Thursday, October 22, 2009

Up Front Contracts

Before I get into the details, let me just note that this is a key component to the Sandler Sales System. There are seven major components. The first is Bonding & Rapport, which is probably self-explanatory - it’s the first part of a sales call, where you establish a relationship with the prospect. Sandler has some interesting things to say about Bonding & Rapport, but nothing really earth-shaking, so I won’t bore you with that.

Up Front Contracts is the second component. So what is an Up Front Contract? It’s just a verbal agreement between you and the prospect on exactly what will happen next, even if that next step is for the prospect to tell you “no.” Let me outline a couple of scenarios where this is useful:

Scenario 1
You talk to an interested prospect on the phone and he agrees to schedule a meeting. You decide on next Thursday at 10.

PROBLEM: Have you ever shown up for a meeting and a) found that the prospect is not there or b) had the prospect either show up late or rush you through the meeting because he inadvertently scheduled something else for 30 minutes after your meeting?

This may not happen often, but it’s frustrating when it does. In particular, being forced to rush through a meeting puts you in a pressured, get-to-the-point mode, so it’s tempting to try to shove all your features and benefits into a quick presentation. The net effect is you spend too much time talking and not enough listening to the prospect. And the end result is that the prospect does not truly get engaged in the problem you’re helping them solve. Instead, he is looking at the clock and/or getting bored while you try to wow him with features and benefits.

SOLUTION: Establish an Up Front Contact with the prospect committing him to show up and give you his full attention. It doesn’t have to be confrontational, just assertive. An easy way to pin them down on the date and time is simply to ask, “should I write this down with a pen or a pencil?” If the answer is pencil, suggest another date and time. If the answer is pen, say “are you sure? You don’t have anything that might bump this off the calendar?” Get them to commit!
Also, during this stage make it clear that you really need a full hour so you can fully understand their business before you can determine whether you’re a fit for each other. Ask them to commit to that. If they resist, suggest another time or (and this takes guts, but it could save you a lot of wasted time), say “Mr. Prospect, it sounds like you’re not really interested in solving this problem. Which is fine, maybe it’s not a big enough issue for you right now. So should we just hang up now and call it quits?” If the answer is yes, be thankful that you saved yourself a couple of hours trying to convince someone who is not going to buy. If the answer is no, ask the prospect “So what should we do?” And SHUT UP! Don’t rescue the prospect. He will realize that he has to make a commitment or you’re not showing up. Once he makes that commitment, his ego is on the line, so he’s much less likely to blow you off.

Scenario 2
You go to the meeting and the prospect is there. You spend an hour doing your whole dog and pony show. At the end, you ask for the business. He may raise some objections, which you handle, but then he says he wants to think it over and to please call him next week.

PROBLEM: You go home, wait a few days and make the call. Voice mail. “Hi, this is Joe Salesman. Just wanted to touch base and discuss next steps. Please give me a call. Blah blah blah.” He doesn’t call back, so you try again a few days later. Same result. Eventually (or maybe not), you reach him and he tells you they’re still thinking it over, or there’s some other decision maker involved or any one of a hundred other excuses. He doesn’t say “no,” so you continue following up every now and then, knowing in your heart that he’s probably avoiding you. But hey, persistence pays off, right?

SOLUTION: Wrong! Persistence pays off maybe 1% of the time, but the other 99% of the time it’s just a giant time sinkhole that has the awful side-effect of undermining your confidence. The key to avoiding this is to gain control of the sales process with Up Front Contracts. Earlier I talked about how to do them when scheduling the meeting, so now let’s talk about how to use them in the meeting itself.

It’s really pretty simple. Just remember the acronym TTAP (pronounced “t-tap”).
The first T is for “Thank you for inviting me in today.” Not letting you in, but inviting you in. Salespeople have rights. Do not beg for anything. If the prospect treats you like crap, don’t accept it. Period. But I digress… The second T is for Time. Ask the prospect how much time you have for the meeting. If they don’t give you enough time, cancel the meeting. Yes, you heard me right: cancel it! Explain that you need to ask the prospect a lot of questions to determine whether you’re a fit.
If the prospect resists, don’t wimp out! Ask him this: “Mr. Prospect, how long have you worked for your company?” He’ll say something like 5 years or 10 years or whatever. Then ask him, “If I were to ask you to explain everything you’ve learned about your company, industry and current situation in the past X years in 20 minutes, would I come away with a thorough understanding of everything necessary to solve your problem?” He will say no, so you then say “So do you really think I’ll be able to understand your situation and give you a thorough understanding of my solution in that time?”

If he still resists, another tactic is to apologize. That’s right: apologize! Don’t get into an argument with the prospect. Instead, “fall on your sword” as a way to gain empathy. Say “Mr. Prospect, I’m sorry. I’ve done you a disservice. I’ve given you the impression that I can come in here and give you a good presentation in 30 minutes. I’m sorry for doing that, but I just can’t in good conscience try to shoehorn this in. So what should we do?” The prospect will probably cave in and reschedule by now.

If not, just take it away from him. “I’m sorry, but it looks like we’re not a fit. Good luck finding a solution to your problem” and leave. The prospect may come after you and tell you he’s changed his mind. If so, great! If not, great! You do not want to work with a prospect who cannot even commit to an hour. Believe me, it’s not worth all the uncertainty that will surround the situation.

And you know what? Wishy washy prospects are almost impossible to close unless you confront them. Start doing it at the beginning of the process, not at the end. And by the way, if you’re concerned about losing the sale, just remember: you can’t lose something you never had.

A is for Agenda. This is a great one because the prospect so rarely gets this from other salespeople. Simply ask “Mr. Prospect, what do you need to see, hear or get a feel for in order to make this a successful meeting?” By doing this, you will quickly get a sense of how the sales process is going to evolve, what you should focus on, and how they want it presented. The “see, hear or get a feel for” is a tactic to get them to reveal how they think: visual, auditory or kinesthetic. I won’t spend time on that point now, but suffice it to say that it can be useful in determining how you present your solution.

There may be several things they want to achieve in the meeting, so make sure you write them down and parrot them back. Make sure you understand exactly what he wants and don’t make any assumptions. So if he says something vague like “I want to learn more about your product,” drill down into that by saying. “That makes sense, but could you give me a better sense of what that means?” A better answer is “I want to understand how your Foo integrates with our Bar.”

One more thing with Agenda. Once you’ve established the prospects goals, get an Up Front Contract as to what will happen next. “Mr. Prospect, this is very helpful. I’ll make sure to focus on X, Y and Z. Pretend for a moment that we’ve done that and the meeting is finished. What would happen next?” As with above, don’t accept wishy washy answers. Nail down the exact next step. An reasonable answer is, “we’ll schedule a due diligence meeting with our IT department.” A bad answer is “I’ll think it over and show it to my boss.” Which leads to…

P is for Permission to say no. What? You heard me. You give the prospect permission to say no. This helps you avoid wasting your time on someone who’s decided not to buy. Here’s how you do it. “Mr. Prospect, you said the agenda is X, Y and Z. Let’s pretend for a moment that we’re on the other side of this meeting. Can I ask you a favor? If for whatever reason you decide we’re not a fit, are you comfortable telling me no? I think some prospects are embarrassed or don’t want to hurt my feelings, so instead of saying no, they say they want to think it over, when what they really mean is no.” The prospect will almost invariably say something like “Absolutely. I’m real straightforward about that.” Not to be blunt, but he’s lying. Most prospects hate to say no because they’re afraid of confrontation or, even worse, that you’ll try to sell them even harder. If you make them feel okay about saying no, perhaps even saying “and by the way, I won’t try to sell you again after you say no, because I don’t want to waste your time or mine,” it takes the pressure off the prospect and usually leads to a more open, honest discussion.

“No” is good, because then you don’t waste time chasing a prospect who is not going to buy. Of course, “yes” is best. But do not accept “think it over” for an answer. This doesn’t mean they have to sign the contract in the same call - some sales cycles are complex and take multiple calls - but it does mean they have to tell you at the end of the call whether they are serious about moving forward or just blowing smoke.

This is pretty different from traditional sales training, which generally revolves around convincing the prospect that he should buy from you. By contrast, Sandler is about helping the prospect discover why he should buy from you. Convincing is very difficult, time-consuming and energy intensive. Discover is fun, enlightening and relaxed. To compare it to the web, discovering is like surfing web sites about a topic that interests you, whereas convincing is like getting hit with a blizzard of popup ads. Which do you prefer?

Just yesterday I had a great sales call in which the prospect talked probably 80% of the time. I asked him a lot of open ended questions that got him to understand the pain he is in and envision a solution provided by me. At the end of the meeting he thanked me profusely and said I was very different from the other vendors he had talked to. This despite the fact that he did most of the talking!

And that’s another key point about the Sandler System - you don’t look like every other salesperson that walks through the prospect’s door every day, so the prospect doesn’t treat you like the stereotypical lying salesman. Let’s face it, the prospect assumes salespeople are liars. What image pops into your mind when you hear the word “salesperson?”

So, use Up Front Contracts to get control of the sales process and understand exactly how it will evolve. Prospects don’t usually have a systematic buying process, so you’re doing them a service by bringing clarity to the process. In truth, the only things the prospect is concerned about are a) solving their problem and b) not getting cheated by a lying salesperson. Done well, Up Front Contracts ease the pressure on both of you and makes for a much more manageable process.