITD) technique, brought
back these inner city memories.
The FITD technique involves making a small,
negligible request first, and then following up with a much
larger request. The first small request (i.e., Initial Request)
is a setup for the real request (i.e., Target Request). Studies
have shown that if someone agrees to your first request, she
is likely to agree to your second request. Why? Agreeing
Finding the Why in (How People) Buy
Victor Antonio
to the initial request creates mental momentum called
“consistency”.
If the stranger, for example, gave the
vagrant a light because he wanted to demonstrate to others
(and especially to himself) that he was a kind and caring
human being, then denying the vagrant the follow-up
request would be inconsistent with his own self-image of
kindness. Agreeing to the initial request is a sales influence
moment that sets up the mind-trap for the follow-up
request.
In selling, what if we could use the FITD technique to
increase the chances of getting a prospect to say yes to
buying our product? Would that be useful?
Let’s set up a scenario where you might be able to use
this technique to your advantage. For example, you’re in
your first meeting with a prospect. The initial goal is to
reduce the prospect’s sales resistance by asking him a
simple question (initial request), one that you know he will
say yes to:
You: “Mr. Prospect.
Would you consider buying a
product that can do X, Y, and Z, and save you money?”
(Initial Request)
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Sales Influence
Prospect: “Yeah, I might if it really did what you said it
could and was priced right.”
You: “Fair enough. I’ll let you take our new Gizmo
3000 home for a week and let you see for yourself that
it does work and it will save you money in the long
run.” (Target Request)
Notice that the initial request had the non-binding and
seemingly harmless phrase “Would you consider?” This
three-word phrase is powerful because it reduces sales
resistance by “priming the prospect” with a small, initial
request – to simply “consider” buying the product.
After the prospect responds positively you then reveal
your true intention (i.e., your target request) by asking the
prospect to take the product and use it.
In this example, the goal is NOT to sell the prospect on
the spot, but to get the prospect to agree to use the product
in the first place with the hope of selling it to him later (i.e.,
try it, like it, buy it).
Finding the Why in (How People) Buy
Victor Antonio
The key to the FITD technique is to get a small
commitment upfront (i.e., consider using) and then ask for
a bigger commitment (i.e., use the product). Getting the
prospect to use the product puts you at the half-way mark
of closing any deal, wouldn’t you agree?
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Finding the Why in (How People) Buy
Victor Antonio
Chapter 5
DBM Factor – Increase
Close Rate by 10% to 20%
Selling effectively begins with trying to understand what
problem or concern the buyer is trying to resolve. Once we
understand the problem, we are more equipped to position
the product for easier acceptance.
But one of the things we want to ensure is that if the
buyer goes down the path of purchase, she doesn’t change
her mind at the last minute due to cold feet. To “block” the
buyer from backing out, it would be wise to reinforce her
buying decision.
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The first step is to identify the buyer’s Dominant
Buying Motive (DBM). A DBM is the primary reason a
client will buy from you.
Let’s say you walk into a store with the purpose of
buying a dryer. The DBM is the need to be able to dry
clothes.
But if we look beyond the DBM, we’ll see that
there are other underlying considerations that are
“supporting” the DBM.
Let me illustrate the point by using the need for a dryer
to dry my clothes as my DBM.
I know that by having a
dryer I will also solve other issues or concerns.
For
instance:
•
I wouldn’t have to hang the clothes out to dry on the
clothesline, saving me time, effort, and some
embarrassment.
•
I don’t have to leave home to go to a public
Laundromat to get my clothes dry.
•
My current dryer isn’t effective, so the clothes smell
of mold.
•
A good dryer could help me reduce my ironing time.
Finding the Why in (How People) Buy
Victor Antonio
•
I wouldn’t have to dry clean certain items, thereby
saving some money.
•
My current dryer is an energy hog, and I keep
blowing a house fuse when I use it.
So you see, although my DBM is the need for a dryer to dry
my clothes, I also have underlying circumstances and
reasons that support my buying a new dryer.
In selling, most people just attack the DBM, in this
case, by telling the buyer that having a good dryer is a good
thing. Then they go on to explain all the latest bells and
whistles (i.e., features) that come with the dryer.
A more effective strategy would be to emphasize how
having a dryer will solve the other underlying problems
related to not having a good dryer. Keep in mind that the
buyer is looking for reasons that support his decision. So a
good sales pitch may go along these lines:
"You chose a great dryer. First, you’ll no longer have
to take the time to hang your wash inside or outside.
This will save you time that could be well-spent doing
other things.
Also, think about the amount of time
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Sales Influence
you’ll save by not having to lug your laundry over to
the Laundromat. Having a dryer immediately available
after a wash will cut down on the moldy smell you often
get from clothes that haven’t been properly dried.
You’ll also cut down on the amount of ironing time with
the new steam jets in the dryer. These new dryers have
the latest in energy-saving technology which means that
over a one year period, the average energy bill is
reduced by $100 to $300."
You may not agree with the wording or tone of the
above pitch, and that’s okay. Each salesperson will have
his own selling style and approach. The point is to get you
to notice that this sales pitch doesn’t address just the DBM,
but also the supporting factors that will drive and push the
sale forward.
The DBM is what the customer wants to address. The
underlying factors that support the DBM are the “reasons
why” the customer really wants to buy the dryer. Think of
these contributing factors as legs that support the DBM.
The more support legs you can place under the DBM, the
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Victor Antonio
better. Reiterating those factors will ensure that the buyer
doesn’t get cold feet and back out of the deal.
Another important reason for emphasizing the DBM
supporting factors is to reduce the likelihood that the buyer
may cancel or return the product.
In general, a buyer who plunks down a large amount of
money may start to feel some “Buyer’s Remorse” when he
leaves the store or your meeting, and question whether or
not the decision to buy was wise or prudent. But, because
of your emphasis of the support factors, a buyer will be
able to rationalize and justify the purchase later on when
you’re not around.
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Sales Influence
Exercise:
For your business, think of a typical client’s DBM. Then,
take the time to write down three to five reasons that
support the DBM. If you don't know what those reasons
are, then probe by asking the client questions regarding his
motivation for wanting to buy.
If you listen carefully,
people will generally give you the necessary information to
sell them.
Then take those reasons and build them into your closing
sales pitch or as reinforcement statement(s) once the sale is
made.
If done correctly, you could realize a 10% increase in your
close rate, and you may also be able to reduce your
cancellation rate by another 10%. If so, then you could
realize an effective increase in sales of 10% to 20%.
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Sales Influence
Chapter 6
How to Sell Your Side of
the Story
In any line of business you might be in, at some point
you’ve found yourself having to present your side of the
story and explain to the client why she should buy from
you. Your competitors are, of course, also going after the
same business. And the potential client has just asked that
one question we salespeople dread hearing, “Can you tell
me why I should buy from you and not from your
competitor?”
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How do you best present your message so that it has a
lasting impact? How do you attack it? Do you talk about
what you can do, or do you begin by telling the client what
your competitors can’t do?
There are psychological factors that will determine if
the client will listen to your side of the story, or buy the
other side. Understanding how these factors work will
allow you to craft a persuasive message and better position
you to close the deal.
Let’s begin by analyzing the situation by stating the
obvious: every argument or proposal has at least two sides
– one for (your product or service) and one against (the
competition). The question is how to position your
message so that the client will buy into your products or
services, while at the same time not leave the door open for
your competitor to win the business.
The first question you need to ask yourself is, “Is the
client in a receptive state of mind to really think about
resolving her problem?” A client is in a receptive state of
mind if she is “motivated to think” about the problem.
What do we mean by motivated to think? A person is
motivated to think (i.e., will have a tendency to give the
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Sales Influence
subject careful thought), when the proposal is personally
relevant.
If the proposal is of little or no relevance, the client will
not give the subject thoughtful consideration, and therefore
not be in a receptive state (i.e., motivated to think about the
proposal).
Knowing whether or not a client is motivated to think is
critical. For instance, if the client is not motivated to think
about the proposal, you may be talking to the wrong
person, or the client doesn’t feel a sense of urgency on her
part to give the matter thoughtful consideration. In both
instances you would be wasting your time pitching your
product or service.
The second area we should question is, “What will the
client remember most (i.e., have most impact), and what
should I present first or last?” When a person is swayed by
what is presented first, this is called the Primacy Effect. If
presented with a two-sided argument, this person will favor
the first argument.
When a person is swayed by the last or most recent
argument, this is called the Recency Effect. If presented
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Victor Antonio
with a two-sided argument, this person will favor the
second (last or most recent) argument.
What do “motivated to think”, primacy, and recency
have do with your ability to sell more effectively?
The research in the domain of persuasion is clear.
When we are motivated to think about a subject (i.e.,
relevant to us), we will side or give more weight to the first
(primary) argument we hear. If our motivation to think is
low about a subject, we will side with the most recent (last)
argument.
Persuasion Theory
Motivation to Think
Effective Effect
High
Primacy
Low
Recency
Why is this so? Research has shown that when someone
who is motivated to think listens to the first argument, she
has a tendency to consolidate the information and form an
opinion (favorable attitude) about the first argument.
Consequently, when the second argument or proposal is
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Sales Influence
mentioned, a motivated thinker will be resistant to
attitudinal change.
For a listener with low “motivation to think”, a pause or
break between messages (i.e., after you’ve spoken about
your company and will now talk about your competitors)
signals to the listener (client) that important information is
about to shared and she should probably listen. Now the
low motivated thinker is in a high state of thinking and will
grasp the second argument (recency).
Advertisers Get It
Medical commercials are good examples of how using the
effect of primacy can be effective in convincing viewers to
buy their products.
Think back to a Viagra-like
commercial that you may have seen on television. One that
I saw recently made me laugh. It showed a man in his late
fifties or early sixties throwing a football through a car tire
hanging from a tree. No explanation of the metaphor is
needed.
The narrator, in his mellow, reassuring voice, tells men
that they don’t have to live with the embarrassment or
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Victor Antonio
worry of not being able to “perform”. The commercial
then briefly cuts away to a close-up of the wife who is
sitting on the front porch smiling affably watching her
husband, indicating to the viewers that she is “satisfied”
with the results.
Then with five seconds left on the commercial clock,
the narrator switches verbal speed and, in a dismissive tone,
tells you, the viewer, about the possible side effects of
using their product, and that you should consult a doctor if
you have one of a series of undesired conditions.
By the time the narrator gets to this point, the initial
message has been delivered and received by the viewer
who, according to the effects of primacy, has already
consolidated a favorable opinion. He then proceeds to
dismiss or minimize the narrator’s warning at the end
(recency). The commercial is aimed at men who have
sexual dysfunction, so their “motivation to think” is very
high, which is why the key message is presented first.
If you’re not having problems (i.e., it’s not relevant to
the viewer), then you’ll probably pick up on the narrator’s
warning at the end. But advertisers don’t care about low
motivated thinkers because they’re not the target market for
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Sales Influence
the commercial; men with sexual dysfunctions are their
primary targets, and these potential buyers are highly
motivated to think about the message in the commercial.
Now let’s transition from sexual dysfunction to sales
function. Sorry – there is no good way of doing a smooth
segue here.
Sales Strategy
Suppose a client asked you the question, “Why should I
buy from you and not your competition?” The inherent
implication is that the client is “motivated to think” about
making a decision. What you now have to do is deliver
your message effectively.
First, begin by letting the client know that you will be
presenting your product first, and that you’re going to cover
all the relevant features (and benefits). Second, show how
your product or service is superior to that of your
competitors. Your response to the question, “Why should I
buy from you and not your competition?” might go
something like this:
John, I get that question a lot and I am more than
happy to answer it. So here’s what I’m going to do.
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Victor Antonio
Let me first tell you about our product and what makes
it a good choice and fit for your business. And then I’ll
talk a little bit about what our competition offers and let
you decide which is more suitable. Is that a fair
approach?
Much like the commercial, what you’ll do is first present
the features and benefits of using your product and how it
can help the client resolve many ongoing issues. And then,
once your message has been fully delivered and
understood, take some time to cover what your competitors
have to offer. Do it in such a way that it minimizes, if not
dismisses altogether, what your competitors have to offer.
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Sales Influence
Exercise:
Think of a situation where you have to present two sides of
an argument, and ask yourself how you could improve your
argument by using the principles described. It doesn’t have
to be a business situation per se; it can be a personal
situation where you have to convince someone else of your
point of view. This comparison between your and your
competitor’s products also invokes a rule of persuasion
called “Contrast” (see Chapter 14), which makes this
overall approach that much more effective.
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Sales Influence
Chapter 7
How to Get Bigger Tips and
Higher Commission
One of the fastest ways to build rapport and trust is to
prove, in concrete terms, that you are looking out for the
client’s best interest. In the words of Zig Ziglar, noted
motivational speaker, “People don’t care how much you
know until they know how much you care … about them.”
One tried and true strategy to prove to a client that you
care is something called “Reversing Field”. In football,
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Victor Antonio
when a player carrying the football reverses field, he goes
the opposite way to avoid getting tackled by the defense.
In sales, when someone thinks you’re going to go one
way, you can surprise them by going the other way, thereby
catching them off guard and opening them up to being
influenced by demonstrating goodwill. Here are two
examples to illustrate the point and show how it can help
you make more money:
Scenario 1:
You walk into a restaurant and are escorted to your
table by the greeter, who tells you that your waiter will
be by in a just a moment to take your order. After a
few minutes go by, a nice young man introduces
himself politely and asks, “May I start you out with a
beverage or a drink?” You order your drink and the
waiter tells you about Today’s Specials. After rambling
off the list of specialties, and before he quickly darts
off, he says, “Let me go get your drink, and I’ll be back
to take your order.”
Minutes later the waiter comes back with your drink.
He grabs his pen and notepad and asks, “Are you ready
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Sales Influence
for me to take your order?” You decide to order one of
the Specials. The waiter pauses for a moment and
looks at you and says, “The last two people I had in
here before you arrived ordered the same plate, and in
both cases they weren’t very happy with the way it was
prepared. If you’re really hungry for that type of dish,
try this other dish. People love it! It’s a bigger serving
and $5 cheaper than the Special.” You instinctively
agree. As the waiter leaves, you think to yourself,
“Wow, what an honest waiter. Not only did he protect
me from ordering something I might not like, but he
also saved me $5 in the process. I like this kid.”
Result: The meal was great. You usually tip 15%, but
for his honesty and kindness you feel the need to
reciprocate and show your appreciation, so you decide
to leave the kid a 20% tip.
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Victor Antonio
Scenario 2:
You walk into a car dealership to browse around and
look for a car. You walk past a few cars on the
showroom floor, and one of them catches your eye.
Out of nowhere a salesman appears and says, “I can see
you like this car. My name is Bob. You’re lucky I got
to you before one of the other salespeople. They’ve
been trying to unload this car for the last month. Let
me tell you upfront that it may look good, but you don’t
want
the
headaches
that
go
along
with
it.”
At this point you have to slap yourself mentally to make
sure you’re not dreaming. “Did a car salesman just tell
me NOT to buy a car?”
The salesman then takes the time to escort you around
the car lot telling you the pros and cons of each car
you're interested in. After a while, he figures out what
you’re looking for (i.e., your Dominant Buying Motive)
and helps you narrow your choices.
Result: You feel comfortable with his recommendation
because he seems to understand your needs, and you
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decide to buy a car that is 10% more expensive than the
one he told you NOT to buy.
The old adage that honesty is the best policy holds true
here. With so much information available to buyers today,
they need someone they can trust who won’t steer them in
the wrong direction when making a purchase. This is the
premise of consultative selling. People need help making
critical decisions. Position yourself, much like the waiter
and car salesman, as trustworthy, and you will reap the
benefits in the end. Seek to serve, then to sell.
Demonstrating goodwill is a powerful influencing
technique, if done correctly and with integrity.
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Exercise
How can you use this “Reverse Field” strategy in your
business to create trust and goodwill between you and your
client?
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Chapter 8
How People Lie in a
Social Setting
Like many of you, once in a while I venture out into the
world and attend networking functions. Let me state
upfront that I DO NOT ENJOY going to these events, for a
good many reasons that I'll outline in a bit.
While attending a recent event, I decided to take some
mental notes on how people “sell themselves” at these
events. It was sort of a sociological experiment on the
networking habits of the advanced Homo Sapiens we call
“Humans”. If you go to Wikipedia and look up the term
Humans, you'll find this definition:
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Sales Influence
Humans are bipedal primates belonging to the
mammalian species Homo sapiens (Latin for "wise
man" or "knowing man") under the family Hominidae
(known as the great apes).
Humans have a highly
developed brain capable of abstract reasoning,
language, and introspection. This, combined with an
erect body carriage that frees their upper limbs for
manipulating objects, has allowed humans to make
greater
use
of
tools
than
any
other
species.
This type of information is invaluable to know before
attending a networking function. I mean, it's good to know
that humans have the aforementioned capabilities before
interacting with them.
At this particular event I decided to observe the natural
networking habits of humans. It seemed that everyone was
really working very hard to impress each other. As I
walked around and mingled, I caught bits and pieces of
conversation and made some visual notes of what was
going on around me. Here's what I gathered:
•
Some tried to convey confidence
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•
Some dressed sharply, giving the illusion of success
•
Some spoke smugly on a particular topic
•
Some expounded their philosophy of life
•
Some spoke on how much they loved their careers
•
Some told how they could help the other...for a
price
•
Some talked about setting up another time to talk
(ironic, isn't it?)
I stepped to the side near one of the walls, leaned against it,
and closed my eyes. I no longer wanted to see what was
happening; I wanted to hear the event. The sound was
amazing – a cacophony of sound bites, each person battling
to be heard, each wanting to make an impression on the
other!
Call it a salesman's instinct, but as I listened in closely
to neighboring conversations, I got the distinct feeling that
people weren't being altogether truthful about themselves,
their careers, or their services. Some might call it bending
the truth; I prefer to call it by its real name – lying.
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One of the reasons I dislike networking events is that,
in the past, they've been rather disappointing. I discovered
that people tend to exaggerate who they are or what they
can do. Maybe it's me, but I have the feeling I'm not alone
on this.
University of Massachusetts psychologist Robert
Feldman did a study to test the concept of lying in a group
setting. I define a group as a minimum of two people (if
you're
schizophrenic,
then
all
bets
are
off).
In one experiment, Feldman put two strangers in a room
together. They were videotaped while they conversed.
Later, independently, each was asked to view the tape and
identify anything they had said that was not entirely
accurate.
The study, published in the Journal of Basic and
Applied Psychology, found that 60 percent of people had
lied at least once during the 10-minute conversation, saying
an average of 2.92 inaccurate things.
"People almost lie reflexively," Feldman says. "They
don't think about it as part of their normal social discourse.
We're trying not so much to impress other people but to
maintain a view of ourselves that is consistent with the way
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they would like us to be," Feldman said. "We find that as
soon as people feel that their self-esteem is threatened, they
immediately begin to lie at higher levels."
Gender Note: Men and women lie equally, but for different
reasons. Men are more likely to lie to make themselves
look better. Women are more likely to lie to make the other
person feel better.
So having a highly developed brain capable of abstract
reasoning, language, and introspection can come in handy
at a networking event. Our ability to manipulate objects
has now been extended to manipulate "perceptions” as
well. Now, let me state for the record before I get any hate
mail from “Networkers":
•
I'm not trying to dissuade people from going to
networking events.
•
I'm not trying to make a case that networking events
don't have some redeemable value.
•
Feldman's study can also be applied to company
meetings, customer visits, dating, social gatherings,
and so on.
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The next time you find yourself talking with someone for
whatever reason, make sure you really listen in to what
people are saying or trying to selling you. Always be
questioning, and in the back of your mind ask, "Can this be
right? Can this really be true?" This is the best defense
against deceitful social intercourse with fellow Homo
Sapiens.
If people can lie three times (2.92 according to
Feldman) in a 10-minute conversation, can you imagine
how many "inaccuracies" you'll hear in one to two
hours?! It's insane, isn't it?
In sales, often it's the customer who is not telling us
what's really going on.
Although his reasons may be
justified for not being straightforward, our job as
salespeople is to identify those little obscurities in order to
get to the truth to better understand where we stand in the
sales process.
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Sales Influence
Chapter 9
How to Sell Without Using
Closing Strategies
Many of us have walked away from a sales meeting or
sales pitch, kicking ourselves on the backside for not
having succeeded in closing a deal we knew was well
within our reach. And then we begin to analyze and overanalyze
what
went
wrong.
Upon
further
mental
investigation we reflect on all the things we should have
said, and all the things we shouldn’t have said. We then
come to the realization that maybe, just maybe, we should
have planned better for that meeting or sales pitch.
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Victor Antonio
We, as salespeople today, have been conditioned to
spew forth features and benefits all over the potential client
and then close them. We are armed with mini-arsenals of
favorite closing techniques which we bring to bear on any
unsuspecting client (i.e., victim) that crosses our sales
path.
And when these choice closing techniques don’t work,
our confusion turns into desperation, and we further
jeopardize the sale by unknowingly inserting-foot-in-mouth
(i.e., saying the wrong thing) or pressuring the client into a
decision she’s not ready to make (i.e., being too pushy).
The root of the problem lies in the obvious fact that
we’ve learned to “close” a sale, but we haven’t mastered
the art of selling. There is a vast difference between
learning how to close and learning how to sell.
The best salespeople don’t focus their attention on
closing a deal, but on understanding why the client might
not be willing to buy, and then working toward assuaging
any concerns or doubts that may prevent the sale from
being brought to a successful conclusion with a gentle
nudge rather than a hard, high-pressure close.
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Sales Influence
Let’s shift our attention for a moment away from
closing strategies and techniques. Let’s shelve, for the time
being, the mindless dictum of ABC (Always Be Closing),
and refocus our time and effort on creating a sales
opportunity. How? By learning how to block objections
before they manifest themselves verbally, we can increase
our chances of closing more deals.
Here’s some insight. When a client makes a verbal
objection, she has stated out loud her concern. That means,
that unless the salesperson can minimize or eliminate that
concern, no closing technique we use will work; the sale
simply won’t happen. In sales, what we never want is for
the client to verbalize an objection.
Once that objection is verbalized and made public, we
find ourselves on the defensive, trying to convince the
client otherwise. I go back to a favorite saying I once
heard: if you’re explaining yourself, you’re losing the
conversation.
Let’s rethink how we sell for a moment. What if we
could prevent the client from verbalizing an objection;
would we be in a better position to close a sale? Yes!
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Victor Antonio
Would that change the dynamics of the conversation?
Absolutely!
When a client is able to resolve her concern mentally
based on the information you’ve provided, the client will be
more agreeable because she sees the answer to her concerns
coming from herself and not from an external source (a
salesperson).
If we can get the client to answer her own questions, we
will be in a better position to close the deal because we’re
not trying to convince her; she has already convinced
herself. This practice can be summarized as follows: let’s
focus 90% of our time on objection prevention (i.e., before
the objection is verbalized), and spend the remaining 10%
of our time nudging (closing) the client to the obvious
conclusion of buying from us.
Exercise: Practice Objection Prevention
1. Make a list of all the possible objections a client
could possibly identify to not buy from you.
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Sales Influence
2. For each objection, list one or two ways that you
can block those objections (i.e., objection
blockers).
3. Weave
the
presentation
objection
using
blockers
examples,
into
stories,
your
or
fictitious scenarios by stating a problem and
then showing how your product or service can
resolve it.
4. Where you can, substantiate each objection
blocker with an example, quote a statistic, share
a testimonial, or show tangible proof.
The above outline makes the assumption that you know
your client base well enough to understand and anticipate
the types of objections that will be brought up based on
passed experience.
If you are new in sales or to a position in sales, begin to
build your database of objection knowledge by talking to
your peers or other successful salespeople in your field and
asking them to share with you what types of objections they
find most common.
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If, at the end of the sales process, you’ve covered all the
client’s objections and have answered them satisfactorily,
there’s not much left to do but ask for the order.
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Chapter 10
Customer Penetration
and Up-selling
If I asked any company, small business, or entrepreneur to
tell me who their largest customer or account is, I’m sure
they’d have no problem coming up with a name. But if I
asked them what percentage of the account’s market share
they own, most would struggle to give me a definitive
answer.
It would be safe to say, that more often than not, we
don’t own 100% of the market share with our biggest
account. Said another way, we’re not the only ones selling
into that account. We will make the assumption that your
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competitors are siphoning off their fair share of the
business.
Many companies refuse to give 100% of their business
to one vendor or supplier. They may even have written
policy to that effect. They simply don’t want all their eggs
in one supplier basket.
The question which is key to our sales growth is how
we can maximize our sales percentage within that account.
If we can’t have 100% market share in the account, what is
the most we can expect to obtain?
The first step toward answering this question begins by
redoubling our efforts and focusing on that specific account
to make sure that we are achieving penetration at all levels.
This will require going beyond the basic sales presentation
or product pitches, and asking more involved questions
about the account. General questions to your client may go
along these lines:
•
What are your growth plans for the next 6 to 12
months?
•
Where is your company focusing to maximize sales
revenues?
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Victor Antonio
•
What are some of the cost-cutting measures you’re
considering?
Although these questions are very broad, you can use them
as a starting point to determine if there is any untapped
potential. What you’re really trying to find out is what
other products can be sold into this account. To do this,
your questions have to more specific and related to your
other products.
How do you know what questions to ask? Start by
doing the following:
1. Review what the client or account has purchased
from you in the past.
2. Review your product offering and select other
products that might be suitable.
3. Develop a list of related questions to see if there is a
need or whether you can create a need.
If there is a need, then all you have to do is qualify and
quantify that need (i.e., make sure there is a need and
identify how big the opportunity is). If there is a need, then
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your job is to convince the account that you have the
products to fill that need; then propose a solution.
Think of this penetration and proposal process as a
“Double Funnel”. You have a list of clients you are
looking at revisiting. You select one (red arrow) in
particular who has purchased something from you in the
past (green arrow). The next step is to figure out what
other products (A, B, C, D) you can upsell the client on.
In many instances you may find that simply digging deeper
into your existing client’s needs will increase your sales as
much as 20%. That’s a lot! If a client has purchased
$10,000 worth of products in the past, a 20% increase
would mean an additional $2,000. If it’s a large client who
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Victor Antonio
has purchased $1M, that could mean $200K toward your
sales quota.
The added benefits to this “penetrate and up-sell”
strategy are the amount of time you’ll save increasing your
sales and the transactional costs you’ll avoid by not having
to market to new clients. Sometimes the answer to the
question, “Where can I find more business?” is as close as
your nearest client database.
Exercise:
List your top five to ten clients vertically, numerically by
total sales. Across the top, list all the different products
you offer. Then, fill in the dollar amounts of how much of
each they’ve purchased in the previous year. You will
quickly begin to see where you need to start penetrating
and up-selling to meet your sales goal.
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Chapter 11
How to Prevent Price
Point Erosion
Finding the right price point at which to sell your product
can be a tricky thing. You first have to make sure the price
is competitive. Second, you need to make sure you don’t
cut your pricing too deeply and end up losing money in the
deal.
And lastly, you know the buyer is going to want to
negotiate your price down in order to feel as though he’s
gotten a great deal. The last issue is one that we most often
find ourselves in. Everyone wants to negotiate better price.
The question is, “How do we stop price point erosion?”
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Sales Influence
When selling a product or service, salespeople have a
sliding scale that runs from the ideal selling price to the
point-of-no-return (PONR) price. As a salesperson, what
you need to do is slow price point erosion during the
negotiation process so you end up closer to the ideal selling
price, and stay as far away as possible from the PONR
price. How do you do that?
Interpretation of a study done by University of Florida
professors, Chris Janiszewski and Dan Uy, might help.
In the past, studies have shown that the first price you
hear or are exposed to becomes an anchor or point of
reference in deciding what you are willing to pay for an
item.
Janiszewski and Uy took a closer look at this exposure
to initial pricing and asked themselves how this initial price
point influenced bidding behavior. More specifically, they
wanted to know whether a round number versus a nonround number was more susceptible to price point erosion.
In one particular test, participating students were given
the retail price of an HD Plasma TV and then asked to
guess the wholesale price of the item. One group was told
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the retail price was $5,000 and another group was given a
retail price of $4,988. After tallying the results, the group
with the $5,000 price tag guessed much lower wholesale
prices than did the group at the $4,998 price.
Another study done over a five-year period found that
houses listed at $500,000 got lower closing prices than
those listed at $494,500.
Further studies confirmed Janiszewski’s and Uy’s
suspicions. Prices with round numbers produce lower
bids. People have a tendency to discount an item more if
the number is round. Simply put, people will round down
(i.e., negotiate down) farther when the product is priced
with a round number. How can this help you?
In sales, when submitting a Request for Proposal (RFP)
or presenting the client with a price, it may be wise to keep
this study in mind. For example, instead of submitting a
starting price of $50,000, you may want to price your
product or service at $49,900. Instead of a starting price of
$200, you may want to price at $197. This way, the client's
price in counteroffer will be higher than if you had used a
round number. Get the idea?
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The rule-of-thumb here is to stay away from setting a
price for an item, your anchor price, with a round number if
you want to avoid price point erosion. For those of you
living on the razor’s edge of slim margins, this study is
welcomed news that should be useful in maintaining, or
even increasing, that important margin.
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Chapter 12
Show and Sell – Why
Displaying Your Products
Can Increase Sales
Everyone knows that “demo-ing” a product and showing
how it can help the prospect will increase the likelihood
that it will be purchased. But what about just showing or
displaying the product? Does the simple act of merely
viewing or seeing the product increase the product’s
desirability in the buyer’s eyes?
A study by Janet Metcalfe and Walter Mischel sought
to answer that very question. Does simply viewing a
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desired item increase a person’s impatience for obtaining
the product? In one study a child is offered a reward and is
presented with two options.
•
The child can immediately accept the reward being
offered (immediate gratification), or
•
The child can wait 15 minutes and be offered a better
reward (delayed gratification).
What would you do? You’re probably thinking, ‘That’s an
obvious decision; delay the gratification and wait the 15
minutes.” Well, you might be surprised by the results.
When the reward being offered was “out of sight” (i.e.,
could NOT be seen by the child), a whopping 75% of the
children would wait 15 minutes. But, when the reward was
“in sight” (i.e., could be visually seen by the children), the
average delay time they were willing to wait dropped to
just one minute. None of the children were willing to delay
gratification for 15 minutes when the reward was within
visual reach.
Metcalfe and Mischel referred to the showing of the
reward as a “hot stimulus”; hot, because seeing the reward
activated a part of the child’s wiring that created a desire to
acquire and a need for immediate gratification.
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How can this help you in selling? At a recent seminar I
attended, the speaker at the front of the room was doing his
product pitch. Behind him, and off to each side, were welldressed tables with the speaker’s product elegantly
displayed atop them.
Whether the speaker knew it or not (I think he knew),
by displaying the products, he was taking his cue from the
Metcalfe and Mischel study. The speaker was using a “hot
stimulus” or reward (i.e., the product on display), hoping to
activate audience members with a need to acquire and to
create a need for immediate gratification to boost his sales.
In one-on-one sales presentations I’ve witnessed in the
past, a salesperson will bring the product to the meeting
and place it off to the side while talking to the prospect. As
the salesperson describes the product, the prospect’s eyes
are drawn to the product itself. Just seeing the product
activates the prospect's curiosity and desire to acquire.
Based on findings of this study, it should be obvious
that showing up with a sample of what you’re selling will
always put you in a better position to sell it.
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What if you just want to “display” a brochure or catalog
as opposed to bringing the product to a meeting? The
effect may not be the same. To a prospect, a brochure or
catalog may be seen as only an extension of the product
(i.e., reward out-of-sight) and may not “activate” that desire
to acquire.
In sales, there is no killer approach that will close 100%
of the deals all the time. But if displaying your products can
improve your chances to close a few more deals, why not
do it?
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Chapter 13
Price Strategy – When to
Consolidate or Partition
Pricing to Win Deals
Let’s say that you’re the new software manufacturer on the
block who sells a software package to the high-tech
industry. You’ve been asked by a potential client to submit
a bid, an RFP (Request for Proposal) for your product.
You see this as a great opportunity to win your first big
client.
But you have a dilemma. How should you submit your
bid?
Should you offer one consolidated price or should
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you offer partition pricing where you break down the
pricing item by item?
Consolidated Pricing:
Software:
License Fee:
Upgrade Fee:
Tech. Support:
Total:
$199.00
$0
$0
$0
$199.00
Partitioned Pricing:
Software:
License Fee:
Upgrade Fee:
Tech. Support:
Total:
$145.00
$ 5.00
$ 10.00
$ 36.00
$199.00
Omar Cheema, an assistant professor of marketing at the
Olin Business School, wanted to know the answer to this
question. He also wanted to know how reputation (i.e.,
established credibility) would affect how a bidder would
respond to these two types of pricing.
In one study, participants read the background on two
fictitious cell phone companies. One was reported to have
a “low reputation”, while the other was reported to have a
“high reputation”. After a 30-day successful trial of the
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cell phones, the participants were asked to sign a contract
to continue the service or not. The final prices for the cell
phones from both companies were the same, with the
exception of how the price was presented to the buyer –
consolidated versus partitioned.
The results were interesting. For the company with a
low reputation, participants who saw the consolidated
pricing were more likely to sign up than were those who
saw the partitioned pricing. In other words, the cell phone
company’s low reputation caused buyers to be a little more
suspicious, and they paid greater attention to pricing. The
majority signed up if the prices were consolidated.
On the other hand, it’s not surprising that the company
with a high reputation didn’t have a problem getting
participants to sign up with either consolidated or
partitioned pricing. But it is worth adding that the
consolidated pricing got a higher close rate than partitioned
pricing.
How can this help you to sell more? Go back to the
original question regarding which way a software company
should submit a bid, consolidated or partitioned. If a
software company is “new” to the industry (i.e., has a low
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reputation), then their best bet, based on Cheema’s study,
would be to go with consolidated pricing.
If you’re in a business space where you’re the new kid
on the block or the unknown entity, the best thing to do is
to propose one bottom-line price.
You’re the low
reputation company that no one has ever heard of, and this
could be a problem when bidding on a deal. Consolidate
all your features, add-ons, support, and so on under one
price to avoid triggering any suspicion or hesitation on the
part of buyer.
Use this tactic next time you're submitting a bid,
especially if you’re entering a new product space for your
company, or targeting customers who haven’t worked with
you before and don’t know just how good you are!
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Chapter 14
Lowering Sales Resistance
– The Contrast Principle
Last week I discovered that a big puddle of water had
accumulated in the corner of our garage. Tracing the
watermarks, I saw that water was coming up through a
crack in the cement floor.
I immediately phoned a company that had fixed one of
my leaky underground pipes before. Within two hours a
gentleman by the name of Mark stopped by to see what was
up. The conversation went something like this:
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Mark: How did you find us?
Victor: Well, you did a job for me about a year ago and
I was quite happy with it, so I called you again.
Mark: Thank you.
We sure do appreciate your
continued business. Based on what I see, it looks like
you have a water pipe that’s broken and will require
some repair work.
Victor: How much is it going to cost?
Mark: Well, you have two options. Option one would be
for me to dig up the pipe right here and replace it.
Victor: What will that cost?
Mark: I’ll estimate $2,800 to break the cement, dig,
repair, and lay cement again.
Victor: Ouch!
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Mark: Option two would be to run a new pipe from the
street to your house so that it doesn’t happen again.
Since this is the second time this has happened, you
may have a corroded pipe running from the street to
your house, which means this could happen again.
Victor: I think you may be right.
Mark: Let me measure the distance from the street and
give you an estimate to run a new pipe.
Victor: Ok.
Moments later Mark handed me an estimate with two
columns, one of them crossed out.
Mark: Your driveway is 150 feet and another 50 to
reach the house. To run a new water pipe would
normally cost $6,200 (this was the column that was
crossed out), but because you’re an existing client, I’ve
gone ahead and given you preferential pricing at
$4,400.
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Victor Antonio
He then handed me the clipboard and pen for my
signature.
Victor: Well maybe I’ll just repair this leaky section
only.
Mark: You could do that. But let me ask you a
question, ‘How much did it cost to repair the other
pipeline a year ago?’
Victor: About $1,200.
Mark: Well, you could spend $2,800 and just repair this
section, but what if you get another leak? You did say
the pipes are over 20 years old.
(Mark then went
silent.)
Victor: How long is this going to take?
Mark: I can have a new temporary line up to the house
in about an hour. And the whole job, which includes
contacting the city to see where the gas lines are
located before I dig a trench, could take 48 hours.
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(Mark went silent again and he waited for my decision.)
Victor: All right. Let’s just do it. (I signed the
agreement and handed it to him)
Anatomy of a Sale
Mark used several influence techniques on me to reduce
my resistance. The first one was to thank me for my past
business. We all like it when people appreciate what we’ve
done in the past. That made me like him right off the bat.
Second, the job they had done before was professional
and timely. So he had credibility going for him.
Third, using the rule of contrast when showing me the
two prices, one crossed out, lowered my resistance. It was
as though he was saying, “You’re special, so therefore you
get my special price.”
Fourth, he exploited my fear of loss by reminding me of
what might happen if I went with the quick fix of $2,800.
And finally, he didn’t apply any pressure for me to
accept his offer. He simply handed me the price estimate
and went silent.
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Victor Antonio
The funny thing is that, even though I knew what he
was doing, I was still compelled by the forces of influence.
In fact, when he showed me the crossed out higher price, a
voice inside my head yelled, “You’re being sold.” Yet, as
he was selling me, I was admiring his techniques and his
approach.
There’s much to be learned from this simple story. For
example, have you used the contrast principle of multiple
prices? Did you know that when something is in writing
(i.e. his estimate), it seems concrete and legitimate? Notice
that he never bothered with the $2,800 estimate; he simply
ignored it. He framed my selection to “his” two options
(i.e., $6,200 or $4,400, as opposed to $4,400 or $2,800).
Also, have you used the fear of loss (i.e., opportunity
cost or total cost of ownership) in your sales pitch to get
clients to think of the long-term cost of a short-sighted
decision?
Perhaps this example will be valuable in inspiring some
ideas on how to improve your closing percentage. After
all, it cost me $4,400, and you're getting it for FREE!
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Chapter 15
How to Sell More Using
Decoy Pricing
In the field of influence, I’ve lately been fascinated with
how people make buying decisions, and how easy it is to
manipulate a person’s choice without his being aware of it.
Many studies have been done that demonstrate how
having multiple options forces a buyer to make a decision
based on the context of the pricing presentation. Let’s
illustrate the point with a simple example:
If one chair is priced at $50, another is priced at $60,
and they seem to be of equal quality, the average buyer
will most likely chose the lower-priced chair.
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Now, if a third chair of equal quality is added into the
pricing mix at $75, which will you, as a typical
consumer, choose? If you’re like most people, you'll
probably go for the $60 chair.
Your line of reasoning might go something like this, “I
don’t know which one’s better, so I’ll choose the one in the
middle just to be safe.” The moderating factor here is your
lack of knowledge as to which one is better. Now, if all
three chairs are identical, from the same manufacturer and
made of the same material, then any sane person will
choose the lowest price item. But, because we aren’t sure,
we go for the safest choice (i.e., we don’t want to underpay
or overpay for an item).
Let’s run some numbers. If in year one I offered two
options (e.g., $50 and $60) and sold 100 and 30,
respectively, I would have the following:
Chair 1
$50
100 units
$5,000
Chair 2
$60
30 units
$1,800
Total Revenue:
$6,800
Finding the Why in (How People) Buy
Victor Antonio
Now, let’s say that in the second year I decided to add the
third option at $75, and still sold the same total number of
chairs (130):
Chair 1
$50
30 units
$1,500
Chair 2
$60
80 units
$4,800
Chair 3
$75
20 units
$1,500
Total Revenue:
$7,800
By simply adding a third option, I increased my sales
from the previous year by $1,000 (or ~15%). Knowing
the above, some manufacturers “manufacture” a third
option intentionally because they know it will have the
tendency to increase their sales revenue, as shown above.
This third option is often referred to as a price decoy
because the manufacturer knows that the decoy's role is not
to sell a lot of units, but to push up the sales of the lowerpriced unit.
Ha! I bet you're going to watch out for this in the future
when making a pricing decision.
Keep this in mind: When presenting two options to a
client, although they are slightly different, the client will
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tend to go for the lower-priced item just to be safe.
Therefore, if you want to get the client to move up on his
price point, you may want to add a third option in order to
coax the client into choosing the middle-of-the-road option.
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Chapter 16
Verbal Gifting – The
Ultimate Rapport Builder
In selling, one of the biggest challenges we often face with
a new client or prospect, is getting her to open up so that
we understand her situation and then are able to provide an
adequate solution. Unfortunately, clients and prospects
today are somewhat jaded by the sales process, and
immediately throw up a mental defense perimeter when a
salesperson walks into the room.
Think back to the last time you went to a car
dealership. Before you set one foot on the lot you were
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Victor Antonio
already preparing yourself for mental warfare. In fact, by
the time you got to the car dealership, you may have felt an
intense anxiety and a desire to turn around and go home.
As you walked into the dealership, you repeatedly
warned yourself not to give out too much information
because it might be used against you when it came down to
negotiating a price. Sound familiar?
Our clients today are more reluctant than ever to give
out information.
But without this free exchange of
information and ideas, it’s hard to 1) build rapport and 2)
offer the client our best product or service. So the question
is, “How do we get them to open up?”
One of the best ways of building rapport or getting
someone to open up is to apply the rule of reciprocity. In
the field of influence and persuasion, most people are
familiar with the rule of reciprocity which states that if we
are “gifted” something, we feel the social pull to
reciprocate in kind. Since no one likes to be in debt or
indebted to someone else, we move swiftly to cancel the
debt by repaying the favor in kind with something of equal
or greater value.
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When most salespeople go to see a prospect, after
pleasantries have been exchanged, they dive right into
asking
questions.
They’ll
listen
intently
and
then
demonstrate understanding by asking more questions. As
salespeople, we already know in advance what critical
pieces of information we need to qualify and/or sell the
prospect. So we prepare a list of questions and then engage
in the following sequence to gather the information:
Step 1: Ask a Question
Step 2: Listen Intently
Step 3: Demonstrate Understanding (Back to Step 1)
The danger with this question-listen repeating sequence is
that often it comes across as an interview, or worse, an
interrogation. A prospect who feels like she’s being
interrogated will resist “giving” you information because it
will appear, by virtue of your endless questions, that you
are there to “take” her information.
In today’s society, and as citizens in a society, we hate
or resist takers in any form. To illustrate the point, here’s
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Victor Antonio
an example of a salesperson’s first encounter with Bob, the
prospect who’s looking to buy a car.
Salesperson: Man, it really is hot out here!
Bob the Prospect: Yes, it is.
Salesperson: Well, Bob, you seem like a man who
means business, so let’s get right to it. Is it all right if I
ask you a few questions?
Bob: Go ahead.
In the above example, no meaningful piece of information
(i.e., a verbal gift) was offered upfront by the salesperson.
The salesperson does demonstrate that he respects the
prospect’s time by wanting to get right to business, but
unfortunately, at the cost of not taking the time to establish
an atmosphere of mutual exchange. Instead, Bob the
prospect is bracing himself for an interrogation by a
“taker”.
To avoid this stigma or misunderstanding, it is critical
that from the onset when visiting a prospect you aren’t seen
as a “taker”, but rather a sharer of information. The best
way to do this is to insert a “gift” at the beginning by
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volunteering a piece of information first in the questioning
sequence.
Step 1: Volunteer Information (The Gift)
Step 2: Ask a Question
Step 3: Listen Intently
Step 4: Demonstrate Understanding (Back to Step 1)
Begin a conversation by first presenting the prospect with a
verbal gift that will cause him to want to reciprocate. We
can define this verbal gift as some type of information
about you or your company that has value and meaning to
the prospect.
Let’s step back in time with Bob the prospect, except this
time, let’s try using the verbal gift approach.
Salesperson: Bob, I remember buying my first car 20
years ago and it was a Cutlass Supreme. Man, I loved
that car. What was your first car?
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Bob: My first car was my grandmother’s old beat-up,
wood panel station wagon – a real chick magnet for an
18-year old. (sarcasm)
Salesperson: So, I take it a wood panel station wagon
is not why you’re here today.
Bob: Nah, I’d like to look at some of your luxury
sedans.
The salesperson, by volunteering a piece of personal
information with meaning (i.e., we all remember our first
car), presented Bob with a verbal gift which he then felt
compelled to reciprocate by sharing his own personal
experience about his first car.
This allowed the
conversation to get started without the salesperson feeling
as though he was forcing the other to participate, and the
prospect feeling as though he was being forced. The
prospect saw the conversation as an exchange of
information, not a line of questioning.
The rule of the verbal gift is simple – share
something of value and the other person will reciprocate.
The next time you meet someone for the first time, whether
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in a social or professional setting, try it out. If you simply
offer a verbal gift, you may be pleasantly surprised at how
often people will open up to you. Is this rule 100%
guaranteed?
conversations
No, but I’m willing to bet that your
with
prospects
will
see
a
dramatic
improvement by simply applying this rule. Happy gifting!
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Chapter 17
The Endowment Effect –
Getting Your Clients
Loaded
Studies have shown that once you believe you own
something, you will be more reluctant to give it up. This
psychological attachment is known as the endowment effect
which states that people will value a good or service
“more” once they see it as their own.
One example of this effect is highlighted by Barry
Schwartz in his book, The Paradox of Choice, where he
illustrates how to employ this strategy in sales by playing
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Victor Antonio
on people’s inability to part with what they perceive as
their possessions. In his example, two groups of car buyers
were set up to be sold to under different conditions to test
the endowment effect.
Car owners in the first group were asked to buy a car
that was fully loaded with all the features one could
possibly want in an automobile. The owners were then told
to go ahead and remove any of the options from their list
before finalizing the deal.
A second group of car buyers were given the opposite
task; they were given a car with no options and were asked
to add the options they desired.
It should come as no surprise that the first group ended
up buying cars with more options. Why? Once the car
buyers in the first group mentally bought into their car and
saw it as theirs, they were more reluctant to give up options
because this would be perceived as a mental loss. The
emotional cost of eliminating an option outweighed the
price of owning the option, so they kept it.
For the second group, the endowment effect hadn’t
taken hold because they didn’t “own” the options; they had
only committed to buying the unloaded car. This made it
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easier for the buyers to relinquish options. Every time they
thought of adding an option, they could objectively, not
emotionally, decide whether or not the value of the option
was worth the asking price. And, as the study shows, they
ended up buying fewer options as compared to the first
group.
How can you use this in sales? Let’s say you’ve been
working with a client for some time and they’re now ready
to buy. During the proposal or pricing stage, why not load
it up with features or options and then let the client decide
which of them they’d like to take off? This will force the
client to make the tough decisions and you, the salesperson,
won’t be seen as being too pushy. And, if they’ve fallen
under the influence of the endowment effect, you’ll also be
shifting the price point upwards (i.e., the client keeps more
options in). Here are some possible scenarios:
•
If you’re selling software with plug-in features, let
the client decide what they don’t need instead of
proposing what they should add. The more features
that are left in, the higher the sales price point.
•
If you’re selling real estate, ask the buyers to
describe their ideal, fully-loaded house, and have
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Victor Antonio
them decide what amenities they could live without
prior to looking at houses. If the buyers don’t
eliminate many of the amenities, this translates into a
search for a more expensive house and a bigger
commission for you, the agent.
•
If you’re in banking, list out all the account options
and services your bank provides. If you get some
push-back, ask the business owner what options he or
she would like to eliminate. If necessary, and for
maximum effect, explain what the business owner is
giving up with each option. This reinforces the loss
and minimizes the number of options eliminated.
Remember, the emotional impact of a loss (i.e., giving up
something) is stronger than the desire for gain (i.e., adding
something). A buyer who takes mental ownership of a
purchase will hold on to more options (buy more) in order
to minimize the pain of having to give something up.
You may be thinking, “But doesn’t adding features give
the client some sense of satisfaction? Why not add options
instead of subtracting them?” A great question! Studies
have shown that, in absolute terms, you will be more
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impacted by a loss than by a gain. For example, as we
learned in Chapter 1, if you lost a $50 bill it would cause
you more mental angst than the mental joy you would have
if you found a $50 bill. Think about that again in this new
context, and factor it into your next pricing offer!
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Chapter 18
Sales Positioning #1:
Redefining the Need
Let’s pretend for a moment that you’re in the business of
selling laptop computers. If asked what your top five
product strengths are, you might provide a list, in order of
importance, which looks like this:
1. Weight
2. Screen size
3. Memory
4. Brand
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Victor Antonio
5. Price
Now let’s say that you’re meeting with a potential client
interested in buying a laptop computer. After some careful
questioning, you discover that the client has five criteria for
choosing a laptop. Here, in order of importance, is what
the client wants:
1. Screen size
2. Brand (quality and reliability)
3. Memory
4. Price
5. Weight
If we put your product strengths next to the client’s
priorities, we see immediately that there is a product
priority mismatch between what the client wants and what
your product’s strengths offer. The biggest mismatch
occurs with the product feature “Weight” (i.e., lighter
computer).
Product Strength
Client Wants
Weight
Screen Size
Screen Size
Brand
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Sales Influence
Memory
Memory
Brand
Price
Price
Weight
The client is coming to you with a set of predispositions
and has already determined what’s important (i.e., the
features have been prioritized). And if there's a mismatch,
which there clearly is in this case with the “weight” feature,
you, as a salesperson, have your work cut out.
If you can convince your client that “weight” is not
only important, but should be a prime determinant in
making a buying decision, you then stand a better chance of
making the sale, since you’re playing to your strength.
Also, if you know your competitors can’t compete with
you on the “weight issue”, by making it the top deciding
factor, you neutralize your competition by default.
In order to move the factor of “weight” up the client’s
decision-making totem pole, we have to use a strategy
called “redefining”. This strategy is executed with a series
of questions that will cause a client to reevaluate his
priorities for making a buying decision. In the above
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Victor Antonio
example, the client gives the “weight” issue the least
importance.
So your job as a salesperson is to make the client
cognitively aware of the benefits of having a lighter
computer, and have the client mentally move “weight” up
as a top priority when deciding to buy. Here’s how you
would do it:
Salesperson: So Bob, before I show you what types of
laptops we offer, what are your five key factors that’ll
help you make a buying decision?
Bob: Well, I’d have to say screen size, brand, memory,
and price are important, and weight, too.
Salesperson (having written down all five items on
notepad): How would you prioritize them?
Bob: The same way you’ve written them down.
Salesperson: So screen size being the most important
and weight being the least important.
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Bob: Yep.
Salesperson: I’m curious, Bob, do you do a lot of
traveling?
Bob: You have no idea. The airport is my second home.
Salesperson: Do you bring your computer with you?
Bob: Don’t leave home without it.
Salesperson: When I traveled, I used to haul around
company materials, samples, and all kinds of small, but
necessary items. I remember feeling like a pack mule.
Bob: I’m with you on that. It’s a wonder I can fit most
of that stuff in one carry-on bag.
Salesperson: Think back to the last time you boarded a
plane where your overstuffed bag didn't fit under your
seat and there wasn’t any overhead bin space
available. Has that ever happened?
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Bob: That’s happened more than a few times. What’s
worse is when you have to schlep it around the airport
or run to catch another flight.
Salesperson: It can’t be good for your back either.
Bob: I’m sure it isn’t.
Salesperson: Bob, the reason I’m asking you about
your traveling is because I know that the lighter you
can pack, the better off you’ll be. Would you agree?
Bob: Can’t argue that.
Salesperson: I know you have “weight” down as a low
priority, but if you think about it, it should be one of the
key factors in making a buy decision since you travel so
much. Does that sound right?
Bob: I honestly didn’t give it much thought until now.
But, yeah, that sounds more than right.
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Salesperson: So let’s go ahead and move that up to,
let’s say, in the top three things you want in a laptop.
Does that make sense?
Bob: Yes, it does.
What we’ve just done in this fictionalized sales scenario is
“redefine” for Bob how important the element of “weight”
is in making a buying decision. We did so by first asking a
series of questions to understand Bob’s situation and then
we proceeded to create the “pain” by reminding him about
all the stuff he takes with him when he travels.
Another benefit of using this method was alluded to
earlier. If weight now becomes a central feature of what
Bob wants, and your competitors don’t have that
advantage, this “weight conditioning” will make it that
much harder for your competitors to outsell you.
We also need to emphasize the use of the Rule of
Commitment (i.e., getting people to commit aloud to a
position) when it came to lowering Bob’s sales resistance
and increasing his sales acceptance. By asking Bob
questions and relating to him, the salesperson managed to
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lower Bob’s sales resistance when 1) Bob viewed the seller
as someone who understood the toils of traveling and 2) the
salesperson got him to agree (i.e., commit aloud) on why
having a lighter computer make sense.
By asking him questions like, “Does that sound right?”
or the standard sales staple, “Would you agree?” we’re
getting Bob to “commit” to a position (i.e., that weight is a
prime determinant in deciding which laptop to buy).
We all know that once a person commits aloud to a
position, he is more reluctant to change his mind. By
getting Bob to agree aloud upfront to what’s important to
him, it becomes harder for him to change his mind later in
the closing phase of the sale.
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Chapter 19
Sales Positioning #2:
Highlighting a Need
In Part 1, we discussed how the “Redefining Tactic” can be
used to redefine the client’s purchasing priorities to align in
your favor, to the detriment of your competitors. In that
example, Bob wanted to buy a computer and “weight” was
a deciding factor, but not a key factor.
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Product Strength
Client Wants
Weight
Screen Size
Screen Size
Brand
Memory
Memory
Brand
Price
Price
Weight
By using the redefining tactic, we convinced Bob that it
should be in at least the top three factors for making a
buying decision. Let’s assume for our purposes that Bob
moved his “weight” requirement to the top, and the rest of
the requirements shifted down accordingly.
Product Strength
Client Wants
Weight
Weight
Screen Size
Screen Size
Memory
Brand
Brand
Memory
Price
Price
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At this stage of the sales process, we have the client telling
us that his top two requirements are “weight” and “screen
size”. These top two requirements now match up with our
top two product strengths. Up to this point we’ve done our
job in redefining the client’s needs in our favor. But what’s
to hold Bob there? What’s to stop him from changing his
mind if a competitor comes along and uses the same
“redefining tactic” we used?
Using the Rule of Commitment, what we want to do is
reinforce Bob’s requirements so he doesn’t change his
mind later. Here’s where the “highlighting” tactic can
come in handy. The goal of highlighting is to get the client
to agree on, let’s say in this case, the top two requirements
which favor our product – weight and screen size.
If we can get Bob to agree to two key decision-making
factors that are in our favor, our chances of closing the deal
increase. Let’s walk through another fictionalized sales
scenario:
Salesperson: Bob, based on what we’ve talked about
you’re telling me now that these are our top five
criteria: Weight, Screen Size, Brand, Memory and
Price, is that right?
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Bob: Yep.
Salesperson: Assuming a reasonable price and a brand
name computer with good memory capacity, your top
two requirements, the “must haves” as we say, are a
light computer with a good screen size?
Bob: You got it.
Salesperson: Well then, that makes my job in helping
you easy. Let me show you a couple of brand name
models we have here that are the best of the best when
it comes to light weight and large screen sizes.
At this point you have “framed the context” of your
discussion (i.e., about weight and screen sizes), making it
that much easier for you to close the deal, and making it
that much harder for Bob to back out of the deal. Every
time you get Bob to define what really matters to him, you
increase your chances of making the sale, assuming you
have a product fit, of course.
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Now you may be thinking, “Well, in an ideal world,
with an ideal client, this may work, but not in the real
world. What if he doesn’t want to buy? Then what?” Well,
let’s go through a related scenario that is real world.
Salesperson: Well Bob, these are the best two models
we have to offer. Which one shall we say is yours?
Bob: Well, I need to think about it a little more before I
decide.
Salesperson: That’s fair. But can I ask if it’s the price
that’s bothering you?
Bob: No, it’s not that.
Salesperson: These are top brands so it can’t be that;
what’s holding you back?
Bob: Well, I think I’m going to need more memory
capacity?
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Salesperson: Did you know you can always add
memory later on if you need it. In fact, memory prices
are always coming down, so it might be a wise decision
to put extra memory off for now and get more for your
money later.
Bob: Okay. (pause)
Salesperson: Bob, you told me earlier that the two key
decision-making factors were weight and screen size.
Is that right?
Bob: Yes.
Salesperson: So, here you have the best of both worlds.
With both of these models you get the lightest and the
biggest. You can go out and look for a lighter
computer, but you won’t find one that has this large a
screen size. You can go out and look for a larger
screen, but you won’t find one as light as ours. No one
comes close to our products with this combination.
And if it’s that important to you, which you told me it
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was, then let’s go ahead and get the process started.
Just tell me which one is going home with you.
The purpose of highlighting, as you can see, is threefold:
get the client to agree on key features, frame the
conversation around those key features, and, if necessary in
the closing stage, remind the client of the two features.
The pull or influence of the Rule of Commitment is
very powerful here.
People don’t like to contradict
themselves in order to avoid any appearance of deception
or being seen as disingenuous. Once Bob committed to the
two key factors, his internal consistency belief system
guided his behavior to act accordingly, based on what he
had stated earlier.
The more you can get a client to commit to what’s
important and then highlight what was stated, the less
wiggle room a client has for backing out of a sale. This
approach is not 100% failsafe, but it will dramatically
increase your close rate if applied correctly.
A question often asked is, “What if, after using the
highlighting technique, they still won’t make a buying
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decision; what then?” That’s a great question. There are
two ways of looking at this outcome.
First, maybe the client lied from the outset. In that
case, shame on Bob, since there’s nothing you can do but
move on to the next opportunity and hope it doesn’t happen
again.
Second, even if Bob doesn’t buy right there and then,
maybe your approach, at a minimum, has a lingering
effect. If Bob decides to check out a competitor of yours,
he is now armed with your information and will use it as a
reference point. If he can’t find what he wants elsewhere,
he may be back. All is not lost.
Lastly, it would be negligent not to mention that, as a
sale gets bigger in terms of dollars or complexity, closing
the deal on the spot gets harder since the buyer’s
commitment (e.g., financially and in terms of time) is
greater.
If you’re selling high-end products or services, the best
you can do is to help the client, Bob, determine what’s
important when making a buying decision. Obviously
you’re going to slant the odds in your favor. But in the
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end, if the deal doesn’t get done, as a salesperson and a
representative of your company, you did all you could do to
close the deal. No one can ask for more than that!
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Chapter 20
Sales Truth Serum for
Buyers Who Lie – How to
Get Accurate Information
Have you ever had to ask the following questions to a
prospect?
•
When do you think you’ll be making a buying
decision?
•
How much money do you think will be in your
budget for next year?
Have you ever had to ask these questions of your
salespeople?
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•
So when do you think we’ll close on that big order?
•
What do you think you can sell next quarter (or next
year)?
Have you ever had to ask a subordinate these questions?
•
When do you think that project will be done?
•
How long will it take you to complete (fill in the
blank) task?
And when you did get the answer (i.e., the prediction), for
some reason you didn’t feel quite confident that you were
getting an accurate answer. In fact, more often than not,
the answer you received was either highly optimistic or
pessimistic, and far from accurate. Learning from a recent
study done by Robin Tanner and Kurt Carlson will help
you increase the accuracy of a person’s prediction by
simply applying one simple step.
Tanner and Carlson tested an interesting approach to
getting more accurate or realistic information from a
person.
Instead of asking a “focused question” (e.g.,
similar to those listed above), the study showed that by
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asking an “ideal question” first, followed by a focused
question, produced more realistic results.
In one study, Tanner and Carlson first posed the
focused question to one group (Group 1), and then posed
the ideal question first followed by the focused question to
a second group (Group 2).
Group 1 was asked: How many songs would be
loaded on your iPod at any time.
Group 2 was asked:
In an ideal world, how many
songs would be loaded on your iPod at any time?
Followed by: How many songs would be loaded on
your iPod at any time?
In the study, Group 1 estimates were higher (i.e., how many
songs they would put on their iPods) when compared to
Group 2. In other words, when Group 2 was first asked the
ideal question, followed then by the focused question, the
respondents tended to give more realistic answers. Three
other studies further substantiated the premise that first
asking the “ideal question” before the “focused question”
produced lower numbers (i.e., more reasonable estimates)
than when simply asking the focused question alone.
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Sales Truth Serum
Now let’s use a sales example to see how you would use
this in your sales process. Let’s say you’re meeting with a
prospect named Bob, and you’re trying to get a realistic
timeframe for when a buying decision will be made.
Option 1: Ask the focused question.
Salesperson: “When do you think you’ll be making a
buying decision?”
Bob: “Well, I don’t rightly know. Could be within a
week or two.”
Option 2: Ask the ideal question first, then focused
question (i.e., ideal – focused sequence):
Salesperson: “So Bob, if conditions were ideal, when
do you think you’d be making a buying decision?”
Bob: “Well if everything goes according to plan, I’d say
two weeks.”
Salesperson: “When do you personally think you’ll be
making a buying decision?”
Bob: “Well, I’d say more like three weeks.”
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Based on the Tanner-Carlson study, then the best approach
would be to use Option 2.
Using the ideal-focused sequence forces the respondent to
really think about the answer they’re giving you. It works
almost like truth serum for selling. This is a relatively
simple and painless technique that you can incorporate into
the information-gathering phase of your sales process.
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Chapter 21
Nodding – Pumping the
Prospect for Information
Any salesperson will tell you that, in order to increase your
chances of getting the sale, you have to know everything
about the sale and what’s going on in the background.
Much like the Wizard of Oz, we, as salespeople need to
know how the decision is being driven by the people
behind the green curtain.
Let’s go back to the premise that the best salespeople
are usually the best listeners, and analyze more closely why
that might be so. We’ve all know that person who was able
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to squeeze out more information from a prospect, and we’re
left wondering how she did that.
One study in particular may provide us with a clue of
why that might be so.
Research conducted on human
behavior has revealed that using a head nod encourages the
other person to talk. It’s our way of saying, “Go ahead.
You’ve got the floor.” It has also been shown that simply
nodding your head in intervals encourages the other person
to speak. One study showed that individuals will talk three
to four times longer just because they are encouraged with
repeated head nods.
Allen Pease in his book, “The Definitive Book of Body
Language”, took it one step further by putting together a
formidable one-two punch for priming and pumping the
prospect for more information.
“After you’ve asked a
question and the listener gives his answer, nod your head
during the answer. When he finishes speaking, continue to
nod your head another five times at the rate of about one
nod per second. Usually, by the time you have counted to
four, the listener will begin speaking again and give you
more information.” To further encourage the prospect to
speak, stroke your chin in an evaluative way. This signals
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the prospect that you are listening intently and would like
to hear more.
The psychology of why this works is rooted in the need
to satiate our ego and validate ourselves to others. When
you’re listening intently and agreeing with what the speaker
is saying, you are validating what he is saying.
That
validation is hard-wired to his ego (i.e., his need to
demonstrate his authority on the subject) and helps his selfesteem.
When
“emboldened”
to
self-esteem
continue
rises,
to
the
pontificate
speaker
or
is
share
information. The person speaking gets a good feeling when
others listen and care about what he has to say.
The
attention paid to him further encourages him to keep
speaking, which is why he can’t keep himself from talking.
The next time you’re speaking with a client, try
encouraging him to speak by using repeated head nods.
When you ask a question, go silent and wait for him to start
speaking.
When he starts talking, encourage him to
continue on by adding in some frequent head nods and
some pensive stroking of the chin for good measure. So
you see, not only are the best salespeople in the world good
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listeners, they've also mastered the art of nodding their
heads and stroking their chins!
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Appendix A
The Up Side of a Down
Market – 10 Reasons a
Recession is Good for
Selling
All this whining about the economy is making me sick.
Stop it! Cut it out! Let me take a moment to put things in
their proper perspective.
I lived in Buenos Aires, Argentina as VP of Sales,
managing all of Latin America. The unemployment rate in
Argentina was somewhere between 20% and 25% at the
time. Their currency, the Argentine peso, although pegged
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to the U.S. dollar, bought only half of what you could buy
here in the U.S.
Rent for a typical one-bedroom apartment of about 600
square feet started at $1,500 a month, with the average
monthly wage of a worker being $300 per month. (Yes, you
read that right.) Don’t ask me how they could afford to
live; that’s still a mystery to me. And, the cheapest you’d
ever find a gallon of gas was close to $4 (i.e., a bargain at
the time). "So what?!" you say.
During that time we grew our annual sales from a
little over $400,000 a year to $1.5M in sales in less than
two years; that’s the so what! When everyone around me
was telling me there was no business to be had in the
country, I proved them wrong. There’s always an “up side
to a down market,” and here are ten of them:
1) The economist and pro-capitalist Milton Friedman in
his book, Free to Choose, reminded us that a recession
squeezes out the excess in an over-saturated market.
Simple translation: most of your competitors will
struggle, or better yet, cease to exist during this period.
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Less competition equals more opportunities. Score 1
for a recession...yeah!
2) Accessibility to potential clients is easier since fewer
salespeople are calling on them. This is an opportune
time to start building new relations with accounts that at
one time were impenetrable.
3) Here’s something to ponder: when things are going
well, the last thing a client wants to do is try something
new or rock the proverbial boat. But when a downturn
in business occurs, the client’s upper management is
screaming for ways to either save money or make
money. At that moment, clients are more receptive to
finding new ideas or trying something new (i.e., like
your products). Which leads into my next point…
4) Managers, directors, or simply decision-makers in a
company who don’t want to lose their jobs will work
very hard to look busy and will be more receptive to
meeting with you. Why? They want to be able to
report back to their bosses that they’re looking into new
ideas and approaches.
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5) Your financial solvency becomes an edge. If your
company is well-positioned financially, you can offer
your services (or products) with extended terms (e.g.,
instead of Net 30, maybe you could go Net 120 days),
something your competitors may not be able to do.
6) If your competitor has products that are costlier or
less efficient, now is the time to strike; they're in too
weak a position to fend you off no matter how long
they’ve been supplying the client. Loyalty to a brand
(i.e., product or company) goes out the door when times
are tight. Highlighting to the client how your product
or service can save him money is a welcomed
conversation; have it.
7) Offer the client free or discounted training on your
products. The biggest complaint we salespeople get
when we sell a product is that the client’s employees
don’t know how to use the product, or that times are so
busy they don’t have time to train the employees.
During a downturn is a good time to do some on-site
training
and
further
embed
yourself
and
your
company’s products with the client’s employees.
Remember, employees often get a say in what products
or services they like to use.
Show them love, and
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they’ll give it back in return. I remember doing free
product training at the client’s location whenever we
could, and the client remembered this when they were
ready to start buying again.
8) Sometimes as salespeople, we're running around
with our heads unscrewed trying to stir up new
business. But with a downturn comes less money for
travel, for attending tradeshows, and a pulling back on
marketing events. So, what to do? Studies have shown
that the best way to grow your revenues with existing
products (i.e., upwards of 25%) is to go back and visit
those clients who have bought from you in the past3.
Instead of trying to find new clients, go back and
datamine your existing client base, create a list of the
top 20 clients along with what they’ve purchased in the
past, and put a game plan together to go revisit them
and up-sell them on other existing products.
9) Beta, beta, beta. If you have a new product you’ve
been anxious to test in the field but couldn’t find any
willing clients to take the time to do it, now is the time.
3
The Channel Advantage, Lawrence Friedman and Timothy Furey,
1999, Butterworth-Heinemann Publishing
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This strategy alone helped me “insert” myself into my
competitor’s most prized client locations. The result?
They eventually became my clients.
10) C-Leveling.
During a downturn, your client’s
CEO, CFO, COO, and others are worried. Now would
be a good time to get your CEO or senior management
involved in the sales process. Have your CEO call on
your client’s CEO and see if there is anything that your
company can do. This has no value other than pegging
in your client’s mind at the C-level your concern for his
well-being. Think long-term. If you can help out (or
lend a hand) to a client through the hard times by
offering him flexible terms, small price breaks on
products where permissible, and/or extra support, he
won’t forget it. And when things get back to normal, as
they always do, he won’t forget who stood next to him
through the hard times.
The key to success during a downturn, aside from
surviving, is to further entrench yourself with your existing
client base, and at the same time, look for ways to penetrate
and position your product in your competitor’s backyard.
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So how did we do it? During that one and a half year
period, we focused on our competitor’s top five clients
across three different market segments (i.e., a total of 15
clients). For nine straight months, we bombarded them
with information (product training, price breaks, free
demos, etc.) and kindness (took them out to lunch, made
ourselves available for impromptu meetings, etc.). Sounds
too simple? Try it for six months and then get back to me.
We have it good here in the good old U.S. of A. But
we’ve become a nation of sales whiners.
When
unemployment is rising, we see Armageddon. When the
credit markets tighten up, we come up with reasons (i.e.,
convenient
rationalizations)
why
the
client
won’t
buy…today!
Not all markets are created equal.
We shouldn’t
generalize what we see in the news and assume it applies to
our market. It may, but the direct assumption is a copout.
In George Orwell’s 1984, the media were in charge of
creating perception to fit some totalitarian agenda.
Today, the media irritate me. They can’t seem to make
up their minds whether we’re in a deep recession or
shallow depression.
Who cares!
Pundits, be damned!
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Argentina had an unemployment rate of over 20%, a weak
dollar, overpriced gas, and yet, by some Keynesian tricks or
fortunate turbulence of the invisible hand, companies were
still buying from somebody. No economy stands still!
Right now, at this very moment, a potential client in
your market niche is buying something from your
competitor. Stop coming up with reasons (i.e., excuses)
why you can’t sell, and think of reasons why NOW is the
ideal time to expand your business.
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Appendix B
Seven Ways to Spot
a Sales Phony
We all remember the Tom Hanks movie, Forrest Gump,
the story of a man who is a bit slow on the uptake and life
in general, but who still manages to accomplish great
things.
The line that people often recite from the movie is,
"Life is like a box of chocolates. You never know what
you're going to get." This line has become part of
American pop culture. You can go up to almost any person
and start the line, and nine times out of ten, the other person
will finish it. I guess the line’s popularity stems from the
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simple truth it contains, not just about chocolate, but about
people in general. Because, when it comes to people, or
more specifically salespeople, you never really know what
you're going to get.
No one knows this more than anyone who has ever
hired an employee to work for his company or team. Sales
managers, for instance, can relate to what I'm saying. For
example, hiring great salespeople is tough, I mean really
tough. You can look at their resumes and say, "Great!"
Hire them, put them in the field, and a few months later,
you're saying, "Damn!" You can have them take
“psychological” tests, and they'll pass and you'll say,
"Great." Put theory into practice and send them out to sell,
and again, a few months later you're going, "Damn."
I don't have the answer or a system for hiring the ideal
salesperson.
My only suggestion is to take every
precaution and take the time to do your due diligence (e.g.,
review resume, verify credentials, speak with references,
have him take tests, have him interview with many people
in your organization, etc.).
But what happens when it isn't obvious that you have a
poor salesperson? How can you discern between a person
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who is just towing the corporate line, versus a person who
is out there turning over every rock to find a sale?
You may be thinking, "Well, you can easily tell by
whether or not he’s hitting his numbers."
That's a fair response, but I would counter by making
the following observations:
1. Maybe the quota is set too low because you're
underestimating the size of your market.
2. Just because he’s hitting his number doesn't mean
you aren't losing market share.
I could come up with more reasons why this line of
thinking is faulty. And yes, I recognize that a salesperson’s
hitting his quota is a great indicator, but I would caution
against making the leap that this means he’s great at sales.
Many of us have known people who would hit their
quotas, not because they were great salespeople, but
because of market opportunity and timing (i.e., right place,
right time, right product or service). That's not selling,
that's luck...and you can't be lucky 100% of the time.
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But again, how do you know if you have a great
salesperson or just an opportunist...a sales dud? Well, I've
decided to lay out...
7 Ways to Spot a Sales Phony
1. Comfort Zone: Watch for this! In many cases sales
phonies will not venture out to find new business.
Instead, they come up with creative ways to keep seeing
the same customers over and over again. Now don't get
me wrong – I'm a fan of the "up-sell strategy" to my
existing customer base. I'm also a fan of staying close
to my customer. But too often this becomes a comfort
(safety) zone for sales phonies who, over time, stop
venturing out for new business.
2. Not Perfect: If a salesperson complains about every
little detail of what's wrong with the company and
"implies" that the reason his sales are suffering is
because of all the "little things we do wrong that add up
to a big thing"...you may have a phony on your hands.
Like many managers, I struggled to get things right in a
company (i.e., pricing points, lead times, delivery,
customer service, etc.). But if a salesperson continues
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to use the company's imperfections as the excuse for his
lackluster sales, you may have a sales phony on your
hands. No company is perfect. Good salespeople learn
to manage their company's imperfections without
exposing any internal difficulties in front of the
customer.
3. Sales Call Reluctance: If a salesperson seems to come
up with excuses of why he can't set up a meeting with a
key customer, or why things are moving slower than
expected, be suspicious. Many salespeople are simply
afraid to pick up the phone and make the calls. Fear of
rejection? Yeah. Fear of success? Possibly? If you've
instructed your salespersons to make or set up a
meeting with a customer and one month later it hasn't
been done, you have a sales phony.
4. Product Fear: A subcategory of sales call reluctance is
the fear of being caught with your pants down. It's
common for a salesperson to have been with a company
a long time and still not understand the products. Or,
maybe they haven't kept up with the new product
releases. A true salesperson views a product release as
an excuse to go back and visit a customer. A sales
phony sees a new product as just another product he has
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to push. What he says speaks volumes for how he
thinks. Sales phonies use a lot of fluffy language and
anecdotes to cover up for their technical inadequacies.
5. The Reports: As a manager I always had my team
members submit summaries of their work week.
Reading these reports gave me great insight to what
they were doing and how they were thinking about the
business. It becomes evident over time who the best
salespeople are by the content in their reports. Another
key report is a salesperson's travel report to a customer
or tradeshow. If they're not taking their clients out to
breakfast, lunch, or dinner, then you may have a sales
phony on your hands.
6. Lower Prices: Sales phonies like to use the shortcut
method of selling value by cutting prices.
If a
salesperson is constantly asking for more discounts
across the board on your products, you may have a
sales phony. Great salespeople sell the value, and
expect a customer to pay a premium for that quality of
service.
Finding the Why in (How People) Buy
Victor Antonio
7. And finally, my personal favorite, Blame the Product.
Sales phonies always blame the products. They say
things like, "If it only had this (fill in the blank) feature,
I could sell (fill in the blank) more." Or, they say, "We
lost that deal because we didn't have (fill in the
blank)."
My favorite excuse for not selling is the
"Field of Dreams" excuse. You remember the Kevin
Costner movie about a guy who kept hearing a voice
telling him, "Build it and they will come." So he built a
baseball field and “players from the past” showed up to
finish a game that never happened. Sales phonies do
the same thing; they say "Build this product for me, and
the sales will come." Greatness for them is ALWAYS
over the next new product horizon.
If you're a sales manager, I hope these tips will help you in
the vetting process when trying to find the right
salespeople.
If you're a salesperson and have used any of these
excuses in the past, CUT IT OUT! Sooner or later you will
be discovered. Learn to win. Don't be a dud. Devise a real
sales plan. Don't be afraid to learn new products. Go after
new customers, and if you need help...ASK FOR IT. That's
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what sales managers are there for...to help you succeed in
selling.
Finding the Why in (How People) Buy
Victor Antonio
Appendix C
Improving Your Sales
Performance Model
Measuring sales performance is easy compared to the
Herculean task of trying to predict how well salespeople
will perform. Every quarter, and at the end of every fiscal
year, somewhere in the boardrooms or meeting rooms of
corporate America, there are teams of managers and
executives trying to hammer out the next year’s budget.
That budget largely depends on where they predict the
sales number will be at the end of the year. The higher the
revenue projections, the more that can be done to grow the
business
in
terms
of
investment:
Research
and
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Development (R&D), expanding into new markets, and, of
course, adding more salespeople. But just because a
number is projected to grow doesn’t necessary mean the
sales team will hit it.
For example, let’s say our total year’s revenue number
is $1,000,000 ($1M) and that we have 50 salespeople on
our staff. If we were to democratically ration out sales
quotas, each person would have to sell $20,000 ($1M
divided by 50). I realize this is unrealistic, but let’s work
with this assumption.
Now, let’s also assume that we have no “sales history”
to rely on to project what the new sales year might bring.
That means we have to estimate what percentage of
salespeople will hit their quota (100% or more) and what
percentage will fall short, and by how much.
In the figure below, I assumed that: 25% of the 50
salespeople (12.5 people) will hit 100%, 40% (20 people)
will achieve only 65% of their assigned quota, 25% (12.5
people) will hit 35%, and the bottom 10% (5 people) of the
sales force will hit only 10% of their quota.
Finding the Why in (How People) Buy
Victor Antonio
Total Sales Revenue
$1,000,000
Salespeople
50
Avg per Salesperson
$20,000
Met Quota
% of Quota
Revenue
25%
100%
$250,000
40%
65%
$260,000
25%
35%
$87,500
10%
10%
$10,000
$607,500
As you can see, the total revenues would fall 40% short of
the sales revenue goal of $1M. At this point, we have a
problem and we need to find ways to resolve it (i.e., hit the
$1M).
Scenario: Add more salespeople
This is an option, but there are many things that have to be
factored in to determine whether or not this will solve the
problem. First, adding more salespeople will increase the
costs (expenses), thereby reducing the overall profit
margin, or worse, eroding any possible profit altogether and
putting your company in the red.
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Second, you have to consider training time and ramp up
time for new salespeople. It would be nice to think that the
salespeople will hit the sales ground running, but that
would be betting on a long shot.
Nonetheless,
let’s
assume
we
added
20
more
salespeople and still required them to hit the same quota of
$20,000. As you can see, the revenues did increase to
$850,500 but we're still 15% short of hitting our $1M
revenue goal and we’ve just increased our expenses by
adding more people.
Total Sales Revenue $1,000,000
Salespeople
70
Avg per Salesperson $20,000
Met Quota
% of Quota
Revenue
25%
100%
$350,000
40%
65%
$364,000
25%
35%
$122,500
10%
10%
$14,000
$850,500
Finding the Why in (How People) Buy
Victor Antonio
Scenario 2: Improve the performance of your existing
team
Sometimes the answer to the sales question can be found in
our bathroom accessories. Instead of buying another tube
of toothpaste, maybe the answer is to find a way to
effectively “squeeze” the tube to make sure we’re getting
100% of what we paid for.
Now, squeezing salespeople by demanding they meet
their quota, and then threatening them with job loss, is not
what I have in mind. What if, instead, we decided to
retrain the sales force on product capabilities so they know
what they’re selling and know how to effectively position
the product?
And on top of that, what if we retrained them on using
sales techniques that are specifically designed to sell their
type of product?
Let’s assume that after the training: the top 25%
increased their sales by 50% (total of 150%), which means
each sold on average $30,000 instead of $20,000; the next
40% could increase their sales from 65% to 100% of quota;
the next 25% of salespeople increase their sales from 35%
to 65% and the last 10% increased their sales from 10% to
35%.
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Sales Influence
Total Sales Revenue $1,000,000
Salespeople
50
Avg per Salesperson $20,000
Met Quota
% of Quota
Revenue
25%
150%
$375,000
40%
100%
$400,000
25%
65%
$162,500
10%
35%
$35,000
$972,500
As you can see from the table, the new revenue number
is $972,500. Although we didn’t hit the $1M revenue goal,
it’s pretty darn close, and within striking distance.
It’s worth noting that in both cases you will be
increasing your expenses. But in the first scenario, I can
bet the costs (SG&A) will be much higher compared to the
expense of sales and product training.
I am amazed at how much money corporations and
small businesses spend on R&D, hiring people, product
Finding the Why in (How People) Buy
Victor Antonio
development, marketing, and so on, and how little they
invest in sales and product training!
Jim Cathcart in the Sales Success seminar series,
“Relationship Selling in a New Era", has a great anecdote
about sales training. He mentions how managers or
business owners often worry and complain about people
leaving the company after they’ve been trained. They’d
say, “What if I train them and they leave?” Cathcart’s
response: “What if you don’t train them and they stay?!”
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For more information
go to www.SalesInfluence.com
Finding the Why in (How People) Buy