Paul Kenny gave the single best talk about sales and software I have ever heard at Business of Software 2010. The audience of die-hard techies turned business people agreed. If you involved in any sort of technology business, software, hardware, whatever, you should make some time for this. It will increase your revenue and profit or your money back.
Video, Notes, Slides & Transcript below
Joel Spolsky: Our first speaker this morning is Paul Kenny. Paul teaches software companies how to sell software and he’s taught Red Gate and he’s taught Fog Creek. Please welcome Paul Kenny. [Applause]
Paul Kenny: Thank you very much. OK. So, how’s the conference going so far for everyone? [clapping] Woo, woo, yeah. OK. All right. OK. I’ve been really interested to talk to people over breakfast and in the bar last night about what they were picking up from the conference, because having come here for three years in a row now, what I’ve noticed is that every conference sort of develops a theme, even though most of the speakers don’t speak to each other before the conference.
In fact, the first time we all speak to each other together is usually after the conference. But themes develop. I’ve noticed there’s a bit of a theme developing in this conference. When Seth started yesterday – and he’s an awesome presenter, and he really kind of stretches your world view – but when he was starting about artistry and finding the artist, and moving beyond competence, he was hinting, or stating, that the customer experience is the most important thing. It’s not what we do, it’s the customer’s experience of what we do that really, really matters.
Can I just ask? Can you just do me a favor? You know I like to do this from time to time. If you are a founder, can you just stand up a minute. If you are a founder of a… Wow. Brilliant. Excellent. OK. A round of applause for the founders. [laughs]. OK. [Applause]
If you’re not a founder, but you’re thinking you might be one day, you don’t have to stand up because your boss may see the video. [laughter]
But, one of the things that really grabbed me about David Russo’s talk yesterday was the fact that the stuff you do while you’re a two, three, four person company will become part of your cultural DNA. That really grabbed me because I think you have a unique opportunity as founders to hardwire brilliant sales standards into your business, or you’ve got the opportunity to hardwire the programmers’ contempt for salespeople into your business. At this stage you have a choice about what you do.
The next kind of highlight from yesterday for me was Molly the Bear. I was thinking if I had a little bit more time yesterday I was going to place an order to China. I was going to order 10,000 Molly the Bears. I was going to sell them for $29.00 outside the door as you were all leaving. I was going to have a little tape recorder in it that was saying, “I’m the customer. Pay attention to me.” You could all take it back and sit it in your meeting room and pay attention to it. Now, I think this is really, really important because my talk today is going to be about the dialogue, about the customer, the quality of the customer dialogue that you have.
Then, just to set me up nicely, Jason did one of the most amazing roasts of salespeople that I’ve heard in a long while. So, thanks for that. But, I’m going to talk about dialogue. I’ll go into that in a minute. He raised a really important point. For me, it’s so important I’m going to take a little bit of time to talk about it before I get into my presentation proper. What he really said was that we hadn’t worked out a model for selling yet for this new generation of software founders and owners, and I think he’s absolutely right.
He said that your judgment is more important of any set of rules, and I think he’s absolutely right.
But, I want to have a little conversation about Frank before we begin, because, you see, I’m worried I might be Frank. [Laughter]
I want to talk about Frank because this really hit home to me yesterday during Jason’s presentation. I split my time between working for big companies, not just software, farmer, medical, media. I work for big companies, because, frankly, they pay the bills much better than you guys, but this business, founders are my passion. They absolutely fascinate me.
One of the inherent weaknesses I find, if I’m honest, I think links back to Neil’s first question yesterday, when he said will all the extroverts stand up? Or will all the introverts… You know, if you’re an introvert put your hand up. And everybody did. A lot of founders in technical businesses cannot wait, absolutely cannot wait, to offload the responsibility for talking to clients to somebody else. Therefore they become prime game for the Franks of this world.
Now, I’m going to just give you a health warning about Frank. The issue about Frank is not Frank. It’s you guys. Frank is Frank. Frank started out in one of the big corporations. He may have started out in sales at Microsoft, say, or somewhere else. He would have started out in enterprise sales. Now, the thing about enterprise sales is it takes a year, at least, to get up and running. You know, lead time is six months to a year. It then takes another year to build some momentum. And at the end of that year, if you’re not very good, it takes another year for your bosses to realize it, and then another year of employment to get rid of those people. So, it’s not unusual that the Franks of this world have resumes that have three, four, or five big companies on them. They’ve always got a big deal that they’ve sold. You know, responsible for growing revenue from $25 million to $80 million in two weeks. It’s always there claim. And the fact is, sometimes they did it, but they didn’t do it because they were brilliant salespeople. They did it because they were working for Microsoft. They did it because they were working for huge brands that people know, need, love, respect, whatever. It’s not just Microsoft, by the way, to the Microsoft people in the room, you know, lots of big organizations.
The Franks of this world can go through their career doing three or four of these jobs, sort of getting found out, sort of getting passed over, and moving on. Now, they’re not bad people, they may work hard. They may be able to play golf. There is an art to knowing which game people were talking about, especially when you work in a global market. Was this the Master Loan in Madrid game, was this the Saints versus the Patriots? Who was it we’re talking about? And there is a role for the people like Frank, but it’s not offered in companies like yours. The reason that Frank isn’t right for you is because they represent, if you like, an older school model. What Frank needs to be successful is a big, powerful brand. They need brilliant, big marketing behind them. They need big incentives and sales structures and training courses that take them away for weeks at a time to nice hotels in the country somewhere. They need big expenses, and they need big cars in order to be able to do their job. And you need something different, but the reason that you’re fair game is that eventually Frank’s run out of places to sell it. Nobody else is buying their story. So, what I find is a nice, emerging tech company, and if I can find myself a CEO who’s a coder, who hates selling, I can play on that fear, and I can work myself into a job. I may even get 50% of the company if I’m lucky. Then you have created a company that’s an old style company rather than a company for now, for the future. But all of this is not Frank’s fault. Frank is doing what Frank needs to do. Frank is going out and earning a living, and putting food on the table for his family and trying to make the best of the world. And he’s doing it often with the best of intentions.
The issue is yours. The issue is, “I didn’t have the backbone to go out and sell, to go out and talk to my customers.” I think, as Jason proved yesterday, you know, he said, “I’m not a salesman, but I was doing two demos a day, after which people bought stuff.” [Laughter]
I don’t know how your definition of it goes, but it’s getting close. It’s getting close for me. So, what I want to do is I want to talk about… I’m going to have another sales rant. For those of you who were here, in San Francisco last year, and in Boston in 2008, I kind of get up and I just have a bit of a rant about sales and why it’s a lot easier for founders to accept the responsibility, and accept that although it’s a bit uncomfortable to talk to people, it’s actually hugely beneficial. And, in just the same way that you’ve to learn marketing, and you’ve got to learn finance, and you’ve got to learn HR and hiring and firing, and all those sorts of things, it’s just another thing. And in fact, you know what? It’s a lot easier than firing people. It’s a lot more enjoyable. It’s a lot more enjoyable than changing the pellets in the loos and all those sorts of things. It’s a great part of the job, because if you do it well, especially the stuff that we’re going to talk about today, it’s a great validation of what you’re doing. It’s a validation of why you went into business in the first place.
So, when I first came to speak here, I was incredibly nervous. I had no idea how a sales talk would go, especially one that was ending a day that began with Seth Godin. I was really, really very nervous. My key message, in case you weren’t here, or you haven’t picked up the video, of that day, I thought the most important thing to tell people on that day, if I’m only going to get one chance – because if I’m honest, I did not expect to be invited back – I thought if I can only tell them one thing, the one thing that you need to know, my big point was love your inner salesperson.
Then a couple of subpoints, things like just picking the low hanging fruit through online marketing is great if you can make a lot of money at it, but it’s not a complete strategy. I often think that you’ve learned very little from the people who look at your product online, download it, go “Wow, this is great,” and send you a payment for $1,000. It’s great, but you don’t learn an awful lot about them. I think there’s a lot more to learn from the people who download your software, compare it against a couple of others, or even just try it, and kind of lose interest. Now, those people have got something to tell you. So, my big point in 2008 was just accept it. Don’t rail against it. What you’re railing against is some ancient archetype, or stereotype, of salespeople, which doesn’t help. I don’t think they really exist any more. If they do, it’s only in the dark corners of the industry.
Selling and sales are just about as good, or as bad, as you make it. So, if you want your sales function to be based around your customer support people and your technical support people, who will spend time talking about what people really need, and then suggesting ways that you…. If that’s how you want to do it, and add real value that way, brilliant. That’s the way to do it. If you need to put a guy in a suit because your clients are all lawyers, and some scruffy kid in a Megadeth t-shirt and some jeans with holes in it turns up, they’re not going to take him seriously, hire a guy in a suit. It’s your judgment, it’s your call. It’s as good or as bad as you make it.
So, I thought, OK, well if that’s not the most important thing that people want, this year I’m going to tell them the most important thing that they need to know. And the most important thing that you guys need to know is how to work out what your sales proposition is, what your sales story is, because if you can get a story and you can wrap it up, and you can make it engaging, then it’s easy to use and to talk to people about. It just drops into the conversation. It’s not a stilted sales conversation. It’s not a question of pull the laptop out and let me tell you, Mr. Client, the three prime benefits of working with. It’s none of that sort of stuff. You engage people through a story.
So, I thought that was the most important thing. But then, of course, straight afterwards a bunch of people came up and said, “Paul, that’s great, but how do I know which stories to use? I’ve got loads of stories.” So, it occurred to me that this year this is the most important thing that you need to know. My talk is about dialogue. It’s about conversations. It’s about creating a dialogue with your customers, because it’s really important to know which stories to tell your clients.
How many people here, when you’ve been on the buying end of the equation, have been bored to death by somebody’s product demo. Doesn’t say a lot for our industry, does it? And the problem there is that people think, OK, a demo. We start at the opening page, the landing page, and I’m going to take you through everything this does, whether you like it or not, with a few little journeys up some little side… I’m going to tell you some stories about the coding problems that we had. [Laughter]
And the client gets to the end sort of exhausted by the experience. The trick is to work out which stories are useful. I just want to introduce you to someone. This is my son, Tom. I’m the one on the right, yeah. [Laughter] Thank you. Yeah. But as you can see, he’s a very imaginative character. Now, I really did want to go to the breakout. Yes, I particularly wanted to go to the sales breakout yesterday, but it fell at bedtime back in Yorkshire. So, I went back to my room because Tom is very particular about the stories that he likes at night. So, when I travel, if I can get a break, I will call him and I’ll tell him a story over the telephone. Now, he’s very, very particular about his story. He doesn’t like stories being read to him, they have to be made up. OK, any parents, have you been through this particular kind of torture? Yeah? OK. So, in order to make a story will engage him, I know that I have to include some of his favorite characters.
So, pretty much every story involves a trip to Bikini Bottom and a visit with Sponge Bob, whatever it is. And also, his other favorite character is Horrid Henry, which if you don’t have it over here, is very like Dennis the Menace, that sort of character. So, usually it involves Tom, Sponge Bob, Horrid Henry going out on an adventure. The adventure almost always includes zombies for some reason. OK. But they’ve got to be kind of cartoon zombies, they can’t be too scary because I want to get him to sleep, right? I don’t want to give him nightmares. So, they’re always cartoon zombies with a kind of slight comic element. Usually he likes an alien or two thrown in there, and it usually involves some kind of invasion where a young boy called Tom with his close friends, Sponge Bob and Horrid Henry, will take on the zombies and/or the aliens, because you have to mix it sometimes to keep it interesting, and usually some deal is done where instead of having a major battle, there will be a sporting challenge, which is usually soccer. And Tom and his friends and Fernando Torres from Liverpool will take on the might of the intergalactic forces of evil at football. And in the last minute Fernando Torres will twist his ankle, and it will all be down to Tom to save the world. If there are any film producers in the audience, anybody knows a film producer, I think I’m on to it. The point is that there are very few people who can tell Tom that story, and that story wouldn’t work for your kids. I can tell that story to Tom because I’ve known him since he was born. I can tell that story to him because we sit and talk about all this stuff. I know what he watches. I know what he’s interested in. I know what gets him excited. I know what would be too scary. I know when to introduce a bit of humor, et cetera. I don’t think dealing with our customers is much different from that, if you take it. Obviously, not the zombies and the aliens, or maybe you do. I don’t know.
So, what I say to people is there are really only a few sales skills that really matter. This is why I can never quite get my head around why selling becomes such a big deal, even if people are largely introverted, even if they do like to primarily code in a basement, or whatever. I struggle to see why is it difficult, because really all salespeople do, all the good ones I’ve ever worked with over the last 20 years or so, all they ever do is they ask the right questions. They tell great stories and they put deals together which are attractive to the purchaser. And that’s it.
So, we’re going to talk about dialogue because this is where it all starts. I know this is the last of three, or maybe not the last… I don’t know, maybe the last of three. We’ll see how it goes. When we sit in front of a client, the most important thing is to make sure that we’ve got a dialogue so that when we demo to a client we can tell him about the stuff that’s interesting to them. When we send an email to a client, we can focus on the stuff that’s worthwhile to them. When we blog for clients, we can write about stuff that will engage their interest. If you’re not talking to clients, you’re guessing when you’re blogging, emailing, newsletters, white paper. You’re guessing. You’re hoping. You’re working on rough sketches of what your clients are rather than real clients. So, the key message, and if you want to kind of – those of you who were drinking late last night, you can go to sleep after this slide – is that the quality of the dialogue that you put into your sales transactions, your customer transactions, is directly proportional to the quality of your customer acquisition.
What I’m going to try to do is I’m going to first of all try to explain why that is the case, and then I’m going to try to explain just a few of the things that you can do, as founders, without having to put on a pinstripe suit or take up golf, to engage your customer more effectively and get a better and more mature understanding of what it is they really want from you. And when you can do that, I think there’s some artistry in that. I think it’s an important skill. So, the first reason you should do this is dialogue builds rapport. I guess I’ve been involved in sales and selling for 20 odd years, no 20 plus years. For those of you who work in crowded marketplaces, or in very specialist areas, you know this to be true. Sometimes it is really, really, really hard develop the “purple cow” product, develop something that has so much extra value and utility that it stands out. Or maybe, because you work in a very complex market, much of the real utility of your product is all hidden away in the background. You’ve got to get right into the problem before anybody becomes aware that you do really cool stuff. So, when there’s no difference – and I mean perceived difference, you may think there’s massive differences between my product and everybody else’s – when the client’s sitting there going, “This looks a bit like this, looks a bit like this,” what people will do is they will buy from the people that they like the most. Not in a squishy way, “Love you Ty, buy your software,” sort of thing, but in a “Can I do business with these people?” sort of way. “Do I feel that these people are the sort of people who understand my business?”
It’s not based on anything hard, it’s based on a feeling.
Yesterday, we say, you know, people buy from people they like. They really do. The reason that they do is because we’re always interested in the people who are interested in us. Now, many of your clients, I know there’s a thing that people prefer to be emailed, we don’t like to talk on the phone, all of that kind of stuff, but that just doesn’t ring absolutely true with the experience that I’ve had working with startups, and also with working for some very big companies who sell to so called introverts or technical people. People just don’t like talking to people generally, you know, about nothing. People like talking to people about stuff that’s interesting, and they like talking to people who are interested in them.
Now, most people here yesterday said, “Yeah, I’m an introvert.” So I take it that everybody went straight back to their room last night without talking to anybody, sat quietly, punching in a bit of code. Of course you didn’t. You went out, you talked to people. You built relationships. And why did we build relationships? Because we found people who were interested in the same stuff as us and we found people who were curious about us, and we enjoyed telling our story to other people. Now, if that’s true of you, it’s true of everybody who’s a bit like you. The truth is, we may not feel comfortable doing it, but dialogue adds value. People like to be sold to in their own language.
This is perhaps the most important reason why I would encourage everyone of you to build a culture of talking to your customers all the time. I’ll just give you an example, you know you have those moments when you set up a company that kind of really stick in your mind.
The first company I set up was a training company, Essex Training and Development, and a big deal was we were all from media backgrounds and we were going to sell training services, training solutions, to people in the media. My co-founder, Justin, and I spent the first month trying to get appointments, because it was the early 90’s and that was old fashioned sales. You had to hit the phone and you had to try and get to talk to people. Frankly, we were getting nowhere. Then a friend of a friend of a friend used a bit of leverage to get us in to one of the biggest business magazines, a global business magazine, I don’t want to name names, but people who are interested in economics might be interested in this particular title. We went to them and we said, “You can come…” And this guy said, “All right, I’ll see you. I will see you.” He got his secretary to ring us before and say, “Look, boys, I’m seeing you as a favor to this third party. I’ve already seen six people for this job. I’ve already had to tender documents, I’ve pretty much made up my mind, but I’m going to give you guys a go, because I want to give the new guys a go.” So, he saw us. We turned up at 3:00 for a meeting.
He was as drunk as a lord when he came in. He used every corporate bullshit phrase. He said, “Let’s run a few ideas up the flagpole and see who salutes,” and things like that. He was a typical sales director. And we sat there and he said, “I’m going to give you five minutes.” But because he was pretty drunk, and we started asking him a few questions, he got on a roll and he talked for an hour and a half. We never got a word in edgewise. Every 10 minutes or so he goes, “But, I’m not buying from you guys. OK? I’m not buying.” And then he would go on and on and on and on. My business partner, Justin, he scribbled notes all the way through, and I asked a few questions. And we kept this going, and it became a bit of fun for us. We were thinking, well, you know, it’s the only meeting we’ve got this month, so we might as well have some fun while we’re doing it. [Laughter] And so, we kept this going about an hour, an hour and a half. We went away, and I said to Justin, “What are we going to do about that? Is it worth putting in a proposal?” He said, “No, it’s not worth it. This guy’s never going to buy from us.” And I said, “Well, we’ve got to do something. We’ve got to do something so that we’re not rude. It would be rude to say that we’re not going to do it.”
So, Justin said, “I’ll tell you what,” and he gave all his notes to a typing bureau which was just a couple of streets away, and he asked the person there just to type it all up. And he said, “Just change the tense, so instead of like we want, we will offer. Just change the tense.” And he did that and we checked it for spelling, and we sent it right back to the guy. We put no thought into it. I got a call next day. “Guys, this is the best proposal I have ever read.” [Laughter]
And I learned a really important lesson. The reason you should be talking to your clients, not just emailing them, not just blogging at them, the reason you should be talking to your clients is because they each have their own unique way of describing a problem. The person they’re going to buy from, all other things being equal, is the person who reflects back their problem to them in their own unique language. Does that make sense? Yeah. OK. What that means is, this is another of the big points, you’ll get that when I’m doing that, I’m not very good on PowerPoint, so anything in big and blue, that’s a big point. OK. It’s this, the customer’s faith in your product as a solution to their problem is directly proportional to how well they believe you understand their problem. So, if you have a problem with your car, and there are two mechanics in town, and the engine’s been knocking a little bit and oil’s been pinking a wee bit, so it feels quite rough and the brakes aren’t quite working, if you go to one guy and he lifts the bonnet and he has a good look around and he asks you when the engine’s knocking, and under what conditions the engine’s knocking and what kind of sound is it making, and he asks you all of those sorts of questions and then says, “Yeah, I think I can fix it. It’s going to cost you $200.” And, you go to the next guy, he taps the bonnet. He goes, “No problem, we’re really good at knocking engines, $200.” Who are you going to buy from? Who are you going to give the business to? You’re going to give the business to the person who you feel understands your problem best, which is why you must talk to your customers.
Whether it’s you the founder, you the sales guy, you the customer support, the technical support, you the programmer, who’s putting this stuff together when you’re out at events, et cetera, doesn’t matter to me because I always believe in the sales function, not the salesperson. I think everybody should be selling. Sometimes customers just have a unique perspective of the world, they look at things a little bit differently. If you turn up to sell a beautiful portrait of a woman and the guy’s looking for a saxophonist, you’ve got a problem. We’ve got to understand the customer’s world view. They will view every problem slightly differently. The other reason you should be thinking about this seriously is that if I tell you what you’re doing wrong, if I come up and say, “You know what the problem is with this software that you’re using? It’s three years old. It doesn’t store your databases in a way that’s easily accessible. It goes really slow when you’re trying to do more than three things at the same time, and the user interface just isn’t in any way intuitive, so you need to change it.” You look at me and you go, “I like it. It may not be intuitive to you because you’re stupid. I get this, and I like the fact that it’s slow because it gives me a chance to go and get some coffee while the whole thing’s booting up. And you know, although it is a bit of those things, I might be comfortable with it.” If I try and tell you what’s wrong, your critical brains – because you’re all very bright people and you’re all technically aware – your critical brain kicks in and you push back. You sit and talk to somebody about how they find the interface and what they would prefer and what they would design into it if they could, and talk to them about the issues of multi-tasking, and you talk to them about the speed, and you talk to them about access to the database. How do you feel? What’s your experience? Often people will come to the conclusion, for themselves, that I need to give this another thought. The moment that light goes on, they’re ready to talk to a new vendor; maybe not you, maybe a bunch of people. You may be in a race with lots of people, but they’re willing to talk. You cannot tell your way into a solution. That’s, unfortunately, what a lot of the Franks do because they’ve got too much information. But you can certainly ask your way into a dialogue, or you question your way into a dialogue which gets the client to think about their business. The dialogue changes depending on what kind of market sector you see yourself in.
One of the things an old client of mine always tried to do… He was a serial entrepreneur, and he always used to say, “You’ve got to understand your position in the market and you’ve got to adjust your sales to suit. You really must understand the dynamics of the market you’re operating in.” He always used this little four box model, and I still use it when I’m advising customers and I’m working with salespeople.
Down here in the bottom of our model, you know, your marketplace may be one of those places where people haven’t realized their need for their solution yet. The acceptance of the need is low, but smart people in technical businesses have said, “This is going to be the next big thing.” Everybody’s pumped tons of money into the market. So, there’s lots of competition, but nobody’s buying yet. It’s really important that you know what questions to ask in this kind of market. I’ll come on to it in a second.
If you’re up here and there’s an established need… That market down there is a bit like the early 3G market when everyone was putting money into it and customers were saying, “My phone’s fast enough and it never crossed my mind that I really needed to watch YouTube on my phone,” and all of that sort of stuff. The market caught up. I guess some of the 3-D TVs that are out there right now are kind of in this market. Everybody’s pumping money in and there’s lots of options, but a lot of us are sitting there going, “Do we really need this?”
Up here, in the top corner, is the market that many of you may find yourself in. It’s an established, it’s a mature market, and there’s lots of competition in there. I was staggered having breakfast at how many people, how many different companies, sell software for churches. I was absolutely staggered. I would have guessed 3, but I told Jeff, it’s 40, at least, and that’s just the big guys that everybody knows about, plus all the others around. It’s a crowded marketplace. What we’ve got to do is we’ve got to find out what our customer really wants that’s different in that marketplace.
Some of you may feel that you’re in this kind of a marketplace where you are the lone voice in the desert. You have got yourself a brilliant product. Nobody else has seen the potential for it, but nobody really feels they need it either. Maybe the reason there’s no competition is because there’s no real value in the product. It’s a worrying place to be.
Hopefully some of you see yourself in the “Dream” segment where nobody’s got it yet, and you have and the customers are getting it and they’re starting to buy it. The conversations that you have with these customers have to change. Give you an example. For the HighBurn/Hi Risk customers, you know they’re going to make a choice at some time. So, as a founder, as a sales guy, as a support person, you need to be talking to people about what will drive their ultimate decision. If you want to differentiate yourself from the market, you can’t always differentiate by adding stuff to a product. Sometimes it’s just about pointing out to customers what you’ve already got that they didn’t realize. Remember, it’s that perception of your product that drives the sale, not what your product has got.
For the Evangelists, it’s a bit like a morpheous moment. You know, you’ve got to find the blue pill, or the red pill, I can never remember which one it is, but you know, everything will change after this. Absolutely everything will change after this. And even with those clients that are in the Dream market, we should be talking to them always about the future because stuff changes. And just when you think everything is OK, stuff happens in markets. OK?
So, one of the things I do is I say I’m more of a sales coach than a sales trainer. I like to work in company. I don’t really like the theoretical stuff. What I like to do is get close to companies, go out on the road with the salespeople, talk to the salespeople, listen to their sales calls. You know, try and formulate the sales story, work out what questions to ask. One of the things I’ve been doing this year is I’ve been getting hold of the calls that are going out of companies to clients, or the response to calls that are coming in. You know, many people now tape them as a matter of course. I’ve been getting that information. I was thinking well if dialogue is so important to a business, if understanding what your customer really wants is so important to a business, then surely salespeople, who’ve been trained in this stuff for years, will be really good at it, won’t they?
So, I tried to measure the quality of dialogue. And I took – it was a very long, rainy weekend in Yorkshire – but I took 300 calls that I had on my data bank. And I thought, “Well, what do I do with these? How do I measure the quality of the dialogue that’s going on?” At first I thought, well maybe you can look at the length of a call as an indication; the longer somebody’s talking to a customer, the more quality is going on there. But actually, that doesn’t work, because some people just have some uniquely brilliant ways of boring their clients over a long period of time and it doesn’t really tell me about the quality of the dialogue. So, I thought, well maybe if I look into the CRM systems I can find whoever’s got the best populated CRM records in SalesForce or GoldMine or whatever, then surely they’ll be the people who’ve got the best dialogue going on in their business who really understand their customers. But again, some people will write 400 words telling you they couldn’t get through to the decision maker.
One guy literally wrote: Deal done. $100,000. That was his entire input. Well, that’s useful! Thank you very much! That really gives a great insight to what the customer values and why they value.
So, what I did, what I thought was an interesting indicator, was that I had to sit through 300 calls, so you know it was a tough weekend. I tried to work out, to indicate the quality of dialogue… From the moment that we call a customer, there’s the usual hellos, or whatever, or a customer calls in, “Hi, how are you?” and you have all the small talk. From the moment the small talk’s over to the moment that the salesperson starts talking about themselves or the product, so there’s a little intervening gap where every salesperson is trained to talk to the customer about the customer.
47 seconds was the average length of time between the small talk finishing and the “Let me tell you a little bit about our product. Let me tell you a little bit about our company.” Now that is really poor. I looked into the reasons. You know, when you think about it, can you imagine doing that on a date? How successful would you be? There’s a couple of people going, “Oh. That’s what’s going on.” [Laughter]
But it’s no time. It’s no time at all. What happens is when people go into sales mode they start thinking about, because they’re a bit nervous talking to the customer, they go a bit closed. And what they want to do is ask a couple of questions, I mean they want to tell them stuff. They want to show them stuff. They want to push them into a demo. “Can I get one of our technical guys to come and demo you?” And they’re not really thinking at all about the customer experience.
And here’s the big thing, if you can get the people that talk to customers to just be a bit better at asking the appropriate questions, you are going to be a lot better than everybody else out there in the marketplace. You will surprise a lot of your customers because you’ll be showing more interest in them. And I always think that when you start talking about what we know about customers, we end up with this really basic little stickman. What do we know about our customer? I know he’s in Delaware. I know he has bought x product in the past. I know he buys on a Thursday. See, we know a lot of functional stuff about our customer, and we often bundle them together into some kind of profile. But often, it’s little more than a basic sketch. That hard data, the obvious stuff, is easy to capture. You guys just do it like that, and it’s dead easy to capture.
What’s much more difficult to capture is what I call the DNA. If you can capture a customer’s DNA. This is the other thing that happens at conferences, people start presenting on things using the same titles, like DNA, meaning something entirely different. I’m talking about drivers, needs and aspirations. The more you know about why people choose one solution over another, the better place you are to do something about it. Now, whether that information comes from your tech support guys, your sales guys, your Franks, you, it doesn’t really matter. What matters is that it’s in your culture to talk to customers, and to talk to them intelligently. And to talk to them at depth and to show a passionate interest in what they’re doing. So, when we start building a picture of this, we can move from the stickman: you know, we know where they are, we know what they buy, to something that’s maybe a bit more like a weird CGI photo fit thing, eventually to the realization that the person who’s buying the software is a real person who’s got a real problem that’s very specific to them. This is my one worry about automating all of this. What you get, at best, is the CGI version. It’s only by talking to customers that you get the context, you get the understanding of why.
Now, if you’re in enterprise software, or what’s loosely termed enterprise software, then you should be doing this all the time. But even if you’re selling $100 software that people download and it’s a very light touch business, I would really recommend that you go and ring up, at least every year, you take some time out and you take 50 of the people who bought from you, and 50 of the people who didn’t buy from you, and you email them. And you say, “Can I make an appointment to just find out your opinion of…” You’d be surprised how many of them will go, “Yeah, fine,” because it doesn’t happen that often to them. And the stuff you find out will change not only your view of what you’re doing, but it will change their view of you, as a business.
So, we start with the needs. I know I said DNA and I’m staring with the needs. It’s just NDA sounded like a government department and DNA sounded much more cool. So, we’ll start with the needs. If you take nothing else away from this talk, take this list down, or I’ll stick this up on slide show. Make it central to your conversations. Have a checklist for what our needs are. Have an information target for what I need to know about my customers. When customers call, or we call them, we’re having a conversation, First of all, about what I need. I’m only talking to you as a customer because you’ve got a need, because you need a database, because you need an accountancy tool, you need a CRM tool. I’m talking to you because you need that. So, we’ve got to have a clear idea of the functions that are important to them. This saves us doing the long, boring demos. Only show them the stuff their interested in. We need to understand when they need it. Sometimes customers will buy inferior products because they’re available now, rather than wait for something that’s better, because my problem hurts now. So, you don’t always have to be the biggest, best, you know, cheapest in the market, sometimes timescale’s a driver. Customers are almost always concerned about scalability. How many people are likely to use this now? How many in 3 months time, in 6 months time, in 12 months time? I’m always staggered by the number of people who are just happy to take a deal and go, “Yeah! We made $2000.” Well, who else could use it in that business? Is that business growing, is that customer business growing? What are they doing with their developer team? What other projects are they running? “Well, I don’t know.” It’s just $2000 and nothing that you’ve got out of that. Integration is always a big issue on functionality. How will this fit in with the other systems that we have here? So, what other systems are you running? Budget has to come into it, you know, what kind of resource. And then, the result of they’re after. Now, result and function are different. Sometimes I’ve seen sales that just because someone has talked about the result that they’re after, rather than the function that they’re after, it makes a difference in the client’s perception of how well they’re being consulted.
A silly little example is just that eReaders have been huge this year. I bought a Kindle the other night. I bought an iPod, but my kids now have the iPod, so I’m left with the Kindle – iPad, rather. The function of the Kindle that I’m looking for is, you know, it’s small, it’s page turn, it’s weight, it’s all of those kinds of things. I’m not going to get into a debate which is faster, anything like that. I’ve got an idea of the function, but the result that I’m looking for, the result I’m looking for, maybe different from you, but the result I’m looking for is simply this: it’s space. I’ve moved house 5 times in my adult life, each time to a slightly bigger house. Each time I’ve filled it with books. And now I can’t afford another bigger house and I hate throwing books away. So I made up my mind that that’s… And when I travel, I don’t want to have 4 books in my bag, you know? I want… Thanks for the books, by the way, Neil. [Laughter]
So, the result. Sometimes, just talking to people not about the function, but about the result, is really key. It makes you stick in their minds.
We talked about this slide. These three slides are from last year. Remember we talked about drivers? We said there’s always a need behind a need. I may want a certain function, and I may want it in a certain affordability range, I may want it to produce a specific result, but people also have these drivers, these needs behind needs. It’s really important that as you’re talking to people you build a picture of these. Now, I have never met a customer yet who said, “Paul, I’m just warning you now I’m going to be mostly a belonging buyer with a little bit of ease and convenience in there.” They don’t know the do that, but the more you talk to your customers, the more you form a judgment, a picture of them. This is where the artistry comes in, because as you’re talking to a customer, they start to things like, “Well, who else is using this product? And if you sold this product to General Motors, what are they doing with it? What do they think about it, and how long have they had it?” Now, that’s a security buyer all over. But until you’ve had that conversation, you don’t get that context. You know, “What’s new and different, and what’s going to make me look good?” You know, those kinds of conversations. Oh, he’s an ego buyer. People will never tell you because they don’t really know. They’ve never labeled this stuff. But you will form a very quick picture only if you’re talking to these people.
So, everybody’s got a different DNA, or a different need behind the need.
Then finally on this is the aspirations. Everybody who buys stuff, they’ve got certain needs, they’ve got certain needs behind needs, drivers, that we talked about, and they’ve also got aspirations. And sometimes, when I can’t really make a choice between the functionality of a product, et cetera, I will buy the product that fits in best with my aspirations for my project, for my team, for my organization, for me, personally. So, talking about people’s projects, asking them questions about their project 6 months down the line, 12 months down the line is really important. But it’s more than just asking questions. You can annoy the crap out of customers by asking them a long list of meaningless questions. That’s a Frank strategy. OK. We’ve got to do something that’s a bit more interesting.
So, here’s some, in my last 10 minutes, some really important guidelines for creating a better dialogue with your clients. OK? First thing, just do it. OK. I was inspired by Molly the Bear, but you know what’s even better than Molly the Bear? Talk to the customer, because actually even Molly the Bear is slightly fallible. Sorry Dharmesh, if you’re here. Yeah, it’s slightly fallible, because what we’ll start to do is we’ll start to transpose our own perceptions of what the customer wants onto Molly the Bear.
Talk to the customers. If you are serious about building a high value, customer focused organization, you cannot do it without having some high value, customer focused conversations going on. So, build it into your strategy. If you don’t have a sales team, set aside some time. Make sure you target yourself, 50, 100, 200 customers over 3 months, 6 months, a year. It doesn’t matter. It will be different for every one of you. But put it into your plan, because if you don’t, you’ll be making decisions based on assumptions. The second rule is selfless questioning. Now, what I mean by this, selfless questioning is a bit like building a jigsaw. Your aim is to build a picture of what the customer really wants, rather than just fishing for them to say something so that you can launch into your sale. OK. Again, that’s Frank strategy number two.
The traditional sales strategy is ask a few questions and then as soon as the client says scalability’s really important, “Ah, I’m glad you said scalability’s important.” And then off you go on a scalability rant. I’m the client, I’m thinking, well it was kind of important, but there was some other stuff that’s much more important. And you’ve just hammered them with the scalability.
All right. What great salespeople do, the very best I’ve ever met, what they’re really good at is just keeping questioning, keeping questioning, keeping questioning to build a picture of what the customer really wants, safe in the knowledge that they will either be able to provide it, or if they can’t provide it, they will learn something valuable about the customer. And just because they’ve got that relationship, they can say to the customer, “Do you know what? We don’t do this yet,” or, “Do you know what, a lot of people ask for that, but we do something different that does get you the same utility.” You can have a conversation about that.
Selfish questioning is hunting for the red button.
When I first went into sales, somebody said, “You’ve got to look for the hot button. And you find the hot button and you zero in on that and you sell on that.” What a load of crap.
You must build a picture and trust yourself because you put all this thought into developing your product. Trust yourself. The solution is there. The more you talk to them selflessly, the more people open up to you. If they feel they’re being led down the garden path into asking political style questions: “Excuse me, sir, are you worried about crime in your area?” “Yes, I’m worried about crime in my area.” “Do you think there should be better policing?” “Yes, I think there should be better policing.” “Well, vote for..” You know, that kind of thing. You feel like you’re being led down the garden path. That’s not selfless questioning, that’s Frank questioning.
Selfless questioning is: who, what, when, where, why? It’s wide open questioning. It’s curious. It’s what I call appreciative curiosity. Your clients are the most interesting people you’ll ever meet. Have a questioning strategy. Don’t just talk to people. Don’t just dive in there. Sometimes it’s easier to talk about certain stuff first. What great salespeople do is they create this kind of funnel. They talk to customers about the stuff that it’s easy to talk to them about. When you guys all meet out here, even though you tell me you’re introverts, you don’t really like people, and duh, duh, duh, all those things, everybody has a conversation. So, where do you work? What are you doing? How did you get here? Were you here last year? You have these kind of conversations. You start with easy stuff. Well, for you guys, the easy stuff is to talk to people about their enquiry, or their downloads first. And talk to them about what prompted them to download the product, which is kind of obvious, but you’d be surprised how little of it goes on.
Once somebody’s talked about that stuff, it’s easier for them to talk about the business they’re in and the project they’re working on. If you ring up somebody out of the blue and say, “So, what business are you in and what project are you working on?” “Screw you. I’m not telling you.” But talk to somebody, you know, “You’ve made this download. I see you downloaded the version with xy functionality. Can I ask what encouraged you to bring it down? What’s been your experience so far? How useful has it been?” All of that kind of stuff is really important. Then talk about utility. “What do you really want from this?” What people tell you they want in writing is always different than what people tell you they want when you talk to them, because you can hear the doubt. “Well, I think I need some extra capability…” Does that mean they want it or not? In talking to people you can dig in on that. Talk to them about their options. Talk to them about, “Well, what have you considered? What have you tried? What’s worked? What’s not worked?” Customers love talking about that stuff. And it’s great when they start slagging off your competition, you know, and you don’t have to say anything, you just have to listen sympathetically.
Talk to them about the things they value. You know, some people are nervous about entering into new partnerships, particularly on the enterprise end of the software, because it’s not just the software I’m buying, it’s the whole package. It’s the companies, the relationship. So, talk to them about their best experiences, as well as ones that their not so happy with. Only when you’ve done all of that, talk to them about budget.
There’s a natural flow to a sales dialogue, and you’d be surprised how few people do it. Technical people want to go straight into the utility. It’s really tough to talk about utility until I fell I trust you, until I feel there’s a rapport. If you’re going to ask them direct questions, listen to the answer.
The two most common reasons why people don’t listen:
Number one is a thing called flare up. It’s listening to the climate, and they say something which you know you can sell on. And all you can think about is the one thing you want to tell them now because you’d do something really cool. You stop listening to them.
The other thing is assumptions. You’ve been talking to clients all day and you start to think you know what they’re going to say. There used to be a trick our old teacher used to do. She used to ask this question when we were kids. She used to say, “OK, children. The Old Testament tells a story about how God became angry with man and sent a great flood to punish him. And my question to you is how many of each species of animal did Moses take onto the Ark?” “Two, miss.” And of course, it wasn’t Moses, it was Noah. We stopped listening, and a lot of the technical people, particularly, because you think quickly and you think in terms of focused problem solving and solutions, that stops us listening right at the end.
Take a chill pill and listen. Listen non-judgmentally. Hardwire the dialogue habit into your culture. If you only focus your salespeople – this is for those of you who are hiring salespeople – this is another mini-rant that I’m going to have as I close up. If you only focus your salespeople only on revenue, they will only ask questions that link directly to some revenue that they can earn now. I think we can expect more of salespeople. I think that what we can do is almost like a balanced scorecard, if you like. I think we can target salespeople on revenue, I’m not decrying the importance of it, I’m also a red-blooded capitalist, but we can target them on feedback, target them on the quality of stuff that’s going into your CRM. Did we get the DNA, did we capture it? Because if you don’t get a sale now, if you understand that stuff, you can go back when your product is ready. Target them on growth of the clients, laterally and longitudinally, and target them on things like loyalty, and even, I was inspired, I’ve added Chi there.
Go and get the software from Dharmesh and target them on how happy they are, because when somebody buys from you, they’re not just buying the product, they’re buying the entire experience. The customer happiness index is impacted by the quality of experience. If you guys are good people to talk to, if you’re interested, if it’s easy rapport, then I have a better experience overall. Build the DNA into your CRM system.
One simple thing you can do, every time your salespeople come off the phone, or when your weekly roundups, or whatever, talk to your salespeople, or your tech support, or whoever’s talking to the customer, talk to them about what they’ve learned about the customer. When somebody comes off the phone and goes, “I’ve got this great deal. I’m talking to this guy, he’s really, really interested.” “Is he really? What kind of a buyer do you think he, or she, is?” You know, “What needs? Let’s break down the needs you uncovered. What do you know, and what are you guessing on that? What do they want to do with this product in a year’s time? Have you had that conversation?” And if you ask that all the time, the law of reinforcement kicks in and people start to do it.
When the time comes to hire a sales team, don’t hire a Frank. OK? My one piece of advice, and I said this in 2008 when I was still here,if you want to hire a salesperson, hire the person who asks the most interesting questions, not the person who delivers the best pitch. The person who comes in and says, “Wow, what a great company. How do you do this?” And they ask you interesting questions about the product, “And what about the culture? And what about the customer?” Those are the people that will make the best salespeople. I mean, there’s other stuff as well, but that’s critical. That’s absolutely critical.
I’ve gone slightly over, but I’m just going to finish with this one thing. I’ve covered all of this stuff, and some of you are undoubtedly thinking, “What has this got to do with me? I’m not the salesperson.” I’m going to just finish with this:
You are the salesperson. These three little words, the founders advantage, really matter. You can get through to customers, and talk to them, in a way that no salesperson you ever hire will be able to do it because you’re the founder. Your the problem solver. Nobody will match your knowledge of the product. And there’s just something cool about talking to founders. So, thank you very much guys. Go and build some dialogue. [Applause]
Next AMA: Alex Osterwalder, Author, Business Model Generation, 24th Jan 17.00 GMT.
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