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Archive for April, 2009

What Sells In A Recession

Here is an interesting story from – What Do iPhones and Designer Jeans Have in Common?  The answer is found in the subheading – They Keep Selling, Even in Recession.

Here is a list from the article in regards to hot-selling products during this recession:

The iPhone
Designer jeans
Wal-Mart and Costco
Internet access
High-definition TV sets

An odd list, wouldn’t you say?  The low-price options are logical, the other ones not-so-much.  The explanation from the article:

“Even in down times,” said Michael Gartenberg, vice president for strategy and analysis at Interpret LLC, “people still have some discretionary income. What happens is that they spend it more carefully.”

So they look for things that will last for them — which means, for instance, that a television set will look more appealing than, say, a vacation. “They’ll get several years of use from the TV,” said Gartenberg, “but when the vacation is over, well, you have your memories, and that’s it.”

Now that makes sense…though I have young kids so the memories of those vacations are worth quite a bit to me.

Recently I have found functional upgrades to be better sales approaches than outright new purchases.  What I mean is that companies are still investing in their production capabilities if there is a defined return on that investment.  This approach occurs in any economy, but it is the strongest play in this economy.

I have seen companies tighten spending in “new” areas, but continue to budget for enhancements in existing areas.  One such company I encountered was in the midst of a slowdown like many other companies.  The production team decided this was an opportune time for some needed upgrades to their capital equipment that normally would be in use for 3 shifts.  The salesperson got the deal to upgrade it and the customer got a better price since it didn’t have to be completed over a weekend.

This approach is consistent with the article – companies still have some discretionary funds and they are looking for long-term improvements to their bottom line.  As a salesperson, this is the first place to start your approach with a prospect.

Persuasion Through Scarcity And Fear Of Loss

I was a psych major in college which seemed to be the perfect preparation for a sales career.  I believe it was.  To this day I am still intrigued by the psychology of selling which could truly be described as persuasion.

That background helps explain why I found this article completely gripping – Mastering the Psychology of Persuasion.  You will have to read the entire article to appreciate the depth of it, but let me pull out a couple of points.

First one of the set-up questions:

• Are left-handed people more prone to some mental illnesses, accidents, or seeking positions of power?

And from later in the article:

And while these questions may at first appear to have clear yes or no answers, in reality, there are no definable correlations to them. All of these questions have exceptions to the rule. “It depends,” is the best practical answer. And yet, all answers you came up with in your head may have value if you’re in the sales and management profession.

Let’s take a look at some of these questions more closely. With regard to left-handed people and power: George H.W. Bush, Bill Clinton, and Barack Obama are all lefties. Power hungry? Maybe.

Ok, the left-handed piece hits close to home for me since my wife and son are left-handers.  Yet you see the point – discovering the prospect’s correlation is important for persuading them.

Here are the most recognizable persuasive elements we experience in society:

Habitual patterns. Trigger words or fixed action patterns, automatic behavior patterns, and biases help people organize thoughts and actions.
Consistency and commitment. MacDonald’s hamburgers taste the same from Russia to Denver.
Reciprocation. “I love you. Will you buy my guitar?” The person may be more influenced to buy the guitar as a way to return the gesture of the stated love. Guilt falls under this category.
Likeability. We like people like us. First impressions, and all.
Social proof. Everybody is buying, saying, eating, reading, etc., so I must also.
Authority/power. Law is law and rules are rules.
Scarcity. The more we want something and can’t get it, the more valuable it can appear.
Fear or gain. Research shows fear of loss is stronger than the desire for gain.

The last two are critical to successful selling.  Scarcity is a strong motivator for moving prospects through a qualifying process.  The beauty of it is this – it creates demand in the prospect’s mind in spite of the salesperson.  I have seen some grossly under-developed salespeople thrive based on the perception of scarcity of their solution.

Fear of loss is similar to pain.  The same principle applies here – people move faster to remove pain than to gain pleasure.  The importance of this principle cannot be overstated.  This fact is why features/benefits selling is wasted if the benefit does not remove pain or create the fear of loss.  If your salespeople can combine scarcity with the fear of loss in their qualifying, you will have one highly-developed sales team.

Electronic Layoff

The news stories are flowing about layoffs, downsizing and closing in this brutal economy.  One such story from shares stories from readers regarding extreme situations for being let go.  This one was amusing:

After a traditional face to face layoff session, my company tried a new kinder gentler approach. They called a big meeting and announced that every employee had e-mail back on their computer that would tell them if they still had a job. I didn’t!

I’ve been let go during layoffs before and there isn’t any easy way to do it.  However, it seems to me that if your communication strategy is to use some form of electronic notification (like Radio Shack from a few years ago), you are probably taking a bad approach to it.  Just a thought.

Sales Interviews Are Uncomfortable

I about fell out of my chair reading this article – Interviews Get Comfortable.  A quick excerpt to set the tone:

“It’s your job as an interviewer to make the candidate feel comfortable and it starts from the moment you see that person,” says Barbara Pachter, a speaker, trainer, coach, and author of numerous business books, including The Power of Positive Confrontation (Marlowe & Co., 2006). Pachter does acknowledge that there are times when interviewers put candidates in awkward positions to view reactions, but for the most part they should work to put candidates at ease.

Her suggestions for putting candidates at ease include:

    • Be a gracious host.
    • Ask easy questions
    • Set up the room for comfort.
    • Handle awkward moments properly.
    • Change the environment.

In all fairness, you have to read the article to get an understanding of her approach since there is some nuance to it.  However, in sales successful interview techniques are much different.

My experience has consistently been this:  I learn more about the candidate during the awkward, uncomfortable moments than the smooth, relaxed interactions.  Here’s why – salespeople (even bad ones) tend to have highly refined social interaction skills.

Simply put, they can make themselves appear to be stronger than they actually are.

The key in a successful sales interview is to ask the difficult questions and then use the awkward silence afterwards to compel the candidate to respond.  Silence produces tension and tension removes the candidate’s veneer.  It is at these precise moments that you learn about a candidate’s true sales ability.

I can understand Ms. Pachter’s approach in hiring other positions, but sales is the most difficult position for which to hire.  The better approach is to use an accurate, repeatable process.

Chaotic Freedom In Sales

I read this line from an sales employment ad this morning:

Reps are NOT restricted by territory.

The unrestricted territory seems innocuous enough…maybe even valuable.  It usually isn’t.  As a salesperson, I would read this ad with some skepticism in that the company may be trying to add salespeople without a cogent management plan.

Back in my early years I took a job with a company that had no territories.  There were approximately 15 salespeople in there serving the local market.  What I learned is that the “old-timers” had effectively squatted on all of the accounts, whether they had an active relationship or not.  Since there were no defined territories (geographic, market, size, etc.) and weak sales management (completely hands-off), I was left to scavenging like a meerkat to find any lead.

The aforementioned line from the ad may seem like a benefit, but I would suggest that most savvy sales candidates will drill down on that topic for absolute clarity.

Customers Are Pigs

I have a new favorite title for a sales ad:

Territory Manager, Swine-Minnesota

I’m not making that up, it is an actual title.  This seems remedial, but employment ad titles do matter.  Most of us remember the days of looking at ads in a paper where space was limited and costly.  Titles were less important then because the ad was still displayed.  Not today – I only see the title of the ad and the company in the electronic format.  The title has to be strong enough to elicit the click.

I think there are many companies that still miss that critical point.  And the major culprits are companies with substantial market share.  Apparently they are relying on their name to carry through the click.  Perhaps it works?  I’m not certain and neither are they based on their title writing.

One simply suggestion – don’t use “swine” in your title.

Entrepreneurial Ambiguity is celebrating its 30th birthday with some fascinating articles including an interview with Jim Collins.  The interviewer asked for his definition of entrepreneurship which involves a paint-by-numbers vs. blank canvas analogy.  However, the follow up question and answer was notable:

It has to do with your ability to handle risk, no?

Not risk. Ambiguity. People confuse the two. My students used to come to me at Stanford and say, “I’d really like to do something on my own, but I’m just not ready to take that much risk. So I took the job with IBM.” And I would say, “You’re not ready for risk? What’s the first thing you learn about investing? Never put all your eggs in one basket. You’ve just put all your eggs in one basket that is held by somebody else.” As an entrepreneur, you know what the risks are. You see them. You understand them. You manage them. If you join someone else’s company, you may not know those risks, and not because they don’t exist. You just can’t see them, and so you can’t manage them. That’s a much more exposed position than the entrepreneur faces. But there’s lower ambiguity on the paint-by-numbers path: very clear but more risky. The entrepreneurial path: very ambiguous but less risk. Of course, the truth is that it’s all ambiguous, anyway. If you think you can predict the future, you’re crazy.

That ought to get your mind racing this Monday morning.  As being someone on both sides of the proverbial fence, I know exactly what he is saying.  The key component to managing risk is seeing/knowing the risk.  Ignorance of the risk is tolerable to those who don’t possess the entrepreneurial spirit.


This sales-focused article from the website discusses the power of telling stories when selling:

Think about it: If you were in the audience for another sales person’s sales presentation, which kind would you rather listen to: one in which the presenter simply recited a list of features and benefits, facts and statistics, or one that included a stimulating, engaging, riveting, or inspiring story about how you helped another customer solve a problem similar to the one with which you’ve been wrestling, or achieved an outcome you’re looking to achieve? Which would move you, and which would bore you? Which would be memorable, and which would be forgettable?

Stories are far more effective than feature/benefit data dumps.I used to work for a sales trainer who is a master of telling an engaging, purposeful story and people remember them.  In fact, one customer went through the training more than 5+ years ago, but he still remembers a very specific story about commoditization.


This approach is also supported by CopyBlogger in this post.  Brian couches the discussion around truth-telling which is clearly relevant in sales (though not as widely practiced).  The take-away:

But if people reject what you say, truth or not, you’re back where you started.

Guys like Buddha and Jesus had this problem.

The solution remains the same.

Tell a story.

The power in the story is the ability to make a direct point indirectly.  When dealing with difficult sales situations, this is a tremendous tool for a salesperson to use.  One other note – the salesperson’s ability to use this tool is evident in a well-structured sales interview.