Peter Sandeen

Peter Sandeen

Contact: phone +358 41 433 0144 / Email (contact {ät} petersandeen {dot) com) / Twitter / Google+

Use Customer Complaints to Get Referrals

Don’t try this at work

Yesterday I got to witness a poorly handled customer complaint … again. Here’s what happened. A customer  had ordered some products and was promised to be contacted “tomorrow”. Well, “tomorrow” was four weeks ago so the customer was understandably annoyed. The sales person who had made the deal with her immediately started talking. But not to the customer. Instead the sales person asked the store manager about the order who then ran away to look for it. The customer waited in silence while the sales person did something on the computer. After a while the store manager came back and asked more about the order from the sales person. They quickly found out that no order was made to the supplier. At this point the store manager said “There’s no order so there’s no product.” The customer looked dumbfounded. Firstly: that was the very first thing that was said to the customer. Not even a “Hello” before that. Secondly: still no eye contact was made. None. I was watching this “interaction” in disbelief. After the customer asked again what could be done the sales person finally started to talk with her. She didn’t even receive a discount for the order she then made.

What needs to be accomplished

When a customer complains there are a few things you should accomplish.
1. The customer needs to feel that you care. Start with communicating that you care about their problem. Once they know you care they’ll be calmer; they know they’ll be listened to even if they don’t scream.

  • Greet them politely. Your greeting will dictate the tone of the conversation.
  • Find eye contact. It’s harder to be angry at someone who looks you in your eyes than to someone who avoids you.
  • Ask how you can help them. They will need to trust you. Let them know that you’re there to help them. Even if the customer makes unreasonable demands they should believe you’re trying to help them achieve their desires.

2. You need to understand what the customer is really complaining about. Customers tend to complain about issues that are the easiest. In the situation I described above delivery time was easier to talk about than breach of trust (the sales person never called with additional information). If the customer’s real cause of disappointment had been addressed she would’ve been happier. Use the following ideas to notice what’s really the issue for the customer.

  • What they talk about. If they go back to something over and over it’s a sign you’re not addressing the right problem.
  • Ask questions. Asking for more information gives them the opportunity and “permission” to tell you what they really want. Being understood and listened to is what they want the most.
  • Make different offers. You can never be absolutely certain of the priorities of the customer. Make a few different offers and see which is closest to pleasing them. Emphasize price in one, delivery time in another, and other benefits in a third.

3. A solution needs to be found. If you can’t find an acceptable solution the customer may sue you or at least tell all her friends that you can’t be trusted. There’s a temptation to find the “lowest bid” the customer is willing to accept. If the customer is a good negotiator it might be a good enough solution but usually that’s not the case. You should make the customer happy not just accept your offer.

Complaint into appraisal

Whenever I handle customer complaints my goal is to turn them into appraisals and referrals. Most of the time I get the customer to say “Thank you so much. This was really nice/good service/informative.” If the customer leaves happy after complaining I believe it leads to referrals. I can’t remember how many times I’ve heard a referral in the form of, “They handle complaints and warranties really well.” At least I make referrals based on that. There’s no better time to build trust than when things go wrong. Everyone knows and understands things don’t always go smoothly. If you handle those situations well you earn a lot of trust; why wouldn’t you handle easy situations well too? Here’s what I do to build trust and get referrals:

  1. I let them know a solution will be found. That reinforces an expectation they already had and creates a mutual goal.
  2. I listen to what they say. I look for the (possibly) hidden issues that they’re upset about.
  3. I tell them how I feel about their primary demand. If the complaint is unreasonable I explain in very simple language why that is. At this point about half of all complaints are resolved.
  4. If their demands are justifiable I present a couple of options how we can handle them. I never offer just one way to resolve the matter. The customer should feel they’re in power and giving them a choice reinforces that feeling.
  5. I find another person to evaluate the situation even if I could make a decision then and there. I “brief” them before taking them to the customer to let them know what I offered. When another person affirms the offer’s fairness most customers believe it really is fair.
  6. Once a solution is found I ask again if there’s anything else they wanted to tell me. Quite often there is and it’s important to resolve those issues as well.
  7. I always thank them for complaining. If there was a problem with a product it’s valuable to know about it. At this point they often thank me, but sometimes the next step is required.
  8. I ask if I can do anything else for them. This seems to be the point when the situation at the latest changes. I assume that they want more from me; to buy something, to get more information, or something else “business as usual” stuff. When I act as if there’s nothing wrong they’ll feel that too.
  9. When they leave I purposefully say, “See you again” instead of “Good bye”. I want to leave the impression in their minds that they’ll come back and get good customer service again.

How do you handle complaints? Have you seen poorly handled situations or exceptionally well resolved problems? Share your experiences in the comments below.

Encourage Bad Feedback

Bad feedback is the best feedback

Customer feedback is the best way to understand how to improve your business. Bad feedback in particular is priceless if you know how to use it. I believe it’s even more valuable then the best consultation. Though if you don’t know what to do with feedback, consider getting some consultation for it ;) When a customer gives bad feedback it means their expectations weren’t met. Sometimes this is because they wondered into the wrong store, but usually that’s not the case. Here are the most usual reasons for bad customer feedback:

  • Delivery problems. If a product is even a little late many customers will get angry. It’s surprisingly common that they get angry even if the product arrives on time if an earlier delivery was possible. I can’t count how many times I’ve had to explain to a customer that the delivery date in the contract really is the delivery date. Especially when the delivery takes longer than a week, people seem to think that they can come and pick up their order the previous day.
  • Offending the customer. I have yet to meet a sales person who would never show their annoyance of the customer. Sometimes customers are so rude there’s no way you could treat them “fairly” in their opinion. But quite often it’s a misunderstanding that leads to offending a customer.
  • High prices. It doesn’t matter how low your prices are; they’re always too high for someone. And they’re often willing to pin it on you.
  • Poor product selection. If this comes up often then you have to address it. Customers are resourceful when they need something. If you can’t provide it they’ll find it elsewhere. Often you don’t end up losing just the single sale but instead the customer altogether. Poor selection is something people talk about a lot. So if one customer gives you feedback about your product range they’re likely to tell 20 of their friends about it.
  • Product malfunctions. Even the best products do break sometimes. Fortunately customers usually understands this. But their patience will end if you don’t take care of the problem quickly. The situation is much more complicated if there’s no warranty left. It’s often better to do what the customer wants than to start fighting about it.
  • Insufficient training. I remember when a customer who had bought a usb-keyboard, called and said it didn’t work. When asked if he had tried connecting the usb-cable to another input he said the keyboard didn’t require a cable. It took some time to convince him that a usb-keyboard indeed needs to be connected with a usb-cable.
  • Misunderstood needs. Customers have their expectations about what a product does. Sometimes these expectations are false and they’re not necessarily talked about when the sale is made. It’s usually not your fault, but these situations are often avoidable. You should always understand what the customer wants the product to do. Address misperceptions about your products when making the sale and they can’t blame you.

All these complaints tell you something about your business; what do your customers want from you, but don’t get. If you can answer these needs better, your business will do better. Before you can use the feedback you need to get it. And lots of it. If you only get the occasional feedback from the guy who wants a Sumatran tiger steak from your burger shop you can’t use them. Most business’s make it too hard to give feedback that they never get enough to know how to make their customers happier.

Get feedback

Approximately 80-90% of bad customer feedback is never given. Good feedback is easiest to get when you see the customer. But most people aren’t comfortable with giving bad feedback face-to-face. The online world presents better opportunities for gathering useful feedback. Add a feedback system to your website and encourage people to go there. You can also have feedback forms at your store’s counter. If you encourage people to give feedback, both good and bad, you’ll be seen as open and easily approachable. Along with the feedback form you can set up a Twitter account for customer service. This can only work if someone will actually monitor the account and answer all inquiries. And your customers need to know what Twitter is :) Blogging can also be a handy tool for collecting feedback. Write a post asking for feedback and reply to comments. For most companies today I believe an email asking for feedback is the most effective tool. Send a post where you tell your customers that you’re making some changes in the company and would like to hear their side of things. They can tell you what they’ve liked and if any aspects should be changed. The only requirement for this to work is an emailing list. If you don’t have one, start building it now. Go to aweber.com and start the trial. Build a simple form your clients can fill on your website to be added to your list. Ask customers if they would like to receive occasional emails from you and add them to your list. You can use the list for marketing too, just don’t start spamming.

Use the feedback

Sometimes the customer’s expectations were unrealistic but usually they could’ve been satisfied. I don’t mean you should do whatever customers want. You just should consider if fulfilling those expectations would be beneficial. If the expectations are met by your competitors the need for change is likely. But if the customer wanted to buy a car with $10.000 and you only sell new Porches, you can dismiss the feedback. Or you could create a system to monetize customers who don’t afford your cars. Maybe a nearby used cars dealer would be willing to pay a commission for referred customers?

Getting lots of useful feedback will not change your business at all. To make a difference you need to analyze the feedback and then act on it.

  • Find trends. Are there services customers often ask for? Maybe car buyers want you to get better audio systems to their new cars. Develop a way to meet that need profitably.
  • Broken systems. If customers complain about delivery times, forgotten inquiries, or out dated information, work on your systems. Maybe you should update your data management system.
  • Problematic employees. Often some employees cause more customer complaints than others. Sometimes it’s because of some misunderstanding and you can correct the situation by just telling them what to do in the future. Unfortunately most complaint catchers ask for trouble with their attitude. In either case you can find the problem from feedback.
  • Customer demographics. If you ask for contact detail or other information about the customer in the feedback form you can use it later. Where your customers come from? Where did they hear about you? What car brand they currently own (if you’re a car dealer)? How old are they? And so on. Use this information to target your marketing and refine the overall experience the customer gets.

Bad feedback may be difficult to receive but it’s your best chance of getting better. As always failure teaches more than success. Next time you receive bad feedback think of all the ways you can use it to your advantage. If you make this a habit you’ll soon wonder why you no longer receive bad feedback.

How do you get feedback? Is it usually good or bad? Share your ideas in the comments below.

Path to Buying

Find the expectations

Every customer has some expectations about you, your product, and the experience of buying from you. Here I focus on the experience of buying. It has two parts:

  • What they need to do. If a customer hires you to build a house for them, they don’t expect to be used as a builder. But they do want to pick the color of the house.
  • What you‘ll do. You’ll obviously build the house, but choosing floor panels may not be your responsibility.

In one end of the spectrum is the solution where you take care of planning (hire an architect), purchasing (finding the materials), and building. In this case you’d make suggestions the customer would then approve. It’s also possible that the customer wants to take part in every decision. You as the sales person should understand what the customer expects and then offer a path that fulfills those expectations. If you misunderstand the expectations you often lose the sale. You cannot demand anything the customer isn’t willing to do.

Exceed expectations

Meeting expectations is sometimes enough to get a deal. But why would you stop there if you can exceed their expectations. It will almost guarantee a deal and justify higher pricing. Providing a service the customer didn’t expect will create referrals and increase their trust in you. For example you (as the house builder) can offer to get plans for the garden too. If you don’t do garden planning you can use a good sub-contractor for it. This would be beneficial to all parties:

  • The customer will get a good garden planner without the need to look for one. Note that you really need to find a good planner.
  • You gain trust and value in the eyes of the customer.
  • You may get a commission. You’re also likely to get referrals in the future from the garden planner.
  • The garden planner gets work.
  • The project will likely progress smoothly when you’re in direct contact with the garden planner.

Create a path

Once you know what the customer wants, create a path leading to buying that meets their expectations. If they don’t want to spend time looking for floor panels, do it for them. If they want to design the kitchen themselves include that in the path. Pay attention to what they’re supposed to do. At this point they may realize that they do or don’t want to do something in the path. Adjust the path to suit their wants. You should pick away every obstacle from their path to buying from you. I like to imagine the sales person cutting away forests and moving mountains just to make the customer’s path straight and clear. If their every expectation and hope is exceeded they have no reason not to buy. The biggest difficulty is often power vs. responsibility. Customers usually need to feel like they’re in control. At the same time they want you to do most of the work. The best solution I’ve come up with is to narrow down the options to the best two or three and present them to the customer. This way they feel they have the power, but you do the work.

Get commitment

If there’s nothing more to adjust get the customer to commit to whatever they should do next. Spend some time going over all the things they wanted to do themselves. If they seem overwhelmed you can offer to take care of some of them. You can and should always make a higher profit when you have more responsibilities.

There should be something that you’ll do before contacting them the next time. Ideally it’s something that takes the process (building the house) forward. If you just give a quote on the price you’re not taking the process forward. Instead contact the garden planner for some ideas about the garden. Or fill all the necessary paperwork for getting the permission to start building. Or find out where the customer can get a perfect indoor pool they were talking about. Do something they would have to do if you didn’t do it for them i.e. your clearing the path in front of them. This makes you more valuable for them. If they  decide not to use you as the builder they’ll have to do all those things again (you don’t tell them the names of the contractors before signing a deal of course). When they already saw the path clearing in front of them, imagining the same obstacles coming back is daunting.

How do you create paths customers can easily follow? How much do you talk about the customers responsibilities? I know lots of people say it’s best not to talk about the customer’s responsibilities to avoid scaring them. How do you see this “easier sale vs. happier customer” dilemma? Share your thoughts in the comments below.

Differentiate Your Marketing Message

Advertisement confusion

I was at a mall the other day and the usual speak advertisements were on. An ad started something like, “A new women’s fashion store has opened its doors. The store is filled with unique garments to suit your individual style…” At this point I was thinking, “That’s some aggressive advertising; the same ad was on just 3 minutes ago.” Then the ad finally mentioned the name of the store: it wasn’t the same company. It was a competitor who had copied the ideas from another ad. I guess it was done unknowingly. Nonetheless they were effectively advertising their competitor who had run their ad for weeks already.

Your speciality

The clothing store’s ad got me thinking how poorly advertisements are often written. The substance is non existent and replaced by jargon. In the case of the clothing store nothing specific was said. They used the same clichés every store uses: “unique”, “individual style”, “from Italy”, and so on. There’s no point in making an advertisement that says nothing about you. If you could change your name in the ad with your competitor’s name, something’s wrong. You should highlight what’s unique and special about you. The first step is to really know what you sell. A luxury fashion store doesn’t sell protection against cold weather. They sell the feeling of being special, expensive, and admired. Try to be specific when you assess what it is you really sell. You can even ask your customers, “What do you value about us?” They’ll often tell you exactly why they buy from you instead of your competitors; “The sales people here help me find really well fitting clothes.” When you know your speciality, advertise it.

Clichés to kill for

Every industry has clichés. Avoid them at all costs. Unfortunately it’s not always so easy to recognize clichés. One of the easiest ways to find them is to look at your competitor’s advertisements. If more than a couple of them use the same phrase it is or it’s becoming a cliché. Phrases like “industry standard”, “leading provider”, and “best-selling” are used so much that everyone has learned to skip over them. They are jargon that can be edited away without losing any value. If your product really is the industry standard you should highlight that. But using the phrase “industry standard” is still not a good idea. Rather show it with examples, testimonials, or demonstrations. “Used by *well known customer*.”, “When *product* was used at…”, and “*Product* is the only solution in the industry that…” All these ads would tell something that’s really about your product. And prospects would be much more likely to remember these ads.

Give your marketing a unique form

Could you find a form for your marketing material that hasn’t been used? Lets say you’re running a campaign called, “Lion days” for a shopping center. You could do what everyone else would do: give away balloons, put ads on the sides of busses, and distribute advertisement letters highlighting the best offers. I’m not saying you shouldn’t use those methods. I’m sure they’re quite effective; they wouldn’t be used otherwise. But something unusual would get more attention. Here are some ideas for the same “Lion days” campaign:

  • Give away lion’s tails for children to wear. I know I would notice if every other kid I see wears a lion’s tail. And if they were carrying a balloon advertising the shopping center I’d notice it.
  • Send people in lion costumes around the city. Don’t use them to share coupons but instead make them actually interesting. Hire professional musicians to play music on the streets (in lion costumes). Or hire a stand-up comedian to entertain people (again with the lion costume on). And children would definitely enjoy getting candy from a huge lion.
  • Turn your ad into a competition. “Spot the blue lion in the streets and post his location to Facebook and you can win a $1000 gift voucher to *shopping center*!” You’d get a lot of attention in the social media and in the streets.
  • Think of something that’s not normally linked to your brand/advertising. If you’re not afraid to be bold you could run a TV ad where the mascot lion acts indecently. The line would then say, “Lion days are not just for children.” or something like that. The ad could be used during shows like “Sex and the City” and the like where the viewers are adults obviously not shamed of indecency. Having the mascot appear somewhere nobody expects to see it would be remembered and talked about.

Be rememberable

The best way to be remembered is to give something prospects want to remember. Generic messages are hardly recognized. My advice is to think of something your buying customers value, and then deliver it. How you can deliver something valued depends on what it is, but some general rules apply:

  • Be specific. If you own a clothing store don’t promise “information about body types”. Instead say, “We’ll analyze your body type so you know what’s flattering on you.” Your customers already have “information” about what they’re interested in. What they often lack is the practical way of using that knowledge. That transformation from idea into practice is what makes you a valued expert.
  • Offer real value. “Unique garments” isn’t real value even though it’s valued. “We’ll analyze your body type” instead is actually valuable for the customer. It will be remembered and talked about when the topic of body types or clothing arises.
  • Give to get. This is an underused marketing method. When you give something to a customer a need to reciprocate emerges. The customer can either buy from you or talk about you to their friends to give back to you. If you’ve already received a free body type analysis your likely to feel pressure to buy immediately. And even if you do buy you’re still likely to tell your friends about it.
  • Don’t advertise like all of your competitors. Do your best to deliver your message in a way the potential customers aren’t used to. See “Give your marketing a unique form” for ideas about this.

How do you differentiate your marketing message? What are the most rememberable ads you’ve seen? Were they just like other ads or was there something different about them? Share your experiences and ideas in the comments below.

6 Ways to Get Sales People to Work Harder

1. Salary

When you hire sales people their first question tends to be, “What’s the salary?” They usually feel it’s the most important aspect of any deal you make. While you should negotiate their salary, avoid differences between people with similar responsibilities. Rather than bargaining with salary you should offer changes to their job description (when possible). Some sales people want to do a lot of prospecting, others don’t. Some like to install the products themselves, others don’t. If you can create individual responsibilities I highly recommend doing it. You can decide which tasks are negotiated so if no one would volunteer to do something then everyone can do that for themselves. Remember to adjust (raise) the salary each year; inflation alone justifies a small increase. Salary is closely tied to commissions if they’re used.

2. Commission

The second question (often tied to the first one) is, “How large is the commission?” If paying commissions is usual in your industry, it will be expected. There are some obvious advantages to paying commissions.

  • You can pay a smaller salary with a commission.
  • If someone doesn’t make any sales, they won’t receive commission.
  • People tend to work harder if they earn a commission for it.

Unfortunately commissions also have serious problems.

  • They encourage everyone to play their own side instead of working for the team.
  • People will try to take “their” customers with them if they choose to leave your company.
  • Sales people are more likely to lie and otherwise work questionably to make a sale.
  • Is it fair that only the sales people can earn commissions? Especially marketing people often complain about this.

My advice would be to avoid commissions whenever possible. Instead use performance based bonuses for motivation.

3. Bonus

Unlike commissions bonuses aren’t calculated solely from sales. The bonus for a sales person is of course affected by their sales, but other factors are more important. If you pay generous bonuses (and decent salaries) you don’t need to pay any commission. Here’s what you should take into account when calculating bonuses:

  • Company success. If the company makes a great profit it should be in part distributed to the employees. Even when the company loses money bonuses should be paid; just smaller ones.
  • Team playing. The ideal sales person doesn’t cling to their “own” prospects. Workload can be distributed evenly if everyone is on the same boat and working for a shared goal.
  • Customer appraisal. It’s valuable to have sales people your customers like. They create a lot of return customers that are usually more profitable than all other customers together.
  • Lack of customer complaints. If a sales person gets no customer complaints they’re doing something right. This is especially true in stores where a random customer complaint is almost inevitable.
  • Sales goals. It should have an impact, but make sure you evaluate carefully all the other aspects first. Lots of sales often means that the other issues are problematic.
  • Their improvement. This is my personal favorite and I could even give more weight to this than any other point on this list. The best sales people are those who develop their skills. You should do everything in your power to encourage them to learn and use new ideas. For example you could make AffectSelling.com their internet browser’s home page to help them improve ;)

Many new sales people will demand commissions. If you want to hire them and giving a commission is the only way to make a deal, you should make it. When the time for yearly bonuses comes you can evaluate how much they would get if they didn’t get a commission. If your bonus structure is good and they’re good workers, the difference shouldn’t be big. Give them some time to adjust to the idea of bonuses instead of commission.

4. Title

Prestige is a surprisingly strong motivator. Offering a more prestigious title is a good way to recognize someone and can make people work even harder. But be aware: there’s a trap you can easily fall into here:

Lets say you want to recognize a sales person’s constant improvement. They already receive the highest salary of all sales people and you don’t want to make it any higher. The yearly bonus is already negotiated and there are no additional benefits to offer. You think that giving a more prestigious title would be a nice way to recognize their efforts. It’s a good and easy choice if they’ll be the first who have that title and/or the responsibilities that come with it. But if it’s an existing title, proceed with caution. First take a look at the salaries of those who already have that title. Is it higher than what you’re paying to the sales person? If it is, they may actually feel undervalued when they’ll suddenly be at the bottom of the bunch. Remember that they had the highest salary before the title change. Even though the salary remains the same it’s no longer prestigious.

5. Benefits

Health insurance, car, phone, apartment, etc. You can give all sorts of benefits to your employees. It’s common to think that the only purpose of these benefits is motivation. It’s that too; health insurance for example is something most will work hard for. But some less conventional benefits have the effect of making people more effective.

  • Company gym. If you have a gym where employees can work out encourage them to do that.
  • Sponsoring exercise hobbies. If you pay for an employees exercise hobby fully they can “forget” to use the benefit. But if you only pay half of it they need to make an investment too. They’re much more likely to actually exercise then.
  • Give a bonus for not smoking or drinking. A Finnish construction company gives a bonus to all employees who don’t smoke or drink at all during the year. It has proven to be effective. Their employees are sick a lot less than in other companies in the industry. And the employees stay in their service longer, reducing costs from familiarizing new employees.
  • Offer a healthy lunch. Nowadays many people eat incredibly unhealthy foods for lunch. You can help your employees eat healthy by arranging food deliveries. You could also sponsor a “cooking ring”. All members of a cooking ring make lunch for all members once a week (if there are five members). Peer pressure will make them think twice to what they offer.
  • A company cottage. You can offer your employees the possibility to use a company owned/rented vacation cottage.

6. Appreciation

Studies consistently indicate that people (yes, even sales people ;) ) work harder for appreciation than money. How to show appreciation? Here are a few ideas.

  • Ask for their opinion. You can ask for their input even when you don’t really need it.
  • Give them exclusive information. Tell them about something that’s going on in the executive level. Or talk about a new product that’s not yet for sale.
  • Let them influence their working hours. Some sales people value flexible hours more than money, interesting products, or even work environment.
  • Ask them to answer an executive’s question. If you really trust someone you could let them talk on your behalf. Not many things say, “I trust you.” like letting them talk to their boss’s boss.

Negotiate No Loss Issues

Your preferences

In all negotiations some issues are more important to you than others. The only exception is zero-sum negotiations where just one issue is discussed. But usually even the simplest negotiation has more aspects than price; time frame is the most usual. You should always assess carefully your preferences and consider their value. Calculating each issue’s value in money makes it easier for you to compare your options during negotiation. For instance you could be willing to give a $5,000 discount if the payment was made a month earlier. Or you’d want $30,000 more if exclusivity was demanded from you. If you’ve weighed the importance of different issues you can make justified decisions. Assessing offers without this knowledge often leads to rash conclusions.

No loss questions

When you calculate values to different issues make note of the things that have little or no value to you. Some of them may be important to your opponent. Lets say you’re selling a product you already have in stock. The buyer needs it in 4 weeks and it would cost them a lot if it arrived late. They may be willing to pay extra if you guarantee delivery within 3 weeks. It creates no extra cost to you, but the buyer gets peace of mind. You give them something they value and you get rewarded for it.

Your opponent’s preferences

Just like you, your opponent values some issues more highly than others. Knowing their preferences is important information that you can leverage while negotiating. The company website often tells you a lot about their operation which in turn should tell you something about their interests in your negotiation. If you know someone in a similar company they may be able to offer valuable insights. You can also ask your opponent to make a rough proposal before the negotiations start. They’re unlikely to provide anything specific but you gain a valuable insight into their priorities. You should always exhaust all possible sources of information before starting the negotiation.

Negotiating no loss issues

If you start with, “We don’t care about this issue.” you’re not negotiating. You can keep the conversation open by saying, “This issue isn’t quite as important to us than the other one. I’m sure we can form an agreement where we both get what we want most.” Your opponent will know they can get concessions from you regarding that one issue if they’re flexible on the issues you care more about. As long as they feel you’re making a concession they feel the need to reciprocate.

Don’t get caught

A skilled negotiator may notice if you don’t really care about an issue. This works the other way around too, so you can take advantage of these techniques as well. And when you know what to look for, you can learn to hide your own preferences more effectively.

1. First proposals. If your first offer skips some issues it’s a clear message of their unimportance to you. Unless you’re sending a deliberately vague proposal, mention all possible aspects as if they’re important to you. You can leave more room for maneuvering to indicate the possibility for negotiation. Just make sure you mention those issues.

2. Prepare. Prepare to negotiate and “fight for” the issues you don’t really care about. If you fail to do so, you can’t discuss the issues like the meaningful ones. Sudden lack of preparation will be obvious to any negotiator. You should have an idea (even a fictional) of your desired outcome. You can later give up and your opponent will feel like a winner.

3. Where’s your focus? You naturally focus more on the issues you care most about. You should fight your instincts. Bring the conversation back to a topic and you indicate its importance to you. When an unimportant issue comes up start talking about it. Once a decision about that issue is made you can remind your opponent of your concession. That will create more pressure for them to give concessions on other issues.

4. Place for emotions. You often get really emotional during a negotiation. That’s fine, just remember to match your enthusiasm across all issues. If you stop waiving your hands and talk significantly slower, you won’t convince anyone.

5. What’s it worth really? It’s possible that the issues that you have no interest in are just as meaningless to the other party. If you then get them to believe you care about the issue, you can only lose. When they fulfill your faked desires they’ll expect concessions from you to “break even”. On the other hand if you catch your opponent faking interest in some meaningless issue you can benefit from it. Make a “huge” concession (worthless to both of you) and they’ll owe you a similar real concession.

After the deal

Congratulations! You’ve successfully negotiated with a no loss issue. But there’s still room for error. First of all: don’t draw special attention to that issue. Secondly: don’t make it look too easy for you to fulfill the agreement. If you promised to deliver the products (that you already had in stock) within 3 weeks, don’t deliver them in 3 days. Your opponent expects them in 3 weeks and they may not have storage space for them before that. And more importantly instant delivery will show you were bluffing. If you’ve ever played poker you know it’s not nice to find out you were beaten with a bluff. You may find your relationship short lived if they feel like you fooled them.

Have you tried to claim value for yourself be negotiating with no loss issues? How have you succeeded? Tell your story and share your ideas in the comments below.

Control the Perception of Price

Perception of price

Customers always have an initial idea of the price your product/service costs. You as the sales person should influence that expectation. If they expect to pay $600 for a product they’ll see $500 as cheap. But if they thought the price won’t go over $400, the same $500 will surprise them badly. The expectation’s accuracy varies widely. Knowing how to deal with different expectations is necessary to be an affective sales person.

It’s all about baseline

When you meet the customer, showing something just out of their reach is subliminally affective. You “anchor” the price to which they subconsciously compare later prices to. And they feel like they’re getting a good deal when they find something in their price range. If the first offer you make is too expensive you risk offending or scaring the customer away. If you have a wide price range and you don’t know what the customer is looking for, pick something above the average price first. If the customer doesn’t mind the price quickly move to the more expensive products. Customers will usually tell you when their price limit is breached and if they don’t, seeing it on their face shouldn’t be too difficult. Finding good options is easier and less time consuming when you know accurately the customer’s price range.

Add value

Adding value to the sale is maybe the best way to increase the amount a customer is willing to pay. You can try to sell an unrelated product but it’s easier to create a compelling package from related products. All upsells fall into two basic categories.

Little or no cost to you

Often you as the seller can add value to the product almost for free. Divide payment to small pieces, give an extra “manual” (which can be your advertisement too), or offer free phone support. When you give away something, the original or a higher price seems fair. Even when the added feature isn’t completely free to you, you can make a nice profit. For example extended warranties (for inexpensive products) are rarely used, but add to the total price.

More value, higher price

Customers often have a reservation value (the highest price they’re willing to pay) for the main product they want. They may be willing to pay a little more but not much. What you can do then is sell something else. It’s best to upsell right after they’ve said yes to the initial purchase. If you don’t turn the products into a bundle in their minds, they’re unlikely to do it themselves and their reservation value can be exceeded. Selling related products is beneficial to both parties when done right. If providing an extra service costs you $1,000 and the normal price is $2,500, you can give a 20% discount. You still make a nice profit and the customer saves $500. Without the discount they have no real reason to buy immediately and forgetting the offer is easy.

Dividing costs

People have repeatedly surprised me with their inability to understand piling costs. For example you want to buy a new stereo system. You go to a store and tell them your needs. They’ll then let you listen to five pairs of loudspeakers. When you’ve made up your mind they ask if you need an amplifier. If you need one they’ll sell you one. Then you “should” update your CD-player. And new cables are necessary too. At the last moment the sales person remembers to ask you if you like radio, which isn’t included. The 600$ pair of loudspeakers seemed like a good deal, but suddenly the total cost is up to 1700$. The additional costs were divided into small pieces. Therefore the increased price doesn’t feel real until you see it in the cash register. You’re free to change your mind at this point. It’s just really hard after making the commitment in your mind; you already thought that you’d get that new fancy stereo system.

The starting point

Customers often mislead themselves. They ask for loudspeakers instead of a stereo system. There’s no need to ask at this point if they need a new amplifier. But once they’ve found the loudspeakers you should ask about the amplifier for two reasons: There’s a chance they believe it’s included and they’ll be disappointed when they find out it’s not. And there’s a chance they need one; selling one is then just good customer service. What if the customer asked for a stereo system? You still shouldn’t attempt to sell the entire set simultaneously. It’s difficult to concentrate on five separate products at the same time unless you’re an expert. Dividing the purchase makes the process easier and more pleasant to the non-expert customer. You can open with, “Lets start with the loudspeakers and build the rest around them.” If you feel that the customer has no idea of the price range you can start with, “We have a wide selection of loudspeakers. If you could tell me something about your budget I can choose the best loudspeakers in that price range. You can then choose among those.” They should not stop to think about an exact budget. If they start calculating you can interrupt them by saying, “You don’t need to think about the exact budget, just the price range is enough.” If they settle on a specific budget they’re unlikely to go over it.

Affective comparing

Once you’ve identified the price range you should pick the best solutions in it. Five products is the maximum and one of them should be the baseline. The baseline is something a little more expensive and it should have features the other options don’t have. You can then compare the options to the baseline product to make differences more understandable. At the same time you create desire for the baseline product. That’s why it shouldn’t exceed the budget by much; the customer may be willing to pay more for the seemingly superior product.

Comparing to a budget-exceeding product has some risks. The customer easily feels like the other products aren’t any good. For this reason you should not say, “You can’t hear as many details with these cheaper loudspeakers as you can with these (baseline speakers).” Rather say something like, “You can hear more detail in the mid-range with this (baseline) model, because its body is made of die-cast aluminum.” Giving a specific justification implies that the baseline model is specially good in some way and that the other products are still good. Comparing to a baseline product is especially useful when selling complex technical products the customer should understand. An amplifier for the loudspeakers is one such product. The number of inputs, the cables used, and many other more or less technical details can be challenging to explain. The customer should nonetheless understand them to be able to connect it at home. Baseline comparing can be the stone that hits two birds; the customer gets a better understanding of the product and you get a bigger sale.

How do you use price anchoring while selling? Do you ever run into trouble if the costs are divided? Share your thought and ideas with a comment below.

Business Cards for Marketing

What are business cards for?

Most people use business cards only to share their contact info. Though that’s their primary function, you get much more out of them if you treat them as mini advertisements. You want someone to contact you so you give them your business card. At the same time you shape the image the person holds of you. What’s often forgotten is that you want different people to think different things. If you’re giving the business card for a prospect, it should increase their desire to buy your product. If you give the card to a recruiter you want them to value you more. If you give your business card to someone you want to collaborate with, they should think about your company. You can continue this list with more purposes your business card has. How do you get one piece of paper to fulfill all these needs?

Necessary preparations for designing

Once you’ve identified all needs your business card should fulfill, you can start designing it. Here’s a couple of questions to make it easier.

1. Just one business card? If you have diverse needs for your business card, you should think about having more than one. It’s hard, if not impossible, to create one design that would serve all your needs perfectly. Having multiple cards enables you to affect different types of people in a specific way.

2. Who’s it for specifically? Just like with any advertisement you need to know and understand your target audience. For example you can advertise the same car for men and women, you’re just likely to go about it in two very different ways. Know your audience and your advertising will be much more affective.

3. What’s the effect you’re after? Identify the emotions and thoughts you need to create in the heads of those who see your business card. Design your card to match and intensify those emotions.

Now that you know who you’re giving your business card to and what you want to accomplish with it, you can start designing.

Designing your business cards

How to design a business card is too wide a topic to be fully explained in one blog post. But I’ve gathered some things to consider when you start designing.

Company vs. employee. It’s unprofessional not to mention the company, but you don’t have to use the logo. Consider how the receiver of the business card sees you and your company. If the company is more important than the individual employee, then a clear logo is a good idea. You can use the logo even when the individual person is more important, just make sure the individual’s name is then more prominent.

Pictures. Imagine a TV advertisement only showing contact information. It wouldn’t create a lot of leads. Same goes for business cards. The purpose of a business card is creating relationships. Your phone number (no matter how poetic it is) will not tell much about you. A picture on the other hand tells more than a thousand words. You don’t have to use your own picture, but it’s often a good idea. Faces are easily approachable. That’s why magazine cover pictures are almost always close-up pictures of faces. When you use your own picture consider also using a picture that represents your products/services. It’s easier to remember a product than a person. The recall value (if someone sees your card years later they’ll remember you) is therefore higher.

Which contact info to use. Your phone number and email and the company address and website are almost mandatory. But there’s sometimes a lot more to add. For example your own (professional) website/blog and Twitter and LinkedIn accounts. If you also want to mention the book you’ve written your business card won’t be big enough. Share whatever info you feel is relevant to the receiver. For example a fax number isn’t always necessary; they can call you to ask for it and in some parts of the world it’s rarely used at all.

Add value. You can easily add value to your business card beyond contact information. A gift voucher to your store is a simple example of adding value. Or you could use a business card to mark the time for the next appointment. Think of something that makes the card worth holding on to.

Back side. You can’t write a novel to the back of your business card, but something should be there. A plain back side isn’t bad, but it’s not in any way good. You can use it for adding value (see above) or move the company logo there. You could also write an excerpt of your book or a great testimonial there. In any case it’s space you can use for marketing for (almost) no additional cost.

Differentiate. Make sure your business card doesn’t look like your competitor’s cards. You want your card to be remembered and not to be confused with others. Even if there are “industry standards” you need to think of something original. Coloring, pictures, and/or interesting text placement is enough to make your card stand out.

KISS. Keep It Simple Stupid; a sentence to live by when designing business cards. The worst cards I’ve ever seen are those where you need to look for the phone number/contact name. Having too many contacting methods, pictures, logos, slogans, testimonials, and coupons will make your card unreadable. When you believe you’re ready with the design give it to someone else and ask them to find the least important information on the card. If it takes more than 2 seconds, redesign.

Is one business card ever enough?

If all the following criteria is met, you can get all available value from one business card.

1. You want the same thing from all who receive your card.

2. They all value the same things.

3. They’re emotionally affected by the same things.

4. You don’t want to give different information to different people.

It’s possible that all that criteria is met. For example I once helped a sales person who sold high-end projectors to companies for presentation use. He did most of the selling through phone so he only left his cards after finishing the installation. Of course he could’ve differentiated his cards for each client separately, but I think that would’ve been too much. But I believe that with some creative thinking even he could’ve found more value from business cards. Printing a “10% discount from your next order of over $5,000″ on the back wouldn’t hurt and it might create even more return customers.

Take a look at the business cards you’ve received. What’s good about them? What could be improved? What emotions they create in you? Then look at your own business card. How does it compare to others? I’d love to hear your thoughts and ideas. So, please leave a comment below.