The Exchange: Matthew Bellows & Mike Schultz

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Duration: 38 Minutes

In this episode of The Exchange, Matthew Bellows, CEO of Yesware, interviews Mike Schultz, President of RAIN Group. They each discuss a wide array of topics, from how salespeople are depicted in the media to modern consultative selling.

Mike explains how and why consultative selling has evolved to adapt to the ever-changing mind of the buyer and how to train your team to keep up.

Join our hosts as they discuss the past, present and future of sales.

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Hosts

Matthew Bellows
CEO
Mike Schultz
President

What they cover

How to root out subpar sales advice (2:26)


Matthew, CEO Yesware: Just to start off, the world of sales consulting is vast, fragmented and, frankly, has a wide range of quality, in my experience. Some sales training groups are quite good and others are really quite weak.

How do you approach the issue?

Mike, CEO RAIN Group: So, you’re right, there’s an amount of quality differences in the world of sales training and sales thinking. It really comes from two places:

How do you approach the issue?

  1. There’s flawed thinking out there that people either find something from their experience that they think has worked for them then they say, “here’s how to do it and I’m going to teach a whole bunch of other people.” In reality, those weren’t the things that they were doing, and/or not everyone does what you do.
  2. Another thing in the same area is that people say “oh, I bet I can sell this, this will be hot,” and what they do is say everything else out there is bad. “What I have is good, and you have to buy it from me, and here's some convoluted or shaky research as to why.” It’s enlightened self interest.

The two types of salespeople (5:58)


Matthew: The whole question that haunts me about everything about work is the question of “are you good or just lucky?” I think a lot of sales trainers fall into the lucky category, thinking they’re good.

Mike: I had a conversation with Neil Rackham who wrote this book called Spin Selling in the 1980s and he told me that he thinks there are really two kinds of sales trainers out there. Not just the individuals, but the companies. He said that there are those that are in the entertainment industry, with all the speeches and the dog & pony shows and “when I was living in a van, down by the river and I didn’t know how to sell and I had nothing and now I have this boat and that boat and this car and look at me.” So, there’s quite a lot of that, but the thing is they’re hiding what he would call “health care” in that they aren’t looking at the patient and seeing if they can make the patient better. There is a lot of sales training out there being purchased as “health care” which is really entertainment.


The role of ethics in sales — Is sales sexy? (7:55)


Matthew: What’s your take on the sales movies out there? The movies that make sales look sexy or awesome or dynamic, with characters of the Jordan Belfort sort. How do you think about sales and ethics?

Mike: So, first of all, sales movies. How would you say sales movies tend to depict sales people?

Matthew: Well they’re sexy and awesome and totally amoral and rich and generally end up in jail.

Mike: Sales is often depicted as this schlocky, beaten down male. Second place gets the steak knifes, and everybody else gets fired. Think: “Boiler Room” — “ya married ya happy.” But, that’s what creates the collective consciousness about sales and why a lot of people, especially in sophisticated industries, don’t want to be in sales. Like, consultants or lawyers or accountants. The people that view themselves as solving problems and making people’s worlds better. But, once you put the label of sales person, they feel like they’re connected to this car salesman kind of feeling. I use to ask people this: “name me one movie where salespeople are depicted in a positive moral light.” Can you think of one?

Matthew: *sigh*

Mike: Hard, huh?

Matthew: I can’t think of one off the top of my head

Mike: Most people can’t. Someone pointed out to me once, when the movie “The Pursuit of Happiness” came out. So, what do I think about ethics? I think about in actual sales, most selling has an ongoing relationship where the selling happens year one, year two, year three, year four, year five and the selling is intertwined with the successful delivery of the offering.

Whether it be a product or service. So if you, as a seller, are disingenuous in anyway, you’re not going to get the third sale, the fourth sale, the fifth sale or the sixth sale.

It’s not quite as often people buy despite you, they usually buy because of you.

As a matter of fact, buyers see through selling just benefits and not being truthful about potential pitfalls. They like it when sellers point out the possible challenges, making sure they get what they want. In some of the research that we’re talking about today, we studied 731 B2B purchases from buyers that represented 3.1 billion dollars of products and services purchased. We asked them to compare their experience with the seller they ended up purchasing from to the seller that came in second. One of the things that surprised us that was in the top 10 of the factors that separated the winners from the second place finishers was that “they helped me avoid the potential pitfalls. They were honest.”

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What is consultative selling? (13:20)


Matthew: At Yesware, the title of our salespeople are “Sales Consultants.” Because, their job is to help businesses that we interact with improve their sales process. We do that with data, we do that with our blog, we do that with research, we do that with podcast like this and we do that with technology. We try to always help at the first step. So, talk about consultative selling overall. t’s this storied term that we’ve all heard about and had a previous definition, and you just came out with a paper that redefines what consultative selling means for the 21st century. Can you walk us through that?

Mike: Sure, let’s start with a history lesson to set the stage. Consultative selling started as a term that became popularized when Mack Hanan wrote the book Consultative Selling. It actually came out in 1970, but most people associate it with the 1980s when it really took over. The definition of the term was to understand your products and services and then, instead of pitching prospects, you start with the lens of understanding your buyers needs. A consultative salesperson connects those needs with the products and services and how they might solve a problem, and then communicate it effectively to win a deal.

But then in 2012 happened.

Harvard Business Review published an article titled “The End of Solution Sales.” So, anyone that’d been in sales in the last 30 years had been applying this technique had adopted it as a part of their identity, and then the Harvard Business Review says “it’s the end of solution sales.”

This wasn’t just a case of “hey, here’s this new business tactic.” It was “you need to be a completely different person.”

What are we supposed to do with that? Here are 30-, 40-, 50-, and 60-something-years-olds and you’re going to tell them to completely change because it’s over, it’s done, it’s kaput. So there was this massive argument in the sales about whether or not it was true.

It’s why we commissioned this study. We figured, “well, let’s look at what’s actually driving purchase behavior and lets connect it to behaviors of the sellers.” And to figure out whether or not the old definition mattered anymore and if we should throw it out or how it should change. And that’s what we focused on.

Watch the full video to hear more top research findings.


Is consultative selling dead? (17:51)


Matthew: You’re not saying consultative selling is dead, but you’re also not saying that the previous definition is right. So, what is your approach now?

Mike: Here's the thing: because buyers now perceive more parody different offerings, it’s not just about the product and service.

What’s driving the purchase behavior?

We found that a huge amount of behavior was driven by the perceptions of what the company is like through what they’ve learned and how they interacted with the seller. So, I’ll tell you the top three things that separated the sales winners from the second place finishers.

The #3 thing was that the seller persuaded the buyer that he or she would achieve results. So, is your product or service going to make them more efficient? Is it going to make them drive results in a year, is it actually going to be implemented?

It’s belief in the eventual ROI. And it’s completely on the seller and not on the product.

The #2 thing that separated the sales winners from the second place finishers is the buyer said that “the seller collaborated with me.” Funny, that doesn’t necessarily mean that there was no pushing back from the seller. But there was ultimately a feeling of being on the same team, working to solve the same problem. That was big.

The #1 thing was educated me with a new idea and perspective. So if a buyer is willing to say, “ah ha! I haven’t thought about this.”

So, it’s not the end of solution sales. It’s not the end of consultative sales. It’s just that purchase criteria has changed. Now, I could see if Harvard Business Review had said “the evolution of solution selling” vs “The End of.”

So, if you can bring these ideas to the table, you’re more of a consultant, you’re more of a change agent than you are a problem solver, although you’re a problem solver wrapped into it. That way it’s more proactive, it’s more thinking, it’s more sophistication, and the sellers are doing it are literally killing the other guys.


A brand new look at RFPs (25:05)


Matthew: So, you talk about a seller’s point of view, with the responsibility of redefining reality. What does that mean? How do I need to redefine reality?

Mike: When you get a request for proposal, it comes with this perception of what they’re trying to get done, and it’s limited by the things they don’t know — things that you know might know.

Let’s say you respond to an RFP where they’re asking you to understand their need, craft a solution, and communicate it — because so are three of your competitors. It’s like sharks in the water trying to get something. In the book Blue Ocean Strategy, they talk a lot about this from a business strategy perspective. Don’t launch products in areas where everyone else is playing. They call that the red ocean, because it’s got all the sharks and the blood there.

Instead, do it in the blue ocean, where you’re the only one there.

Help the buyer think about something and they say, “oh, well I didn’t really think about that…” When you redefine what’s possible, then the other sharks will still be fighting over the RFP, and you will literally change the game of what they want to buy and the competitors won’t even be with you.


How to implement change (31:25)


Matthew: From a management perspective, what do you think is the best way to implement or to teach reps this new definition and the process of 21 century consultative selling?

Mike: I’m a big fan of the world of change management. I always loved reading John Cotter’s work and more recently Chip and Dan Heath. I like their book Switch.

So, a lot of how we go about bringing forth this type of change is mental-model change. It’s two-fold:

  1. First, answer “What’s in it for me?” You have to give them the sense of why it’s going to be worthwhile for them to invest energy or consider something like this.
  2. You have to be bright enough. For those who might not be ready for the boardroom discussion, you can feed them ideas. Little things like checklists of “before I go into this conversation, here are the specific questions I should ask.” That way when they go in, they can uncover needs and push buyers out of their comfort zone. You have to make it easy on them. As Chip and Dan Heath would say in Switch, you have to shorten the change, make it so it’s very easy, but you also have to make directions crystal clear.

Matthew: Mike, I really appreciate the insights about consultative selling and I want to let you go, but I want to ask you one more question about teaching sales at Brandeis University. Tell us a little bit about what that’s like.

Mike: So, over the last 20 years it’s actually changed a lot. 20 years ago, there wasn’t that much and now there are a number of centers teaching sales. The thinking is changing about just how important selling is. Estimates say that one in nine people are working in some kind of sales capacity. And yet, it’s not like 1/9th of everyone in business school is in selling, it’s more like 1/90th or 1/900th. So I think the culture and feeling had changed, but it’s a lot of fun to see students explore this area early on instead of either getting hammered with it when they’re 38 because they’re in a career change, and now they’re more senior so they have to do more selling, and helping them understand and see how important it is. But, it’s also because selling is very tangible. You either make something happen or you don’t. We build that into the class and they can actually see “wow, I can do this, I did that, I can’t believe I did that. That was really cool.”

Matthew: Well, thank you so much for taking the time with us today. I really appreciate your insights and always good to catch up.

Mike: Great to catch up with you too Matt.

Matthew: Talk to you soon.

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