If you don’t understand your value… why would your customer?

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Customer Service… two very good words that can often be at the top of the oxymoron list of words that just don’t sit well together… like two supporters of different teams being asked to sit together, in harmony, to watch the match… and to be absolutely clear, my metaphor relates to football supporters watching a derby match… and for those that need translation… football can also be called soccer… and derby is not the town in middle England, nor the horse race that is run annually at Epsom Downs in Surrey which adds to the confusion because Epsom is nowhere near Derby… but to get back on course… the derby I refer to is not the cheese, but an important local competition. Ask Manchester United fans to live in harmony with Manchester City, or Portsmouth with Southampton or Rangers with Celtic… mixing these fans would be like mixing oil and water… it doesn’t work… and neither does customer service in many organisations.

Having used two metaphors in my opening paragraph… the first to help explain an oxymoron and the second to help explain the explanation, I’ve come to the conclusion that customer service is not so much an oxymoron but an idiom. As we all know, an idiom is a term or phrase whose meaning cannot be deduced from the literal definitions of the words used. For example, we Brits often refer to ‘kick the bucket’ as an endearing way to express the passing of one’s sole to another place… or more bluntly… it is a better way to express the word ‘die’. Now, if you took the literally meaning of ‘kick the bucket’ you would think that people go around doing nothing more harmful than putting one’s foot in contact with a water holding receptacle. Now for those not versed in local language a foreigner to our shores may well get into trouble in wondering why the middle of town is full of people six feet under ground having done nothing more than kick a bucket… and why they are buried with 6 feet when they should only have 2 just further complicates things… and having to explain that a grave yard is not a dead centre and therefore these people may not actually be in the middle of town is just a confusion too far… which is about how I felt today after speaking to customer services at British Midland Airways.

I’m a regular customer of BMI… I might not be their best customer but I try and use them whenever I can. I’ve used them so much in the past that I have lots of frequent flyer points… and now I like to use some of these loyalty points to upgrade from cattle class to mildly acceptable class… they call it club, but on short haul is only just acceptable. However having used my frequent flyer points, my loyalty to the airline puts me in a different class to everyone else. One would think better, but it appears cash still talks and those that fund the whole journey with cash… are king… and those that show loyalty and use their points are trailer trash… which of course, trailer trash… is an idiom, but I think more of American origin than British. An idiom can be thought of as a colloquial metaphor… so origins can be important as we will see later.

It all started with booking on line. Booking on line saves the airline money and generally, when it works, it is easy to do. However, it seems that booking on-line and using points to fund some of the journey does not allow you to reserve your seat. If you pay cash then the system will allow you to reserve your seat. My reservation confirmation sent to me by email says that I can manage my booking on-line… but I still can’t reserve my seat. I therefore call the customer service number shown on my confirmation. I called, had to listen to their on line advert about flying to wherever and then wait in a queue for an agent. The line dropped… I called again and listened to the same advert over again, then went into the queue and the line dropped again. I called a third time and listened dutifully to the advert… which is wasting my time and my call money… and went into the queue, and thankfully this time the line did not drop and after 5 minutes I heard the dulcet tones of someone sitting in a call centre in the middle of India. I explained what I wanted. I had to give the booking reference, my name, the first line of my address, my post code, the full details of my itinerary, my date of birth, by which time I was prepared to give my inside leg measurement, what I had to eat yesterday, the mileage on my car and anything else to confirm who I was. Having gone through all this and wasted 20 minutes of my life I was informed that because I use points I need to call another number. It’s not what it said on the confirmation. This man could book my seats… I know he can… he works for British Midland Airways… he has my reservation details on his screen… but could I persuade him to do it… no… unemotional, uninterested, jobs worth. I now had to ring another number and go through the whole thing again, except this time the dulcet tones had just too much of a local accent to be fully understood and so most things had to be repeated as I strained to work out what was being said. It’s not a pleasant experience speaking with someone you just don’t understand.

So, something that I could have done on-line when I booked the flight, which because I used some frequent flyer points – and cash I may add – I am in a different class of customer and the airline wants to penalise me for my audacity of using my loyalty points and therefore restrict me from booking my seat in the club class cabin. When I pay full cash the system will let me do this. I am therefore forced to pick up a phone and spend a whole day confirming who I am only to be told that the person on the end of the number I was given to call will not book my seats as I am a different class of passenger… one of the unclean who has had the audacity to use their loyalty to the airline points… and therefore I have to speak to someone else who has yet to be trained in building linguistic rapport with their customers and wants all the same information again from me  before they will deal with my request. I got there in the end… but customer service… no it is not, rather customer disservice… and that’s not an oxymoron.

Had a similar experience with customer service?… then add to this post and name and shame those corporations who have more customers than they sometimes deserve.

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If you don’t find what you are selling exciting or compelling… then why should your customer?

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After a couple of weeks break it’s time to start the writing again. Summer breaks are often associated with time on the beach… sun, surf and sand… and it’s the last of these associations that I thought I would make to get me back in to the swing of things… sand, or in this case sandbagging.

Generally I can’t condone it, but it happens and it will continually happen while the sun still rises in the morning and will only be eradicated when pigs learn to fly. In my experience, the predominate reason for sandbagging is due to poor sales management… not necessarily the sales manager of the sandbagger per se, but sales management culture in the organisation.

I would suggest that those with the wrong sales culture are those with the rising fixation with spreadsheets… it’s often more difficult to manage and motivate sales professionals than it is to manage numerous versions of the numbers. You can therefore plot the decline of good sales management skills to the rise of the use of Excel…. The more spreadsheets in existence the more sales management skills erode. It’s a dying skill and soon no one will be left to pass on the skills to the younger generation. A harsh assessment?… perhaps… but also probably not too far from the truth. It is therefore the dying art of sales management that is leading to the rising tide of sandbags.

However, before I divulge anything I should point out to the uninitiated that sandbagging relates to not putting sales opportunities into the corporate pipeline… like keeping some back for a rainy day… and having cleared that up, here’s my list of reasons why sales professionals sandbag.

1. There’s Only a Pipeline, no Funnel
CRM systems do not appear to be able to handle the concept of a funnel and pipeline. Proof, if any were needed, that Customer Relationship Management were not designed for sales management… however, I digress on to another hobby horse and I know what happened last time I jumped on my hobby horse… where was I?… pipelines.

The pipeline is for real opportunities that have been qualified; the customer will be buying from someone… hopefully you. The funnel is for the unqualified… the sales leads that need to be investigated and developed with the customer to get them to the point where the customer agrees that they need to do something… and at this point they go into the pipeline.

The funnel is an important part of sales management. It’s an important part of obtaining incredibly high forecast accuracy… and most sales organisations don’t have one… because their CRM system doesn’t have one. Now, sales management may recognise this and encourage their team to put early opportunities into the pipeline as 0% or 1%…

“…listen team, we need to see everything that you have, so even if it’s early in the process (sales lead) put it in the system at 1%”

So, the unsuspecting sales rep puts their juicy deal, that they are trying to develop, into the system… it’s not a real deal yet, but the customer is talking and it may develop into a real opportunity soon. However, once in the system the red mist descends on sales management and they see a real opportunity and want to know when it is going to close… sales rep protests that it’s not real and that they can’t yet predict when it will close… the response by management?… offer to discount and see you can close it this quarter… the red mist is very intoxicating.

The sales rep won’t make that mistake again… safer to sandbag.

2. Target Setting
Most sales people are on commission… nothing like stating the obvious… and most have their commission earnings are accelerated if they overachieve… and so as sales people like to earn as much money as they can… they strive toward overachieving. If they overachieve they are happy, and the company is happy because someone else has missed their target, but thanks to the overachievers the company has not missed theirs.

So, with target set the sales rep sets forth and goes out to hunt for business and bring back the kills to feed the corporate beast. There is often a lot of work involved in finding and stalking the prey and the rep wants to be rewarded after the kill… sales reps are not like lions… they don’t want to be the lioness of the pride, to be sent out to hunt and kill, only for the head male lion to take the kill away and gorge themselves at the expense of the female hunters.

Same for sales reps. Why should they do all the stalking and working the deal and getting it ready for the kill only for the organisation to see the kill and then take it into account in the reps target.

If the large deal can’t be closed before the new targets are set, then best to sandbag until targets are known… better safe then to be out of pocket.

3. Commission Caps
As mentioned, sales reps are in it for the accelerators. A deal in accelerators is worth more in commission. However, once a commission cap has been met, then the deal will not be worth anything in commission… the rep will lose money. Therefore, better to sandbag until next quarter than lose money.

4. Bad Quarter
Similar to reason 3. If it’s going to be a bad quarter and accelerators are out of the question, then it can often be more profitable to bring the deals in next quarter if there is a chance of moving into accelerators. So, instead of a bad quarter, have a terrible quarter by pushing the close date back until the next quarter. All good sales reps are allowed a terrible quarter now and again!

5. Protection
This is similar to reason 1. If you declare all your potential deals early and by early I mean they are in the funnel, rather than pipeline, then by definition the fall out will be greater than those deals that have passed qualification. If sales management do not understand the difference between a funnel and pipeline then you could gain the reputation of losing large deals… not a good reputation to have… and therefore safer to sandbag all these early deals until you are sure that they have a good chance of progressing and closing.

6. Unwanted Attention.
Big deals attract upper management like raw meat attract flies in the summer… they swarm all over it trying to feast in the glory of closing the large deal that will be the difference that make the difference. Sales reps will be asked questions by their manager and their manager’s manager and their manager’s manager’s manger and so on until the CEO is calling for his daily update. It’s not the attention that most sales reps crave and so sandbagging until it’s nearly a done deal saves weeks of unwanted attention.

7. Unnatural Acts
In their eagerness to close anything in the pipeline, no matter how far out, sales management will be encouraging, nay forcing, sales reps to offer discounts and other incentives for early closure. This is a bit like signing to buy a house before you have fully decided whether you want a house in the first place. If the rep is then forced to make the offer they know it will tarnish their hard fought credibility… so best not to tempt hard pressed managers… sandbag!

There we go a quick roundup of the 7 best reasons to sandbag and hopefully no one will recognise any of them.

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The old adage is alive and well… people buy from people… it has to ‘feel’ right in order for them to buy… and this means all buying is based on emotion. The job of sales is to get it to ‘feel’ right for the customer… and that is where the skill comes in… identifying what its going to take to make it ‘feel’ right and then achieving it.

However, it seems my grand theory of selling does not apply to public sector buying… or so I’ve been told… again… and it seems all that can be done is for sales to follow due process and act as the proverbial ‘walking talking brochure’… what else can they do?… they can’t influence the decision… there is a process that the public sector people have to follow… it’s structured… it has to be transparent… it can be audited by the audit committee… and the people in the process can’t favour any one supplier… the right choice has to be made due to a set of criteria.

The public sector buys differently to the commercial world… I know this because I’ve been told… again. The process has been designed to eliminate the human bit… follow the process and the right answer will be found… the public sector will have value for money…. um… sounds a little like the corporate world…. can’t do, public sector is different.

I have to admit I started writing a comparison of how the public sector buys versus the corporate world… just to show they are not that different. Well, they are different in that the public sector seems to have lots of rules, regulations and laws to make sure the procurement process is open and can’t be abused. I’ve just done some research and have been reading a number of official documents and to be quite honest I got bored… and so I’ve decided to scrap all that comparison stuff from this post and get straight to the point…

At the end of the day there is a tender document sent out… suppliers respond and the public sector employees take the responses and mark the responses… award points for the answers. These points are then multiplied against the predetermined weightings (notice they are predetermined, once set, can’t be changed… clever) and then scores totalled up to give an overall score for the tender. Best and final prices are then submitted by the hopeful suppliers and the decision is given to the supplier who demonstrates the best value… Best and Final Price / Total Points… the supplier with the lowest value score is awarded the contract.

It’s a fool proof system that is fair to all those that participate and it can’t be manipulated because it’s open for scrutiny… however, there is a flaw… the scoring is done by humans… and humans have emotions… even public sector ones. Most questions have answers that are open to interpretation and are therefore subjective… it’s up to the humans to interpret the answer and give it a score… sound familiar?

I want you to think about this… have you ever read an email and taken it badly… and then the person standing next to you who reads over you shoulder says… “oh, it’s not that bad, what they probably meant to say is this…” The person helping you interpret the email has put a positive spin on it, but if they did not like the person who sent it, then they would have probably put a negative spin on it… compounding your already negative thoughts. So what do you think happens with those public sector folks who read your responses… will they put a positive or negative interpretation on your response?… depends on how well they know you… how much they trust you… and if they want you to win or not… um… sounds a little like the corporate world…. and on that point I rest my case… all… and I mean all… buying is based on emotion.

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Here is the third post in this series. Thanks to everyone who have posted comments on the first two posts in this series… good additions.

The Four Business Relationships

As I mentioned in a previous posts, I’m sure there may well be more than four, but these are my four…

• Transactional
• Dependable
• Consultative
• Partnership

Have a look at the Transactional and Dependable Business Relationship to compare and contrast.

Consultative Business Relationship

Relationship with Customer: Relationships developed with middle management. Poor to good at best. Relationships developed further while pursuing individual opportunities.

Relationship Status: Solution Architect.

Customer’s Knowledge of their situation and how Vendor can help: Understand that they have a problem. They will be looking to address it or they are unsure how to address it. The problem may not have high enough priority.

Customer’s Risk: Will depend on the project being undertaken. Customer often has trouble accessing it. On strategic projects will often defer to partnership supplier.

Customer’s Expectations of Vendor: To have professionals qualified to give advice in order to solve identified problems. Receive information in terms of benchmarks and previous experiences. To respond to request for proposal.

How the Customer Buys: Customer identifies problem and sends out a Request For a Proposal (RFP) document.

Vendor’s Value to Customer: Help the customer to identify and analyse his problem. Propose specific solutions that are suitable. Provide technical pre-sales consulting.

Customer’s Value to Vendor: High value project based opportunities. Potential to develop relationship to Partnership status.

Salesperson’s Value to Customer: Skilled in analysing and giving technical advice and facilitating others from vendor team to do this. Facilitates customer towards the most suitable solution. Manages sales process and responsiveness of Vendor.

Competitive Advantage: Compete on benefits delivered as part of solution. Fit of solution to requirements. Price of solution versus benefit.

Salesperson’s Value to Own Business: Identification and winning new markets / new customers.

Role in Customer Process: Problem identification and solution provider.

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The washing machine broke down yesterday… oh no, I can’t take it any more, not more clothes to wash… no, it wasn’t an emotional breakdown, just a mechanical one, well, actually it was electrical… in a mechanical sort of way. I would be lying if I said the washing machine had an emotional breakdown… you know I’m right, because washing machines don’t have emotions do they… or then again, maybe they do… because ours can get a little temperamental… and that’s an emotion… so maybe they do get emotional… well… then again maybe not!

I’m going to be honest here… well, I don’t mean me… I’m not referring to myself… not that I’m dishonest or not honest… I’m just referring to the phrase, or ones similar, that I often hear sales professionals utter. The problem with it, is that it infers they may have been dishonest prior to being honest… so might as well not use it.
We all know that you should not lie to our customers… well, hopefully we do and therefore we don’t. It’s as they say… it’s not that sales people tell lies, it’s just what they know is not true!… so we need to to honest… honesty is always best… or is it.

As the engineer was repairing our emotionally depressed washing machine he was taking calls from potential customers. He’s a busy chap… he runs his own business… he keeps his customers happy… he’s efficient, reliable and gets the job done… he’s in demand. Our machine broke down yesterday, he came out today… other people on the phone he was telling them he can’t get to them until middle of next week. If that was us, there would have been a few more emotional breakdowns in the household with my daughters’ unable to have their daily fix of clean clothes.

Anyhow, the nice doctor, sorry, engineer explained that he will always make sure he sees his good customers. Those that are new have to wait the normal time… he has to look after his regulars… and then he has to look after his not so regulars (the ones with the more emotionally stable machines)… now with these guys, to keep them happy he tells them that he won’t be able to see them until Monday… he’s waiting for a certain part… just fitted the last one yesterday and he will get the delivery at 7am Monday and will be with them at 7:30… will that do? Customer is happy, they are being looked after… not the engineer’s fault he has to wait for parts.

However, the real story is… he has the part, but he’s too busy to get to them… they are not on the really important list of customers. So, rather than hurt their feelings he told a white lie - a lie that is relatively unimportant and designed to be tactful, polite and keep the customer feeling good. The question is… is this wrong?

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It’s Sunday morning, it’s sunny, I’m still paying taxes, breakfast is on its way and I’m about to do a hard days graft in the garden… and the only thing not dependable in that list is the weather… it’s a weekend… it should be raining! A yoke I often heard when I lived in South Africa… in Cape Town, what follows two days of torrential rain… Monday!

It’s the dependable bit that’s the link to my little intro… it’s the next business relationship that I want to cover in this series of four.

The Four Business Relationships

As I mentioned in a previous post, I’m sure there may well be more than four, but these are my four…

• Transactional
• Dependable
• Consultative
• Partnership

Have a look at the Transactional Business Relationship to compare and contrast.

Dependable Business Relationship

Relationship with Customer: Relationships with low to middle management with depth of relationship good to excellent.

Relationship Status: Product Supplier.

Customer’s Knowledge of their situation and how Vendor can help: Will have excellent experience of Vendor and know capability and product/ services.

Customer’s Risk: Low to medium depending on purchase. Will expect vendor to respond well if problems encountered.

Customer’s Expectations of Vendor: Quality, delivery and support. Will be willing to pay higher price than transactional for the support. Coverage for against potential problems. Depend on relationship to add value.

How the Customer Buys: Transactional to project based. Will probably not issue RFP for projects.

Vendor’s Value to Customer: Provide quality, reliable, responsive service, delivery and products / services. Proactive in identifying products and services that may help customer.

Customer’s Value to Vendor: Vendor attains high level of customer’s spend. Referencable customer. Dependable revenue.

Salesperson’s Value to Customer: Understands the customer and their business. Takes into account the specific needs of the customer. Able to facilitate vendor’s processes to aid customer. Makes sure commitments for products, prices, services, lead times, etc are upheld. Makes it easy as possible for customer to do business with vendor.

Competitive Advantage: Customer views vendor as very dependable and will buy in preference to others.

Salesperson’s Value to Own Business: Optimise relationships with customer while keeping sales cost under control. Maintaining predictable revenue stream.

Role in Customer Process: Helps the customer to buy. Very responsive and can be proactive. Is interface to Vendor to ensure commitments are fulfilled?

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The last post I put up mentioned what a small world it is and to prove the point I have, as I regularly do, been reading other people’s blogs and have just finished reading Skip Anderson’s post on who’s out there and I have to say I’m exhausted! he writes about a great technique of finding new customers and after applying his technique you may get a better understanding of the phrase… it’s a small world!

What I also found this week that made me smile was Tim Rohrer’s post on Look Inward for Solutions. Tim has a great way of getting his point across and in this post he is talking about sales people taking control and for many it’s never their fault when the deal does not come in… not seen that before, Tim, honest!

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I got an email from an old friend recently… not that she would like me to describe her as old, which I’m not, but the friendship can be described as old, but not older than her, because that would mean we were friends in a previous life, which is taking things a bit far. Anyway, Belinda now lives in Australia, which is a few miles away from here in the UK and her recent email had - small world - in the subject field. Apparently she has just delivered some training down under to an old friend of mine… I’m not going there!… and expressed the surprise of it being a small world. Today, I get a call from Emanuel who lives in Sydney (it’s in Australia for those who are not good at geography) and he had read a number of my posts and materials on pipeline management and wanted to know more. We had a very interesting conversation and he seems to be doing some very new stuff with workflow in sales management… more about that another day… anyhow, we got on to the subject of talking about the fact that there are different business relationships in selling. I couldn’t agree more and was having the very same conversation with some customers of mine whom I happen to be visiting in Scotland yesterday… it’s an international topic you know, business relationships… so having this coincidence happening one day after the other has prompted me to write this post on business relationship.

The Four Business Relationships

I’m sure there are more than four, but I’ve settled on four and they fit very nicely into a both the pipeline management model and the Territory Analysis model I use. The four types are…

• Transactional
• Dependable
• Consultative
• Partnership

So what I thought I would do is share with you how I categorise each of these relationships under various headings. I’ll start this post with the first type of relationship and follow up over the next few days with the others.

Transactional Business Relationship

Relationship with Customer: Low level. Technical buyer. Depth of relationship weak to good.

Relationship Status: Commodity Supplier

Customer’s Knowledge of their situation and how Vendor can help: Excellent product knowledge. Knows requirements. Will have good grasp of required product or service.

Customer’s Risk Considered to be low: Customer will take responsibility for it.

Customer’s Expectations of Vendor: To attain the best price, lead time, payment terms, etc.

How the Customer Buys: Customer buys against purchase framework or calls direct with request or responds to marketing initiative.

Vendor’s Value to Customer: Choice of products, excellent quality, good prices, availability, support, ease of purchase.

Customer’s Value to Vendor: Low value in terms of individual deals. Transactional sales are the ‘bread & butter’.

Salesperson’s Value to Customer: Low, particularly if business is conducted across the web. If not web, then transactional business is often telephone based. Value in explaining choices, by making it easy for the customer to buy and by allowing the customer to negotiate favourable terms. Helpful relationship to customer.

Competitive Advantage: Compete on price, feature, function, lead time, availability, etc. Salesperson Value to own Business None if web based. If salesperson involved, then chance of differentiating choice against competition.

Role in Customer Process: From none to helping customer select right product.

So, that’s the transactional business relationship explained and as mentioned I’ll follow up over the next few days with the other three… and so it’s thanks to Emanuel for the prompt… which during my conversation with him it turns out that he used to work for Lucent in the UK and in a previous life (not a real life, but a previous job) I used to provide sales training to Lucent in the UK… our paths did not meet then… but it seems it’s a small world, particularly with those down under!

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