Tim Riesterer is Chief Strategy Officer of Corporate Visions, responsible for leading the strategic direction of the company in thought leadership, positioning, and product development.
In this episode of The Salesman Podcast, Tim shares why up-selling your current customers is the best way to hit quota during the pandemic.
Featured on this episode:
Resources:
- Book: The Expansion Sale: Four Must-Win Conversations to Keep and Grow Your Customers
- CorporateVisions.com
- Tim on LinkedIn
Transcript
Tim Riesterer:
Really when you look at any company’s quota or revenue target in any individual seller, 70% to 80% of that number is existing customers and that is either renewing or expanding, selling extras, upgrading, updating, whatever it might be. Just like sellers are now having to sell remotely a 100% of the time instead of, oh, I don’t know 50% of the time I feel like existing customer work has now become your entire work.
Will Barron:
Hello sales nation I’m Will Barron, host of the Salesman Podcast. The world’s most downloaded B2B sales show. On today’s episode, we have the legend that is Tim Riesterer. He is the author of The Expansion Sale. And in today’s episode, we’re diving into how you should be dealing with your current customers, not new prospects, your current customers in these uncertain times, how to lock them in place so that they don’t unsubscribe to this. Don’t stop buying from you in this moment in time, when you need as much revenue coming from your current customers as possible.
How Much Revenue are Salespeople Leaving on the Table by Focusing on Winning New Business Instead of Upselling or Reselling Their Current Customers? · [01:08]
Will Barron:
What to do when you screw up, how to effectively apologise to them, and also how to upsell them as well. If you enjoy this episode, make sure that you click the subscribe button. All the show notes are available over at salesman.org. and with that said, let’s jump right into it. How much revenue are salespeople potentially leaving on the table by focusing on what seemingly for a lot of sales people, the obvious thing to do focusing on winning prospects and new business, as opposed to upselling or reselling their current customers?
“When you look at any company’s quota or revenue target in any individual seller, 70% to 80% of that number is existing customers.” – Tim Riesterer · [01:29]
Tim Riesterer:
Well, I don’t know how much revenue they’re leaving on the table, but really when you look at any company’s quota or revenue target in any individual seller 70% to 80% of that number is existing customers and that is either renewing or expanding. Selling extras, upgrading, updating, whatever it might be. I was standing in front of a large sales kickoff recently for a very well-known software company that does CRM, and they identified that 80% of your number this year is reliant on what you do with existing customers and so you better do it well. So the question becomes what’s your renewal rate? Could it be better? What’s your attachment rate, penetration rate, add on rate? Could it be better? And how much of your revenue or target is riding on that?
How Important is Up Selling Your Product or Service to Your Current Customers During the Pandemic Versus Pre-Pandemic? · [02:10]
Will Barron:
And how prevalent is all of this right now, as we record this on what’s a date, just so we have context. The 31st March 2020. We’re in the midst of potentially this pandemic, the economy has taken a dive. How important is focusing on and potentially upselling or reselling or reaffirming your product and your service with your current customers in this climate versus just the general 12, 15 years of good times you’ve had before this?
“If you think about it, nobody’s making big decisions, rash decisions to change vendors right now. If anything, they’re making decisions to start shedding some things. So being able to take care of your current customers, keep them and maybe your only next upside opportunity is going to be them doing something more with you.” – Tim Riesterer · [02:54]
Tim Riesterer:
Yeah, I think that ironically, just like sellers are now having to sell remotely 100% of the time instead of, oh, I don’t know, 50% of the time I feel like existing customer work has now become your entire work. If you think about it, nobody’s making big decisions, rash decisions to change vendors right now. If anything, they’re making decisions to start shedding some things. So being able to take care of your current customers, keep them and maybe your only next upside opportunity is going to be them doing something more with you, because fundamentally your customers, as long as things are going pretty well, they know you they trust you. And right now that’s what people need is something they can know and something they can trust if they’re going to do anything additional. So I believe it’s now become a 100% of the job for a while and taking advantage of your incumbent advantage is now the motto.
Step One of Taking Care and Providing Value For Your Current Customers · [03:35]
Will Barron:
And what does this process looked like, then Tim? Is step one, taking care of people, getting that know and trust building the rapport, even deeper. And then looking at potential opportunities, not necessarily upsell within this current climate that might come down the line, but to add more value so that it becomes a no brainer to spend more money in the future. Is there a step-by-step process to implementing some of this?
Tim Riesterer:
Yeah, I think so. The idea of adding value though is, did you add value, if it isn’t documented or memorialised, did you add any value? If a tree falls in a forest and no one’s there to hear it, it doesn’t make a noise. So I think the first thing you want to do is make sure you are documenting results. You’re getting agreement on what kind of business impacts you’re trying to have, what kind of outcomes you’re trying to achieve. What kind of goals are trying to reach with your solution and how good a job have you done at assuring that they’re using it, they’re using it well, and they’re getting the promised results and then documenting that and making sure that you’re sharing that on a regular cadence.
“Every single move you’re going to make, whether it’s a renewal or an upsell of any type, starts with identifying and documenting results, anchoring and justifying their faith in you.” – Tim Riesterer · [04:53]
Tim Riesterer:
So ensuring adoption utilisation and identifying and documenting, and then sharing business impacts on a regular cadence. That is clearly step 1, 2, 3, because every single move you’re going to make, whether it’s a renewal or an upsell of any type, starts with identifying and documenting results anchoring and justifying their faith in you. So let’s make sure you have that foundation. So that later when you have to have the renewal conversation and the upsell conversation, you can leverage that.
Tim Shares Examples of Business Impacts of Salespeople Taking Care of Their Existing Accounts · [05:18]
Will Barron:
I don’t mean to be, I’m a kind of a stickler here, but what would be an example of a business impact or doing a good job? I saw your face turn when I said, just to add value because it doesn’t mean anything. It’s a phrase that people throw around when they’re not being definitive on things. So what would be an example of, especially in the climate that we’re in, a business impact that your organisation could have on an overall organisation?
Tim Riesterer:
Yeah. You have to think, there’s two concepts that we actually teach sellers. The first is the three Rs and those are stand for returns and there are three forms of returns, hard Rs, which are quantifiable and those are the ones that you can attach to an income statement or a balance sheet. So cost out, revenue up, real hard things that they would recognise on official financial documents. Soft Rs, those are the things that they recognise as truly impactful and meaningful to the organisation, but not as quantifiable on typical financial statements, let’s say satisfaction, time to market turnover. So things that are important to the business, but softer because they can’t be counted by the bean counters, and then strategic Rs. Those are the ones where you’re looking for a competitive edge in the market, and you get some differentiation. You make a move in a marketplace to respond to a changing environment, like the ability to respond to a pandemic.
“The second thing that we teach people is what we call the triple metric. So you have your project-level objectives. What did you all agree you needed to do with this project? Then how does that connect to something that the business or department that this projects needed to accomplish? And then how did that accomplishment help the business overall? So triple metric project, department, business or company.” – Tim Riesterer · [07:07]
Tim Riesterer:
So strategic Rs are often the ways you set yourself apart in the market and the ways you think you will gain advantage. Soft Rs are those important things that are measurable, but not counted on a financial statement and then hard Rs are those that are. The second thing that we teach people are what we call the triple metric. We do everything in threes, I guess. So you have your project level objectives. What did you all agree you needed to do with this project? Then how does that connect to something that the business or department that this projects in, needed to accomplish? And then how did that accomplishment help the business overall? So triple metric project, department, business or company, and you’re trying to create a food chain effect, but it all starts with meeting your project level objectives, and then showing a layer above what that means to things they care about and then making some dot connections above that.
How to Influence Real Change and Upsell Accounts Within an Organisation · [07:55]
Will Barron:
So not to paint all managers, leaders, and end users of products with a broad brush here but I imagine a lot of them are feeling somewhat paralysed. They’re probably worried about their own jobs, their own security on that front. Are there any of these where it’s hard, soft, or strategic that have a bigger psychological impact on somebody who is perhaps sat their, looking at spreadsheets and trying to justify their own job in middle management that we might be trying to sell to over the next kind of six months? Is there any of these that would have more impact to focus on now than perhaps prior?
Tim Riesterer:
Yeah, that’s an excellent question. What’s interesting is I always argue that the hard Rs, the really quantifiable measures are good for justification and validation, but they aren’t really the thing that moves a decision. A decision is much more emotional. So there’s a story that needs to be told and I believe in the soft and strategic Rs, that’s where the story lives and the story that convinces people they should either stick with something or change, lives in that world. And then they use the hard Rs to convince themselves and everybody else, they made a good choice. So the choice is already made often and the hard Rs is just that validation that we all sort of cognitively need to feel better about ourselves and hopefully everybody else feels good about us, but interestingly, the real change is emotional and intuitive and those live in the other Rs.
The current state, future state business change Storytelling Strategy · [09:18]
Will Barron:
With that said, then if we were to focus on stories to anchor or pre-frame a change in the future right now, is there a type of story that works, a customer success story or a product story? Is there a way of communicating with a potential customer, with a current customer right now that we are the safe bet you should invest further into us? And we do have your back. Is there a way to communicate that again, that’s going to have more impact in this moment in time.
Tim Riesterer:
Yeah. So one of the best ways to tell any kind of story is to make sure that you tell, we call it current state, future state business change and so I’m going to use my hands for those who are watching this on video. There’s a current state and what they’re doing today and the future state that you’re promising and want to talk about, and they have to envision and try that on and take ownership of that. I always say they have to live in that contrast. And in that contrast between current state and future state is where they start to perceive value. And so the story you tell is helping them fully establish and agree on what they think the current state is and what the future state could be and then start to look at that contrast in the middle and say, is that enough value for me to make a change?
“People will rarely make a change to get more or less the same as what they’ve got. If everything looks the same, they’re just going to stick with what they’re doing and what they’ve got” – Tim Riesterer · [10:31]
Tim Riesterer:
Is that worth the effort? People will rarely make a change to get more or less the same as what they’ve got. If everything looks the same, they’re just going to stick with what they’re doing and what they’ve got and so if they’re going to take on the risk of change or do something new or different, they’re going to have to see enough contrast in terms of what they do different and do better, and what will happen differently and happen better. So we call it the current state, future state business change story, or the story with contrast, because again, that part of the brain that makes the decision actually needs contrast to cause it, to make that choice.
Why It’s Never a Good Idea to Push for Abrupt Change with a Current Customer · [11:05]
Will Barron:
So are we better focused… I don’t know the answer to this question. I genuinely look forward to your response here, but the future states that we are, perhaps I don’t use the word pitch, but I’m going to say it because I can think of a better way to describe it but the future state that we are pitching our current customers, should we be pitching them that everything’s going to go back to normal and you’re going to do this and everything is going to be great, or should we be pitching them? That things are going to have changed. You’re going to have to change with it because that seems like it could instill even more anxiety and get them batten down the hatches even more so and double down on the status quo, even though that might be more accurate.
Tim Riesterer:
Yeah. So that’s really putting a good sort of stress test on some of our models. So in all honesty, when you tell any kind of change story to your existing customer, you should open with saying, here’s what we’ve accomplished together. Here’s some of the good things that have happened and here’s the investment and effort that we’ve both made in each other. There’s a piece of science called sunk cost. And people believe that if there’s any kind of positive momentum and they’ve put a lot of investment in effort in getting that, they’re now on a trajectory, if they change, they have to start all that over. So the idea with an existing customer is not to have sort of an abrupt, brutal change conversation, it’s to make it look evolutionary. That’s why we call it the expansion sale. It’s not disruption. It’s not this idea of coming in and provoking the phrases challenging.
Tim Riesterer:
It’s none of that that will backfire with an existing customer and even more in these times. Now it’s a matter of, here’s what we’ve done together. Here’s all the time and efforts you’ve made to change your processes, to onboard your people, to maybe change your nomenclature, to put the systems in place, create the interfaces. Now we’re now sort of operating in a, in a frictionless environment. It’s just part of your operating rhythm. Let’s talk about a couple of evolving trends that are happening subsequent to that.
“In an existing customer relationship, any sort of change is built on the platform of success and investment in efforts sunk so that now they feel like they’re maybe a little bit freer to do a couple of these things because it’s incremental and evolutionary and an opportunity to continue to get better. Not some sort of abrupt disruption, a reconsideration or rethink of everything they’re doing.” – Tim Riesterer · [13:16]
Tim Riesterer:
You made a great decision here, but here’s some of the changes being made and here’s some of the ways we’re prepared to help you address them. So in an existing customer relationship, any sort of change or next is built on the platform of success and investment in efforts sunk so that now they feel like they’re maybe a little bit more free to do a couple of these things because it’s incremental and evolutionary and an opportunity to continue to get better, not some sort of abrupt disruption, a reconsideration or rethink of everything they’re doing. That’s the kind of approach you take when you’re trying to dislodge an incumbent, not when you are the incumbent.
Tim Explains How Salespeople Can Highlight the Pros of their Product or Service to their Current Customer and Explain the Cons of Changing Suppliers · [13:50]
Will Barron:
So should we be, I know the answer to this because I’ve read the book and it, you talking about in the book, but I’ll say it up for the audience. Should we be doing this process of doubling down on everything that we’ve achieved to strengthen the status quo in customers who are perhaps they’re a subscription, a SAS we’re selling a SAS product, whatever it is, should we be now calling on these people and really emphasising how hard it was to get the deal done in the first place and everything that we’ve done so far and how much of a pain in the ass it would be to change suppliers or leave us now, is this something that we should proactively be doing right now this moment?
“We often say that you defeat status quo bias when you are not the status quo bias. You want to reinforce the status quo bias when you are the status quo bias.” – Tim Riesterer · [14:33]
Tim Riesterer:
I believe so. In fact, I don’t think just because of a pandemic in existing customer relationships, there’s a motion and approach that is 180 degrees different from the acquisition. We often say that you defeat status quo bias when you are not the status quo bias. You want to reinforce the status quo bias when you are the status quo bias, and you want to have regular business reviews where you go in and check in and they do exactly that, you remind them of the diligence they put into the process to make this decision, because subconsciously you want them thinking, do I want to go through that again? You want to remind them of the business impact so that people go, why would I want to stop a moving train? You tell them of the investment in effort made and they go, why would I want to find more budget and do that again?
Tim Riesterer:
And then you talk about the new opportunities and the upside and the changes and the advances that are being made. And I see that as like an agenda, almost that you can bring to them twice a year or quarterly, whatever you see as important to have a certain cadence that allows you to put some new stuff in front of them, but always in the context of continuing the progress. So I would suggest that you create a regular rhythm if you don’t already with existing customers of having business reviews and then what we’ve produced in the book are two frameworks, the framework for a renewal related business review, or one for an upsell related business review, but they all are foundationally rooted in this idea of the investment, the effort and the impact so far, and then building that story on the top of it.
How to Pitch a Business Review to a Buyer who is Unsettled in The Pandemic Economy · [15:55]
Will Barron:
So let’s get practical, Tim, how do we, I like this the term business review, because it removes the sales element from the conversation in the framing of what we’re sitting down here to discuss. How do we pitch a business review to someone who is panicking about the job they are. There’s all kinds of crazy stuff going on. There’s people being laid off in the organisation, they are wanting to look good in front of their boss, so that they then are less likely to lose their job. Even, if this is just a perception of all this happening, rather than it happening in reality, how do we go about practically phoning, emailing, setting up a business review in the next week, or so for someone who listening to this episode, who wants to put this into practise?
Tim Riesterer:
If we can just for a moment, assume that the person you’re speaking with a person who might be a little bit panicked on the inside of their company, but is in charge of the project that your product or services attached to now more than ever, they could probably look, they could probably use, or would really appreciate some sort of well-documented sound business impact and outcomes to justify the effort and investment that they’ve made. So this opportunity, a business review is really, Hey, we’re going to help everybody involved, understand how sound their judgement was in the decision and how we’ve progressed since then. And everyone could start to see, this is vital to the business.
“In exchange for giving you the time to have one of these meetings, you’re going to be bringing the kind of evidence that is useful to them personally and professionally in that organisation and the project or job that they’re working on.” – Tim Riesterer · [17:32]
Tim Riesterer:
If it’s not documented and not memorialised, it might as well not have happened and so I think in exchange, you’re exchanging value here in exchange for giving you the time to have one of these meetings, you’re going to be bringing the kind of evidence that is useful to them personally and professionally in that organisation and the project or job that they’re working on. Ideally, that’s why they bought you in the first place. So it would really be in their best interest, in our good partnership to help them put that case together.
Why Now is the Perfect Time to Document and Prove the Effectiveness of Your Product or Service · [17:56]
Will Barron:
So we are coming to them with some… We’re hoping to end the meeting with some kind of documents that looks at the returns, hard, soft and strategic, so that they can perhaps show that to their boss and say, Hey, you, you pay me. I invest the capital that you give me and we’ve got these results. Look how wonderful and important and necessary I am in the organisation. Is that what we’re trying to achieve here?
Tim Riesterer:
Absolutely. Now, ideally, when you sold the business, you would have convinced them, these are the Rs that you’re going to hit. So that now when you’re reviewing the business, you’ve measuring those Rs but, I’m going to accept that. Not everybody went in with a business case, but if you did, if you had any kind of business case, now’s the time to go and try and figure out what marks you’ve hit and here’s what I can promise you. You don’t have to have hit them a 100%. Even if you show progress, like 25%, 30%, 40% toward goal, most people are like, that’s great because if we keep working, we’ll get there. So you want to show positive momentum and trajectory. Don’t panic. If it isn’t 100% of goal, because the risk is if they change now, they could do even worse than what they’re doing.
Tim Riesterer:
So just lean into that a little bit. If you never documented anything in the deal, you didn’t have any kind of business case requirement. Now’s the time to put a little dashboard together and start to identify some metrics that are measurable cooperatively and things you can report back on to the organisation. That is a great exercise before asking for a business for you review, Hey, let’s have a working session to determine the impact. Even just having just the forthrightness to say, I want to engage in a discussion to make sure you’re getting the adoption utilisation and impact and then we can report on it later to do a little work around that. That’s that should be a part of our cadence. I recognise it’s not always, now’s a good time to put that in place.
How to Use a Business Review to Differentiate Yourself from Your Competition · [19:50]
Will Barron:
I feel like by just doing this, even if we are doing it retrospectively, even if no one that has a… If some of the audience hadn’t come across the book at your training, corporate visions and everything else that you’re instantly differentiating yourself from all the pesky salespeople who are just ring you up for new business right now. And it’s almost like a personal branding exercise in sorts of you becoming seen in the eyes of the buyer as not even a sales, but as a business person, I know it’s cliche to say, sales consultants or people on those lines, you’re separating yourself into that category. Rather than the used car sales person who got into B2B sales and was just flogging and pitching it as heavy, and it as harsh as they can. Do you think that’s fair to say.
“I always joke that if you ask the customer questions about what their pains are, and then you replay those for the customer, that doesn’t make you a trusted advisor that makes you a tape recorder.” – Tim Riesterer · [20:48]
Tim Riesterer:
Yeah, I think everybody’s said to your point, it’s a little cliche. We got to be more consultative. We got to be a trusted advisor and they may be sprinkled in a few extra probing questions to sound consultative. And they said, check I’m a advisor. I always joke that if you ask the customer questions about what their pains are, and then you replay those for the customer, that doesn’t make you a trusted advisor that makes you a tape recorder. So the real opportunity here is to actually live out this value or this concept and not do it in some forced contrived way. Just having this dialogue immediately positions you that way. And they start to think, why would I bring in a sales person with a new thing when I’ve got a partner with the existing thing? So if you just lean into this behaviour and this activity together, yes. I think those things will accrue to you. Those things that you just hoped for now will happen because you’re actually functioning like that.
Will Barron:
That makes total sense. Okay. So we’ve covered with why we should be spending time with our current customers, especially at this moment in time during this pandemic crisis we’ve covered, perhaps how you can dislodge the status quo slightly. So then you can potentially upsell to a better, a higher level of service. And you can frame that as the fact that you are now a partner, and you’ve got this, you’ve got this background together and you can move forward and do bigger and better things. We’ve also covered how you can keep someone on board by doubling down on the status quo and making them so terrified to move. And as long as they’re getting the results that they expected, they are so terrified to go to someone else or to re reinvestigate this, that it wouldn’t, it wouldn’t be cost-effective or time-effective for them. I guess the final thing is to look ahead to Tim is what do we do?
How to Communicate and Apologise to Your Customers When Things Aren’t Going According to Plan · [22:15]
Will Barron:
If things aren’t going to plan, perhaps we’ve made a mistake, perhaps everyone’s working from home and they’re not using our product. And they’ve not got that login rate from our SAS software that we were hoping and expecting. How can we communicate with our current customers during what might be for some people relatively tough times and keep them on board rather than double down on selling them more or keeping them as a customer except for when it’s going fine. What do we do in a situation where things perhaps aren’t going so well for us in the account?
Tim Riesterer:
Yeah. And the book we talk about this because in renewals we talk about, you have to answer the why stay question, why should they stay with you? In upsells, you have to answer the why evolve question, why do more with this company? Well, there’s also the moment where your customer’s asking, why should I forgive them? Why should I continue to do board despite this situation or circumstance? And this happened, I was at a conference and I was speaking about why stay and why evolve those two movements we just talked about? And a group of people came up to me afterward and said, okay, we’re from a telecom, a B2B telecom. And what if your customers aren’t really happy with you right now? Do these methods work? And I joked, they didn’t think it was funny. I said, well, do it where a you’re a telecom, nobody likes their telecom provider.
Tim Riesterer:
And so there was haha. And then I said, okay, we got to get down to science. Well, there’s a whole discipline out there called the apology sciences. But most of it’s done in politician and celebrity world. How to apologise after a moral failure and they talk about different elements of a good apology. There’s limited work in B2B. And we wanted to dig into that with some of our research. So we took some of the findings and identified five components of a good apology and we wanted to determine if they worked in B2B. And if there was a specific order. Should you apologise and document your apology? Because like we said earlier, just saying it isn’t enough. The real important part of an apology is how you document and memorialise it because that’s what circulates or walks the halls of your customer, or gets viral on the email chain, inside your customer.
“The service recovery paradox. And the reason it’s a paradox is it says if you recover well from a service problem, you can engender more loyalty than if you never had a problem in the first place.” – Tim Riesterer · [24:37]
Tim Riesterer:
So what do you say and how do you document it in such a way that you invoke a piece of research called the service recovery paradox? And the reason it’s a paradox is it says if you recover well from a service problem, you can engender more loyalty than if you never had a problem in the first place. So there’s the old axiom never waste a good crisis. What I like to say is, Hey, don’t panic. If you’ve got service problems, they’re an opportunity if you handle it well. Now I’m going to assume that you’re taking responsibility and working to recover, but what the research shows is the documented apology is what has the greatest effect on the recovery, on the service recovery paradox, because later on, when they have to renew or buy more from you, it’s the documented apology they remember. If you didn’t document the apology and how you plan to fix it, the only thing you remember was the problem.
Tim Riesterer:
Oh yeah. That’s the company we had that issue with. So what you want is this document memorialised sort of process and so what we did is the research on the key elements of an apology in the proper order to have the greatest impact. And in the book, we have this moment where we show you the different orders we tried. And you think about which one do you think would work every time I’m in a room. And I say, which of these five tests, conditions do you think was the winning model? People pick the one that performed worst or second worst. The one that won was actually quite counterintuitive and that sort of blows people’s minds. They’re like, wow, I would have been doing this all wrong.
Tim Goes Through a Practical Business Apology and Explains Why it Works · [26:01]
Will Barron:
And again, practically, what does that documentation look like? I’m assuming it isn’t, I Will Barron and apologise for watching Netflix when I should have been on the phone with you last Tuesday, and this caused this and this, this, and this and this. How do we document that? What does that look like? Is it on a page? Could we do a video? Is it a voicemail? What was it practically like?
Tim Riesterer:
In the test? So when we do studies, we run simulations and we recruit would be B2B buyers and we put them in this scenario. And in this test, we told them this software went down during a critical period. Here’s, who was mad at you, here’s who is all uptight and this is what puts your… This is how your career was jeopardised and then we ask them to rate on scale of one to 10, how mad would you be? And then one and two were the most mad. And we only took them and put them into the study. We wanted the people who are really mad. Scientists call this, they had to be past the zone of indifference. And so we put them into the study. And what we discovered is that the most important thing you can do first in an apology and in the test, it was a document.
Tim Riesterer:
It was here’s the email sent by the company with the apology. We didn’t test a video versus an email because we were really looking for placement in the test. We cut and paste the same words, but in different orders. So that was our best way to do it. Turned out that people respond significantly more favourably when you open, not with, I will. I’m so sorry. In fact, when you open up with I’m sorry, it performs worse. What you open up with is, here’s the problem? Here’s the repair and here’s the value we plan to restore to you. It’s called justice theory where they perceive there was a lack of fairness. The thing about a customer and seller relationship is there’s always a balance of fairness when there’s a problem, they perceive there’s a lack of fairness. They are not getting the value they paid for.
Tim Riesterer:
So what you open with is this offer to repair and not just the fix, but to repair the value that was perceived lost. So what did you do in terms of providing extra resources at no cost? What are you going to do to maybe extend the contract for the time that was lost? What are you going to do? Offer to repair the perception of loss value? Because it turns out they’re not ready to hear your apologies until they know fairness has been restored. A bunch of apologies at the beginning are falling on deaf ears, at least according to our research and the way the numbers presented. The close of your apology is all the nice, soft stuff. It turns out like you want to exit well. When we put other things at the end, it just sounded like excuse making. So one component was identify the precise cause of the problem
“Identify the precise cause of the problem because you want them to know you know why it happened because then that increases their confidence that it won’t happen in the future and that you can fix it.” – Tim Riesterer · [28:47]
Tim Riesterer:
You want to say that in your apology somewhere, because you want them to know you know, why it happened because then that increases their confidence, that it won’t happen in the future. And that you can fix it. If you end with that statement, then it sounds like you’re just pointing fingers and making excuses. So open with the offer to repair the value and close with the soft apologies, sort of that, I’m sorry repentance part. In the middle is all kinds of explanations of exactly what the problem was, how you fixed it, how you’re never going to let that happen again, what you’ve done to mitigate it, but the opens and the clothes are so important. We discovered, and it does matter what went first and what went last.
When Apologizing for a Business Mistake, Focus More on the Value Rather Than the Transactional Costs Incurred · [29:30]
Will Barron:
Tell me if I’m right here or wrong, but it seems like you’re focusing on the value rather than the transactional costs that may have occurred or have been negated by the, for example, the software product going down, you’re giving people an extra month of free access as opposed to saying, we’ll refund you for the month that you are lacking. Is that something that you looked up?
Tim Riesterer:
Yeah. Whenever you’re running a test like this, you have to create some scenarios, simulations and assumptions. And so the premise here was that you had mitigated the problem. When you document the result… Here’s what I’m saying is if someone calls you and their hair’s on fire, you don’t say, here’s my offer to repair. You say, I’m very sorry. Your hair’s on fire and we’ll get right to it and that everything else you’re doing in terms of documenting the result is memorialising and documenting what took place, because this is the key. This is the thing that will, like I said, walk the halls afterward. And fin perpetuity the idea is that when everything’s calmed down and now they have to think about your relationship, they’ve got this to fall back on.
“It’s crazy that you can increase the level of advocacy and buying if you apologised well, as opposed to never having had a problem in the first place.” – Tim Riesterer · [31:01]
Tim Riesterer:
And what we discovered is the right apology then can impact both their willingness to buy again. And their willingness to buy more. We discovered the right apology can significantly improve their willingness to be a reference and actually advocate for you. It’s crazy that you can increase the level of advocacy and buying more if you apologised well, as opposed to never having had a problem in the first place and the right apology can increase their confidence level in your business and your reputation and brand. So doing this well has many impacts and across time, at the moment of renewal and upsell, that this is where referenceable document.
Tim Reveals That a Majority of Sales Training is Based on Subjective Real-Life Experiences Instead of Quantifiable Data · [31:32]
Will Barron:
So we’ll wrap up with this, Tim. So this is coming from someone, I am a published chemist. I’ve got a study that was published in the journal of computational chemistry back in university. I’ve got my degrees in chemistry. I’ve got another science podcast I do on the side as a hobby. So when you talk about studies and data, I’m lit up from ear to ear. I love all this stuff and that this is an opportunity for you to promote yourself as well. I guess, as subtly or as a abruptly, as you’d like to, but our what percentage of all the training in the sales training industry and all the cliches that we all have at the back of our brains, whether they’re right or wrong, how much of it is based on data and how much of it is based on some dude or woman in the 90’s had a hunch and wrote a book on it.
Tim Riesterer:
Yeah, I believe that most of what you’re hearing is individual success parlayed into a book which has really unexamined folklore. And the problem with the human brain is the way we explain things is different than the way they really happen. And so, we explain things in the way we’d like to think they happened, and how we want you to think of us. And it’s the same way in human decision-making. Our ability to explain a decision is impossible because the decision takes place in a part of the brain that doesn’t contain the capacity for language. So what I would say is many people talk about in business analytics and a data rich world that we are information rich, but theory poor. We have so much data. We just don’t know what to make sense of it or how to make sense of it, in selling.
“In selling, I believe we are theory rich, but data poor. And if you poke underneath, most of what’s out there it’s one person’s opinion or a couple observed best practises, but they don’t really know why those worked.” – Tim Riesterer · [33:02]
Tim Riesterer:
I believe we are theory rich, but data poor. And if you poke underneath, most of what’s out there it’s one person’s opinion or a couple observed best practises, but they don’t really know why those worked. We do studies in areas of decision science and how humans frame value and humans make choices because ultimately the only science that matters is brain science. How does somebody process the invisible forces to make a decision? How do they frame value? How do they make choices? So we do our work in the decision-making sciences of cognitive neuroscience, social psychology, behavioural economics. And then we make it really simple. We say, here’s the message that works best when you’re trying to dislodge an incumbent and win new business. Here’s a message that works best when you’re trying to protect your incumbency because you are the incumbent and how do you build on that?
“The data of simulations and studies of how humans actually make decisions is the only way to feel confident that what you’re doing will have the impact you desire.” – Tim Riesterer · [34:38]
Tim Riesterer:
And it’s because we’ve studied and seen the reactions of actual buyers. We’re not just trying to observe behaviours of sellers and not understand why it works. And the other thing is never survey a buyer, always simulate a selling situation or run a controlled field experiment like we do, because again, customers and surveys will answer the way they think they want to be seen. And it’s like when I was asked by my financial advisor to fill in a survey about how risky I am, I’m super risky in the survey. Now, when the market goes down, I’m like get me out. And so what we realised is surveys are bunk. So any training that’s based on surveying a customer and what they think they do, bunk. Anything that’s based on unexamined, folklore of an individual, bunk. The data of simulations and studies of how humans actually make decisions is the only way to feel confident that what you’re doing will have the impact you desire.
Parting Thoughts · [34:50]
Will Barron:
Got it. I love it, Tim. I really appreciate that. I know sales nation do as well with that. Tell us where we can find The Expansion Sale and where we can find out a little bit more about yourself.
Tim Riesterer:
So you can find The Expansion Sale on Amazon. We are pleased to say in the first three weeks of its release, it was the number one new release on Amazon for business marketing, business sales and customer relations. So this is important, regardless of role, if you are a commercial person, having customer conversations, existing customer conversations, this works. So go to Amazon for the expansion sale. If you want to find me and our company we are Corporate Visions. It’s corporate and visions, all one word, plural, corporatevisions.com. We have tonnes of resources, free eBooks, reports, webcasts. We believe in the abundance mentality. We want to tell you what we know, and maybe someday you’ll need our help, but we’re here to let you know how to do it, how to do it right. And do that as a science backed, proven approach.
Will Barron:
Good stuff while leading to the book, everything else that we talked about, the website and everything. Also, we’ve just discussed, maybe even some of the… I’ll link to some of the webinars or the anything that talks about the studies as well. Any nerds like myself that want to dive into it in a little bit more detail in the show notes over@salesman.org. And with that Tim, I want to thank you for your time, your expertise in all this, and for joining us on the show.
Tim Riesterer:
Well, thank you so much. Really appreciate your time.
