Solution selling v’s problem selling

Customer Contracts – what’s the point?

I had an Epiphany about sales contracts the other day when in negotiations with a new supplier that I want to use.  I won’t name the company – but let’s assume that I am dealing with your company as I am sure that most companies (including my own) do what this supplier did.

Here’s the scenario:

I want to use your company services and have made a verbal commitment to do so assuming that we agree on price (something that we have pretty much done). The sale is going well from both points of view. I am excited to be using you and you are excited to have me as a customer.

Good so far. In fact, you could say it is going great so far.

We have questions go back and forth, but they are getting answered well, at least from my point of view.

You then try and close the sale – and ask if I am prepared to sign the contract.

I say “Yes, send it over”.

So now, the sale is going really well from your point of view also.

Terms of the contract

Then I start to ask you about the terms of the contract, and that’s where things start to take a bit of a nose dive as I quickly see all the benefit of me signing this contract is for you, and none of it is for me.

Here’s how the rest of the scenario unfolds:

I am a few months away from needing your services. Consequently, whilst I am sure of what services I need now, there could be a few amendments later down the line – I might change exactly which service I use.

You inform me that once I sign the contract, I am obligated to pay 100% of the fee for each service that I sign up for. If I want to change, I still have to pay for the service that I don’t use.

Mmmm. No flexibility from my point of view. I can understand from your point of view why you have this in your contract, it does make sense for you. it just doesn’t make sense for me (yet).

So I start to question some more. Not only do I have to pay 100% for each service that I sign up for, but I have to start paying as soon as the contract is signed.

Mmmm. Not great for my cash flow. Great for yours though. This is another win for you, the supplier, but not a win for me.

The Key Question in the customer’s mind

So, I ask the key question in all of this: what is the benefit to me for signing this contract now?

It is the key question. Yes I want to work with you. I have my mind up on that. So the “what’s in it for me if I sign now” question now becomes my key question.

Your answers:

You get an account manager and technical help when you sign.

Great, but you know and I know that if I call you (the sales guy) and ask a question – you will answer it. And if you don’t know – your technical people will answer it. You still want me as a customer. You are not going to cut me off until I sign the contract. That would be suicide. So this is not a valid reason.

The time slot that you want is all booked in.

If I don’t book them now, will I loose my slot? Is that why I need to sign the contract? Again, no. I find out that if someone else comes along and wants my slot – you’ll call me first. If I don’t sign the contracts at that point, you’ll offer it to the new guys.

So again – no risk to me for not signing the contract.

You run out of answers for me.

The benefit for me?

In fact, the benefit for me is not to sign the contract: I still get the time slots I need (at least first refusal) at the price agreed. I have flexibility if I want to change services, I still get the service I need to go forward from you and cash flow is much better for me. So I don’t sign. At least not yet. I will sign when it suits me, not you (even though I like you).

In case you haven’t guessed already, this made up scenario happened to me a few weeks ago. I want to use the services of a company – but I didn’t want to sign the contract at that point.

The problem was – signing the contract was a win-lose scenario. Not signing the contract is also a win-lose scenario but the other way around. Our contracts should be win-win.

Takeaways

1. Ask yourself – what’s the point in my customer signing this contract now? What are the benefits for them?
2. What are the benefits for you are your company if they sign?
3. Is there at least some sort of balance between the answers to these two questions? If not, what can you do to change that?
4. Also look at the is terms and conditions (also know as serious constraints) on you and your customers. Is there balance here too?
5. Have you made it really clear what the benefits of signing now are?
6. Is it your contract so good that they will happily sign a second time and a third? Or does it put them off?

I know that I will be looking at ours now!

Extra Takeaway: Thinking differently

What I did here was challenge the norm. The norm in that industry is to sign the contract as asked. Everyone does it. It is what is expected. So my extra takeaway for you here is: challenge the boundaries that are in place. Just because that is the way everyone else does it – doesn’t mean that you should do it that way. There could be a better way if you challenge a little.

What’s your experience with sales contracts (others and your own)?

Update: A New Definition of Marketing

Last week I wrote a post called A New Definition of Marketing (if you haven’t read it – it might be worth a quick glance). It has sparked some interest on the comments, facebook, twitter and email! It has definitely been the most engaging post of the week, taking most of the web traffic and social network interaction.

I mentioned on the blog that anyone could take the diagram that I put together in Omnigraffle (iPad version) and change it as they thought. John LeMasney did just that and came up with an adapted version:

Thanks to 365sketches.org

John’s idea of a circle connection intrigued me, and I have been playing around a lot this week with the diagram. A few emails back & forth with John and afew others, I eventually came up with this amendment – taking the original idea and adding the connections in.

As you can see, instead of the circle joining from the Ally back to the Beginnings section – I noticed with my customers a much tighter pattern emerging. Specifically, I saw two (general) things:

1. Engagement Cycle: People on their journey are more likely to have an engagement cycle with the previous phase of their journey.
2. Spread the Message: People pull in other people to their previous phase of their journey.

The Engagement Cycle

For example, let’s say that I have just released a new product to the market – Product Y. If an existing contact is at the Conversion phase with my company (with, say Product X), then they will end up at the Beginnings stage with Product Y. Our previous connection helps them speed through the Discovery phase, but because I don’t have much connection with them, they end up in the Conversion-Beginnings cycle.

Spreading the Message

People at the conversion phase tend to be good at gathering people into the beginnings stage. They don’t have a lot of connection with your company – but they have enough to at least recommend you to people. These people then join at beginnings.

The Engagement Cycle

The Existing customers are somewhat easier to get involved with our new Product Y. They have a stronger connection with us. They like our company and services, so end up back at the Conversion phase and take a little persuasion to get involved.

Spreading the Message

Customers have a much stronger connection with us, so when they refer people to our company – they do so as part of your sales team. They convince the people a little more than those at the conversion stage – so people that come to our company as a result of the Customer referral tend to enter at the Conversion stage and are easier to convert into sales.

A Business

This is the end point for most companies and indeed where I find our company at. We have customers that are connected to us. We don’t win them on every product or service we sell – but we are, at least asked and stand some chance.

We spend our time then, increasing the amount of people in the discovery phase (lead generation), and through our sales process – lead them to conversion. We also work on providing a great follow up service to our Customers (at least a portion of them) and we also get some great referrals from Customers.

A movement

I came across a quote by Ron Bruder: Bruder doesn’t run companies. He leads movements.

This quote gave me a great split on this diagram. Movements come as a result of deepening the connection with Customers and thereby creating Allies. This is where I want to take the companies that I am involved in – not being just a business but a movement, and I guess to do that I have work at getting the customers in to the Ally phase, because here is where the magic starts to happen.

The Engagement Cycle

Apple have done this well. That’s why they have people queuing for 8 hours to get the new iPhone, even though they have never used it. They buy just because you make it. That’s all the reason they need. There is no conversation or conversion – they are sold immediately.

Spreading the Message

Not only that – but Allies persuade other people to join your movement. They draw in people – and these people by-pass all of the other stages and quickly become customers – just because of the passion and evangelism of your Allies. How many people have decided to buy Apple stuff long before ever connecting with them simply because of the Apple Evangelist Friend?

Takeaways

Takeaways are actions that you can takeaway from reading this blog post that hopefully help:

1. Quick Check. Print the diagram out or quickly redraw it. Mark on the diagram where most of your current marketing effort goes (in terms of money and resource but also in terms of ROI). This should show strong and weak spots.
2. Strengthen. Now you understand where you weak spots are – write down a list of 20 things you can do in the next 3 months to strengthen each weak spot.
3. Implement. Take the top three items from your lists and work on those today.
4. Review. Schedule a time in your calendar to do this exercise again in 2-3 months.

A quick thanks…

So, there you go – this is my thinking so far of the Connection Journey Diagram. If you want a quick recap of the different phases of the journey – then please read my blog post: A New Definition of Marketing.

Thanks to all those that contributed so far with thoughts and ideas (through all the various forms of social media) and thanks again to John for doing a great job of re-drawing my initial model.

What do you all think of this model? How can we make it better?

A remarkable business model that I stumbled upon.

A few months ago, I wrote about the death of trade shows because the shows that I went to were very disappointing for me. Yet, in the middle of one of one particular trade show stood a company that absolutely caught my attention.

How it Worked

I walked around the show with my heavy back pack (why I insist on taking this bag I’ll never know, but I did) and stumbled upon a small, out-of-the-way stand that offered massages. I looked at the signage and there was no indication of price. In fact, the sign didn’t tell me anything other than the company name: Mobile Massage UK. One of the masseurs saw me and she asked me to sit and one of the (7) therapists would be with me soon.

She then proceeded to tell me that for the pleasure of a massage “you pay what you think it is worth”. This is what surprised me. She offered the service, but no price – that was my choice based on what I thought about the service they offered. I, of course, accepted her offer as I had nothing to loose. If it was bad – no money. If it was good, then I would pay something. I didn’t have a clue what I would pay – but I knew it would be something.

As I sat there contemplating this and as the lady continued to massage her client – my masseuse became available. He explained to me again that he would give me a 10 minute head and back massage. At the end of the ten minutes I could pay what I thought was a fair price for the massage. He also told me that “people usually give between £5 and £20″ and that “10% of the money I give will go to a Children’s charity”. I still, of course, wanted my massage (which was very good and too be honest, I could do with another one now).

I sat there thinking about this model and how it worked. At the end, I paid £10, which equates to £1 per minute. I did think about 60p per minute, but that would mean asking for change. It seemed fair and neat to pay the £10. It was easy.

The lady that initially spoke to me owns this business and I was keen to talk to her about her company and especially the business model that she had chosen. She kindly spoke to me and answered every question that I had.

The Business Model

They had tried the fixed price for a massage – but she made more money this way (although she didn’t know how much more). She put on the signs once “pay what you think it’s worth” and business dropped dramatically. So all she had on the signs now was the name of the company (Mobile Massage UK).

People would walk by and stop and ask if the service was free (put on by the event organisers). This was, of course, planned. That initial question was the opener for the staff to give their story. They must get asked this question hundreds of time every day, and each time the patter is the same. Some people didn’t like this – but more often than not people sat down.

She (the owner) told me that a few times people didn’t pay and occasionally you get teenagers paying £2, but more often than not people did what I did – and paid £10 (which is actually expensive for a 10 minute quick back rub). So not only did she get more business, but the people seemed happy to be paying more for the service. She takes a risk on the price, but reaps the rewards of doing so.

The charity thing is because it is what people expect rather than out of a desire to change the world, “people in this country don’t like the idea of you making money – so the charity statement helps with that” she told me. She is obviously listening to her customers.

View more info at: http://www.mobilemassageuk.com/

What do you think to this idea? Have you experienced this yourself (I know there is a restaurant in London that does this for example)? Have you done this yourself?

A new definition of marketing

I have been thinking a lot recently about how my company does marketing.

We used to have a great girl who worked for us (Naomi) who left a few months ago to set up her own company. Her remit was to handle marketing. It didn’t have any specific definition but Naomi did well because people really warmed to her. She made people feel important and cared for — and that was great!

So, it now comes back to me, so I have taken this opportunity to examine what we do, and perhaps start with a clean piece of paper with the word WHY? in large letters at the top (rather than just take what we do and add to it).

So – why do marketing? What is the purpose of it? What does it mean for our company?

Marketing is simply to build connections

I like this kind of question, rather than taking the one-size-fits-all approach. It’s good to think. So I took my journal and began to write. I came to the following conclusion: marketing is simply to build connections. That’s it. I appreciate that I might be taking old ideas and adding new language to it, but it has helped me.

Read More

Authentic Selling: Building trust

This is the final post in a series looking at authentic selling (Post 1: general overview, Post 2: Being Genuine, Post 3: Authoritative, Post 4: Truth, Post 5: Create win-win, Post 6: Credibility)

If you remember, the dictionary defines authentic as:

1. Genuine
2. Authoritative
3. True
4. Entitled to acceptance
5. Established credibility
6. Trustworthy

Trustworthy

I wonder whether this should be first on the list rather than last? There is a lot of buzz around the word “trust” at the moment. There is a lot of talk about whether or not people trust you, or your business because without trust – you really are going no where. Especially in the long term.

As you may know, I am reading Simon Sinek’s book Start With Why at the moment, and he writes:

Trust does not emerge simply because a seller makes a rational case why the customer should buy a product or service, or because an executive promises change. Trust is not a check-list. Fulfilling your responsibilities does not create trust. Trust is a feeling, not a rational experience. We trust some people and companies even when things go wrong, and we don’t trust others even though everything might have gone exactly as it should have.

How true this is. Early in my sales career, I made a point of telling customers about all the great things that we did and all the great projects that have been done. I showed them the best designs and most creative solutions. But there came a point when I realised, actually – it works just as well to tell the clients about the ones that didn’t go right and what we did when we landed in that mess.

I started to trust my clients and my clients started to trust me (trust is a two-way thing after all!).

It was hard to trust my clients with information that I thought might be damaging to my business – but by extending trust, I became trustworthy. My best clients are the ones that I trust the most, without a doubt.

Trust is an irrational feeling that can be jeopardised in a second. When clients do start to trust us, protect it at all costs. The simplest way that I have found to do this is to keep them informed, even when it is going wrong. Tell them what you are doing about it. Reassure them. Even if the calls are hard at times, it is worth doing.

Communication breads trust. It is that simple. And don’t just give your customers half-facts. Trust them.

Are you trustworthy? Do you have trustworthy clients?

Authentic Selling: Established Credibility

This is the 6th post in a series looking at authentic selling (Post 1: general overview, Post 2: Being Genuine, Post 3: Authoritative, Post 4: Truth, Post 5: Create win-win)

If you remember, the dictionary defines authentic as:

1. Genuine
2. Authoritative
3. True
4. Entitled to acceptance
5. Established credibility
6. Trustworthy

Established Credibility

If you have been doing the other items: being genuine, authoritative, tell the truth attractively and creating a win-win – then you should be well on your way to establishing credibility with your customers (your customers believe you, and you are proving yourself to be reliable).

My 8 year old set’s up his first company

Today, I came across a new business venture. It was really unique and one which I think I will always remember. It was my son’s first business (he is 8). The photo at the start of this blog is a sign that he has put on his bedroom door. Josh has realised that his mum likes being “fussed” (hair stroked or brushed, back rubbed) and decided to turn it into a business.

I am really quite proud as he has done this all on his own initiative. He checked with his customers what prices they would be willing to pay. He set his opening hours and is advertising his services. Josh was talking to me today about this business and wondering if he needed to extend his opening hours. He was also telling about his half price offer on Thursdays.

He had thought about all of this himself…I was amazingly impressed (and proud!). He wanted me to buy his services – which I did after negotiating the price.

Of course, the one thing that Josh didn’t have is credibility. He was a new company. Fortunately, mum and dad didn’t mind that – but it was something that he did think about.

He asked us to rate his performance, and that rating has gone on the sign on his bedroom door. He wanted to know if it was a 1 star, 2 star, 3 star, 4 star or 5 star rating. When I said 3 – we had a talk about how he could improve.

What he did, though, was build a facility that enabled him to build credibility. He had his customers provide feedback about his service and now he has made that public so other people can read it. It builds credibility as other customers are talking about his service. It is not just him telling me about all the good things he has to offer, it is his customers. That is believable.

Everyone reads Amazon’s reviews. We like to read what other customers have said about the product or service. The web makes it easy to do this. It is imperative that customers see what other customers say (the good things and the bad things). This makes our message credible because it is not just us saying it.

Building credibility is a key to my success

But it is not just about what our customers say, it is also about what we say. Is your message, and your product and your service credible? Is it believable or reliable?

When I took over the sauna business that I now have, the first thing that we went to work on was the credibility (it was in ruins). The product was great. The back and service was in a complete mess. We weren’t being credible by offering a sub standard service and great product. We worked hard on rebuilding the service and thereby the credibility of the business and the trust with customers.

It took a while – but we got there. We became credible, believable and reliable again (in all aspects of the business).

How is your product and service credible? How is your message credible? Do you give a chance to your customers to speak to your other potential customers?

Authentic selling: creating a win-win contract

This is the 5th post in a series looking at authentic selling (Post 1: general overview, Post 2: Being Genuine, Post 3: Authoritative, Post 4: Truth)

If you remember, the dictionary defines authentic as:

1. Genuine
2. Authoritative
3. True
4. Entitled to acceptance
5. Established credibility
6. Trustworthy

Entitled to acceptance

This is a bit of an odd one at first glance. If we dig a little further the dictionary defines this as the right to agree to enter into a contract. It is about an agreement of terms. In other words – authentic selling is not just about you and what you can get out of the deal. The terms of your contract should not be biased towards you.

It’s not all about me

Recently I was having a conversation with a gentleman about saunas (inevitable I know, given that is what I sell). It was obvious to me quite quickly that we were not going to be the best fit for him. I could have sold him a cabin, but on this occasion I believed that there was a much better way of doing things.

I then spent 20 minutes explaining this as an alternative that would save him at least 50% of what he would spend with me.

You see, in this situation – the terms of the sale would have been heavily stacked in my favour, and it didn’t feel right. Selling is not all about what I get out of it.

It’s not all about the customer either

Conversely – it is not all about your customer either. Authentic selling is as much about turning away work that is not suitable as it is about getting work that is. I have turned away work because the work didn’t match my core values (I was asked to develop a porn site for example – and that wasn’t acceptable to me. The terms didn’t sit right).

I have also been in situations where the client presses and presses for a reduction in price. In this situation it quickly gets to the point where I tell the client that it is not worth me doing it for the price they want. It would cost me too much, and the terms of the contract are heavily stacked in favour of the client.

Yes, I should look out for my client, but I should also look out for the wellbeing of my company. I am no used to the client if I renege on the deal half way through or even worse, sell them the product and go into administration afterwards. I owe it to my staff and my customers to maintain a profitable company.

If I have been building trust by being genuine and authoritative before hand, then when I explain to the customer that this contract has to suit both parties and not just them – they believe me. I am not lying when I say it is at the point that I need to turn down the work (and they respect me for that).

So authentic selling is about having a balanced contract, one that genuinely benefits you and your customer. In the language of Steven Covey – it should be a win-win. This is what creates an acceptable between you and your client.

Authentic Selling: Telling the truth attractively

This is the fourth post in a series looking at authentic selling (Post 1: general overview, Post 2: Being Genuine, Post 3: Authoritative)

If you remember, the dictionary defines authentic as:

1. Genuine
2. Authoritative
3. True
4. Entitled to acceptance
5. Established credibility
6. Trustworthy

TRUE

It is totally obvious that if we are committed to authentic selling, then we have to be committed to telling the truth: not half-truths, partial truths or outright lies.

People value truth and honesty. No one wants to be conned or have the wool pulled over their eyes. They want to feel that they have made a great decision to use your product and service. If you lie in the sale – customers quickly find out, and believe me – they will tell the whole world about it. If you tell the truth and your product or service meets (or even better, exceeds) their expectations – then great! They will tell the world about that too.

People fear telling the truth because their product isn’t “sexy” enough. Well, then change the product! If you feel you have to lie about deadlines to sell your service – you need to change how you deliver your service. It should be the truth that is always consistent.

Tell the truth, attractively

I have it in the back of my head that it was Zig Ziglar that said “sales is telling the truth attractively”. What a great definition of sales!

So telling, the truth doesn’t have to be boring, On the contrary – the truth is incredibly attractive. You just have to learn to present the truth with passion, rather than fear it and learn to lie.

If you are a small business – don’t pretend to be bigger than you are. Embrace the truth. What is the great thing about being a smaller company: lower overheads, quicker mobility and more personal service is available. Don’t hide the fact that you are a small business, tell the truth – attractively.

Go through your recent conversations with clients and think about whether you told the truth, lie or half truth (half lie). If you lied or half-lied, why? Think about why you feel the need the lie. What changes can you make so you can tell the truth?

Authentic Selling: Authoritative

This is the third post in a series looking at authentic selling (Post 1: general overview, Post 2: Being Genuine)

If you remember, the dictionary defines authentic as:

1. Genuine
2. Authoritative
3. True
4. Entitled to acceptance
5. Established credibility
6. Trustworthy

So – let’s look at this word authoritative

Why on earth should I listen to you talk about your product and service? Are you an authority or expert in your field? Or are you just telling me something that you’ve heard or been told?

This is where new entrepreneurs can struggle I think. You can have a great idea and really believe that what you are selling is great (being genuine). But there is no authority because the only other person that has used it is your mum. That doesn’t count. This is why when you start a business you often take lower money just to get the projects under your belt – you want to be able to talk with some level of authority.

Lazy salespeople can also struggle here too. If you sell cars, for example, you might have a natural charisma and are quite genuine. There is no real incentive to spend the time becoming an expert in your field though, and if you are really honest – you are not quite sure what it actually means to become an expert. It is easy to be lazy here I think.

Authentic selling means that you are making at least reasonable steps to learn about your product and service and industry so that you can talk with some kind of authority. This is easier these days than it has ever been with the help of the internet. And if you haven’t got time to research, use a Virtual Assistant service to do the research for you and send you the information. Read industry news and journals, read books and even get professional qualifications.

Imagine going to the doctors and finding out he is not really an expert…you’d get out of there, fast! With the advent of social media – there has been a proliferation of so called Social Media Consultants, yet very few of them are really an expert. They have set up a Facebook account and a Twitter account so in their eyes, that is enough to try and market yourself as a consultant.

So my question today – are you an expert (or are you at least on the way to becoming an expert)?