10

APRIL, 2019

How Clients Buy by Tom McMakin & Doug Fletcher.

Don’t sell, help clients buy.

In brief:

1) Selling professional services is not the same as selling product.

2) Selling professional services involves ‘credence goods’, which relies on trust.

3) Therefore, a seven step approach is required to selling professional services:

Step 1) Awareness: Has the client heard of you?

Step 2) Understand: Does the client know what you do?

Step 3) Interest: Does the client think your results will help them?

Step 4) Respect: Does the client regard you as credible?

Step 5) Trust: Does the client believe you have their best interests at heart?

Step 6) Able: Client can marshal sufficient resources.

Step 7) Ready: Timing is good.

4. What professional service you sell determines how important each of the seven steps will be to you:

a) Evergreen – for example, accountants running payroll. Sensitive to awareness and trust.

b) Acute – for example, tax investigations or turnaround specialists. Sensitive to understanding and respect.

c) Optimising – for example, cost cutting or sales maximisation. Sensitive to interest and readiness.

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The following are my notes on ‘How Clients Buy’. What I record is a reflection of my own interests as much as the content of the book.

I have classified it as ‘public transport appropriate‘ e.g. it can be read in a busy environment with the odd interruption and you will be able to pick up where you left off with ease.

Review: The book authors base their work on personal experience, a literature review and some interviews. They mention the book is not a piece of academic research though they call on universities to further knowledge in the area. 

How Clients Buy makes some attractive assertions but some are at odds with current thinking.

Example: The authors suggest being liked is not important in selling professional services. They suggest when people choose a doctor they select on the basis of expertise not attraction. However, research in this area (behavioural economics, article here) suggests who you refer to is based on the type of purchase. Buy some shoes, you’ll most likely refer to the opinion of someone you like, a friend. Buy something with long-term impact on your life (pensions, healthcare etc.) and you’ll seek out an expert opinion, regardless of whether you like them. 

“All things being equal, people will do business with a friend; all things being unequal, people will still do business with a friend.”
Mark McCormack

The authors also suggest current sales approaches focus too much on the salesperson when they should help the buyer to buy. However, any sales approach of any value focuses on the buyer. The author’s solution is a seven step process which suggests much the same as the famous advertising acronym AIDA:

> Awareness

> Interest

> Desire

> Action   

I can’t but help think AIDA is a more memorable and therefore valuable model.

How Clients Buy is a pleasant read. It will help people who are new to sales, particularly professional services sales, gain a sense of what to do, when. However, the book is unlikely to change a seasoned sales professional’s direction of travel. 

Notes

Introduction

Selling professional services is not the same as selling through a product funnel. You are the product.

Professional services centres around ‘credence goods‘. Seller is an expert and they decide a customer’s needs – similar to when you take a laptop to a recovery expert, you leave it to the expert to determine what needs to be done.

Credence goods rely on trust, which is established by:

  • Relationships: I know a good accountant, sales expert etc.
  • Referral: I have a trustworthy friend who recommended an accountant, sales expert etc.
  • Reputation: Awards etc.

Problem with sales

We’re not taught selling at business school, it’s seen as below them. We dislike sales because it’s seen as:

  • Wrong
  • Difficult
  • Ineffective

Sales in US has emerged through three phases according to Walter Friedman in ‘Birth of the Salesman: The transformation of selling in America’.

  1. Peddler: Man turns-up on household doorstep with goods for sale
  2. Drummer: Man sells through retailers, drum-up business on the road selling
  3. Professional Salespeople: Man has set territories and targets, up skilled to treat sales as a serious endeavour

Selling professional services is harder than ever owing to adverts, technology, firefly ideas and number of players in the sector. However, since 1455 the Grand Bazaar, Istanbul has traded and faced competition, it’s nothing new.

Current approach to sales is all wrong as it:

  • Doesn’t help the buyer buy.
  • It uses a funnel which assumes unlimited prospects (not so in pro. services)
  • Treats leads as short term
  • Focuses on that which is measurable (but many sales are tangential)
  • Uses a linear approach and ignores referral effect
  • Perpetuates the idea of the super sales person, ignores the value of domain expertise

Solution: 7 Step Approach

Never sell: Instead focus on these seven steps:

  1. Awareness: Has client heard of you?
  2. Understand: Does client know what you do?
  3. Interest: Does client think your results will help them?
  4. Respect: Does client regard you as credible
  5. Trust: Does client believe you have their best interests at heart?
  6. Able: Client can marshal sufficient resources
  7. Ready: Timing is good

1. Awareness

“There is only one thing worse than being talked about and that is not being talked about.” Oscar Wilde

Don’t broadcast, narrowcast to your channels.

Approach to cold call:

  • Who can you help?
  • Identify their role in company
  • Call that person
  • Leave a voicemail (they’re unlikely to pick-up)
  • Send email referencing voicemail. Keep email short and reference point of intersection or personal details.
  • Persist

After a cold call follow-up with a deck, this should include four things:

  1. Statement of capabilities
  2. Case studies
  3. Credibility page (logos etc)
  4. Contact information

How to build awareness:

  • Ask for advice
  • Publish your point of view
  • Speak
  • Host summits
  • Attend conferences
  • Write emails
  • Host best practice round tables
  • Write newsletters

2. Ensure client understands what you do

Shrink the pond until you’re the big fish dominating your market. 

Find focus by asking these questions:

  • What project are you most proud about from last two years?
  • Which clients would freak if you stopped trading tomorrow?
  • Which work seems most effortless?
  • Which work do you rarely get push back on price?
  • What’s the most profitable work?
  • What would customers not miss if you stopped providing it tomorrow?
  • In which areas are there zero competition?
  • Who are our main competitors and how are we different?

3. Interest: Client’s goals are your goals

You must appear relevant and have potential to solve problem or advance agenda for the clients. 

“I tell clients one things they don’t know about their competition, one thing they don’t know about their own company and one thing they don’t know about us. I don’t just want to ask for information when I visit them. I want to bring them information.” Big four partner.

    4. Respect: Client thinks you have the right stuff to help them

    Demonstrate track record because buyers of professional services are often uncertain about criteria to use they focus on the one question:

    Q. Have you done this before?

    For a similar company? Did you do a good job?

    This is defensive decision-making [my comment – see Gerd Gigerenzer].

    Can they rely on you to get the job done?

    When you’re selling credence goods education is used as a proxy for capability. In the absence of great education you must highlight experience. 

    5. Trust: I trust you have my best interests at heart

    Kent Grayson at Kellogg School of Management, trust is:

    1. Competence
    2. Honesty
    3. Benevolence

    Build through time – all things remaining equal we’ll trust those we know for longer. Build through friends of friends. 

    6. I Am Able: Client has budget and buy-in

    Most important things is to have high ROI and right level of stakeholder. 

    7. I am ready: The Timing is right

    • Be patient
    • Continue to serve
    • Stay proximate
    • Look for the moment

    Putting seven elements to work

    There are three types of professional service companies, each are more sensitive to certain elements of the seven steps:

    Evergreen, for example accountants running payroll: need awareness and trust. Often find partner on local charity boards. Differentiation impossible, not a matter of if to engage, more who. 

    Acute, for example tax investigations, turnaround specialists: need understanding and respect. Can people understand what you do and are you credible? They are often referred through generalists, therefore need to network with intermediaries

    Optimising, for example cost cutting, sales maximisation. Need interest and readiness. Need to ask lots of questions to unlock true needs of clients. 

    Sales starts before the sales person makes first contact: 1958 McGraw Hill Advert:

    “I don’t know who you are

    I don’t know your company

    I don’t know your company product

    I don’t know what your company stands for

    I don’t know your company’s customers

    I don’t know your company’s record

    I don’t know your company’s reputation

    Now, what was it you wanted to sell me? 

    Moral: Sales starts before your salesman calls”