Todd Caponi: The Transparency Sale

The Transparency Sale

Today, children (aka “our future buyers”) are growing up surrounded by reviews and feedback on everything they interact with. Adults are becoming dependent on them as well. These present and future buyers have an expectation of transparency, where their decisions are influenced by user-submitted feedback listed right alongside the options they are deciding upon.

A product with a 4.2 star rating sells better than one with a perfect 5.0. Inherently this makes sense. Our brains are wired to resist being “sold-to” and so this is an understandable defense mechanism.

The Transparency Sale is about giving people all of the information the brain requires to feel confident about making a decision. It’s about framing our solutions as a 4.2 – 4.5, and no longer positioning as though we’re a perfect 5.0.

Prior to the digital age we’re all living in, salespeople had the power. Buyers needed sellers. Buyers had limited means to research your products, your services, and your pricing without actually communicating with you, the seller.

It’s time to regain the power back. This starts with a better understanding of our buying brain: the way that we make decisions as consumers. Beyond reviews or striving for authenticity, building a better understanding of how decision making really works is key to getting better at selling anything to anyone.

Transparency Redefined

The Brain and Decision Making

Why do people make decisions the way they do? Why do people justify decisions to others one way, but are likely making those decisions using a different set of criteria? The mission of the sales profession is meant to be to help people make good, confident decisions that have a positive impact on their buyers both personally and professionally.

I identified three fundamental truths about how the brain functions and makes decision in a sales context.

For the purposes of sales application, think about your brain as having three primary “parts:”

The reptilian brain: Located at the core of your brain, this part governs instinct.
The limbic/midbrain: This section of the brain is in charge of your feelings and emotions.
The neocortex: The neocortex makes associations utilizing the information it receives from the reptilian brain and your limbic/midbrain with thought and logic.

As these parts work together, there are three fundamental truths that result from the brain’s configuration:

Our brains are designed to resist “influence.”
Our brains are wired to make decisions with emotion and feelings, then justify those decisions for themselves and to the outside world using logic.
Human beings make over 90 % of decisions subconsciously.

In a University College London study, it was found that the amount of effort an individual perceives in doing anything actually changes what our brains see.

There are three strategies the brain executes to avoid influence and resist change.

The first way the brain works to avoid influence is through physical avoidance.
The second core way the brain works to avoid influence is through mechanical avoidance, which can look like fast forwarding through commercials or filtering and deleting unwanted spam emails without reading them.
And the third way is through cognitive avoidance, which is the act of looking away from an influencing message.

Dr. David Rock created a model for the feelings that drive decisions that focused on humans’ tendencies to move (a) towards a reward, or (b) away from risk. He calls it his “SCARF” model, consisting of five domains of feelings contributing to a decision: Status, Certainty, Autonomy, Relatedness, and/or Fairness.

Status is about relative importance of the purchase to others.
Certainty is related to how well the buyer feels he or she can predict the experience that they will have as a result of the purchase.
Autonomy related to the perception that the buyer has a sense of control.
Relatedness is associated with cause and effect, or connectedness.
Fairness is a perception of the cost versus the expected value in return resulting from a purchase.

In the book, Descartes’ Error, author and neuroscientist Antonio Damasio takes readers on his journey of coming to this discovery, that without feelings, decisions could no longer be made.

Damasio proclaimed, “We are not thinking machines that feel. We are feeling machines that think.”

We often forget that the sales process isn’t about one decision, but hundreds (or maybe even thousands) of subconscious micro-decisions.

Branding expert Martin Lindstrom. In one of Lindstrom’s studies, which reveals our subconscious decision making, he studied 2,080 smokers on their perceptions of the warning labels that appear on the side of packs of cigarettes.

Lindstrom’s findings resulted in his conclusion that, “You really can’t ask that question to the conscious mind and depend on a verbal answer.”

As sales professionals configuring our message, we so often believe that our prospecting messages of massive returns, incredible growth, and huge profit margins will compel your audience to action. The human brain does not always equate what’s best for it with the actions and decisions it makes.

Buyer Empathy

“Transparency is the risk, authenticity the currency, and trust is the reward.” — Dr. Mani

Depending on the study you read, in most industries, approximately 25 % of all deals that are truly “qualified” actually close, where a “qualified” opportunity is one which meets the criteria you and your company have defined, indicating that the potential customer is worth pursuing.

And, according to a research study by “The Sales Benchmark Index,” a whopping 58 % of qualified opportunities end with the buyer opting to do nothing.

During every interaction with a potential buyer, your buyer is subconsciously assessing whether you are communicating with sincerity, competence, and consistency.

Uncertainty leads to “homework” for the buyer.

Every interaction you have with the buyer is either building trust and confidence, or eroding it, without you even realizing you’re doing it. And, the more homework you require your potential buyer to do, (a) the less control you have over your opportunity, (b) the longer the sales cycle will take for the buyer to reach a buying decision, and (c) the more likely your qualified opportunity will result in the dreaded “no decision.”

Among shoppers under the age of forty-five, 86 % purposely seek out negative reviews before making a purchase.

The higher the amount of “consideration” a buyer needs to complete a purchase, the more their brain requires transparency.

And, with high consideration purchases, you are no longer selling to just one individual: Those organizations have buying teams, processes requiring multiple approvals, and multiple “buyers” who will need to have their brains feeling confident in finalizing a purchase with you.

Every single interaction is a decision point for the buyer.
The less trust the buyer has in you, the more homework they will do.
Know where buyers will go to do their homework, and know what they will find.

Why Doing it Right Matters – The Results Formula

There are four fundamental components that are the contributors to your actual results, and they all happen to be directly impacted by your approach through transparency:

Number of Qualified Opportunities
Average Deal Size
Win Rate
Cycle Length

If you increase your number of qualified opportunities by 5 %, your average deal size by 5 %, your win rate by 5 %, and you shrink your cycle length by 5 %, you will grow your results by 22 %.

Ensure you have a tight, consistent definition of a “qualified” opportunity. For each opportunity, I tend to like to “take the prospect’s TEMP,” focusing on the following factors: T – Trigger, E – Engagement, M – Mobilizer, P – Plan.

All of the elements of TEMP are subject to change during the buying journey, however, Engagement has always served as a key indicator of progress.

Measure your progress: Every month, put a reminder in your calendar to measure your progress. What are the percentage lifts or reductions in each category?

Why Change, Why You, Why Now?

Ultimately, the success or failure of a company is in its ability to effectively sell its products and services. A sale is an outcome.

The theory before the advent of the internet was that by modeling a successful sales process, the documented sales process would allow the company to plug in practically any salesperson.

However, the digital age has made selling a “buyer’s market,” where a buyer has the upper hand in establishing their feelings around a potential purchase before they ever talk to you.

Every single buyer you talk to has piles of problems, both small and large.

The key isn’t convincing a potential buyer that your solution has significant ROI. That’s logical, but not emotional.

Typically, a buyer can only concentrate on fixing three to five problems at a time.

The types of questions that buyers often ask themselves are regarding which problems to address are: which projects do I really believe will increase revenue, reduce cost, or help me avoid a direct hit from a freight train, with the highest return on perceived effort?

Buyers can find themselves in one of three stages:

Actively Buying (AB) = In this stage, the buyer already understands the cost of not making a change to their current environment, has identified and prioritized a problem, and is actively seeking a solution.
Passively Buying (PB) = A potential buyer recognizes that a problem exists but has yet to prioritize resolving it.
Status Quo (SQ) = This kind of buyer is fully content with their current situation, regardless of how much better their situation may become if they pursue an alternative.

You’ll need to deal with all three buying states, and you will need to adjust your approach for each of their feelings and emotions. I would argue that your ideal opportunity is with the SQs.

I have found that when you become the guide, educating the client on a problem or risk they didn’t know they had, more often that buyer will see you as the Sherpa guiding them up the mountain from SQ to PB to AB.

When configuring your sales process, acquire the mindset of recognizing the state of the buyer in their purchase journey. Your efforts will still include prospecting, positioning, presenting and negotiating, but in the context of your buyer’s answers to these questions: Why change, why you, and why now?

The typical activities that are taking place in the “Why Change?” category include “Prospecting,” where you are generating new opportunities, “Positioning,” where you are engaging in the initial dialogue with a prospective buyer, and “Mutual Decision Plans.”

The activities that are taking place in the “Why You?” category include “Presenting,” where you are making a formal presentation and recommendation for the buyer’s business, as well as assisting them in the “logic” to support their decision through the details, often including checking with “References.”

And, once the buyer selects your service, he or she is constantly battling with the final checkbox of confidence in their brain.

It’s all about “Why now?” for the buyer. In this category of the buying process, following the selection of you and your company, your focus shifts to the final “Negotiation”.

Why change?

Email Prospecting

The popularity of another type of interruptive selling, using the telephone, began to overtake the sales world in the early 1980s.

By 1995, telephone answering machines and voicemail expanded in use, and prospecting techniques had to change again.

Now, email is the medium that is the most effective, efficient, and economical path to your buyers. However, advancements in email technology are beginning to have the same effect as caller ID had on the telephone call.

Why do we, as human beings, check email as often as we do?

Responsiveness: In the business world, responsiveness is an admirable trait.
The Low Number Inbox: How does it feel to clear out a bunch of emails from your inbox?
Reward: Checking email is like playing the instant lottery. There’s a chance you’re going to win.

How do we optimize those first few words of the email? Through personalization and value creation, not through sales pitches and attempts to influence.

Here are the words and messages you should avoid in the beginning of your emails:

“I” or “We”
Meaningless pleasantries
Guilt trips

Your subject line and first few words must be a reflection of the content of the email itself. Otherwise, trust is immediately eroded.

Here are some ways to provide value in a personalized way, minus the sales pitch:

Share information about the recipient’s competitor.
Share information that connects with their personal values.
Share information about something useful for their role.
Offer to make a connection. Do you know other people in similar roles, where a relationship between that individual and your prospect could be mutually valuable … for them?
Congratulate them.

Your brain prefers easy tasks, which means short emails that don’t create a time suck or additional work. The visual impact of lots of text puts the brain into resistance mode.

If you can’t fit your initial message into 240 characters or less, there’s a diminishing return to every character that follows. The average word length in the English language is 5.1 characters, so you’re looking at no longer than 47 words. Can you do it? Of course you can.

The simplest way to provide a path for the reader to understand who you and your company are is to include a link to your company in your email signature.

Dr. A.K. Pradeep talks about the concept of “novelty” in his book The Buying Brain. He says that novelty is the single most effective factor in capturing the brain’s precious attention.

The “history of prospecting” would be an interesting book. When a technique is proven to work, the next thing you know, every prospecting salesperson is using it.

When selling, it is important to continually disrupt your customers’ brain filters.

A style that always has the chance of bypassing a buyer’s influence filter is personalization. Don’t give the target homework. But instead, give them an easy path to learn more if they so choose. One click.

Speaking to someone “live” actually creates anxiousness in the brain. Technology is becoming a tool for avoiding stressful situations.

Sellers must adjust to the effect that this shift has had on buyers. The mindset is three-fold:

The buyer’s brain is resistant to being “sold to” or influenced, which is now the primary assumption of an unrecognized phone call.

Managers and executives are considerably more in control of their schedules, desiring not to be driven by interruptions.

For unsolicited or unrecognized calls, managers and executives more often consider the idea that – if it’s important, they’ll leave a message.

Positioning

IKEA doesn’t hide their flaws. Customers expect to have this experience when they go to the store, and as a result, the experience is less unpleasant.

IKEA has created a highly profitable business model that provides stylish furniture at very reasonable prices, and has generated notable customer loyalty. IKEA wears their flaws instead of hiding them. They essentially tell the world, “Here’s what we don’t do, but if you’re okay with that, here’s what you’re going to love.”

Progressive Insurance will give you a quote for your insurance needs, however, they’ll also provide you with the rates of their three nearest competitors.

The truth is, no matter what you sell, it probably isn’t perfect.

Step 1: Figure out where your buyers go if they are looking for independent information on your pros and cons.
Step 2: Do your homework to understand exactly what both you offer and your competitors offer. Create a chart. How do your competitors position their unique offerings?
Step 3: Match your competitors’ unique offerings up against your understanding of your client’s requirements. Which differences matter? Which flaws will matter?
Step 4: Put them in order, from what you perceive to be least important to most important to the buyer.
Step 5: Pick a couple of those offerings from the top of the list, and communicate those to the client.

I liked to take a different approach when presenting this new capability to potential clients. I started with a story about how we screwed up a sampling campaign as we were rolling out the new capability, which ended up disarming the audience of buyers.

Embrace feedback. If your organization has a list of their core values, add this one. Across your organization, it is now vital to have an always-on radar for what your customers are saying about you, what your competitors are saying about you, what analysts and bloggers are saying about you, and what current and former employees are saying about you.

Marketing: Holistically, your marketing team will need to be constantly aware of the chatter about your organization. The goal isn’t to create a list of reasons why you’re inferior, then have a sales organization list them off in an excruciating “This is why we suck” diatribe. The goal is to employ messaging that presents your solutions on the 4.2 – 4.5 range, not a perfect 5.0.

Sales Enablement: The sales enablement team will need to turn marketing’s messaging into training where sales professionals can practice delivering less than perfect positioning.

Mutual Decision Plans

While you might think that adding more choices to a shopping experience is valuable, study after study shows that the more choices and decisions you force on the buyer, the more fatigue it causes the brain. As a matter of fact, Roy F. Baumeister, who authored the book Willpower, coined the term “decision fatigue.”

Commonly called either a “Sequence of Events” doc (SoE), or a “Mutual Action Plan” doc (MAP), these documents are designed to lay out the decision-making journey with a buyer. I like to call it a “Mutual Decision Plan” (MDP), which is an incredibly important element of the Transparency Sale, or really any sale. If you do four things, you make decision making so darn easy:

Introduce the MDP early.
Make every interaction transparent.
Revisit/follow the MDP through the entire process.
Limit options.

Once you’ve collaborated on the plan, some amazing things happen:

A Truly Qualified Opportunity
A Confident Buyer
An Early Warning System

When the brain isn’t exhausted from the journey, decisions get made.

Why you?

Presenting

While many of these sales processes are rightfully designed to recognize buyer behaviors, they serve as a foundational framework to ensure efficiency, consistency, and a guide to the buying journey.

What I’ve rarely found is an organization who has implemented a presentation process.

Our brain’s number one priority is to get its genes to the next generation … so, survival and reproduction. Your presentation is pretty low on your audience’s brain’s priority list.

Selling to a group versus an individual is especially hard, given that these individuals all come to a purchase evaluation with unique personal beliefs, motivations, fears, hopes, and desires.

In psychology, the term “the boomerang effect” refers to what happens during an attempt to persuade someone, but end up solidifying their opposing position instead.

When we present information logically, we may be subconsciously causing a group to solidify opposing views to a potential purchase. When we present stories and emotion, then support that emotion with logic, the result is a much higher propensity to drive connectedness and consensus.

Focusing on short-term rewards is a more effective mechanism than attempting to gain consensus through a set of long – term fears which may never become actual threats. A short-term “carrot” has a greater impact than a longer term “stick.”

Bring these concepts together: focusing your presentation on the client, empathizing with their state of mind and attention span during a presentation, emphasizing emotion over data, and emphasizing rewards over fear.

To help the prospect understand that their situation may be broader than just the problems they outline for you? That’s the goal, right? To help them understand their problem more fully, to inspire feelings that their status quo is less sustainable than they originally thought, to motivate them to change, and to connect them in a way where they want to change with you!

I use as a guide to creating a presentation with a focus on your audience. It is designed to disarm, educate, engage emotion to bring the audience together, and compel action.

Step 1: Alignment. Begin the meeting with a verbal agreement on the purpose, agenda, and ground rules of the meeting.
Step 2: Disarming. The audience is getting ready to hear a sales pitch. Their brains are shifting into a mode that is subconsciously telling them, “Ok, we’ve gotten through the pleasantries, here comes the flood!” Our purpose here is to disarm that filter, through a relevant story, a personal revelation, or a vulnerability.
At this point in the presentation, the client is comfortable and disarmed. However, one wrong move, and your efforts to disarm their midbrain’s “influence” protector will be lost.
Step 3: Diagnosis. Now is the time to teach them something about their business that they likely had not ever considered, showing them how their status quo is not only unsustainable, but worse than they may have previously considered.
Step 4: Prove It! Knowing that the brain needs data to justify a feeling they have in their own brain, we had to quickly follow up with the proof.
Step 5: Potential Reward. Considering that the human brain is more attracted to a reward than a potential future risk, the framing of this language is an important consideration.
Step 6: The Path Together.

People learn in small chunks. The “sustained” attention span of an adult is thought to be no longer than fifteen to twenty minutes, and that’s for someone performing surgery, handling fragile objects, or anything else requiring consistent results on a task over time. Listening to your presentation isn’t likely to be that mission critical for your audience.

If the presentation has to be longer than twenty minutes, then think about how you can give the audience a brain rest every five to ten minutes.

Also, keep in mind that most people can only hold around five items in short-term memory.

Having your last slide, which stays on the screen during the final portion of a presentation, containing only the word “Questions?” is a mistake.

What action do you want everyone in that room to take when they leave the conference room?

Have passion for your topic. The words you use should be chosen to generate engagement.

Create a “presentation choreography”, the six-step presentation choreography framework designed to teach, tell a story, and reinforce both emotions and rewards for action.

Empowering References

If you’re the buyer and you’re speaking with a reference, you are looking for the honest, less than perfect reviews.

First, just like your prospecting emails, asking a client to be a reference must be framed as valuable for the client.

Second, empower your references to talk through the challenges they’ve had in working with you.

Lastly, knowing that it doesn’t take a perfect reference to make a perfect reference call, is there an opportunity to develop more of your clients into potential advocates?

Why now?

Transparent Negotiations

“Transparent Negotiation” is showing your hand to the buyer from the beginning, disarming their barrier to the discussion. It’s providing your buyer with the transparency that continues to builds a feeling of certainty, fairness, and provides them with the autonomy to configure their own deal with you.

I wrote the following four items on the whiteboard, known as our “levers;”

Volume
Timing of Cash
Length of Commitment
Timing of the Deal

Phrase, “pay you in the form of a discount” is one I used often. It sets the tone. It legitimizes the pricing we provided as a part of the initial proposal. And, it reminds the client at every stage of the discussion that we’re not here to provide charity, but to structure a mutually beneficial agreement.

During the “Positioning” phase: At the start of the sales cycle, when a prospect asks about how our solutions are priced, be transparent right from the beginning.
Proposal Delivery: When we deliver our initial proposal, it should be clear that your pricing is modeled around your levers.
Final Negotiation: Then, when it comes to the negotiation, the discussion is much easier. Often, it’s unnecessary.

For most contracts where length of commitment matters, there are warranty provisions, or something called “termination for cause.” Essentially, warranty and cause provisions provide buyers with protections in case the solution does not function as described in the documentation. However, many larger organizations ask for something called “termination for convenience.” Termination for convenience (TFC) provides the right for the client to cancel the contract at any time, and for any reason.

Negotiating Terms & Conditions

In so many businesses, the momentum of the deal slows to a grinding halt at the finish line due to “Argh! The lawyers are involved!” All organizations involved have a vital responsibility to balance risk with the anticipated reward.

As a result of the grueling legal processes, the buyer’s excitement level has often eroded by the time you get to the signatures. Momentum is lost. Trust is eroded. The final stage of the sales cycle/buying journey is sometimes the longest and most painful, especially when selling to large, multinational corporations.

Sales teams regularly treat the legal process like it’s not a part of the sales process and relinquish control of that portion of the cycle.

Where are you eroding trust in your contractual language? Where you are placing a burden on your client? This historical approach to legal discussions explains why so many larger companies are forcing vendors to start from their document, placing the burden entirely on the vendor.

A few other tips for getting through the legal negotiations:

Start in the middle: Create a legal document chock-full of unexpected surprises that create mutual value and scream partnership.
Have a cover document: Create a cover document of a few bullets that lay out how the contract was created, what the overall terms are, and explains the reasoning behind language that may appear on the surface to be one-way, but serves to benefit both parties mutual.

Why stay, buy more & advocate?

Post-Purchase Interaction

Often, when we are compensated for closing a deal, we “throw” the client over the wall to the delivery team responsible for implementing whatever the buyer just purchased. In many organizations, the salesperson’s last interaction of substance with the client takes place on the day the contract was signed. Then, a whole new team is assigned, and the trust-building process starts over.

World-class sales organizations and sellers don’t stop when the deal is signed.

As a seller, work with your internal teams to establish a communication process that starts from the minute the signature is made.

Prepare a talk track to kick off the call that touches on the following points:

The buyer’s objectives.
Why the buyer chose you.
A reminder of exactly what they purchased, and what they did not.
Introductions to your team members.

From there, it’s time to step back and allow the process to unfold. Your implementation team will need to earn trust and take ownership of the relationship themselves.

Client Success

Essentially, whether your client success team has a quota or not, they are still occupying an important sales role. Client success teams are directly or indirectly responsible for:

Building trust with every interaction.
Uncover and position upsell and cross-sell opportunities.
Advocating for the customer within your internal organization.
Escalations.

Here are two important pointers for client success teams:

Invest in self-service issue resolution.
Don’t send client interaction surveys after troubleshooting.

It’s impossible to fix things you don’t know about. When clients leave, getting to the heart of the “why” is a fundamental requirement. Listen for the “feel” when talking with a departing or upset client. If they’re giving you logic, confirm that their logic is fully understandable, but don’t be shy about getting to the real “why.”

When a client is in full escalation mode with their emotions, the key focus is to change the “tense” of the conversation.

Own the past: While you could go into a dissertation about how you warned the client about the costs of rushing into going live, if you do this, the client’s brain will go into full survival/defense mode. Instead, quickly confirm that this is your responsibility. You are a 4.2 – 4.5, not a perfect 5.0. Own it.
Communicate the present: Move quickly into outlining what you and your team are doing right now. Confirm what you need the client to focus on to fix the problem.
Confirm plans for the future: Promise a full debrief at a later time. If the client is asking for a promise of retribution in the form of credits or contract termination, now is not the time to discuss those items.

Transparency Applied To…

Foster a culture of transparency, where you are consistently celebrating accuracy versus chest puffing, and celebrating effort and learning over having a “losses are for losers” mentality.

The End of Lying?

Hiding lies or spinning mistakes in business is a no-win proposition in today’s digital age.

Putting customers first, applying your new found understanding of their brain function as it relates to decision making, and leveraging the concepts of unexpected honesty and transparency will become not only the norm, but the minimum acceptable criteria.