Understandably everyone wants to save money, especially in these times, however we need to be aware of falling victim to false economy.  False Economy is an expression that refers to an action which saves money at the beginning but which, over a longer period of time, results in more money being wasted than being saved.

For instance, I have never understood why some people will drive half an hour across town to get their petrol two cents a litre cheaper, all the while using up what they may save by driving across town, notwithstanding the time it took to travel there and back in the first place.  In almost all cases this action delivers a net loss.

The following excerpt from Wikipedia on a False Economy provides some good examples:

A notable practitioner of false economy was King Frederick William I of Prussia, who was said by Thomas Macaulay to have saved five or six dollars a year feeding his family unwholesome cabbages even though the poor diet sickened his children and the resulting medical care cost him many times what he saved.[1]

The concept of a false economy is similar to planned obsolescence, whereby the lower initial cost of a false economy attracts buyers mostly on the basis of low cost, who may later be at a disadvantage.

Motivating factors on the part of the party engaging in false economies may be linked to the long term involvement of this party. For example, a real estate developer who builds a condominium may turn the finished structure over to the ensuing condominium corporation which is run by its members once the last unit is sold and the building has passed a final inspection. Longevity of the components of the structure beyond the final turnover of the facility may not be a major motivating factor for the developer, meaning that the result of the application of false economies may be more detrimental to the end user, as opposed to the developer.

A false economy affects businesses and consumers on many levels.  The quality of decision making is the factor here.  The cause and effect of our decisions may be creating a false economy in our businesses or our personal lives.  Anyone in the procurement profession (purchasing) who still holds onto ‘cheapest’ being their only option for purchasing from suppliers may be setting their companies up for failure or disaster.

For instance, many SME businesses may be tempted by the cheap telco service offering or cheaper equipment.  On the surface, these cheaper offerings could appear to be great deals, but before one buys anything they should do some analysis beyond the obvious price on offer.  Just because something is cheap does not mean it is good for you or your business.  A cheap phone or communications system could mean unreliable phone or poor internet connection, poor equipment performance resulting in frustrated or lost customers who cannot communicate with you or your business, a poor reputation, or poor staff retention.  The so called ‘cheaper’ service just cost you a whole lot more than you intended to pay.

The expression ‘buyer beware’ also springs to mind. It is not just the sales person’s job to convince us to buy it. Our job as the buyer is to do the math and to look at the genuine ROI (return on investment) of our purchase.  Any self respecting sales person is well equipped to look at the consequences and ROI of each purchase, and would help you make a sound decision based on facts.  We need to work together to ensure we do not enter into a false economy for all our sakes.

So what are we really purchasing?  Thinking beyond the immediate outlay of money, we can view every purchase in our personal or business life as an investment.  I have just had a salient lesson in false economy courtesy of my eldest son and his friend when they purchased some remote control products online.  They found some great planes on a website whereby they could purchase them at a considerably cheaper price than elsewhere.  Seeing as they were paying for them with their hard earned pocket money, the price looked great to them.

You can see what’s coming can’t you?  8+ hours of my time attempting to communicate with the US online company to get our order processed involving numerous attempts to get what we ordered fully shipped. This was a classic case of false economy.  Even though my son and his friend went through feelings of devastation at the thought of losing their collective $740, feelings of disappointment when their order was not fully filled and the shipping costs were out of proportion, and resignation that not everyone fulfills their promises, the lessons for all of us were invaluable.

They learnt about checking out the reputation and credibility of a company first, the cause and effect of buying and selling ‘cheap’, that trying to fix problems can take a lot of time and cost money, and that plenty of people have lost a lot more than they did. So we were able to put it into perspective, albeit that $740 to an 11 and 13 year old is a lot of money.  They also discovered the value of thinking before you act, the consequences of actions, and how to process a range of emotions that we feel when things go wrong. Perhaps most importantly, they learnt how to respond with patience and reasoned analysis to get what you want rectified, instead of threats.
All in all it was a great lesson, learnt early in life with limited consequences, and hopefully one they will carry with them into the future to help them on their way.

So if using a cheaper alternative costs you even one sale, is it worth it? While in some cases the answer may be yes, in many other cases the more expensive option may be the one that provides the greatest return for you. As you’ve just read, ‘costs’ can involve a lot more than just dollar value.

Special thanks go to my son Josh and his friend Nick for the inspiration for this article.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

After thousands of hours of study and many years honing technical skills to be a competent professional in your chosen field, it can come as a rude shock that you now need to sell your services and capabilities as well.  In today’s busy market, a competent selling capability isn’t a nice-to-have it is an essential business and life skill.

Interestingly, the topic of selling and growing a business often doesn’t feature in those university lectures does it?  In fact, selling is in many cases covered over and, if spoken about at all, was only mentioned as an unsavoury aspect employed by the desperate.  ‘We don’t have to sell because we are …’ are the famous last words of many failed professional or small business owners who focus only on their domain of expertise as the distinguishing factor.  Well those days are well and truly over.

This myopic view of the essential life skill of selling has often left people feeling vulnerable, confused and financially worse off.  No longer can you rely upon only your technical competence to guarantee your success or wait around for passive referrals.

The bad press that often accompanies the profession of selling doesn’t help either.  Often the only ‘selling’ stories we hear or read about in the media are those about shonky operators exploiting anyone they can, especially the vulnerable and weak. For instance, the plethora of insulation businesses and telemarketing firms exposed as fraudulent and incompetent has done nothing for the PR of selling.  This type of behaviour is labelled as ‘selling’ by the media which I argue is incorrect.  The type of behaviour and intentions exhibited by these operators and other ‘shonk merchants’ is actually fraud and deception, and in some cases bullying and intimidation. That is not selling.  This is one reason why many people don’t want to be in sales.  Who wants to be associated with ‘shonk’?

There is another issue too, the old Australian legacy of the ‘tall poppy’ syndrome.  Heaven forbid that you take proactive control over your destiny by getting out there and promoting your business and your capabilities so others may benefit.  Heaven forbid that you actually make a name for yourself.  ‘Who do they think they are?’ or ‘They’ve got tickets on themselves’ are some of the catch cries from people who begrudge those who get up and make what they do visible to other the people.

These syncs often confuse proactive, ethical self promotion, prospecting, and selling practices with self- grandiose, boasting or big noting.  Sure there are a few people for whom this is true; it’s all about them.  While these people can be highly entertaining in some instances, people often tire of them if there is nothing of real value and substance to support them.  The truth is one can lead a very successful sales career without becoming a boastful, self-absorbed git.  In fact, the research into highly effective sales professionals shows they are often humble, highly self-aware, collaborative, see the big picture and details, effective at what they do, and have a ‘we’ not ‘me’ focus.  They are very capable, resourceful, and engender trust on all levels.  They are worth knowing.  Is this what most of us want for ourselves?  Don’t we want people to know that if they work with us they will be better off as a result?

Despite the overexposure of those shonky operators by the media or the cringe factor brought about by the ‘tall poppy’ critics, there are a lot of good untold stories about ethical selling practices out there.  They often don’t make the mainstream media or general conversations because they are happening everyday in millions of ways.  It’s a bit like IT, we never celebrate or talk about the fact that our IT system hasn’t crashed we only hear and complain about it when something goes wrong.

Yet many people struggling with the concept of selling pay good money to go on selling skills courses to learn how to sell and yet they never put it into practice.  So before you pay money for selling skills, examine the state of your mind; the beliefs, feelings, and intentions you hold about selling.

Your beliefs, not your abilities, could be holding you and your career hostage. Before you can dedicate the energy to become skilful and masterful in something as complex as selling, you need to want to sell.

So let’s cut to the chase, for those of you who now need to consciously include the capability of selling in your business mindset and skills here are a few things to consider:

• Why do you need to sell? Who will benefit from you being able to sell competently?
• How will ethically and proactively promoting and selling your capabilities help you and your clients?
• What is your current view of selling? Do you hold onto a view that makes you feel ashamed of selling?  How is that view affecting your ability to keep your business healthy and viable?
• Can you reframe your thinking about selling? See it as a way to make what you do visible to the people who need to know about you so they can benefit from your skills and talent?
• How do you feel about the statement ‘everybody lives by selling something’?
• How can selling be incorporated into your business and align with your ethical values and desire to run an honourable business?
• Do you feel worthy of being able to earn what you are worth?

Sadly limiting beliefs about selling are a significant issue for many people and something that can be overcome with patience, clarity, and persistence. If this is an issue for you please feel free to contact us to discuss this further. We would be happy to help you get started on your sales career.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

What’s happened to having a pleasant, hassle free customer experience in this country? We are hearing more and more war stories from customers.  Some go to buy something and are met with whinging, whiny staff or others return to a supplier (retailer or B2B) with a query, return, or problem to be resolved to be met by resistance, apathy, excuses, and, worst of all, customers being informed of their lack of understanding about how the company in question works.

I mean, do we really expect our customers to be fully aware of and understand the following:

• The reasons why we haven’t got our stationary supply yet and can’t process a gift voucher because someone forgot to put the order in and head office sent the wrong forms?
• Why we are frustrated, grumpy, or agitated from an earlier customer interaction?
• Why we haven’t taken leave for ages, are stressed out, and can’t cope with dealing with customers at the moment?
• Why we let our best people take leave during the busiest time?
• Our reasons for being in business in the first place? i.e. it’s only a hobby which somehow makes it less of a business
• The internal processes and procedures we need follow to fulfil and service a sale?
• Why we think head office ‘sucks’?
• Our business strategy and how we are having problems making it work?
• Our staff roster or staffing retention issues?
• Our ordering and stocking procedures?

I think you get the picture. The personal dramas on display by some sales and service people, and even business proprietors, would have you thinking they are doing you a favour or that you are there as a counsellor rather than a customer.  It makes being a customer very unpleasant indeed.   I’m all for empathy and understanding, however a number of the issues raised here are just not relevant to the customer and never should be.  We do not need to know about these as part of our customer experience.

While other areas such as returns policies should be made explicit in clear, simple language customers can understand before the sale is made, even if it means having it on display for people to read.  For instance, if you run out of exchange vouchers and can’t process them immediately you need to have an alternate strategy in place to deal with that.  Or if you can’t answer the query straight away and promise to follow up with a phone call then do it.  Leaving a customer hanging not knowing whether it is good news or bad and then having them to do all the leg work to follow up because of you forgot to call is not good enough.

Then there is the customer experience of being met with a surly attitude or a roll of the eyes in response to a query.  If it falls outside a standard procedure it just all seems too hard to deal with.

I am left asking, what has happened to customer service standards in this country?  And I am sure that this is a common question many people are asking. With so many buying choices, managing expectations and modelling proactive, professional customer service and sales activities in a polite, constructive, and helpful way can make  a huge difference to whether a customer returns or not.  We may have the best product or service but if we treat our customers in an offhand manner or take them for granted they are not likely to come back anytime soon, if at all.

A Few Facts about Customers

• Only 4% of customers ever complain directly to the supplier; some simply suffer in silence, while most simply go elsewhere.
• People who stop buying from or dealing with a particular business do so because:
• 1% die
• 3% move away
• 5% seek alternatives or develop other business interests
• 9% begin doing business with the competition
• 14% are dissatisfied with the product or service
• 68% are upset with the treatment they have received.
• It is 6 times more expensive to acquire a new customer than it is to retain an old one.
• Happy customers, or customers who have their complaints satisfactorily resolved, will tell 3 to 5 people.  One study revealed that 1 unhappy customer told 11 other people, who in turn told 5 other people.
• Between 54-70% of customers who complain will nevertheless continue to be customers if their complaint is resolved to their satisfaction.

Customers have more options than ever before and feel less loyalty as a result. I wonder why?  They want products and services faster, cheaper, and better from whoever will provide them. That means that as a customer service provider, the competitive advantage for our companies rests with all of us.

Why is this important to everyone?

It’s important because customer service does more than simply provide a means to drive sales. When companies have a commitment to customer service it raises the bar of competition. The only way companies can effectively accomplish this is through their employees. As the competitive bar goes up, the quality of employees must go up equally.

Having a better team is good for the individual employee, good for the company and very good for the customer. When a company is committed to customer service, its corporate culture will change to absorb this new dimension, first becoming an integral part, and then becoming the driving force causing amazing results take place.

Need more convincing? It is also well documented that organisations which provide superior customer and sales service can charge more, create greater profits, and achieve greater market share because customers will generally perceive more value and be willing to pay a premium for superior service.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

Many sales people, for the first time, are experiencing tough times when it comes to selling and many are not sure how to handle themselves in these difficult situations.

The current climate is, indeed, a test of character.

Many sales people, especially those in their 20’s and 30’s have not likely experienced selling in tough markets before.  For the past 12 years prior to 2008, at least, the business climate in our market place has been, for the most part, buoyant.  As we all know it’s very easy to sell when times are good.

It now begs the question: How well have we prepared ourselves practically, emotionally, and physically to manage our way through these tough times?

In recent weeks and months at Barrett, we have seen an increase in the number of conversations we are having with clients about how to help their salespeople to deal with distressful situations. They are seeking support, coaching and training in how to help sales people and sales managers handle the emotional fallout from the GFC.  The requests for  support and training range from wellbeing, emotional resilience, optimism, stress management, how to re-engage with the team or clients, and how to lead a healthy life.

Not surprisingly, many of these requests have come from the finance and advertising sectors reporting that the current landscape has been one of turmoil and distress. While other sectors have also sort support it is not at the level suggested above.  These business leaders have indicated that many of their clients have been severely affected by the GFC and this has created a significant amount of depression in the market place, also affecting their sales teams.

For instance at a recent management meeting, the sales leaders raised their concerns about how the sales team was handling the distress arising from severely reduced incomes for themselves and their clients and loss of a number of clients from their industry.  They wanted to know what they could do about it because what they were doing by way of standard management practice wasn’t working.  For the first time they are seeking help around emotional resilience, and optimism.

Another business, in the advertising space, reported that their sales team had been hit hard too with lower than expected advertising spend. Management was observing very low motivation levels and rising levels of distress in the team.  They realised that their people didn’t have strategies to cope with this crisis.  They were worried their people were feeling useless and dejected.

The one thing these two sales teams have in common is that their sales people earn significant commission from their sales results.  With their clients in freefall and sales down, these sales people’s earnings were being affected which meant that some are having trouble paying their mortgages, maintaining their life styles, etc.  Certainly reasons for concern, however doing nothing and getting ‘depressed’ isn’t going to help solve their problems.

But it isn’t just the income drop that’s causing concern, another sales team whose incomes are not linked to commissions, also found it hard to remain positive and keep going in the face of adversity.  With clients feeling the pain, these sales people didn’t want to be around the negativity or distress.  It’s almost as if they have chosen to put their fingers in their ears and saying ‘la la la la la’ to block out the stress hoping it all goes away.  Not very useful either.

The sales teams mentioned above are all highly trained and skillful sales people.  They have been trained in appropriate sales skills and processes but many do not have the tools or know-how when it comes to managing their own wellbeing, stress, emotions, and the emotions of others.

If, as is being highlighted, these and other sales people like them are not used to dealing with sets backs, overcoming obstacles or they let the negative sentiments of  others overtake them then their work will suffer.  It will be much harder to achieve results.  This negativity can cloud their thinking and potentially keep them from seeing and realising those ideas and strategies that will get them back on track and producing again.

So what do you rely upon to get you through the tough times?

Besides the obvious sales skills, processes and tools, we need to learn (if we haven’t already) and apply the skills that go to developing strategies for healthy thinking, emotional resilience, optimism, healthy lifestyle practices, etc.

My concern is that many people, especially younger people may not have been in a position to really build up their resilience and toughen up, especially in sales and tough markets like this.  It appears that many don’t seem know how to navigate and manage their thinking and emotions through these times.

Developing emotional resilience and awareness in a variety of situations is vital for your ongoing survival and ability to thrive despite the markets or life’s other circumstance.  Developing emotional resilience supports individuals to better achieve their goals, communicate with and manage other people, and spring back emotionally after suffering through a difficult and stressful time in one’s life.

Some of us might be born with the potential to be more resilient than others but you do not know how resilient you are until you put yourself to the test or life does it for you.  The saying ‘if it doesn’t kill it will make you grow stronger’ is quite apt here.

We can all learn how to be resilient and we can learn from a very early age.

Whether we learn to develop and cultivate our resilience in relatively safe environments like playing both team and individual sports, or learning music and performing at recitals, or we develop resilience via our personal experiences such as developing and losing friendships, or other trials of childhood like playing favourites, not fitting in, learning difficulties, etc., or more extreme difficulties such as  losing a parent to cancer, chronic illness, and other life changing events, all these have an effect on each of us.  How we are taught to deal with and overcome these challenges and learn from them the best way we can is what helps us develop resilience.  If someone else tries to assume responsibility for your journey, even if it is with the best intentions, they are really taking away your ability to learn and grow.

As a parent I know I want my children to be safe and free from harm, however if I cotton wool them from life’s tough experiences then they will not develop their resilience and learn the lessons of life. None of us need ever be a victim when we know we have choices in every moment and we take responsibility for them.

No one can ever be guaranteed of winning. We know we have to work for our successes. We usually  fail more than we succeed but that is par for the course in life.  We need to encourage each other  to pick ourselves up and keep going, learning from our mistakes, stretching ourselves to do better.  It’s about doing our best at whatever we do.  Winning isn’t everything, but doing our best, developing self mastery, taking calculated risks and learning from everything we do is what life was all about.

It is possible to teach people how to develop the skills to enhance their emotional resilience, optimism and ways of thinking and dealing with the world. This information is not new either, it has been around for thousands of years.   We can all encourage a resilient attitude at work and at home.

Here are some tips.

Developing a Resilient Attitude
The first step to becoming more emotionally resilient is the acknowledgment that there is room for improvement and taking the time to learn more about yourself.  The following behaviours and attitudes are some ways in which emotional resilience can be demonstrated and measured:

•    Have realistic and attainable expectations and goals.
•    Show good judgment and problem solving skills.
•    Be persistent and determined.
•    Be responsible and thoughtful rather than impulsive.
•    Be effective communicators with good people skills.
•    Learn from past experience so as to not repeat mistakes.
•    Be empathetic toward other people (caring how others around them are feeling).
•    Have a social conscience, (caring about the welfare of others).
•    Feel good about themselves as a person.
•    Feel like they are in control of their lives.
•    Be optimistic rather than pessimistic.

Selling, as a career, is not for the faint hearted as I have often stated.  Besides good selling skills, quality thinking and solid process it takes courage, self discipline, determination, persistence, the ability to learn from your mistakes, a sense of humour, and a healthy approach to life to lead a healthy sales career.

How do we do this?  Among other things this requires people to have access to insight and self awareness.

In my opinion, we need to help people become more emotionally aware, and resilient in a number of ways.  We need to give people access to tools, processes and assessments that can help them develop insight and strategies to enhance their emotional resilience and allow people to make the most of their capabilities and the situations they find themselves in on a daily basis. Particularly if they have not had the chances to really test themselves in previous roles or earlier in their lives.

Not only do we need to be skilful in selling we need to be skilful in how we manage our wellbeing, our emotions and the emotions of others.

So as I reflect on my life so far and all the challenges and joys that come with it, I am indeed grateful for the gift of resilience, it keeps me growing.

Author: Sue Barrett is Founder & Managing Director of BARRETT

For further information on emotional resilience and other strategies please contact us on (+61) 03 9532 7677 or use this form.

To ensure our strategy is right for you, Barrett can incorporate a range of methods into our work including Emotional Intelligence (EI) theory, Positive Psychology, Cognitive Behavioural Therapy (CBT), Mindfulness and Meditation.   Mind Your Emotions® encompasses a series of programs and facilities Barrett has developed to give people access to tools, processes and assessments that can help them develop strategies to enhance their emotional resilience and allow people to make the most of their capabilities and the situations they find themselves in on a daily basis.

Talk to us about how you can Mind Your Emotions® and develop and enhance emotional resilience.

Like many people in Australia, my family and employees have been captivated by MasterChef Australia.

What I love about MasterChef is that it can be seen as a metaphor for expressing our talents and being the best we can be.  Given my interest in everything to do with sales, personal mastery and performance, I particularly love the parallel I have been able to draw about what it takes to be an elite master chef and an elite sales person and elite sales leader by the observation I have made in MasterChef.

As lessons for people wanting to master the sales profession,MasterChef works on many levels:

• It’s about acquiring and honing a range of skills, often difficult to master skills individually and even more so in concert with each other
• It’s about receiving and dealing with real feedback about real results
• It’s about learning from your mistakes – practice, practice, practice
• It’s about resilience – being able to get back up when you are down and face a new day whatever it may bring
• It’s about personal insight and self-awareness
• It’s about humility – letting go of the old to embrace the new
• It’s about listening to and understanding what needs to be achieved
• It’s about operating under pressure, sometimes extreme pressure (internal and external)
• It’s about finding your own character and what you stand for; your values, your purpose
• It’s about friendship and community even in a competitive environment
• It’s about skillful learning – including learning how to be coached and mentored
• It’s about personal responsibility
• It’s about respect – for self, for peers, your leaders, and your profession
• It’s about process – following the recipe, the fundamental rules of chemistry that work
• It’s about personal leadership and being true to yourself
• It’s about potential, opportunity, creativity, innovation and achievement

In my opinion, the real heroes of this program are the judges and guest chefs who have shown leadership and clarity of purpose in their mentoring and managing of the various contestants.

As leaders they display and model:

• Their skillful leadership as masters in their own profession – they know what it takes to be a master craftsman in their profession.  There is something magical in watching a skillful person create something wonderful.
• Their respect for the discipline of training, learning, constant practice and continuous improvement
• Their respect for process and quality – the foundations, the recipes, the ingredients. As leaders they leave nothing is half baked (pardon the pun).
• Their love of and passion for what they do and the expectation they have for each contestant to reach and push beyond their own potential and what they thought they were capable of.  Their encouragement and desire for excellence in each person is outstanding.
• Their coaching skills – from running the master classes to their observations and feedback at the contestants work bench as they work through real life challenging situations is nothing short of text book.
• Their constructive and honest feedback at judgment time as well as their ability to drill down to the fine detail to show where contestants did well and where they could improve makes for fine example of performance management conversations at their best.
• Their care, respect and concern for each person and each person’s special gifts and talents.
• Their regular referencing to and questioning of the real intentions of each person to make sure each contestant was in it for real.
• Their knowledge about how to run a viable business – from cost of ingredients to the true value of a dish.
• The standards they set.  There is nothing mediocre aboutMasterChef.

My hope is that we as Sales Leaders can aspire to be role models in the same way these leaders are for their people.

We each could learn lessons from how all the people on this show have managed their part in it – the good and the bad.

MasterChef inspires me to continue to live by our motto at BARRETT, ‘excellence through purposeful action’.

Excellence means giving our best to whatever we do and giving our best to relationships. Setting noble and realistic goals and remembering to plan and practice. We don’t try to do everything; instead we focus on developing our special gifts.

Purposeful Action means having a clear vision of what we want to accomplish. Knowing why we are doing what we are doing. Having a clear goal and getting back on track if we get scattered or distracted. Finishing what we start and persevering until we get results.

As author William Arthur Ward quotes  “The price of excellence is discipline. The cost of mediocrity is disappointment.”

I commend MasterChef for its devotion to excellence through purposeful action. Thank you.

Remember everybody lives by selling something.