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.
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.”
Do Whatever It Takes!
Published June 5, 2011 | Last year, SUNY was hosting a special program for Colombian government officials. At the last minute, they had a cancellation and asked me if I could fill in and do a presentation on Leadership Challenges in the 21st Century. They agreed to have a translator present to convert my English into Spanish for the audience. I agreed. Then, I followed the Number One Rule that I teach in all our presentation workshops and coaching – BE AUDIENCE DRIVEN.
- I developed content to be valuable for the audience
- I created an organizational structure and style that would allow for interaction, even if there was a language barrier.
- I decided to have the slides translated into Spanish, so while people wait to hear my English translated, they could at least read the words in their language.
- Before I started, I “met my audience”. I knew Spanish was their first language and expected many to also speak some English, allowing them to get something from my speech, if I spoke more slowly, and get the rest from the translator. I discovered that virtually no-one spoke English.
- Recognizing that if the audience and I had to wait for each and every sentence to be translated, that would significantly reduce the impact of the presentation. Since I had learned Spanish many years ago, I asked the audience if they would let me try to present in Spanish, with the translator filling in when I was stuck. Knowing that the technical words were in Spanish on the slides, I figured I could probably cover about half the presentation in a broken and often grammatically incorrect Spanish. The audience overwhelmingly told me “ Go for it”, and I did.
- Turns out I presented almost 90% of the presentation myself – and built a terrific rapport with the audience (and received compliments later).
At Presentation Excellence, and all the other companies with which I’m involved, our approach is to do “whatever it takes” to meet the client’s needs if possible. A partner once gave a client a fresh shirt he happened to be carrying for an afternoon investor meeting when an accident spoiled the one he was wearing. Good thing I took all those years of Spanish many years ago!
May all your presentations be excellent!
Are You Perfect?
Published May 9, 2011 | If you’re like most people I know, you’re not perfect – and therefore susceptible to the common causes of failure.
In business strategy and leadership courses, we often focus on Best Practices to help guide students. Some courses now also focus on the flip-side: why leaders commit key errors. For instance, Confronting Reality: Doing What Matters to Get Things Right, includes a chapter on “The Six Habits of Highly Unrealistic Leaders”. I thought I’d share it with you.
According to Larry Bossidy and Ram Charan there are six common causes of failure to confront changing realities. I add a seventh:
- Filtered information. Given the increasing complexity of life and the overwhelming amount of information available, filters help us avoid overload. But in doing so, key information challenging basic assumptions may not get through.
- Selective hearing. As humans, we do the same thing: we filter the information to which we attend and often seek information to corroborate our initial decisions
- Wishful thinking. In a world of complexity, doubt and uncertainty, people sometimes resort to wishful thinking. The Bay of Pigs fiasco of 1962 is an example.
- Fear. Facing uncertainty and the unknown, Kahneman and his fellow Nobel prize economists proved that people prefer to avoid losses than seek out gains.
- Emotional overinvestment. Adopting new behaviors and attitudes means giving up older ones; when people are emotionally overinvested, they downgrade the logic of the argument in order to resist change.
- Unrealistic expectations of capital markets. Capital markets focus on quarterly changes, even though true changes, such as a product branding or business development effort can take much longer.
- Inertia. Human nature, like the real-world, resists change. Once we’re comfortable with what exists, it’s hard to recognize that change may be essential. Think of all the companies that were successfully making a nice profit on products (e.g., floppy disk, buggy-whips and netbooks) while other companies were building new products (flash-memory, cars and ipads).
One of the reasons I agreed to chair a CEO group for Vistage, is that the 12+ members of a typical group know that their job is to provide each other with:
- Objective perceptions when a member is falling into one of these traps
- Creative new solutions to overcome business challenges
- Accountability for taking steps necessary to get quality information, avoiding these psychological traps.
My CEO group, which calls itself the Game Changers, is especially focused on avoiding these causes of failure and facilitating adoption of best practices. If you’re in NYC and want to join, feel free to contact me.