Monthly Archives: February 2012

10 ways to get what you want, without violating your conscience (Part 1)

Success as a leader, salesperson or entrepreneur depends on the ability to influence. Whether you are a CEO, salesman or an entrepreneur selling a vision to investors, influencing is how you get what you want.

What tools do you have in your “persuasion toolbox”? There are a variety of principles and tactics that can increase your natural ability to persuade, without sacrificing authenticity or credibility. This is the focus of my post, but before I continue, it’s important to differentiate influence from manipulation.

Manipulation is a short-term strategy relying on power tactics (such as positional authority, fear), dis-honesty and win-lose outcomes. It ultimately benefits neither the manipulator nor the manipulated. Influence is about empathy, changing attitudes and win-win outcomes. These are the ingredients in building a long-term relationship.

People start developing influencing techniques in childhood, which you’ll know all too well if you have kids (must that candy be at the supermarket checkout?).  As we navigate relationships from childhood through adulthood, our most effective tactics get added to the toolbox (e.g. “you scratch my back and I’ll scratch yours”). Depending on our experiences and natural influencing abilities, people may use anything from a few favourite “tools” to a broad range of persuasion tactics.

I’m betting that you know a master influencer. If you do, what makes them so effective? How are they different? Chances are they have a high EQ (emotional quotient, the empathy equivalent of IQ) and a VERY full toolbox. The following list of principles work individually, but are even more powerful when used together.

The first 5 principles that need to be in your “persuasion toolbox” are:

  1. The Visibility Principle. People gravitate toward the familiar and are inclined to trust what they know. Conversely, the unknown is generally treated with skepticism. The best persuaders make sure they are very visible, because interaction breeds familiarity. Face-to-face visibility is still the gold standard, but social media is revolutionizing the visibility game. It is now possible to stay on the radar of hundreds of people in parallel through LinkedIn, Facebook, Twitter and Google+ by posting valued-added content for your audience and demonstrating authentic interest via “likes”, “shares” and “retweets”. For salespeople, this is already being hailed as the Social Selling Revolution.
  2. The Supply-Control Principle. Any salesperson can tell you that a limited supply of time or benefits is a key influencer (does the Best Buy sales guy really only have one TV left at that price?), when it is credible. This is the law of scarcity, which you have no doubt heard of. The challenge in applying this principle is staying on the right side of manipulation. Artificially limiting supply is a sure-fire way to damage credibility. Think Apple, not the Best Buy sales guy, when applying this principle to increase demand.
  3. The Negative Sensibility Principle. Harrison Monarth described this well in his book Executive Presence: “Research shows the unconscious mind cannot hear and does not process a negative sensibility; this means that the word not doesn’t even register in the mind.” When Bill Clinton said “I am not a racist” during Obama’s campaign, the only words that were heard by the audience were “I am a racist”. “The unconscious mind, which records the entire experience on an emotional level, retains the memory of the word racist.” Master influencers avoid negative labels.
  4. The Authority Principle. People trust information that comes from a perceived authority. Expertise from a credible source fosters trust. If you position yourself as an authority or bring an authority to bear, trust and influence are much easier to achieve.
  5. The Highlighter Principle. Everyone has a natural tendency to focus on what confirms our preconceived ideas and arguments. This isn’t manipulative, it’s just human nature. The problem is that the tendency to highlight can be perceived as manipulation by an audience that disagrees with your message. Effective influencing means controlling the urge to highlight, because a balanced argument is a stronger form of persuasion.

My next post will be on the remaining 5 principles. If you want to read more before then, the book Executive Presence by Harrison Monarth is a great resource for leaders and entrepreneurs looking to improve their presence and influencing abilities. It was also my primary source for this post.

What is your go-to technique for influencing others? Please add yours to my list!

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Why people buy (or how to increase lead conversion)

Ask top salespeople why people buy and they’ll give you a simple answer: trust. The bigger the purchase, the more trust required to get the buyer to “yes”. The reason is common sense. Large purchase decisions can have a big impact on a buyer’s career, especially when things go badly. Physiologists call this “loss aversion”; people are more motivated by fear of a loss than hope of a gain.

In these situations, “who” one buys from is often more important than “what” solution one buys. This is nothing new. Even the social sales revolution hasn’t changed the basic nature of how people buy. Take the example of a salesperson in the 1970s named Don Draper.

Don is a real sale pro. Knowing instinctively that people buy from those they know, like and trust, the first step in his sales process is information gathering. On the weekend at his golf club, he asks around to see if anyone knows Jim, the prospective buyer. It turns out one of his foursome met Jim, a fellow Western University grad, at a local alumni event. Much of their conversation that night revolved around fishing.

One of Don’s best customers is also a graduate of Western, so he calls him up to find out if he can get an introduction. Fortunately for Don, the customer comes through and provides the warm introduction he was hoping for.

At their first meeting in Jim’s office, Don looks at the photographs, awards and sports paraphernalia on the bookcase. From these items, it appears that Jim has a daughter and son around 10 yrs old, is a major Boston Red Sox fan and is a real mover-and-shaker at his company with multiple awards to his credit. It looks like he’s also a Republican, based on a Nixon campaign button sitting on his desk.

During their meeting, Don starts off by talking to Jim about their mutual friend. They share a couple of stories about him, and Don talks about their last company fly-fishing trip together. The next 15 minutes they talk about nothing but trout and Don offers to send Jim his favourite brook trout fly. Don then asks a lot of questions about Jim’s role at the company, their recently released financial results and a disastrous recent product launch that was written up in the newspaper. Don does not talk about politics or the Red Sox. He is not a fan of Nixon and has no interest in baseball.

At the end of the conversation, Don finally gets down to business. He talks about how he helped his customer (the mutual friend), increase sales by 30% with a national marketing campaign, and he lists the other customers  using the solution. He sincerely states his belief that it may be possible to turn-around Jim’s recent product launch challenges. They agree to talk more over lunch the following week.

In this example, Don is well on his way to a sale because he did these five key things that build rapport:

  1. Gathered sales intelligence. Knowing your customer, and showing you care enough to do your homework, is step 1 for rapport building. It’s simple math: knowing=caring=liking=trusting.
  2. Found authentic common ground. Studies show that people like those similar to themselves*. It’s a very strong psychological bias. Finding common ground, speaking in the buyer’s language and even mirroring body language is closely tied to likability. Like Don, you need to stick to authentic common ground (i.e. fishing not baseball).
  3. Used social proof. Don used a common relationship to show that he was a “safe choice”. When someone the buyer trusts purchased your solution, it provides “proof” that it is a good idea.
  4. Took advantage of the “Bandwagon Effect”. This is common sense, but worth adding to the list just the same, given its importance to the selling process. People tend to do or believe something because many others are doing or believing the same. It’s what makes customer success stories, good white papers and recommendations powerful.
  5. Applied the “Principle of Reciprocation”.  Studies have shown that it is a general social rule that a person should try to repay fairly what we have received from another person*. If somebody performs a favour for us, we usually feel obliged to return their favour. Don’s offer of a fly increased the likelihood that Jim would say “yes” to their next meeting. Authenticity is, again, very important. Don’s gift worked because his shared interest was authentic.

Email, social selling and the web have fundamentally changed the selling landscape since Don’s time. Sales intelligence is just as important, but information gathering has undergone a revolution. Buyers have less time for meetings and phone calls, zero interest in Q&A and you’ll get some pretty funny looks using the tired “I see from this photo you’re a Sox fan” strategy. Buyers expect salespeople to know about them, their business and their problems BEFORE you’ve even spoken to them.

Salespeople have access to more information than ever before, often directly from their customers’ own mouths. However, buyers have higher expectations than ever before, so sales “homework” is more important than ever.

Successful, sales professionals now get their intelligence from web-based sources. What differentiates leaders from the laggards is how efficiently and effectively intelligence is used. Here are the top 8 sources of sales intelligence on the web:

  1. LinkedIn. By far the best tool out there for sales intelligence. With 150 million users (and growing), you can access descriptions of people and companies in their own words. This is far superior to the traditional sales intelligence databases like Hoovers. By showing connection paths, it also greatly accelerates networking to a target.
  2. Company website. It is amazing how many B2B salespeople don’t take full advantage of this resource. Press releases, financial reports, biographies and other information are often available right on the web.
  3. Offline networks. Social selling has not eliminated the need for talking and meeting. Resources like LinkedIn can make your networking more efficient, but business people are still far more likely to build relationships face-to-face. These networks are powerful sources of unpublished (and un-tweeted) information.
  4. Commercial databases. Sources like Salesforce’s Jigsaw (recently rebranded data.com) are helpful for clean contact information ontargets. I find Jigsaw less useful for larger B2B deals, but perhaps their partnership with D&B may increase the depth of both the D&B and Salesforce offering. In addition, they don’t intelligently incorporate web-based info from sources like Google, Slideshare or YouTube.
  5. Social media. If your customer is talking, you’d better be listening. The challenge here is volume, but it does save time to do searches for relevant content rather than monitor the whole flow. Social media is also a good way to see what targets and connections are reading and sharing.
  6. Trade press. The move to electronic versions of traditional trade press made the resource much more valuable. Now you don’t have to read every issue to find relevant content…you can just search! It’s a great source for industry-level challenges/opportunities, movers & shakers, products and companies.
  7. Web news. Google news searches, aggregators and industry sources (like Techcrunch and VentureBeat) are powerful sources of company and industry intelligence. Again, these sources are easily searched and do all the work of aggregating what is relevant to a particular business.
  8. Blogs. Most companies are either blogging or being blogged about. There is no better source for information on what people are saying about your target customer or industry. I regularly use Google blog search to find this content.

 How are you gathering sales intelligence? Is there a source of intelligence that I should add to my list?


Sources

  1. Dr. Gouldner reported that the rule of reciprocity can be found in all human societies the rule of reciprocity in his classic 1960 publication: http://garfield.library.upenn.edu/classics1979/A1979HT60900001.pdf
  2.  Publication except on the phycology of persuasion:  http://www.media-studies.ca/articles/influence_ch5.htm

		
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“Lean decision-making” lessons learned

Take one look at tech blogs, start-up news or content shared on LinkedIn and you’ll find plenty of the business equivalent of “self-help”. This is not surprising. Tech leaders work in conditions of constant change, and rarely have the luxury of wearing just one functional “hat”.  We need digestible content to help us manage the complexity of our daily lives.

Fortunately, we have easy access to the largest pool of information in history.  Thanks to tablets, e-readers and smartphones, this content is accessible anywhere, anytime. However, there’s risk hidden in this mountain of content – it often contains BAD advice. In fact, some of it’s downright dangerous to your business.

Chances are you’ve seen bad business decisions made based on hope or fear, what others are doing, the latest business trend or what senior industry leaders did or said in the past. In other words, on everything but hard facts. It happens all too often. It unfortunately also happened to me.

Remember the matrix management fad? In a nutshell, matrix management pooled people with similar skills under a functional manager (e.g. head of engineering). They were then assigned work on projects under other managers. In my case, engineers had to report to several managers to get their work done. The matrix was supposed to leverage the skills of our team across multiple projects, making the company nimbler and more effective. In reality, this was a recipe for needless complexity, endless turf wars, competition for talent and many many meetings.

After a couple of wasted months, I untangled this mess by putting one person in charge again. This was a real boneheaded move, but at least I wasn’t alone. Many organizations have tried and failed to implement matrix organizations, often with the help of expensive management consultants. Had I done my homework, I’d have found precious little factual support for this management fad.

The only way to separate success-driving practices from their ineffective (or even harmful) brethren is through evidence-based management.  Eric Reis’s Lean Startup Method^ is an excellent example of evidenced-based management for start-ups. He’s a proponent of making decisions based only on hard facts generated through experimentation and data collection. These quotes from his book say it all:

Test assumptions you’ve made about your business, its customers and how you’re serving them.”

“… productivity is not just making more stuff, but systematically figuring out the right things to build.

“The three A’s of metrics: actionable, accessible and auditable.”

Looking at the facts is not easy, not even for leaders of Fortune 500 companies. Just look at their love affair with M&A. Think AOL-Time Warner or HP-Compaq. Study after study shows that most mergers benefit only investment bankers and lawyers – some estimates are that 70% or more fail to deliver shareholder value (Of course, don’t forget the Pixar-Disney successes either)*.

Of 200,000 mergers reviewed in 93 peer-reviewed studies, analysis shows that the negative effects of a merger generally become clear in less than one month and continue thereafter! So what separates the 70% from the 30%? Facts and strong processes. This is consistent with my personal experience as a lawyer turned-corporate development wonk. The majority of deals I’ve seen ultimately value destroying for a variety of reasons, including culture clashes and lack of investment in integration.*

Companies like Cisco prospered through M&A by identifying success factors, such as merger size (small is better), integration practices and culture compatibility. In fact, Cisco averaged about one merger per quarter last decade, most of which were successful. They experimented to find what works and beat the odds, following a very similar philosophy to the lean start-up method.*

Good decisions, effective business practices and successful businesses are built on metrics, measurements, testing and validation. They are also built on avoiding poor decision-making practice and recognizing biases.

To increase your odds of business success, avoid these 4 big mistakes:

1.  Doing what (seems to have) worked in the past.  Suppose a doctor wanted to do an appendectomy on you. When you asked why, he answered, “because I did one on my last patient and he got better.” You’re going to run from his office, right? Don’t confuse success in spite of from success because of. In addition, your business environment, model or market just might be different enough that the past solution won’t work for you.*

2.  Casual benchmarking.  It’s ok to learn from others – it’s an important source of ideas and practices – but make sure you benchmark based on facts and data. Do your homework, ask the basic question of WHY something works and understand if the practices of others really make sense for your business model using both logic and real data.

3.  Following deeply held yet unexamined ideologies. Many people treat first-mover advantage like dogma. What may surprise some is that this pervasive belief is not supported by the facts. At best, the empirical evidence is unclear. Beliefs that are rooted in ideology are “sticky” and contrary evidence is often ignored. Watch out for this bias, because the biggest risk comes from a failure to question one’s personal beliefs.*

4. Listening to experts too much. Management experts and consultants can leverage their experience across organizations to help their clients learn from the successes and failures of others. Just be careful. Experts are paid to have all the answers, and it is tempting to lean too hard are their advice. It is the job of the leader to logically assess, challenge and adapt expert advice to the needs of their unique business and market.

If you’re interested in learning more about evidenced-based management, I highly recommend the Lean Startup by Eric Reis and Hard facts, Dangerous Half-truths  & Total Nonsense by Jeffrey Pfeffer and Robert Sutton.

* J. Pfeffer & R. Sutton, Hard facts, Dangerous Half-truths  & Total Nonsense, Boston: Harvard Business School Press (2006).
^ Eric Ries, The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses, Crown Business (2011)
 
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