JUNE 3rd 2009 / Issue 24
WHY DO PEOPLE SAY YES? The Psychology of Influence
Sales Forecasting Where to Begin? Why is Selling Still a Dirty Word?
It’s Time to Rewrite the Dictionary
NZ’s e-mag for sales leaders
JUNE 3 RD / Issue 24
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THIS WEEKS MUST READ WHY DO PEOPLE SAY YES? An exploration of the psychology of influence.
WHY IS SELLING STILL A DIRTY WORD? Paul Newsom on the definition of selling today and why itâ€™s time to rewrite the dictionary.
10 NZSM CALENDAR 11 TWO MINUTE TOP-UP SALES FORECASTING How to start building a forecasting system which looks after many of your long and short term needs. 12 RESOURCE CORNER THE RICHEST MAN IN BABYLON The simple secrets for achieving personal wealth. 14 SALES TRAINING DIRECTORY 15 THE CLOSE
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NZSM / JUNE 3rd 2009 / 2
used to say that sales people are the most important people in business.
Sometimes this didn’t go down too well with non-sales people. But after working with many businesses over the years, my views have changed. I am now of the firm belief that it’s not sales people who are the most important people in business, but Sales Managers. While a good sales person may be able to increase their sales by 25% or 50% in a year, a good sales manager has the potential to increase the sales of a whole team or a whole company by 25% to 50%. And while the poor performance of a single sales person may not be a business killer, the poor performance of a whole sales team certainly can be. Quite simply the ability or inability of a sales manager gets magnified and the more people in the sales managers’ team, branch or division, the greater their ability to make or break a company. And while the position of sales manager may have certain privileges, it also comes with huge responsibilities and a lot of pressure. Whether your title is Sales Manager, Team Leader, Branch Manager, GM or Business Owner, if you’re in charge of the
sales team it is you who is ultimately responsible for the performance of your company’s sales people – not a responsibility for the faint hearted, and not a responsibility most sales people can handle. As many successful sales people have found out, being a good sales person is certainly no guarantee that you will be a good sales manager. But given the importance of sales managers, how many businesses have a company training or induction program for their sales managers? How many businesses understand the challenges sales managers face or how to support them in their role? In my experience many businesses invest more time on their processes and systems for cleaning their office than for their sales managers and sales teams. Sound familiar to you? If so it’s my hope that we can provide you, the most important people in business, with some much needed encouragement, inspiration and ideas to help you make the changes New Zealand businesses need is worth more than their weight in gold. Happy selling!
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THIS WEEK’S MUST READ
WHY DO PEOPLE SAY YES?
The Psychology of Influence
st people will probably associate the words o influence and persuasion with the sales process. However, influencing – getting another person to accede to your requests – is at the core of most soft skills including leadership, negotiation and teamwork. All of these functions require us, at some stage, to influence and persuade others. It may be influencing customers, colleagues, friends – even our children – to buy, do, accept or believe in something or someone. The ability to influence others in an ethical manner is a greatly underrated competency and one that many of us do not do well. However, new research has highlighted that persuasion skills can be learnt by almost any individual. Enter, Dr Robert Cialdini. If you want to sell anything, influence anybody or motivate action I urge you to read Cialdini’s brilliant book, Influence,
By Rob McKay
Science and Practice. Cialdini is a psychology professor at Arizona State University. He is the most cited social psychologist on the subject of persuasion in the world. As the book’s title states, the content is based on science – Cialdini has examined hundreds of psychological experiments on persuasion to form his core thesis. But what’s really impressive is that he actually took three years off to work as a ‘spy’ in a number of jobs to understand how his theories held up in the everyday working environment. Cialdini’s influencing theories centre on six key constructs that are easy to learn and apply. They are: reciprocation, commitment and consistency, social proof, likeability, authority and scarcity. Let’s have a brief look at each. NZSM / JUNE 3rd 2009 / 4
Reciprocity People are more willing to comply with requests (for favours, services, information and concessions) from those who have provided such things first. This is the old ‘give and take’ scenario – if I do this for you, maybe, in the future, you will do something for me. This form of influencing is used in many ways – gifts, concessions and exclusive information are common tools of reciprocity. One place you see this tactic used is in supermarkets; merchandisers offer you free food to taste, you reciprocate by purchasing. The key concept here is that when giving make it a gift, not a reward! Your actions must not be seen as coercion.
Social Validation People are more willing to take a recommended action if they see evidence that many others, especially similar others, are taking it. We live in a busy world with no time to fully validate our decisions, so many times we rely on what others are doing. If many people are doing it, it must be right – or is it? Have you ever noticed how a small group will attract a crowd and a crowd attracts a mob? If a street performer can get four or five people to stand and watch, I guarantee there will be 20 or 30 people there within a minute or two. If two or three people throw money into the hat, many other coins will follow – that’s why buskers always seed their violin case with notes and coins.
Commitment/Consistency People are more willing to be moved in a particular direction if they see it as consistent with an existing commitment. An example of the commitment principle is used in retail sales – a good salesperson will try to get you to try something on because once you are committed to trying, you are closer to buying. People will very rarely go against their own values and beliefs. Once a person makes a choice, or takes a stand they will encounter interpersonal and personal pressures to behave consistently with what they have previously said or done. Now you can understand why the power of getting a small holding deposit from a potential buyer works so well – they are now committed to moving forward. Authority People are more willing to follow the directions or recommendations of a communicator to whom they attribute relevant authority or expertise. For example, an expert witness talking in technical terms has more persuasive powers with juries than a lay eyewitness.
Here’s a little test you can perform. When next in a crowded area with a couple of mates have the three of you all look up into the sky – I guarantee everybody around you will start doing the same. Scarcity I love this one; it sucks me in all the time. People find objects and opportunities more attractive to the degree that they are scarce, rare, or dwindling in availability. Air New Zealand’s current ‘grab a seat’ campaign plays on this scarcity principle. Think about the one-day sale or tickets to a popular concert/event that last sold out in 30 minutes. The interesting psychology working here is that people fear loss more than they want gain. Telling someone they will lose $1000 a year if they don’t take action is more powerful than promising they will make a $1000 by taking action. Another tip, numbers are more powerful than time as it creates competition.
A tactic used a lot in advertising is to have recognised experts endorse products. Having Dr or PhD linked to a name adds persuasive power. Dan Carter sells a lot of men’s underwear to women who are buying on behalf of men. A double whammy here, Dan has authority and attractiveness (see below). The biggest symbols of authority are automobiles, clothes and titles.
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Liking/Friendship/Attractiveness Yes folks, beauty does sell. People prefer to say yes to those they know, like, find attractive or are similar too. It’s a proven fact that voters will be more swayed by an attractive, friendly candidate than policy. I’ll tell you one thing, there were many election billboards littering out streets in the recent election campaign that helped people to vote against a candidate! Apart from people liking you, people will also be moved to say yes to your requests if you show them (naturally and sincerely) that you like them. All of us are suckers for flattery! Measuring, Predicting and Learning Influence The science of influencing can be learned; however a person’s ability to influence successfully is heavily driven by their personality. If they don’t have personality traits like resilience, optimism and assertiveness, no amount of training will make a silk purse out of a sow’s ear!
Personality can be measured. Influencing skills can be taught – you can’t have one without the other. So, if you are hiring or developing staff that need influencing and persuading ability (salespeople, outbound call centre operators, leaders, managers and marketers) it’s important to ensure they have the innate personality characteristics to drive this competency. Assessing them through a valid personality profile will give you this important information. Then, introducing them to Cialdini’s six core principles of persuasion will be analogous to putting a strong sea breeze into their Kevlar racing sails. The science of influencing is very powerful. Those who can understand the theories will be better equipped to generate change and growth in their businesses. But a word of caution – your influencing tactics must be ethical; people who use unethical strategies may win the first round, but will lose the match.
Rob McKay MA(Hons) CMCT is a Business Psychologist and Director of AssessSystems Aust/NZ Ltd. Visit his website at www.influenceatwork.co.nz
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Why is Selling Still a Dirty Word? It’s Time to Rewrite the Dictionary By Paul Newsom
often begin sales workshops by asking the question “What is selling?” We always end up with several different definitions, and some better than others in the context of the business. Stop reading for a moment and write down your definition of selling. Selling can and should mean different things to people who sell. The definition needs to consider the nature of the sale. It is interesting to note that the origin of the word sell is Sellan, the old English word meaning ‘to give’. A quick dictionary search on Google comes up with the following definitions: • To exchange or deliver for money or its equivalent • To persuade (another) to recognise the worth or desirability of something • A deception, a hoax • Sell down the river (betray the trust or faith of)
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We don’t need to go into three and four, as they’re outside our meaning of the word in this context. So let’s look at the first two definitions.
people to buy something they have no need for. The best persuasive sales people will leave the buyer thinking they have bought well, rather than been sold to.
Firstly, exchanging money for goods or services is not selling. This is the definition of ‘sale’ which is the transactional outcome of the process of selling.
In a complex sale however, a strategy of persuasion is unlikely to result in long-term success. I think of selling as ‘the process of helping people make quality buying decisions and developing mutually beneficial and profitable long-term relationships’.
A great exercise is to ask your salespeople, “What is selling?” If your salespeople cannot present a consistent answer it’s highly likely that your customers are receiving an inconsistent buying experience from your company. Secondly, those selling commodity product to repeat buyers in a competitive market are likely to need good persuasive skills, but will hopefully not be using persuasion to get
It is about helping the client succeed, from which you make sales, rather than persuading people to buy. There is a big difference. How well does your definition of selling support the desired sales culture of your business or organisation? I generally find that wide variation of opinion on what selling is within a team will be a good indicator of a dysfunctional sales culture. A great exercise is to ask your salespeople, “What is selling?” If your salespeople cannot present a consistent answer it’s highly likely that your customers are receiving an inconsistent buying experience from your company. In any context, selling is something you do with or for someone, not something you do to someone.
Paul Newsom is Learning & Development Manager at the Rev Sales Network. Visit www.rsn.co.nz for more information.
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WED 3 JUNE
MON 8 JUNE
TUE 9 JUNE
Key Account Management David Forman Wellington (8-9 June)
RSN Seminar # 3 Rev Sales Network Auckland Advanced Sales Development David Forman Auckland Customer Service Zealmark Auckland Coldcalling Workshop Top Achievers Sales Training Auckland
Advanced Sales Development David Forman Auckland
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FRI 12 JUNE
SAT 13 JUNE
SUN 14 JUNE THU 18 JUNE
FRI 19 JUNE
MON 15 JUNE Customer Service David Forman Auckland Sales Development David Forman Wellington (15-18 June) Sales Development David Forman Auckland (15-18 June) Networking Workshop Top Achievers Sales Training Auckland
SAT 20 JUNE
Sales Management Geewiz Auckland
WED 10 JUNE
TUE 16 JUNE
FRI 26 JUNE
Business Negotiation Zealmark Group Auckland Advanced Serious Selling Geewiz Auckland Hit the Road Running Sales Seminar Top Achievers Sales Training Wellington
TUE 30 JUNE Sales Management David Forman Wellington
WED 1 JULY Sales Management David Forman Wellington
Sales Skills 1 Zealmark Auckland Sales Basics Seminar Geewiz Christchurch Hit The Road Running Sales Seminar Top Achievers Sales Training Auckland
WED 17 JUNE
Sales Skills 2 Zealmark Group Auckland Customer Service David Forman Auckland Telephone Sales Skills EMA Northern Auckland Exceeding Customer Expectations Geewiz Wellington
MON 22 JUNE Prospecting & New Business Development David Forman Auckland
SUN 21 JUNE THU 25 JUNE
THU 11 JUNE
Sales Skills Level 3 EMA Northern Auckland Prospecting David Forman Wellington Advanced Serious Selling Geewiz Christchurch
Cold Calling & Prospecting Top Achievers Sales Training Auckland
WED 24 JUNE
FRI 5 JUNE
Managing Difficult Customers Zealmark Auckland
NZSM CALENDAR SAT 6 JUNE
THU 4 JUNE
SAT 27 JUNE
TUE 23 JUNE Managing Through Leadership Zealmark Group Auckland Sales Basics Geewiz Auckland Hit the Road Running Sales Seminar Top Achievers Sales Training Hamilton
MON 29 JUNE Sales Management David Forman Wellington
SUN 28 JUNE THU 2 JULY
FRI 3 JULY
SAT 4 JULY
Sales Management David Forman Wellington
SUN 5 JULY
NZSM / JUNE 3rd 2009 / 10
TWO MINUTE TOP-UP
The Sales Managers Dilemma! Part 1 of a 3 Part Series By Michael Taplin
you can talk him into placing that big order this month for delivery over the next two months, you might just get away with it. You know you’re just fudging it yourself and the chances of getting lucky next month are not good but things are tough out there. What is the real problem? If you have ever found yourself in this position, you need a better answer. Your problem is that your sales forecasting system does not look far enough ahead. It does not tell you the truth early enough for you to act and make a difference.
Do you identify with this scenario? Two weeks into the month and the CEO walks into your office looking pensive. “How was the board meeting?” you ask. “The chairman wants to know whether we will hit our sales budget this month. What should I tell her?” You knew this was coming but foreknowledge doesn’t change that sinking feeling you experience. Dare you say “Yes”? Can you bear to say “No”? “I’d better check around before I answer that,” you respond. “Get back to me by 10am tomorrow,” says the CEO. The equation: 15 days to go, MTD sales $200,000, budget $500,000, sales achievable at the present rate $400,000. What have your reps got in the pipeline? A quick email goes out looking for the instant update, and the answers trickle back. They say they can pull in another $250,000. $450,000 is not good enough for you to take back to the boss. You’ll be in the gun. But do you believe them? What if they are too optimistic? What if you tell the boss $450,000 and they are just fudging to buy time? At $400,000 your job is on the line. How can you find the truth? Can you pull in a couple of favours from customers? You took Joe fishing last month and he caught the snapper of a lifetime. He owes you. If
You need a forecasting system that gives you two months’ notice of a bad month so that you can get your sales team working on the things that will fill up the bucket.
Making a sale requires real work; the process has to be Let’s think about the things we know:
followed, both for you and the customer. There are quite a few stages in the process, from finding a prospect, putting together a quote, getting the order and starting the work. Short cuts don’t work. Sales teams cherry-pick their prospect lists for the easy sale and look dumb when they have to chase the harder ones. Salespeople are over-optimistic at the start, and good at excuses when it turns to custard.
So can you build a simple sales forecasting system that will not only let you know in an instant what your team will close this month, but be alerted to problems months in advance? The good news is YES. You can solve your problem by treating every sale as a project in its own right. Then you can track and measure your progress through the steps to the sale.
Next issue we’ll look at a simple spreadsheet model that will let you keep track of sales prospects for each territory or representative, and when you add them together you can start to manage the work that will deliver the sales. If things are going in the wrong direction you will get advance notice and you can help your people manage their activity to NZSM / nov 12TH 2008 / 11
Let’s think about the things we know: Making a sale requires real work; the process has to be followed, both for you and the customer. There are quite a few stages in the process, from finding a prospect, putting together a quote, getting the order and starting the work. Short cuts don’t work. Sales teams cherry-pick their prospect lists for the easy sale and look dumb when they have to chase the harder ones. Salespeople are over-optimistic at the start, and good at excuses when it turns to custard. So can you build a simple sales forecasting system that will not only let you know in an instant what your team will close this month, but be alerted to problems months in advance? The good news is YES. You can solve your
problem by treating every sale as a project in its own right. Then you can track and measure your progress through the steps to the sale. Next issue we’ll look at a simple spreadsheet model that will let you keep track of sales prospects for each territory or representative, and when you add them together you can start to manage the work that will deliver the sales. If things are going in the wrong direction you will get advance notice and you can help your people manage their activity to correct the problem in good time. It’s not magic; it can be done by any sales manager, and it works as well as sighting in a rifle helps you hit the bull’s eye. Next issue: Part Two in our look at sales forecasting – How to create a simple and accurate forecast for your business.
Michael Taplin is a business mentor and strategy consultant with special expertise in sales forecasting. You can visit his website at www.bizlearn.biz.
THE RICHEST MAN IN BABYLON By George S. Clason Published by New American Library
The simple secrets for achieving personal wealth. Read by millions, this timeless book holds the key to success – in the secrets of the ancients. Based on the famous Babylonian principles, it’s been hailed as the greatest of all inspirational works on the subject of thrift and financial planning. The simple solution for a strong financial future. This celebrated bestseller offers an understanding of – and a solution to – personal money problems. This is the original classic that reveals the secrets to acquiring money, keeping money, and making money earn more money. Simply put: the original moneymanagement favorite is still the best! .
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“ First you fuel the desire, then the desire will fuel you
Author “Think And Grow Rich” IN THE NEXT ISSUE OF NZ SALES MANAGER...
Competing with “E”ase – the new competitive edge for today’s market place How to create better strategic alliances Sales Forecasting Part Two: How to create a simple and accurate sales forecast for your business Plus: We talk to performance development coach Adam Sands about developing sales cultures in large businesses Plus: Will you be the next NZ Sales Manager Wineplus Winner? Have you subscribed to New Zealand Sales Manager? It’s free! Simply visit www.nzsalesmanager.co.nz to get a copy of New Zealand Sales Manager delivered straight to your inbox every third Wednesday! NZSM / JUNE 3rd 2009 / 15