Consigning all selling to the past – post 2 of 2

In the first of these two posts, building on earlier material about why selling is inappropriate in today’s society, about the new ABC of Sales, and about the death of the sales force, I argued that putting ‘Up’ or ‘Cross’ in front of ‘Sell’ doesn’t change my position one jot; and I highlighted the wrong-headed approach of the Post Office in the transformation programme they are currently implementing, focusing on a strategy heavily reliant on ‘Up Sell and Cross Sell’.

upsell_cross sell

I committed in the last post to provide a strategy that delivers a far more effective approach to growing the revenues (and thus the profits) of businesses than the traditional tools, techniques and tricks of the classic sales approach. I suggested that a little patience by you would lead to everything falling right into place. Thank you for your patience; your wait is over, here’s what you waited for.

Here’s my alternative – start with the customer. Find a way of identifying what the customer places most value on, what would be the best offering for them right now? Have no pre-formed idea of what you want to provide to them. Instead stay in a very simple question for as long as possible – ‘can I provide the best solution for this customer right now?’ There is very interesting social sciences research that shows how surprisingly effective this approach is.

The Post Office has a major, strategic challenge deriving from the demographic of its customer base and adopting my alternative strategy can better position the Post Office with newer, younger, time-poor potential customers. Other businesses can deploy it with great success. Some of my clients are already doing so; with the sweet spot of deployment being in highly bespoke person-to-person complex professional services environments. Think of businesses where the nature of the service is that it is derived from the knowledge, skill and expertise of the people within the business. Think of ‘solopreneurs’ deploying their personal capabilities to delight their clients (perhaps designers, including graphics designers; maybe HR professionals; possibly Healthcare and Well-being practitioners). Think of Professional Services firms such as law firms, accountancy practices or Insolvency Practitioners/Financial Advisers). All are operating in highly bespoke person-to-person complex professional services environments.

Can I_question

Many sales trainers teach people tools, techniques and methodologies that purport to improve sales effectiveness. Included amongst these approaches is often the application of ‘Positive Mental Attitude’ as an approach. It is far more effective to tell yourself you can successfully sell to the person in front of you than it is to have doubts about your ability to do so. I had years in this sales environment of P.M.A. and A.B.C. (Always Be Closing) and have no doubt that the attitude of this positive group is more effective than a second group that constantly has doubts and insecurities regarding their abilities.

However, the social science research indicates that there is a third group who are even more effective than those who use P.M.A. as the bed-rock of their success. This third group have been shown to be 50% more effective than the P.M.A. group who use assertive self-talk when in the sales process (‘I can do this!’) Instead the third group stay in ‘interrogative self-talk’ (‘Can I do this?) for as long as possible. I think it would be far more effective for the Post Office, along with other service organisations, to train people how to use this interrogative approach when interacting with customers and potential customers. The resultant jointly-crafted solution is far more attractive, and valuable, to those whose needs have truly been listened to and honoured.

Adopting this strategy would enable them to grow their businesses without selling but with a strategy of using ‘max-serve’ to provide the best solution to their customers. If they cannot provide the best solution it is better to let the prospective customer walk on by. The ‘max-serve’ strategy recognises that only delighted customers will join the army of ardent advocates that recommend your business to others. If you merely satisfy a customer they are very unlikely to stick their head above the parapet and recommend your business to friends and loved ones. Disappoint them and they will tell many people. Delight them and they will tell those they love and trust – the people they have high standings with who are more likely to change their behaviours as a result of a recommendation from them. I will be writing more about the ‘max-serve’ strategy in the near future – once I have completed the review I am currently undertaking of extensive research.

An army of fans

In my business, I use the ALIGNED framework as a way of ensuring I deploy the ‘max-serve’ strategy in every customer interaction. I also teach others how to use the ALIGNED framework to shift the focus of their customer interactions. The ALIGNED framework, concentrating so much as it does on understanding the situation of the prospective buyer, constantly asking the question ‘can I find the perfect solution?’, and avoiding premature searches for possible solutions, greatly improves the alignment between seller and prospective buyer. By staying as long as possible in the question, using interrogative self-talk instead of assertive, the potential seller creates the opportunity to identify the resources needed to provide the perfect solution and crafts internal, intrinsic motivations over externally referenced drivers. Keeping alive the possibility that the answer that may emerge could be ‘No, I cannot provide the perfect solution’ multiplies the effect of the interrogative approach.

There is still hope for the Post Office, but only if they can revive their moribund customer base and can attract new customers to establish a squadron of sincere supporters to supplement and replace their dying customer base. It was once widely held to be a much-loved and revered British institution. I hope Chief Executive Paula Vennells acts quickly enough to move it into this century, realising last century isn’t good enough.

I hope you consider carefully the growth (or survival) strategy for your business. Which of the three groups above are you in currently? If you are not in the third group – the one that is most effective – what are you going to do? If you want to get into the third group, how will you do it? A goal without a plan is just a dream. Don’t just dream, do.

all-you-need-to-succeed

 

 

 

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Consigning all selling to the past – post 1 of 2

Those of you who have read my newsletters this year will have noticed I have written about why selling is inappropriate in today’s society, and about the new ABC of Sales. If you follow my blog posts you may also have seen me writing about the death of the sales force. Putting ‘Up’ or ‘Cross’ in front of ‘Sell’ doesn’t change my argument one jot; and I decided to highlight the wrong-headed approach of the Post Office in the transformation programme they are currently implementing, focusing on a strategy heavily reliant on ‘Up Sell and Cross Sell’.

Post Office

I think there is a far better strategy, not only for the Post Office, but for all organisations aiming to survive, even thrive, nowadays. The articles that can be reached from the hyperlinks above advance the case that selling is inappropriate nowadays. Recent social science research has identified that there is a far better approach to growing the revenues (and thus the profits) of businesses than the traditional tools, techniques and tricks of the classic sales approach. The aim of the ‘Up Sell and Cross Sell’ strategy is to capture a bigger share of the spend of the customers, to leverage the relationship between buyer and seller such that the seller takes a larger slice of the buyer’s spend. On the face of it, it makes sense that a company that has invested in acquiring a customer reaps the relatively easier additional revenue and profit streams. After all, it typically costs somewhere between five and ten times more to acquire a new customer than it takes to sell to an existing one. The problem with the ‘Up Sell and Cross Sell’ strategy of any business, whether or not it is a British institution, is that it doesn’t really address the issue of acquiring new customers.

I am all for building deep and meaningful relationships with customers. Businesses, especially those involved in providing services, which successfully deploy a strategy of attracting and retaining an army of ardent advocates are on the right track. However the way to foster such fervent fans is not through up-selling and cross-selling – far better to focus on finding ways to ‘max-serve’ customers. In their transformation programme, Post Office staff are being trained to routinely offer additional products and services from the portfolio that they were taught about in an extensive training programme. Staff are being helped to understand where the most profitable products are in their portfolio and to then find ways of offering them to those who stray into their bazaars. Many companies have employed this strategy for years. I too was trained to Up Sell and Cross Sell; it was one of the sales mantras in the nineties and noughties in the ICT companies I was then working for. Times have moved on, even if the venerable British institution is still trying to drag itself into the nineteen nineties, so new strategies are needed.

In the second and final post on this subject, I will outline my alternative solution to the Up Sell and Cross sell strategy being pursued by the Post Office and many others including law firms, accountancy practices, and many technology companies, to name but a few. As I wrote above, social science research has identified that there is a far better approach to growing the revenues (and thus the profits) of businesses than the traditional tools, techniques and tricks of the classic sales approach. I won’t keep you waiting long; the second instalment will be posted next week.

in time things will fall into place_patience

 

Winning sponsors…

Highway Signpost "Business Transformation"How can you be a successful Sponsor of business transformation? A winning Sponsor PACES FAVOURS. Here are my top tips for what Sponsors must have.

Power – the organisational power to sanction or veto change, to support or oppose targets.

A public face – the willingness and capability to exhibit the public support that is necessary to deliver change through strong organisational backing.

Capacity to monitor – the determination and capability to establish and nurture monitoring systems and processes to track progress and setbacks.

monitoring

Effects – the ability to make sure that what ensues from an action is appropriate. Promptly rewarding those actions that support the change and sanctioning those that do not.

Scope – the capability to comprehend the scale of the impact and consequences of the change.

Foresight – a thorough understanding of the effect the changes will have on all stakeholders, and a comprehension of their likely reactions.

foresightA private face – the ability, willingness and emotional intelligence needed to convey strong personal support privately to key individuals and groups.

Vision – a clear definition of the change that will occur, the ability to define, express and embody the Big, Well-Crafted Dream that Engages All.

visionObstinacy – the sheer determination to succeed and the ability to reject short-term actions that are inconsistent with the long-term goals. Without compromising the ability to recognise flexibility is needed, the stubbornness to maintain course when that is the appropriate choice.

Understanding – a comprehensive understanding of the organisational resources (time, people, materials, money and so on) needed for successful implementation combined with the willingness and capability to commit them.

Ruthless compassion – the ability to fully understand and empathise with the significant personal issues major change raises, combined with the determination and ability to do the right thing for the transformation in the face of these issues.

Ruthless compassionSacrifice – the commitment to pursue the transformation, in the sure knowledge that it is likely a price will have to be paid.

 

You can find out more about being a winning sponsor from the ‘Dance with the Elephants’ Bonus Material ‘Successfully Sponsoring Transformation’ available here http://bit.ly/BonusMaterials

What really motivates us at work

I posted two months ago on the subject of beliefs about work performance. In this post, I am going to discuss what really motivates us at work. Surprising, what really motivates us at work is AMP. No, I am not using it as an abbreviation for amphetamines, and I am not suggesting a measure of electrical current is involved. AMP stands for Autonomy, Mastery, and Purpose. Let me explain and take you through the research.

AMPAutonomy – the desire to be self-directed. Organisations place much emphasis on management, and much is spent on “management training”. Management is fine if you want compliance. Stephen Covey writes about managing people to cut down trees in a forest, about organising rotas, dividing tasks, taking care of logistics to complete a pre-determined task. Management works where we need compliance. If compliance is not enough, and we want engagement, self-direction is better.

Atlassian, an Australian software company, illustrate the point. One work day in each quarter, four days a year, all employees are told “today, you can work on whatever you want.  You can decide what you do; all we want is for you to share the results the next day.” The company arranges things that will make clear the day is different. I’ve heard they provide cakes, and beer, entertainment and all sorts of cool stuff. One day of undiluted autonomy leads to improvements in their products (such as bug fixes) and creates new ideas and new products that wouldn’t be achieved during the rest of the “normal” days. The management message is “You probably want to do something interesting, we’ll get out of your way.” Worth trying in your organisation? It doesn’t need to be everyone on the same day and you might have different ideas than beer – stopping internal email for a day and ensuring there are no pre-arranged meetings should help.

Mastery - AMPMastery – the urge to be better at stuff. Mastery is why we do things, like learning to play a musical instrument or learning another language, without any financial reward. It’s fun and we get great satisfaction from our improvement. It is not just things that are unrelated to work. People do work-related activities for free in order to strive for and achieve mastery, and not only for charitable reasons.

This brings me to Purpose. More and more organisations want a transcendent purpose. It makes going to work better and helps to attract the best talent. Skype is a good example of this overarching sense of purpose. Their goal is to be disruptive in the cause of making the world a better place. Organisations must have more than just the profit motive. Where the profit motive overrides or becomes detached from the overarching purpose, bad things happen. People get disengaged, products and services become worse, customer satisfaction and retention declines, sickness absence increases, there are more workplace accidents and it is just not fun.

Organisations should maximise purpose as well as maximising profits. There is a very good reason for this. Organisations employ human beings, and we are meaning-making machines. Have you ever experienced anything at all without attributing meaning to it? I remember a TV advert a while back. A man is running down the street and the crowd of people behind him are shouting. We attribute meaning to this – perhaps we attribute anger to the crowd, maybe we think that the man has just stolen something and is running away, maybe he is running to catch a cat about to fall out of a tree. We could attribute many things, but we will attribute something. The next time you meet someone for the first time, check out what you are attributing to them by the way they are dressed – even before they speak (when they do, even more attributions kick in.)

We need more AMP. Organisations that enable all their stakeholders to get more AMP are the ones that will be rewarded with tangible and measurable benefits in an increasing competitive “War for Talent.”

War_for_talentThe alternative is to do nothing and hope for the best. I do not think that is a viable option. It is time for you to take action in your organisation because others are already doing so. If you want to get ahead of them, you’ll need good programme design and management, and the experience of delivering cultural and behavioural change. If you want help in designing and delivering your programme(s) of action, let me know at piw@wttresults.co.uk or contact me via www.wttresults.co.uk

Challenging beliefs about work performance

Here are two conventional beliefs we seem to hold in work, and possibly in life in general:-

  • If you reward something, you get more of the behaviour you want
  • If you punish something, you get less of the behaviour you don’t want

carrot_stickThey are the foundations of many Performance Management Systems (PMS) in organisations; good behaviour is equated with bonuses and other rewards, poor behaviour leads to Performance Improvement Plans, sanctions and disciplinary action, and ultimately dismissal. Many of us have experienced the good and bad of PMS.

There is an interesting body of work that challenged these beliefs. Funded by the US Federal Reserve Bank, four leading economists from three of the leading US universities conducted a study undertaken by students from the Massachusetts Institute of Technology (MIT). The study caused them to question the findings as they ran so counter to conventional wisdom.

The students were asked to complete a variety of challenges such as memorising strings of numbers, solving crossword puzzles, completing tasks to test spatial ability, and undertaking physical tasks such as throwing balls into containers. They were offered three levels of reward for achievement at different levels of performance. Those who did pretty well would receive a small financial reward; those who did better earned a medium financial reward; those who did really well would get a cash prize of $50. Sounds like the basis of most PMS – reward the top performers well and provide minimum rewards at the bottom of the scale.

Here’s what the economists found.

–       As long as the task involved only mechanical skill to determine the level of success, higher rewards produced better performance.

–       Once the task called for even rudimentary cognitive skills, a larger reward led to poorer performance.

The economists were troubled. Maybe the study was flawed because the financial rewards offered were insufficient to determine the performance of relatively well-off American college students; maybe $50 was insignificant. They decided to eliminate this “wealth factor” and conducted a similar study in rural India. This study also used three levels of reward – a sum equivalent to one week of average pay at the lowest level, reward of two weeks in the middle, and a pot of one month’s pay for the highest levels of performance.

rural IndiaYou may have guessed what they got – exactly as at MIT. Where the task was purely mechanical, higher rewards produced higher performance. Where any cognitive skills were needed, higher rewards produced poorer performance. The same basic study has been replicated time and again, whether conducted by economists, psychologists or sociologists, producing the same conclusions. For simple, straightforward tasks, rewards increase performance in a pretty linear fashion – higher rewards equals higher performance. When a task is more complex and requires conceptual, creative thinking, these kinds of motivators just don’t work.

I am not trying to argue in this post that pay and financial rewards are irrelevant in influencing performance at work. The point is to pay people sufficient that they are not constantly thinking about pay; to take financial reward out of the equation so that they can focus on the work rather than financial rewards.

A subsequent post will cover some interesting research about work performance and will reveal what really motivates us to perform at work, identifying the three factors that lead to better performance and personal satisfaction. The three factors might surprise and excite you. I hope they do.

Save money by improving staff retention!

We know UK plc has a productivity problem; fixing it is not rocket-science and is not expensive. Yes, it is relatively easy and cheap given the massive improvements you can achieve. Studies, conducted by academics, consultants and leaders of organisations in all of Public, Private and Third Sectors, show the links between Employee Engagement and improvements in all of the following:-

  1. Income growth
  2. Productivity and performance
  3. Customer/client satisfaction
  4. Innovation
  5. Absence and well-being
  6. Staff retention
  7. Health and safety

In this series of posts, I have been covering each area in turn. We have now reached staff retention

staff retentionWe all know that replacing employees who leave is time consuming and expensive – it can cost up to 150% of the departing employee’s salary and their job is most likely not getting done, or done well, until they are replaced with suitably trained staff. For managerial and sales staff, the costs rise to 200% to 250% of salary. These costs consist of:-

  • Costs due to the person leaving
  • Recruitment costs (both internal and external)
  • Training costs
  • Lost productivity costs
  • New hire costs
  • Lost sales costs

The Corporate Leadership Council (CLC) identified that organisations with high Employee Engagement have the potential to reduce staff turnover by 87%; the disengaged are four times more likely to leave the organisation than the average employee (CLC 2008).

Gallup showed in industries such as Retail with high staff turnover (over 60%), those companies with the lowest engagement (bottom 25%) had a 31% higher turnover than those in the top 25% for Employee Engagement. Very similar findings emerged in organisations with lower staff turnover, showing the strong connection between Employee Engagement and staff retention.

According to The Hay Group, companies with high levels of engagement show staff turnover rates 40% lower than companies with low levels of engagement.

In the UK, Rentokil found the teams that most improved engagement saw staff retention increase 6.7%, providing an estimated saving of almost £7 million.

When organisations put sound HR practices in place, they are more likely to discover that employees feel satisfied, safe and will work to their full potential…and that means they are more likely to stay put and not jump ship (or fish bowl).

goldfish jumping out of the waterA 2013 Cornerstone study in America identified that 19 million employees or 13 percent of the total U.S. workforce were angling to change jobs that year. This churn was predicted to cost U.S. businesses an estimated $2 trillion to recruit and train new workers.

Organisations can improve their employee retention, can reduce the costs of staff turnover, and can drive bottom-line improvements by introducing sensible programmes to improve Employee Engagement. These programmes do not cost a great deal and deliver higher levels of retention and lower staff turnover costs. Organisations win when they thoughtfully and consistently implement well-designed programmes to increase Employee Engagement.

Ethical marketing – increasingly vital in business

Ethical marketing“Ethical marketing – isn’t that an oxymoron?” I hear you ask. I think it need not be. Marketing should be true to the brand and, for me, a brand is a promise kept. Brand is vital for small businesses. So often, the business owner is the brand. We may have some brand extensions such as our qualifications or accreditations, but the core of the brand is us individually. Our brand is what we do, who we are; it is our values and beliefs and our overriding sense of purpose. We know the risks to our brand of not being ethical in all ways at all times.

As our lives become increasingly fast-paced and ever-more complex the opportunity for marketing to trick us increases exponentially and this is why I think ethical marketing is increasingly important. Let me develop the logic, the emotion and the response.

Technology develops faster than we do as a species. We know that often our modern day actions and reactions are little different from those of our cave-dwelling ancestors. We all recognise the “fight/flight” reactions that certain situations automatically produce within us. How often do we see groups of people all doing the same things and looking very similar – the “pack instinct” in us? As technology develops ever-faster, our natural capacity to process more and more information is increasingly likely to be insufficient to manage the excess of choice, change, stimulation and challenge presented to us by our increasingly complex world. I recently read a report identifying that the amount of data in the world is now doubling every two- to two and a half-years. This baffling complexity makes our brains hurt because the brain is unable to process the bewildering array of messages, possibilities, implications and interpretations presented to us. We need a mechanism to enable us to cope.

Fortunately, we have such a mechanism that we use without cognitive recognition. In many ways, the use of this mechanism is similar to other species who cannot cope with complexity. If we look in the animal kingdom, where there is less brain power available to the species, we see how they cope. Their intelligence is often insufficient to process all the information available to them, so they don’t. Instead they rely on single pieces of information.

An experiment by the animal behaviourist M.W. Fox, undertaken in the 1970’s, illustrates my point. The study involved turkeys, specifically mother turkeys. These creatures spent (and still do spend) great effort looking after their chicks; warming, cleaning, tending and generally looking after them and huddling the chicks underneath them. Fox identified that the turkeys doled out their tender loving care based on one single piece of information. Available to the turkeys was a range of information to enable them to identify their chicks – their smell, their feel, their appearance and so on. However, Fox concluded that the turkeys relied solely on one piece of information, the “cheep, cheep” sound of young turkey chicks.

Unconvinced? Fox’s experiment introduced individual mother turkeys to a stuffed polecat (it was an experiment conducted in America) – the natural enemy of the turkeys. Unsurprisingly, the introduction of the stuffed polecat invoked a response from the turkeys of squawking, clawing, pecking rage. However, if the stuffed polecat had within it a small recorder that played a recording of young turkey chicks making “cheep, cheep” sounds when the stuffed polecat was introduced, a very different response was invoked. The mother turkey not only accepted the stuffed polecat, but drew it underneath her. Switching off the recorder led to the vicious attacks seen without the identifying noise. This behaviour is known as fixed-action patterns. Similar experiments have been reproduced in other species, for example substituting the red feathers of a stuffed robin with blue feathers produced different behaviour.

Surprisingly, we see humans frequently also rely on single pieces of information. To take one example, how often do we look to see what other people are doing in a situation where we are uncertain, and then mimic their actions? If everybody else is acting the same way, that must be the right thing to do – right? Often we don’t bother to process all the information available to us, we just rely on one piece – in this case what everybody else appears to be doing. Just because everybody else is doing X doesn’t make it right. Everybody else is walking past the man collapsed on the street, so we do the same – ignoring his moans and clear distress. Maybe everyone else knows he is drunk and it is his own fault. Why bother to process any more information than the single piece of what others are doing?

Narita

It works in reverse (what people are not doing) too. When I lived in Japan, I had a visa that permitted me to enter the country through the passport queue used by Japanese nationals. Narita Airport queues were often long, and frequently there was great disparity in the size of queues at the respective passport checks for nationals and for foreigners. After a long flight, and before a long train journey from Narita to my home in Tokyo, the last thing I needed was a long queue. Accordingly, I went to whichever queue was shorter. If that was the queue for foreigners, I passed through without incident. Almost without fail, when I went through the queue for nationals there was pandemonium and great unease and muttered conversations around me, and several people would earnestly explain to me in halting English that I was in the wrong queue. My explanation in Japanese that I was permitted to use the queue for nationals led to even more earnest urgings to use the other queue. One piece of information, my looks, was all those around me (apart from the passport inspectors) needed to govern their behaviour.

So as the world becomes ever more complex, our brains come to rely more frequently on fixed-action patterns and single pieces of information. This makes us vulnerable to unscrupulous marketers who bombard us with erroneous information, as we exhibit more of a tendency not to process all that is available.

I want to be very clear that I recognise the benefits of fixed-action patterns and using single pieces of information. Their use can make our lives easier; I am not an advocate of the brain ache caused by considering every single piece of information all the time. When making decisions, we will less frequently enjoy the sumptuousness of a fully considered analysis of all the information. Instead we will rely increasingly on a focus on one single, usually reliable feature. Where those single features are truly reliable, there is nothing inherently wrong with our shortcut approach of picking a single factor and using fixed-action patterns to arrive at an automatic response. The problem arises where something causes the normally trustworthy to lead us to errant actions and wrong-headed decisions.

The “something” in the previous sentence is often the result of unethical marketing, aimed specifically at tricking us into the rather mindless and mechanical nature of our shortcut approach. This can be as crass as marketers adding canned laughter to a TV programme (everybody laughed, so we laugh too) or making up statistics to try to convince us that their products are the “fastest selling” products (Where? For how long? At a fraction of the price you are now offering it to me?) This is why I think ethical marketing is so important, and will become ever more important as our world becomes increasing complex. Marketers can help us to cope with complexity by giving us information that is genuine and does not pervert and distort. The treachery is when the profit motive tempts them to make their profits in a way that threatens the reliability of our shortcuts. To avoid brain-ache we have to have reliable shortcuts, faithful rules of thumb that we can depend on. These are no longer luxuries for us; instead they are increasingly becoming vital cornerstones that allow us to cope with modern life. Where we see unethical marketing we should shout about it from the rooftops and shame those who use it.

Better still, we should boycott the product or service being unethically marketed, and let the marketer know why we are so doing. Maybe I am being too cynical, but when I see a retailer, who has a price-match promise, increase the price of an item by 40% I begin to think. They get 40% more at the till, and give you a coupon so you get the money back when you next shop there. “No harm, no foul”? I think not! This is unethical marketing. You may get your money back off your next shop, but they get the cash flow and the return visit. The hyper-cynic in me is just waiting for the future promotion that proclaims “Great Price Reduction, Previously Priced 40% Higher!!!” Leave the item where it is and tell the store manager why! Better still, don’t use the retailer at all and tell them why.

It’s time to fight back against unethical marketing. Ensuring we market our businesses ethically is no longer enough, because unethical marketing is compromising the vital cornerstones and faithful rules of thumb that we need to thrive in our increasingly complex world.