Once upon a time simple forms of industry knowledge were a significant competitive advantage. The little things we knew about our industry from working in it mattered. We had to earn expertise over long periods, and the release of that expertise to prospective customers. We traded in trade secrets. But now those days are coming to a close.
In a market where anyone can know anything about an industry (from the worlds experts) with just a few key strokes, then we need change our view on what creates an advantage. Knowledge of products, prices, places, who does what and who owns what are all knowable. We are quickly approaching a market of perfect information. And when everyone can know everything, and prices quickly level out, the only thing left is trust. And a great way to build trust is by sharing trade secrets. By being generous with our knowledge well before we want to do business with anyone. We need to share what we know so others can navigate the market and reduce their risk.
When it finally comes down to doing business, customers have a much higher probability of trusting those who gave them the most trust first.
When selling anything we need to know where to focus our energy. Often there are two different realms we need to sell against.
- Convincing or demonstrating to the person that the product or service is good or better than the alternative.
- Convincing the person to exchange the thing in question for their money.
Most good sales people know how to do both of these tasks, but sometimes it’s tricky to know which one is the focus question of the moment. A simple way of finding out is to go ahead and ask. It’s worth remembering that selling isn’t a guessing game it’s a service game.
In baseball a hitters average matters a lot. If you are hitting 100, it means that you score a run 1 out of 10 times you step up to the plate. If you are hitting 300, it means you are getting 3 runs per 10 steps up to the plate. In modern times, a season batting average higher than 300 means two things. The first is that you will be in high demand in major league baseball. The second is that you will be earning millions of dollars for that skill. Anything higher than .400 is regarded as an almost unachievable goal. The last player to do so, with enough plate appearances to qualify for the batting championship, was Ted Williams of the Boston Red Sox, who hit .406 in 1941, though the best modern players either threaten to or actually do achieve it occasionally, if only for brief periods of time.
It turns out that sales and baseball are very similar.
An average person will probably close a deal 1 out of 10 times. Someone who can get the job done 2 our of 10 times will make a very good living as a sales professional and earn an income well above the norm. If however, a person can get over 300 in selling, then they too will end up earning millions of dollars – just like the guys in the major leagues. All they need to do is find an industry that understands and appreciates the value of people who sell their wares. A big clue here is that it wont be a product that sells from a shelf. Another clue is that sales can be learned, it’s invariably a human skill that we all have, but very few people actually embrace their potential to do it.
When it comes to startups, we’ve all got to sell. We’ve got to sell our ideas, our passion, our product and our vision. We’ll even need to sell to our supply chain before we even get a chance to sell to customers. Success and selling are inextricably linked. No matter how advanced technology becomes someone has to sell it at some point, or revenue wont happen.
The thing to to remember though, is that we really only need a hit rate of 2 out of 10 to beat Joe Normal. Doing any better than that and we are on our way to stardom.
It has been said many times that ‘selling’ is the worlds highest paid profession. While I had my doubts early on in my career, I have never been more convinced of it that I am now. For quite a few reasons which I have shared below.
There is no limit
If we are in a real sales job, then there is no limit to what we can earn. That is, we work on commission. And while there are plenty of dodgy commission based sales jobs around, the serious sales roles allow sales people to earn as much as possible. It’s a simple formula to let a sales person take a piece of every pie they bake. If we are working in a sales role for a salary, then the truth is we are not really sales people. If we work in a sales role that has guaranteed distribution – then again we are not really in a sales role.
The truth about investment bankers
The general populous has been tricked into thinking that investment bankers (yes the type that hang out in wall street and ruin economies) are mathematicians and brilliant statisticians who work out innovative ways to generate more money than existed before they arrived. Well, the global economy learned the hard way that the people running the finance industry are not a bunch of geniuses who worked out algorithms beyond our comprehension. The reality is that the highly paid investment bankers are the sales people of their organizations simply extracting commissions. It just so happens that small percentages on big numbers really add up. The unfortunate thing for all of us is that they are unscrupulous operators who invent a bunch of bullshit (unsecured debt derivatives anyone?) to sell people sausages at steak prices. But the fact is the money goes to the guy who ‘convinces people to pay’ not the engine room.
Great entrepreneurs are gun sales people
It doesn’t matter how great our startup is, we have to sell the idea. First to investors, then to customers – and very often, even to employees and suppliers. The hardest part about what we do as entrepreneurs is getting people on board. Selling to all the members of our supply chain. Sure, the occasional new product or service enters the market and wows the world and spreads organically, but this is the exception more than the rule. It should be our assumption that we’ll have to sell startup to everyone it touches instead.
The definition of selling has changed
When we hear the term ‘salesperson’ we imagine the someone working in a car yard, or traveling sales guy with a brief case calling on prospects, or the telephone sales cold caller. We need to change our perception of what the sales person is these days. The sales person in the 21st century is the blogger, the tweeter, youtuber, the instagramer, the public speaker, the co-working space provider – anyone who is a self publisher. When we self publish, by definition we are building a personal brand that we hope to sell at some point in the future. It’s pretty much everyone. We’ve now entered the age of the micro entrepreneur and personal branding. And if we can’t sell ourselves, we certainly wont be able to sell anything else. We’re all sales people now.
The final human truth is that selling is technology agnostic. The sales process doesn’t care if we are selling potatoes, micro chips and iPhone apps. The process remains unchanged, even though the tools are broadening. And if we want to succeed at anything, at least financially, then we need to embrace the idea that selling is where the money is, always has been, and always will be.
I heard a great little story today about how to overcome barriers when pitching business, changing minds or influencing in general.
Changing worldviews is hard, often impossible. But there are two possible routes we can take when trying:
Route (A) We can try and change peoples view on a topic- change the unchangeable.
Route (B) We can change the currency. - This route is invariably more successful because it re-directs peoples perspective.
Car sales people do it all the time. Once the negotiation is close to reaching a stale mate on price, they then bring in the optional extras: Items removed from price. Although they do have a value, it changes the view point of the negotiation. It’s a change in currency. And the discussions can progress to a close.
When trying to reach an agreement, or change a mindset, we need to re-invent the currency of what is being discussed.
I took this piece of copy directly from the 37 Signals blog. When it comes to websites, it’s what often the one thing we really need to break through. I also think it is why ‘free’ on the web just wont go away. It’s something web startups just can’t ignore.
The Network Effect: The network effect occurs when the value of a particular good or service increases for both new and existing users as more people use that good or service. It can also occur when other firms design products that compliment an existing product, thereby enhancing that product’s value. For example, the fact that there are literally millions of people using eBay is the thing that both makes eBay’s service incredibly valuable and makes it all but impossible for another company to duplicate its service.
Seth Godin has an interesting idea of being Famous to the Family. Which is similar to my definition of cool: the stuff that matters, to the people who care.
This short interview is a 5 minute investment worth making.
- Decide who your family is.
- Build them stuff they really care about.
- Enjoy doing it enough, to be able to continue without riches.
- Be patient.