Once you know that clients base their decisions on either pain-based or gain-based reactions, how do you use that knowledge to improve your sales process?
That is one of the intriguing details that Dan Seidman discussed in a wide-ranging interview with Publisher Paul Feldman.
In last month’s installment of the interview, Dan explained “direction,” which is the way people lean in their decision-making, either away from pain or toward gain. In this segment, he explores how to spot the differences and use that information as a basis for a larger sales process.
Dan draws on decades as a sales trainer focusing on improving team performance. He’s the author of numerous magazine articles and books, such as The Ultimate Guide to Sales Training. He is especially passionate about adding gain-based techniques to the traditional pain-based approach to balance how people actually make decisions.
In this part of the conversation, we bring in another element of Dan’s background. He is also a World Masters athlete, which follows a lifetime of competition. He earned three gold medals from playing on the U.S. basketball team at the World Masters Games, which are the Olympics for athletes over age 35. He is training for the next games in New Zealand next year.
Of course, his athletics don’t have anything to do with sales, but they have everything to do with success. In this interview, Dan gets down to the details of pursuing excellence.
FELDMAN: Can you tell us about the foundation of your thinking on pain-versus-
SEIDMAN: Here are some of the historical concepts that create the foundation. The philosopher Jeremy Bentham made this statement in the 1700s: “Nature has placed mankind under the governance of two sovereign masters — pain and pleasure.”
About 40 years later, Arthur Schopenhauer observed that people are not simply motivated — they are motivated toward something or away from something. It must be in one direction or the other.
This is described in the Encyclopedia of Educational Psychology as the foundation of understanding what motivates people to get their classwork done, to obtain their degrees, to work hard at sports.
In modern times, Roger Bailey has used this effectively in his research on pain and gain. He made a name for himself working with Southwest Airlines and creating an assessment for hiring based on this.
Anyone who’s flown Southwest knows how unique the staff is, and Bailey’s work was a significant contributor to how the airline grew.
FELDMAN: How are you delving into this area for your next book?
SEIDMAN: I had an American Psychological Association researcher compile 70-plus studies in over 1,200 pages on direction and motivation. I’m digging through all that data right now. And the book will be identical to the structure of Malcolm Gladwell’s writing where he takes interesting research and turns it into practical applications.
When you start looking at pain and gain, you see it everywhere.
For example, in one of his State of the Union addresses, President Franklin Roosevelt discussed what is famously known as the Four Freedoms: freedom of speech; freedom of every person to worship God in his own way; freedom from want — that’s individual economic security; freedom from fear — world disarmament to the point that wars of aggression are impossible.
He has two gain-based statements followed by two pain-based statements. You start seeing this in the world around you and realize this validates the idea that people are influenced by one or the other.
FELDMAN: How can salespeople use this pain-versus-gain awareness?
SEIDMAN: I’ll give you a few thoughts on that.
First, remember to use criteria questions to find out whether your prospects are pain-based or gain-based buyers. They’re going to give us the standards they will use to choose whom they’re going to buy from.
Here’s a criteria question — “What’s important to you about X?” X refers to your offering. So, in this case, it would be “What’s important to you about an agent or a financial advisor?”
If somebody says, “The last guy lost 40 percent of our portfolio, and we missed going on an around-the-world cruise that we planned for years,” that’s a lot of pain.
On the other hand, somebody else might say, “We want an 8 percent return. We’d be delighted to have money to use for things we enjoy — just get us an 8 percent return and we’ll be happy.” There’s a gain-based response.
No. 2, create a direction field in your CRM, your contact manager. Why not add direction to a field in your records of all your prospects and customers? Then anybody clicking on that client’s record knows what direction should be addressed in conversations with them.
And the last thing — train to fix the weakness gaps. Typically a sales system is taught chronologically. It’s a linear progression of the sales experience from finding a customer, asking questions, dealing with the resistance objections, presenting closing follow-up, upselling, referrals and so on.
Nobody remembers all of that. Major, global selling systems teach everything chronologically and dump it on you all at once.
Find out where your salespeople are weak, and fix them so you eliminate that weakness.
FELDMAN: Is there a typical weakness that you find?
SEIDMAN: Objection-handling is a huge one. Eliminate the choke points that end the sales conversation, and smoothly work through objections. Then you’ll move further down the path toward a close.
You’re going to have deeper, longer sales conversations and close more people just by fixing one step in the sales process instead of learning and trying to remember all of that. So train the gaps — don’t train chronologically.
FELDMAN: Can you give us a case where you saw that make a difference?
SEIDMAN: This one was a really big and exciting surprise for me. I had a company call me to do a keynote, and I convinced them to do an objection-handling tool instead of a speech.
Together we built the objection-handling tool, which was language to use when people gave them resistance. They would be able to move past the resistance and have better conversations and eventually close a higher percentage.
So this company called me six months after I trained them. They hired five kids out of college and sent them out to five territories that worked very well for their business.
After the product training, the sales training was the objection-handling tool. They didn’t cover introductions or anything like that. They gave them an objection-handling tool, which had some questions embedded in it.
They all went and started the same day. On the first night, the vice president of sales got a detailed email from each of the five kids basically saying, “Oh, my gosh, everything people said when they told me they weren’t interested was something you prepared me for.” He was shocked.
But think about it — when you sell, you get the angst in your gut, the acidy feeling because somebody’s rejecting you, your product and service.
And now think about it as a kid just trying to figure out, “Can I sell? It’s my first day in sales. Can I do this? Are people going to be mean to me?” But they all got past that, because we had prepped them with language skills to move past the resistance.
FELDMAN: Why don’t more managers invest in training?
SEIDMAN: Some industries are really bad about this, especially ones that have high turnover such as automotive sales. In a lot of dealerships, they don’t like to train their people because it’s so expensive and the guy’s going to leave soon anyway.
They will say, “What if we train them and they leave?” And we reply, “What if we don’t and they stay?”
If your sales pros aren’t going to improve performance and you’re keeping them hanging around, that’s just as bad.
FELDMAN: What about your experience with FMOs and IMOs? What are some of the sales challenges that you have seen there?
SEIDMAN: The agonizing conversations I have with all these guys are around the 80/20 rule, and usually it’s 85/15. They focus on the tiny percentage of their people who are performing.
They just keep playing the numbers game and signing people under contract, hoping that if they get 10 new guys, one or two of them will perform. We’ve been doing it that way forever, and people are just resigned that that’s the only way to get this done.
There are not a lot of organizations giving really good sales training. Or what’s worse is that they give you marketing training and call it sales training, which is an insult to our profession. It’s more about what you send, the literature, how your invitations look and that kind of stuff.
I’m tactical. I’m about, “How do we help people have a better conversation one on one, or one on two with a couple, in order to get them to buy from us?” That’s why these influential language skills are really what people need to focus on more than anything else.
FELDMAN: Are there any other parts of the sales process that people and organizations should focus on?
SEIDMAN: One of the most important things that I teach people is, you have to work hard to disqualify buyers right upfront.
If you’re serving a meal to 40 people at a seminar and you’re going to get five or eight appointments, how quickly can you find out which are the 32 people you shouldn’t be talking to?
Quickly disqualify people. If you’re really smart, you’ll disqualify them before you’ve bought them a meal. But the whole qualify/disqualify is a huge factor in the sales process. That’s a big gap.
FELDMAN: How do we close that qualify/disqualify gap?
SEIDMAN: We’re back to criteria — the reasons people make decisions. A company should have a criteria list of questions to ask new prospects in terms of whether they’re worth pursuing.
We tracked top performers in a company and found that somebody who spent 37 minutes on average and worked hard to disqualify buyers when they first engaged was a much better performer than somebody who had three or four calls, ran the numbers, maybe talked to their accountant, that sort of thing. Then they either got the sale or they didn’t, after they wasted 12 hours, on average, as opposed to 37 minutes. It’s a big deal to have criteria set up for qualifying and disqualifying buyers.
FELDMAN: What about prospecting?
SEIDMAN: The biggest complaint I get from sales managers, executives and entrepreneurs is that salespeople don’t prospect enough.
I can give you an example of somebody doing it really well. I was brought in to train at an insurance company and worked with their top performers. Their No. 1 guy in the country was from Arkansas.
I asked him, “How come you do better in Arkansas than anyone else in the country?”
He said that he has in his contract that when anyone does business with him, they agree to give him 10 referrals. He said, “They have to give them to me right when they sign on the dotted line. I tell them during the conversation that this is part of my agreement.”
I asked him how he gets people to agree with that, and he said, “I tell them that I don’t spend any money on marketing, because I am very selective about the clients I work with. So you’re the kind of person I want to work with, and I won’t be chasing anybody else. The next 10 people I’ll be talking to will be 10 people that you feel I should be talking to. So you get more time and attention. I don’t spend money preparing marketing brochures and doing a radio show like some people like to do.”
And the clients are already sold on the reasons they should move the money, so it’s not like that’s a deal-killer at all. He said he has always received 10 from each and all he is doing every day is working with the warmest leads he can get.
Since then, I actually started putting that in my speaking agreement. I ask for five referrals to other companies or industry experts in all my speaking and training gigs now.
Those are the three really big things — qualifying, objection-handling and getting referrals — for advisors and marketing organizations to focus on.
FELDMAN: As an athlete and somebody who understands the work ethic required to succeed at athletics, what are some tips that you would give somebody to apply that type of mentality to their own business?
SEIDMAN: There’s actually some research done on this. Jack Groppel wrote about it in the book The Corporate Athlete. He and Jim Loehr formed the Human Performance Institute in Orlando, which was bought by Johnson & Johnson. These guys worked with pro tennis players and identified that the top performers had rituals they went through all the time.
I also have rituals I go through. Like, I played basketball this morning. I get up at 4 in the morning, and at 5, I walk into the gym and all my buddies whom I’ve known and played with for years are there.
I say, “Hi,” tie my shoes and walk down to the opposite end of the floor. I don’t want to talk to anybody. I go through the exact same warmup routine that I’ve done for, like, 15 years. I get warmed up; I’m loose; I’m feeling it. And then I get together and we start playing.
Then other people are trying to get going. They show up a little bit late. They’re not stretched out properly. Their shots are looking stiff and cold, like they are.
They’re struggling because they don’t have a ritual so that when they show up, they’re ready to go. And business pros need to figure out “What is the ritual that makes me most successful?”
In my office, I have a chart hanging on my lamp shade that chunks out my day.
FELDMAN: What does the chart show?
SEIDMAN: I’m writing my next book, so I’ll spend 60 minutes doing some writing at the start of my day. After the kids get off to school at 7, I can sit down and write for an hour.
Then I’ll start sending out some emails, and after that I will ignore emails for a good chunk of the day. I’ll do lead generation calls and coaching calls with clients.
We’re building a sales-training, gamification tool, so I’m scripting. I am rewriting all my sales training modules so that we can animate and do simulations of sales experiences based on questioning skills and objections.
FELDMAN: Are rituals essential to being successful?
SEIDMAN: The best performers are almost religious in how they make sure they take care of their time, because your time is the most precious thing you have. If you don’t manage your time really well, you’re not going to be productive.