Firing your Customers

I have been engaged in a number of conversations in the last week about when “enough is enough” with a difficult customer.

The advice I had for one client this week was simple – after the job is done, and the customer has paid their invoice (however far down they negotiated it after the fact) – look at your total costs dedicated to the service of that customer.  Did you make a profit?

If not, I would give it one more try – two at most to make a profit (not just break even), and then it ‘s time to fire your customer.

Fire your customer?  Why not?  Lots of companies are parting ways with customers who either cost them money outright, or take up so much time and mental energy that there is no net benefit to having their business.

Let’s look at the three types of customers you should fire:

1. The Post-Negotiator.  These are the guys who agree to a price up front, agree to the terms of service up front, and sign everything they need to.  Then, after the service has been delivered, they drop the bomb:  “I’m not satisfied with the way x, y, or z was done, and I would like either a) a significant discount, or b) the whole invoice cancelled.”

Here is where a two-strikes-you’re-out rule is definitely called for.  The first time, there is probably a legitimate concern, and a reason for them not being satisfied.  At that point, the onus is on you to tighten up the expectations, and be extremely clear about what you will be delivering, and under what circumstances the Post-Negotiator will qualify for a discount.  After that, if they try it again, tell them politely that you will not require their custom any longer, and refer them to your least favorite competitor.

2.  The ‘Extra-Service Black Hole’.  These are the guys who don’t require changes to their invoice, but require so much in the way of extra service, effort, and time and energy on the part of your staff (or yourself) that the invoice no longer reflects the actual cost of doing business.  Again, tighten up the delivery specs or terms of reference, and indicate that if they require the same amount of extra hand holding the next time, there will be extra charges attached.  Or if they like, offer an increased flat rate in advance, for all the extra time they could ever want – but make sure you price that flat fee high enough to justify the even greater pressure that will be put on your resources next time.

3.  ‘The Shouter’.  These people don’t cost you directly, by trying to renege on agreed upon charges, and they don’t cost you indirectly by tying up your (or your staff’s) time.  These guys cost you mental energy by simply sucking the joy out of every transaction.  Ask yourself, before you send them an email do you proofread it 9 or 10 times to make sure the tone is perfect.  When you see their address in your email inbox, or their number on your call display, does your mouth go dry?  Chances are you’ve got a Shouter.  Even if they never shout, their constant negativity, criticism, and complete inability to be satisfied is simply not worth the money.

In my experience, the Shouters are the most insidious, because the money is usually good, and the work plentiful.  They just expect to be able to abuse you as well as purchase your product or service.

The choice is yours, either add a 10%-20% ‘Jerk surcharge’ on your next invoice – to make it really worth your while to put up with, or just thank them for their business and politely refer them to that least favorite competitor I mentioned above.  Take it from me, by doing so, you will suddenly feel 6″ taller, and  20 lbs lighter, and will probably close several more deals that week just from all the joy you will be exuding just from not having to deal with them anymore.

All this begs the question – which customer do you need to fire right now.  And what’s stopping you?

It Slices, It Dices!

Every 15 minutes or so, I get another message on Twitter, advertising, the “most powerful sales tool ever” or “tired of buying leads?”, or something of that sort.

It got me thinking today, what are the most essential tools for starting a prospecting campaign?  Here is my ‘back of the envelope list’, in no particular order:

1.  At the risk of being obvious, you need a phone.  You do NOT need a cordless, wireless, all the bells and whistles phone.  A simple one will do.  A headset is pretty much essential, but I have survived without one for short periods of time.

Now before you say – “I don’t believe in cold calling” remember that you are going to need to set follow up appointments for your networking contacts, and if you’re smart, you will respond to email inquiries from your screaming-hot website with a phone call.

2.  You need a computer, with internet access.   It doesn’t need a blazing-fast connection, but ‘high speed’ is essential, if for no other reason than that you need to talk on the phone and look things up at the same time.

What software should you be running?

a) You need a database for managing your contacts.  You can spend a fortune, or run an Open Office database for free.  It all depends on the level of organization you need – which largely depends on how big a pipeline you want to manage at any given time.

b) You need to run a good web browser.  By which I mean anything other than Explorer.  But maybe I’m biased.  You will need this to run Google searches on the companies you are calling, or if you are in the B2C sphere, you will need it to research the census tract profiles (or U.S. equivalent) of the neighborhoods you intend to call.  You will also need it to look up any upcoming free networking events, and to manage your LinkedIn, Facebook, and Twitter profiles.

3.  You need a script.  I’m sorry if you don’t agree, but the simple fact is, that after 30 or 40 calls, you will fall into a pattern of saying the same thing every time anyway – also known as a script.  So instead of just stumbling across one (which will be subconsciously designed to minimize rejection) why not write one out in advance, that will be aimed at maximizing results (NOT the same thing).  BTW, this is true, even if you are just following up on networking events, or trade show leads.  Now that I phrase it that way, you probably need a bunch of scripts – one for each circumstance.

4.   You need business cards.  DO NOT go and get the free ones online (or do, be my guest, you’ll see what I mean when they arrive), and do not print them yourself.  Find a designer who will do a nice one for cheap, and get them printed properly.  Mine cost me $156.00 including design (for 500 of them), and I get compliments on them all the time. BTW, my designer’s name is Leigh, and she’s amazing.

5.  You need Chutzpa.  Ok, that’s not really a tool, but it’s probably the most important part of the whole thing.  Three days ago I was coaching a client, who asked why my wife did business with one of his competitors.

“Because he cold called her.” I replied.  ‘And he hustles like crazy.”

The unspoken question was “When is the last time you made a cold call?” but we all knew the answer was measured in MONTHS not days, much less hours.  So chutzpa is essential.

Have I missed anything?  I may have missed one or two obvious ones, but I think my list is pretty complete.  Feel free to disagree in the comments.

Balance

I’ve spent a lot of time mixing it up on Twitter recently with other sales professionals, and trainers, and there seems to be an overarching trend amongst them:

“My way is the best, and if you just do this 1 thing, you will make millions.”

What gives?

You wouldn’t go through life eating only one food, or invest in only one stock, or have only one friend, so why would you restrict your prospecting efforts to just one technique.

It’s all about balance, my friends.

The whole concept behind the “Third Way” is that salespeople need to break out of their black and white thinking, and adopt new ways of looking at situations.  A big part of that, is bringing balance into your life and your business.

“Cold Calling Doesn’t Work!” I hear them cry.

Let’s make one thing perfectly clear.  I have generated thousands of dollars in commission in the past few months strictly from cold calling.  Just because you don’t like it, or in the words of one Twitter follower “It’s evil!” doesn’t mean it doesnt work.

Just because you don’t like the taste of Orange Juice, doesn’t mean that it isn’t loaded with vitamins, and does a pretty darned good job of fighting a head cold.

And what’s more, if you do it properly, and build value early on, and move quickly into qualifying questions, far fewer people are going to hate you.

“Social Media/Pull Techniques are the only way to prospect!”

Maybe if you’re a hermit, who is afraid to pick up the phone, or leave your house to go to a networking meeting, but if that’s the case, I submit you are going to have a whole different challenge when the sales call comes.

I agree, Social Media, and pull techniques are very powerful, I have also generated several thousand in commission in the last few months using these tactics.  When done consistently and engagingly, it is a valuable tool for keeping your pipeline full.

Now, fortunately, nobody seems to be saying that Networking is the only way to prospect, but quite a few insist it’s the best.  That’s fine, but if you’re not willing to sit around and wait for networking events to start, you are either going to have to pick up the phone, or fire up your social media tools to book lunches and appointments.

So now we’re back to square one.

What, I humbly submit, is the problem with integrating all three into your prospecting campaign?

Use Cold Calling to fill your pipeline with appointments quickly and inexpensively.

Use Networking to establish a personal brand, and keep your pipeline full.

Use Social Media to build that brand, and keep a steady stream of ‘lookers’ that you can convert into buyers.

Now, on the other hand, if you only ever eat Brown Rice, only drink orange Tang, only ever invest in IBM, only do Cardio when you exercise, and only have one friend…then maybe a balanced approach isn’t for you.

When life hands you lemons…

As the saying goes, when life hands you lemons, make lemonade….but what if life has handed you a bunch of dried out, rotten lemons.  What then?

While this may be a little off topic, I found myself, halfway through a particularly tough week, reflecting on one of my favorite “self-help” writers.

Barbara Sher has built a career on writing no-nonsense advice, that doesn’t rely on any ‘mystical unbreakable laws of the universe’, or the latest pop-psychology theorem.  Instead, she offers down to earth solutions to everyday problems.

One of those problems, which she addresses wonderfully in her book Wishcraft, is how to react when things really go in the tank for you.  You’ve had a miserable week, nothing has gone right, you are WAY behind quota, and the light at the end of the tunnel is not just a train…it’s a burning locomotive pulling a dozen fuel cars.

She recommends, what she calls “Hard Times.”  In essence, let it all out.  Find a trusted friend who will not try and solve your problem, but will just listen intently and sympathize.  Give yourself a time limit … and go for it.

So how does this apply to prospecting?  Well, the reality is that there are going to be weeks that don’t go your way.  There may be much more than just weeks.  And putting on a polyanna attitude of “Winners never quit, and quitters never win” is not going to address the underlying psychological problem – namely that you’re p***ed off at the world, and you desperately need to vent.

Years ago I worked with a guy named Harry, who was the single most foul-mouthed individual I have ever known.  I have worked on landscaping crews, in call centres staffed with former welfare recipients, and in dozens of different restaurants, but shoe-store Harry took the cake.

One day, during a particularly rancid tirade over some customer who had tried to return some shoes that had obviously been worn, I stopped him mid-sentence, and said,

“Harry, you need to calm down.  You’re going to have a heart attack.”

He smiled beautifically and replied,  “No I’m not.  You only have heart attacks if you bottle things up.  I let everything out, I’m probably going to live to a 100.”

Truth was, Harry went to sleep every night and dreamed sweet and pleasant dreams.  He never had any of the typical “nervous ailments” like stomach troubles, constant colds, or anything like that.  Harry let it all out, and as a result lived a relatively stress-free life.

Now, far be it from me to suggest you take up recreational venting as a hobby, but there is some wisdom to Harry’s solution.  Once in a while, turn off the ‘positive affirmations’, which have been clinically proven to do more harm than good – especially if your self esteem is low to begin with.

Find  someone you trust.  Someone who will keep really quiet about what you have said, and someone who loves you enough to call “time” when your self-appointed venting period is up.

Then, let it all hang out.

Because sometimes the only way to clean a wound, is to get all the poison out first.

The Sales Equation

I spent much of last friday running from salesperson to salesperson at my biggest client’s office, writing the following equation on any scrap of paper I could find.

Trust + Value = $

If the customer trusts you, but doesn’t see the value in your product:  No sale.

If the customer sees the potential value, but doesn’t trust or like you:  No sale.

If the customer sees the value in your product, and trusts and likes you:  You’ll have the sale more often than not.

Funny thing is, as little as 10 months ago, if you had enough of one, you didn’t need all that much of the other and you could make a decent living.

If your product had huge value, but you were pretty lousy at keeping your word, and didn’t really care much personally about the people you did business with (and were lousy at hiding it), you could sometimes still make a reasonable living – if the value were high enough.

Similarly – if the value wasn’t really there, but the price point was low, and you were an incredibly warm, genial person and an amazing rapport builder, you could make a good living.

Many salespeople grumble about how the economic downturn has taken a huge bite out of their 2009 earnings, – how it has cost them money.

The problem is that the ‘downturn in spending’ has not been nearly as bad as the ‘downturn in trust.’

That’s right, we’re living in Bernie Madoff’s world, and don’t you forget it.

People have always resisted parting with their hard earned cash due to a lack of perceived value – but now add to that the fear that every salesperson is a possible $50,000,000,000 fraudster in financial planner’s clothing, and your job  just got a whole lot harder.

Hunter S. Thompson made a startling remark about Richard M. Nixon when he died.  As you may recall, at the time Nixon’s ‘legacy’ (esp. China, and the opening up of American foreign policy) was being praised by all – with an apparent willful disregard for the disgrace he brought upon himself, his party, and the office of President.

Thompson’s remark in The Rolling Stone was something to the effect of:

“That man did more to destroy the confidence of the American people in their elected officials than any other person in history.  We shouldn’t be celebrating his life, we should throw his body into a dumpster and set it alight.”

Harsh words indeed, but a similar remark may be made of Madoff in however many years – ‘no one person has done more to destroy the confidence of the buying public in sales people in general than Bernie Madoff”.

If you are in the Financial Planning, Insurance, or Real Estate businesses – or any other field like them – consider getting a new tattoo on the back of your right wrist, just beside your watch.  That way 5 or 10 or 20 times a day you can remind yourself of the new truths of a post Madoff world:

Trust + Value = $

To Incent, or not to Incent?

Had a great discussion with some people in my training session today about how to properly provide an incentive for a sale or appointment, and whether it was even a good idea in the first place.

The idea of providing some incentive to the sale or appointment is as basic as it gets.  Newspapers use this extensively – sign up for a subscription, and get your free Shamwow!

When I was in University, students used to sign up for the Sears cards so they could get the free food storage set – and never seemed to realize that if all they consumed was pizza and warm beer they had no need to store any food at all – and that the interest rate on the cards was 29%.

Most of my friends had Sears cards.

So to incent, or not to incent?

First, ask yourself a few questions about the proposed incentive:

1.  Is it immediate.  Can they get the incentive either now, or very soon.  The longer they have to wait for it, the less potent it will be.

2.  Does the value of the incentive seem ‘atainable’?  The discussion today centred around how it was MUCH easier to get people to fill out a ballot for a $50 drug store gift card, than it was to get them to fill on out to win $10,000.  Very few people can conceive of actually winning $10,000.  Most people know what they’d do with $50.

3.  Does the incentive have a greater utility/higher perceived value than the item you are selling.  If so, you have a serious problem.  It may seem obvious that if people at least want the item you are giving away, they will take the one you are selling, just to get it.  It doesn’t work that way – The students signing up for the Sears card knew – that next April, when the student loan money had run totally dry, that a couple hundred bucks at Sears would get them a really snappy new interview suit for the summer job hunt.  The food savers were nice, but they were just a bonus – it was the $500 of available credit that was drawing them in.

Similarly  newspapers tend to give away quite extravagant gifts when you sign up for the newspaper.  Get a three month subscription, and you can have a Shamwow that sells for $29.99 in stores!

The problem is, not many people read newspapers anymore, but when you offer to give away something people want, if they buy something they don’t want – it creates what psychologists call “cognitive dissonance.”  A sense of “that’s not quite right” that not only leads them to walk by the booth, but to associate your product or service with desperation tactics.

4.  Have you fooled yourself into thinking “free” is a value?  To most people, free is a pretty scary word, because poor salespeople have trained them to expect a brutal ‘time share’ sales pitch will be attached to it.  And the larger the ‘free’ item, the worse they expect the pitch to be.

“Sign up for our free draw” = Sign up for a month of pestering phone calls at dinner.

“We’d like to offer you a free subscription” = We’d like to qualify you as a prospect, and sell your name to anyone who wants to buy it.

“I can come by and do a ‘free evaluation’ of your _____________ needs/situation.” = I can come to your house, and not leave until you have a) signed the contract, or b) set my hairpiece on fire.

In these cases, if they don’t see any value in the product or service, the word “free” is going to send them screaming for the exits.

Instead, try offering huge amounts of value up front – asking engaging questions about who they are and what they do – what their current situation is.  Try asking one good “Killer” question that not only positions you as an expert, but gets right to the heart of why they need your product.

Then if you feel the need to give away a Shamwow…that’s up to you.

The Obvious

Read “The Secret” yet?  Know anybody who has?  It seems everybody these days has bought into the formula for visualizing your way to success, loosely based on Napoleon Hill’s work: Think and Grow Rich.

Have you taken a good look, though, at the people who don’t just pay this idea lip service, but practice it every day?  Is it me, or are they almost universally broke.  And the people you know who are really successful; while they may say “The Secret” is a good thing, I suspect we both know what the answer would be if we asked them how much time they spend every day visualizing a better life for themselves.

From this quick, informal survey, it’s pretty easy to come to the conclusion that “The Secret” is just the latest in a long series of magic beans that have been sold to a general public looking for a quick fix.

Anybody who passed high school physics knows that while there are a lot  of universal laws in the universe, ‘ attraction’ just ain’t one of ‘em.  On top of that, the attempts to link what is basically New Age mysticism to Quantum Mechanics would be laughable if they weren’t so insulting.

So if there’s no ‘Secret’, then how does one become successful?  How about ‘The Obvious’.  There’s a handful of things that almost every really successful person you know does regularly, and none of them have anything to do with visualizing:

1.  They Take Healthy Responsibility.  If something goes wrong, they admit responsibility quickly, move to fix the problem, learn from the mistake, and move on.  End of story.  They don’t assign blame, dodge the facts, and perhaps most importantly, they don’t self-flagellate about it for decades.  Apologize, repair, learn, move on.

2.  They have a Bias for Action.  Given the choice between nailing down all the details to the nth degree, and ‘giving it a go’, these people almost always fall on the side of action.  Truly successful business people can be on their 9th or 10th prototype by the time a more cautious one has rolled out their ‘perfect’ but untested version.

3.  They Treat People Really Well.  They are dedicated to improving the lives of those around them.  They pay people what they are worth, give them the space to do their job, and respect their work life balance.  As a result, the people who work for them put in WAY more than they are paid to do, and go not the extra mile, but two or three or four, while the stingy micromanager can’t figure out why his employees bolt for the exits at 4:59:59.

4.  They Learn and Grow Constantly – They are always reading, taking courses, looking things up, and adding to their storehouse of personal knowledge.   They are grounded enough to know they don’t know everything, and are open to learning whatever they can from pretty much everyone they come in contact with.

That’s my magic four.  I was going to add “always positive” to the list, but then realized that it didn’t necessarily  apply.  Truly successful people are very rarely ‘negative to the point of despair’, but they have no problem laying things on the line.  It’s the difference between an employer who insists everything is rosy, right up until the day of the mass right-sizing, vs. the employer who sits down with his team, tells them just how bad it is, and then empowers them to come up with a plan for getting out of the mess.  I don’t think that counts as being negative, but it is certainly more realistic than the rose coloured glasses many self-help gurus suggest you go around wearing.

Any additions? I’m sure they are – feel free to leave them in the comments.

Throw Away Questions

Everyone who has ever picked up a phone, or knocked on a door, or done any kind of “cold” calling, knows that 90% of the time, when you attempt to determine if there is any interest there, you get a resounding ‘no.’

So if you’re going to get a ‘no’ anyway, why not try asking a question that it’s ok if they say no to.  Then continue with your probing.

The principle, is that of the ‘reflex no.’  That’s the ‘no’ you give a retail clerk when you come into her store, with $100 burning a hole in your pocket, reach for the item you have been pining over for months, and she says “Can I help you?”

“No, I’m just looking,” you reply.  And then take the item to the till.  In the background, she is pulling her hair out, and can’t figure out what she did wrong?

Simply put, she treated the reflex no like it was final.

Mike Ferry, the Real Estate Sales Trainer teaches people that the first question in a Real Estate cold call should usually be “When do you plan on moving next?” to which the anser (Never!) is so predictable, that he actually writes it into his scripts. What he also writes in, are four or five more questions to get past that ‘no’, and ascertain whether or not there is any real interest.

That’s the key, though, you’ve got to ignore the reflext no, and keep going.  So if you are calling for a financial planner, and when you ask the question “Do you currently have a planner you work with?” – Expect them to say ‘Yes!’ (which in your case, is really a ‘no’), and keep going. “That’s fantastic, how long have you been with them?  What kind of returns are you getting?  How often do they update you?  Do they have all of your business?  And so on.

It all comes down to starting the conversation.  And the only way to do that, is to ignore the first no, and keep going until you get to them talking.  After that, it will become pretty obvious what you should do.

How do you get to Carnegie Hall?

Practice, practice, practice!

The worst cold call I ever made, was early on in my consulting career  offering telemarketing success seminars (much like  part of what I do now).  So I called up one of the largest Real Estate Brokerages in Toronto, and the call went like this:

“Hi Tom, it’s Jason Allen calling, I provide top quality akdasdoifandsfadsfoindcvsadfoi.”

“I’m sorry?” Tom asked.

“Maybe I’d better call back.”  And I promptly hung up.

What had I done wrong?  Well, I had woken up, thrown on some clothes, had about half a cup of coffee, fired up my computer, and started dialing.  Not even 10 seconds to rehearse my script, or to any pre-call planning. 

The results, a botched reputation with the broker of the biggest real estate firm in Toronto.

I learned my lesson, have you?  Do you rehearse your pitch for 10 – 15 minutes every time you are about to call, or go to a networking event?  Do you visualize, mentally rehearse, or even pace around your office rehearsing out loud how you expect the call to go?

A little preparation can go a long way to sounding professional, confident, and like you know what you are doing.  The key though, is not to spend 4 hours the day before preparing, and then go in cold the next day.  Prepare in the hours, and even minutes before going into the call or situation, so the rehearsal is fresh in your brain.

That, and if you are going to call the biggest potential client in the city, do a couple of warm up calls to smaller prospects first!

Drowning in a sea of self doubt? How about a PFD!

Years ago, when I first started in Sales, I went to see a group of motivational speakers perform, and fire up the crowd.  The keynote speaker (you know him) said if we had troubles with self doubt, or self confidence, we should look ourselves in the mirror every day, and say “I like myself, I like myself.”

“What a crock.” I thought as I left the seminar.  That will never work.

However, it continued to be the prevailing wisdom in the “self help” world for decades.

Now it seem, a University of Waterloo Psychologist has done an extensive study using self-confidence testing, and positive affirmations.  The findings were a surprise to some, but just reinforced what I have always believed.

If you have a good self-image, positive affirmations can help reinforce that.  However, if you have a negative self-image, positive affirmations can actually make it worse.  In essence, the researchers said, when you tell yourself over again that “I am love able”, you think  it’s not true,  then you hate yourself more for lying to yourself.

So what’s the solution.  NLP?  Sorry, every clinical study ever done has debunked those theories entirely.  Counseling? Sure, if you’ve got the time and money, it can be a powerful tool.

However, years ago, a friend of mine who was a practicing Psychiatrist explained to me that most people’s negative self-image comes from rehashing previous events in their lives, and “picking at the scab” of perceived failures.

“They just need to change their perspective.”

Here is a tool to help you do just that.  I call if the PFD, not a personal flotation device, but it can feel like one when things get bad.  It stands for “Perspective, Facts, Discovery” and it simply is this:

1.  What is your Perspective on the situation.  Was it a total failure? Did it prove to you that you are a complete loser?  Did it prove that to the world?  Be honest.

2.  What are the Facts of the situation.  What really happened.  Was all the responsibility yours?  Was it shared?  Sure you had a role to play, but was it really the most important one?  How did others perceive it – did they think it was as big a disaster as you did?

3.  What positive thing can you Discover about yourself as a result of coming through the situation with your sanity intact?  What does it prove about you as a survivor, about how resourceful you can be, about the rich relationships you have that support you?  What positive learning can you take from the outcome?

And that, in a nutshell, is what the “Third Way” is all about.  If you want to, you can perceive everything in life as either a complete victory, or a massive rout, but if you are willing to step back and learn something every time things don’t go your way, you are going to add up a whole lot more wins on your balance sheet.  And you may just give yourself the strength you need to keep plugging.

For more info, go to www.thirdwayconsulting.ca, click on Contact, and send me an email!