Gerry Harvey, (Harvey Norman) was recently bemoaning the culture of discounting in our retail sector. He was saying that retailers had lost the plot and didn’t know how to sell real value anymore.  He said they had fallen foul of a culture of constant discounting as the only way to attract customers, which was tantamount to business disaster and a degradation of the retail sector. I happen to agree with Gerry in this instance.

He went further by saying that retailers were failing to find out what customers really wanted and what they really valued.  He said retailers weren’t offering choice – a range of options of different value and therefore were not selling.  He went on to say that while a ‘sale’ may attract customers to a store, you still needed to put the effort into selling.  Selling doesn’t happen by itself.

I’m not a retail expert, however, discounting, sadly, appears to be main stream in Australian retail businesses.  Rather than a ‘sale’ being a rare event, it now seems, everywhere you turn there is a ‘sale’ or discount war waging.  In short, over the last 10-15 years the consumer has been habituated to look for cheap, cheap, and cheap.  The real value to, we, the consumer, of having a range of products and services to choose from across a wide value scale, seems to be lost in a mentality of it must be ‘cheap’.

It begs the questions “How has this come about?” and “Who started this discounting avalanche?”  It wasn’t always this way.   I recently had the opportunity to visit the exhibition ‘til you drop – shopping, a Melbourne History’ at the Victorian State Library which is about retail shopping in Melbourne across the last 100+ years.  I found it quite an enlightening and educational experience. For instance:

“In the 19th century, ‘retail therapy’ had a different meaning from how we understand it today. Shopping was often promoted as combining commerce with intellectual or aesthetic benefits.  Influenced by British morals and values, the display and purchase of goods were expressions of taste and self-improvement.” This is certainly a far cry from ‘cheap, cheap, cheap’ we now hear.

It seemed that shopping in the 19th century had a higher purpose to it.   Perpetual discounting sadly does not.

Constant ‘discount sales’ erode margins and low or no margins means a business is not profitable and therefore not sustainable.   Gerry and other retail experts will tell you that there is a time and a place for discounting – moving old stock, stock liquidation, seasonal or special events for instance.  Discounting should NOT be seen as a regular occurrence or constant ‘way of life’ as this will affect the buying patterns of consumers i.e. people will wait for the ‘sales’ instead of buying across the year.  They will pick their way through the plethora of ‘sales’ on offer every day, meaning no one has to pay full price for anything across the year which in turn forces retailers to enter a never ending loop of discounting.

Discounting in any business sector, retail or business to business, may increase turnover initially, but as a constant strategy comes at a cost which, in the long term, may create more severe problems than we had intended. This may include poorer sector and business performance, less investment in new ideas and products, loss of jobs, business closure, decreased diversity, poorer quality products sourced in place of better quality offerings, which can lead to increased customer dissatisfaction, and less choice as a result.

Less choice means we end up only getting access to products that are of a lesser quality. This creates poorer product performance, a diminished product life, and increased and unnecessary consumption, resulting in greater costs than if one had invested in a better product or service in the first place.

Who wants to pay for more ‘crap’?   In a world where more and more people are conscious of overconsumption, you can see that this journey down the ‘cheap’ road doesn’t lead to a very good place.

Maybe retail needs to return to its ‘higher purpose’ roots.  Another excerpt from the ‘til you drop’ exhibition bears this out:

“While bargains are always popular, when standardised brands replace some specialty and locally produced items the quality of products can become less reliable.  Today, many shoppers are returning to smaller stores selling organic or locally-grown and made produce.  Supermarkets are, in turn, following this trend and promoting gourmet sections and their own ranges of organic and specialty products.  The fact that consumers are becoming more aware of the impact of goods and shopping trends on the environment can be seen in new approaches to packaging and transportation. People are increasingly recognising that more sustainable shopping practices can reduce their ‘shopping footprint’.”

This is why I propose that a climate of perpetual discounting may potentially lead to the erosion in our quality of life and may limit our ability to make the right and best choices for ourselves, our families, our businesses, our communities and the environment.  Is our culture of ‘discounting’ potentially leading us to a false economy? If so, ultimately, this will ‘cost’ us a whole lot more.

Gerry, I suggest you and your retail mates take a collective look in the mirror and do a bit of reflecting on the potentially larger issues ‘constant discounting’ may be creating for us all.  And while you are at it, why not pay a visit to the ‘til you drop’ exhibition which has some great pearls of wisdom about creating real value in retail.

Special thanks also go to Andy and Errol, my fellow tennis parents who work-shopped this article with me one Sunday morning as our sons played tennis.

Remember everybody lives by selling something.

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

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

‘Everybody lives by selling something’ was the trend, in our 12 Sales Trends for 2010, voted as second most important for businesses in 2010.  It is a very significant trend on many levels as it involves everyone, not just the people who are labelled as ‘sales’.

‘Everybody lives by selling something’ has had a profound impact on our business at Barrett. Since we introduced this as our core philosophy and principle behind our work it has been amazing how many people feel open to discuss the topic of selling and sales, especially those people who have been most reluctant to the concept of selling including professions such as Teaching, Law, Accounting, IT, HR, and Engineering.

At first, it seemed that this statement may narrow us to being seen as just ‘sales’ focused but in fact the opposite has occurred.  While ‘everybody lives by selling something’ has focused our attention on what we do well, it has also broadened our horizons in terms of who we work with.  This statement, coined back in the late 1800’s by Robert Louis Stevenson, has shifted the conversation to a broader landscape.  Beside sales teams, we now engage with, train and coach teachers, accountants, lawyers, engineers, and others who would never had considered selling as part of their professional repertoire.

‘Everybody lives by selling something’ seems to have allowed people to discuss an area that is fundamental to human relationships and communication, the principle of exchange.   In our lives we are all exchanging things of value.  Whether what we exchange is of value to others should be determined through effective communication, open dialogue, and trust.

Taken to an organisation wide level, everybody in a company has an impact on how the business communicates with and engages in the principle of exchange with its customers, suppliers, the broader community, and each other.

The legacy of silos in organisations, where departments distance themselves from each other, pitting their agenda against others to gain an upper hand, is the opposite of the principle ‘everybody lives by selling something’.  It flies in the face of being a fit, viable business, yet this still happens and businesses, staff, customers, and the broader community suffer as a result. All the bluster about being ‘world’s best practice’ or ‘best of breed’ comes undone in an instant when people forget that ‘everybody lives by selling something’.  The energy wasted, emotions expended, and distress caused because people think they were more important than the greater good of their company, their customers, and the community is very sad.

It reminds me of a simulation exercise we run with teams where people form groups (‘companies’) and then have to create their own departments. The dynamics of this particular simulation test people’s ability to choose between the greater good for their ‘company’ or the self-interest of their own department, thereby tests their ability to engage in the principle of exchange.   Although each group is a company in itself, they are also competing for points against the other groups (‘companies’) in the simulation. It is amazing how many people compete with people within their ‘company’ and end up losing out to a competing ‘company’.  Their focus falls internally and they miss the point entirely.

The irony is that while we say that we are focused on trying to stay ahead of our competitors with better products and services and snappy marketing, it is often the internal competitions (politicking, one-upmanship, disassociation from customers and sales) in our own organisations that is undermining our efforts to be effective, sales fit, and successful.

Everybody in our organisations needs to be an ambassador for our business, our message, and our brand. There needs to be recognition that we are in one of two roles 1) actively involved in selling or 2) supporting someone who is.

How well people and organisations embrace and practice this philosophy will be the test in 2010. We encourage you to have open discussions about ‘everybody lives by selling something’ in your business and see what happens.

Enlightened sales people and leaders already recognise that ‘product’ is only part of the sales process and that selling is actually a ‘value exchange’, underpinned by real relationships. Those companies that support and train all their people in a culture of proactive client engagement, transparent selling and proactive positive communication practices aligned with their strategy, will gain a significant competitive advantage in 2010.

So we would like to ask you, do you live by selling something?

Remember everybody lives by selling something.

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

Everything lines up: your solution is a very good match for the client company, you have ticked all the boxes but the deal is rejected.  You are perplexed and confused.  “It’s a great solution!  It’s what they wanted and needed. Why are they saying no?”  Building on from last week’s ‘How do I deal with client objections?’ l thought we should look at when objections become personal.

Over the years I have come to realise that many of us have lost sales not because we didn’t have a good offering or we couldn’t show a real return on investment, rather a key person(s) involved in the sales process or outcome didn’t want the sale to go ahead due to personal reasons or biases.

In the past, I have naively thought that all clients wanted to do the right and best thing for their business, their teams, and their people, however I have been proven wrong on a number of occasions.  Eventually I came to realise that whilst all buying decisions will have a personal aspect to them, some were more self serving than I realised.

What I have learnt over the years is that when people’s status is threatened they can act wildly.  Seeing the world from another’s perspective isn’t always easy, especially if the other person is basing their decision on how it will affect them personally, often at the expense of others and the higher goals of the business or project.

When we are selling, thinking about the impact on the person(s) involved is, therefore, very important.  This is based on the notion that people are unlikely to be as objective in their decision making as we would like and have their own agendas which can be both visible and hidden. The same can be said for sales people too, their personal biases can severely affect the outcome of a sales as well. In fact, rationality often goes out the door.  Not everyone likes to reveal their real reasons behind a decision because they may not be that pleasant.

No one really likes to look stupid or incompetent, especially to their people, managers, clients and markets.  Pointing out the obvious solution which looks great to you may be seen as threatening by some prospects or clients.  For example, they could be thinking “Why didn’t I think of that?”, “This might put me out of a job if we do this”, “My preferred supplier, who is a mate of mine, may lose out here and I’ll lose a friend if that happens”, or “This means I’ll have to change how we do things here and my power/position/status/influence will become redundant”.

There are many examples of where self- interest or even group think can dismiss a great idea or solution from being implemented.   In a sales situation, if you come across indecision, stalling, or rejection of a well matched solution, think about how your solution may be affecting the individuals involved. Is your solution at risk of making the other person(s) feel?

• Less credible or appear stupid to their peers, managers, or staff
• Lose power or control over a situation, team or decision
• Affect their career aspirations
• Not be seen in the best light with their superiors or their team
• Lose status or kudos
• Act differently to how they really want to
• Have their real intentions, actions or agenda exposed to others

We all know not everyone acts in the best interest of the group.  They may be acting to serve their own interests at the expense of others or the greater good.

It is often necessary to try and understand those often ‘unspoken’ needs of customers. While I don’t always get it right, I have worked out that I need to do at least two key things:

1. Find out where I need to be a King Maker
2. Find out where I need to be wary of the Saboteur

Distinguishing between the genuine buyer and the saboteur

As sales people we need to quickly recognise how we and our solution can be a feather in the cap of our buyers.   For instance, if our solution or working with us can help or enhance a person’s career, status or reputation, for the all the right reasons, then this needs to be part of the solution and decision making process.  Who doesn’t want to be associated with a successful partner or project?  If we support the key decision maker, influencer, or end users to feel validated then this can aid the decision making process.

Asking the client how the proposed solution will help them or benefit them personally will give you a valuable insight into their decision making process.  If a person is making a decision based on, amongst other things, how this solution will look on their resume and affect their career status, then we need to realise that our role is also part King Maker.  If this is important to them and does not transgress ethical boundaries then why not?

I try to remember to ask “How will this decision help or impact on you personally?” and then take that into account when preparing my proposal, pitch, follow-up or roll out of the solution.

On the other hand you may come across the Saboteur.  The Saboteur is the person who operates behind the scenes and has a hidden agenda(s) that may involve your proposal not being successful.  If you have a Saboteur as part of your decision making process, it will mean that they are going out of their way to ensure that your proposal does not get put forward. This usually stems from some sort of self-driven, self-serving agenda.

If you suspect you have a Saboteur in your midst, you must try as early on as possible to determine what their motives are. If you are unable to do this, you must pay special attention to their objections and probe where possible. This will help to provide you with more information around their key drivers.

Bear in mind that Saboteurs are often well known amongst the key decision makers and influencers in the decision making process for their underhanded, self-driven ways and often their opinion is given less weight.  However, their bite can certainly strike a blow to your progress if the decision is hanging in the balance.  Be sure, they will find your weakest spot and run with it.

Some key characteristics of the Saboteur

• Have a hidden agenda
• They have a vested interest in you not succeeding
• Can derail entire sales process and influence key stakeholders negatively
• Possibly aligned with competition (sleeping with the enemy)
• May appear genuine on the surface but can be the ’smiling assassin’

The world of selling is a complex one at the best of times and you may be left thinking that you need a Phd in psychology in order to deal with the variations in human emotions, intentions, and behaviours.  While a Phd it is not necessary, be aware, wary, and alert to the subtleties of client engagement and interactions.  Carrying your moral compass along with your very best skills in active listening, questioning, verifying, problem solving, and prevention, and self-reflection along with you for the ride and  applying them on a consistent daily will aid you enormously.  And the good news is they take up very little space, yet give you an expansive view.

Remember everybody lives by selling something.

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