When corporate spending is down and there are fewer projects to go around, you need to win more than your past share to deliver your sales target.
Well into the 20th century, coal miners brought canaries down coal mines as an early-warning signal for toxic gases, like methane and carbon monoxide. The birds, being more sensitive, would become sick and stop singing giving the miners a chance to escape before they too were overcome by fumes.
In other words the canaries enabled the miners to spot a significant hazard before it became a problem for them. Now, think about the problems and challenges your customers face. What if you could identify early warning indicators before your competition or, better still, before your customers themselves? Imagine what an edge that would give to your selling efforts.
We don't say it enough of ourselves but salespeople are problem solvers. We solve the ‘costs are too high’ problem. We solve the ‘not enough revenue’ problem. We solve the ‘production takes too long’ problem.
The business challenges we solve may not emerge overnight but, like the canary in the coalmine, there is almost always an early warning sign.
The problem among prospects - and thus the opportunity among sales people - is the fact that these early warnings are usually ignored until the problem becomes too significant to be dismissed.
On September 16th 2008 Lehman Brothers, the world's fourth largest investment Bank, filed for Bankruptcy protection. Had nobody seen it coming? Or were warnings were ignored?
As far back as September 2003 Ron Paul, Republican Senator for Texas, predicted a housing bubble with its subsequent financial fallout:
“Like all artificially created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss.”
Three years later, on May 26 2006, another Republican Senator, John McCain, warned:
“If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole.”
Again, no one listened.
Closer to home, In September 2006, Irish Economist David McWilliams cautioned;
"All over Ireland, ‘ghost estates’ are enveloping many of our towns. Anywhere there is a tax-driven scheme, there are ghost estates ......... You don’t have to be a child or believe in Halloween to find that scary.
"All the estate agents told me the reason prices were rising was that demand outstripped supply and we needed more houses. Well, it is crystal clear that the opposite is the case. It is not that we don’t have enough houses – we have too many....
"Here is the problem. With 13.5 per cent of all houses vacant and an estimated 40,000 more ghost houses being built as I write, what is keeping their value up?…...
"…..In a country where the construction industry is operating at full tilt, where 50 per cent of our new builds will be bought to be left vacant and when strains are appearing in the frothy auction market, the existence of ghost estates of vacant houses is a very bad sign ......
"In the years ahead, these ghost villages, like our famine villages, may stand testament to a great tragedy which, although predicted by concerned observers, was never fully appreciated until the morning the crops failed."
Not only was McWilliams' warning ignored, he was castigated by a great many of the very people who stood to lose most if his predictions came to pass.
Perhaps the most famous and disturbing example of what can happen when people discount warnings and early indicators of a looming problem, is a message that read: "Captain, Titanic – Westbound steamers report icebergs and field ice in 42 degrees North from 49 degrees to 51 degrees West, April 12. Compliments, Barr."
The area referred to in was just a few miles north of Titanic’s intended course. The message was delivered to Captain Smith on the RMS Titanic who made no alteration to his course. When a second warning came in from 'The Baltic', the captain brought it with him to lunch, eventually handing it to Bruce Ismay, chairman of the White Star Line. Ismay kept it in his pocket for five and a half hours before posting it on the ship's bridge.
The sixth message on the subject that day, came from The Mesaba, which warned that The Titanic was heading straight for a vast belt of ice, stretching some 78 miles across her path.
In the wire room at 11pm, Jack Phillips was so fed up with warnings that his response to the California's announcement that "We are stopped and surrounded by ice." was "Shut up, shut up. You’re jamming my signal. I’m busy."
40 minutes later, the 'unsinkable' Titanic had hit an iceberg. Two hours and 15 minutes later she slipped beneath the icy waters to make her 4km to the bottom of the ocean, taking 1,500 souls with her.
So why do people chose to ignore early warnings and clues that problems lurk around the corner?
It’s human nature to process calls for change rather than to act upon them. The reason for this is simple. If we were to change every time that a problem presented itself we simply wouldn’t be able to cope with life. We deal with change by progressing through a series of phases:
Phase I: Discounting. We will discount the symptom and subsequently the significance of the problem. Take John, a 45 year-old manager who is 175cm tall, weighs 110 and smokes 20 a day. Finding the lifts out of order he takes the stairs to his second floor office. Wheezing and coughing he complains that “the stairs is steep”, while his heart struggles to get blood to his unconditioned limbs through his semi clogged arteries. Everyone else sees the heart attack warnings but not John. He has discounted the symptoms by externalizing the problem and blaming the stairs for his breathlessness.
His doctor tells him to go on a diet and give up smoking. John's response is that his father smoked two packs a day all his life and lived to 81.
As for the weight, he rationalises that he comes from a family of ‘big boned’ people and that ‘a little weight is just a sign that he appreciates the finer things in life’, besides people who obsess about their weight are just boring. Not only has John discounted the symptoms of his state of health, when the implication of his weight is pointed out to him by his doctor, John discounted the significance of the problem.
Phase II: Resistance. Once change is put on the agenda, the natural tendency is to resist. Resistance has its roots in one or more of the following concerns:
Change implies uncertainty and uncertainty is uncomfortable. Not knowing what may potentially happen often leads to heightened anxiety. Resisting change is one of the anxiety-reducing actions.
The new order may require capabilities that are beyond our reach. We resist trying new approaches because we know how to operate in the existing order. We fear we won't be able to accommodate change if new skills and behaviors are required.
The required change may not align with our own beliefs. We might acknowledge the need to change but disagree with the course, fearing more will be lost than gained. Understandably, this often happens when there is a lack of trust between those initiating change and those affected.
Inertia and the desire to maintain the status quo. Change requires effort and the effort required to overcome the inertia is not inconsiderable.
“Sometimes people stay in a hell a long time just because they know the names of the streets.”
Phase III: Exploration of Options.
Few can resist change indefinitely and as reluctance wanes, the mind turns to questions such as:
Who else is doing this?
What can be done?
What options are available?
What are the risks and rewards associated with each option?
What is best for me?
Phase IV: Acceptance.
Finally a consensus emerges that change is necessary. The path chosen and the players involved are understood, plans can be made and monies allocated.
In essence, the process of discounting and resistance followed by exploration and acceptance is the same process organisations undergo when purchasing big ticket items. We have all targeted companies at the different phases, companies whose efficiency and bottom line we can help:
At the Discounting phase they say: “we’re happy with what we have” or “we’re not looking to do anything with that right now”. At the resistance phase they say: “we’re looking at it but it’s not a priority right now, we’re really too busy.” Then you get lucky and call them while they're exploring their options and they want to talk. The only difference here is that you caught them at a time that they actually admitted your call was relevant.
As night follows day, each step is followed by the next so long as the forces in favour of change outweigh those against. Those forces can be economic - it must make sense financially; they can be related to ego; they can involve to some external factor - Legal requirement, discontinued supply, technical function - or they can be a combination of the above.
The question is - when does the process become a project? At what stage of the buying process is a project defined, along with a project manager, a project sponsor, a project timeline and a project budget?
Take Glanbia, a €3Bn multinational Agri-Food business, whose IT investment process takes 9 months. Around February/March they engage with their consulting partners to get their advice on where they should be investing in the following calendar year. In April/May they contact vendors to discuss roadmaps and potential solutions. Over the Summer they’re engaged in pilots, evaluations and workshops, evaluating vendors claims. By September they have stopped meeting with vendors, to focus on internal reflection and fine-tuning. In October they put forward their investment recommendations to their investment committee for budget approval, which may come by November.
So, the question is - when should you be engaged with them? When there is a specific budget assigned to a project? Or months earlier when you’ve had an opportunity to influence the prospects thinking and develop your relationship?
If you get involved early enough you can identify the problems, challenges, concerns and troubles that preceded the instigation of the project. You can observe what people are talking about, what are they resisting and what gap exists between where they are now and where they want to get to.
Keep doing that and you’ll always have an edge on your competition.
You’re probably wondering how this works in practice? Consider the approach used by Bernadette, one of the brightest sales people I have ever known. Bernadette sells high-end technology to the public sector. To gain an edge - which is always reflected in her take home pay - Bernadette scours EU websites for new legislation being ratified by the EU Parliament. Legislation that is enacted today will probably makes its way onto the agenda of the national parliaments 12 to 18 months later. Instead of waiting for it to filter through all three hundred layers of bureaucracy, Bernadette seeks out what up-and-coming legislation will affect her customers. That way, when she meets with them she brings more than a sales pitch, she brings vital industry information. They get to hear about changes in advance and more importantly they already have some answers, compliments of Bernadette, when their managers come looking for ‘urgent’ answers.
Do you think they see her as more than a ‘vendor’. When she needs a favour, do you think they feel obliged to help?
Bernadette is the proverbial canary in her customers' coal mine. Like the miners, her customers listen to her because she has effectively created a role for herself as advisor in their businesses. Over time they have seen the benefit of listening to her. If our warning comes out of the blue, like those received by The Titanic, they run the risk of being met by obstinance, arrogance or ignorance. Our ultimate goal, therefore, should be to be recognised as 'problem solvers' by our prospects, who will then welcome our calls.
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