Selling someone else’s products

Have you ever thought about selling someone else’s products? When you sell someone else’s products,  parts of that vendor’s business obviously become a part of yours: their products and services. However, the reality is a good bit more complicated.

Be sure what business you’re in

When you consider selling someone else’s products, it’s critical to assess whether the product is germane to what you do.

For example, it isn’t hard to find stores selling fidget spinners. They’re an impulse buy that could add a small bump to daily sales, so grocery stores, convenience stores and the like could justify selling them back when they were hot.

However, it makes little sense to see these gadgets advertised on outdoor signage at pawn shops and musical instrument stores – which I’ve seen lately. The logic behind advertising out-of-context impulse items on a specialty retail store’s limited outdoor signage escapes me – particularly on high traffic streets.

Will it confuse their market? Will they lose their focus by selling a few $2.99 items? Doubtful. While they’re trying something to increase revenue, the emphasis on an out-of-context, low-priced impulse buy product is the reason I bring it up. It makes no sense for a specialty retailer.

When you start selling someone else’s product, there are questions you don’t want your clients and prospects asking. They include “Have their lost their focus?” and “What business is my vendor really in?”  These questions can make your clientele wonder if another vendor would serve them better.

Should you sell out of market?

I had this “Is it in context?” discussion with some software business owners this week.

One of the owners (not the tool vendor) is asking the group to sell the development tools they use to their customers & other markets. Ordinarily, this would be a head scratcher, since most software development tools generate their own momentum, and/or are marketed and sold with a reasonable amount of expertise. That isn’t the case with this tool vendor.

However, the discussion really isn’t about that tool vendor, even though they’re at the center of the discussion being had by these business owners. The important thing for you is the “Should we sell this product?” analysis.

Start the conversation by bluntly asking yourself if makes sense for your business to sell this product.

Adjacent space or different planet?

If your company sells to businesses that develop software internally or for sale to others, then you might consider selling a vendor’s software development tools to your customers. It might make sense if you sell into enterprise IT.

However, if you sell software to family-owned, local businesses like auto parts stores and bakeries, it makes no sense at all. You’re going to appear to be from another planet going to these customers to sell software development tools.

If you try to sell these tools in an unfamiliar market, then you’re starting fresh in a market your team probably isn’t used to selling and marketing into. The chance of losing focus is significant unless you’re leading your current market by a sizable margin and have plenty of extra resources.

Ideally, a new product line feels congruent to your team, clients and prospects. Even when it’s a good match, the work’s barely started as selling and supporting a ready-to-sell product requires a pile of prep work.

Your sales team needs training to sell the product and know how/when to integrate it into multi-product solutions. You need to include the product in your marketing and training mix. Your support team needs training to provide the level of support that your customers expect. Your infrastructure team needs to incorporate it into your CRM, accounting, website, and service management systems. Your deployment team may need training as well.

What if the new product’s vendor has problems?

Reputation damage is one of the biggest risks when selling someone else’s products, particularly if you have to depend on the other company to service and interact with your customers.

Does the product vendor provide support as good as yours? Do they communicate in a timely & appropriate manner? Do they service things promptly? Are they a good citizen in the developer community? These things are important in the software tools market. In your market, they may not matter.

The actions of the product’s creator reflect on you, since YOU sold the product to YOUR client. Carefully consider the risk/reward. Your entire clientele will be watching.

The ingredients of effective criticism

Today we’re going to use a common political event (and some football) to discuss the effective delivery of criticism.

Recently a new candidate joined a local political race. The new candidate’s campaign has spent plenty of time pointing out things that are broke, need attention, or didn’t go well. That doesn’t mean the candidate has nothing to say, nor that they have nothing valuable to add to the conversation about how their community is run. Even so, this “list” dominates their campaign while offering no specifics about their qualifications for office.

Criticism is not a qualifying skill

We all have the right to bring attention to things that aren’t working or need improvement. Even so, the ability to identify problems doesn’t qualify us to run the organization exhibiting those problems.

For example, my alma mater is (putting it politely) having a rough decade on the football field. It’s easy to note my team’s problems (or at least the symptoms), including their consistent inability to win a game after trailing at the half. When this doesn’t happen for six years, it stands out.

The ability to identify the team’s problems doesn’t qualify me to run a NCAA football program. That’s why I didn’t offer a solution. I might have theories, but management expertise doesn’t make you a coach.

The same kind of expectations exist for that political office. It’s real work. The ability to criticize isn’t enough. The job requires related experience.

If you want a job that requires leading the management of a $25 million budget, people expect that you’d have a fair amount of experience successfully managing a budget of at least low seven figures. Criticizing your opponent’s handling of the budget is fair game. Likewise, so is the public’s desire to hear about your experience and specifics about what you’d do differently and why.

If you want a job that requires leading the management of a team of ~900 employees, you should have experience successfully leading the management of a team of 100 or more. Tell us about your management successes, what you learned from your management struggles, and specifically how you’d make things better. Don’t think we won’t be taking notes and coming back to them to remind you of your suggestions if you win.

Criticism in the workplace has similar demands. If you provide context and propose specific solutions, great. If you’re simply complaining – does that help you, the company, or your target?

Embarrassing people isn’t criticism. It’s ego.

While I frequently discuss inept, unfortunate, or unproductive business behaviors I’ve experienced, I avoid mentioning the business. Why? Embarrassing an employee or business owner serves no purpose. It doesn’t improve the lesson / advice. It doesn’t positively serve the reader, or the business. It’s the kind of criticism that accomplishes nothing.

I prefer to shine a light on things a business can improve how they serve their customers. In turn, this gives the business a better chance of not just surviving – but thriving. It should also build job security for their team, and help the owner’s family benefit from the risk they took wh en opening a business.

To make your team’s feedback loop more valuable, teach them how to deliver effective criticism.

Criticism delivery determines the response

Whether running for office, grumbling about your team, or criticizing how you were treated in a local business, how you deliver that criticism says more about you than it does the recipient. It also plays a substantial part in how your criticism is received and the response you receive.

Criticism is not a bad thing. We all need it. It serves the recipient, not the one delivering it. Much of the criticism people given these days serves only the ego of the person doling it out – and does nothing for the person receiving it.

Ego-driven criticism looks like this: “(business / org / person) is terrible at (whatever). Fire them.

Effective criticism is intended and designed to help those receiving it, rather than drawing attention to the provider.

When delivering criticism, include specifics and where possible, suggestions for improvement. Describe the problem behavior / activity / outcome. Compare it to the desired behavior / activity / outcome. Discuss solutions. Ask how you can help. The outcome is usually what needs to be fixed, not the person.

Think about the best criticism you’ve received. What made it so valuable? Consider that when criticizing the work of others. You’re giving them a gift.

Photo by AutrementDit Toronto.

Why your growing company needs to work slower

You might have seen last week’s discussion of automating administrivia and clerical work simply as a systemization of the E-Myth. That’s fair, but remember that the goal was to reduce cognitive load on focus workers. We didn’t eliminate ALL administrivia and clerical work – and you can’t. Discussions on scaling a growing company rarely cover the burden this work creates. The key to keeping this work from bogging things down? Work slower.

Work slower?

A few years ago, Richard Tripp and I were talking about the challenges of installation and on-boarding in complex enterprise environments. He started the conversation by asserting that “Slow is smooth and smooth is fast.”

As he explained, you have to slow down your processes to improve them.

On a rough road, potholes, dips, and washboards make it difficult to drive safely at high speeds. On a smooth paved road, accelerating to and maintaining cruising speed is easier, safer, and more comfortable. The situation is exactly the same for a growing company’s admin and clerical work.

Note the emphasis on “and maintaining” in the previous paragraph. It isn’t fast to repeatedly accelerate, slow down, then accelerate back to cruising speed. It’s jerky and disruptive. If processes aren’t streamlined and capable of consistent speed and volume, then the work is neither smooth nor fast.

A flat tire on a busy highway

Process disruptions kill you when you’re trying to scale operations.

Fits and starts are demoralizing. One-offs to deal with random failures and issues consume a ton of time and take your team off task. This frustrates your team and delays work output – often backing up other work as a result.

These problems impact your operations like a flat tire affects travel on a busy highway. When a car has a flat, the impact isn’t limited to that car – it slows down the surrounding cars.

In your business, work (traffic) backs up, plus the task that suffered the failure (the car with the flat) is completely halted. Any work dependent on the stopped task is also at a dead stop. A shipment stuck in production can hold up packaging, shipping, the loading dock, invoicing, or other areas.

When you work slower, you create time and space that makes it easier to identify and eliminate the bumps and potholes in your processes. “Slow is smooth” takes shape. It’s about reviewing fundamentals, but also about the deconstruction and review of each part of the process.

Hummingbirds and governors

If you’ve ever watched a hummingbird fly, there’s not much to see. By naked eye, the wings are a blur at best. The bird hovers and appears to veer about as it flies. It seems anything but smooth.

In a slow-motion video, the beauty of a hummingbird’s flight is revealed. Every motion is smooth and consistent – motion that looks much different to the naked eye. Likewise, slowing down your processes and analyzing them step by step allows you to identify inefficient motion, poorly designed screens and paperwork, as well as unnecessary steps.

The elimination of inefficient motion isn’t the reason for a governor, but the idea is similar. A governor is a physical device that changes position as rotational speed of the governed mechanism increases. Eventually, rotational speed reaches a point where the governor moves into a position that cuts the throttle or otherwise limits the speed of movement.

Like speed, scaling reveals flaws

Governors are used to limit machine speed, giving the machine a means of protecting itself.  A mechanism without a governor could gain enough rotational speed to tear itself apart.

Your processes at at risk in the same way. If your business is used to shipping 100 items a day or onboarding 15 new customers a month, things change when you double those numbers – or add a digit. Where 100 shipments a day sustained you, 1000 a day might put you out of business. Under those conditions, an ungoverned not-so-smooth business can tear itself apart.

Smoothly-operated, well-rehearsed processes can accelerate to high speed and high volume without exploding – thus “smooth is fast“. You may need to get faster equipment to handle the volume, but faster equipment won’t fix a broken process. It simply breaks it at high speed.

Improving the efficiency and effectiveness of your work processes allows you to be ready to “remove the governor” at any time, without allowing the business to destroy itself.

Raise productivity by lowering cognitive load

Are you trying to figure out how to help your team become more productive? Traditional efforts to raise productivity will help, but are they enough? At some point, you’ll find that the law of diminishing returns will take over. Rather than give up, you & your team need to reassess the team’s workload and how it’s handled.

It’s important! It’s mandatory.

Traditional attempts at workload assessment usually include a re-prioritization of tasks. Regular priority assessment is a good thing, but not often a great thing. Sometimes it resembles “rearranging deck chairs on the Titanic”. What takes a re-prioritization from good to great is leaving your team open to not assigning a priority to EVERYTHING – i.e.: giving permission to not do a task. It’s OK to identify work as “work we don’t need to do”, or “work we don’t want to do”. However, your team still has to do this work because “It’s important!” and/or “It’s mandatory”.

There’s “mandatory because the law requires it”, but there’s a second form of mandatory that’s rarely talked about: “mandatory because I said so”. Some tasks legitimately fit this criteria, but many shouldn’t. The quote “Mandatory is one of the crutches we use when we can’t lead people.” speaks to these tasks. I’ll bet we’ve all seen this type of mandatory task in the workplace.

Mandatory doesn’t mean a person has to do it

Mandatory workloads tend to be administrative and clerical work placed on non-admin / non-clerical team members. Sometimes, it even includes administrative and/or clerical work placed on admin / clerical folks. Some of this work is necessary and important, like timekeeping for employees whose time is billed out to a customer. The rest should be subject to re-prioritization.

Your team has to stop doing unimportant work so that they can focus on what IS important. I’m sure you’ve heard and thought that before. Even so, we continue to put more “administrivia” work on our people. Sometimes this work is important, but if you look a little harder at it, you’ll find that much of it can be delegated. My favorite team member to delegate this kind of work to is “systems”.

Why do you want to either stop doing this work or delegate it to someone other than an employee? Cognitive load.

Every task you give a person increases their cognitive load. Take a high-value employee who does focused work for you. If in addition to that work, they also have five or more daily administrative / clerical tasks on their plate, those things have to be remembered.

Why does cognitive load matter?

Ever notice how you suddenly remember things at two am, or when on a walk, or while on an airplane? At two am, you’re usually sleeping. On a walk, your mind is free of all the things at your desk. On an airplane, the restrictive environment means your phone is useless and often, so is your computer. Those environments have a lower cognitive load, and suddenly, your brain remembers things again.

Extra tasks competing for brain power create “rush hour traffic” for the brain. Driving a car full of kids in heavy, urban traffic is more mentally draining than driving them on the open road. The complexity of heavy traffic and urban roads make driving more challenging. Add a bunch of kids in the car and.. well, you’re probably all over what cognitive load means. Add darkness, rain, and fog. Each layer increases the cognitive load your brain must manage in order to drive.

New administrative and/or clerical work increase the total cognitive load for employees who do focus work, decreasing the importance of their “real work”. Are these admin tasks more important than the number one task any random team member is expected to complete that week? My guess is that they aren’t.

Lowering cognitive load via systems

Work that requires deep thought is sabotaged by interruptions. We “clump” meetings together in order to reduce interruptions and increase available focus time. We clean our office to reduce clutter – and thus visual “noise” / distractions. Unnecessary tasks, office clutter and interruptions all add to cognitive load.

People under high cognitive load don’t need darkness, fog, or rain (interruptions / clerical work) added to their “drive” (workload). While these tasks can’t always be eliminated, they can often be automated. If someone is making a phone call or checking a website multiple times per day to determine if an action should be taken, is there a way to automate that determination? If you have systems tracking various aspects of your business, is someone manually tabulating that info? Is there a way to automate that tabulation? What can you eliminate or reduce? What can you automate?

Photo of Atlas by Simon Cope

The premium price lesson taught by craft beer

The craft beer explosion in the US over the last 5 to 10 years is a great lesson in premium price / premium product / premium services and customer ascension.

So what is the big lesson to learn from craft beer? Is it that you could make beer that only a certain percentage of the market will drink? Is it that you can put anything from talcum powder to motor oil in your wort as an ingredient and someone out there will want to drink it? Is it that you can charge for one pint what previously would have been a tolerable price for a six-pack?

But I don’t WANT an $80 diaper!

Those answers are all accurate at some level.

However, the biggest lesson is that in any market (including yours), there is a percentage of the market that’s willing to pay a premium price for a premium product. Products and services have had “Good, Better, Best” for years. Despite that, there are still many businesses out there that only offer a single product line with very little variation or options, premium services, or the opportunity to “ascend” to the next tier of product buyer.

These opportunities are not limited to automobiles, cigars, locally brewed beers, or any other thing. You can buy cheap toilet paper and you can buy fancy toilet paper. Speaking of, there are companies making a living selling diapers that cost $80 each.

While I don’t want to buy an $80 diaper, it’s clear that some portion of the diaper buying public does. That’s the trap that you can’t let yourself get caught in. It doesn’t matter that you and I aren’t interested in an $80 diaper. All that matters is that enough people are buying them. The same goes for a bottle of craft beer that might cost $12, $29, or much more. The challenge is finding a product that fits a market.

Premium price changes everything

In whatever you sell, there is almost certainly a premium price product or service opportunity – or both. You’ll never know where the price ceiling sits until you test it. We’ve all been offered an up-sell (want fries with that?), but this is different. Successful efforts typically result in a new tier of products and/or services. Sometimes, it reveals a completely different type of customer. It also allows ascension for some of the customers you have now.

Testing new product / service / price tiers could result in a new way of doing business for a subset of the people you serve. It may also reveal that there are additional price / product / service tiers between your existing regular and premium-priced options.

A successful “bar” that closes at 8:00 pm?

Montana micro-breweries are a fascinating example of finding an undiscovered tier in a market. They operate under a number of restrictions that impede their growth, including (recently raised) limits on the number of barrels they can brew each year.

Two additional restrictions that would ordinarily seem fatal to a traditional drinking establishment have instead created a new market tier.

First, Montana breweries with a taproom / tasting room may only serve 48 ounces (three pints) per patron per day. This might seem like a rather punitive restriction, but it doesn’t work out that way. First, most craft beers have a higher alcohol content than “regular” beer. As a result, three pints per visit is usually enough. Ever seen a bouncer in a brewery’s taproom? I haven’t. You’re more likely to see families and friends meeting together with their kids. Yes, in a taproom.

Second, Montana brewery tasting rooms cannot serve beer after 8:00 pm – at least not without getting a more costly / complex alcoholic beverage license. The traditional thought process would presume the 8:00 pm close dooms the tasting rooms. Instead, they’ve become gathering places after work, or before/after shopping and/or recreation. You’ll often see groups in a tasting room that you’d rarely see at a bar.

Without the typical late night hours of a bar, employees get home early enough to do some homework, put their kids to bed, or get a decent night’s sleep before their “real job”  (or college).  Likewise, these businesses avoid the occasional negative late night bar behavior that some places have to contend with.

While these limitations are restrictive, they’ve created a consumption tier that all but eliminates the negative behaviors sometimes associated with traditional bars.

The question is – what could be the premium-priced craft beer in your business?

Discarding clients & the math of job security

How often are you discarding clients? When fussy, needy, and/or high-maintenance clients complain repeatedly, there’s significant temptation to simply toss them out with the garbage. Some business owners build “filters” into their marketing designed to repel such clients.

When an existing client provokes thoughts of “Life’s too short to deal with this“, who fires them? How is the decision reached? Is the process documented? How is the decision communicated to the client and to your team?

Hammers, nails & curmudgeons

I asked some friends how they describe people they’d fire as clients. Their responses included unreasonable, unrealistic, frustrated, afraid, disgruntled, troublesome, pedantic, rebarbative, cranky pants, curmudgeon, etc.

Are you teaching your team that getting rid of imperfect clients is the only acceptable solution? Owners know there are situations that don’t merit dropping a client. Owners discard clients based on their experience. Does your team have that experience to back up their decisions? Take care that your team doesn’t use this tactic like a hammer while seeing every complaining customer as a nail.

It’s essential to be careful using “You’re fired!” as too-frequent use can damage your reputation. Businesses learn to detect bad apples and few are surprised when these clients get fired. Taken too far, your business can get a reputation for arrogance. People will think you discard clients the first time there’s an objection or even a question. You don’t want your reputation to be “At the first hint of a problem or even a question, they tell people to leave and not come back.” Some prospects will hear that and decide not to show up.

The math of discarding clients

Discarding clients sometimes feels as easy as pulling a splinter. The pain and aggravation fades quickly, making you wonder why you ever tolerated them. Even so, every choice to discard a client impacts your bottom line. While getting rid of high-maintenance “time vampires” will probably improve your bottom line, you have to be careful not to let your team believe that’s the only solution available. That’s where the math kicks in.

If your team gets rid of one customer a month, what does that mean to your bottom line? You likely know the typical customer’s lifetime customer value (LCV). Owners usually know how often the typical customer buys from them. They also typically know how much customers spend on average per transaction. Combined with the rate at which you are adding new customers, you can determine what an improper “firing” costs you and how long it takes to recover from it.

Uninformed profitability math

Employees don’t usually know the financial impact of discarding clients. When you explain the financials of your business to your team, it helps them understand why you think the way you do. Tools like “The Great Game of Business” (start with the book) help employees understand how the business works financially (free resources) vs. how they think it works.

Learning how the business works from a financial perspective encourages employees think more like owners. It can alter “I’m working my tail off for $15 an hour while the owner gets rich.” to something closer to reality. Even if the owner IS getting rich due in part to the risks they took & the investments they made, “uninformed profitability math” isn’t healthy. This “uninformed profitability math” rarely create behaviors that are positive for the business.

Many employees have never had the opportunity to see how their work (and how they work) impacts company financials. Meanwhile, business owners regularly complain how their people don’t think like owners. Part of that thought process is understanding the financial impact of events that occur in the business each day. Knowing that what your work does for the bottom line carries substantial value.

A “We’re having a good (or bad) month” message to employees is rarely accompanied by data explaining why. Understanding what good and bad month means affects the security a team member feels about their job. This impacts their confidence in their ability to provide for their family – and certainly affects job performance and attitude.

What does “we’re having a good/bad month” mean at your business? What message does it send to your team?

Photo by Shinichi Haramizu

Is it better to keep a customer or replace them?

“$29 per month… NEW CUSTOMERS ONLY!” Most of us have seen something like this and thought less than pleasant things about a vendor who hangs these new customer offers out in public where existing customers can see them. That bargain basement deal that’s not available to existing customers doesn’t make you feel good about your decade-long relationship with that business. The loyal customers who have stuck through good times and bad with that vendor – including their mistakes (which we all make).

The thought?

“Where’s my screaming deal?”

It isn’t that these deals are inherently bad. The mistake is putting them out there in front of everyone – including your current customers. If you can find a way to avoid showing the “loss leader for new customers only” offer to existing customers – avoid it. In some media, you can’t avoid it – so don’t use that kind of offer there. It ticks off your loyal customers. Every. Single. Time. Your customer service team gets to take flak about this each time you run these promotions.

Meanwhile, a lack of communication to existing customers plants the thought in customers’ minds that their vendors take them for granted. We know you’re thinking of us when you outsource customer service to Jupiter to save $1.29 per hour, or when you discuss how to shrink receivables. What sort of effort do you invest to retain existing customers?

If you have convinced your customers that you aren’t thinking about them & that you’re more concerned about getting new customers – why should they feel differently about you? You’re advertising for new clients everywhere. While those ads are out there chasing down more new customers to fill the leaky customer bucket, are your long-time loyal customers (and the rest of your customers) being ignored?

All the single ladies

Look at it this way: If you’re someone’s steady “significant other” and they are constantly out chasing down new “others”, most of you wouldn’t take that so well.

Why should your customers feel any different when they aren’t being wooed, cared for, thanked, communicated with, or given any special attention? They only seem to get attention when they call to report (or complain) about a service, delivery, or product failure. Once the initial sale is concluded, is the only time you connect with your clients when they contact you, or something has broken or otherwise gone wrong?

“That’s what everyone else does.”

You might be thinking “That’s what everyone else does. Why should I behave differently?

You are, or have been, a customer of car dealers, cable companies, dry cleaners, restaurants, various repair shops, handyman services, plumbers, sewage tank pumpers, electricians, hair salons, clothing stores, hardware stores, quick lube shops, etc. Almost all of them are advertising for new customers this week. How many of them are ALSO communicating with you to keep you, to bring you back, to make you feel good about being a customer, and/or encourage you to refer them to someone you respect and/or care about?

Very few.

They’ll likely continue appearing to take you for granted for weeks, months, or years – all while chasing new customers, all while grumbling about churn as they slowly lose customers to someone else’s $29 new customer offer. Don’t be that business.

Doing only one of these (looking for new, caring for existing) is not sustainable. Yes, I know it’s more work to do both. Most places need to get new customers, but most of those same places spend a lot more money & effort to get a new customer than they do to keep and care for an existing customer. Doing both means making an effort to protect the asset you paid for – yes, customers are an asset. Perhaps not in accounting terms, but in the real world where customers don’t grow on trees, we’d all rather have more long-time customers and others begging to do business with us.

Don’t spend $12 to get a customer this month, only to ignore them hereafter and hope they stick around, and then go spend $12 to get another one. That assumes you know how much it costs to get a customer (and it’s always more than you think).

Recycling customers is expensive.

Take better care of your existing clientele. Well cared for clients tend to buy more, buy more often, & for a longer period of time. They refer their friends & colleagues because they finally found someone who gets it. Be that someone.

Photo by martin.mutch

Training: One cure for sales problems

When having a conversation about sales problems, I might remind you about the folly of only taking cash (depending on the type of business). I might also remind you to eliminate the tedious & annoying out of your buying process. There are cases where that’s useful, but mostly – it isn’t. But not today. Today, I’d like to remind you of the value of training your sales team.

You’ve got questions

Heard of Quora.com? Quora is a website where you can ask questions. Many times, you’d never have access to those who answer: world-class subject matter experts. If you asked an airplane question, you might hear from an engineer who helped design it & three commercial pilots who fly it.

Why Quora? Because I found a Quora question pertinent to this discussion: “What can businesses learn from the military?” It reminds me of the not well informed “Why don’t non-profits run like a business?” question, but this is a much better question.

A Marine named Jon Davis who deployed to Iraq & Afghanistan answered: “Training”.  His answer breaks down like this: 1) A detailed process to track progress. 2) Regular job specific training. 3) An annual schedule to ensure standards are met. 4) Find & reward teachers. 5) Ignore the “training them to leave” myth. 6) Discipline.

If those six items are checkboxes – can you check any of them?

I’ve recently met several folks who work in the car business. The one I wrote about last week is the only one I’ve encountered recently who knew the product well. I don’t mean he could wake him in the middle of the night & tell me (blindfolded) how to change a timing belt. I mean he didn’t have to run to the showroom to find out the horsepower for a vehicle whose manufacturer makes cars with only two engine choices across the entire product line. Yes, it happened.

This isn’t a sales team failure. It’s a management failure. Are you preparing your salespeople to succeed? Product knowledge isn’t what sells cars. Rapport is. Guiding me to a “special value” (car that’s been on the lot too long) because it pays more than a mini (minimum commission) doesn’t build rapport.

A question about the value of rapport: What’s worth more to you, getting that “special value” off the lot, or creating a relationship that provokes me to return every x years to buy only from you for the rest of my vehicle buying days, while also encouraging my friends to do so? You decide.

Sometimes product knowledge is critical: “Can you help me find a good red wine?” The salesperson who knows less about your product than most prospects will struggle – & reflect poorly on your business. You need someone who understands the problems your prospects want to solve & how your solutions address them.

Don’t have a sales team? Still affects you.

One of the best parts of the answer Jon gives relates to on-boarding. He describes how the military trains recruits and leads them. He then compares that to the training that most businesses provide: haphazardly, if at all, and with little ongoing mentoring –  which unfortunately matches my observations over time.

You probably hire experienced people so they’ll step in & become effective quickly. Do they do it the way you want it done? Did they learn a completely different way of doing what you do? What if you don’t want them to do it that way? How will they learn your proprietary way of doing things?

Don’t assume an experienced new hire has mastered the systems, machinery, methods, and processes your business uses to succeed. Learn from their experience, but train / mentor them.

No matter what, the last thing you ought to be doing is turning them loose on your customers, prospects, products, and services and simply assuming that everything’s going to work out. Maybe it will. They might survive, or get by, or be good enough. Did you exert all that effort to find just the right person only to toss them to the lions with the expectation that they’d get by?

How much does it cost each time you have to replace a poorly trained salesperson who failed? How much does it cost to keep someone who isn’t as effective as they could be because they had to learn your ways by the seat of their pants?

Photo by formatc1

Accepting change: How can you help?

New technology is full of emotional change. Everyone finds their own pace when it comes to accepting the changes that come when adopting new technology. With brand new technology, the differences in adoption rates widen even more. Some folks won’t touch new technology. Other people prefer to wait a little while and let someone else take the punches that “first implementers” must often withstand. There are those who consider how the new tech can help them, and if it can, they’ll dive in wholeheartedly. Finally, some chase the Bright Shiny Object (BSO) – no, not the eclipse. The BSO distracts them just like a randomly reflected spear of piercing sunlight off a car windshield grabs your attention while driving.

This isn’t limited to technology

Segmenting the speed of accepting change isn’t new. A series of books by Geoffrey Moore, starting with “Crossing the Chasm“, examined this in detail. However, the phenomena isn’t limited to technology. Anything in our lives that introduces change tends to fit into these segments of how much (and how early) we’re willing to dive in. We’re creatures of habit, even in how we change. Our hesitancy or comfort to try new things impacts every purchase – including the uptake of anything new or different. Some of us love change. Some hate it. Most are somewhere in the middle. Many occupying the “fat part of the (Bell) curve” need a reason to change. Maybe not a big reason, but a reason all the same.

Ever tried to get a young child to try a new food? If so, you probably didn’t give them an adult-sized serving the first time you had them try it. As with the kid and that broccoli they (at first?) loved to hate, it’s often best to ease people into a new thing. Sometimes, you have to offer them something they crave (like ice cream for dessert) if they’re brave enough to choke down their broccoli.

It’s no different with adults. Try to convince a pickup driver to change from Ford to Chevy or Dodge. Ask a golfer to change clubs. Ask a frequent flier to change airlines. In each case, you’ll probably face substantial resistance.

How is that different from you wanting them to switch to your restaurant, hardware store, dinner menu, or IT company from the one they’re comfortable with?

IT ISN’T.

Risk reversal reduces friction

If you need someone to make a change in order for your venture (or career) to succeed – you need to figure out where the friction comes from. Whether you’re trying to work with the pickup driver, golfer, or frequent flier, what creates the resistance that keeps them from considering a change? Risk is a common source.

When we wanted people to change to our software years ago, almost everyone had a 30 day money-back guarantee. A few had a 60 day one. We changed ours from 30 to a full year. The difference in refunds is trivial between 30, 60 and 365 days. The perception of who takes the risk, however, changes completely.

I was on several car lots over the weekend. Of maybe eight different dealers, I met one salesperson who was hustling. He clearly understood that the goal was to get a new customer, not simply to sell a car. Almost anyone can sell a car (or whatever you and I sell), a real salesperson is looking to create customers for life.

Anyhow, this guy offered to send a car home with me for a few days to make sure it fits. Sure, I know how this works. It’s like a test drive on steroids. If they get you to test drive it, they know how much more likely it is that you’ll buy (trust me, there’s lots of data). “Take the car for a few days and see how it fits” is the next step up from a test drive. Even so, it’s a proven risk reversal strategy. We know we’re likely to miss something on a test drive. When our neighbors see the car, when we see that it fits in the garage, & when the rest of the family reacts – it’ll be tougher to return it.

Your challenge: Determine what’s necessary to reduce resistance to the point that your prospects will consider making a change. What risk(s) must you take off the table? “Change” in this case means make a sale and get a new client.

Photo credit: Frank Winkler

Sustainable revenue demands leadership

Recently, an employee of a tool company publicly commented (in a snarky way) about another vendor in their market. The target of his remarks isn’t a competitor. They create tools which complement what’s created by tools sold by the company that the snarky guy works for. Do employees who publicly snark about a vendor (or a client) think about the outcome of a vendor conflict that escalates badly? Perhaps. Let’s take a look at what’s at stake. The situation speaks to the leadership you provide to your people, even at a small company, and how it affects the sustainability of your company, and possibly that of your market.

What does sustainable company really mean?

We talk about sustainable companies and how culture, hiring, marketing, product, service, and leadership all contribute to create a company that lasts a very long time. Let’s tear this down into the pieces you and I can directly relate to. We’ll do it in the context of the two companies I’m referring to, but keep in mind that these things affect every company – including yours.

Many millions of dollars (and other currencies) are made each year from work created by the tools sold by the company that snarky guy works for. The company is rather small and one might think they’re insignificant in the big picture when compared to the big vendors who own that market internationally. You might think the same thing about your business. Don’t. When you look at regularly performed analyses of tool usage worldwide, the snarky guy’s company rarely appears on the list. In the rare occasions when it does appear on such lists, it’s in the second 50 or second hundred. In this market (perhaps like yours), it may seem insignificant. As such, why should we care what one employee said in public, right?

The leadership of that “insignificant” company should care. As should you when your people speak.

The math of an “insignificant” company

While there may “only” be 5000 to 10000 people worldwide who own tools made by snarky guy’s company, a portion of them are generating a good income – good enough to support their families for decades in some cases. This is not “random math”. I know a fair number of these folks. Many have employees. A few have 50 or more employees in the U.S. and/or scattered around the globe, and/or their products are a critical tools for companies with many employees.

When you take that community as a whole, we’re conservatively talking about between 100,000 and 200,000 people affected by the income generated via products created by these tools. Included in that figure are employees, customers, family members of the vendors, client companies, and other groups directly affected by that income. Expand that to the users of the products created by these people by adding those who make a living from the products. Add those making a living where these products are a critical tool in their work day. Now add their employees and families. Add the vendors all of these companies and families buy from. While this tool isn’t a global leader (and that’s OK), it still creates a significant amount of impact. For those who keep the lights on and their kids fed based on income rooted in those tools or businesses run by products created with those tools, it’s quite personal.

I suspect the 100,000 to 200,000 figure is quite low, even though it’s the estimated cumulative impact of one small tool maker who rarely (if ever) shows up on the radar of their industry. Small, much like the impact from any number of small businesses in your town. Including yours, perhaps.

So how does leadership affect sustainability?

The impact of even the smallest of companies must be taken seriously. Your company may seem insignificant compared to large multi-nationals, but the sustainability and leadership of your company has real impact. It affects homes, cars, kids, retirements, groceries, utility bills, and college plans for more families than you may have considered. Your team’s behavior follows the leadership example you set, which reflects upon your community, your company and you. Counsel your people about speaking about your company, your clients, your competitors, and those you collaborate with even in the smallest of ways. The smallest of things start a forest fire. When they do, everyone gets burned. Photo by Payton Chung