This week, Let’s take a look at sales hiring, and point out some things that you will see during the hiring process – and why these things should be a knock-out blow to any candidate’s hopes.

  One quick note:  As you are reading these, you will see mistakes and say, “Well, gee, of course you shouldn’t hire this person!  Would anyone?”  Rest assured that, for each mistake, I personally know of more than one person who was hired after making these mistakes.

Mistake Number One:  The Bad Resume’.  You will receive resume’s with misspellings, grammatical errors, and other detail mistakes that indicate a lack of attention to detail on the part of the candidate.  If you see these, don’t make the hire; in fact, don’t interview.  For a sales candidate, the most important sale they will ever make is the “sale” that comes with a hiring offer; if the candidate can’t be detail oriented here, why would they be when dealing with your customers?

Why this is ignored:  This gets ignored because most managers do a resume’ scan (about 15 seconds) to determine suitability for an interview.  That’s fine, but after you scan for interviewable candidates, you should then go back and READ the resume’s in order to look for problems and design interview questions.  Managers that don’t do so will have this one slip by.

Mistake Number Two:  Lateness.  “Geez, sorry I’m late, traffic was tough.”  How many times have you heard that one?  Guess what?  Traffic will be tough getting to your customers, too, and the candidate who can’t show respect for your time is the candidate who won’t respect your customers’ time.  My philosophy is that the interview begins at the appointed time, whether the candidate is there or not – and an interview of one isn’t much of an interview.

Why this is ignored:  Basic human niceness.  We’ve been late to meetings before, so we are inclined to cut some slack.  Don’t.  Remember, this is their most important sales call; if they can’t get it right, they won’t get them right for you, too.

Mistake Number Three:  No Mental Presence.  I received a phone call a few days ago from a candidate who wanted to respond to an ad that I had run as part of my recruiting practice.  He opened by saying, “Hello, this is XXX and I responded to a blind ad for a sales position, and you were the contact.”  Problem – I don’t run blind ads.  My ads say who the company is, what the job is, and what it pays.  I explained this to the candidate, and he stammered that he’d have to find the ad to be sure what job he sought.  I told him not to worry about it, got him to repeat his name (so I’d know which candidate to avoid), and told him I’d give his resume’ appropriate consideration.  Which I did.  If a candidate can’t have his act any more together than this, he’s not a candidate for one of my clients.

Why this is ignored:  I think there is an overall declining standard for jobseekers, and unfortunately, some hiring managers have bought into the idea that you can’t expect the same preparation and presence of mind as in years past.  Bull.  There are people out there who are quality people at every level of the market, and managers shouldn’t let themselves settle for candidates like the one above.

Mistake Number Four:  Lack of Preparation.  When a sales candidate comes in to interview, he or she should be prepared with a copy of a resume’, as well as having done some rudimentary research on your company.  Showing up empty-handed and empty-headed should be a quick ticket to a 10-minute interview.  Don’t fall for the “too busy to prepare” excuse.  Remember – they are there to sell YOU, the same as you are to sell them.

Why this is ignored:  I find that candidates that show up empty-handed tend to be very conversational in nature, and it’s easy to find yourself drawn off-topic into a conversation that has little to do with their skills and abilities.  In so doing, you forget the fundamentals of hiring.

Mistake Number Five:  Bad Presentation.  When you greet your candidate, you should be evaluating your impression of them in light of your customers’ potential impressions.  Do they look the part (i.e. neatly and professionally dressed)?  Do they have good hygiene and body language?  And – I write this directly after one such interview – do they put off any offensive smells?  Laugh if you like, but when you interview someone who either smells like smoke, liquor, or has marinated in their choice of cologne, remember that your customer will make their own judgments – and they won’t be so kind.

Why this is ignored:  Interviewers tend to put their own first impressions aside, forgetting that their customers will make similar judgments.  Put yourself in the place of your customer; if the person offends merely by being in the office, they won’t make much headway with customers, either.

Overall, good interviewing just involves being detail oriented and reminding yourself of the traits necessary to succeed in your own sales environment. Stay focused, kick out the bad candidates, and you’ll find the one you need.

Let’s follow up on our theme from a couple of weeks ago, regarding how “comfortable customers buy.”

  They do.  What salespeople don’t understand is that many of the things that they do by reflex end up working against them.

Salespeople have a lot of tactics and techniques that turn out to be both time-wasters and contact-breakers.  Many times, when I ask them what they’re doing, they tell me that they’re “trying to make the prospect comfortable.”  That might be true, but usually, the truth is that they are trying to make THEMSELVES comfortable.  If you do some of these things, you might take the time to ask yourself why – and who it is you’re trying to comfort?

“Hi, Mr. Prospect.  How are you today?”  This is the all-time time waster, and is the death of more potentially great sales conversations than any other phrase.  It’s also the most common.  When this is used in a cold-prospecting environment by a salesperson who doesn’t know the prospect, it’s a virtual announcement to the prospect that the caller is a pesky salesperson who is incapable of making the most of his or her time on the phone.  The reaction by the prospect is always the same:  “Uh, fine.  Who is this?” or some variation on the theme.  But what has happened with that simple little phrase is that the prospect, whom you really want to approach your call with an open mind, has now geared up his or her defenses and is prepared to resist.  That’s pretty much the opposite of what you want to happen.  The truth is that “how are you today” is a bridge to a conversation built by a salesperson who is uncomfortable with his or her message, and is stalling before delivering it.  Don’t be that guy (or gal).  Get comfortable with your message, and dump that question.

“Is this a good time for me to call?”  Here’s the truth – when you’re calling a decision maker, it’s hardly ever a great time to call.  Therefore, the best thing you can do is be as respectful as possible of their time by being impactful and communicating value.  But asking that question creates a great opportunity for the prospect to dump you off the phone, never to hear from you again.  Again, this is delivered by salespeople uncomfortable with their own message.  Instead, go ahead and deliver.  If it’s REALLY a bad time, your prospect will tell you.

“Fish on the Wall” selling.  Everybody knows what this is, right?  That’s the salesperson who enters a prospect’s office, sees a fish mounted on the wall, says, “Did you catch that fish?  Hey, I fish too!” and then spends an inordinate amount of time talking about fishing – or whatever personal interest they observe.  It’s not a great practice when the salesperson really IS an enthusiast, but it becomes downright pathetic when the salesperson isn’t.  Example – my favorite sport happens to be auto racing, and it’s not a casual pursuit.  I’ve done everything in it, up to and including owning and driving my own race cars.  When a salesperson enters my office and tries to build fake rapport with an obviously solicitous discussion of racing, it works against his desire to make a sale.  Why?  Because it’s phony.  You didn’t enter that office to talk racing (or fishing, or whatever) – you entered to attempt to make a sale.  Whether you’re working on selling or not, the clock is ticking.

“Just.”  This is a word that salespeople use to take the edge off their communications.  For example, “I was ‘just’ calling to follow up…” etc.  The problem with this is that the word “just” diminishes the importance of whatever follows, by definition.  And if what you’re doing/saying isn’t important to you, why should it be important to the customer?  If selling is important to you, the truth is that you don’t “just” do anything.  You do it.  Eliminate the “just calling” stuff from your communications, and you’ll have more impact.

“I’m seeing if you have any questions.”  This is a great one, usually used after a salesperson has delivered a proposal.  “I’m calling to see if you have any questions about my proposal” really means “I’d like to have the business,” but the salesperson doesn’t have the guts to ask for it.  Guess what – if your prospect has questions, they’re probably smart enough to call you and ask.  So why are you trying to diminish the importance of the act of asking for business?  The truth is that you have fear, and you need to let it go.

All of these communications habits have something in common – a salesperson who is uncomfortable with the role and task of selling.  If you’re using them, take a deep look inside yourself and ask why.  You might be startled at what you find out.  There’s nothing unimportant about the act of selling, and you shouldn’t diminish the importance of your job with comments like the above.

In sales, preparation can make the difference between selling, and never having the opportunity to sell.

Full disclosure – I was never a Boy Scout.  However, I do know the Boy Scout motto, and I bet you do, too.  “Be Prepared.”  I’ve always tried to live by that, in my personal and my business situations.  It’s always stood me in good stead, and I’ll go into some of the specifics of how I do that in selling in a little bit.  First, however, I want to tell you about a situation that just arose, and how being prepared helped.

Two weeks ago, I had lunch with an old friend from high school.  We rediscovered each other – as many people do these days – on Facebook.  It was really great to see her, and well worth the hour drive back to Topeka (my hometown) for the afternoon.  As I was leaving the house, I nearly left my briefcase behind – this would, after all, be two old friends reconnecting – but I decided to take it along. I’m glad I did, because what happened after we finished our burgers demanded the briefcase.

We had a great conversation, catching up on the last 20 years or so.  Toward the end of the conversation, we were talking about what I do for a living, when she got a funny look on her face.  I asked her, “What is that look for?”  She replied by saying, “It’s funny.  I was having drinks with a friend yesterday, and my friend was saying that she’d just had to fire two of her salespeople.  She was really upset about it and didn’t know how she would replace them.”  Obviously, I had some ideas about how that could be effected.

To make a long story short, one cell phone call later, I was sitting in front of the owner (my friend’s friend) of a medium sized industrial supply company, and discussing how my recruiting and training programs could help her grow her business.  By the end of the meeting, I was walking out with new business.  This, from a day that I thought would be strictly a personal day.  Had I not had my briefcase, been equipped to handle a business meeting, and had the tools to create an agreement and an invoice, it might not have happened.  “Be Prepared.”
When it comes to being prepared, here are my philosophies:

Always be prepared to have a business meeting, even if none is scheduled.  This was but one example of a personal day that turned into a business day.  I’ve had business meetings while on vacation, while on unrelated business trips, and on weekends.  Unless it’s completely impossible, I never go anywhere without business cards, basic brochures, and blank invoices.  You never know when opportunity will arise.

Always be prepared to take a sales call to its ultimate conclusion.  The “one call close” is the Holy Grail for some salespeople – but, to my amazement, other salespeople avoid it.  Don’t be one of those salespeople.  Take an inventory of what you need to make a sale.  Do you need blank proposals, invoices, service agreements, etc?  Then have them with you when you initiate a sales call – even if you believe whole heartedly that the call will not result in a sale or that it’s too early.  You don’t have to pull out your invoice unless it’s needed, but many, many sales have been lost by the salesperson who said, “Well, I have to go out to my car and get….”  The customer says, “Oh, don’t worry about it – it’s not that big a deal….” And then the opportunity is lost.

This, by the way, is also an excellent argument for carrying a briefcase.  I know that some consultants say that you shouldn’t because it’s “too intimidating” or some such nonsense, but the truth is that customers respect a salesperson who is there to do business, because that means that the customer’s time will be used effectively.

Always be mentally prepared to get into selling mode. When opportunities arise, you may not have time to mentally rehearse a sales call, research, and prepare on your own time.  You may just have to pull the trigger.  That means that you have to own your sales personality.  Know the questions you need to ask, and how to demonstrate results from purchasing from you.  Here’s a hint:  One of the things that I do in my recruiting process is to test the salesperson’s ability to do this via an unplanned phone call.  Salespeople that can’t quickly get into selling mode don’t work for my clients.

If you’re not always prepared to sell, you WILL miss sales.  Without my tools to sell, I might have lost the sale two weeks ago.  Don’t be that guy (or gal).

We’ve always heard the old saying, “When you assume, you make an ass out of YOU and ME.”  Well, it’s true, and I’ve seldom seen a better example of this than last week.

  I was in a situation where I was the customer (actually trade show attendee), and the person in the booth ASSUMED.  He didn’t make an ass out of me, but he definitely made one of himself, and therein lies a lesson.

As a bit of background, I do have a side business interest that coincides with my hobby of old and fast cars.  I have an online business that sells parts and accessories on a dropship basis, and last week was the occasion of the largest automotive aftermarket show in the world.  If you’re guessing that I was having a good time, you’re right – checking out high-end show cars, networking with vendors and suppliers, etc.  My good time was spoiled – temporarily – by a vendor, however, and amazingly enough, it was one that I had thought that I had a great relationship with.

This particular vendor representative works for a company that supplies automotive suspension components. I’ve known him for over a decade (although most of that time was in my former capacity as a freelance motorsports writer – another part time hobby that I’ve had to give up due to time constraints).  I’ve done favors for him; he’s done favors for me.  As the comedian Ron White would say, “We’ve met.”  As I approached the booth, I was a little proud.  I’ve sold over $10,000 of his product in the last year, and considering that the average price point is $20 per item, that’s a lot of merchandise.  However, I hadn’t talked to him since I started this particular business (I buy through a warehouse), so I figured this would be a fun conversation.  I was wrong.
I greeted John, and started to tell him about my business.  As soon as I said “dot-com,” he rolled his eyes and said, “Oh, good grief, you’re one of those Internet guys!”  I was taken aback.

“So,” I said, “You’re complaining that I sold over $10,000 of your stuff this year?”  Now he looked like he wanted to hide under the table.  He realized that I was a vendor – and a quality one – and that he’d just angered a guy who was not only a friend (or at least I thought I was), but someone who was moving his products.

He quickly explained that he, along with most manufacturers, were overrun at shows like this one with people who had Internet sites, didn’t sell much, but wanted to buy his products direct and drop-ship using his inventory.  Most of them really just wanted to buy at a discount for themselves.  I asked him, “So, despite our long relationship, you just assumed that I was one of those guys, without even asking a question or two?”

Again, he looked like he wished that he was pretty much anyplace else.  I could have dropped into sales trainer mode and shown him a couple of quick questions he could ask to qualify prospects and save himself from these situations.  But, to be honest, I didn’t care to.  I was pretty angry and offended.  He tried a couple more times to recover, and he did – at least in his own mind.

He didn’t recover in my mind.  When I got back to my hotel, I made my listings for his product inactive, and uploaded a competitor’s (in the few days since the show, I’ve made some sales of his competitor’s products).  As a result, he’s lost sales – by ASSUMING.

I could spend another 2,000 words on the various ways that salespeople ASSUME things that get them into trouble.  Instead, I’d like to just ask you to apply a simple rule.  There are two words that start exactly the same way; one can get you into trouble and one can make you money.
Instead of ASSUMING, ASK.  A quick question or two can usually give you a framework for a conversation.

Will I re-activate his product listings on my site?  Probably.  They are the standard of the industry in that particular line of business.  However, I’m going to keep the competitive product up as well now; ultimately he’ll lose potential sales if not active sales (I, on the other hand, may gain).  All because he ASSUMED.  As I said, he made an ass out of himself.

As some of you may know, I used to race stock cars.   Racing stock cars is a pretty intense activity – you’re on a track that is somewhere between ¼ and ½ mile in length, you’re trying to control hundreds of horsepower, and you’re among 20 of your best friends (or not).  It’s competitive and it’s mentally absorbing, which I always liked.  In those characteristics, it reminded me of sales.

It reminds me of sales in another way, too.  In both activities, you can have the best-laid game plan in the world – and nearly as soon as you start, your plan can be blown out of the water.  When I started, I’d plan out my entire strategy, even for a short 20-lap race.  The problem was that there were 20 other guys wanting to do the same thing I did, and they weren’t exactly respectful of my strategy.  So, I learned to plan two things:  The start of the race, and my overall objective.  Again, selling works the same way.  Let’s see how.

In racing, the course of the race isn’t under your total control.  It’s heavily influenced by the other drivers on the track.  In selling, the course of the sales call isn’t under your total control, despite what sales trainers have been trying to tell salespeople for decades.  The call is heavily influenced (in reality, it’s controlled) by the customer.

In racing, I could have the greatest plan in the world – what path I’d take into the first turn, who I would follow to the front, and when I’d make my move on that driver.  If the driver made a mistake, suffered mechanical failure, or had another issue early, my entire plan was shot.  In selling, I might have a terrific plan and presentation laid out, but if the customer is interested in something else, my plan is shot.

That’s why it’s important to have an idea, and plan for as many eventualities as we can.  This doesn’t take away the need for a call plan; it does, however, greatly impact what aspects of the call we can plan.  You should have these things in mind before each call:

The opening:  I know, I know, it goes without saying – except it doesn’t.  I still do ride-alongs with client salespeople, and there are a lot of salespeople out there who don’t know how to open a call.  Essentially, the opening (which should take no more than two minutes at most) should recap how we got here and set the stage for the meeting.  If it’s a new prospect or contact, you obviously should introduce yourself.  You should also recap what element of the phone conversation got you in front of the contact (i.e. what was their interest?).  If it’s an ongoing relationship, it’s always good to recap the most recent developments.  Customers forget.  I know, I know, you’re the most memorable person in the world – except that you’re not.  None of us are.

The information you want to get:  Every sales call, even those in an ongoing relationship, should include a discovery portion.  It’s through good questioning that we build and deepen relationships.  Have a basic game plan for questioning – and then be prepared to abandon that plan if the customer wants to go in a different and potentially more productive direction.

The information you want to give:  Sometimes, you’ll have information that must be conveyed regardless of the direction of the rest of the call (for instance, a price increase or a change in shipping policy).  Other times, the information you give will be dictated by the information that you get (i.e. you discover a need that leads you to a solution).  Again, “be prepared” is the motto here.  As you are questioning, you should be listening, discovering needs, and flipping through your mental file box of information that needs to be conveyed to make the sale and help the customer achieve his/her result.

The next step:  Setting a good next step is neglected in three out of four sales calls.  The salesperson is fat, dumb, and happy from what he/she has ‘achieved,’ and settles for “Okay, I’ll call you in a few weeks.”  Then the salesperson calls, and calls, and calls, and calls, with no response.  Instead, set a definite follow up schedule.  There’s no better time to set the next appointment than when you’re on the current appointment.  I always like to plan three levels – the dream call, the realistic call, and the bare minimum action that the customer will take to continue being a viable customer or prospect.  Preplanning these levels will help keep you from chasing inappropriate business.

As they say, “The best laid plans….”  My favorite race win happened when one of my plans completely went away.  I’d successfully moved from the back of the pack to be running fifth midway through the race, and I was getting ready to start passing the top four cars one by one (or try to).  Suddenly, the top four cars made contact with each other.  Two spun to the inside, and two to the outside, and to me it looked like the Red Sea parting as I drove between them.  I held the lead for the rest of the race.

Likewise, your most enjoyable sales calls may come when your plan is blown up very quickly and you have to think on your feet and make the right things happen off the top of your head.  The moral of the story is this:  Plan, but not too much.  Remembering the four elements above will keep you on track, and the customer will help you fill in the rest of the blanks.

One of the toughest challenges (but perhaps the most enjoyable) is dealing with a competitive situation in selling.  I was reminded of this a couple of days ago when I was the customer in a sales call.  The situation was that I was purchasing a technology offering, and I was comparing a few different products.  Now, I’m not a “techy” person.  I’m not necessarily one who gets into the deep details of technology products; I’m more focused on the result and what it will do for me.

My salesperson handled the situation badly, and made pretty much every mistake a salesperson could make.  His ‘questioning’ consisted of badgering me to tell him what other programs I was comparing, and then once I told him, he spent the rest of the call explaining how his competitors were substandard.  Not surprisingly, this didn’t help me.  Of course, most salespeople know that the first rule of selling against a competitor is “don’t speak ill of your competition,” but few know what to do in the absence of speaking negatively about them.  Let’s talk about what you should be doing – and should NOT.

Don’t say “apples to apples.”  If there’s any phrase that salespeople use CONSTANTLY that raises my hackles, it’s “Well, let’s make sure we’re comparing apples to apples.”  First of all, “apples to apples” is one of those nonsensical, hackneyed phrases that bottom-feeder salespeople use.  The intent is to metaphorically lay out a side by side list of features so that the salesperson can say, “Well, see?  We have flipperwotzen version 6, and they only have version 5!  That’s why you should buy from us!”  The trouble is that the customer might not even use the flipperwotzen.  Yep, my salesperson did this to me.  That’s because he didn’t understand the most basic element of competitive selling.

Start at the end and work backwards.  In selling – and particularly in competitive selling – the most important fact is the result that the customer is seeking.  When comparing two products or services, the only meaningful data is the two offerings’ ability to achieve the customer’s desired result.  Of course, this means that you have to know the result the customer is seeking.  The salesperson I dealt with didn’t.  Why not?  Because he didn’t ask me – and he apparently didn’t listen when I volunteered the information.  He kept referring to capabilities that I wouldn’t use and characteristics that didn’t affect my end-user experience.

Forget the features.  This is a bit repetitive, but it bears repeating.  The product characteristics that are your main bragging points might not be important at all to your customer.  For instance, my salesperson pointed at his competition and said, “Well, they outsource a lot of their solution, and we do everything in-house.”  I was using the free trial of both solutions, and in my end-user experience, the one that was supposedly ‘outsourced’ was much more seamless and user-friendly than his.  If they’d outsourced it, kudos to them; they had outsourced to the right people.

Don’t insult the customer.  Yep, my guy did this.  At one point, he said, “Well, the problem here is that you really don’t know anything about these types of products.  If you did, you’d understand why mine is superior.”  From past experience, you probably know how likely I am to buy from someone who has insulted me.  It didn’t work this time, either.  I’m sure he got a bit frustrated during the call, but his frustration was of his own making.  Had he asked me what I was seeking in the beginning – or listened when I attempted valiantly to explain what I was seeking – he’d have known and been able to adapt his sales approach.

If you must speak about your competitor’s product, know it like the back of your hand.  My salesperson made several claims about his main competitor’s product that were demonstrably false.  I’ll give him the benefit of the doubt and say that he just didn’t know; a less charitable customer would say that he was lying.  Either way, it was bad for him.  If you’re going to make claims, you’d better know exactly what you’re talking about, and you’d better be current and correct.  Just because something was true six months ago doesn’t mean that it’s true today.  Once you are incorrect about one thing, your customer will assume that you are incorrect about all things.

Finally, do not get dragged into a price match.  “Matching the price” is one of the worst things any salesperson can do.  The customer’s interest in purchasing two competing products is seldom equal in the customer’s mind.  Hence, the price of those two products does not need to be, and should not be, equal.  Still, the salesperson who hears, “If you’ll match the price, I’ll buy from you” is sorely tempted to do so.  You’re only one question away from getting a (perhaps slightly) higher price.  That question is this:  “Why would you rather buy from me than from them?”  If you’re offered a price match opportunity, that means that you are the preferred seller – so you need to use that.  Whatever the customer’s answer to that question, it has a monetary value, and it’s your job to realize that value.

Ultimately, the salesperson’s tactics worked against him.  After the call, I decided to do more research, and what I found was that customer reviews and independent reviews showed that his criticisms of the competitor actually applied more to his own product; I signed an agreement for the competitor later that same day.

Competitive selling is tough – but it’s also fun.  The key is not to step on the common land mines, as I’ve explained above.

Into every life, a little rain must fall.  In selling, customer complaints are our rain.

Salespeople hate negativity.  Sometimes, that’s OK; negative messages can be demotivators.  However, sometimes negativity has to happen, such as when customers complain.  The salesperson (or customer service person) who disregards a complaint risks losing a customer.

Something along these lines happened to me recently.  I rarely need a physical office, given the nature of my work; however, for those occasions, I have a membership with an executive suite company that allows me ten days a month; it’s very reasonable and convenient.  They have several locations in Kansas City, so I can even choose where I work.  Sometimes, I use the office for meetings; other times, I use the offices simply when I want to get away from my home office for productivity reasons.  One such day reminded me of the importance of handling a customer complaint appropriately.

In this case, I was the complainer.  I had a day reserved, and I went to my usual office center (I’m nothing if not a man of habit when it comes to these things).  As usual, the receptionists greeted me with a smile and showed me to my office.  For the first time, however, I had trouble connecting to the Internet on their network (both wired and wireless).  I went to the receptionists’ desk and explained the problem.  The receptionist said, “Oh, it’s no big deal.  Sometimes it goes off, but it’ll come right back in for you.”

It did come on – for about ten minutes.  Then it went off again.  As with many of you, e-mail is my lifeline when I’m working in an office.  After about an hour, I went to the receptionist’s desk again, and said, “I’ve been here for an hour, and I’ve only had the Net for ten minutes.  I think there’s a problem.”  The receptionist – whom I hasten to say that I like and had only good experiences prior to this one – said, “Hmmmm….my Internet is working fine.  Did you restart your computer?”  When I responded that I had done this twice, she said, “Gee, I don’t know, Troy.  We haven’t had any complaints today.”  I told her – politely – that in fact, she did have a complaint – me. Then I asked her to call the next closest office center that the company had, and switch my reservation to that one.  In 5 minutes, I was headed to the other complex.

Now, when I need an office, I go to the other complex (where, I should note, the Internet worked perfectly).  And in this episode, there is a lesson on how to handle customer complaints.

Recognize the complaint when it happens.  One of the most remarkable comments that the receptionist made to me is, “We haven’t had any complaints.”  That told me that she didn’t even recognize the fact that what I was telling her (that a core service wasn’t working) was a problem.  When a customer complains, you need to understand that it is a complaint.

Whether it’s important to you, know that it’s important to the customer.  I think, upon reflection, the aspect of my little episode that surprised me the most was that the receptionist didn’t seem to understand that the lack of Internet access was an important issue to me – which is even more amazing in this technologically dependent age.  Think about it.  When a customer complains to you, the issue may seem minor to you – but it’s important to the customer, and you’d better think hard about fixing it.  The blasé attitude really shocked me, especially considering my previous experiences at this location.

Don’t say, “It works for everyone else.”  If you’re looking for a fabulous way to irritate your customer even more, tell him/her that whatever the problem is, nobody else is having it.  This does two things in the customer’s mind.  First, it lets them know that they are not important to you in the grand scheme of things (after all, if “everyone else” is fine, who cares about me?).  Second, it insinuates, without investigation, that the problem is caused by the complaining customer.  When the receptionist says, “Well, it works for me,” I came very close to saying, “Great.  I’ll take your computer for the rest of the day, then.”

Forget the blame. At least the receptionists didn’t do this.  One of the first reactions that many people have, upon hearing about a problem, is to immediately try to fix blame (usually upon anyone but themselves).  Here’s the problem:  Your customer doesn’t care about the blame.  Your customer cares about getting the service experience that they are expecting.  Blaming only wastes time and can irritate the customer.

Fix it.  This is the part that your customer really cares about.  Figure out what the problem is and at least attempt to fix it, or start the process of fixing the problem.  In my situation, my guess is that whatever the fix was, it was outside the domain of the receptionists – but they didn’t even investigate, so I don’t know for sure.  Sometimes, YOU can’t fix it, so what’s important is to involve those who can and let the customer know what’s going on.

Make sure the customer buys into the fix.  It’s not important if YOU think the problem is solved; it’s important that the CUSTOMER thinks that the problem is solved.  In my scenario, we never got to this point, but ultimately you must ask the question, “are you happy?  Did we solve your problem?”

Never leave your customer hanging.  From the time your customer complains until the time the problem is solved (in their eyes), your customer must believe that you are focusing your attention on fixing the problem.  Sometimes, that’s difficult; sometimes you have to depend on others.  Here’s what is critical – never go home without touching base with your customer, even if you don’t have a solution yet.  Remember – your customer needs to feel that your attention is on the problem.

Obviously, in my case, there were really no adverse consequences to anyone.  I simply changed locations, but I didn’t move my business anywhere else. And that’s fine with me; overall, I’m happy.  When your customer complains, you might not be as fortunate if you don’t handle the complaint well.

Should referral fees be part of your sales strategy?

I’ve maintained, throughout my career, that when selling is done right, it’s one of the most purely beneficial and enjoyable ways to make a living that there is.  And then, there are times that I’m disappointed in the ethics of my profession.  Such an instance happened a couple of weeks ago, and it centered around a referral.

A small business consultant whom I have known for some time called me and said, “Hey, Troy, I have a referral for you.  A client of mine really needs some sales consulting help, and I feel like you’re the right guy for it.”  I thought that sounded good, and we talked.  The more we talked, the better it sounded – until the other shoe dropped.  Within that shoe was a misunderstanding of what referrals really are and what they should be.

The consultant, after we had discussed it for awhile, said, “By the way, I’ll need a referral fee on this one.”  I should point out that I’ve referred him a few pieces of business over the years, and never asked for a fee.  I don’t do that.  It’s against my ethics.  However, I asked him how much he’d need, and when we figured out what the project would be worth, his fee (had I chosen to pay it) would have been slightly more than $1,000.

I explained to him that I neither pay, nor accept, referral fees, because I think they introduce an ethical issue into the transaction.  Over the years, I’ve paid referral fees five times (the last was about six years ago), and every time, the deal has gone sour due to ethical or communication issues on the part of the referrer.  I also reminded him that he had done business from my referrals – which I never charged him for.  He still responded that he was pretty committed to needing the referral fee.

I asked him if, should I not pay the fee, he was going to find someone else who would pay it?  He hesitated and then indicated that he would do so.  “Even though,” I asked him, “you have told me that you feel like I am uniquely qualified to solve your customer’s problems?  Is $1,000 that meaningful to you?”  He grew quiet, and then said that his ‘new business model’ required these fees.  I thanked him for the thought, but told him that if the business could be bought by anyone for $1,000, that I didn’t want it.  I asked him one final question, which I’ll get to in a moment.

What’s disappointing to me isn’t the fact that I won’t get the business; I’m doing well.  Nor is it the fact that I’ve referred him business for “free” in the past.  I might do so again.  He’s good at what he does.  What’s so disappointing to me is that he’s willing to sell out his ethics at all, never mind for such a small amount.  You see, a referral to me involves certain ethical guidelines.  Let’s look at that.

When you refer another service provider to your customer, here is what you are saying:  “I know you have a need that needs to be solved, and I can’t solve it.  However, I care about your well-being, and based upon my experience, I know someone who can solve your needs – and I stake my credibility upon their work.”

Wow.  That’s a heavy statement, isn’t it?  Notice that, nowhere in there did it say “and I’m getting paid for solving this problem.”  In fact, the other question I asked the consultant was, “Does your customer know that your referral depends on who pays you?”  He got very, very quiet when I asked this question.  The truth, I suspect, is that if the customer knew, it would greatly damage his relationship.

When a true referral is made, here is how the three parties involved perceive the referral:
Referral provider:  “I’m doing a good thing here, because I’m solving a problem for a customer (and hopefully deepening my relationship because of it), as well as helping a friend or trusted associate to grow their business.  Hopefully, I’ll get a referral back.”

Referral recipient:  “This is great!  I’m getting a new customer, and the person who is giving me a referral is showing a lot ofconfidence in me.  I need to see if I can generate a referral back for them, to help them as they have helped me.”

Customer:  “Boy, that saved me a lot of trouble!  This salesperson (or associate) whom I trust and respect is introducing me to someone he trusts and respects; I should value this new person’s work and input highly.”

Now, here’s how the parties involved perceive the transaction when a fee is involved:

Provider:  “Well, I can get some cash out of this, which I wouldn’t have if the customer found his/her own solution.”

Recipient:  “I can buy this piece of business.”

Customer:  “Boy, that saved me a lot of trouble!  This salesperson (or associate) whom I trust and respect is introducing me to someone he trusts and respects; I should value this new person’s work and input highly.”

Did you notice that the customer’s perspective didn’t change?  That’s because nobody told the customer that it wasn’t a true referral.  Hence, the customer doesn’t know that it’s a cash transaction instead of an expression of trust.  In many cases, if the customer did know, it would greatly affect the success of the transaction – or even kill it.  In fact, if the customer does learn that a fee was paid for the referral, his trust in both parties tends to drop significantly.

When people want a ‘piece of my action’ for introducing me, my first thought is to wonder how much business that person is actually doing on their own; my experience has shown me that the value of a referral fee pales in comparison to the value of a reciprocal referral.  However, people who charge for referrals seldom receive referrals of their own, and the reason is simple:  Once the fee is paid, the obligation from one party to the other has been completed.

In many professions, referral fees are illegal, precisely because of the conflict of interest inherent in the process.  Even in professions where they are not illegal, I would strongly recommend not charging them nor accepting them.  A good rule of thumb is this:  If you couldn’t proudly relate the details of the referral to your customer, maybe you shouldn’t do it.

In this case, I lost the business, but kept my ethics and dignity.  You might occasionally lose business, too, by staying “fee free” with respect to referrals – but isn’t your integrity worth more?

Is your company doing well – or are you measuring the wrong things?

Last week, I spoke at a conference in Arizona, and at the evening reception before the education day, I had the occasion to converse with a business owner who was very proud of his performance on his “KPI’s” – his Key Performance Indicators.  He recited survey result after survey result, all very positive.  I couldn’t blame him for being proud.  I asked him, “So, what’s your customer retention rate?”  “Eighty-five percent,” he said proudly.

As you have probably already figured, an 85% retention rate means a 15% customer loss rate – which sounds bad.  That’s because it is bad.  However, it’s worse.  His company runs on contracts of three to five years, which means that in any given year, only 20% to 33% of his customers are even empowered to make a decision to stay or leave.  Hence, his real “customer retention rate” hovers somewhere between 25% and 55%; that represents the percentage of customers who are able to make a positive decision to stay and in fact stay. Oddly enough, retention rate was NOT one of his KPI’s.  It occurs to me that too many businesses measure the wrong things.  Let’s talk about doing it right.

A true “Key Performance Indicator” should be a real measurement of how your company, department, or people are performing at any given moment.  By “real,” I mean that it should be something that you can hang your hat on.  Unfortunately, too many businesspeople (like my contact above) hang their hat on customer surveys.  That’s not real.

Customer surveys ask about an experience in the abstract; i.e. detached from other business decision making criteria.  Here’s an example:  I’m a loyal Southwest Airlines customer.  I  have a one-hour rule; if Southwest can get me within a 1 hour drive of my final destination, I’ll fly Southwest over another airlilne that can get me closer.  That’s because Southwest consistently delivers on my expectations.  They get me where I’m going on time, my baggage shows up (with one past exception), an the people are pleasant and responsive.

Every now and then, however, I have to go someplace they can’t take me.  One such instance happened about a month go.  After I flew, the airline sent me a survey asking about my experience.  I responded honestly – my experience was fine.  Yet, as I’m writing this, I’m in the airport waiting for a Southwest flight, having chosen Southwest over that airline (as well as a few others).  So, did I lie on my survey?  Nope.  I don’t lie on surveys.  However, their survey did not require me to make a purchase to validate my results.  So, I’m sure I helped their “KPI’s,” but I’m buying from their competition.

Repeat after me:  Market Research isn’t real until you ask someone to write a check.  I’ve noted before that one of the most well-researched product launches of the 20^th century was the Edsel; yet, the Edsel was a flop.  The Edsel sounded good to buyers until they were asked to buy.

Hence, your KPI’s should be based on real transactions that ask customers to make an investment – if not in cash, then in their time and credibility.  Here are a few examples:
Customer Decision Rate:  Your Customer Decision Rate (or CDR) should measure the customer’s desire to buy from you (or continue to buy from you) in the framework of other potential buying decisions.  As you’ve seen above, my acquaintance’s CDR landed somewhere between 25% and 55%.  85% is bad; those numbers are ugly.  Incidentally, this number should be different than your proposal close rate, because it should only pertain to current customers.  Your current customers are your best barometer of your ability to keep your customers happy; new customers are different.

Customer Internal Growth Rate:  This should be a measurement of how much, over time, your customers’ business with you grows.  Again, this should be separate from your new customer selling efforts.  Are your salespeople able, on a regular basis, to expand your business within current customers – or are those customers making a decision that you have not earned the right to do more business with them?  Retailers have a measurement called “Same Store Growth” that measures how much their existing stores grow their revenue, independent of new store openings.  This is a parallel to that number.  If you do it right (have a high retention rate and a high internal growth rate), your Internal Growth Rate can offset customer losses, meaning that new-customer sales become pure growth.

Referrals and Testimonials From Current Customers:  Referrals and testimonials are another measurement of your customer pleasure.  While these do not (typically) ask the customer to invest money, they do ask the customer to invest their time and credibility.  In some cases, this can be a more significant investment.

Price Index Over Time:  You should be measuring the average prices, or the average profit, achieved in your ongoing customers over time.  Some industries (including the one referenced above) have a “rollercoaster” price effect.  The account is signed at a low price, and then the company increases prices periodically over the term of the contract.  Then, at renewal time, the incumbent must requote prices at a low level to retain the business.  Ideally, we want the customer’s price and/or profit to consistently (if slowly) increase over time.

Ther are, of course, many other KPI’s that you can use.  We haven’t even touched the subject of new customers, for instance.  The ones I referenced are extremely important because they all referencetransactions and price.  Transactions and price are simply ways of quantifying the value of your relationships with your customers.

If you’re measuring the right things, you’ll get the right knowledge; if not, you may have great “indicators” without having real success.

Can you really build a lifetime relationship in 30 minutes?

Recently, while perusing discussions on my LinkedIn groups, I saw a statement that can only be described as a doozy:  another sales trainer posted, “I can teach you to build a relationship, based on trust, that will last a lifetime, and accomplish that within a 30 minute sales call.”  Wow.  That’s quite a statement.  And let me make a statement, as well:  I cannot teach you how, within a 30 minute sales call, to build a lifetime relationship based on trust.

Of course, I suspect that the author of the statement can’t do so either.  In fact, I’m sure he can’t; earning a lifetime’s worth of trust cannot be done within 30 minutes.  People simply don’t work that way.  However, if your sights and your goals are set correctly, you can accomplish some important things in a 30 minute sales call.  Let’s talk about what they are.

Establish Dialogue:  The first task on any sales interaction is to generate a comfortable dialogue for both parties.  Any sales interaction begins with fear on both parties’ sides.  Your customer has a fear of making a bad deal, or at a minimum, wasting time.  You have a fear of not selling and not succeeding.  Within the first 30 minutes, you can put at least some of those fears to the side.  The fear creates a wall between the two of you; if that wall isn’t lower by the time you leave than it was when you started, you’ve missed something somewhere.

Deposit into your Emotional Bank Account:  The Emotional Bank Account is at the center of all of your relationships.  Essentially, the EBA is a measurement of how much “equity” you have earned with the other person.  We are constantly making deposits and withdrawals in our EBA’s; the key is to maintain a positive balance by making more deposits than withdrawals.  We make deposits by making positive gestures toward the other person.  We make withdrawals by asking things of the other person that might be unpleasant, tough, or uncomfortable for them.  In the first 30 minutes, it’s critical to begin making deposits into the EBA; if your balance is zero or negative at the end of the first 30 minutes, your customer is likely to close your account.

Gain Understanding of your Buyer:  One of your first tasks as a salesperson is to begin to understand your buyer – and by that, I mean understanding his/her perspective and worldview as it pertains to business dealings.  You do that by asking good questions about your buyer’s background, the things they enjoy about their work, and good big-picture questions about the company itself.

Align Yourself With Your Buyer:  As important as understanding your buyer is aligning yourself with your buyer.  When the sales call starts, one of the buyer’s assumptions is that you and he are on opposite sides of the table, and not necessarily working in the same direction to a common goal.  You’re a salesperson, and the perception of a salesperson is that of someone who is trying to “push” a product or service off on the buyer without significant regard for the buyer’s well-being and interests.  You can communicate, through word and deed, that you are on the buyer’s side and that you are working in the same direction.

(Maybe) Generate an Opportunity:  This one depends greatly upon your offerings and sales environment – but, yes, it is possible to generate an opportunity for a proposal or even an initial order on a 30-minute sales call.  What’s important is to keep this in perspective; even if you have generated actual business in 30 minutes, it does not mean that you have generated that “lifetime” relationship.  It means that you have generated enough trust with your buyer to give you a tryout; what you do from there will determine if you ever have that opportunity to build a lifelong relationship.