Why Do Buyers Buy
I wanna talk about what causes buyers to take action in the first place because that's the starting of all this. I wanna talk about how they go about exploring change and thinking through what they're doing. And I wanna start by talking about the world that we live in right now. And I'll give you two views, a traditional buying cycle and how to think about buyers now. So I call the age that we live in right now the age of Accelerating Constant Disruptive Change because I'm an optimist. And the change is more structural right now, it's going faster, it never seems to end. And we have all these factors that are putting downward pressure on companies to perform, especially financially. The first of which is globalization. The world is now really, really small. And so we're competing with people in India and China, and this means that there's pressure to compete and be competitive on a global scale, for which most people means pressure on their margins and more difficulty in selling. The s...
econd, and my favorite, factor is disintermediation. And this is a fancy way of saying cutting out the middle man. And the very best example on Earth is Amazon.com. First they disintermediated book stores, and then they decided to disintermediate everyone everywhere. And that's what Bezos is trying to do. And he's the great white shark. And he's the best at this. But it means that I'm gonna try to treat you like a commodity and I'm gonna put downward pressure on everything because I can just transact. And that's what Amazon does better than anyone, transact. They're even better than Walmart now. And then we have all these technological forces that are causing even greater disintermediation. And these are the ones that stick out to me, but I could pick a couple others for creatives, which I'll show you. There was no one better placed to start Airbnb than Hilton. Or Starwood, or Marriott. They know how to run properties better than anyone else on Earth, and they missed it, and now there's an Airbnb. No one was better prepared to produce a publishing platform than the New York Times, or the Washington Post or somebody that ran magazines, or a television station. But Zuckerberg with Facebook destroyed that part of the market with an app. And Uber, I walked through JFK two weeks ago, and there was a giant line of taxis with no one standing, waiting to get in a taxi as the Uber line was flying right by. And everybody's going right over to the Uber line, it's a very different level of experience. But no one was better positioned to do that than the taxi industry, and that's how things are being disintermediated. But for creatives, I wanna talk to you about Fiverr, which says if you're a graphic designer, your work's now a commodity, and I can get you to do it for $5 to $ even though it's art and even though you create greater value than that. That's the disintermediation here. And you've also got UpWork and things like Design Pickle and things like this that are all saying there's downward pressure on you. You have to do something different. And we'll talk about what you have to do different as we go through this. All of this leads to commoditization. We're all being treated now, like this is a commodity, whatever it is you sell. And that you're supposed to have the lowest price. I wanna show you what I learned at Harvard Business School in three years, in one chart, and about a minute and a half of time, so of all the strategy, this is really what it boils down to. You only have three choices as to how to run a business successfully. The first choice is to always have the lowest price. And we love that one. We take price out of the equation and we just say look we have a product, it has features and benefits. You should buy it. We love that because we don't have to be a great salesperson. I just go there's the lowest price. Some people perceive value as the lowest price, particularly Walmart-type purchases, transactional purchases, Amazon.com. But this is not discounting, this is a business model. So when people do this they're doing it intentionally, I wanna corner the market by having the lowest price. And there tends to be one winner. The second choice you can make, is to have the very best products on Earth. That's a difficult thing for most people. The very best product on Earth is the Apple iPhone X. That's not an ad for the iPhone X, it's an ad for the eleven. Because as soon as they have an eleven, I'm gonna buy that too. (audience laughs) This is the best product, and that's the category that they're playing in. In big audiences I ask people for the Samsung people to raise their hand, if they support Samsung. And a few hands go up. And then I remind them that I'm allowed to bring my phone on an airplane, and they're not allowed to bring their phone on an airplane because it might catch on fire. So this is still the best phone. But that's the war with Samsung, right? They're trying to create who's got the better product. And what that does as a salesperson, it says I don't have to be a good salesperson, because my product is so good. The product's good enough to command the price by itself, so I don't really have to do much. For most of you watching this though, you're not in either one of those categories. Most of us operate here in this last column called Customer Intimacy. And Customer Intimacy means I may not have the best product, and I may not have the best price, but the overall combination of the way that I create value, creates more value than anyone else on Earth. And that means I'm really good at developing clients, which is what we call salesmanship right? That means I'm really good at understanding the product mixes, the way to customize it for a particular client, and the way to help them grow their business. So this is the column that most of us play in even though we don't know that. And if you wanna look at the book, it's The Discipline of Market Leaders by Treacy and Wiersema. And it's a little book that you can learn probably everything you need to know about business models in one quick little reading. And ultimately it will help you understand what you're trying to do because you're trying to help create value, and it's probably not because you have the lowest price and it's probably not because you have the best product, because everybody makes good products now. It's probably because it's intimacy. Which means I'm gonna serve you in a better way. And if you're a creator and you're watching this, this is still the place that you play no matter how good your art is. This is what's changed in the world for us, especially in sales. My favorite quote from management guru Tom Peters, who I had the pleasure of meeting a few weeks ago and he was delightful. Everything you would want one of your heroes to be. And I asked him about this quote, I said when you wrote this quote, "The past is gonna look like a mellow prelude" you were not in one of your more optimistic moods, were you? And he said no I wasn't I was frustrated with people not understanding how big these changes were. And he wrote that in 1999. That's not my favorite quote in this deck. This I my third favorite quote in this deck. "If you don't like change, "you're gonna like irrelevance even less." And that's a call for all of us to recognize what's going on in the world, and saying I have to do a better job understanding how to serve clients, and a better job of creating value, because we live in a more difficult world and people are struggling to produce results. So you have to show up and be that value for people. I wanna talk about a traditional buying cycle so you understand what you're looking at. People buy when they're dissatisfied. When we decide to change, it's mostly because we can't stand it anymore. I'm now at a breaking point, I have to do something different. And we, for a long time, have called that dissatisfaction or pain as it pertains to a sales process. I often have people argue with me about dissatisfaction starting this process. But a couple of them have been my favorites. In a giant workshop of 900 people, I had a young woman in the front row say I buy all kinds of things when I'm not dissatisfied. And I said I find that to be very interesting. What is it that you buy when you're not dissatisfied? And she said I buy $800 Jimmy Choo shoes. I didn't know what that meant. You know what it means 'cause you smiled. I had to get help. I'm like I don't know what that means. Apparently what it is, it would be like a shoe if a shoe was some sort of punishment for your foot. And it would be really expensive, and it would look like something you shouldn't be able to walk in, but in fact, women do. And they pay a lot of money for a really, really uncomfortable looking shoe. And I said to the woman, where are you wearing those $800 Jimmy Choo shoes? And she said I'm wearing them to my best friend's wedding. And I said what if someone looks better than you at that wedding? And she said ain't nobody gonna look better than me at that wedding. And I'm like that poor bride! She's got a competitor, this is terrible on her big day. And so I said to her, all the $800 Jimmy Choo shoes in the world are not gonna fill the giant hole in your heart. I didn't say that. (audience laughs) I'm not a monster. I thought it though. I was like you're solving for something else. I would never say anything that mean. I had a gentleman in another workshop say I was so dissatisfied, I bought a new car. And I said, what was wrong with your car? And he said the driver's door window was broken. And I said that doesn't sound like something that would cause you to have to get a whole new car. He goes yeah it was really expensive. I'm like not for a driver's side window, that's not very much. He goes okay, heads up display, 12 speakers, zero to 60 in 3.2 seconds. I'm like there's the source of the dissatisfaction right? It's human stuff. We want things to be different, we need them to be different. But there's some human reason compelling people to change. And so you're always looking for the real cause of the dissatisfaction. The business results are part of it. When someone's solving for art, and they're saying I'm gonna decorate my building with paintings or whatever the case may be, they're solving for something else. I need to make this impression. I need to have clients come in and feel this certain way about me and my company. That's where all of us start this process. So you're looking for this, you're always looking for it. Sometimes we're creating it. The second thing that happens to people when they start to recognize they have a need, is they start going and looking for options. They wanna understand what are my choices, what could I do? And so they recognize this and they say this is the pain that I have right now, I wanna do something. And as salespeoples we step into that gap, and we say, let me share with you some things that you might think about. Once they start to identify their alternatives, they start making decisions. Is this better than that? Should I work with these people or some other people? And that's where a lot of people end up reaching out to B2B salespeople. They reach out to us, in your world, it's gonna be an RFP. You're gonna get an RFP. We've decided that we're gonna change our enterprise resource planning software completely which I think is the same as a colonoscopy, open heart surgery, brain surgery and a root canal all at the same time, right? So they have to be really dissatisfied to get to that point. But they're gonna send an RFP to say I wanna look at what my choices are and I wanna weigh some alternatives. At the end though, everybody comes to the same point. I'm concerned, is this the right decision to make? Is it too much money? Do I trust these people with my business? Are they gonna be here to serve me? Is my boss gonna think I made a good decision here or am I gonna be under fire for making a bad decision later on after I've already made a bad decision? All this stuff is going on at the same time. So I wanna give you two little ways to think about this because I want you to understand this is all about individuals and people that you serve. And there are needs that human beings have. Anthony Robbins told us from Maslow, I stole it from Robbins, I decided to steal it back. If he can steal it, I can steal it. There are certain things that tend to be common in human beings, that drive their behaviors, even in buying situations. The first thing that people want in most cases is certainty. And so when you call on someone and they have a lot of concerns, it's because you look like a risk. I think the risk is too great. So what you do to serve people like this is you give them certainty. Let me show you how I'm certain that this will work out for you. Let me give you references. Let me get you on-site so you can see this work. I wanna make sure that I take care of that need for people. The other need that some people have that's the opposite of this, 'cause you're human beings and we all have all six of these needs, is they need variety. They need something to be different. One of my best friends jumped out of an airplane this weekend. For his 50th birthday because he wanted variety. And he told me they take you to the edge, and then because he did a tandem, they just jump out over you. And you don't have time to be afraid. I said were you? And he goes yeah. It ends up that his state changed very quickly because he was going 112 feet per second on the way down. So your state changes very quickly. And then the chute opens and you get another state change. Like this was a good thing that the chute came open. He described that to me. Love and connection belongingness is large part of why human beings prefer other human beings. And we don't like to talk about this. And in fact in the world of sales right now, a lot of the conversation is around relationships not mattering anymore. And that's because the world's getting pulled in two different directions. One direction is transactional, the other direction is super-relational. Those are the ways that people are getting pulled. And people misunderstand this. But I would challenge you and this audience, B2B people, to think about that client where you show up at their site for an hour long meeting, and three hours later you're trying to figure out how to get out of that room. You're like I can't spend the whole day with them. But you're like the best friend they've had and they wanna keep talking and they enjoy your company and you're actually working on stuff together. That's belongingness. They wanna feel something and they want that relationship. And people want this at different levels, but it drives their behavior. And then we get to the big one, significance. I'm important, I need you to recognize how important I am. I have friends that are like this. They're driven by significance. They write books, they give speeches, they stand up and do workshops, they're really troubled, troubled souls, my friends. Not me, I'm talking about my friends. I've got this all covered. You can see it in their clothes, you can see it in the car they drive. The signs are very clear when someone needs the significance. And when they need that, that's what you give them. You make sure that they understand these things. And then there's a couple others. Growth, some people just need to get better and they're always looking for what's the new thing? What's the next thing? How do I grow? How do I be more, do more, have more? And then finally when you've met all these needs for most people you just get to contribution, how do I give back? How do I serve other people? But I'll tell you, the choice for you here in this room, is you can just go to the end and start with contribution right now and that's okay. You can say how do I help other people and you find out it's probably the best thing you can do. If you're at home you have to look at it this way, this is my lens, and when I'm looking at people who are inside the buying process, I'm looking at them through this to say what's driving them and how do I give them what they need? If they need certainty how do I give them that? If they need variety how do I give them that? How do I frame this up in a way that serves them? And this is very much like Maslow, which you got in high school probably. I just wanna make one note about this. Basically the lower someone is on this, if the business is trying to survive, it's gonna be a price-conscious, certainty-based decision. And when it's up here at the top and the company's doing great and the leadership team is enlightened, you're gonna find out that most people are looking for how do we create greater value for other people? How do we get more strategic? Everyone's somewhere on this continuum. This isn't the only way to view this though, and I'll share with you my view now. I think the buying cycle has changed. I think for a lot of people what's happened is the status quo is so deeply entrenched, and there's so much fear post the recession, and in this difficult business climate that people decide I will do nothing. I just won't change at all. And so we have to go in and compel change so that they actually do what's in their best interest moving forward. So this means we come in and we create dissatisfaction. We start teaching them. There are factors that are gonna impact your business, if you don't do something different now. That's a different role for salespeople, and I'll just tell you the difference. On one side, the traditional way, we're looking at this saying they have dissatisfaction and I'm gonna respond to that dissatisfaction. On the other side though, we're stepping in and saying if you're not dissatisfied, you should be. There are things that should be causing you to change, so that you can serve your clients better. And in this environment I showed you Airbnb and I showed you Facebook and Uber, in some cases you need to change to survive at all. If your business doesn't change to live in the digital world that we live in now, you're gonna fall behind and you're gonna lose market share and eventually you'll go the way of a dinosaur. I have a slide that I used to teach this to people, of a tyrannosaurus rex, to remind them that even the largest, mightiest of all dinosaurs went extinct when the extinction event occurred. And that can happen to a business too. Once you do that, if you build consensus around this, and you say this does look like the right answer and everybody agrees it's the right answer, what tends to happen is that you eliminate a contest altogether. Even if the company lets an RFP, even if they ask other people for quotes, the fact that you came in and initiated the change, described the change, built consensus around the change, collaborated and built that solution, it's easy for people to say I wanna work with these people. These are the people that helped us do this. So this is the world that we live in now. And it's a dramatically different world. So if you're B2B the way that you wanna think about this is in some cases, somebody's already gonna know what they want. That's one case. The second case is for most of us, with our dream clients and our targets, and even leads that come in, we have to step in and say there's a very good reason for you to change. There are trends and things that are changing right now that are going to cause you to have problems in the future and opportunities in the future. We need to look at that so you can decide to do something different now. This is how buyers really buy. A lot of it has to do with human psychology. And when I'm asked what books I read on sales, not very many. Just my friend's. Most of the time I read psychology because helping human beings means understanding human beings. And that's why we start with how buyers buy. And now again, we have time for Q and A. Do we have anything online?
Yeah Joanne asks do you ask personal questions to find a common denominator between you and the buyer?
Do I ask personal questions?
How personal do you get with the questions?
Real personal, but not in that order. And this is the thing that I would say to Joanne who sent the question, and thank you for the question. I think right now, if you're calling on a business person, you do not wanna step into that relationship and say you have kids that play soccer? I have kids that play soccer! We're exactly the same, we should do business together. And they're like, wait a second. There's this great video on YouTube of a guy that walks into an office and says I see that it's fish on the wall, tell me about this fish. And he goes into this whole thing, it's not even the guy's office, he's in his partner's office, he doesn't fish. You know so you're always trying to find these things like what do I hook on to? I find that if you decide to do the business agenda first and say here's what I'm hoping that we can cover, and then I'd like to ask you some other questions, that's always enough. And if you wanna get into it, because there's not one right answer for this. If you're in Alabama, you're probably gonna do a lot of rapport building at the beginning of a call 'cause that's more of a southern custom. If you're in New York and you start asking me about my kids I don't have time for you about that fast. So you may just ask, tell me how long you've been here. Tell me how you ended up in this role. What were you doing before that? And that tends to open enough personal things that you get a sense of the individual. That's my recommendation. Start with the business first. But if you're gonna do that, don't ask super personal questions, just ask 'em where they came from and they'll share enough with you that you can work with it.
Is there anybody in the audience who would like to ask a question?
Yeah I have a question. So this is the fast is slow and slow is fast thing, maybe you answered already, but salespeople usually have a quarterly quota that they have to close otherwise they don't get commission. So what do you advise, how do they manage the cycle? And if they're going too slow, they're not gonna make the commission. If they go too fast, they're gonna lose the deal. So how do you balance it? Maybe you answered it already when Michelle asked.
No, no I'm happy to answer it again in another way. The question is how do you manage fast is slow and slow is fast when I have a quarterly quota? The problem with having a quarterly quota for most of us, is that the work that you could do inside a quarter would not get you your quota anyway. That's the biggest challenge. So the best time to plant a tree was 100 years ago. The second best time to plant a tree is today. And so what happens is they end up behind in a quarter, not because of what they did in that quarter, but because of what they did three quarters or four quarters ago. And so ultimately to go fast, you have to go slow, but what that means is that you have to do all the work that's necessary in this quarter to produce that result in a future quarter. And we have somebody here who sells a very complex solution, that can be 10 years? A 10 year sales process? Yeah. And the best time to start that process is right now because they have to go through the process of deciding to change. So what should a salesperson think about this? They have to think about every day mattering. And if you're watching this at home, you have to think about every day mattering. You can take one day off from prospecting and nothing bad happens to you. You can take a week off and nothing bad happens to you. No one comes around says anything like hey, you can take a quarter off and nothing bad happens in that quarter. But four quarters from now, now you're in deep trouble. So you had to do the work when it was necessary, and you can't make it up. I've checked this. I've checked it everywhere I could, there's no way to cram success in sales. There just isn't, there's no cramming. It was great for me in high school and I was particularly good at it in law school, I could cram really, really well. But turns out for sales, you just have to do the work when it was due.
Talking about creating dissatisfaction and building consensus. Selling software into medium and enterprise companies, frequently we hear, well we're really heavily invested. And how do you move people? And they'll be very forward in saying yeah it's not great, we're not happy, but we're really heavily invested. How do you deal with that?
I love that question. There's other software people here too. Here's probably what the primary challenge is. The primary challenge is that you want the software to do the work of replacing the competitor. And the software by itself probably isn't enough. So there has to be something else that should compel them to change, that's outside of just swapping out the software. And even the dissatisfaction around the software. So what you wanna do is try to move up as high as you can to say if you continue with this software right now, and you continue to have these challenges, then these challenges are gonna grow over time, and here's why. And I wanna be able to talk about trends that are impacting their business, that are causing them to need to do something different. And I wanna be able to come up with a compelling case of forces outside. That means if you don't change the way that you're operating your business now, eventually you're gonna have an event where this doesn't work for you anymore and you lose clients, you lose market share, you lose profit, all of these things. You have to get to a higher level of value than just the dissatisfaction with this software doesn't work this great. What does the future look like when they don't change? So you're gonna have to move up to a much, much higher level of reasons to change, which tends to be environmental. I'll just give you an example, and I'll give this example a couple times. I came out of staffing, so I know a lot about the labor markets. So right now in the United States, and I'll repeat this later on, there are 11,000 baby boomers retiring every day. That's 4.3 million baby boomers retiring every day in the United States. To just replace them in the jobs that they're in, takes 358,000 people a month. And we're producing about 211,000 new jobs a month. So we're already with a massive deficit. They're gonna go on Medicare and Medicaid. And that means your cost for those services are gonna go up. Because such a big generation is going on them. And you're gonna have trouble finding people to replace them because they don't have the skill sets. I wanna get up to that level where I'm having a conversation of that wide change that has nothing to do with what I sell. Except it has everything to do with what I sell. That's a tricky answer. We'll dive deeper though, and I'll try to serve your more with that later on.