Bob Metcalfe, a co-inventor of Ethernet and co-founder of 3COM and GP at Polaris Ventures is in 6.078 today to talk to us about selling.
The talk began with an excellent point - "nerds" have a disdain of the "suits". But one of the most frequent causes of doom in a tech. start-up is this disrespect. Three things that sink a company are the uncontrollable ego of the founder, lack of money and lack of focus.
He then went over the numbers at 3COM - for every $1 spent on engineering, $10 was spent on increasing sales.
First level of selling consciousness is the belief "build it, and they will come".
Second stage of selling consciousness is argument - go out and argue with people why your product is better than the competitor's. Frequently, you will win the argument, but will not get the order.
The third stage of selling consciousness is when you over-promise and under-deliver. Works better than second stage but is ultimately not too successful.
The fourth and ultimate stage is to learn to listen to customers, and hear what they are actually telling you. This will result in the maximum number of sales.
Caveat: If you are going to go ask customers what they want now, you are going to have to guess what they want 2 years from now, if that's when your product is going to be ready.
On how do you know when you're selling to someone who will never buy vs. someone who needs more convincing, the trick is to qualify the customer. 3COM survived versus competitor because they made a conscious decision to not network Apple computers.
Showing posts with label Sales lessons. Show all posts
Showing posts with label Sales lessons. Show all posts
Monday, November 30, 2009
Saturday, August 9, 2008
Salesmanship
When I started my first company, I was convinced I hated sales. I disliked the idea of selling something a person does not really need, but ends up buying because I was glib. I questioned the ethics of it, and told myself that I would never be a good salesperson because of this. Boy was I wrong! Well before I acquired my first customer, I realized that practically EVERY aspect of running a business involved sales. I was constantly selling something or the other - an idea, a product, a vision - to someone or another, be it the software engineer, a partner or an investor.
Why I remembered this today - I stumbled upon this really interesting blog post titled "What I learned buying a rug in Turkey". I found myself relating to a lot of the author's experiences and educated myself about the psychology and science behind it. I am looking forward to reading Robert Cialdini's book. I will post a review when I am finished.
Mr. Weisburgh's post reminded me of my own experience recently when we were visiting the Taj Mahal in Agra, India. In order to minimize pollution and for security reasons, vehicles are not allowed close to the Taj and the nearest parking was a fair distance away. When we reached this parking lot, we were besieged with people offering to take us to the entrance using various means of transport - a golf cart, an EV, a horse carriage, and a cycle rickshaw were our options. The horse carriage and the rickshaw drivers got our attention appealing to our emotions - they pointed out this was their livelihood and will likely forgo a meal if we end up picking the golf cart. Having effectively whittled away our choices, the rickshaw puller played the emotional card further asking us to choose between feeding a horse versus a human being. We were effectively trapped though I had misgivings about a man doing the work of a horse - the road had a slight slope and it was no easy task for one man to haul 300+ pounds of our combined weight.
We had negotiated for one way transportation only since we were trying to get to the Taj as quickly as possible before it closed for the evening, and had planned to take a leisurely stroll back enjoying the cool evening breeze. When we reached the entrance, several things happened. Looking back at it after reading Mr. Weisburgh's post, it was classic salesmanship that I experienced, without recognizing it.
1. Reciprocation: During the ride, the rickshaw driver informed us that electronics such as cell phones and iPods are not allowed inside the Taj for security reasons and to make sure we leave them at the lockers provided if we didn't want to be harassed by security people. He also made it a point to mention that potable water wasn't readily available inside the Taj, and to make sure we take our own when we go in since it was a particularly warm day. We were very grateful for this advice, particularly since it was spot on.
2. Commitment and Consistency: The driver told us that all of the entrances would look alike once we were inside, and to make sure we retrace our path and come out of the same entrance if we didn't want to be stranded a long hike away from the parking lot where our car was parked. We couldn't deny the logic of this advice and committed to coming out the same entrance, and out of consistency, agreed to meet him when we returned since he said he would wait for us.
3. Social Proof: The driver was so grateful for the business that when he clasped his hands together to profusely thank us, who were we to say we won't give him our business on the return trip?
4. Liking: The driver provided helpful tips on how to get the most out of our Taj visit and built a rapport with us before he successfully talked us into riding his rickshaw for the return trip.
5. Authority: He told us he was born and raised in the area and had been in this business for a number of years and therefore had inside knowledge of the Taj, thus establishing his authority.
6. Scarcity: Knowing that time was scarce and if we had walked we would have made it barely 10 minutes before closing time (as the rickshaw driver pointed out) made the rickshaw ride more compelling.
I bet the rickshaw driver hasn't read Cialdini's book. Successful salespeople just seem to know the tricks.
Why I remembered this today - I stumbled upon this really interesting blog post titled "What I learned buying a rug in Turkey". I found myself relating to a lot of the author's experiences and educated myself about the psychology and science behind it. I am looking forward to reading Robert Cialdini's book. I will post a review when I am finished.
Mr. Weisburgh's post reminded me of my own experience recently when we were visiting the Taj Mahal in Agra, India. In order to minimize pollution and for security reasons, vehicles are not allowed close to the Taj and the nearest parking was a fair distance away. When we reached this parking lot, we were besieged with people offering to take us to the entrance using various means of transport - a golf cart, an EV, a horse carriage, and a cycle rickshaw were our options. The horse carriage and the rickshaw drivers got our attention appealing to our emotions - they pointed out this was their livelihood and will likely forgo a meal if we end up picking the golf cart. Having effectively whittled away our choices, the rickshaw puller played the emotional card further asking us to choose between feeding a horse versus a human being. We were effectively trapped though I had misgivings about a man doing the work of a horse - the road had a slight slope and it was no easy task for one man to haul 300+ pounds of our combined weight.
We had negotiated for one way transportation only since we were trying to get to the Taj as quickly as possible before it closed for the evening, and had planned to take a leisurely stroll back enjoying the cool evening breeze. When we reached the entrance, several things happened. Looking back at it after reading Mr. Weisburgh's post, it was classic salesmanship that I experienced, without recognizing it.
1. Reciprocation: During the ride, the rickshaw driver informed us that electronics such as cell phones and iPods are not allowed inside the Taj for security reasons and to make sure we leave them at the lockers provided if we didn't want to be harassed by security people. He also made it a point to mention that potable water wasn't readily available inside the Taj, and to make sure we take our own when we go in since it was a particularly warm day. We were very grateful for this advice, particularly since it was spot on.
2. Commitment and Consistency: The driver told us that all of the entrances would look alike once we were inside, and to make sure we retrace our path and come out of the same entrance if we didn't want to be stranded a long hike away from the parking lot where our car was parked. We couldn't deny the logic of this advice and committed to coming out the same entrance, and out of consistency, agreed to meet him when we returned since he said he would wait for us.
3. Social Proof: The driver was so grateful for the business that when he clasped his hands together to profusely thank us, who were we to say we won't give him our business on the return trip?
4. Liking: The driver provided helpful tips on how to get the most out of our Taj visit and built a rapport with us before he successfully talked us into riding his rickshaw for the return trip.
5. Authority: He told us he was born and raised in the area and had been in this business for a number of years and therefore had inside knowledge of the Taj, thus establishing his authority.
6. Scarcity: Knowing that time was scarce and if we had walked we would have made it barely 10 minutes before closing time (as the rickshaw driver pointed out) made the rickshaw ride more compelling.
I bet the rickshaw driver hasn't read Cialdini's book. Successful salespeople just seem to know the tricks.
Sunday, June 22, 2008
Thoughts on salesmanship
I was reading an article about the importance of sales in any organization and that got my mental wheels turning. I figured I could use my blog as "lessons learned" ledger, so here's what worked for me when I was trying to sell my Smart Shopping Solution to grocery stores:
- First and foremost, confidence in my product and sales skills. It was uncanny how people I was making my sales pitch to could instantly pick up when I was less than completely confident.
- Characterizing and selling my product as meeting an unmet need, as opposed to a "want". Sounds simple enough, but it took me a couple of failed pitches to figure this out.
- This one took me completely by surprise, but in hindsight make sense: having a competitor is VERY important on a couple of levels. Potential customers get uneasy when they think they're guinea pigs for a new technology or a new product. The more adventurous will try to use that to their negotiating advantage. Plus, it's really hard to make a case that you're fulfilling a need and not a frivolous want when you claim there's no other company in the world that does what you do!
- Fairly basic lesson learned during my days in corporate America trying to communicate with people who are not involved in the nuts and bolts of engineering the product, basically any one who was not an engineer and a co-worker: describe the product in terms of benefits to the target audience, not features. No matter how cool, or gee-whiz-bang the feature is, save it for fellow geeks who actually get the"it's not a bug, it's a feature!" joke.
- First and foremost, confidence in my product and sales skills. It was uncanny how people I was making my sales pitch to could instantly pick up when I was less than completely confident.
- Characterizing and selling my product as meeting an unmet need, as opposed to a "want". Sounds simple enough, but it took me a couple of failed pitches to figure this out.
- This one took me completely by surprise, but in hindsight make sense: having a competitor is VERY important on a couple of levels. Potential customers get uneasy when they think they're guinea pigs for a new technology or a new product. The more adventurous will try to use that to their negotiating advantage. Plus, it's really hard to make a case that you're fulfilling a need and not a frivolous want when you claim there's no other company in the world that does what you do!
- Fairly basic lesson learned during my days in corporate America trying to communicate with people who are not involved in the nuts and bolts of engineering the product, basically any one who was not an engineer and a co-worker: describe the product in terms of benefits to the target audience, not features. No matter how cool, or gee-whiz-bang the feature is, save it for fellow geeks who actually get the"it's not a bug, it's a feature!" joke.
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