They Don’t Have to Buy

Sales is a very interesting profession. It may not require a specific type of person, but I think it requires a specific type of mind-set. It has been shown that people more readily buy from people that they trust. You have to fully believe in and be committed to what you are selling in order to gain that customer trust. You must be the first to be convinced of what you are selling, before you have any kind of a chance of convincing a customer. If not, you have a tendency to come off as an archetypal used-car salesperson, and no one seems to trust them.

There was some research done some time ago that showed that there actually was a “smell of fear” that could occur. When scared the body does emit chemicals that that can be sensed by others. (https://www.telegraph.co.uk/news/science/3545435/The-smell-of-fear-is-real-claim-scientists.html)

I think that there probably also exists a “smell of insincerity”. Just as it may be possible to sense fear in others, it is probably also possible to sense insincerity in others. And for a sales person, insincerity is probably the worst thing for a customer to sense. There is that trust thing again.

That means that the first person that a sales person must convince of the benefit of the product or service that they are selling is themselves.

Having been in sales I can vouch for the fact that it is difficult enough to sell anything in the face of competition, let alone sell a product that you are not fully convinced of or believe in. And if you don’t fully believe in what you are selling, you will come across as insincere. And as I said, like fear customers can sense insincerity.

So, why am I going into all this discussion regarding sincerity and trust, and whether or not a sales person has convinced themselves that they believe in the benefit of the product or service that they are selling? There are a couple of reasons. The first is as I said good sales people are convinced of the benefit of their product or service. This is a good thing.

The second is that just because the salesperson is convinced of the benefit of the product or service they are selling, does not mean that the customer will be convinced of the value.

First, let’s do a few definitions. Today’s source will be the Merriam-Webster dictionary:

Definition of benefit: Something that produces good or helpful results or effects or that promotes well-being (https://www.merriam-webster.com/dictionary/benefit)

Definition of value: The monetary worth of something (https://www.merriam-webster.com/dictionary/value)

So, while the first step in a successful sales process is convincing the sales person (or sales team) of the benefit of a product or service, the second step is convincing the customer that the benefit of the product or service is at least worth the cost required to obtain it. That would mean that the monetary worth of the benefit is greater than the amount that they are paying for it. This is the value.

Too many times I have heard and seen sales people who have been convinced of the benefit, and who have communicated this benefit to the customer, believe that their job is then done. This point in the sales process is usually denoted by when the salesperson utters the phrase:

“They have got to buy.”

This phrase is usually accompanied by qualifiers along the lines of:

“The customer’s competition is doing…” or

“The market is moving or responding…” or

“The technology is ready…”

These are all non-commercial, or non-value related reasons as to why a customer should make a positive buying decision. Let me illustrate with an example:

Let’s say you are looking to buy a new car. You have your own set of reasons for wanting a new car. Perhaps your old car is worn out. Perhaps you have decided you now need a sedan instead of a coupe. What would your response be if you heard the following when you went to the car dealership:

“All of your neighbors are buying exotic sports cars.”

“The car market is moving toward and responding to exotic sports cars.”
“The technology associated with exotic sports cars is the best and highest available.”

I’m guessing that unless you were going to the dealership with a specific interest in buying an exotic sports car, it really wouldn’t mean that much to you, and depending on the approach and ferocity of the sales person, it might actually dissuade you from buying anything from that dealership.

Yet it is an approach that many marketing people and teams create for their goods and services, and it is belief that many sales people and teams seem to adopt.

The point I am making is that no customer has to do anything. Just like the car buyer in the example above doesn’t “have” to buy a car. (My guess is that they used a perfectly viable car to get to the dealership in the first place.) Most customers are looking for something that they deem, using their specific product priorities, to be better than what they currently have.

However, the “better” or the benefit of the new product or service buying decision is still only half of the Cost – Benefit equation, which results in value. Just as exotic sports cars may be able to go twice as fast as other cars, there may be question regarding their value if they cost ten times as much as those other cars.

There will be a market segment that is interested in going twice as fast as everyone else. These will be the customers that will look at the twice as fast for ten times as much value equation and find it acceptable. But just because this segment sees the value does not mean that the rest of the car buying market will as well. That is why there seem to be so few high-speed exotic sports cars on the road.

It is very risky to extrapolate market niche applications into market wide acceptance.

With most products, it is usually technology and its evolution, that drives new products into the market. The idea that the new technology can create greater benefits can be a significant market force. But just like the new car replacement question, new technology must replace and supplant the existing technology in the market.

This means that there (usually) already exists a viable product and technology in the market. The new technology must create a greater benefit at a price point that makes sense for the customer, or they will not make the positive new buying decision.

This is not the case for “new” product-technologies with no existing capability or analog. Examples of this would be items such as Ford’s Model T (replacing the horse), Sony’s Walkman (possibly replacing the boom box – now there is an old phrase), Apple’s iPod (replacing the Walkman), or more recently Cellular Phones (replacing radio phones). These are products that created new markets, but once created they followed the technology evolution path with a good example being the iPod’s displacement of the Walkman as a personal music listening platform.

Much has been written about this technology evolution-replacement-benefit relationship. Roy Amara was an American researcher, scientist, futurist and president of the Institute for the Future best known for coining Amara’s law on the effect of technology. He coined what has become known as Amara’s Law. It goes:

“We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.” (https://en.wikipedia.org/wiki/Roy_Amara)

This law has become known as the basis for what has been called the “hype cycle”, as coined by the Gartner Group, to represent the maturity, adoption, and social application of specific technologies. The hype cycle provides a graphical and conceptual presentation of the maturity of emerging technologies…. (https://en.wikipedia.org/wiki/Hype_cycle) It is depicted as follows:

Circling back around to sales people and their selling of products, it would seem that they are the first group to go through the Hype Cycle since they are the first group that must be “sold” on the product or service before it hits the market. They are the first to see the benefits and experience inflated expectations. But since they are selling instead of buying, that is all they can truly define as they do not initially have good information on the relative costs and values of purchase in the customer value equation.

Unless it is a new market defining product, all defined benefits are “relative”. That means that the existing product in the market already has established a baseline of customer benefits. Each new iteration or generation of the product (hopefully) brings incremental benefits. The value equation for each customer is the balancing of the incremental benefits of the new product versus the incremental cost of obtaining it.

Sometimes the value of the benefit outweighs its cost and buying occurs. Sometimes it does not. Regardless, it is a very rare instance where a customer “has” to buy a product.

With this in mind, I would suggest that most buying decisions can probably be delayed by all customers for an extended period without their experiencing much if any deterioration in their market position. In today’s economically uncertain business environment, I would not be surprised if significant purchases of any kind are delayed, even if only for a little while. This may be due to the realization by customers that in today’s environment they do not have to buy every iteration of new technology to remain competitive.

I suspect that I too will probably be delaying on my desire to buy a new car in the near future as well, mainly because right now I don’t have to buy one.

Moving

Moving, or changing offices by and large, is usually not very much fun. In business it entails gathering up all your stuff, putting it into standard moving boxes, which are not much more than over-sized, glorified shoe boxes, and going somewhere else. It can be in the same building or across the country. You are essentially out of commission from the time you start putting your stuff into the boxes, until the time that you have taken it out and reconnected to the network. It adds stress to an already crowded calendar.

Long ago, when I first joined the corporate world, I read that on average you moved or changed offices every two to three years. I actually tried to look up this article to properly cite it, but, alas I couldn’t find it. Perhaps it has passed from fact, to just something that everyone knows.

You either changed roles, or business units, or assignments, or were promoted, or any number of other events that resulted in you having a new place to sit while doing your job. This was back in the days when you came into the office to work. Everybody came to the office to work. Working at home wasn’t so much of an option then.

The idea back then was to generate synergy in an organization by having groups of similarly focused individuals sit together and regularly interact in the expectation that they would be more efficient, creative and powerful as a group then they would be as discrete individuals. It seemed to work, at least back then.

I think a lot of this idea was based on the sports analogy where it was demonstrated that having all members of the same team, working together and running the same plays, were far more effective than if they all acted as just talented individuals and did what each thought was best. It was widely accepted that the best teams won, not necessarily those that just had the most talented athletes. However, I think it was Roy Williams, the basketball coach at the University of North Carolina, who said: “I can coach them to play better basketball. I can’t coach them to be seven feet tall.” So, talented athletes are still very desirable.

There were many positives and some negatives associated with this co-located and hence almost constant office moving phenomenon, for both the individual and the business. As I said earlier there is a disruption to your ability to execute your responsibilities while you are moving. This affects your, and those that are dependent on your productivity. At least for a while. This was and, in some instances, still is debatable based on some roles and activities that I have seen.

On the business side there is the cost. There are two basic costs associated with all this moving. The lost productivity that I have already noted, and the cost of the team and staff of resources that were constantly planning and executing these moves. Depending on the size of the business location, there had to be a small army of people available to bring boxes, and then move and transport boxes to the new location. There had to be a logistics team working with the Information technology team to make sure that connectivity and communications were available, at the appropriate time at the new office (or cube) location.

Moving was not cheap. Therefore, it was expected that the synergy that co-location generated had to be good enough to offset this cost. For the most part it seemed that it was.

Another good thing about moving was that it presented the opportunity to go through your stuff, take stock of what you needed and throw away all the rest. It was sort of a forced purging opportunity. As an aside, I have a friend who used to take pride in the thirty to forty boxes of stuff that he took with him whenever he moved. He is an engineer and believes that there will come a day when he will need some of the documents or calculations that he has created over the last decade plus for something else he may be working on.

It hasn’t happened yet, but I am sure he will be prepared. Like I said, engineer.

The periodic purging associated with a move was the opportunity to get rid of stuff, primarily paper-based communications and documentation, when it was no longer needed. I have hit the point that if I haven’t looked at something in the last year or two, then I don’t need it. I think this is probably a good rule of thumb for everyone. Also, with the increase in machine and cloud storage capabilities, a hard copy of just about anything can seem to be a little bit of overkill.

You don’t know how much it pains me to say that. But just as I have had to change with the times and move from the tactical joy reading of actual physical books to using an e-reader, I have gone to reading a screen instead of printing a document. And they said that dinosaurs couldn’t evolve.

Organizations have also done their part in trying to reduce the costs associated with moving. Initially they started limiting the number of boxes that you could have / they would move. Now as we continue to move toward more and more of an “open office” concept, where no one has a defined office, there is also the requisite limitation on the amount of stuff that you can have based on what has now become a limitation on the amount of physical storage that is available.

If you don’t have any place to put it or store it, then you are forced to get rid of it.

The result is that what used to happen every two to three years, and cost both the individual and the corporation a lot of money in employee discomfort and lost productivity, as well as the maintenance of a staff the size of a small army to assist in making these moves, are now both essentially gone. In the open office environment there is no defined office to move either from or to. Storage for the physical accoutrements of an office have been so minimized, and document retention has now been virtualized that there is no longer any significant amount that ever needs to be moved.

The office itself has also been virtualized. There are now both remote offices and home offices in addition to the open offices. It seems now that if you want to keep any “stuff” you will probably have to keep it in your home office. I tried this once. Then my wife complained about all my clutter. I told her it was what I needed to captain industry. She told me to get rid of it.

I personally think she was in cahoots with the corporate Workplace Resources group in this regard. Though, admittedly the home office does look cleaner.

But, I can’t help but wonder, if businesses saw such a value in the concept of having everybody actually physically work together, to the point that it outweighed the costs associated with making sure that they could work together, what happened to that value? Economics teaches us that there is no free lunch. The cost – benefit analysis of business is based on the same principles. There is a cost or investment for every benefit you get. 

Has someone, somewhere gone through the analysis associated with virtual / home / open offices and compared the hard, recognizable cost savings with the somewhat softer and much harder to quantify lost synergy values. In the past it was believed that the synergies outweighed the costs. Was everyone wrong for so long and now those ideas no longer hold true?

I think the answer lies in the “hard” cost and “soft” value equation that I mentioned earlier. It is easy to define how much is saved when most of the costs associated with moving offices are eliminated. It is a number. It exists in a budget. When it is reduced or cut, it can be tracked.

The same cannot be said for the values generated by having people work together in the same office as opposed to “virtually”. I think everyone believes there is a value associated with that type of working environment, but I is almost impossible to quantitatively put a hard number to that value.

You can estimate it, but that is never as good as a well-defined cost reduction. The result is that a definable cost has been reduced, and an undefinable value has also been reduced. But since the value was undefinable in the first place, the amount of reduction to it is also undefinable.

I really didn’t like moving offices all those times that I had to do it in the past. I think that we are going to dislike what we may have lost by not having to move anymore.