Episode #74 Value Understanding In Sales

Happy sight. Our office location in Akasaka is a good one because the streets around here are full of trees in full bloom and it is really a magic time to be in Japan. If you haven’t experienced it yet, come and do so! Today we are talking about if we want to make a sale, we had better be talking value rather than getting dragged down into the mud and blood of pricing discussions. Great Greg, you might be thinking - just how do we do that? There are some key factors which guarantee we will be having the correctly focused sales conversation with buyer and that is what we will reveal today. All will be revealed shortly.

According to a PEW Research Center survey Japan occupies third place amongst countries most willing to accept immigrants. Twenty three percent said the country should bring in immigrants. Only thirteen percent wanted the number of immigrants reduced. This was the lowest percentage amongst the twenty seven nations surveyed. Fifty eight percent said they wanted the status quo maintained. In other news, market leader Yamato Holdings has agreed to jointly develop an unmanned cargo aircraft with Bell Helicopter Textron, aimed at launching a flying truck by mid twenty twenty. The company expects the flying vehicle will carry cargo weighing up to four hundred and fifty three kilograms traveling at a speed of one hundred and sixty kilometers per hour. It will be able to take off and land vertically and cruise horizontally. Finally, the home delivery business saw four point two billion items delivered in 2017. Five years ago the number was three point six billion. Japan’s chronic labor shortage means that delivery firms are struggling to find staff. From April a new law will restrict the amount of overtime a worker can do to a maximum of seven hundred and twenty hours a year or sixty hours a month. The delivery industry will have nine hundred and sixty hours or eight hours a month, to cope with the home delivery demand.

Price is always a big issue for sales people. Sales Managers know that sales people are very happy to drop the price, because they see this as the easy route forward with the client. Whenever there is a price increase, sales people immediately whine about it, because they see this as making their life more difficult. They are permanently happy to discount, in order to win the business, even when their commissions are tied to the size of the sale. The problem is they are totally focused on the wrong thing.

What they should be focused on is not pricing. I was talking with a seasoned Japanese salesman at an event and I asked him how he personally dealt with the objection – “your price is too high”. This is one of the most common objections in sales and I was looking forward to getting some new ideas on how to deal with this one. His answer was shocking. He said he always drops the price by 20%, when the buyer pushes back on price. There are so many things wrong with this approach. Price and value are separate entities and talking about price and not value, is bound to get you into a death spiral of price discounting. The secret is to never get into that pricing discussion, because you are honing in on the value to the buyer so that they accept your price. How do we do that?

Salespeople need to do a better job of listening to their clients, to really, deeply understand what that business needs to succeed. Having a fixation on price discounting by the buyer doesn’t deliver the answer, if the solution is incorrect or flawed. A cheap, but bad solution is still bad. Salespeople need to get the right mental acuity. Rather than carrying around a bunch of screaming monkeys around in their head all fighting about price, commission size, boss anger, mortgage payments, personal status, which new car to buy, etc., they should be 100% concentrated on the client’s problems, not their own.

Given the way to the client’s price agreement is through listening, just what should salespeople be listening for? Counter intuitively, certainly not what the client decides to talk about! The client isn’t there to do all the hard lifting and run the sales meeting. They are perfectly allowed to take the sales conversation and willy-nilly, wander around all over the place. That is their prerogative as the buyer. The salesperson’s responsibility however is to ask intelligent questions which will uncover the client’s needs. They need to keep the sales conversation on track. That means find out the needs, deal with any concerns or hesitations and then get the buyer’s agreement to do business together.

Rather than going into a discussion about what price they can get the client to agree to, salespeople would do much better to join the conversation going on in the mind of the buyer. The customer has goals and aspirations. Our job is to help them to be realised. In their success lies our own success. In fact, the cost of our product or service is free to the client. It is free because it is paid for out of the additional growth we bring to the client’s business, or the efficiencies we render, rather than a subtraction from what they have today. Clients see us as a cost and we have to reframe that idea to one of three things. We need to show how we can increase revenue, or reduce costs or increase market share, or if we are geniuses, all three. How do we do that?

We have to shift gears. When you think in terms of paying for your contribution from the increase in the revenues or costs savings for the client, then your whole mental framework shifts and so does the conversation. A focus on repeat orders rather than this one transaction is also a powerful mindset shift for salespeople when engaging with clients. There may be occasions where this transaction is a one shot wonder, but really we want to build relationships with clients which last. Such relationships are totally based around the amount of trust which has been created. Thinking only about yourself, isn’t going to make that trust engagement happen any time soon.

The salesperson’s kokorogamae or true intention is the key. Who are they really serving – themselves or the client? The pressure for results, to make budget, to hit the target drives salespeople to short-term thinking. Clients are not stupid. They can smell desperation or comprehend sales push very quickly. There is a great aphorism: “everyone loves to buy but nobody likes to be sold”. Precisely! We want to be shown the value of giving up our currently available cash flow, to build a better future. We don’t want to be pressured by salespeople, driven by their own selfish needs, to hand over our security.

So, how do we get the salespeople better able to have the proper approach to clients? In lieu of no existing sales philosophy at all, salespeople will generally posit their own version and often this is a highly selfish one. So we need to set down what is our attitude to our clients and how we do business around here. We need to explain we are building lifetime client value, our brand, our reputation and we are playing the long game. Salespeople need to have this repeated to them endlessly. Sales Managers may think a couple of doses of this philosophy will do the trick - well it won’t. We have to hammer on about this all the time, to drive the idea into salespeoples’ minds and souls.

Value is in the eye of the client, not what we imagine it to be. To really accurately grasp what constitutes value, we need to fully understand the client’s business, their challenges, their goals and where we can be the greatest help for them to realize their goals. The only way to find that out is to ask intelligent, well designed questions. If all you are doing, is turning up and pitching, then good luck with that because you will fail and fail and fail, and keep doing it with mesmerizing regularity. Time to get behind value conversations that preempt any pricing discussions. Your Own Leader Voice