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Punished by Rewards

October 30, 2008 in Attitudes & Behaviours, Ethics & Values, Performance Management

Punishment and reward proceed from basically the same psychological model, one that conceives of motivation as nothing more than the manipulation of behavior.

As part of my own development and in an attempt to keep my mind as open and fresh as possible, I take to reading all sorts of things. On my current reading list is a very interesting book called “Punished by Rewards” by Alfie Kohn, author, speaker and educator. He writes about the trouble with “gold stars, incentive plans, As, praise and other bribes”.

In light of current discussions and debates about the issues surrounding CEO performance bonuses and incentives, and incentives paid to sales people and other employees, I thought it would be worthwhile to take a look at the possible impact of incentive and rewards systems on the quality of our decision making, the effect on workplace performance and sustainable business practices. I warn you this may not sit well with some of you.

The following is excerpt is taken from the Gurteen Knowledge Website, which reviews the book I speak of.

Our basic strategy for raising children, teaching students, and managing workers can be summarized in six words: Do this and you’ll get that.

We dangle goodies (from candy bars to sales commissions) in front of people in much the same way that we train the family pet.

In this book, Kohn shows that while manipulating people with incentives seems to work in the short run, it is a strategy that ultimately fails and even does lasting harm. Our workplaces and classrooms will continue to decline, he argues, until we begin to question our reliance on a theory of motivation derived from laboratory animals.

Drawing from hundreds of studies, Kohn demonstrates that people actually do inferior work when they are enticed with money, grades or other incentives. Programs that use rewards to change people’s behaviour are similarly ineffective over the long run.

Promising goodies to children for good behaviour can never produce anything more than temporary obedience. In fact, the more we use artificial inducements to motivate people, the more they lose interest in what we’re bribing them to do. Rewards turn play into work, and work into drudgery.

Step by step, Kohn marshals research and logic to prove that pay-for-performance plans cannot work; the more an organisation relies on incentives, the worse things get. Parents and teachers who care about helping students to learn, meanwhile, should be doing everything possible to help them forget that grades exist. Even praise can become a verbal bribe that gets kids hooked on our approval.

Rewards and punishments are just two sides of the same coin – and the coin doesn’t buy very much. What is needed, Kohn explains, is an alternative to both ways of controlling people.

The final chapters offer a practical set of strategies for parents, teachers, and managers that move beyond the use of carrots or sticks. Seasoned with humour and familiar examples, “Punished by Rewards” presents an argument that is unsettling to hear but impossible to dismiss. See here for an interview with Alfie Kohn.

When I read this book I cannot help but look at the current financial markets debacle and the consequences excessive greed and unethical rewards systems.

The impact being that it is left up to the rest of us to mop up the mess. Further food for thought…

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Create your own opportunities

October 24, 2008 in Attitudes & Behaviours, Call Reluctance, Prospecting, Strategy, Value Creation

Just one idea can positively transform your life, career, income and wealth.
As I have written before, in uncertain times, we can let the negativity of current events and others consume us or we can continue to look for opportunity. Excessive worry, however, can often cause us to lose sight of our goals and can limit our creativity and problems solving capabilities just when we really need them.

These tough times call for us to be even more innovative, inventive, creative and persistent. Some of the most successful sales people are the most adaptive and creative people you can meet, especially when it comes to finding new markets and new ways to solve customers’ problems with their products and services.

As the saying goes “Necessity is the mother of invention’. And in these tougher times it is not only necessary to keep our sales activities going and ensure that have enough people to speak who can work with us but to think creatively about how we going to do that.

Does your thinking or sales approach need a refresher?

If you are feeling in a bit of sales slump here are some questions to consider that may help you keep your ideas fresh, check for any blind spots and help you create opportunities so you can keep your prospecting and sales efforts on track:

  • What are the current boundaries or rules in your business, team or area of expertise?
  • What are the rules that can increase the likelihood of success in your business, your team’s field of expertise? Rules can be formal (written down) or informal (spoken or implied). How do these rules help you solve problems?
  • List 3 times when you didn’t listen to an opportunity and it hurt you, your team / business. What can you learn from this?
  • What were the rules you followed that kept you from seeing or taking advantage of those opportunities?
  • What changes can you make to your thinking to increase your imagination and flexibility and create more sales opportunities?
  • What is impossible to do right now, but if it could be done, would fundamentally change you, your team and your business for the better?

Often times our customers can have the answers to these question also. So if nothing get out there and ask them for feedback about how you can all work together more effectively and creatively get through these challenging times in good shape.

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Persistence and the Honourable Retreat

October 15, 2008 in Attitudes & Behaviours, Call Reluctance, Prospecting, Self Promotion

Did you know:

  • Over 50% of sales people give up at 1st contact if they get a ‘NO’ from the prospect never to go back to that prospect again .
  • At the 5th contact 7% of sales people are left to speak with the prospect to see if they can do business together.
  • At the 8th contact there is only one sales person left to work with the prospect. Hopefully it is you.

Many sales people, especially those new to sales, often take it personally when a prospect says ‘NO’. Many fail to persist and often fail to favourably position themselves to ‘leave the door open’ for future contact thus limiting their sales opportunities even further.

Now I understand there can be a fine line drawn between persistence and harassment, however in order to have a steady stream of sales coming in the door we need to ensure that we have a regular mix of prospecting activities happening on a daily basis.

Sometimes we will strike viable and interested prospects and other times we come across viable but not interested prospects. Don’t burn those viable and not interested prospects as they may become viable and interested in the future. But you will never know if you don’t go back.

Here are some handy hints to make sure you can go back to these prospects in the future and give yourself a chance of working with them.

Don’t take it personally
If a prospect doesn’t commit to seeing you it could be due to one of the following reasons:

  • They do not have a need right now
  • They do not fit your target market
  • They do not perceive having a need right now
  • They have other associations or relationships
  • They are not convinced they need to see you

Honourable retreat
Don’t give up. Whenever you make contact with someone make sure you always leave a favourable impression. Make sure they felt it was worthwhile to speak to you even if they don’t fit your target market – you never know who they might know.

Allow for the honourable retreat if they cannot meet with you now:

  • Seek permission to send some information for their review
  • Seek permission to follow up in the future
  • Seek permission to keep in touch in case their current suppliers cannot support them in the future
  • Ask for a referral

Follow up with persistent daily effort
Choosing your state of mind, your attitude, is critical in when prospecting and selling too. Successful salespeople know that prospecting doesn’t happen by chance it is requires a consistent and persistent effort.

Successful sales people:

  • Diarise follow up calls
  • Use a CRM to track activity
  • Keep a number of activities on the go
  • Prioritise
  • Persist

Happy and prosperous selling

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On Show

October 2, 2008 in Self Promotion, Wellbeing Support Services

Recently I have been watching the rerun of “Life at 1” on ABC TV in readiness for the “Life at 3” series as I am fascinated by all things behavioural and developmental. The series focuses on children and their development from age one and beyond, similar in concept to the Seven Up series. However this series cannot be complete without the children’s parents and siblings being involved.

I am interested in the series because I am a parent, however it is amazing what you can learn about other areas of your life from seemingly unrelated sources. This is such a case.

As part of the final episode of ‘Life at 1” the researchers measure the levels of cortisol, often referred to as the ‘stress hormone, in the bodies of the children and their parents to see how the stress of the parents lives affects their children.

One of the fathers being tested in the series had recently changed jobs from being a professional sales person in a luxury car showroom to working in the family market garden business growing vegetable. His ‘stress’ levels actual and emotional were significantly lower after having changed jobs which also affected his child’s stress levels for the better.

While he had indicated that he had been successful in his sales job having achieved good sales results and commissions he found the pressure of always having to be ready for action, ever attentive and available for clients over long periods of time exhausting and draining, so he finally left for something more relaxed. And feels much happier for the change.

Now I am not advocating us all leaving our sales careers for veggies, however, I could relate to what he was saying. I have been thinking about the concept of always being ‘on show’ for some time.

Each client sales meeting is like a performance. If we are going to be an effective sales person, we need to ‘perform’. We need to be present, alert, attentive and ready for action for each client meeting and doing this several times a day. We are ‘on show’.

Selling can be and often is a ‘high stress’ job; people to contact, problems to fix, results to be achieved, more people to contact.

Now I know some people do not care about how they appear to others and what impressions they make, however many an aspiring or seasoned sales person does. They know you never get a second chance to make a good first impression.

However most non sales people think that we have it easy – ‘out there meeting people all day, chatting, doing coffee, la la la’. Yeh right! Little do they know that you are always having to present your ‘very best self’ every day, several times a day.

Sometimes at the end of the day you just don’t want to speak to or meet another person. That’s OK if you don’t have to talk to anyone else when you get home or you live like a hermit, however for many of us we have a partner or a family to go home to and, I can’t speak for you, but I want to be there for them too. I wrote about the importance of active listening in another posting recently called ‘pay attention’ and how I find it a challenge to go home and listen actively to my children after being with clients all day.

Having a healthy lifestyle, clear goals and making sure you get personal ‘free’ time on regular basis are just some of the things that are critical to maintaining healthy performance at home and at work, however, I wonder how many of us feel that we are having to be ‘on show’ more often now than ever before.

In this networked world all our actions have the possibility of effecting someone else. Maybe I have taken being ‘on show’ too far and need take a break and be more ‘daggy’ from time to time.

I wonder how others feel about this. I would like to explore this further and would welcome your feedback on this issue. In the meantime I will keep on being fascinated by all things behavioural and developmental, including sales.

Happy selling.

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Take Note

September 25, 2008 in Communication, Sales Skills

I would like to focus on something, that at first glance, may appear rather trivial. In fact it might seem so inane that you are wondering why I am even writing about it.

It’s ‘note taking’.

I learnt a very salient, if not embarrassing, lesson in my early 20’s. When in my first sales consulting role I turned up to a sales meeting with a prospective client with no obvious note taking materials. Up until that time I had never been told to take notes by my managers. I hadn’t thought about talking notes myself. I relied on my memory.

However this call was different. I sat down and proceeded to ask the client questions without taking notes. This client stopped me in my tracks and said:

“Why aren’t you taking notes? How can you possibly understand me and my business if you do not take notes? Bloody sales people never take notes. What do they teach you anyway?”

I didn’t know what to say. I was in shock. After a long silence he handed me a note pad and pen and we picked up where we left off with me taking notes.

It has to be said that I have taken notes ever since and for good reason too – it really works.

OK so we can put my faux par down to youth, however, it never ceases to amaze me how many sales people (of all ages) still do not take notes when they are speaking to clients over the phone or face-to-face. For the last 10 years we have been running a true-to-life sales fitness simulation exercise where we have tested 1,000’s of sales people. Part of the exercise requires people to listen to a body of text which has vital information in it. Sadly the vast majority of people (over 90%) do not take notes which severely impacts their ability to successfully undertake the remainder of the exercise. When we debrief the exercise many confess to not taking notes in the field either.

Note taking is one of those small but really important things you can do in any client sales interaction.

Note taking:

  • Helps you capture what the client is actually saying in their own words
  • Keeps you focused on your client
  • Gives you something to refer back to when verifying your understanding of your client’s needs
  • Helps you prioritise yours and your client’s thoughts
  • Helps the client feel confident in you as they see you making an effort to really understand their priorities and requirements
  • Helps the client feel ‘listened to’ and understood
  • Shows you are paying attention
  • Gives you good content to work from when pulling together a quote or proposal
  • Means you don’t have to rely on memory alone
  • Gives discipline to the person taking the notes ensuring they get everything they need to know (and the client is willing to let them know) from the client

Rule of thumb:

  1. Ask permission to take notes: Let the client know that you would like to take notes and check that this is OK with them. Sometimes clients may want to say something to you but do not want it recorded. By asking permission you show you are working together on gathering the right information.
  2. Draw little flags against the key areas where you know you can make a sale or be of service: Too many sales people jump in at the first sign of a sales opportunity often missing additional information that could lead to bigger or more sales. To prevent this from happening I draw a little flag against each potential ‘sales opportunity’ I come across. When I have finished gathering all the information from my client I go back over my notes and let them know what I have flagged. This helps both of us get a clear picture of their situation and where I could be of service.

I find clients respond very favourably to note taking and my verifying their situation. Firstly they seem pleased to hear someone else repeat back what they have just said and secondly they feel more confident in my ability to work with them and help them in the best manner possible.

With B2B sales becoming more complicated and consultative in nature you need to take notes to keep a check on all the different facets of the client’s needs and priorities.

Give you and your client an easy break – take notes.

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