Episode #235: Dealing with Bad News
THE Sales Japan Series
If we try to hide the bad news for the buyer will that work? How long with it work for? Bernie Madoff died in prison, his wife left in a perilous state, one son dead from suicide and the other from cancer. I call that family devastation. He got away with his lies and cheating for quite a while. He offered modest, but steady returns. He told people he had no capacity to take their money, then rang them back at a later stage to say there was an opening. They were grateful for the chance to give him their money. The 2008 recession showed who was “skinny dipping” in the markets, as Warren Buffet termed it and Bernie could no longer sustain the fraud.
If we are loose with the facts and the truth with our buyers, how will that go toward fostering the re-order culture we want to create? The usual ploy is to downplay the costs by offering the best case example and not offering the most realistic case. I was reminded of this the other day, while watching a video from the President of this particular organisation. He wanted more money, a lot more money for this project. Let’s park the fact he was a hopeless advocate for his case, bumbling his way through his pitch. The examples he offered were very carefully culled to make the pain look miniscule. The obvious problem with that though was the vast majority of the stakeholders did not fit into that minimum damage category.
He was trying to avoid the pain, but that came across as dodgy and duplicitous. We have to reach for our financial calculators and work out the damage for ourselves and we are left to our own conclusions. It would have been much better to meet the elephant in the room head on and explain why the bigger number was a good decision. That way the seller controls the narrative, not the buyer. Call out the number, then justify the living daylights out of it. Talk about the long term benefits and the opportunity costs if we take no action now. Pile on the value of the proposition in the context of the number.
Trying to talk about the value proposition unrelated to the number doesn't fly. We need to connect them together as we explain the value. We unveil the ugly number but wrap the pain up in the value to come, to the glorious future, to the sunny uplands, the better days herafter. Context is everything here. Our hero didn't do that and I believe he missed a great opportunity to get people to back his proposal.
When we are selling there is a number attached to the service or good. Actual tangible objects are easier to understand from a pricing point of view. Services though are nebulous. I was selling some training to a major corporation and the people I was dealing with were HR folk located outside Japan. If you live here, you understand the cost of living and all the relativities which apply around pricing. If you are in Hong Kong or Singapore you don’t. Living in these low tax, low cost environments makes Japan’s numbers look stratospheric.
They told me our pricing was much higher than this Hong Kong located from who delivered for them in English speaking countries in Asia. I asked them why they didn’t use them for Japan. Of course, they didn't know Japan, had no capacity to deliver here in cultural and linguistic contexts, so that is why they were talking to me. Yet the expectation was my pricing would fit in with this other vendor, based in Hong Kong. Who were these people? I checked them out and they are nobodies. They are not global, they don’t have 109 years of credibility or 60 years on the ground in Japan.
In the end, I had to do a demonstration of what we would deliver. It blew them away because the value proposition was so much greater than the other firm. Now the cost, the higher price, the bigger ask, that larger number made sense. I didn't fold on the price for two simple reasons. I know our value and I know what companies here will pay for the value we generate. Yes, it is Covid and yes it is perilous for training companies at the moment, but you have to believe in your value based pricing and you have to be prepared to fire the client.
Don’t run away from the hard conversations. Instead find ways to demonstrate and show your value. Keep honing your persuasion skills to sustain the narrative about why they should buy from you and buy from you now and keep buying from you.