There is an art to selling but many entrepreneurs and startups miss the mark by turning all of their attention to the product! Today on the Atlanta Small Business Show, we’ll find out why George Deeb, Managing Partner at Red Rocket Ventures, Forbes Contributor, and author, says to focus on the ‘why’ not the ‘what’ when selling.
Transcription:
Jim Fitzpatrick:
George, thank you so much for joining us once again on the show.
George Deeb:
Yeah, Jim, it’s great to be here.
Jim Fitzpatrick:
Huge year ahead. Here we are in now February, which I can’t believe, we’re already through the holidays, and now the first month is in the history books, but we still have a whole lot of year left and I know a lot of small businesses are trying to focus and get their sales teams in line and such. So what are you talking about when you say what versus why when it comes to selling?
George Deeb:
The what is the product itself, right? The product or service that you’re actually selling. The why is the benefits that the customer should expect to receive from that product or service.
George Deeb:
So that’s the primary distinction where sometimes the entrepreneur likes to lead into the what, because they’re so excited about their new product that they’ve built but the client sometimes will get put to sleep with a demo of some new product or service. You need the attention grabber of the why it’s going to help them improve their business and kind of take it to the next level.
Jim Fitzpatrick:
That’s right, that’s right. How do you define the expected customer benefits from the why?
George Deeb:
To me it’s really three different things. The first benefit is how will your product or service improve your client’s revenues? That’s the first one. The second be how would it help your client save their costs and lower their expenses?
Jim Fitzpatrick:
Okay.
George Deeb:
That would be the second one. And then the third one is how does the product or service help improve the user experience and kind of make it easier for their customers or their employees to kind of do their jobs or play with the product.
Jim Fitzpatrick:
Sure. Sure. Are there minimum thresholds, these benefits should achieve to get a customer’s attention?
George Deeb:
Yeah. I mean the bigger the number the better you’re going to have a chance of selling it. If you walk into a potential listener and say, “Hey, listen, I can save 10% on your cost or increase your revenues by 10%,” that will get their attention. If you walk in and say, “This is a 1% problem,” then they’re going to look at it as a nice to have, not a need to have and the bigger the number, the more they’ll give you the attention.
Jim Fitzpatrick:
Right. Right. My father used to say that a good salesman, doesn’t talk, they listen, and they qualify that customer, and I don’t mean from a financial standpoint, but what is it that that customer is looking for when purchasing this particular item? Then pretty much focus and direct your sales and the information that you give to curing that problem that the customer’s faced with. Right? Does that make sense?
George Deeb:
Yeah. From your father’s mouth to all entrepreneurs’ ears. That’s exactly right. The biggest mistake a salesperson makes is they don’t listen.
Jim Fitzpatrick:
Right.
George Deeb:
They really need to listen more than they speak. Ask those probing questions and learn what their pain points are and then solve those pain points.
Jim Fitzpatrick:
There is no question. How do you calculate revenue benefits?
George Deeb:
The easiest way to do that is to try to research the revenues of the client you’re talking to. There are a lot of services out there. You can go to Google and type in a company’s name and the word “revenues,” and it may take you to service like Zoom Info or some of these public data disclosure businesses where they’ll help estimate the revenues of the business. If it’s a big public company, their financials are already disclosed-
Jim Fitzpatrick:
Yeah.
George Deeb:
So you know what revenues you’re working with just based on their public filings. Then you need to figure out, okay, if the clients use your tool, your product or service, how much additional revenues do you think that your product will help drive them and then you calculate what that percentage lift is.
Jim Fitzpatrick:
Right.
George Deeb:
If that percentage lift is a big number, you’re in good shape and if it’s a small number, you still got to do some work.
Jim Fitzpatrick:
That’s right. That’s right. Then conversely, how do you calculate what the cost savings benefits would be?
George Deeb:
Yeah, it’s not too dissimilar than the first one, except now you’re researching the expenses of what they’re doing. Let’s say you’re sell them a piece of software and it’s a big publicly known piece of software where you can go to a website and find the pricing for that particular product. You know what they’re paying today for that product or service and then you can come in and say, “Hey, listen, I know you’ve got this quote, unquote ‘Rolls Royce product’ out there at this Rolls Royce price. What we’re going to give you a Rolls Royce experience at a Volkswagen price and I think I can help cut your costs in half. How does that sound?'”
Jim Fitzpatrick:
Yeah. Yeah, for sure. When quality comes up, it’s so vitally important because some customers might look at a product and say, “Well, that item is $500 and it’s $300 more than what we’re used to paying for this particular item.”
Jim Fitzpatrick:
You ask the customer, “How often are you switching out these products?”
Jim Fitzpatrick:
“Oh, we switch them out every two years.”
Jim Fitzpatrick:
“Aha. Our product is guaranteed to last 10, 12, or 15 years so at the end of the day, the $500 additional investment now sounds like a lot but at the end of the day, it really saves you maybe another $1000 because you’re not switching them out all the time because they’re breaking,” right?
George Deeb:
Yeah. For sure. Quality is a key driver in any purchase decision and your clients are going to have quality probably first of mind on their list. If they’re smart, quality will come before price. I’d rather have something that’s reliable and trusted and backed up and supported with good client references-
Jim Fitzpatrick:
Yeah.
George Deeb:
Because the switching costs of making a mistake now is going to be double the cost to get it back up and running again and double the time delays of not getting the right decision made upfront.
Jim Fitzpatrick:
That’s right. Also, I think it’s wise for sales people today to emphasize the support that goes behind product, because it could very well be that the lack of support that the prospect is currently experiencing with their current carrier is what really put them in the market for a new vendor. I think it’s often overlooked because if a company does provide great service and great support, sometimes the salespeople don’t focus on that. They focus, to your point, on the product or some of these other areas. But it might be that service and that support that actually wins the deal.
George Deeb:
Yeah, for sure. There’ve been several examples where I was buying a piece of software where I like this product. It looks like it can solve my problem, but I have some I questions or product questions, and there was no service desk or support desk or anybody to talk to help convince me that I was making the right purchase decision. Then what ends up happening is they don’t get the sale and I’ll find somebody else that can answer my questions and looks like they have a product that can meet my needs.
Jim Fitzpatrick:
That’s right. That’s right. Talk to us. How do you calculate user experience benefits? That’s a top one.
George Deeb:
That’s a bigger, more ethereal term. There’s kind of three things that I’m kind of studying there. Can your product or service help them retain their customers? That the customers are happy enough not to cancel.
Jim Fitzpatrick:
Okay.
George Deeb:
That’s called your churn rate.
Jim Fitzpatrick:
Okay. Right.
George Deeb:
You want to keep your churn rate low. This second thing is how loyal are they to you? Your repeat sales metrics and are they coming back to you year after year and you’re retaining them? That’s a good signal that they’re happy with the product or service.
Jim Fitzpatrick:
Right.
George Deeb:
Then the third point is, are you seeing a growing word of mouth generating a buzz around your business and helping you get new customers? Because if people are happy with the product, they’re going to spread the word of mouth to all their friends and the friends are going to come in and buy your product and service as well. Those are metrics that’ll help you make sure that you’re improving the user experience.
Jim Fitzpatrick:
Yeah, for sure. Can you provide a case study of how this has worked for you in the past?
George Deeb:
Yeah. I think the best example I can give is when I was running my travel business, iExplore, we wanted to cut a big strategic relationship with National Geographic. We were going after the same target demographic and our thesis was the reader of the National Geographic that wants to go to all these exotic destinations could be a good partner for us because we’re the travel business that was actually going to take them there. But instead of me calling their CEO and saying, “Check out my great travel website, it can help you search for trips to these destinations or these activities or whatever it is,” and what most entrepreneurs would do is talk about their product-
Jim Fitzpatrick:
Right.
George Deeb:
I instead kind of researched their business, learned how much revenues they had, the time they had about $500 million in revenue. I did some back of the envelope calculations that I knew how big their customer audience was and that if we could get 1% of their customer audience to purchase a travel transaction, that would’ve been an equivalent of growing their revenues by $100 million.
Jim Fitzpatrick:
Wow.
George Deeb:
That’s a pitch where, “Hey, listen, how would you like to grow your revenues by 20%? We’re the vehicle that’s going to help you do that. I just need your help and your marketing muscle to get our pitch in front of your customers.”
Jim Fitzpatrick:
Wow. Very strong. That’s exactly what is needed today because that will get the attention of the decision makers in any company when they hear that kind of a leap in their revenue. Then it’s a kind of a, “What’s in it for me?” Those numbers are very impressive.
George Deeb:
Well, especially if the business is trying to reinvent itself.
Jim Fitzpatrick:
Right.
George Deeb:
At the time I was pitching National Geographic, they were still largely a magazine company And magazine subscriptions were declining and they were losing potential revenues and they were just figuring out their cable business and they were just figuring out retail stores and other things that they wanted to be testing so it was a good time. It was a right time right place.
Jim Fitzpatrick:
Right.
George Deeb:
It also helped that I knew that Discovery Channel was one of their competitors and the minute they heard that Discovery Channel was also in discussion with us, that was their opportunity to close the deal with us and cut out Discovery Channel from the discussion.
Jim Fitzpatrick:
Wow.
George Deeb:
It was a great way to get what they wanted done and what we wanted done at the same time.
Jim Fitzpatrick:
For sure. For sure. These are all great ideas and great strategies when it comes to sales.
Jim Fitzpatrick:
Let me change gears a little bit with you in some of the people that we talk to out there, we’ve had discussions about the fact that today’s salespeople and entrepreneurs and people out there selling their services and such, it’s a little bit like shooting fish in a barrel because they’re selling everything that they can. We’re in the middle of a very, very strong economy and many materials are in short supply so everyone’s running and getting what they can and willing to pay whatever they need to pay to get it. There’s not a whole lot of selling going on right now. It seems like if you’ve got the product or you can get it quicker, you get the deal. As many of the experts that I talk to say, “We caution people about that,” because there’s going to come a time when products are all back on the shelves and there isn’t this pent up, I shouldn’t say pent up, but there isn’t this shortage of products that are out there and all of a sudden you’re going to turn around and start selling and talking to your customers the same way you did down the road as you are now, which is, “Okay, what day do you want it delivered? Let’s go.”
Jim Fitzpatrick:
And they’re going to go, “Whoa, whoa, whoa, wait a minute. Tell me about your product, sell me on your product. Why should I do business with you as an individual or you as a company?” As we talked earlier, “What’s the support behind it?” Because right now a lot of those questions are not being asked. They’re just saying, “You got it? Great. I need it. How quickly can you get it here?” Then salespeople are patting themselves on the back for being superstar salespeople when in reality it was just because you had access to the product. Does any of that make sense?
George Deeb:
Yeah, for sure, a case study I’ll use as our restaurant furniture business. Yeah. Supply chain is in complete chaos.
Jim Fitzpatrick:
Right.
George Deeb:
Nobody has inventory.
Jim Fitzpatrick:
Right.
George Deeb:
So whoever has the inventory’s going to get the sale and you’re right, it doesn’t take a whole lot of blood, sweat, and tears selling to get that sale because you are the only one with the product.
Jim Fitzpatrick:
That’s right.
George Deeb:
Now, before the supply chain problems, if you went to the website and searched for restaurant furniture, a lot of the competitors would lead with the product or the price. That’s really as far as they took their messaging.
Jim Fitzpatrick:
Right.
George Deeb:
We said we were going to take a completely opposite approach. We were going to lead with service and we wanted to be an extension of this particular partners procurement department and help them with their product strategies, help them source new vendors that they hadn’t discovered before, help them with putting multiple products from multiple vendors on one invoice and putting out the fires when they develop and dealing with their claims and dealing with the logistics and all the things that kind of happen around the movement of furniture. They’re willing to pay more with us for those services.
Jim Fitzpatrick:
Yep.
George Deeb:
They are willing to walk away from the cheapest product if they can get the best service and our business has flourished for that specific reason.
Jim Fitzpatrick:
Yeah. That’s fantastic. It means a lot today, but so many salespeople right now are just, as we just talked about, they’re thinking they’re superstar salespeople or entrepreneurs when in reality, it’s only because they might have that product right now and all of their competitors don’t, but I caution for the small businesses and the entrepreneurs that are listening and the sales people that are listening, that’s not going to continue. These ships are going to be unloaded one day and the supply chain’s going to come back to normal and the customers right now that you speed through are going to remember that experience. They might not be as nice to you down the road to say, “Yeah, I remember when it’s short supply and you charge me top dollar for your materials and didn’t spend a whole lot of time with me and now guess what? Now you want me back as a long term customer.” It’s something that I caution a lot of small business owners on right now. Obviously you’re going to sell them and yes you’re going to get a good margin on them, but take good care of them. Don’t take them for granted, like there’s 14 others at the door because this is not going to last.
George Deeb:
Yeah, for sure. You’re going to get some good, positive word of mouth and some new good customers from good service but the worst thing can happen is if you deliver bad experience and bad service and kind of take them for granted, you could lose 10 customers with the negative word of mouth.
Jim Fitzpatrick:
So true.
George Deeb:
It’s important to kind of lean into your strengths and make sure that they’re clear that they’re really getting a great experience.
Jim Fitzpatrick:
Yeah, no question about it. George Deeb, managing partner of Red Rocket Ventures and a Forbes author and contributor. I want to thank you so much for joining us once again on the show. Man, our viewers just eat up everything that you talk about on the show. We’re constantly being asked to bring you back on, so thank you so much for joining us. Really appreciate it.
George Deeb:
It’s terrific being here again, Jim, happy to help.
Jim Fitzpatrick:
Great, thanks.
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