Tomicide Solutions, June 2011

Three Practical Objections Against Cold-Calling To Sell Premium IT Solutions

By Tom "Bald Dog" Varjan

Carl Lewis has undoubtedly been one of the greatest athletes in US sports history. During his career he won nine Olympic gold medals and eight World Championship gold medals. He became an athletic icon.

But this iconic status got somewhat shattered when, in 1987, he decided to get into music, and created the pop "masterpiece" Break It Up.

Rightly or wrongly many of his fans started ridiculing Carl for his musical act.

So, what does this event have to do with cold-calling?

Well, just as Carl's brave act alienated him from lots of his fans, cold-calling alienates sellers from their target markets.

Today, in the age of suspicion and scepticism, cold-calling is regarded as a form of harassment. Buyers rightfully believe they have the right to buy whenever they are ready to buy not when sellers need money.

And buyers raise massive walls, well, peddler fodders, to keep peddlers outside of their operations.

And what do sellers do?

They invent various ways of breaking through these walls and corner buyers into buying something.

So, here starts the perpetual battle between buyers and sellers.

Buyers work harder to keep sellers away, and sellers work hard to penetrate buyers' circles of attention.

So far it seems buyers are winning but sellers are tenacious and work hard to get to buyers.

Especially small IT businesses fall into this trap because most of them are strapped for cash and the business is more about daily survival and less about strategic growth and long-term prosperity.

Many smaller IT companies don't have marketing managers and programmes in place because they cost money.

What they have are armies of salespeople on straight commission and, the more "advanced" ones, small groups of minimum wage people dialling for dollars from dawn to dusk.

But there are lots of medium sized IT companies too that refuse to invest in marketing, and hire hordes of peddlers to roam the land in pursuit of new clients.

What their owners fail to realise is that while this approach can make some short-term savings and short-term revenue, in the long-run it can only hurt their businesses.

Trying to save money by skimping on marketing is the same as trying to save time by stopping your watch.

So, let's see why running a business without marketing, while relying on a bloated sales force and heavy-handed sales tactics to drum up business may look cheap and enticing on the surface but can be a pretty self-damaging long-term practice.

First Cold-Prospecting Problem: It Limits Your Growth Potential

There are far too many sales experts out there who give the following advice to their clients when their sales figures start going down...

"Hire more salespeople on straight commission, so it doesn't cost you a penny. Then increase the mandatory number of cold-calls they must make no matter what. Further, for your existing salespeople, shrink their sales territories, reduce their commission percentages and increase their quotas. And start whipping them harder than ever."

Yes, all that, plus watch Alec Baldwin in Glengarry Glengarry Glen Ross.

What does he urge the salespeople to do? He urges them to do more of the same.

Can you see the problem?

For many sales managers increasing sales is all about hiring more salespeople and doing more of the same but doing it harder and longer. The sad thing is that far too many sales trainers are on the same opinion.

"You must memorise more closing tricks."

Yes, more manipulation.

"You must ask for the sale more aggressively."

If it's about aggression, why not beat the shit out of buyers, and keep beating them until they sign the purchase order and hand over the money?

"You must get better at handling objections."

Let's attend a seminar on objection handling... taught by serial rapist. After all, he's a real expert at not taking no for an answer.

So, how does this lunacy play out?

If salespeople currently make 50 cold-calls a day, then sales managers mandate minimum 100 calls a day.

If salespeople currently knock on 20 doors a day, then sales managers increase it to 50. They truly believe that doubling their efforts automatically double their results.

But now let's think differently for a moment...

Who sells more books? Amazon with a few people and a robust system or your local encyclopaedia distributor with no system and a legion of door-to-door peddlers working harder and longer than a kulak prisoner in a Gulag labour camp?

Some people say selling is a numbers game, some say it's not. I think it depends.

Using a dating example, if a guy's goal is to bed as many women as possible, it's a numbers game. But if his goal is to find a special one for the rest of his life, then it's not a numbers' game.

If you accept anyone with a pulse and wallet as a new client, then it's a numbers game. But if you base your client acquisition on a Perfect Client Profile, then it's not a numbers game.

And if we start accepting anyone as a new client, then we're in trouble because most of those clients are likely to be rotten clients.

And by "rotten clients" I mean clients that are way outside of our Perfect Client Profiles. They may well be good people, but bad clients for our businesses.

But if selling is a numbers game, I don't want to go through the numbers one by painstakingly one, pounding my fingers numb on the dial pad of a telephone and wearing my feet and shoes out roaming miles of pavement every day for the rest of my life. I want to build an automated system through which prospects can come to me if they choose to, and they can qualify or disqualify themselves with my minimum involvement.

And let's stop here for a moment.

Pitch-based business development is like hunting. With your sales pitch loaded in your gun, you roam the land all over hell's half acre, chasing prospects who try to run way and hide from you.

Information-based business development is like fishing. You decide what kind of fish you want to catch that matches your taste, and put together attractive and valuable information, that is bait, accordingly. If you are after pike, then you bait the hook with some small bait fish. But if you're after carp, you bait your hook with a piece of lightly cooked potato or sweetcorn.

And then you wait and the fish will come... in droves. Also, you've developed a highly duplicable consistent and predictable system that brings you a steady supply of fish with pretty little effort.

The only reason why most people can afford to buy cars today is because they are assembled on automated production lines. If I remember correctly it takes some 43 minutes (definitely less than one hour) to put together a Harley Davidson bike. If they were assembled manually, most people couldn't even afford to buy a bicycle.

So, how do IT companies expect to stay competitive in an automated world when their response is just increased brawn power? More of the same old, same old. How would they fare in a boat race when their response to making their galleys go faster is bringing in more slaves to the oars and whipping them harder? That's what most IT companies do.

Imagine an IT company with 100 employees, each earning an average annual salary of $50,000. One way of increasing profitability, while keeping costs at the same level, is by laying off all 100 people and then hiring 50 top talents at an average annual salary of $100,000.

Your costs are still the same (actually even less because managing 100 people is at about 4-times harder than managing 50), but now you have a higher calibre work force, so you can do higher-calibre work at higher fees.

Manageability of people is the function of the number of members in the group, and their relationships with each other.

Total number of relationships in a group = (N * (N-1)) / 2, where N is the number of group members.

For 50 people, we have a total of 1,225 relationships.

For 100 people, we have a total of 4,950 relationships.

That's 4.04 times higher than number of relationships in the 50-person group. So a 100-mmber group is 4-times harder to manage than a 50-person group.

"$100,000" professionals are not merely twice as good as "$50,000" professionals, but several times better.

As Bill Gates put it a few years ago at a Microsoft conference...

"A great lathe operator commands several times the wage of an average lathe operator, but a great software code writer is worth 10,000 times the price of an average software writer."

The key to this client acquisition conundrum is to automate the front end of the process and humanise the rear-end when the sales lead is about to become a paying client.

If a manager's only strategy to increase sales is to call, harass and piss off more people with his intrusion, then he's in for a very very bumpy ride and I can almost guarantee that he will suffer some serious cuts and bruises along the way.

Now let's move to the...

Second Cold-Prospecting Problem: It Makes You Look Desperate for Business...

...and the big hairy truth is that no one wants to do business with desperate peddlers. You are chasing people while they are busy running and hiding from you.

Just imagine this situation. You're walking on the pavement and about 200 meters away you spot a group of beggars. You know they will harass you for money and, especially if it's dark, they may even give you a good recreational beating to make sure you meet their demands.

What do you do?

Especially if you live in a country where you have no right to defend yourself, even if your life is in danger. You can be done for endangering the life of a miserable thug.

I suppose, for the sake of your health and wealth, you take a different route, although if you get too close they chase you down and wallop the money out of you. Those folks are desperate for your money and have nothing to lose. And if you can run away, they hit on someone else.

Can you see now how your prospects react when you harass them with your offer?

A few years ago I went to see Robert Kiyosaki in Vancouver. Just before the event, there was a woman going around and giving everyone a promotional CD for her multilevel marketing business opportunity. It was interesting to see people's faces. They didn't want to reject her but were not interested in joining her business either.

So they took the CD and later chucked them straight into the rubbish bins inside the conference room. They managed to reject her without hurting her feelings. And she is hoping to receive phone calls from those people ready to doing business with her. How naive. How wasteful. Well, how dumb.

What happens if she follows up with some of the people? Some say "not interested" but some will string her along with the typical "send me more information" stuff. No one wants to join her because they see the desperation on her face, and see that in order to succeed in that business, after joining, they have to do the same brainless mass-prospecting grunt work. And of course, except some masochists, they don't want to do it.

It's only fair to say that cold-prospecting of any kind undermines your market position and raises suspicion for your business. In this new world of ours scepticism is higher than ever. Trust is lower than a mole's bellybutton.

Have you ever sat down with sellers who had dollar signs flashing in their eyes? Do you still remember the pressure you felt, as they tried to push you into a dark corner and separate you from as much of your money as humanly possible? I guess, it's happened to all of us.

For most people, when they have to invest time, money or energy to reach a goal, the enjoyment of that goal feels a lot better than as if it just fell into their laps.

Have you noticed how most lottery winners squander their money?

The late Jim Rohn used to say that the beauty of becoming a millionaire is that in the process people become better people. Actually, money makes us more of who we are anyway. Money makes a kind person even kinder, but a nasty bastard even nastier.

So, when we cold-call people and offer our services, they don't value it because it was not them who've discovered the opportunity. It's something that's fallen from the sky into their laps.

But when you put out quality content and detach yourself from the end results, which you can't control results anyway, then you know you do your best and, in harmony to the nature of the universe, there will be a response. And usually a good one.

This may sound a bit woo-woo, but let's think of the many solo IT consultants who operate without salespeople, yet they out-earn many of the large IT companies on a profit per employee basis.

There are a good number of IT consultants out there who make seven-figure annual net profits (NOT gross revenue), but only a handful, and that's a very very tiny hand, of sizeable IT companies.

And which IT company is more likely to have a Perfect Client Profile. Yes, IT solo consultants. Since, after getting clients, they have to work with clients, they do everything in their power to avoid problematic clients.

Why is this not a problem in larger IT companies? Because as a salesperson I don't care how irritating clients are since I don't even have to talk to them after the contract is signed.

Especially salespeople on straight commission don't care. For them what matters is that they get paid, and the tech staff can duke it out with belligerent bastard clients.

This is why on average, some 40% of an IT company's clientele is slowly consuming the profit which the other 20% makes. And some 40% of the clientele is about neutral.

And why would IT companies accept less than perfect clients? Because they play the "growth at any cost" game. And that mantra puts them on a constant money chase.

But as Tim Williams puts it in his book, "Positioning for Professionals: How Professional Knowledge Firms Can Differentiate Their Way to Success", this "growth at any cost" mantra doesn't lead to growth but only to enlargement.

Yes, the company gets bigger, but also slower, fatter and sicker. Sick with excess politics, general sloth and preponderance of not-invented-here-ism. In my view, in any company, any physical growth in headcount must be linked to intellectual growth. That is, what new capability does this new person bring to the company?

If you already employ a bunch of MCSEs, what would it mean to your company's bottom line to bring in a 10-year veteran CCSP?

Now, this is something to consider. You don't necessarily need a full-time web designer or graphics designer on your payroll, as so many IT companies erroneously do, but a full-time CCSP could make a huge difference in the range of projects your company could take on.

Third Cold-Prospecting Problem: It Hurts in More Than One Way

It is emotionally demoralising, humiliating and demeaning to run around to beg, plead and grovel for business.

One upon a time, sales expert, Gill Wagner of Honest Selling had a phrase on his website...

"Do you know why salespeople sit on the edges of their seats when meeting prospects?

So that they wouldn't damage their knees as they fall on the ground begging for business."

There may be some exaggeration in this statement, but there is a lot of truth as well. Buyers regard cold-callers, as direct marketing genius, Dan Kennedy calls them, uninvited pests, and treat them accordingly.

So, the only way these salespeople can sell anything is by effective begging, pleading and grovelling.

I know, in traditional sales it's called "asking for the order", but the effect is the same whatever we call it. After all, the only difference between surgery and autopsy is the state of the patient. All right, maybe slight difference in the tools used.

But the fact is that salespeople can ask for the sale until they're blue in the face and dead broke, but until and unless buyers are ready and willing to buy, they don't buy.

Yes, some may say, good salespeople can sell ice to Eskimos and sand to Bedouins. Yes, they can do it... Once. Most car salespeople still live by this practice. But have you ever returned to same salesperson from whom you bought your last car to buy your next car? Probably not.

Using cold-calling, salespeople can have lots of one-off business but no repeat and referral business?

And while the headache is in the one-off deals, profit is in repeat and referral business.

Look at multilevel marketing (MLM), the typical industry that is based on systematically harassing friends and family members. And what is the result? The typical MLM distributor makes just over $34 a year. That's a great return on alienating friends and family members.

Cold-prospecting is despicable both for people who do it and - even more - for those to whom it is done. Then what's the logic in doing it?

There are lots of books and sales trainers out there who teach salespeople how to scumbag their ways to buyers or at least to purchasing agents, but the problem is that they are still regarded as pest, a common pain-in-the-arse.

So, how can they expect to be perceived as peers in this equation?

No, they can't.

And at this point buyers bring out their most powerful "pest control" tools, like "Send me some information", "send me a proposal", "prepare a comprehensive Powerpoint presentation" or "contact purchasing".

And spending the whole week at "pest control" meetings is not going to advance salespeople's career any further. Yes, they can get busy, but that's all. But it's about being productive not merely being busy.

What Do You Think Excessive Sales Training Is Designed For?

It's designed for companies with armies of peddlers. Companies that suffer from a chronic lack of brain and finesse, and try to compensate for this loss with more brawn and sheer backbreaking grunt work.

And the funny thing is that a huge chunk of old-fashioned sales training is pure motivation. Imagine, there is an explicit need for a seminar to motivate people to actually practise their chosen profession. That's pathetic.

Can life actually become more miserable that that? I doubt it.

Former Apple marketer, Guy Kawasaki has made this comment about inbound and outbound marketing...

"If you have more money than brains, you should focus on outbound marketing (chasing after prospects). If you have more brains than money, you should focus on inbound marketing (magnetically attracting prospects)."

Well, you can be the best swordsman in the vicinity, but you are no match against a guided missile.

And your company can have a whole army of these proverbial swordsmen and women, but when they come up against your competitors' marketing machine they get bulldozed to the ground, and there is not a dickybird they can do about it. Nothing. Not a sizzling sausage.

Also, just think about the tremendous amount of motivation that goes hand-in-hand with traditional sales training. Why?

Maybe because salespeople who are freshly trained in traditional - manipulative - selling, must overcome their personal emotional trauma and self-hatred from using what they have just learnt to trick and deceive their fellow humans to get money from them?

Maybe because otherwise honest people have been taught that to stay in business they must use sleazy, unethical, manipulative techniques, and they simply need the motivational lift to go through another day of screwing people out of their money?

Imagine two drastically different situations through which your market can receive your message:

Situation #1: "I've never met you. I've never heard of you. I don't know your firm. I don't know what you offer. I don't know how you got in my office or on my phone line, but I don't like it at all. What the hell do you want to sell me?"

Situation #2: "I've read your content (books, articles, blogs etc.). I've seen you speak. I've been receiving your newsletter for over a year now. I like your approach. When I'm ready to change, I will definitely choose you as our change catalyst."

Situation #2 looks a touch better and friendlier to me. Yes, it takes a bit more time, but if you understand that in B2B business development you don't sell when you're ready to sell, but when the buyer is ready to buy, then you have no problem with seeing beyond the futile drudgery of cold-prospecting grunt work.

When businesses' only chance of landing new business is to out-sell, out-trick, out-peddle, out-grunt, out-brawn, out-cold call, out-pavement-pound, out-drudge, out-last, and out-luck all their competitors, then they are doomed and dead, although they may still be kicking.

So, how do your salespeople fare in successfully approaching high-level executives? Do they need to cold-call, or do they use some more intelligent methods.

Come and let's discuss this newsletter issue on my blog...

Attribution: "This article was written by Tom "Bald Dog" Varjan who helps privately held information technology companies to develop high leverage client acquisition systems and business development teams in order to sell their products and services to premium clients at premium fees and prices. Visit Tom's website at http://www.varjan.com.