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Sunday, 23 February 2014

Having Difficulty Closing the Sale? You Need to Ask AIDA to Help!

One of the perennial faults with many sales people (note: Sales, not Business Development) is the tendency to talk incessantly rather than to ask questions and then shut up and listen. 

I well recall a young lady who came to us for a sales position and she told us that she would be ideal for the job as she “had the gift of the gab”.  She was right. End of interview. 

It seems to me that not only do we need to ask pertinent questions and then listen but we also need to be very aware of what might be called buying signals from the buyer.  I am using that description although it encompasses any individual sitting across the table in a sales pitch and they can be in any function of their business, not only in the Purchasing role. 

Again I remember being taken to a sales call with a senior colleague a lot of years ago and I was there to learn from the master.  He started out by showing the buyer our brochure with some lovely photographs of the Managing Director and the factory and eventually got round to discussing the reason for the call. 

The buyer listened to the sales pitch which had been delivered without any reference to his possible needs and started to nod from time to time and make interested noises. 

This is called a “buying signal” and the great sales people like my old sales mentor, Phil Copp, the Sage of Wythenshawe would immediately take the hint and start in on the detail and possible ways in which we could help to solve a problem. 

Not my senior colleague.  He prattled on until the buyer’s eyes started to glaze over as he looked at his watch and shuffled some papers. Even then my colleague didn’t take the hint until we were courteously but firmly shown the door.  My colleague appeared satisfied with this result and said that we would meet again in a couple of months time etc etc etc and off we went. 

The moral of the story?  Not only do we need to ask questions and then listen but we also need to keep a very close eye on how the buyer reacts to information. 

In fact I was given a great mnemonic this week to ensure that we do just that.  It is: 

·      AIDA 

which stands for Awareness, Interest, Desire, Action those being the stages through which any buyer would pass during the sales pitch.  That is would IDEALLY pas. 

The initial route is to ask relevant questions to elicit, if at all possible, the level of need on the part of the buyer followed by at least a modicum of information to create the awareness of your product or service, always answering the WIIFM (what’s in it for me?) question. 

At this stage we need to look out for expressions of interest and ideally expressions of desire (that would do the job, it sounds just right for us, how much?) and so on. 

Finally there is the action phase and surprisingly that seems to be the one which gives so many sales people the biggest problems.   

Heaven protect us from those sales people who create great relationships and don’t ever close them out. In the end, we have to Ask For The Order (another acronym - AFTO) and there are many ways in which to do that. 

The key to the whole discussion of effective selling techniques is to realise that we don’t sell, but people buy from us.  They are in the driving seat and it behoves us to use that charming lady, AIDA to encourage the buyer along the path to success (ours, that is).
 
 
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Sunday, 16 February 2014

Why Don’ Financial Incentives Always Work? People Need Autonomy, Mastery and Purpose!

The BBC Business Editor, Robert Peston commenting on the recent results from Barclay’s Bank on Twitter wrote: 

“Barclay’s profits down 32% to £5.2bn but bonuses and incentive awards up by 10% to £2.4bn.  So incentives do what exactly?”  He might well ask. 

I have long thought that there appears to be an anomaly in the use of financial incentives which seemed odd, in that sometimes they appeared to work effectively and then at other times they had little or no effect on performance. 

The use of incentives in the financial services sector seems to add to this anomaly, in that, here we have people shovelling other people’s money around, buying it at one price and selling it at another hopefully higher price and making a “profit” for the bank. 

Whether these “incentives” are actively linked to performance or are merely a large sun allocated at the end of the financial year for a job well done, I am not sure but it would seem to me that it is more likely to be the latter. 

Over many years I have experienced incentives and bonus scheme both linked to performance and also discretionary and while, as far as I am aware, no-one rejects them as inadequate, they don’t seem to have the effect that the business both hoped for or expected. 

For some time I have been suggesting that my Vistage members take a look at a remarkable video on YouTube: http://www.youtube.com/watch?v=u6XAPnuFjJc (ignore the advertisement at the start!) by US economist and author, Dan Pink in which he explains the research which has shown that in many cases not only do incentives not work but in some situations they actually have the opposite effect. 

This is dramatic stuff and turns the whole concept of “pay more, get better performance” on its head. 

I recall a salesman we once employed who never earned, in an open ended commission scheme, more that 10% over and above his salary even if that 10% had been earned in the first week of the month.  When I asked him why this was he said that he was content with a 10% increase in his compensation as that paid for the extras he wanted. 

Dan Pink demonstrates that for a task which is completely routine and mechanical then financial incentives can work and I have seen that in operation in a factory environment. 

However when there is a mere modicum of cognitive skill needed to complete the task is when the anomalous situation of lower performance kicks in. 

His solution?  People look for three things, knowingly or unwittingly, in their working existence to gain maximum effect and hence satisfaction from their work and they are: 

·       Autonomy – give people the freedom to work in the way that suits them with consequent accountability and performance will improve.

·       Mastery – people want to demonstrate their abilities and again need to be given the freedom to express them fully.

·       Purpose – the ultimate reason for completing the task and indeed the whole ethos of the business must be linked to an overarching purpose and not just a motive for making profit. 

Pay your people the compliment of believing that they are thinking human beings, give them the freedom to express themselves and watch them and the performance of the business grow.
 
 
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Sunday, 9 February 2014

How Far Do You Trust Your People? More Importantly How Far Do They Trust You!

Perhaps the most emotive word in the whole leadership lexicon is trust.  The number of times that I have heard people say, for example, “A good worker but I’m not sure whether I can trust them to make a decision - it might go wrong”. 

Where there is mistrust in either direction very little of worth will be accomplished.  On the other hand in a trusting environment anything can be achieved. 

This was brought to mind this week with one of my members who has recently taken a new job and is looking around the people to see what talent can be uncovered. 

He found two, both 24/25 years old, one with six years service and the other a recently employed graduate.  Both had been working in a directive environment, “do as I say and don’t make any mistakes” and were not happy. 

In the new atmosphere of inclusivity now being brought into the business, both are now being trusted and encouraged to analyse situations, make decisions, and get on with the action. 

The result?  Two happier, involved and engaged young ladies who are starting to make a significant difference in the business. 

A simple tale perhaps but a very important lesson. It is matter of culture; the difference between the authoritarian approach and the inclusive approach. 

A wise sage once said that leaders are not there to lead people.  They are there to grow people to enable them to perform. 

It all starts with the values espoused by the leader and hence the business.  It is essential to articulate them at every opportunity so that the values become a vital part of “this is the way that we do things around here”. 

From there it is the vision of what can be accomplished and where the leader intends the business to be in the next few years.  Once again this must be driven into the business on every occasion. 

Finally the people must be given the freedom to perform and that for some may be difficult.  When people have been exposed to an authority organising their (working) lives at every touch and turn some find freedom a trifle daunting and don’t know what to do with it. 

It can take time but with effort, most of the people will react positively.  It all demands from the leadership an absolute dedication to a no-blame culture; no-blame because if we give people the responsibility of making decisions, then we cannot reprimand them for making mistakes. 

Any problems must be looked on as a learning experience, at least once.  More than once may result in something more than just a learning experience. 

It all devolves on trust.  Trust is a fragile flower and needs to be cared for.  Trust must be bi-directional and, in some ways, cannot be anything else. 

With trust comes accountability for performance and that implies reward (not necessarily financial), growth, achievement and success. 

All these features are the most motivating aspects of anyone’s working life and when they are in place and available, anything can be achieved.
 
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Sunday, 2 February 2014

Is The Customer Always Right? Not Every Time – Try This For Size!

Over the past few weeks I have come across a very useful little piece of marketing advice, one that I recall that I discovered some time ago and promptly forgot. 

It is: 

·       You can have our product or service good, fast or cheap BUT – you can only have two of them. 

Just check this out.   

·       If you want a product that is good and cheap, then you can’t have it quickly. 

·       If you want a product that is good and you want it quickly then it won’t be cheap. 

·       If you want a product that is fast and cheap then it won’t be good. 

How true is that.  For example I have recently come across a business which prides itself on excellent fast service and very high quality.  Very admirable but, for example, when a customer calls on Friday to say that they want the product delivered by Monday the answer is “Yes, of course”. 

Equally admirable but manufacture of what is essentially a bespoke product means that there has to be extra shifts in place to fulfil the order over the weekend. 

Because the customer is very demanding they work is done as promised and the price is as normally quoted for normal delivery, in spite of the fact that they had to pay time and a half on Saturday and double time on Sunday. 

In other words they did the job superbly to the total satisfaction of the customer and at a margin so reduced that it wasn't worth taking on. 

That is a classic case of saying to the demanding customer: 

“Yes of course we can do it and at our usual high quality standard and as we will be working over the weekend the price will be.......” 

Conversely if you want it done quickly and refuse to pay a sensible price for the work then it is quite possible that the quality will suffer as corners will be cut. 

If they still demanded high quality and still refused to pay the extra then we can’t do the work in time demanded. 

While I am great proponent of total customer satisfaction there comes a time when the level of leg pulling can overwhelm rationality.  It can be done quietly without rancour.  It must be done so that the most important fact, hat of the gross margin, is protected as far as is feasible, at all times. 

The gross margin is the true income of the business and any reduction implies that the volume of sales has to increase to compensate and usually, this means to an unattainable level. 

It is essential that leaders constantly review the core values of the business.  Capitulation in front of a demanding customer does nothing but perhaps increase sales and probably decrease the true income and what is the point of that? 

Try adding the Good, Fast, Cheap offer to your core values and be firm in your maintenance of them.
 
 
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