Ken Krogue

What’s the real value of what you sell? Of your expertise?

The reality is, it doesn’t actually matter what the “real value” is. What matters is, what’s the absolute, bottom-line, no-questions-asked lowest possible price you will ever sell your products and services for?

Regardless of the actual number, that’s ultimately its value to you.

I bring this up because I bumped into a link on Twitter to a blog entitled the Redhead Writing, where author Erika Napoletano talks about how too many businesses give away the “meat” of what they sell for free, then wonder why the client isn’t willing to pay more.

Be warned: the article, and much of her Web site uses language that, well, let’s just say that your typical sailor wouldn’t feel too out of place (at the risk of mixing metaphors, I realize for some of you that’s a feature, not a bug).

But in the midst of the article was this fabulous gem of wisdom:

“If you’re looking for something for free, you’re going to get a lot of 36,000 foot view information mixed with some 5,000 foot view gems. If you want ground level insight, that [crap, cow dung, poop] costs money.”

And the principle couldn’t be more accurate for high-touch B2B sales.

Why are we so willing to undercut our products and services’ value? Why are we so willing to give away our time and resources chasing after those elusive deal closes?

I know why the prospect asks for it: bargaining on price is leverage. They know it puts pressure on you, and it’s the most immediate win for them—it’s the fastest, simplest, most easily measurable way for them to minimize their cost of risk. In some cases it’s less about the actual dollar amount as it is about their own mental state—”Well, it wasn’t what I hoped, but at least I bargained for it at a good price.”

Don’t ever forget that when a prospect buys, it’s because they inherently value what you’re selling more than they value the things required to get it. The fact is, a sales transaction by its very nature ultimately generates more value for the customer than for the seller. As sellers we accept this fact because most of the time even getting the “short end of the stick” is still enough to be profitable.

Why are so many “bad clients” the most demanding? Because they know that they’re far and away getting more value than what they’re putting in to it, and they’re going to maximize that to the absolute limit.

Giving away stuff “free,” or “cheaper” is easy to do, just be aware that what you’re doing is merely increasing the relative disparity in value between you and the prospect. If you’re fine with that, by all means no one will stop you–but before you do, do some realistic thinking about what your real hard price cap is, and whether or not it’s what you really believe it should be.

As a football coach for a city league team of 13-year-olds, I came across a very interesting statistic over the weekend.

Want to know what the difference between success and failure in the NFL?

It’s one yard.

It’s the difference between having a 2nd down and 5, versus 2nd down and 6.

An NFL offense that can average 5 yards on 1st down instead of 4 converts nearly 30 percent more 1st downs.

The same principle applies in baseball.

To bat .300 (the statistical “All-Star” gold standard), a player has to get 180 hits in 600 at-bats.

The difference between hitting .300 and .250 in 600 plate appearances? 30 hits, or 1 additional hit every 20 at bats.

That’s it.

A five percent increase in base hits a year is the difference between being an All-Star (and getting paid like one) and run-of-the-mill.

So what’s the big “So what?” here?

Mostly that I don’t think the majority of us plan our sales pipelines around prospects walking up and saying, “I need what you have, where is it and how soon can I get it?”

If you’re one of the lucky sales reps who gets leads that are always qualified and ready to buy, more power to you, but I know for most of us, sales aren’t 80-yard touchdowns or “home runs.” They’re a consistent process of “moving the chains,” controlling down and distance, and setting ourselves up for success.

Hitting singles, moving baserunners, and setting up RBI opportunities.

Too many reps go into their next phone call, their next email, their next conversation not really knowing what they want the outcome to actually be—so it’s not for lack of reason that noted sales evangelist Paul Castain preaches using a “sales playbook.” A playbook teaches a rep how to make the “right call” for the right “down and distance,” and to make progress with every “touch.”

If it feels like you’re constantly facing “3rd and long” situations in sales, go back and look at your strategy and playbook–for every down and distance. Occasionally you’ll convert a “3rd-and-13″ type of prospect out of sheer luck, persistence, or both. But good “down and distance” means running the right “plays” to have productive first and second downs–and not having to sweat the pressure of converting a “3rd and long.”

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Seth Godin is a pretty smart guy. I own several of his books, and I typically enjoy reading his blog to get interesting snippets of marketing conversation.

His posts are usually short and aren’t always earth shattering, but they always have a clear underlying message, and they almost always get me thinking.

Today’s blog entry was no different, but I wanted to add a small corollary to his post.

As he has stated on many occasions, Seth’s message was once again that the company that “wins the battle” is the one that creates new and unique ways to interact with their vendors and customers, the one which doesn’t act like a “faceless factory.”

Here’s my addendum: You need to be a “faceless factory” before you can be anything else.

Let me explain what I mean.

Most of the time, in a business-to-business environment, we want a product or service that we never have to think about. 99 percent of the time, I want my cell phone vendor to be “faceless” because I want to simply know that it works. I want my service to work, I want my phone apps to work, and I want to have as many “bars” in as many places as my chosen plan affords me. Without that, my ability to “engage” with that company is meaningless.

Now it’s not that I don’t care at all about the “face” of the company. If I’m forced to work with their customer service, I expect to be treated well. But the fact is, no matter how stellar the customer service is, any time I have to deal with “the face” means I’m dealing with my cell phone vendor, and not doing something else.

Now I think Seth would agree with me that once you reach that “99th percentile” of trust, then you’ve got a shot at reaching out to your customers, to reach out in unique ways that make you valuable. Create a sense of loyalty that leads to lasting engagement.

But “lasting engagement,” or “customer loyalty” doesn’t exist if we haven’t reached the “99th Percentile of Trust.” Become an efficient, solid, reliable “faceless factory” as fast as you can—and then start building your “brand.” When Dave Elkington and I founded InsideSales.com in 2005, we knew that “long term marketing strategy” was going to be about #8 or 9 on our Top 10 Start-Up Actions List.

If 15 percent of your “customer engagement” is working like crazy to get them to ignore the fact that your product stinks, offering discounts and unique “buy ins” isn’t likely to motivate them.

I’d rather every cell phone company take every dollar and cent they spend on “customer loyalty” programs, and put them towards making the most efficient, well-run, high-impact call center they can—since it’s the real “face” I have to deal with on the rare occasions that I interact with them.

And the next time I think about blowing some money on a pet marketing project, maybe I’ll talk to the COO, and see if that money can go towards making our product better instead.

Low motivation usually arises from one of the problem areas previously mentioned (poor strategy, mis-hiring, unclear objectives, unfair goals, complex priorities, and slow feedback) as well as from poor leadership, lack of discipline and accountability, and a win-lose or lose-lose pay plan.

Salespeople want to sell as much as possible as easily as possible. They will be quickly demoralized when obstacles that are outside of their control prevent them from succeeding.

These things tend to dampen sales teams’ motivation:

1. Pay plans that reward actions and events beyond the employees’ control.
2. Pay plans that take too long to reward success.
3. Lack of immediate recognition.
4. Lack of clarity about expectations.
5. Goals that are set too high.
6. Lack of leads or good lists.
7. Products or services the salespeople don’t believe in.
8. Working for a Sales Manager who isn’t perceived as fair.
9. Poor communication of what is good and bad.

Best Practice: Ask your salespeople what motivates them, do your homework with the experts, make a list viable incentives and get started.