Art Of Value

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To Increase Value, Create an Experience with Joe Pine – 099

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Creating an experience means that work becomes a performance for which you charge an admission fee. What would you have to revise to sell a ticket to engage with your business? The answer to this question can launch your business beyond the first three stages of economic value–commodity, goods and services–to the fourth stage, the experience.

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The Progression of Economic Value

  • What is the most important thing you can share about pricing?
    • You are what you charge for.
      • If you charge for undifferentiated stuff, you are a commodity.
      • If you charge for tangible things, you are in the goods business.
      • If you charge for the activities you and your people perform, then you are in the services business.
      • If you charge for the time your customers spend with you, you are in the experience business (staging a memorable and engaging experience).
      • If you charge for the demonstrated outcome your customers achieve, you are in the transformation business.
    • There is no more economic value you can provide than to help someone achieve his aspirations.
    • Goods and services are no longer enough, as consumers only care about price.
  • What do you mean by “What would we have to do different if we charged an admission fee”?
    • An admission fee is charging for time.
    • Companies give away their next level of value to better sell what they have today.
    • IBM means service, which meant that they gave away whatever service you wanted, as long as you bought the product.
      • Eventually, they realized that the people only cared about the services and the equation flipped.
    • Think about how you charge for time to align what customers value with what you charge.
    • Assume you are charging an admission fee and you will acquire the wherewithal to create a great experience.
    • We increasingly pay people for our experiences.
    • When you made a birthday cake from raw ingredients, it was less expensive than the value created in a cake mix.
      • Then you would order a cake at a bakery, and it is more expensive than the mix.
      • Now you outsource the whole party to Chuck E. Cheese, and it is even more expensive.
    • You create more value as you step up the progression of economic value.
  • What would it take for a hotel, doctor or bank to create an experience?
    • Some hotels now charge for 24-hour periods, realizing that they are charging for time, not just activities.
    • In the healthcare industry, the better the patient experience, the better the outcome.
      • Waiting rooms are one of the worst parts of the healthcare experience.
      • What if you could immediately get into the flow of care, even if it started through technology?
    • Most banks made the lions share of their profits off fees when you make a mistake.
      • One bank started charging for people to talk to a teller vs. use the ATM.
    • What if you “charged admission” and made it worth it to visit with the live person?
    • ING wanted physical touch points for its virtual banking services and created cafés across the country.
      • They charged for the coffee, but not for admission, to signal there was a real business.
      • The barista then engaged you, talking about your financial needs.
      • Many banks have a café bar because it engages all 5 senses and it's where people want to spend time.
    • Banks have an untapped resource, knowing what people are spending and for what they are spending it.
    • Money is a means to an end, so the key is what is the end?
    • If you can ascertain what a customer's aspiration is, and focus on helping them achieve it, you will create much more economic value.

Creating An Experience in Business

  • How can a small business create an experience for the customer?
    • Recognize that when you are in the business of staging experiences, then your work is theater.
    • Whenever you and your employees are in front of customers, you are on stage, and you need to figure out how to engage the audience.
    • The original Geek Squad was costumed and drove around in Geek Mobiles, providing a computer repair experience.
    • The goal was that the experience was so great that consumers would look forward to having their computers repaired.
    • Today the experience is the marketing.
  • What are the four types of theater?
    • The one people recognize the most is improv, making it up as you go along.
    • Platform theater is like a Shakespearean play, without making anything up.
      • It is good if customers are watching you work, but are not interacting with you.
      • For example, FedEx employees are always supposed to walk quickly to give the impression of speed.
    • Matching theater is like film or TV, where you film different performances, and they are matched together.
      • All of the potential interaction points with the customer have to match.
    • Street theater seems like improv, but the performers change routines, mixing and matching them to create the right performance at the right time.
      • They need to have a great ending and are able to work the audience.
    • The big idea is the same whether it is a big business or small business. There is a tremendous opportunity.
    • If you do not create theater (experience), you will become commoditized.
    • What is your organizing principle for your experience?
    • Once you have that, you can create a cohesive experience that everyone can be engaged by.
  • What is ING-ing?
    • Any word that ends in “ing” is a gerund, which makes a thing into an activity.
    • Start playing around with “ing” words and how you might change them, like the door opening experience, the waiting room experience, or even making up words.
    • TST Engineering in Ft. Collins, Colorado, developed a theme that they are dream makers for their customers.
      • When they built their offices, they put in a slide. At the signature moment, they take the customer to the second floor and they slide down to the first floor.
  • Could creating an experience help rescue the medical industry?

    • Yes, this could help them overcome the regulation and insurance mess by creating an experience.
    • Vance Thompson Vision designs its buildings like an eye, such that it is listed as a tourist attraction.
    • Most professional services need to think about why their customers are coming to them.
    • In medicine, you want to go from sick to well.
    • With accounting, you want to take home the most money and not go to jail.
    • Think about “from to” – how do you take the customer from where they are to where they want to go.
    • Go beyond just the project into thinking about the relationship with the customer. It takes a series of experiences to affect the transformation you want.
    • Starizon was created because of page 193 of The Experience Economy. It created an experience design place to get customers to come to their location.
    • They have a 25% Transformation Guarantee–25% of the price is completely at the customer's discretion to pay all or none of it.
    • The art of value is aligning what you charge for with what the customer values, which is either the experience or the transformation, not the activity.

Discover the Customer's Sacrifice

  • What is “customer sacrifice”?
    • Mass customization is about efficiently serving customers at a low cost.
    • Customizing a product turns it into a service; customizing a service turns it into an experience; customizing an experience turns it into a transformation.
    • A key measure is customer sacrifice vs. customer satisfaction.
    • Customer satisfaction is about meeting expectations, which might not be the best measure.
    • Customer sacrifice is the ideal offering the customer needs and what they have to sacrifice when they settle for only what they can get.
    • To uncover where the customer is sacrificing, do ethnographic research – observe your customers when they interact with you.
      • If you can uncover this area, you have found gold.
    • When you find a sacrifice with one customer, others are likely going to sacrifice similarly.
    • Look for a common uniqueness to customize your service.
  • Is there a cable TV provider that is creating a true experience?
    • Roku and Apple TV might be close to allowing a consumer to choose their channels and put them in the order they would like.
      • No one is doing this well yet.
    • What you really want is one channel, which will show you what you want to watch next, based on your viewing habits.
    • Dumb products are becoming smart and smart products need to become genius products.
  • What is one of your best stories about creating value for a customer?
    • One of the greatest impacts was with a European company who wanted him to do a workshop on mass customization.
    • They found a brief window to do a workshop.
    • Through that workshop, they created a mass customization experience, which is running still.
    • He met the needs of what they had at that time to jump-start their endeavor.
    • It is not about the time you spend, but how much you impact them.

About Joe Pine

Joe is the co-founder of Strategic Horizons. He is the author of 6 books, including The Experience Economy. He's written for the Harvard Business Review and Wall Street Journal. He has taught and spoke at MIT, Harvard University, Penn State, and UCLA. His personally stated mission is to help improve the economic value of your business.

Value and Pricing in the Enterprise with Matthew Habuda – 094

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After discussing the limitations of hourly rates in a Facebook group, Matthew Habuda decided to give value pricing a chance. He started with a small project and progressed to a Fortune 500 opportunity. Along the way, he had to convince the customer and subcontractors it was the right decision. He shares his results and why he will never bill by the hour again.

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Top of Show Resources

The Switch to Value Pricing

  • What is the most important thing you can share about pricing?
    • Embrace what you are worth.
    • Give yourself credit for what you bring to the table; do not devalue it.
    • Most people tend to price themselves below market value.
    • You are more likely to be accepted and engaged by your clientele if you put the real value on the table.
  • What is the story of your switch to value pricing?
    • He came from traditional consulting firms where everything was done by the hour.
    • He adopted it because he saw it as the industry standard.
    • His potential customers always led with, “What is your hourly rate?”
    • He hit the top end of the hours he had available to trade.
    • He was getting faster and his product was getting cheaper every day.
    • The projects were getting bigger and that raised the question.
    • The size of a new initiative was completely out of his pricing model.
    • He could not do all the work alone and the client did not want to accept the hourly rate for the subcontractors because they were not as experienced.
    • A bundle of services was required to offer the real value.
    • It is more challenging to use an hourly model with a virtual business than an onsite model.
  • Did the customer embrace or resist the switch to value pricing?
    • Initially, the customer was hesitant because of hidden costs.
    • The conversation naturally moved from people to deliverables.
    • The customer was glad he didn't have to track hours. It saved the accounting team a lot effort to review the invoices.
    • His invoice was reduced to 6 line items with a fixed fee.
    • The support work was simplified for both.
    • A results-based compensation model was added to the deal based on reaching a specific due date.
    • Value pricing incentivizes finding wins for the customer.
    • The ongoing relationship is one of the biggest benefits.
    • The customer understood he wants to take care of their needs and his team.
    • It has led to a lot of referrals.
    • His take home was about 7% higher than it would have been otherwise.
    • The real win was the fact that his subcontractors made 15% more.
    • Each sub had a fixed dollar figure they were awarded based on the number of courses they facilitated ahead of schedule.
  • Did your subcontractors embrace or resist value pricing?
    • Tracking hours is the biggest nightmare when you are a consultant.
    • It turns into 3-5 extra hours of work at the end of each week.
    • The subs enjoyed the change and asked if they could work on more projects like this in the future.
    • Nobody went to college to learn to fill out a timesheet.
    • Some firms allocate 5 hours per person per week to fill in timesheets and expense reports.
    • In a consulting world where 70-80 hours per week are common, giving those hours back makes it easier to retain good employees.
    • By 2025, it is expected that 50% of the employment base in the accounting industry will be contract-based employees.
    • Gen 20/20 is playing by a different set of rules. They want to be rewarded based on the quality of the work, not the number of hours.
  • How has your business evolved since the switch to value pricing?
    • After 18 months, it has been a huge success for the larger projects.
    • Smaller customers struggle to make the mental transition of value for money.
    • He explained to customers who wanted the hourly model, that it would take longer and cost more to deliver the same thing.
    • Some of the smaller companies feel they need “control” by monitoring the hours.
    • Customers have embraced the upfront payment because they feel they are invested together.
    • Once customers see his vision and values being aligned with their objectives, they are comfortable paying 100% up front.
    • They understand he can operate at the highest level efficiencies by not waiting for a check.
    • It is OK to negotiate payment terms based on the budgetary constraints of a customer.

Using Performance-Based Compensation

  • Do you use results or performance-based compensation?
    • 90% of his contracts have a results component.
    • For new developments, reward-based compensation kicks in when they achieve the goal of the customer being fundable.
    • Additionally, by reducing a company's overhead, they are rewarded based on a percent of the savings.
    • You are willing to work very hard to achieve reward-based compensation.
    • Selling into organizations, who want you to be as invested as they are, opens the door for this type of compensation.
    • Competitors are still using fixed time and materials compensation with no guaranteed results.
    • Deliverables and scope are clearly defined in the proposal.
    • Objectives can be beyond the control of the consultant, so they require metrics to measure  the results.
    • Cultural adoption and other objectives are harder to develop metrics for compensation.
  • What pricing experiments have you tried that worked or not?
    • Post-implementation surveys gave vague numbers so it was hard to tie compensation to it.
    • Working with supervisors to capture champion moments worked better, allowing them to earn a certain percent based on each moment.
    • You have to trust the customer to pay with that method.
    • To implement the champion moments, they had to work closely with the front-line supervisors, who are learning how to participate in and supervise it.
    • They are able to highlight their personnel, putting both in a positive spotlight on a weekly basis.
    • There are also rewards given to the manager and the employee to incent them to report it.
    • This method allows you to develop a long-term relationship.
  • What changes have you made to your project management style?
    • They needed a little more flexibility.
    • Deliverables with deadlines drive where they put the efforts, allowing for more flexibility, as opposed to how many hours are worked.
    • The whole team might work late when necessary, but they can leave early on Friday if they want.
    • The team appreciates it and has become a unifying goal among the members.
    • The unity demonstrates to the customer when can happen in their organization.
  • What is one of your best stories about creating value for a customer?
    • A non-profit organization runs conferences for adopting or fostering mothers.
    • Not one penny was earned – their success was his success.
    • The faith they put in Matt allowed them to completely fill their conference.
    • Since he had structured other deals to make his company financially stable, he was able to do pro-bono work to achieve something significant.

About Matthew Habuda

Matthew Habuda is the founder of Habuda Consulting, specializing in strategic planning, culture and effectiveness for executives and middle management. He was previously a consultant at one of the Big Four accounting firms. He is a graduate of Oral Roberts University.

Learning the Art of Frame Control with Oren Klaff – 093

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Oren Klaff is an expert at pitching and closing multi-million dollar investment deals. His closing rate is high because he has mastered the art of frame control. Frame control helps Oren capture and keep the investor's interest during a presentation. The same concepts apply when you are having a value conversation. When you encounter resistance from the customer, frame control can help redirect the conversation and stay focused on discovering value from their perspective. We include a live demonstration of frame control at the half-way mark and again 10 minutes before the end of the episode.

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What Is Frame Control?

  • What is the most important thing you can share about pricing?
    • Most the pitches that request Oren's help include features, benefits, and economics early in the presentation.
    • However, once you start discussing price, the meeting is over.
    • It is not a good method for selling products and services.
  • What is the “croc brain”?
    • Think of the mechanics of how the brain functions.
    • How you talk, speak and calculate come from the neocortex (smart part of the brain).
    • When you meet someone and start a conversation, the information coming from your neocortex is going to their crocodile (lower) brain, which manages new information.
    • The crocodile brain is wondering if the information is something it wants to eat or kill.
    • You have to work your way upward, past the crocodile brain, and into the midbrain before you earn the trust necessary to get to the neocortex.
    • Features and benefits cannot be understood by the crocodile and midbrain.
    • Tailor what you say to the way the brain works.
    • Once you have a good pitch, it should work for anyone.
    • Rock bands and comedians do not change their shows based on where they are performing.
  • What is frame control?
    • In any social interaction (which includes sales and business), you cannot have two different perspectives for the same product or service and achieve a deal.
    • A frame is simply a perspective.
    • Looking out different windows gives different perspectives, resulting in different emotions.
    • People have to look at the same deal from the same window.
    • Frame control is about getting people to see your highly differentiated service as high value and worth the high price by seeing through the same window.
    • Frame control is giving someone a lens to see what you see.
    • A buyer's frame is that he usually thinks that his money is the most important in the world and that he is in control.
    • Gain frame control through a process called “prizing.”
    • The prize to win in the meeting is you because you are the only one who can do what you are selling.
    • Communicate that theory clearly by avoiding status-reducing statements and controlling the meeting.
    • This method does require you to take a risk.
    • No one wants to come to a meeting to talk about themselves; they want to learn things they do not know.

[clickToTweet tweet=”Looking out different windows gives different perspectives, resulting in different emotions.” quote=”Looking out different windows gives different perspectives, resulting in different emotions.”]

How to Be the Alpha

  • Should you give a presentation or start by asking questions?
    • You should be able to pitch one-on-one with the power of ideas rather than decks.
    • Decks are used to get the meeting, but not necessarily at the meeting.
    • Getting asked questions can be laborious.
    • A cold read lets the buyer know it will not be a boring presentation, but rather you have done your homework, and you are willing to take risks.
    • The mind understands when you are taking risks.
    • When you as a seller use your intuition and experience to read the customer and tell the customer what you are seeing, it demonstrates a sense that you know what is happening.
    • Even if you get it wrong, you will get respect because you are taking a risk.
    • Avoid having the conversation that they have had five other times.
    • Skip the weather or sports talk, as it chews up time.
    • You only have about 20 minutes from a buyer before he starts to tune out.
    • Have an agenda and make the most compelling argument while the buyer can pay attention.
  • What are the common opposing frames and the proper response?
    • Technical and social games tactics are laid out in chapter 4 of Pitch Anything.
    • The most common frame is the power frame.
    • You can combat it with the moral authority frame.
    • It is slightly immoral for a large company to grind on a small company to get a financial advantage.
    • Large companies should want their vendors to be around and deliver for a very long time.
    • Small companies disappear when they do not have good margins.
  • What is a beta trap?
    • There are alphas and betas in the animal world.
    • In a business meeting, you know which one you are from your internal sense of who is driving the meeting.
    • Recognize it when the other guy has trapped you into a low-status, supplicant position.
    • The free 6-Minute Pitch course can help you figure out how to get out of beta traps.
    • Most presentations start with information, which creates analysis.
    • Analysis is done with the cold, unemotional part of the mind.
    • If you are trying to open or close with information, you put the buyer's mind in a cold state.
    • The goal is to capture the information with stories or narratives that are compelling and create a want in the buyer.

[clickToTweet tweet=”You only have about 20 minutes from a buyer before he starts to tune out.” quote=”You only have about 20 minutes from a buyer before he starts to tune out.”]

Why Now vs. Why Me

  • Why is “why now” important in a sales conversation?
    • Try to demonstrate how the world is changing, positively and negatively.
    • For example, the next generation of business will leave behind the executives who do not have basic computer skills.
    • When you demonstrate a new world order, then the customer wants to know what solution you have that fits in the new order.
    • Why now has to be characterized and structured into how things are changing in the macro.
    • You can approach it technically, economically or socially.
    • Why me is largely implied by your interactions.
  • What is the role of neediness in a sales conversation?
    • Neediness tends to show up at the beginning and end of a meeting.
    • The real meeting happens in 20 minutes; everything else is discussion, relationship, and rapport.
  • What is one of your best stories about creating value for a customer?
    • A customer shared his presentation to raise money for his company.
    • It was so bad that Oren asked who told him to do it that way.
    • The customer told him it was a board member who had used the method 15 years ago.
    • Oren's team was then able to help him fix the presentation to move forward more effectively.

About Oren Klaff

Oren Klaff is the author of Pitch Anything. At his day job, he raises funding in capital markets for Intersection Capital. He is also the co-developer of the Velocity, a proven framework to create a winning financial presentation.

The Mental Health of the Entrepreneur with Cory Miller – 091

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Mental health is a tabu subject. And that is exactly why Cory Miller is sharing his story. He went through a divorce, and one of the effects was depression. It affected his ability to lead his team and make decisions in his business. Fortunately, he had an attorney who recognized the symptoms and suggested he see a counselor. Now, on the other side personal tragedy, Cory is telling entrepreneurs to pay attention to their mental health. He has done what few people would ever do. He was interviewed for Inc. magazine about his experience and is speaking openly at WordCamps across the country about the danger of poor mental health to your business and family.

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Get to Know Your Customer

  • What is the most important thing you can share about pricing?
    • Pricing is a part of a larger negotiation between the buyer and seller.
    • When you offer significant value, price does not matter; it is just a formality to pay it.
    • Price is the start of a negotiation.
    • It is bigger than a negotiation over a number.
    • It is a negotiation of value between buyer and seller.
  • What is the foremost pricing lesson you have learned at iThemes?
    • Know your customer to the core.
    • Provide exceptional value for the community to make their lives awesome.
    • Think of the core thing that you are trying to solve.
    • iThemes tries to save money, prevent loss of data and offer peace of mind.
    • What are the customers‘ obstacles, and challenges?
    • What is the customer's journey?
    • What obstacles that arise could our products solve?
    • Those answers direct product development, the sales page, and technical support.

[clickToTweet tweet=”When you offer significant value, price does not matter; it is just a formality to pay it.” quote=”When you offer significant value, price does not matter; it is just a formality to pay it.”]

Understand Value Like the Customer

  • What is the value conversation for a risk management product like backup or security?
    • BackupBuddy was created because a dedicated server crashed, without a backup.
      • Cory personally lost photos and blog content that he can never get back.
      • There is no number that he could assign to that loss.
      • He asks his customers, how much do you value your online work: website, e-commerce data, blog posts, comments?
    • iThemes Security was created because one of his websites was getting nailed with spam and bad login attempts.
      • Cory did not even understand how bad his site was being attacked.
    • These products are like insurance.
    • Empathize with the customer's journey.
    • It helps if you have your personal stories to relate.
  • What is the correct balance between gathering and implementing feedback?
    • The vocal minority tells you what is critical and what they want.
    • The majority is silent.
    • Customer empathy and understanding their journey is the key.
    • A translator between the customer and the developer is important to avoid disconnects.
    • You do not want the customer to talk directly to the developer becasue they speak different languages.
    • The technician and the customer perceive value in different ways.
  • What is the advantage of having a “customer advocate” on your team?
    • You have to step your game up to know and serve your customers better than the competition.
    • You want the customer to feel an empty void if you are to leave.
    • He is conducting his own iPhone vs. Android comparison to make sure he understands his customer's perception of value.
    • Get as close to the customer's experience as possible.
    • Understand whatever affects your customer and then think through the future and lead them.
    • iTheme's purpose is to take customers from transactional to transformational.
    • They want to go from making a profit to transforming lives, by making sure their customers are in the best place possible.

[clickToTweet tweet=”When employees know their leader is maintaining his health and happiness, they are more confident.” quote=”When employees know their leader is maintaining his health and happiness, they are more confident.”]

Your Mental Health Is Important

  • Why is mental health important to an entrepreneur?
    • Cory was interviewed for an article in Inc. magazine, Why This Entrepreneur Is Talking to the Tech World About Mental Health.
    • He is a voracious reader and shares articles with team members to increase their quality of life.
    • Entrepreneurism is a tough sport; most family and friends do not understand.
    • He shared his story publicly, including his mental health and divorce, and most people had no idea.
    • He wanted others to understand that they are not alone.
    • He was helped greatly by some experiences, and if he did not share them, it would be a tragedy.
    • The key is empathizing with your fellow human being; just care about people.
    • He chooses to use his time, talent and treasure to serve other human beings by making their lives awesome.
    • He was divorced and suffered low-grade depression.
    • The statistics for entrepreneurs shows he is not alone.
    • His attorney suggested he go to see a counselor.
    • His biggest fear was feeling vulnerable; he uses a digital journal to help.
    • Building intricate, healthy, loving, reciprocal relationships around you is important.
    • Four times a year, he calls his counselor to get a professional opinion, where he can unload his baggage and leave it at the door.
    • He sets time alone with his family and team to pour into each others' lives.
    • It makes you happier and healthier when you decide what you will and will not allow into your life.
  • What is the impact of good and poor mental health in your business?
    • At one point, his team was concerned.
    • He realized he had a responsibility to the people in the families supported by the business.
    • He had tried to skate by on his ego and pride, but he has committed never to try to do it alone again.
    • Healthy relationships and a professional counselor have made a big difference.
    • Being mentally healthy as the leader of the company makes his team better.
    • When they know their leader is working to maintain his own health and happiness, they are more confident in what the business is doing.
    • You have to be responsible for your happiness.
    • That responsibility applies to your team members too – you cannot carry them.
    • Six Pillars of Self-Esteem is a great book that he wished he had read as a child.
    • It helped him take responsibility of just being himself.
    • “Show up filled up” (Kary Oberbrunner) to take care of yourself, your family, your team and your customers.
    • Your health and happiness have to come first, or you are no good for your spouse, your kids, your team, etc.
    • Your customers and team, deep down, can see that things are not fully right.
  • What is one of the best books you have read about mental health?
    • He bought The Happiness Advantage for his team.
    • Share around your dinner table with your family 3 things that you are thankful for every night.
    • His favorite book is Six Pillars of Self-Esteem, about leading cautiously and accepting your feelings.
    • He has recommended reading on his site.
    • Books are a very cheap way to gain amazing wisdom.
    • By putting them on your Kindle, you can take them with you anywhere.
    • He has over 300 books on his iPhone so he can carry the wisdom with him.
  • What is one of your best stories about creating value for a customer?
    • Three years ago, he was at a WordCamp in New York City meeting with customers.
    • His wife asked him to share a story about how a customer's life was changed.
    • You can treasure the stories about how you are a part of a life transformation.

About Cory Miller

Cory Miller founded iThemes in 2008. iThemes was one of the first commercial companies in the WordPress space. Its mission is to make people's lives awesome. They have a core suite of products including BackupBuddy, iThemes Security, and Exchange. Before founding iThemes, Cory was the communication director of a church with a staff of zero.

Selling Value to Corporate Purchasing with Jennifer Kinson – 074

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Jennifer Kinson sells professional services to Fortune 100 customers in information technology. She typically manages 6- to 7-figure deals. Because of the size of the engagements, Jennifer has to put together ROI statements for her customers. She does not have a traditional sales background, and that works to her advantage. Her husband, James Kinson, is the host of The Cash Car Convert.

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Talking About Price Is NOT Slimey

  • What is the most important thing you can share about pricing?
    • Talking about pricing does not have to be uncomfortable.
    • It is about establishing the value of your product or service.
    • If you are not having that value conversation, you are not very credible.
    • Talking pricing is not unethical or slimy.
    • During her first 10 years of selling, she went through the entire sales process, disclosed the price at the end and then took the objections. It was not a comfortable situation.
    • Customers are looking at products and services because they already see value in them; these are not cold calls.
    • Sales is about customer service and solving problems.
    • The pricing discussion is about understanding how much value they see and what it is going to mean to them.
  • Why is a professional more valuable to an existing customer?
    • You are more valuable to your customer the longer you have been in a relationship with them.
    • A transactional customer relationship, where you engage and disengage, loses momentum.
    • Having a partnership with your customer gives you confidence that there is value in the relationship. The conversation is not about price.
    • Fortune 100 customers have purchasing departments that do not care about the value.
    • They are a disconnected organization, which takes each engagement down to the lowest common denominator.
    • When you can deliver value that no one else can because of your long-term relationship, your price can be higher.

The Mindset of Corporate Purchasing

  • How can you counter the typical mindset of corporate purchasing?
    • There is an organizational discord between the customer-facing people and the people in the back.
    • As a seller, by design, she is not going to be working from the same agenda as procurement, whose mission in life is to take cost out of a contract.
    • She does not like to provide a high price, knowing they will knock it down, as she negotiates in good faith with her business stakeholder.
    • She tells procurement that she has already worked with the stakeholders and has provided a good price for the value they need.
    • If they think that the business stakeholder missed something or a remix is needed, she will work with them.
    • You increase the cost to the stakeholders if you hire someone who does not do as good of a job.
    • If you have not internalized your value, then you are vulnerable to those kinds of arguments.
    • If you have done a good job, your stakeholder is prepared to be your advocate with procurement.
    • The stakeholder has to do his due diligence before procurement ever sees the proposal.
    • Procurement's tactic is to say to competitors, “This is the business outcome I need – can you do it for less?”
    • You are exposed to these tactics if you have not worked with your stakeholder throughout the process to make them understand why you are uniquely qualified for that project.
    • You must be able to explain that you are not only providing the value required but that you are eliminating risk.
    • Some procurement people come with a win-win approach; others approach it as a boxing match.
    • Procurement is a reflection of the company culture.
    • Financial consulting and professional service firms have a better grasp of assigning value to risk than manufacturing companies.
    • You have to prioritize the procurement battles you are going to fight, due to high demand and limited resources.
    • Careers and livelihoods are at stake – there is a right way to do it and a cheap way to do it.
    •  Your poker skills are not what you want to bring to the negotiation table.
  • Can you sell on value to corporate procurement?
    • You can, as a qualified yes.
    • It depends on the corporate culture.
    • If you are just talking to procurement, your odds of having a value conversation is lower.
    • If you are at a strategic level and you are actively working with the stakeholder and they bring procurement in as a partner, you are more likely to have a value conversation.
    • You have to be judicious about involving procurement earlier in the conversation.
    • Keeping your business stakeholder in the conversation is more beneficial than bringing procurement in early.
    • In one situation, by working with procurement early, she was able to a structure to fit their business and win the proposal.
    • They helped her re-architect and reframe the deal to something that worked for her team and theirs.
    • Positioning yourself as a partner is the best way to work with procurement, but it is very nuanced to each company.
    • It is relationship-driven. Navigating the corporate politics of each organization requires a champion or sponsor to help you with procurement.
    • The sponsors are usually executives, but not always. They are always key influencers.
    • You have to put effort into the relationship to earn the sponsor's trust before you engage procurement.

Creating ROI Statements

  • How do you create an ROI statement for a customer?
    • If you are selling to a business, whether you are stating the ROI or not, the case is being made.
    • Your stakeholder is going to have to justify why he wants that product or service.
    • The need has a value associated with it, and your product or service has a price associated with it.
    • By doing the math and including the long-term value, you can set up a slam dunk.
    • Work with the stakeholder to determine the value and include it in each piece of documentation you send.
    • It takes an investment of time to get the data together; otherwise, you are taking it on faith that the stakeholder will handle it.
    • You have to help them understand what the value is to go beyond the cost mentality of “the budget.”
    • Understand the way your customer perceives the offer you bring to the table, especially if you are creating new value.
    • Salespeople have to be experts at discovering and explaining value.
    • To operate as a partner, you have to be able to align to the risks and the business initiative.
    • If a customer is trying to solve a strategic problem with a tactical discussion, you can hand it off to someone else.
  • What is one of your best stories about creating value for a customer?
    • In working with a customer who is re-engineering how they interface with their customers, every percent she increases their efficiency saves them $50 million.
    • The value associated has a direct correlation to the number of jobs they can maintain and value they can bring to their shareholders.

About Jennifer

Pursuing of the Economic Buyer with Higbee & Riopelle – 065

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Wes Higbee is a software consultant from New York. He has been interviewed on the AOV Show before about software consulting, agile development, and customer value. Matt Riopelle is a creative consultant from Austin. He was a guest on the AOV Show previously to discuss the importance of pricing. Wes and Matt practice value pricing in their businesses and frequently teach others how to implement it.

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Defining the Economic Buyer

  • What is the economic buyer?
    • Matt – It is someone who has the intent, the authority and the ability to purchase.
    • Wes – It is the person with authority and accountability.
      • Authority means that someone can make the decision to move forward and can get the money.
      • Accountability means that the person is responsible ultimately for the result of the project.
    • Kirk – It is an operational and a financial decision maker, and the same person could be both.
    • Wes – You need to understand why you need to speak to the economic buyer to stick to the rules.
  • What is a typical job title for the economic buyer?
    • Wes – Job title is a good way to gauge but do not dismiss someone as not being a buyer, especially in a small company.
    • Sometimes a President or a Vice President in a large company might not have the authority or accountability you would expect.
    • Ask “who will approve the project” to uncover the final buyer.
    • The title can be helpful, but it can be deceptive.
    • In an organization under 50 people, you usually want to talk to the owner.
    • In a large organization, there can be more than one buyer with different titles that have the authority and a budget.
    • Matt – Knowing titles and organizational charts is much more important in outbound sales.
    • For inbound sales, you are usually only one person removed from the final buyer.
    • Listen to the name and titles of others who might be involved.

The Importance of the Economic Buyer

  • Why is it important to talk to the economic buyer?
    • Wes worked with the wrong person, only to discover that the decision maker did not have the project on his radar.
    • If he had pressed, he might have been able to get to the person setting the priorities so that he could help with the actual priorities.
    • Kirk – Why is it was in the best interest of the customer for a provider to speak to the economic buyer.
    • Matt – If you are trying to offer the maximum amount of value to the customer, you have to talk to the people to whom it matters the most.
    • If you cannot talk to the people it impacts the most and understand their motivation, then it is a waste of time.
    • If the customer is going to trust you to create value, you cannot effectively do it without talking to the decision maker.
    • Matt said that he would talk to as many people in the organization as possible during the discovery process.
    • If you come in at the wrong place, someone may be able to articulate the value, but that person might not have the authority to help the people who ultimately need help.
    • Kirk – It is a waste of time, energy, effort, resource, etc. if you do not talk to the right person.
    • It is easy to go to an organization with an hourly rate and enter the company at any level.
    • As a result when the organization changes, the customer relationship gets pushed down to lower levels.
  • What are some questions to determine if you are talking to the economic buyer?
    • Wes has four questions from Alan Weiss:
      1. Whose idea was this project?
      2. Whose budget will support this?
      3. Who will you turn to for approval?
      4. Who can veto this process?
        • The authority to say no does not mean they can say yes.
    • Matt – Listen for queues in addition to those questions.
    • If someone brings up another person in the organization, then you can ask about that person.
    • Matt – Is this something you would bring up during the first call?
    • Kirk – Simply ask, “Where are you in your decision-making process?”
    • Talking to the wrong person can lead you astray because the objectives you get are not the same as the decision maker.
    • Matt – As you look to provide value, spending time with the right person becomes more crucial.
    • With a small business, you should be able to define the person (economic buyer) within 30 minutes; a larger business might take 15 minutes more.
    • If it takes longer than that, it is probably being resisted.
    • Wes – If you are talking to multiple people, you have a problem.
    • Individuals make a decision, not a committee.

Resistance and the Economic Buyer

  • How do you handle resistance to talking to the economic buyer?
    • Kirk – First you need to determine if you are the person who can help them.
    • If the person resists, their reason is usually emotional.
    • With resistance, Wes throws it back to them with a simple “why.”
    • Helping people is not pleasing people.
    • By asking why, rather than answering questions, you can get to the root of what the objection is.
    • Kirk – For example, “Can you tell me why prior experience in your industry is important?”
    • Blair Enns in Win Without Pitching Manifesto says our job is not to convince the customer to work with us, but to see if we are a good fit.
    • You can break the ice with a gatekeeper, but Matt sees these obstacles as red flags.
    • If there is resistance, it is probably not a fit.
    • Trust is important. If it starts with a fight to get to the right person, it is a bad sign.
    • Wes – It is imperative to plow through the gatekeeper to help people.
    • Remember that you might be dealing with one bad apple in an organization. Keep looking for the good apples.
    • If the buyer is not open to conversation, then the company by not be the right fit.
    • You can give people options when you want to talk to someone else to get them talking about when or how rather than “if”.
    • Try to talk to the person making the decision alone.
    • Determine if the gatekeeper perceives you as a threat.
    • If you can get someone to uncover his fears or threats, you can often assuage his issues.
    • Matt – If your position is that you want to make the people you work for look good, it can do a lot for the relationship.
  • Should you ask about the budget when talking to the economic buyer?
    • Matt does not have a great answer and has done it both ways.
    • The inherent problem can be how you position yourself.
    • Kirk – It helps to ask about the budget.
    • Wes – Wait for a signal to see if the person is price sensitive before asking about the budget.
    • If someone has not even thought about the budget, he likely has not thought about the true need.
    • Psychologically, when you hear a number, even if it has nothing to do with the conversation, it can anchor the price.
    • Matt is concerned that he might undervalue himself based on their budget.
    • If he exceeds the budget, then it appears as though he has not listened.
    • Value the investment that both parties make in putting together a proposal.
    • Always clarify if the person has no budget at all.
    • There is no basis to talk about a price until the value has been identified.
    • A stated budget is rarely the exact amount of money they have to spend on a project.
  • What is the risk of submitting a proposal if you do not talk to the economic buyer?
    • Wes speaks to the perspective of the risk of submitting a proposal if you have not spoken to the buyer.
      • The buyer can be blindsided.
      • The buyer does not care because it is not a priority.
      • You are being hired as a set of hands rather than a brain.
      • The conversation will focus on price rather than value, the further you are from the buyer.
      • 90% of the time you submit a proposal, you will be told no or will not get a response.
    • Matt – Decide if you want to be a proposal writer or if you want to get paid to do the actual work.
    • Work on the problem, not the proposal.
    • You do not want to shock someone with a proposal.
    • Matt speaks to the risk if you get a “yes”, and you have not spoken to the buyer.
      • The project is moving forward without the buy-in from people who will have the most influence on the project.
      • You have been hired to do something that:
        • was not valuable to the company
        • solves the wrong problem
        • solves a surface problem
        • leaves money on the table
        • misses other opportunities, solutions and problems.
    • The risk to the provider is the lack of ROI.
    • The risk to the customer is larger because they are not going to create value to obtain the ROI they want.
    • Hope is not a strategy.
    • Wes – The ultimate damage is done to the customer.
    • The buyer needs to be committed to his success, and you might need to remind him how he said it would look.
    • It is bad for your reputation if you are not doing the work a buyer values – you can get pigeonholed.
    • Scope creep happens when you do not work with the buyer.
    • If your contact leaves, who will continue the project?
    • When you help someone, you have to be on a “mountain” to help bring him “up”.
    • You want to get permission to help someone, so you do not put someone “down.”

About Wes Higbee & Matt Riopelle

Using Value to Steal the Show with Michael Port – 063

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Michael Port is the author of six books and a New York Times best-selling author. The Boston Globe commented, “He is an uncommonly honest author.” He has been called a marketing guru by the Wall Street Journal and a sales guru by The Financial Times. His seventh book, Steal the Show, is due this fall.

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“Book Yourself Solid” Sales System

  • What is the most important thing you can share about pricing?
    • People buy to express their values.
    • If you look at the sum of what we purchase, you get a clear picture of who we are.
    • Your price is about the buyer, not you or your services.
    • It is about how the purchase of the product or service makes them feel about themselves.
    • It gives them an opportunity to express their values, what they want other people to recognize.
  •  What is the Book Yourself Solid sales system?
    • Book Yourself Solid outlines a simple sales system.
    • Marketing is not what gets you business; it just gets people aware of you.
    • What you do after someone becomes aware of you is what books the business.
    • Sales offers should be proportionate to the amount of trust you have earned.
    • If you have the sales conversation at the right time, it is easier to book business.
    • If you design your sales system properly, you will have no problem making the sale.
    • The 4-part sales system asks these questions:
      1. What does your customer want to achieve?
      2. Why does the customer want to achieve it?
      3. Does the customer want help to achieve the goal?
      4. Would you like me to help you, because you are my ideal customer?
  • If the customer finds you, should you assume they want your help?
    • There is an implication that they want you if they have sought you out.
    • However, it is a good idea to ask them to articulate and confirm it to avoid tire kickers.
    • You want to get an intentional yes from the customer.
    • If you focus on the customer, you do not have to prove that you can do the work.
    • Customers want to know what you stand for and what your philosophy to make a buying decision.
    • Control how you are known in the world.
  • In Part 3 are you asking, “Is this a problem you want to solve right now?”
    • Yes, and it is probably a concept with which people are more familiarity.
    • Having different ways to process information helps the audience understand it better.
    • Every person should use their own language to convey meaning.
    • Having structure gives you a process to follow, without needing a script.
    • Understand how the process works, and then determine how it works for the individual.
    • Being process-oriented helps you understand the big picture to fill in between the lines.
    • Understand how things work from a basic standpoint; then you can geek out on the details.

Improvisation As a Sales Skill

  • Why is improvisation an important sales skill?
    • If you sell something, things you do not expect are going to happen.
    • You need to be able to manage the situation, in the moment.
    • The structure allows you to improvise.
    • Improvisational comedy structure is based around the concept of “yes, and….”
    • Rehearse to prevent being nervous.
    • The better prepared you are, the easier it is to improvise.
    • You can be free and more authentic if you know the structure well.
    • It is a mistake to look too far ahead. Only one link of the chain of destiny can be handled at a time. – Winston Churchill
    • Build a strong chain, one link at a time. Then you can have a successful sales conversation.
    • Learn how to read what your customer is and is not saying to adapt your conversation.
    • The most effective salespeople have sophisticated social intelligence.
    • Social intelligence is a skill that you can learn.
  • What is the role of emotional and social IQ in sales?
    • Emotional IQ is being able to manage yourself and your feelings.
    • Social IQ is being able to manage other people‘s feelings in certain situations.
    • The way we show up tells the world something about us.
    • Be aware of how other people see you.
    • Salespeople can get too caught up in trying to make things happen.
    • Being self-aware is the first and most important ingredient in self-expression.
    • The sales process is artistic, not scientific.
    • You can measure what improves conversion online, but it is harder to do so face-to-face.

Learn From Your Pricing Mistakes

  • What is one of the biggest pricing mistakes you have made?
    • The biggest general mistake was believing that his customers bought based on price.
    • He doubled the price for 6 months as a test and had the exact same number of people sign up.
    • Another mistake was just following what other people did.
    • He offered 3 options for virtual training and figured everyone would go with the second choice because of framing (and they did).
    • They ran the program again and just increased all the prices except the most expensive.
    • Almost everyone went with the most expensive option the second time, even though the price was the same as before.
  • What is one of your best stories about creating value for a customer?
    • His master class on public speaking and performance attracts a wide range of people.
    • Every now and then, someone comes to feel more confident in themselves.
    • A female CPA, Lori, came to one of the events. She was meek, small and shy.
    • She just wanted to find her voice – not give speeches.
    • She walked to the front quietly with notecards and she started speaking.
    • He took away her notecards and he asked her to tell her story.
    • Her mother once slapped her and told her “no one wants to hear from you”. It stayed with her for 40 years.
    • Lori now helps others find their voices.

About Michael Port

You Can Learn To Price Too with Kevin Mitchell – 056

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Kevin Mitchell is the President of the Professional Pricing Society (PPS). He is the publisher of a quarterly journal on professional pricing, which is primarily academic research. He also publishes a monthly newsletter, called the Pricing Advisor, which follows trends in pricing. He has spoken all over the world on pricing, including North America, South America, Europe, and Asia.

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Professional Pricing Society

  • What is the most important thing you can share about pricing?
    • Businesses worldwide understand that the best lever they have to increase their profits is pricing knowledge and management.
    • Having great services and products that are well-promoted does not make a business profitable if they are priced wrong.
    • A company's products and services need to provide great value to its customer base.
    • Pricing allows you to be compensated fairly for the created value and permits you to reinvest in your company, community, and employees.
    • Pricing is the best lever to improve a firm's profitability.
    • A 1% increase in price can result in a 10% increase in the bottom line, as referenced in The Price Advantage.
  • What is the Professional Pricing Society?
    • It is the membership organization for pricing professionals and enthusiasts worldwide.
    • It was founded in 1984 by a pricing professional, Eric Mitchell, Kevin's father.
  • What does PPS offer for knowledge professionals?
    • Some members have pricing in their title for an organization; others are sole proprietors, sales people, and marketers who are pricing thinkers.
    • Resources are available to help measure how your company is performing as a pricing organization.
    • There is a lot that happens in business that is not pricing, but involves pricing decisions.

Basic Pricing Concepts

  • What are the three most important pricing concepts?
    • Prices are stickier when they go up, rather than down.
    • Discounts might be permanent in your customers' eyes.
    • Your customers live in the same connectivity era that you do; they can research pricing too.
    • The price you provide for a product/service is often the first indicator of quality for that offering.
  • Does a commodity exist in professional services?
    • There are certain individuals within the pricing discipline, like Ron Baker, who say there is no such thing as a true commodity.
    • Think about the goods and services from the perspective of your customer.
    • As an accountant, there is usually a reason you select by your customer.
    • There is a value to being in business a while, in being close by, in being available to your customers.
    • Downtime to the customer can be a very expensive consideration as well.
  • Where is the opportunity to differentiate in professional services?
    • Perceived commoditized services can offer different benefits:
      • Number of years in business
      • Referrals from others
      • Professionalism surrounding the service
      • Ease of use
      • Flexibility
    • Switching costs are also something to consider from the customer's perspective.
    • Ask your customers what is valuable to them, “Help me help you.”
    • The conversation can be very simple and very straightforward.
    • Many business professionals think inward, rather than using soft-selling skills to think outward.
    • If you show an interest in the customer's perspective and demonstrate that you understand it, you have an opportunity to sell a service to make things go smoothly for the customer.
    • Start the discussion and let your customers know there is empathy.
    • The extra connection to understand a customer's business allows you to provide more value.

Pricing Trends in Professional Services

  • What are some pricing trends influencing professional services?
    • Most of the trends are analytic and psychological.
    • There is a quantitative and qualitative side to human beings.
    • Pricing must appeal to both sides of the brain.
    • Consumer nature and irrational behavior by customers are being studied right now.
    • There are situations where humans are not completely rational.
    • Pricers who sell to other businesses have done cost-plus pricing in the past.
    • People are figuring out that the customer doesn't care about what your cost is; they just want it to work.
    • Businesses are looking at what their customers gain from doing business with them.
    • If you have a hardware store, you need to remember that your customer doesn't want a drill, he wants the holes.
    • Do business on your customers' terms and get compensated for the value.
  • What is one of your best stories about creating value?
    • A man worked in a paper mill (old economy) in a small town.
    • He had a junior pricing professional who found that his company didn't have to raise prices to improve.
    • Instead, they had been over discounting and not requesting the real value they were providing for years.
    • The discounting issues were generational in nature and were often unearned as the customers weren't doing what was needed to earn the discount.
    • They didn't raise prices but removed the unearned discount.
    • They were able to save one of the paper mill plants, based on removing discounts.

About Kevin Mitchell

The Role of Value in Sales with Donald Kelly – 053

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Donald Kelly is the host of The Sales Evangelist podcast and an award-winning speaker. His podcast has been mentioned in Entrepreneur Magazine, The Huffington Post and on Yahoo Finance. He's a sales trainer and mentor, and a self-admitted addict to staycations. Kirk was a guest on Episode 32 of The Sales Evangelist.

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Getting Started in Sales

  • What is the most important thing you can share about pricing?
    • Price is the reward for the value that people see.
    • People can be afraid of having a conversation about money.
    • Price is a demonstration of appreciation of perceived value.
    • Discussing price can be challenging to salespeople because they think the price is going to drive the customer away.
    • All customers know they have to pay for what they are going buy.
    • The fear is head trash, which limits the ability to talk about price.
    • If you do not have confidence in your product and service, you will be afraid to discuss price.
  • How did you discover your passion for sales as a profession?
    • When Donald was a kid, his dad had the entrepreneurial spirit and was successful.
    • Donald started selling cookies in the front yard or mangos he had picked.
    • When he came into professional selling, post-college, he had to learn how to sell in the B2B world.
    • Once he realized there was a process to follow, he decided to share it via The Sales Evangelist.
    • If you have the desire, he can teach you to sell.
    • The entrepreneurial spirit can be hereditary.
  • What is the most important thing to succeed in sales?
    • Episode 133 discussed the one thing necessary to succeed: having measurable goals.
    • The idea of the episode is to quantify your performance.
    • You need to be able to measure what you are doing by being methodical.
    • Key indicators is an important way to measure your performance.
    • Once a salesperson gets a taste of commission, they can sometimes get complacent.
    • Fundamentals of a sales process:
      • Understand your key indicators.
      • Generate interest.
      • The meat of the process is being able to ask appropriate questions of the customer to understand their problems and challenges.
      • You have to present the information with options.
      • Close the deal.
      • Exchange the value.
    • When you ask the appropriate questions, you might learn that the customer is not a fit.

Selling Value by Asking Questions

  • What are some of your favorite questions to ask in the sales process?
    • Why is this an important thing now?
    • What have you done to remedy this situation before?
    • What is your process like when you have made purchases like this before?
    • If you do not do something, what will be the effect on the organization?
    • Getting to the truth can sometimes be five layers down – keep asking why.
    • The goal is to get to the right decision for the specific customer.
    • You have to be able to probe, and make it feel like a comfortable, natural conversation.
    • Jeb Blount's book, People Buy You, is about selling on a human level.
  • Do you recommend always selling on value?
    • Value is in every sale.
    • Your product might make it harder or easier.
    • If you believe you are selling a commodity, you will act like you are.
    • If you think you are a premium, you will act like you have value to offer.
    • If you are confident in your value, it is important to articulate that.
    • Commodity thinking results in profit from volume only.
    • You can ask the customer what they think about your price. Then listen and learn what they believe about you.
    • When your customer comes to a conclusion on their own, rather than you telling them, it helps close the sale.
    • Ask your customer to give you their perception so that you can tailor your questions to them.
    • Every customer is unique and should be treated that way.
    • Practice, so that the questions become natural to you.

The Impact of Options in Sales

  • What is your experience offering options to customers?
    • People like to have options.
    • When the customer comes to an opt-in web page, they are familiar with three types of options.
    • A person who would buy Donald's lowest package still needs to get the same tools as the highest package.
    • With the options Donald offers, the amount of time that they spend with him is the main difference.
    • Do not make your customers feel stupid or that you are trying to trick them into something.
    • In more complex B2B sales, options are not always used.
    • You have to stay within the realm of what you offer when you provide options.
    • People like to choose.
    • Do not offer an option that is worthless to the customer or you.
    • How to Avoid Contract Hell was an episode about a software deal that was worth over $200K. The complexity of the negotiations required creativity to offer different options.
  • Which guest on your show did you learn the most from?
    • Kirk offered a lot of advice on Episode 32..
    • Justin Su'a (Episode 7) and Ralph Quintero (Episode 2) are about mindset and getting the habit of success.
    • Donald is the emcee for Podcast Movement and is bringing a suitcase full of costumes for his introductions.
  • What is one of your best stories about creating value for a customer?
    • A chiropractor's office in Miami did not have an IT staff.
    • Donald worked with a managed IT service.
    • The value for the doctor was to be able to provide service to his customers without distraction.
    • Donald explained how he could solve the IT issues remotely.
    • It felt good that he helped a doctor be able to heal others.

About Donald Kelly

Diagnose Before You Prescribe, Then Price with Blair Enns – 011

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Blair Enns is a business development consultant to creative firms worldwide. He's documented his expertise in his book, The Win Without Pitching Manifesto. He spent a dozen years working in-house for large agencies and small design firms. Since he has spent another dozen years consulting to independent creative businesses to help with their business development practices. He was academically expelled from his university.

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Win Without Pitching

  • What is the most important thing you can share about pricing?
    • Pricing is subjective.
    • There are 3 main pricing strategies: cost-plus, market-based pricing and value pricing.
    • Market-based pricing comes with it, a set of ideas of what the market will bear.
    • After you dig in, you realize it is all in your head.
    • You figure out what you can do to change the frame of reference.
    • Value is subjective as well.
    • People cannot objectively perceive value – they can only compare it as more or less than something else.
    • But, you can influence the comparison that is made.
  •  What was the inspiration for The Win Without Pitching Manifesto?
    • Jason Blumer, Kirk's accountant, sent Kirk a copy of the book.
    • Blair's business grew to the name, Win Without Pitching.
    • He doesn't agree with pitching ideas during a sale.
  • Is the practice of pitching free ideas unique to the creative space?
    • It's not completely unique to the creative space.
    • But, it's endemic in the creative businesses.
    • The thought of giving away ideas to win business is not unique to the creative space, but it tends to run rampant in creative agencies.
    • Creativity is not the ability to write or draw, but the ability to see, the ability to bring perspective to a problem.
    • Autonomy is relative to creativity, meaning you abhor routine.
    • Creatives' strength is that they are drawn to solving a problem.
    • They resist process and have a problem saying no.
    • If you have a high competitive drive on top of that, you also love to win.
    • Creatives are addicted to the presentation and having to think on their feet.
    • Creatives are so addicted to presenting that they are willing to give away ideas for free.
    • Have a little discipline and learn to say no.
  • What is your favorite proclamation from Win Without Pitching?
    • Blair doesn't have a favorite proclamation of the 12, but the foundation of the book is: We will specialize.
    • Specializing is to set yourself apart from your competition; to differentiate your firm.
    • Creative people are more likely to build a broad business to allow them to sell a wide-variety of services to a wide-variety of customers.
    • When you make yourself full-service, you're competition to everyone.
    • Get your power back in the buy-sell relationship through positioning, by reducing the number of viable alternatives.
    • Leverage the power in the buying process.
    • Become an expert in something, by narrowing your focus and build a deeper firm.
    • You need a certain amount of power or control to be a true practitioner.
    • The alternative to specialization is to be a vendor rather than a practitioner.
    • Practitioners lead.
    • You have a professional obligation to diagnose before you prescribe, or it is malpractice.

The Power of No

  • Why is it empowering to be able to say “no”?
    • As soon as a customer presents you with a problem, you are driven to say yes in order to solve their problem.
    • If someone is so enthusiastic about helping you solve a problem before you are even done describing it, it makes you wary of them.
    • The way a practitioner behaves can show neediness.
    • If you lean on passion during the sales cycle, it smells like neediness.
    • People are repelled by neediness.
  • How do you overcome resistance to taking the time to diagnose?
    • If a customer is resistant to the diagnostic conversation, they should probably go to another provider.
    • You have to gain an understanding of the goals of the customer.
    • Value pricing is tied to your ability to have meaningful conversations, to sell and to diagnose.
    • You demonstrate your expertise by asking questions.
  • What is one of your favorite questions to ask during a value conversation?
    • Blair's favorite question is, “How do you make money?”
    • He also likes, “How do you think I might be able to help you?“
    • It helps to prevent you from putting people into standardized offerings.
    • In other words, if you are holding a hammer, don't see every customer as holding a nail.
  • What is the relationship between pricing and “not pitching”?
    • When you're pitching, you have to be a good soldier to win the pitch.
    • You want to put options in front of customers, including some that the customer hasn't considered.
    • If you don't provide options, the customer is going to go look for comparisons elsewhere.
    • Put the comparisons in front of the customer so they don't shop for it elsewhere.
    • You want to seem like the only option for the customer.
  • Why is the concept of a “premium” important to pricing?
    • The Justice of Price Premiums was a recent blog article written by Blair.
    • Premium in the marketing world is a price that is commanded above an ordinary or benchmark price.
    • In the insurance world, a premium is the what you pay for insurance.
    • It is the payment, that you make, to avoid risk.
    • It is presumptuous of a practitioner to make a decision on the patient's risk profile.
    • Measuring risk is part of pricing.
    • The higher the risk to the practitioner, the higher the price.
    • Let the customer decide what amount of risk he's willing to take.
    • You don't need to ask a question to determine the customer's willingness to take a risk.
    • Just put the right options in front him to demonstrate high risk vs. low risk.
    • You can put forth a cost-based price to demonstrate the risk vs. a value price.
    • For certainty on the delivery, you have to pay more.
    • Make sure everything is stripped out if you provide an hourly price, like access to the principals.
    • The cost-plus price could be an anchor to the low deliverable.
    • Providing choice gives you a true ability to price.

Talk about Money Early and Often

  • What is the root of stress in a money conversation?
    • Most stress is caused by the things you don't do.
    • Talk about money early and often.
    • Agree not to waste effort with a customer by having a minimum level of engagement.
    • A minimum level of engagement should be used as a mandatory sales tool, but it doesn't have to really be a mandatory minimum.
    • Simply use it as a hurdle for the customer to leap over.
    • See yourself as in a race to object.
    • You can reserve the right to remove the objections or your ‘no'.
    • The criteria for waving your minimum are:
      • capacity
      • capability
      • profitability
      • no competition
    • Anchor high.
    • The easiest thing to do in a negotiation is to be the most comfortable with silence.
    • It just takes a little practice before it becomes fun.
    • The Win About Pitching Rule of Money: “Those who don't talk about it, don't make it.”
    • It is considered rude to talk about money in a personal setting.
    • It is considered poor business practice to not talk about money in a business transaction.
  • What is the story of you and your friend David pitching the same customer?
    • Mining for Confidence was the blog that came out of this situation.
    • Blair received an email from an employee at an ad agency looking to hire a consultant.
    • It mentioned what they needed, self-diagnosed and self-prescribed.
    • He just responded back and said that there was free information on his website to see if they wanted him.
    • He refused to compete for it and asked to speak to the real decision maker.
    • He forwarded his response to his friend, David, who called him and said he got the same email.
    • David had forwarded it to the owner of the company saying, “This woman is incompetent; fire her.”
    • Don't validate a flawed process being wielded by someone who doesn't know what they're doing.
  • Why is charging higher prices in the best interest of the customer?
    • Profitablity drives loyalty.
    • Your customers get better service when you charge more, because the margin allows you to fix your mistakes and cover unforeseen issues that may arise.
    • If you eat up all the margin, you operate on a loss.
    • If you don't price properly, you can end up resenting the customer.
    • If they walk away from the price, it's OK – especially if you didn't want to do it anyway.
    • Customers get better service when they pay upfront as well.
  • What is one of your best stories about creating value for a customer?
    • A customer bought a membership to an online service that Blair offers.
    • The customer said how much money he had made from his advice, in the millions of dollars, with only about a $3,000 investment.
    • Blair's overwhelming feeling was that “it wasn't fair,” so he resolved to learn better pricing.
    • He believes there are 11 books on pricing worth reading, including Pricing on Purpose by Ron Baker.
    • When you're in the consulting business, every solution is custom and everything you put in front of a customer is priced individually.
    • Productized services are easier to sell and easier to scale, but you make higher margins if you can value price.
    • Blair best recalls his pricing mistakes, rather than wins.
    • When he productized his service to fit everyone's needs in an immersion program, he realized there were flaws because everyone doesn't have the same problems.
    • Every firm has a different mix of the problems that he sees that recur.
    • If you are going to standardize products, you have to be clear about what is and isn't involved.
    • If you are billing yourself as a consultant, the customer expects a fully customized solution.
    • You must diagnose first and then provide them with 3 options to move forward, which must be specific to that customer.

About Blair Enns