The Price is “The Price” Isn’t It?
Published January 6, 2012 | 
Whether you’re buying or selling, price often matters. The number one thing you hear in sales is that people want to buy their products/services at the “lowest possible price” (which is why sales people often claim they need to lower their prices for customers). In the meanwhile, pricing executives want to sell at the highest price to cover costs and maximize revenue. But does that mean they prefer it all at once or through payments-over time. So, “the price” rarely is a simple hard-and-fast dollar amount. Many things affect it and “it’s all in the presentation”.
Form:
Imagine you want to buy a new car. There’s the sticker price; the “sales” price (especially offered during the Xmas holiday season”; the negotiable price you can get from the salesperson; the price listed in discount buying guides/websites. There’s the cash price, the leasing price and the bank-loan price. Each form addresses a different need of the buyer. You must understand the buyers/sellers’ needs and values before determining the most effective form in which to extend a pricing offer.
Context:
Decisions are rarely made in a vacuum; the context needs to be taken into account. People buy more than the features of the physical car; they want the image it projects (e.g., sporty, affluent, family focused); ease-of-use over time (e.g., what’s the warranty, customer service quality, repair convenience and quality, etc.) Salesman’s flexibility and incentives to sell change over time (e.g., end of month and seasonal sales quotas). And, both buyers and sellers compare all these things for comparative products, time periods, etc.
Guiding Decision-making
With so many things affecting “price”, how do you make an effective presentation? As we’ve discussed in this column, the answers are complex, but doable:
- Understand the needs of the audience
- Tailor the message the meet those needs
- Be succinct and use powerful words/graphics
- Organize the material to guide the decision-making process of the other person. Acknowledge the logic and emotional issues of importance; structure the presentation to match the process by which the person is going to make the decision.
- Exude your “leader-presence”, because people want to follow trustworthy leaders. Do so by demonstrating, integrity, authenticity, humility, confidence, passion for serving the customer.
The Job of a Presentation is to Communicate Value
Buyers allegedly want the lowest possible price; yet the reality is that virtually no-one actually buys clothing, homes, food, etc. that cost the absolute lowest dollar cost. Instead we want value, and our decision to buy and sell is determined by that conclusion. Whether you’re selling or buying, it’s not just the dollar-value of the price but also the form and context of the presentation that communicates value determines the outcome. So, before you assume the price is to high or low for the other person to act, determine who you can change the presentation to communicate the values that the other person really wants. When it resonates with his/her immediate and long-term needs and wants, you’ll close the deal.
It’s Time for Business Leaders to Step in When Government Fails.
Published November 20, 2011 | Howard Shultz, CEO of Starbucks, has it right. Government officials are digging their heels into their antagonistic positions and blaming each other for not enabling workable solutions and a consensus to implement them. He proposed that people boycott making election donations to politicians who seem to be using the money to attack their competition, rather than generate new solutions.
If you’re not part of the solution you’re part of the problem. With government effectively frozen for the next 12 months until the 2012 election, he recently announced the “Create Jobs for America” program; he’s leveraging the power of Starbucks to reach 60 million people and enable them to contribute money ($5.00 or more) to be used to help create jobs by donating it to the Opportunity Financial Network which lends money to small businesses. His goal is to engage other businesses in this worthy enterprise.
But the real goal has to be larger. It’s time for business leaders throughout America to step in and create new solutions when government fails. These leaders constantly confront challenges that affect stakeholder’s lives – employees, community residents, investors, etc. They look for tried-and-true approaches as well as creative new ones, and then apply them to resolve the situation. When they succeed, everyone benefits.
Mr. Shultz re-assumed the helm of Starbucks after the company stopped growing due to
overexpansion, the economic recession and other causes. He challenged the status quo,
adopted new approaches and turned the company around. And now with the company
back on track for growth, he’s taking this no-nonsense problem-solving approach and
applying it to societal problems.
We need more leaders to do this. As Chairman of a local CEO group for Vistage International (www.vistagenewyork.com), I have the opportunity to watch these business leaders confront challenges with creative approaches and produce impressive results. Imagine unleashing the potential problem solving skills not just of the 14,500 Vistage CEOs, but millions of other business leaders throughout the USA to take the initiative and develop creative solutions to the challenges people face, without being dragged into party politics. It’s what we need to do.
Enabling leaders to realize their ability to confront business challenges creatively is the first step toward engaging them to step outside the business realm and address societal challenges. That’s one of the two driving forces behind the newest venture that I’ve co-founded, LeaderSolutions.TV. It provides a forum through which business leaders can share how they confronted challenges creatively, and allow others to learn from their experiences. Listening to the many varied stories will undoubtedly inspire one another.
As leaders increasingly recognize their abilities to creatively attack their company problems, I hope they increasingly will step outside their businesses, and apply their drive, insights and energy to address societal challenges – just as Howard Schultz has done. I chose to gain psychological, legal and management skills many years ago to work within the government sector to make this world a better place. Yet, after a few years, I felt I could better use my creative skills to create new solutions within the private sector and inspiring young people by teaching in universities to do the same.
However, today, with government frozen, and time to solve our economic, energy and other challenges slipping away very quickly, I believe business leaders need to take the initiative in developing solutions to the societal problems and gaining consensus to implement them. While government is the problem, business leaders need to drive the solutions.
Compelling Case + Irresistible Influence = Success
Published October 2, 2011 | Recently, a colleague asked for some help to sell a bureaucracy on making a change for him. Complicating matters was the fact that several other people had made similar requests before and all had been refused, in part because change would have meant promoting customer needs over the needs of his staff. We developed our presentation/negotiating approach, executed it and succeeded. He then suggested we share the process we took with everyone, so others can do the same. Great idea… so here goes.
- ADAP: Adopt the Audience-Driven, Authentic Presentation philosophy. The audience is a senior executive who has three main concerns: Promoting the excellence of his brand, protecting his staff and pleasing customers. Therefore, the presentation must address these concerns, in that order! Second, to help him resolve the conflict between customer and staff needs, we need to bring both the logical and emotional issues to bear.
- Create a Bond: People buy from people they like, people with whom they identify. You do that by demonstrating that you share similar values, background or history. In this case, I began the conversation by demonstrating my personal interest in his area of specialization and commonalities about our backgrounds.
- Create Trust: Knowing that he has to make a tough decision, I shared with the buyer my understanding of the conflicting values he must weigh, and made sure to focus on the super ordinate goal – that in order to promote the excellence of his brand, pleasing the customer was more important than ruffling the feathers of some staff members. Building a bond and trust, enables you to create irresistible influence – the emotional element in decision-making.
- Compelling Case: Since we like to make decisions based on logic, the key is to present a persuasive fact-pattern. As a leader, his #1 responsibility is to promote it, authentically. Choosing to protect his staff rather than the brand’s values would undermine the brand. In this case, excellence in education means creating an atmosphere in which we encourage people to invest time, creativity and energy learning the subject; ultimately, the goal is to inspire people to want to learn more. Anything less diminishes brand value. The leader needed to remember these were his authentic values and that only one course of action would promote them.
- Feel like a Hero: We all want to feel we make good decisions, which is why we should end with a positive conclusion that eliminates the possibility of “buyer’s remorse”. Knowing that the client might experience some negative feedback from staff, we concluded by addressing his emotional need that he made a good decision. With this decision, he would promote his brand value to customers and reinforce his self-image as an authentic leader who does the right thing.
In sum, we combined the power of Irresistible Influence and Compelling Case to succeed:
- Feel like a Hero: We all want to feel we make good decisions, which is why we should end with a positive conclusion that eliminates the possibility of “buyer’s remorse”. Knowing that the client might experience some negative feedback from staff, we concluded by addressing his emotional need that he made a good decision. With this decision, he would promote his brand value to customers and reinforce his self-image as an authentic leader who does the right thing.
- Irresistible Influence: Creation of a bond and trust for the emotional framework for the buying decision we wanted, and
- Compelling Case – A logical argument to take one course of action really promotes brand value in this case.
In your future presentations and negotiations, use the both of them to succeed!
To Help Others Develop, Start With Yourself
Published July 22, 2011 | I’m often asked “Why did you agree to chair a group of 8-16 CEOs for Vistage?”
Follow my career and you’ll see that my passion is helping good people unleash their potential. I’ve studied human psychology, strategy and organizational systems in order to facilitate efforts by good people to be consistent winners.
Vistage is for leaders who want more for themselves and their companies. They agree with Jim Collins’ insight that Good is the Enemy of Excellent. They understand that one of the best ways to encourage leadership development by their team is by openly developing themselves.
Marshall Goldsmith commented about this, after hearing General Mills’ CEO Steve Sanger talk about his development to 90 of his colleagues. Dr. Goldsmith noted that twenty years ago, few CEOs received feedback from their colleagues. Today, many of the world’s most respected chief executives are setting a positive example by opening up, striving continually to develop themselves as leaders. In fact, organizations that do the best job of cranking out leaders tend to have CEOs like Steve Sanger who are directly and actively involved in leadership development.
Michael Dell is a perfect example. As one of the most successful leaders in business history, he could easily have an attitude that says, “I am Michael Dell and you aren’t! I don’t really need to work on developing myself.” But he, has taken the opposite approach: sincerely discussing his personal challenges with other leaders.
Vistage New York isn’t for everyone. It’s for leaders at all levels who are committed to improvement by being open to new ideas and perspectives, willing to make public commitments to peer advisors and being held accountable by them and an expert coach. The CEO Game Changers, as our CEOs call themselves, proudly announce that they want to be the best they can be and will change when appropriate.
If you haven’t yet applied to be part of Vistage New York, think about how you and your team and your family spend their days, and ask: “Is that all there is? Could it be better? Am I prepared to find out?” If you want more, let’s meet and see if you qualify for one of our groups.”
Structuring Your Presentations – Connect With the Audience!
Published July 18, 2011 | All too often, when a client calls us to help close more deals, it’s because the client is using a “one type fits all” presentation, rather than a focused series of presentations that address specific needs within each stage of the sales process.
A sales strategy typically calls for identifying prospects’ needs, and demonstrating how the company’s solution meets them. But to connect with the audience, an effective presentation should take into account the client’s receptivity needs: the ability to absorb the information and make a decision. Studies have shown that people’s sales attention spans generally last about 20-25 minutes. So don’t overload the presentation if you want the desired impact.
For this reason, sales presentations often consist of several coordinated pre-planned, two-way conversations in which you identify the client’s product and buying needs, including:
- what benefit does the product/service provide?
- how does it fit into the clients’ bigger business picture
- what cost, value, and risk taking issues will affect whether they will buy an appropriate solution from you?
The first presentation, therefore, focuses on building confidence. You need to demonstrate:
- your product/service will meet the client’s needs
- your company has the capabilities to meet and exceed these needs by adding additional value and reducing related risks
- you, as the sales representative, will also add value and reduce risks to make sure the client gets what he/she needs
Given that the goal of the decision is whether or not to proceed to a second presentation, the first will need to be succinct and powerful.
Subsequent presentations, which may include new parties with more detailed concerns, build upon prior presentations, but shouldn’t duplicate them. We had a client who, knowing this rule, was about to board a plane for an important sales meeting, and felt something was wrong with his presentation. He asked us to review it while in the air and give him our analysis when he landed. When he called us we reminded him that this was his third presentation to the group (and the first designed to close), yet the initial set of slides were the same ones from both prior presentations!
Another example. Imagine you’re selling an investment opportunity. In the first presentation you’re focused on the nature of the investment product, the track record of the sponsor, and (most importantly) “the secret sauce” – how management uniquely uses proprietary decision-tools to achieve excellent results. The second presentation should focus on demonstrating in-depth how the managers have made excellent decisions in the past (e.g., picking and managing prior portfolio companies) and how they will do the same in the future. But spending time going through all 25 portfolio companies in the initial presentation would be distracting.
If you have only one meeting at which to present your entire story, consider breaking the story into two parts. Have the initial sales presentation focus on demonstrating your Unique Sales Proposition. Then, offer a second presentation booklet, that the prospect can read later, to reference the details.
In sum, today more than ever, it’s not what you say, but how you say it that counts. You must structure the presentation process to connect to the audience’s decision-making process, which includes a readiness to accept different types of information over time, and the ability to conclude that they want to work with you to get your solution.