Sales Competitions - Do they Work? Really?

When I joined a certain North American company as hemisphere head of sales (don't check my LinkedIn! ) they had just announced the President's club winners. The largest deal of the year was made in Anonymesia.

I wanted to understand that deal and interviewed the main players and the customer. There's no doubt that our Anonymesia country manager was the deal architect and main sales person. She was a personal friend of the customer CEO and she made the deal.

So who went to President's club?

The rookie sales guy ....and ....the country manager's boss who was not even based in country! Two people that contributed almost nothing to the deal of the year. That president's club decision triggered a collapse of the entire workforce in Anonymesia including the loss of a great country manager.

Let's play a different movie ...

My first job out of university was as field engineer with the oilfield services multi-national, Schlumberger.

Our training cohort assembled in Singapore in bright new coveralls for fire-fighting and first aid training; three Indonesians, two Australians, two Americans, two French, two Egyptians, one Japanese, one Lebanese, one Venezuelan, one Malaysian one Thai and one Palestinian on a forged Tunisian passport (another story) We were to be trained to operate electronic survey instruments which are lowered deep in oil wells to measure rock and fluid properties.

After a week in Singapore there was one month familiarisation on an oil rig, before three months intensive training. During the familiarisation, I got a picture from experienced engineers of what that training would be like:

“Its hell! You have an exam every week and if you fail, they kick you out. You hardly get any sleep and there is a 24 hour exam at the end”.

When we got to the training centre, a few kilometres south of Medan in Sumatra, the regime was indeed, tough. Long days of theory and practical tasks through the week and all day Saturday to study for a weekly exam. Sundays were free but we were mostly exhausted from unfamiliar labour.

Within a couple of weeks, both Egyptians and one of the Indonesians were fired for failing tests.

Their failure was not through lack of intelligence, trainees were selected from the top of their universities. No, the weekly competitive 'scoreboard' showed the obvious reason; good English speakers at the top, poor English speakers at the bottom.

The failures were affecting group morale and the schedule was too intense. We got together and hatched a plan.

A deal was offered to the training school manager; we guaranteed a 100% pass rate in return for testing on Friday evenings to allow a full weekend for relaxation. The training centre manager was sceptical, this was unheard of in 33 previous schools, he was convinced we would fail, but he agreed.

We changed our study routine to include intensive tutoring for the non-English speakers and we studied in mixed-nationality groups.

The results were instantaneous, a dramatic improvement at the bottom of the list. Our weekends were spent exploring North Sumatra, touring the volcanic island in Lake Toba on motorcycles, crossing Sumatra to the west coast surf beaches, climbing an active volcano and lazing on the beach on the East coast.

By graduation day we were a tight knit team of friends with the highest pass rate in the history of the training centre.

So, Sales Leaders, before you create internal sales competitions you may like to consider:

Is the competition fair? 

Does everyone in your team even speak the language? It’s common that only a small proportion of sales teams can speak 'sales'. Furthermore, I’ve yet to see a sales team with equal territories, so what is the basis for competition?

Can your objectives be achieved another way? 

Maybe your team can achieve your objective on their own terms? Are you willing to listen to what they want?

You are not the only leader.

It is likely that you have team members that can also lead, are you willing to give them an opportunity to show what they can do?.

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Here are some photos from that happy time. Apologies for the poor image quality.

Top photos - At the Medan Training Centre ITC34, Nabil and Heru

Lower Photos - First month oil rig familiarisation, offshore Sulawesi

The Author operating state of the art technology, circa 1985

Our happy band of brothers weekend touring - Lake Toba, Padang, Volcanoes and Beaches, 

Francois, Katsuaki, Jeswant, Jim, Nabil, Peter, Phil, Jose.

Five steps to Landing the Deal

A few years ago I read Propellerhead, Antony Woodward’s highly amusing account of learning to fly. The book starts with Antony’s friend Richard returning to England from Africa with a pilot’s license and instant sex appeal! The magical effect of a pilot’s license on conversations with the fairer sex fuelled Antony’s motivation to learn to fly.

Richard and Antony could only afford part shares in a flimsy microlight but they found a third partner with inexpensive hanger space and low cost instruction in country Norfolk where they would escape to from London for weekends flying.

Unfortunately, Antony proved to be a singularly unskilled pilot. While his friends quickly acquired their microlight certifications, Antony struggled with all aspects of piloting but especially landing. He had absorbed the theory, practised with instructors but when it was his turn to land it all went horribly wrong.

The epiphany for Antony was the realisation that 'the plane lands itself”!

All Antony needed to do was put the aircraft on the right landing path and the plane lands itself. Antony had an erroneous belief that there was a complex action that he needed to perform at the moment of touch down.

And so it is with sales.

There is a widely held, erroneous belief that there are secret tricks to ‘close the deal’.

Yes,there is a secret but it’s not in the landing, it’s in understanding and managing the landing flight path.

Flight Path Step 1 – Buyer Commitment to Change

Every sale involves change for the buyer. If the buyer doesn’t feel the need for change then, not surprisingly, nothing happens! Depending on what you sell, more than half of stagnant deals in your pipeline can be attributed to failing at this first hurdle.

Questions to ask:

“So what are you planning to do about <this issue>?”

Asking potential customer’s about their plans for solving their own business challenges is illuminating, it signals intent. Few sales people ask this question. You can lock in that intent with another question:

“Would you say there is an important need to change < Situation >?”

Rather than you say there is a need to change, you want them to say they will change. Then the psychological law of ‘consistency’ comes into play. People want to be consistent with their own pronouncements.

Flight Path Step 2 – Commitment to Change Now!

The larger and more significant the deal, the more important it is for there to be a compelling event. In general, we humans don’t like to change and we won’t unless we are compelled somehow.

These questions can tease this out:

“Where does this project fit in your priorities?”

“What is it costing you to continue like this?”

“What will happen if you don’t make this change?”

Cost of delay, Success and Future Success (promised land) stories can persuasively move a future customer to take action now.  All of these stories should be in your sales team Story Library.

Flight Path Step 3 – Commitment to your Solution Type

For every business challenge there is normally a range of solution possibilities. You may propose productivity software (for example) but your customer could also choose to outsource or hire low cost labour to solve her productivity problem.

Gaining commitment to your solution type requires a good understanding of your competition and the relative benefits of different solution types. Many sales people think far too narrowly about who their competitors may be.

Having understood the competitive landscape, your job now is to get the customer to commit to benefits of your solution type and disavow the failings of competitive solutions.

“Would you say that <insert your advantage> is a critical requirement?”

“So you are seeking to avoid <competitor’s weakness>?”

Again we are employing the psychological law of consistency to get the customer to announce intentions in favour of your solution type.

Flight Path Step 4 – Commitment to You

The customer is now committed to your solution type but why buy from you and not a similar competitor?

Often this commitment is personal and the psychological principle of “liking” comes into play. All things being equal people will do business with people they know and like. The most natural way to invoke ‘liking’ is to find your future customer likeable. The persuasive law of reciprocity says that if someone likes us we will like them back. Engaging in rapport building with two-way personal stories also increases likeability.

Again the psychological law of consistency applies. If you have persistently asked for and received small commitments from your future customer, you become someone your customer gives things to. To be consistent, she should also be inclined to give you the final deal.

I wouldn’t like to give the impression that the sales person need only apply persuasion techniques to win business. By this stage of discussion a solid financial business case should also have been created. Ideally co-created with the customer buying team.

Flight Path Step 5 – Commitment to Pay

Finally we are at closing the deal. At this stage there is often an emotional disagreement over price or terms and conditions. Be aware this is just a normal desire by the buyer to reduce the risk of making a mistake - your buyer's natural fear of a crash landing!

Your future customer is asking herself Will I be fired?, Will it work as advertised?, Am I paying too much?

Your task as the seller is to reassure the buyer that she is on a safe landing path, If you have locked in the first four commitments, it will be ok, reiterate those commitments and retell the ‘promised land’ story.

Happy Landings!

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Notes

For details on psychological laws and principles of persuasion in sales, see Robert Cialdini’s,

Influence The, Psychology of Persuasion

, Harper Collins 1984, in which six basic forms of influence are described

Your Personal Story

In mid 2015, The Story Leader CEO, Mike Adams, met a Perth-based managing director (MD) and company owner in Melbourne at an industry trade show. They had a brief chat about sales team performance and agreed to meet when Mike was next in Perth.

Unfortunately, each time Mike went to Perth, the MD was somewhere else in the world. It seemed like they would never meet. After five attempts to schedule a meeting, Mike emailed the MD and suggested that he meet his Perth-based business partner, Sue Findlay, instead.

Mike received a one-line email reply:

"Ok I'll meet her, but we're not buying anything".

Hardly a response to motivate an already nervous Sue, whose background is in procurement and not sales.

Mike and Sue setup a practice meeting via conference call and Sue practised telling her story about why she founded our consulting company.

That story is about Sue's frustration with sales people who seemed unable to supply the critical information required for the tender submissions - submissions that Sue crafted for her clients in her tender-writing business.

Sue went to the meeting while Mike waited anxiously in Melbourne.

A couple of hours later, an excited Sue called Mike and explained how she had told her story and the MD responded with:

"Welcome to my world, lets go to a whiteboard ..."

We are happy to report that this company is now a valued client.

By telling her personal story, Sue connected with the MD on an emotional level. They had a shared frustration with sales performance and the story made an immediate connection. Of course, there was more work to do to prove our credentials but our fledgling company had a new client.

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Your Company Story

Do you know that telling the story o how and why your company exists can be a secret sales weapon?

How do your sales people describe your company today? Many describe their company rather than tell a story and it often sounds like this;

"We are the largest/best/most innovative/most successful company in <pick your sector>".

There is a better way.

For thousands of generations, humans have used stories to memorably engage, inspire and educate. Your sales people can use the same technique with your company story,  

IF you take the trouble to prepare that story for them.

Our consulting company, has only been in existence for eighteen months but the story about why we exist has helped us engage with several early clients.

Here is an example of a company creation story that we helped create for one of our clients.

If you work for a large corporation then a story about your company division or geographical territory may be more persuasive such as Mike's story from 

Schlumberger in Russia

The Ponytail and why your stories must be true

Have you heard the story about how NASA spent millions of dollars developing a pen that would work in zero gravity but the Russians were smarter – they just used pencils!

The story is told to mock profligate government spending and love of complex technology.

There is only one problem with the story – it isn’t true! It’s an urban myth.

It turns out that in the early years of space travel both the Americans and the Russians used pencils in space but pencil tips can break and float into sensitive electronic equipment so a solution was needed. A private inventor developed a pen that would work in zero gravity (at a modest cost) and NASA and the Russians purchased the design.

Not such an interesting story.

What happens if you tell a story that isn’t true and you are found out?

Of course your credibility is gone. We teach sales people to use purposeful stories to build rapport and to progress their business opportunities. And credibility is a critically important resource for sales people.

So you need to find true stories …

Christmas day, 1985, I was operating an electronic survey instrument two kilometres deep in an oil well in the rice fields of Java in Indonesia. I was sick from food poisoning, homesick and in the world’s most populous Muslim country there would be no Christmas.

The oil well I was surveying had a leak – a hole in in the steel casing - and I was running an experimental ultra-sonic scanning tool that, theoretically, could measure the thickness of the casing with enough accuracy to locate a hole.

That was the theory but all I got was unintelligible data.

We winched the tool to the surface to see if it could be repaired. On the rig floor, as I was explaining to the company man that my fancy piece of equipment was not working, a rough young man with southern US accent piped up with:

“Y’all looking for a hole? I can run ya a ponytail”

It turns out that a ‘ponytail’ is a length of frayed rope attached to weight and run down hole on a slick line cable. When the frayed rope passes a hole in the casing it catches and a spike on the cable tension indicates the depth of the hole causing the leak.

A one dollar piece of frayed rope did a job that my $300,000 worth of electronics could not.  

And I had one more thing to be sick about.

HOME

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Mike's other posts:

Zen Mind - Sales Mind Games - Part 2

Sales Mind Games - Part 1 - How to Sell

The Power of Stories. The Art of Persuasion (Part 2)

Mindjacking with Metaphors. The Art of Persuasion (Part 1)

Chasing Shadows? Three Thinking Traps to Avoid in Sales.

Six reasons why technical people don't sell and one good reason why they can

Warning! Step carefully through the Sales Recruitment Minefield

The Power of Stories. The Art of Persuasion (Part 2)

I think the first time I noticed the power of stories in sales was when I was managing a sales team in Russia for Schlumberger in 2000.

Schlumberger was formed in 1926 after the invention of a technique to measure the variation of resistivity in oil wells and hence locate the oil. Today, Schlumberger is a $35 billion revenue company which dominates the oil and gas services business. But the company suffered a huge setback in the 1930s when Stalin nationalised its assets in Russia.

In the mid-1990s when Russia was opening up to western companies after the collapse of the Soviet Union, Schlumberger needed to make a decision on whether to re-enter the market. Then CEO, Euan Baird was asked how much money he was willing to risk on a Russia re-entry. Ewan’s answer was “$200 million”.

With that answer, Schlumberger set about placing senior experts and investing in two of the top six Russian oil companies. The results were astonishing. Using western techniques, the two Russian oil companies achieved dramatic production increases while their competitor’s production was falling.

I told this story many times and heard it re-told by my customers. The story’s effect was remarkable and unmistakable. The power of  stories to capture our attention lies in the narrative journey; the complications, trials and mistakes that expose the hero's vulnerabilities. Without the setback of Stalin's nationalisation the story would not have the same power.

More recently, while working to build our sales consulting company, I listened to my business partner, Sue Findlay, tell her story to a prospective customer who had already told us that he was “not buying”. Again, the story’s impact was striking and immediate. The managing director reciprocated with his story and opened up about the sales challenges they were experiencing and we have started to work with them.

The wonderful thing about learning how to use stories in sales is that it is so much easier and more natural than any other conversation method.

Mindjacking with Metaphors. The Art of Persuasion (Part 1)

Mike's other posts

Chasing Shadows? Three Thinking Traps to Avoid in Sales.

Six reasons why technical people don't sell and one good reason why they can

Warning! Step carefully through the Sales Recruitment Minefield

Chasing Shadows? Three Thinking Traps to Avoid

A few years ago, I was sales manager for an international sales team in a multinational technology company.  We provided high-value products and services and there was a formal decision committee responsible for approving sales opportunities from early identification to, hopefully, a successful close.

I was concerned about our low sales win-rate and thought that we were chasing too many unwinnable or unlikely tenders, diluting our overall sales effort. Our activity level was high, but quality was low.

Increasingly, I played the devil’s advocate in the decision gate meetings, urging the team to ‘no-bid’ the less likely cases. But every opportunity had its passionate champion and even if we agreed that the chance was low, there was always the old; “we can’t afford not to bid, it will damage our customer relationship”.

Then one day, I was sent a tender for review which, incredibly, included the name of our major competitor’s product in the title;

Tender for provision of <Competitor’s Product>.

Excellent, I thought, finally, our chance for a no-bid decision! This is the ultimate unwinnable tender.

I will never forget that meeting. Here was a tender that we clearly had no chance of winning and yet, unbelievably, I was hearing arguments that a non-conforming bid stood a good chance.  Eventually, I lost my cool, pulled rank and we no-bid.

The sky didn't fall down, we worked on other bids and a strange air of relief and calm fell over the technical sales team. Furthermore, the customer continued to talk with us.

We could dismiss this as just an amusing story, but chasing unlikely business is something I have seen in many companies and industries. Why are normally rational people so intent on wasting company resources on low chance gambles? How do we make sense of this phenomenon?

I think there are three psychological forces at work and each represents a cognitive error or bias that we need to guard against:

1. False Hope

The cost of bidding seems low compared to the potential payoff. Like buying a lottery ticket, it appears to be a low cost for a large payoff. Unfortunately, low cost is an illusion. The real cost of chasing low-chance business is the high-chance business you missed out on. Opportunity cost, not bidding cost should be top of mind when considering a bid.

2. Fear of Loss

The flip side of false hope is avoiding the feeling of loss experienced when that hope is extinguished by a no-bid decision.  We irrationally feel the loss as if we lost the tender when really we lost nothing but an unlikely possibility.

3. Diversion from real work

For sales people it’s easier to think “this tender will make my number” rather than getting out and doing real sales work finding more  business. This is a normal human frailty and a primary cause of missed quota in B2B businesses all over the world in every industry. 

The solution is eloquently described in a sales novel (!) called “Selling to Zebras”(Jeff and Chad Koser, 2008).

Every company needs a clear description of what its natural prey looks like. If you are adapted to hunt zebras then don’t be distracted by other animals. 

Zebra identification cannot be left to the sales department, they will hunt everything that moves. A cross-departmental team should agree the ‘zebra checklist” with a scoring mechanism to set a go/no-go threshold and you should make zebra discussions a common theme of your sales and management meetings:

“Black and white stripes, check! Four legs, check! Equine family, check! – go for it!”

Our sales consulting company was created because of our Managing Director, Sue Findlay’s, frequent frustration when she was running her ‘winning tenders’ consulting business.  When approached to support urgent tenders, Sue would often find there was little chance of success because either the business was not qualified (not a zebra) or the sales team had not done the necessary pre-tender sales work.

Strictly defining and sticking to your ‘zebra’ means that your sales team will have time to do the all-important pre-tender sales work.

Happy hunting!