Emotions win over Reason in Sales

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Decades of neuroscientific research suggest that salespeople who use reasoned argument on a sales pitch will close fewer deals than a seller who appeals to the emotions.

We (humans) are rational beings and trying to appeal to our customer’s intellect, showing them the reasons why our product is a sensible choice and meets their stated needs seems to be a great idea. The whole school of Solution Selling is based on this premise. Hundreds of years economists based their theories on the postulate pf rational behavior.

However, our daily observations and personal experience may suggest that we (humans) are not that rational at times. Think about Global themes of 2016: Brexit, Trump… Is that rational? Or, perhaps, emotions took over?

So, what’s in it for me, the seller?

Often (not always), customers make decisions about a purchase with a part of their brain that operates on emotions, not reason. Reasoned argument may not be particularly effective in appealing to such buying instincts, scientists have found.

A deal is always a change and people are naturally resistant to it. So, what salespeople need to do, is to activate client’s emotional response.

…for example, fear of losing money or missing out. It is that ‘burning platform’ that will galvanise them to risk making a change.

Cold reason has its place and should not be disregarded. The point of the research is that, when used alone, logical argument is far less effective in moving the needle. It is a viable helper, but almost never the trigger.

Remember that , when you prepare for your next pitch.

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Customer Experience

In May, I visited Salesforce.com World Tour in London — an amazing event. Every Keynote presentation was about CX (Customer Experience)… In a nutshell — end to end control and conjoined execution, aimed at providing best customer experience is the way to win today. We’ve entered the age of the customer — an era when focusing on customers is more important than any other strategic imperative.

It’s not about Internet and Tech companies only, that’s why it is not about UX. It’s about CX. Businesses seem to be rediscovering a simple truth — Customer is the single reason for any business’ existence. Companies from various sectors such as retail, car manufacturing, home appliances, and even heavy industry wake up, increasingly wining or losing on the battleground of customer experience. Arguably, only companies that recognize that they are in ‘CX business’ are successful.

WHY?

  • Commoditization has stripped away existing sources of differentiation. Competitive barriers of the past — such as manufacturing strength, distribution power, and information mastery — can’t save you today. Traditional industry boundaries have dissolved. Automakers now find themselves competing not only with other automakers but also with services like Zipcar, which obviates the need for car ownership.
  • Customers have more power than ever. With online reviews, social media, and mobile access, it’s easy for your customers to know more about your products, services, competitors, and pricing than you do. Your business is transparent for the customers, whether you want it or not. As strategy guru Michael Porter said: “Where the buyer has full information about demand, actual market prices, and even supplier costs, this usually yields the buyer greater bargaining leverage.”

Convinced? SO, WHAT NOW? 

You can find plenty about business processes transformation, aligning them with the customer journey, and how data will boost your customer intimacy… But the truth is you have to start with PEOPLE.

The organization and its people have to change their practices and behavior, their attitudes and beliefs. Data driven marketing and decisions, process alignments and new customer communication channels are the tools, which help. However, they will render barren and useless, if mindset and behavior don’t change. All CX leaders understand that they can provide a great experience only through frontline employees. Such CX begins with workers who know about it, care about it, and are well positioned to deliver it.

That’s why it is so difficult and takes time —  behavior and mindset change takes a lot of investment on the leadership side and ROI is not ‘obvious’. It’s a decision of “true/false” type, not of positive or negative NPV. Everyone in the organization has to believe in a CX programme and to engage with it actively. Employees must know that leadership clearly understands the situation, has an organized way to move forward, and is serious about change.

We have entered the age of the customer. Relatively quickly, we’ll see businesses, which managed to adapt, rise and those who can’t — fall. Exciting times!

New reality… #marketshift

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The news consumption game has passed a new milestone – social media outstripped TV according to the report, published @BBC.  The article is actually about the implications for propaganda and political campaigns.

However, this shift clearly has implications for marketeers and sales teams too.

Of the 18-to-24-year-olds surveyed, 28% cited social media as their main news source, compared with 24% for TV.

My teenage children do not consume TV at all… 0% (have a look here). So, whoever is trying to send a message to them via the most creative and ubiquitous (but traditional) TV add will heat no one. Not a single viewing. Millennials are like that — they feed on their personal gizmos. And they expect personalized and relevant content — delivered to them, intended for them – for the individual, not a data point in a target segment…

Social networks and respective mobile Apps on iOS and Android devises offer precisely that. No surprise they outstrip TV. It is a result and reflection of the demographic shift and it will only become bigger every year. 92% of teens report going online daily — including 24% who say they go online “almost constantly,” according to a new study from Pew Research Center.

These people are future customers. Are you working hard to change the comms strategy and processes in your business and to capitalize on this trend? You better be.

 

Race to zero

Being the lowest cost provider can never be a long-term strategy. By definition it is a race to the bottom. Agree?

Let me clarify… If ‘lowest cost provider’ is your only strategy, your business is doomed. Why? Cause you can cut costs only so much.

Of course it is only right to cut off the fat. And every business should be doing it routinely (but it does not have to be part of its strategic equation). If you focus most of your efforts and wit on costs, however, and go beyond the fat, starting slicing the muscles off, you will have the skeleton in the long run. Then your business is simply dead.

Low price (and presumably low cost) is a good strategy to rapidly penetrate markets. This, however, has to be coupled with an innovation machine, constantly and continuously spitting out new products and services to its customers. The trick is to avoid commoditization. A good example of a company successfully pursuing such strategy is Amazon. If you can’t – read the paragraph above.

There are actually very few businesses, which declare ‘lowest cost provider’ as their strategy nowadays. The last one I remember was Compaq… Where is it now? Although, it is rare for a business leader to proclaim ‘lowest cost provider’ as a strategy, if you look at daily practices, there are plenty of businesses, which practice it even without preaching it.

They will probably never admit it, but those businesses are usually obsessed about their bottom line rather than customers. Typical excuse – we do it, since under competitive pressure we couldn’t find a better way… yet, we have to deliver results. The leadership of such organisations has forgotten the reason they exist! (have a look here).

They routinely cut costs because that’s the ‘easiest’ and fastest way to achieve profit objective…  short term though. More dramatically – they believe their objective is to churn out certain profit. Sadly, customer is not even in the picture.

Stay away from those businesses.

Any business starts with Sales. 

Forward Business Planning

 

…or rather with Customer?

I have heard many times: “Develop a killer product – that’s the most important for your business.” It seems to be especially common among wannabe entrepreneurs in technology sector.

I heard it from a startup in quite a traditional segment, too. “Have you tested your idea and concept with a potential customer?” – was my question… “No” – was the answer.

Well, if you can’t sell your great product (have no customers), there is little sense in such business, isn’t it? The business I speak about went bust after having burnt money for about a year.

Unfortunately, this happens to many startups – tech and non-tech alike. The basic laws of business are universal and apply to any sector.

“The purpose of any business is to create a customer.” #PeterDrucker.

Here are 3 simple suggestions that I hope will help you (and your investors) avoid costly mistakes:

1. Talk to your customer early. You are obsessed about your product (even if it is at an idea stage only), you have very good reasons to believe it is great. That means you probably can guess who would share your opinion. Talk to them, put your enthusiasm to a test. And if they “don’t get it” you probably need to change either your concept, or audience (market) – talk to adjacent group (age, occupation, sex, income level, activity, habits, etc.)

2. Gather feedback, never stop. And go beyond asking ‘how can I make this product better?’ Ask ‘how/where do you see such product/service used?‘  You may be amazed by the insights you get. This may lead you to a different market segment or application.

3. Sell it. Yes, even when it’s just a prototype, try selling it. In fact, try selling a similar product before or while developing yours. First, this will show if it is going to fly at all. Second, you can gauge the price/value for your future business. Third, you will learn a whole lot about your customers  – what’s really important to them and what’s not. Finally, if you’re selling, you already have customer base and sales channel – you have a business.

So, in the end, it all does start with sales.

Millennials are here. Are you ready?

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I am from Generation X… I still search for the phone number on the ‘Contact Us’ section of a corporate website. Millennials though are the ones, who were born in Dot Com era and grew up with Internet. Judging by my own children, these are the people who chose Snapchat, Twitter and WatsApp over phone. And if you Skype them , you must be their grandpa or granny.

According to PwC report, 48% of population are those born between 1977 and today and by 2020 50% global workforce will be Millennials. What’s more important – those Gen y and Gen Z are increasingly becoming your customers and consumers. Accenture reports that Millennials already spend $600 bln every year in the US alone. Continue reading “Millennials are here. Are you ready?”