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Archive for March, 2012

Defending Price or Selling Value…

What do IKEA; free breakfast; and the memory of my Dad have in common with selling value?  (Really Gary?  Slow day?)  No, really. 

I visit the IKEA cafeteria some Monday mornings.  Since they opened in 2011 they’ve offered a Monday morning breakfast special – free breakfast.  Free – my Dad would be proud. 

It’s a simple affair; scrambled eggs; potatoes; two strips of bacon; and coffee.  And the setting (if you’ve never been in an IKEA store) is a large cafeteria, in a “very-big-box” retail store (400,000+ square feet big).  The parking lot at my office borders the IKEA store, so it’s a short walk for a free breakfast.  Free. 

Let’s pretend you are the sales rep and I am your prospect.  If you were selling me the value of this IKEA breakfast, what would you focus on?  Go on – take a moment and write it down.  We’ll come back to it. 

My fellow sales professionals have worked with me recently on ways to articulate value during their sales process.  In my opinion, selling value (vs. addressing price) is a huge challenge for us.  There are many reasons for this, but generally, I believe value tends to be vague; usually varies by person; and can be very hard to quantify.  

Our prospects often gravitate towards price, don’t they?  And we can inadvertently help this migration by offering things like TCO or ROI calculators.  Guess what the calculators drawn the prospect’s attention to?  Hint – it’s not the “Return” (that’s the number we came up with); it’s the “Cost” in the TCO or the “Investment” in the Return on Investment.  Unlike value, cost is specific; measurable; objective; and doesn’t vary by person. 

My Dad was a “Depression-Era Baby”.  That meant was he was very cost-conscious.  No matter how hard a salesman tried to sell him value, ultimately the price was the determining factor.  I suppose growing up in the Depression had that effect.  When you own little and make even less, everything seems unaffordable. 

In spite of our recent recession, I think we still live in an era of affluence.  However, we don’t like to pay high prices – that’s why prospects often pit sales people against one another to compete for their business.  Do you compete on price?  Your prospect hopes so: 

The Law of the Marketplace: 

If only one price can be obtained for any quotation, the price will be unreasonable.

                                  Unknown Sage 

And who doesn’t enjoy getting a deal? 

         It’s not the cheaper things

That we want to possess

But expensive things

That cost a little less.

                                  Rolf B. White 

An accurate depiction of my Dad’s perspective.  He preferred the higher quality; he listened to the sales presentation featuring value; he just wanted it to cost a little less.  And if he had to make a choice, price often won out over value.  (Although occasionally, he was able to obtain both – and that made for a very good day.) 

Like a free IKEA breakfast on Monday’s – it definitely fits the definition of “a little less”.  My value?  Hint – it’s not the price.  It’s getting out of the office for a few minutes of quiet time to work on a project.  It’s the pleasant, outdoor walk in Colorado sunshine. And it’s the fond memories of my Dad.  I’m visualizing his proud smile as if he joined me for the free breakfast. 

Curious – are those the value statements you wrote down? 

GAP 

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Techno-speaking…

OMG! Just when we thought we had all of the typical acronyms in the technology business figured out. 

Using techno-speak, acronyms and other, made-up stuff is unfair, don’t you think?   I mean the English language is complicated enough.  Add in txting (which I thought was a universally accepted, misspelled shorthand; but come to find out it’s just me who is misspelling it universally); or SMSSocial Media Shorthand (OK, I made that one up; LOL!); and how can one be expected to communicate clearly today?  

It’s not a new challenge.  David S. Pottruck once told us; 

E-mail and voice-mail have, of course, exacerbated the problem in the last ten years.  Unfortunately, for all their convenience, these innovations have made it much easier to believe we are communicating when we are merely informing; if I have e-mailed you, you know it. This presumption frequently escalates from knowledge to understanding, then to consent, and finally to the delusion of wisdom. 

Ah yes- if I have e-mailed you, you consent.  How many times have we made that erroneous assumption?  Here are a few others. 

BAM – I assumed this was a word (silly me).  You know, like, “I was driving to work and BAM I realized today is our wedding anniversary and I haven’t bought a card or a present for my wife yet.  But no; as it turns out, BAM actually stands for Business Activity Management

And then there’s BOOM, which, again, I thought was a word.  As in, “When my wife realized I had bought her anniversary gift at the 7-11 on my way home from work that night, BOOM, there went the last chance for a “romantic” evening.  But no; as it turns out BOOM actually stands for Business Opportunity Optimization Management. (Who knew?) 

Do you think whoever created these terms ever combined BAM with BOOM?  (Don’t get me started!) 

Is it because the typed word is replacing the spoken word in our business world today?  To type as fast as we talk we created acronyms, short-cuts, and a new, techno-speak language, K?  In a pinch, we resort to voice mail (hoping the other party doesn’t actually answer our call because we’re too busy to converse).  That’s not good: 

Masquerading as a better way to put everyone in touch, e-mail (and voice-mail) have become incessant distractions, a nonstop obligation and a sure source of stress and anxiety.  I expect that a public statement by the Surgeon General is in the offering.

 Seth Shostak  

I also became acquainted with CAO, not to be confused with Ciao, which of course is Italian for both “Hello” and “Goodbye” (nice to see confusion is an international pastime).  CAO refers to the Chief Accelerator Officer.  And if your CAO is Italian, that means he is capable of doing business, as well as saying “Hello” and “Goodbye”, very fast!  

Maybe the thinking behind the creation of these terms originates from those childhood years where every kid received a ribbon – whether they finished first, or last – everyone was “special”.  Is it those same kids, now adults, who have created their own business role with its own acronym?  Is everyone “special” again? 

Call me kooky, but BAM sounds a lot like my manager; I think I spoke to BOOM the other day when I was ordering a pizza and being up-sold extra toppings and side dishes; and this morning I’m with a CAO – there are hundreds of them – they work at Starbucks. 

GAP (oops – my bad!) 

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The power of “culture”…

Business executives (and sailors, I suppose) know how to use every means at their disposal to fuel company growth, true?  Three examples are “change”; “culture”; and “acquisition”.  There are many others. 

Some of the most successful companies have used “change” as their fuel: 

It is not for nothing that Bill Gates likes to say that at Microsoft they know one thing:  In four years, every product they make will be obsolete.  The only question is whether Microsoft will make it obsolete or one of its competitors will.                       

We would certainly list Microsoft as one of our most successful companies.  Of course, many of us “end-user-types” have disliked their penchant for forcing “change” by architecting product obsolescence (remember Windows Me and Windows Vista?). 

In recent times the “acquisition” tactic has replaced organic growth at many companies.  But when you buy another company, what can you expect from the employees that come with the deal?  And visa versa; what will the new “culture” be?  

During an “acquisition” Leaders employ interesting vocabulary with their employees, true?  Citing our favorite Unknown Sage: 

“EMPOWERMENT”: 

A term meant to give survivors of restructure the illusion they have a role in the company’s future. 

In my professional career, I’ve observed how a company’s “culture” can drive tremendous growth.  What I like best about “culture” is the contribution every employee makes.  “Culture” gives us all a sense of adding value. 

Take ADP for instance.  Led by Josh Weston, ADP grew from a $350 Million payroll service bureau in 1979 to a multi-billion dollar, technology services titan.  Weston, a US Naval veteran, as it turns out, was CEO from 1982 to 1996, and retired as Chairman in 1998. The company had a string of 164 consecutive quarters of double-digit, Earnings-Per-Share growth (41 straight years!) – unbroken during his time at the helm.  

ADP leveraged the “acquisition” tactic, too.  And then they imposed their “culture” on the acquired company.  Sadly, ADP’s recent Leaders have not sustained the same “culture” of success that Josh fostered.  Is it because they weren’t sailors?  I’m not either, but our Unknown Sage was: 

            Don’t panic – Jack was every inch a sailor.  

Speaking of the Navy, another Leader wrote a best-selling book from the powerful “culture” he built at sea, It’s Your Ship: Management Techniques from the Best Damn Ship in the Navy

To find out why people are leaving I assumed that low pay would be the first reason, but in fact it was fifth.  The top reason was not being treated with respect or dignity; second was being prevented from making an impact on the organization; third, not being listened to; and fourth, not being rewarded with more responsibility.  Further research disclosed an unexpected parallel with civilian life. 

D. Michael Abrashoff 

The most powerful business “culture” in civilian life that I ever experienced was at Oracle Corporation.  Oracle’s revenues grew from $26 Million in 1985 to $1 Billion in 1991 – six years.  I was there from 1989 to 1991; what a ride!  

Although Larry Ellison’s CEO-persona was legendary (still is); and as it turns out, he sails, too; it was the power of the Oracle “culture” and the contributions of every employee that fueled this unprecedented growth.  I wonder if Oracle’s “culture” today has waned and their growth morphed to pure “acquisition”? 

Here’s hoping you and your colleagues are excellent sailors; don’t panic; and fuel your company’s growth through a powerful “culture” this year. 

GAP 

Did you like this little ditty?  You might enjoy my book, too:  The Peace & Power of a Positive Perspective©  Please check it out Subscribe.