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.
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Transcript
Joel Spolsky: Our first speaker this morning is Paul Kenny. Paul teaches software companies how to sell software and heâs taught Red Gate and heâs taught Fog Creek. Please welcome Paul Kenny. [Applause]
Paul Kenny: Thank you very much. OK. So, howâs the conference going so far for everyone? [clapping] Woo, woo, yeah. OK. All right. OK. Iâve 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 Iâve noticed is that every conference sort of develops a theme, even though most of the speakers donât 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. Iâve noticed thereâs a bit of a theme developing in this conference. When Seth started yesterday – and heâs 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. Itâs not what we do, itâs the customerâs 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 youâre not a founder, but youâre thinking you might be one day, you donât have to stand up because your boss may see the video. [laughter]
But, one of the things that really grabbed me about David Russoâs talk yesterday was the fact that the stuff you do while youâre 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 youâve got the opportunity to hardwire the programmersâ 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, âIâm the customer. Pay attention to me.â 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 Iâve heard in a long while. So, thanks for that. But, Iâm going to talk about dialogue. Iâll go into that in a minute. He raised a really important point. For me, itâs so important Iâm 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 hadnât worked out a model for selling yet for this new generation of software founders and owners, and I think heâs absolutely right.
He said that your judgment is more important of any set of rules, and I think heâs absolutely right.
But, I want to have a little conversation about Frank before we begin, because, you see, Iâm worried I might be Frank. [Laughter]
I want to talk about Frank because this really hit home to me yesterday during Jasonâs 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 Iâm honest, I think links back to Neilâs first question yesterday, when he said will all the extroverts stand up? Or will all the introverts⌠You know, if youâre 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, Iâm going to just give you a health warning about Frank. The issue about Frank is not Frank. Itâs 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 youâre 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, itâs not unusual that the Franks of this world have resumes that have three, four, or five big companies on them. Theyâve always got a big deal that theyâve sold. You know, responsible for growing revenue from $25 million to $80 million in two weeks. Itâs always there claim. And the fact is, sometimes they did it, but they didnât 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. Itâs 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, theyâre 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 weâre talking about? And there is a role for the people like Frank, but itâs not offered in companies like yours. The reason that Frank isnât 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 youâre fair game is that eventually Frankâs 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 whoâs 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 Iâm lucky. Then you have created a company thatâs an old style company rather than a company for now, for the future. But all of this is not Frankâs 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 heâs doing it often with the best of intentions.
The issue is yours. The issue is, âI didnât have the backbone to go out and sell, to go out and talk to my customers.â I think, as Jason proved yesterday, you know, he said, âIâm not a salesman, but I was doing two demos a day, after which people bought stuff.â [Laughter]
I donât know how your definition of it goes, but itâs getting close. Itâs getting close for me. So, what I want to do is I want to talk about⌠Iâm 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 itâs a lot easier for founders to accept the responsibility, and accept that although itâs a bit uncomfortable to talk to people, itâs actually hugely beneficial. And, in just the same way that youâve to learn marketing, and youâve got to learn finance, and youâve got to learn HR and hiring and firing, and all those sorts of things, itâs just another thing. And in fact, you know what? Itâs a lot easier than firing people. Itâs a lot more enjoyable. Itâs a lot more enjoyable than changing the pellets in the loos and all those sorts of things. Itâs a great part of the job, because if you do it well, especially the stuff that weâre going to talk about today, itâs a great validation of what youâre doing. Itâs 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 werenât here, or you havenât picked up the video, of that day, I thought the most important thing to tell people on that day, if Iâm only going to get one chance – because if Iâm 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 itâs not a complete strategy. I often think that youâve learned very little from the people who look at your product online, download it, go âWow, this is great,â and send you a payment for $1,000. Itâs great, but you donât learn an awful lot about them. I think thereâs 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. Donât rail against it. What youâre railing against is some ancient archetype, or stereotype, of salespeople, which doesnât help. I donât think they really exist any more. If they do, itâs 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 youâŚ. If thatâs how you want to do it, and add real value that way, brilliant. Thatâs 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, theyâre not going to take him seriously, hire a guy in a suit. Itâs your judgment, itâs your call. Itâs as good or as bad as you make it.
So, I thought, OK, well if thatâs not the most important thing that people want, this year Iâm 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 itâs easy to use and to talk to people about. It just drops into the conversation. Itâs not a stilted sales conversation. Itâs not a question of pull the laptop out and let me tell you, Mr. Client, the three prime benefits of working with. Itâs 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, âPaul, thatâs great, but how do I know which stories to use? Iâve got loads of stories.â So, it occurred to me that this year this is the most important thing that you need to know. My talk is about dialogue. Itâs about conversations. Itâs about creating a dialogue with your customers, because itâs really important to know which stories to tell your clients.
How many people here, when youâve been on the buying end of the equation, have been bored to death by somebodyâs product demo. Doesnât 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 Iâm going to take you through everything this does, whether you like it or not, with a few little journeys up some little side⌠Iâm 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. Iâm the one on the right, yeah. [Laughter] Thank you. Yeah. But as you can see, heâs 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 Iâll tell him a story over the telephone. Now, heâs very, very particular about his story. He doesnât 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 donât 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 theyâve got to be kind of cartoon zombies, they canât be too scary because I want to get him to sleep, right? I donât want to give him nightmares. So, theyâre 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 Iâm on to it. The point is that there are very few people who can tell Tom that story, and that story wouldnât work for your kids. I can tell that story to Tom because Iâve 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 heâs 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 donât 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 donât 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 Iâve 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 thatâs it.
So, weâre 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 donât know, maybe the last of three. Weâll see how it goes. When we sit in front of a client, the most important thing is to make sure that weâve got a dialogue so that when we demo to a client we can tell him about the stuff thatâs interesting to them. When we send an email to a client, we can focus on the stuff thatâs worthwhile to them. When we blog for clients, we can write about stuff that will engage their interest. If youâre not talking to clients, youâre guessing when youâre blogging, emailing, newsletters, white paper. Youâre guessing. Youâre hoping. Youâre 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 Iâm going to try to do is Iâm going to first of all try to explain why that is the case, and then Iâm 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 thereâs some artistry in that. I think itâs an important skill. So, the first reason you should do this is dialogue builds rapport. I guess Iâve 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 âpurple cowâ 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. Youâve got to get right into the problem before anybody becomes aware that you do really cool stuff. So, when thereâs no difference – and I mean perceived difference, you may think thereâs massive differences between my product and everybody elseâs – when the clientâs sitting there going, âThis looks a bit like this, looks a bit like this,â what people will do is they will buy from the people that they like the most. Not in a squishy way, âLove you Ty, buy your software,â sort of thing, but in a âCan I do business with these people?â sort of way. âDo I feel that these people are the sort of people who understand my business?â
Itâs not based on anything hard, itâs 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 weâre always interested in the people who are interested in us. Now, many of your clients, I know thereâs a thing that people prefer to be emailed, we donât like to talk on the phone, all of that kind of stuff, but that just doesnât ring absolutely true with the experience that Iâve had working with startups, and also with working for some very big companies who sell to so called introverts or technical people. People just donât like talking to people generally, you know, about nothing. People like talking to people about stuff thatâs interesting, and they like talking to people who are interested in them.
Now, most people here yesterday said, âYeah, Iâm an introvert.â 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 didnât. 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 thatâs true of you, itâs true of everybody whoâs 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. Iâll 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 90âs 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 donât 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, âYou can comeâŚâ And this guy said, âAll right, Iâll see you. I will see you.â He got his secretary to ring us before and say, âLook, boys, Iâm seeing you as a favor to this third party. Iâve already seen six people for this job. Iâve already had to tender documents, Iâve pretty much made up my mind, but Iâm going to give you guys a go, because I want to give the new guys a go.â 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, âLetâs run a few ideas up the flagpole and see who salutes,â and things like that. He was a typical sales director. And we sat there and he said, âIâm going to give you five minutes.â 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, âBut, Iâm not buying from you guys. OK? Iâm not buying.â 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, itâs the only meeting weâve got this month, so we might as well have some fun while weâre 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, âWhat are we going to do about that? Is it worth putting in a proposal?â He said, âNo, itâs not worth it. This guyâs never going to buy from us.â And I said, âWell, weâve got to do something. Weâve got to do something so that weâre not rude. It would be rude to say that weâre not going to do it.â
So, Justin said, âIâll tell you what,â 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, âJust change the tense, so instead of like we want, we will offer. Just change the tense.â 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. âGuys, this is the best proposal I have ever read.â [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 theyâre 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, youâll get that when Iâm doing that, Iâm not very good on PowerPoint, so anything in big and blue, thatâs a big point. OK. Itâs this, the customerâs 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 engineâs been knocking a little bit and oilâs been pinking a wee bit, so it feels quite rough and the brakes arenât 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 engineâs knocking, and under what conditions the engineâs knocking and what kind of sound is it making, and he asks you all of those sorts of questions and then says, âYeah, I think I can fix it. Itâs going to cost you $200.â And, you go to the next guy, he taps the bonnet. He goes, âNo problem, weâre really good at knocking engines, $200.â Who are you going to buy from? Who are you going to give the business to? Youâre 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 itâs you the founder, you the sales guy, you the customer support, the technical support, you the programmer, whoâs putting this stuff together when youâre out at events, et cetera, doesnât 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 guyâs looking for a saxophonist, youâve got a problem. Weâve got to understand the customerâs 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 youâre doing wrong, if I come up and say, âYou know what the problem is with this software that youâre using? Itâs three years old. It doesnât store your databases in a way thatâs easily accessible. It goes really slow when youâre trying to do more than three things at the same time, and the user interface just isnât in any way intuitive, so you need to change it.â You look at me and you go, âI like it. It may not be intuitive to you because youâre stupid. I get this, and I like the fact that itâs slow because it gives me a chance to go and get some coffee while the whole thingâs booting up. And you know, although it is a bit of those things, I might be comfortable with it.â If I try and tell you whatâs wrong, your critical brains – because youâre all very bright people and youâre 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? Whatâs 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, theyâre 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 theyâre willing to talk. You cannot tell your way into a solution. Thatâs, unfortunately, what a lot of the Franks do because theyâve 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, âYouâve got to understand your position in the market and youâve got to adjust your sales to suit. You really must understand the dynamics of the market youâre operating in.â He always used this little four box model, and I still use it when Iâm advising customers and Iâm working with salespeople.
Down here in the bottom of our model, you know, your marketplace may be one of those places where people havenât realized their need for their solution yet. The acceptance of the need is low, but smart people in technical businesses have said, âThis is going to be the next big thing.â Everybodyâs pumped tons of money into the market. So, thereâs lots of competition, but nobodyâs buying yet. Itâs really important that you know what questions to ask in this kind of market. Iâll come on to it in a second.
If youâre up here and thereâs 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, âMy phoneâs fast enough and it never crossed my mind that I really needed to watch YouTube on my phone,â 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. Everybodyâs pumping money in and thereâs lots of options, but a lot of us are sitting there going, âDo we really need this?â
Up here, in the top corner, is the market that many of you may find yourself in. Itâs an established, itâs a mature market, and thereâs 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, itâs 40, at least, and thatâs just the big guys that everybody knows about, plus all the others around. Itâs a crowded marketplace. What weâve got to do is weâve got to find out what our customer really wants thatâs different in that marketplace.
Some of you may feel that youâre 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 thereâs no competition is because thereâs no real value in the product. Itâs a worrying place to be.
Hopefully some of you see yourself in the âDreamâ segment where nobodyâs got it yet, and you have and the customers are getting it and theyâre 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 theyâre 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 canât always differentiate by adding stuff to a product. Sometimes itâs just about pointing out to customers what youâve already got that they didnât realize. Remember, itâs that perception of your product that drives the sale, not what your product has got.
For the Evangelists, itâs a bit like a morpheous moment. You know, youâve 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 Iâm more of a sales coach than a sales trainer. I like to work in company. I donât 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 Iâve been doing this year is Iâve 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. Iâve 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, whoâve been trained in this stuff for years, will be really good at it, wonât 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, âWell, what do I do with these? How do I measure the quality of the dialogue thatâs going on?â At first I thought, well maybe you can look at the length of a call as an indication; the longer somebodyâs talking to a customer, the more quality is going on there. But actually, that doesnât work, because some people just have some uniquely brilliant ways of boring their clients over a long period of time and it doesnât really tell me about the quality of the dialogue. So, I thought, well maybe if I look into the CRM systems I can find whoeverâs got the best populated CRM records in SalesForce or GoldMine or whatever, then surely theyâll be the people whoâve 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 couldnât get through to the decision maker.
One guy literally wrote: Deal done. $100,000. That was his entire input. Well, thatâs 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, thereâs the usual hellos, or whatever, or a customer calls in, âHi, how are you?â and you have all the small talk. From the moment the small talkâs over to the moment that the salesperson starts talking about themselves or the product, so thereâs 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 âLet me tell you a little bit about our product. Let me tell you a little bit about our company.â 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? Thereâs a couple of people going, âOh. Thatâs whatâs going on.â [Laughter]
But itâs no time. Itâs no time at all. What happens is when people go into sales mode they start thinking about, because theyâre 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. âCan I get one of our technical guys to come and demo you?â And theyâre not really thinking at all about the customer experience.
And hereâs 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 youâll 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 heâs 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, itâs little more than a basic sketch. That hard data, the obvious stuff, is easy to capture. You guys just do it like that, and itâs dead easy to capture.
Whatâs much more difficult to capture is what I call the DNA. If you can capture a customerâs 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. Iâm 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 doesnât really matter. What matters is that itâs 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 theyâre 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 thatâs maybe a bit more like a weird CGI photo fit thing, eventually to the realization that the person whoâs buying the software is a real person whoâs got a real problem thatâs very specific to them. This is my one worry about automating all of this. What you get, at best, is the CGI version. Itâs only by talking to customers that you get the context, you get the understanding of why.
Now, if youâre in enterprise software, or whatâs loosely termed enterprise software, then you should be doing this all the time. But even if youâre selling $100 software that people download and itâs 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 didnât buy from you, and you email them. And you say, âCan I make an appointment to just find out your opinion ofâŚâ Youâd be surprised how many of them will go, âYeah, fine,â because it doesnât happen that often to them. And the stuff you find out will change not only your view of what youâre doing, but it will change their view of you, as a business.
So, we start with the needs. I know I said DNA and Iâm staring with the needs. Itâs just NDA sounded like a government department and DNA sounded much more cool. So, weâll start with the needs. If you take nothing else away from this talk, take this list down, or Iâll 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, weâre having a conversation, First of all, about what I need. Iâm only talking to you as a customer because youâve got a need, because you need a database, because you need an accountancy tool, you need a CRM tool. Iâm talking to you because you need that. So, weâve 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 theyâre available now, rather than wait for something thatâs better, because my problem hurts now. So, you donât always have to be the biggest, best, you know, cheapest in the market, sometimes timescaleâs 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? Iâm always staggered by the number of people who are just happy to take a deal and go, âYeah! We made $2000.â 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? âWell, I donât know.â Itâs just $2000 and nothing that youâve 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 theyâre after. Now, result and function are different. Sometimes Iâve seen sales that just because someone has talked about the result that theyâre after, rather than the function that theyâre after, it makes a difference in the clientâs perception of how well theyâre 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 Iâm left with the Kindle – iPad, rather. The function of the Kindle that Iâm looking for is, you know, itâs small, itâs page turn, itâs weight, itâs all of those kinds of things. Iâm not going to get into a debate which is faster, anything like that. Iâve got an idea of the function, but the result that Iâm looking for, the result Iâm looking for, maybe different from you, but the result Iâm looking for is simply this: itâs space. Iâve moved house 5 times in my adult life, each time to a slightly bigger house. Each time Iâve filled it with books. And now I canât afford another bigger house and I hate throwing books away. So I made up my mind that thatâs⌠And when I travel, I donât 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 thereâs 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. Itâs really important that as youâre talking to people you build a picture of these. Now, I have never met a customer yet who said, âPaul, Iâm just warning you now Iâm going to be mostly a belonging buyer with a little bit of ease and convenience in there.â They donât 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 youâre talking to a customer, they start to things like, âWell, 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?â Now, thatâs a security buyer all over. But until youâve had that conversation, you donât get that context. You know, âWhatâs new and different, and whatâs going to make me look good?â You know, those kinds of conversations. Oh, heâs an ego buyer. People will never tell you because they donât really know. Theyâve never labeled this stuff. But you will form a very quick picture only if youâre talking to these people.
So, everybodyâs got a different DNA, or a different need behind the need.
Then finally on this is the aspirations. Everybody who buys stuff, theyâve got certain needs, theyâve got certain needs behind needs, drivers, that we talked about, and theyâve also got aspirations. And sometimes, when I canât 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 peopleâs projects, asking them questions about their project 6 months down the line, 12 months down the line is really important. But itâs more than just asking questions. You can annoy the crap out of customers by asking them a long list of meaningless questions. Thatâs a Frank strategy. OK. Weâve got to do something thatâs a bit more interesting.
So, hereâs 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 whatâs even better than Molly the Bear? Talk to the customer, because actually even Molly the Bear is slightly fallible. Sorry Dharmesh, if youâre here. Yeah, itâs slightly fallible, because what weâll start to do is weâll 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 donât 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 doesnât matter. It will be different for every one of you. But put it into your plan, because if you donât, youâll 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, thatâs Frank strategy number two.
The traditional sales strategy is ask a few questions and then as soon as the client says scalabilityâs really important, âAh, Iâm glad you said scalabilityâs important.â And then off you go on a scalability rant. Iâm the client, Iâm thinking, well it was kind of important, but there was some other stuff thatâs much more important. And youâve just hammered them with the scalability.
All right. What great salespeople do, the very best Iâve ever met, what theyâre 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 canât provide it, they will learn something valuable about the customer. And just because theyâve got that relationship, they can say to the customer, âDo you know what? We donât do this yet,â or, âDo you know what, a lot of people ask for that, but we do something different that does get you the same utility.â You can have a conversation about that.
Selfish questioning is hunting for the red button.
When I first went into sales, somebody said, âYouâve got to look for the hot button. And you find the hot button and you zero in on that and you sell on that.â 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 theyâre being led down the garden path into asking political style questions: âExcuse me, sir, are you worried about crime in your area?â âYes, Iâm worried about crime in my area.â âDo you think there should be better policing?â âYes, I think there should be better policing.â âWell, vote for..â You know, that kind of thing. You feel like youâre being led down the garden path. Thatâs not selfless questioning, thatâs Frank questioning.
Selfless questioning is: who, what, when, where, why? Itâs wide open questioning. Itâs curious. Itâs what I call appreciative curiosity. Your clients are the most interesting people youâll ever meet. Have a questioning strategy. Donât just talk to people. Donât just dive in there. Sometimes itâs 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 itâs easy to talk to them about. When you guys all meet out here, even though you tell me youâre introverts, you donât 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 youâd be surprised how little of it goes on.
Once somebodyâs talked about that stuff, itâs easier for them to talk about the business theyâre in and the project theyâre working on. If you ring up somebody out of the blue and say, âSo, what business are you in and what project are you working on?â âScrew you. Iâm not telling you.â But talk to somebody, you know, âYouâve made this download. I see you downloaded the version with xy functionality. Can I ask what encouraged you to bring it down? Whatâs been your experience so far? How useful has it been?â All of that kind of stuff is really important. Then talk about utility. âWhat do you really want from this?â 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. âWell, I think I need some extra capabilityâŚâ 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, âWell, what have you considered? What have you tried? Whatâs worked? Whatâs not worked?â Customers love talking about that stuff. And itâs great when they start slagging off your competition, you know, and you donât 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 itâs not just the software Iâm buying, itâs the whole package. Itâs the companies, the relationship. So, talk to them about their best experiences, as well as ones that their not so happy with. Only when youâve done all of that, talk to them about budget.
Thereâs a natural flow to a sales dialogue, and youâd be surprised how few people do it. Technical people want to go straight into the utility. Itâs really tough to talk about utility until I fell I trust you, until I feel thereâs a rapport. If youâre going to ask them direct questions, listen to the answer.
The two most common reasons why people donât listen:
Number one is a thing called flare up. Itâs 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 youâd do something really cool. You stop listening to them.
The other thing is assumptions. Youâve been talking to clients all day and you start to think you know what theyâre 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, âOK, 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?â âTwo, miss.â And of course, it wasnât 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 Iâm 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, Iâm not decrying the importance of it, Iâm also a red-blooded capitalist, but we can target them on feedback, target them on the quality of stuff thatâs going into your CRM. Did we get the DNA, did we capture it? Because if you donât 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, Iâve added Chi there.
Go and get the software from Dharmesh and target them on how happy they are, because when somebody buys from you, theyâre not just buying the product, theyâre 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 youâre interested, if itâs 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 whoeverâs talking to the customer, talk to them about what theyâve learned about the customer. When somebody comes off the phone and goes, âIâve got this great deal. Iâm talking to this guy, heâs really, really interested.â âIs he really? What kind of a buyer do you think he, or she, is?â You know, âWhat needs? Letâs 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 yearâs time? Have you had that conversation?â 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, donât 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, âWow, what a great company. How do you do this?â And they ask you interesting questions about the product, âAnd what about the culture? And what about the customer?â Those are the people that will make the best salespeople. I mean, thereâs other stuff as well, but thatâs critical. Thatâs absolutely critical.
Iâve gone slightly over, but Iâm just going to finish with this one thing. Iâve covered all of this stuff, and some of you are undoubtedly thinking, âWhat has this got to do with me? Iâm not the salesperson.â Iâm 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 youâre the founder. Your the problem solver. Nobody will match your knowledge of the product. And thereâs just something cool about talking to founders. So, thank you very much guys. Go and build some dialogue. [Applause]
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Collaborative Notes
Engaging Dialogue
In this session Paul will explore how best to get the customer really talking about their needs their concerns and their aspirations. We will explore how best to use our questioning and listening skills to engage the customer in a meaningful dialogue, which will help not only to identify an appropriate solution, but also to enhance the customer experience.
Paul Kenny is frank about Frank
Every conference seems to evolve a theme organically. BOS2010 seems to be developing a theme around customer experiences. The stuff you do as a startup becomes part of the cultural DNA of a business. Founders have a unique opportunity to hardwire either: brilliant standards for sales or; programmers contempt for sales. Dharmeshâs talk about Molly the Bear was a critical reminder of how important the customer was and Jasonâs roasting of sales in general and Frank in particular, was a real wake up call.
Most founders and technical people hate sales and cannot embrace him. By doing so, you as a founder are totally at the mercy of the Franks of the world. Franks come from the world of Enterprise Sales where sales cycles are long and it takes at least 3 years to be found out. Franks often have have impressive resumes that talk about massive sales achievements but you need to realise that most of the work is done by the brand â Microsoft, Oracle etc. There is a role for Frank but he NEEDS a big, powerful, brand with big expenses and big cars in order to do their job. Eventually, the Franks of the world run out of luck and places to go and then try to move to the world of startups where they think they can cut themselves a nice deal as the founders DONâT HAVE THE BACKBONE TO DO THE SELLING.
Although it is a bit uncomfortable for founders to talk to people, it is just another thing that a founder has to do. It is a lot easier than firing people.
This is Paulâs third BOS conference. Here is what he covered in the previous two:
Paul Kenny 2008 2009 Precis
Biggest question from last year was, âHow do you know which stories to share with your customers?â
This is critical and the subject of todayâs talk.
Paulâs son Tom wants to hear stories that involve all the things that Tom loves â Horrid Henry, Spongebob, Aliens, Zombies, Fernando Torres and a climactic sporting challenge in which Tom steps in to save the day. Only Paul and Tomâs Mum really know how to tell a story to Tom that works for Tom. They know what he wants, likes and responds to.
Bed time stories for Tom
Same principle applies to customer dialogue.
- Quality of Dialogue is DIRECTLY PROPORTIONAL to Quality of Customer Acquisition.
When there is little perceived difference between two products, you are likely to buy from the person that you like the most. the most interesting people you will ever meet will be the people who are most interested in YOU. People like to be sold to in their language, not yours. âGreat sales people ask great questions, tell great stories and put together great deals.â
âThe customerâs faith in your product as a solution to their problem is directly proportional to how well they believe you understand their problem.â
This is the key reason that you NEED TO TALK TO CUSTOMERS. The dialogue depends on where you think you are in the market.
Two by two story matrix
- High Burn/High Risk â You need to know what will drive a decision.
- Differentiation â You need to be able to show how you are different
- Evangelists â Sell the dream
- Dream segment â You need to talk about the future
The average amount of time that sales people take from moving from small talk to talking about their product is 47 seconds. You probably donât get to know too much about customers and what they want in 47 seconds. You only need to do a little more than the average to make a huge difference to your customer engagement.
what do you need to know about customers?
Hard data Soft data
Most people know some of the hard data about their customers, but you need to know the softer, DNA based stuff â Drivers, Needs, Aspirations.
DRIVERS â never (or rarely) explicit. This is stuff you can only get from talkingto a person.
- Ego â how does this make me look good
- Security â No one got fired for buying IBM
- Ease
- Belonging
- Gain
NEEDS â the functions that are important to them. This saves doing a lot of long boring demos.
- Function â what do they need something to do?
- Timescale â a quick, immediate & inferior solution is often better than a perfect one that takes a year
- Scalability
- Integration
- Affordability
- Result â is often non-obvious (Paul has a Kindle to buy him space. If he has any more books, he will need to buy a bigger house â more expensive than a Kindle).
ASPIRATIONS
- Project
- Team
- Personal
Guidelines for creating a better dialogue with customers
JUST DO IT
Talking to customers trumps having Molly the Marketing Bear to represent the customer. (See notes on Dharmesh). You run the risk of making assumptions without real dialogue.
SELFLESS QUESTIONING
This is very different to asking questions to find the customerâs hot button. If you ask selfish guiding questions, customers will think you are a dick, or even worse, Frank. Appreciative curiosity.
Dr Evil’s Questioning Strategy
Start with the easier stuff and move onto other stuff.
ASK SIMPLE, DIRECT, OPEN, QUESTIONS AND LISTEN
HARDWIRE THE DIALOGUE HABIT INTO YOUR CULTURE
If you only target sales people on revenue, they will only produce revenue. You can also target them on:
- Feedback
- Growth
- Loyalty and CHI (Customer Happiness Index)
REMEMBER
- Hire the sales people who ask the most interesting questions, not the one that delivers the best pitch.
- Avoid Frank.
- You have the Founderâs Advantage. No one can match your experiences.
- There is something cool about talking to Founders.