|Daniel Kahneman’s Thinking, Fast and Slow|
- System 1 vs. System 2. This is the most renowned principle of the book – the systems that think “fast” and “slow”. System 1 is the mind’s reactionary processes. System 1 relies on heuristics such as recency (a recent event prejudicing the current situation), anchoring (think about the first number thrown in a negotiation), and others. System 2 is a more deliberate, limited-resourced process of the mind. Solving a math problem like 34×27 being an example. It requires a slower, deliberate thought process.
- Sample sizes. Especially the latter half of the book, Kahneman makes several points about understanding sample sizes when deliberating biases, results, and even research (psychologists and economists most notably studied). Too often, statements or actions are based on limited sample sizes (read: not statistically significant). Instead, they are influenced solely by “what you see is all there is”.
There’s a lot more covered in the book. I am limiting the concepts here in these two broad concepts because they’re absolutely key to my take-aways. But also, there was so much discussed in this book that sticking to the highlights help influence change.
- 90% of the web is made of consumers (“lurkers”).
- 9% will contribute occasionally, not often.
- 1% contribute to most of the web. This can apply to social networks, sign-ups, etc.
There are many ratios that have developed over time in business. These are not hard-fast rules. Instead, they are general observations much like the golden ratio in nature or pi. Here are a few other rules.
- 80/20where 20% of “xyz” contributes to 80% of some result. In consulting, I used to find ~20% of product SKUs contributed to 80% of the company revenue.
- 10/10/100from a sales leader panel about terminating a sales associate for poor performance/ poor fit. As a sales leader, you’re only aware of 10% of the whole problem. The fear of addressing the problem is 10 times the reality. And these problems are typically solved 100 days late.
- 10xis commonly referred to as the net benefit needed for a prospect to switch to a new solution as a “must-have”. A venture capitalist (VC) once told me you have to be at least 5x better/ improvement to even be remotely considered.
What are some other ratios you’ve heard of? (Outside of financial ratios.)
There’s a Greek parable I heard recently from a VP of Sales about the Hedgehog Concept. The parable goes, “The fox knows many things, but the hedgehog knows one big thing.”
|Copyright © 2001 Jim Collins. Originally published in the book “Good to Great: Why Some Companies Make the Leap… And Others Don’t.” Image source: https://www.mindtools.com/media/Diagrams/Hedgehog-Concept.jpg|
|Chief Marketing Technologist Blog, May 2017. Image source: https://cdn.chiefmartec.com/wp-content/uploads/2017/05/marketing_technology_landscape_2017_thumb.jpg|
- Controlling emotions is critical. In negotiations, it’s easy to get personally and emotionally involved. However, this is where rationality can be lost. Exude confidence and calmness to influence the other party.
- Preparation is key. In every negotiation, it is best to be well informed on the goals of the negotiator, and what are the potential goals of the other. Prepare understanding the other person’s interests – be empathetic.
- Chris mentions how “black swans” can be important in influencing a negotiation – some outside insight that can change the game. Listen to context clues of the other’s intentions that can reveal clues as to the motivations. These can be financial trouble that is not known at the beginning, etc.
- Mirror – this isn’t just about mannerisms and behavior. Instead, Chris highlights the effect of repeating the 3 (or so) most important words someone says – in a calm tone with a slight upward inflection like forming a question. This buys the negotiator time to think about a response, but also gives the other party to reveal more data points.
- Analysts vs. accommodators vs. assertive. These are the three broad types of negotiators. Analysts need time to think about a situation. Rushing them will cause them to push back. Accommodators are collaborative but can also give up more interests to reach an agreement. Assertive negotiators ask less questions; instead, they choose to tell. For assertive negotiators, they need to be heard first before hearing the other.
- A few questions that help buy time, but also thrusts the onus on the other party to help come up with a resolution (thus, get buy-in later): “How am I supposed to do that?” “Your offer is very generous. I’m sorry that just doesn’t work for me”.
- Chris offers this one line as a means to get a response via email: “Have you given up on this project?” Many reasons for why/ how this works including its directness in causing the recipient to think about loss aversion. This can be a very incredibly uncomfortable email, and though I think it could work, it could work in a detrimental way without some edits.
- Label feelings with “It sounds like…”, “It seems like…” to get the other person to confirm and to speak more and reveal more information.
- “You’re right” vs. “That’s right”. There’s a difference when the other party responds one of these ways. “You’re right”, typically, is the response the other party is just trying to move on. They don’t actually agree. “That’s right”, however, signals an agreement in what the other says. “That’s right” signals the negotiator is on the right-track. Chris asks questions and labels feels to get the other party to suggest solutions, and then, repeats these solutions to get the buy-in from the other party.
- Use exactness and precision in negotiations to seem like it’s calculated with reason. For example, telling the other party you can only $477.65 seems too precise to be made up vs. $500.
- Let other party feel like they’re in control by asking a question looking for a “no” (i.e. is now a bad time to talk?” Let them feel comfortable and in control knowing they said no.
- To turn around objections, consider questions like, “what about this doesn’t work for you?” “what would you need to make this work?”
- Anchor emotions to the worst case at the beginning, then ask if there’s anything else. (For example, “you probably feel that I want to gouge you of all your money. You might even think that I just want to kick you out of the apartment to make more money from someone else. Am I missing something else?”) Let the other party consider the worst-case scenario before you pitch a not-as-bad scenario.
- Coupled with using specificity (not round numbers) in a negotiation, offer another concession that you don’t care much about – the “gift”. This has the perception that you really have nothing else to offer.
- Rule of 3 – the idea is to get the other party to agree to some statement or commitment three times. It’s hard for folks to lie 3 times. Use this to get past seemingly non-committal responses.
- 7-38-55… ratios of what is communicated. 7% is the words actually being said. 38% is the ton of voice. 55% is the body language including facial expressions. You get so much more by meeting in person – body language.
There are some real good tips in here from Chris, and lots of good take-aways for a sales guy (anyone, since we’re all negotiating something sometime). In hostage negotiation, there are limited options/ alternatives. In sales and business, there are usually other alternatives (best alternative to a negotiating agreement (BATNA)). As such, there are situations where win-win situations is the only way deals can be made. Looking for the only win can be short-sighted.
- Sandler goes into depth and length into teaching the reader to separate the Identity and Role of a person (I/R). Sandler recognizes the difficulty of sales and “close” rates such that results can be de-motivating. He wants readers to recognize that sales not who a person is – trying to separate who someone is with what needs to be done. Thus, sales can be coached and improved.
- Monkey’s fist is a sales concept borrowed from marine life – instead of tossing a heavy rope to tie up a boat, shipmen will toss over a lighter “monkey’s fist” that is tied to the heavier rope. This allows a reciver on a dock to easily catch the fist and reel in the heavy rope. This concept is used in sales as a means to easy a prospect into a sale rather than going full bore into a sale.
- Buyers buy when they feel OK. This can be counter to aspects of The Challenger Sale where a Challenger teaches/ challenges a prospect. In many ways, this can put prospects off. Sandler points out that buyers want to feel “OK”. If they don’t feel OK, then they will be defensive and not in a receptive position to listen to you.
- Mitigate buyer’s remorse when a prospect may back out at the last second, or cancel an order shortly after buying. In this case, Sandler offers tips to slow down the sales cycle by offering a recap of what the buyer is looking for, how the product/ service enables the prospect, and confronting any “negative” feelings head-on. Sandler highlights the importance to follow up with prospects to make sure they want what is being bought. This is another area where reverse psychology can play a role making the buyer talk him/ herself into completing the buy and being happy with the decision.
- Using an upfront contract throughout the sales cycle helps the prospect agree on nexdt steps prior to any step is truly taken. This enables prospects to more likely move forward with a sale – “advance”.
As I said, this was not one of my favorite sales books. It is indeed packed with good sales information. However, it was not the more engaging reads while the breadth of the book was a lot to absorb.
A group of scientists placed five monkeys in a cage, and in the middle, a ladder with bananas on top.
Every time a monkey went up the ladder, the scientists soaked the rest of the monkeys with cold water.
After a while, every time a monkey would start up the ladder, the others would pull it down and beat it up.
After a time, no monkey would dare try climbing the ladder, no matter how great the temptation.
The scientists then decided to replace one of the monkeys. The first thing this new monkey did was start to climb the ladder. Immediately, the others pulled him down and beat him up.
After several beatings, the new monkey learned never to go up the ladder, even though there was no evident reason not to, aside from the beatings.
The second monkey was substituted and the same occurred. The first monkey participated in the beating of the second monkey. A third monkey was changed and the same was repeated. The fourth monkey was changed, resulting in the same, before the fifth was finally replaced as well.
What was left was a group of five monkeys that – without ever having received a cold shower – continued to beat up any monkey who attempted to climb the ladder.
If it was possible to ask the monkeys why they beat up on all those who attempted to climb the ladder, their most likely answer would be “I don’t know. It’s just how things are done around here.”
(originally published on Wisdom Pills)
- Coaching by “using” your team
- Invest in the “middle of the pack”
- Don’t water the garden with a firehose
- Establish a coaching cadence
- Meet for a team coaching session every Tuesday at 2PM
- Recorded calls > live shadowing
- Positive reinforcement
- Theme du jour
- Leverage technology
- Coaching by “using” your team. Your team is your best asset to act and react for coaching. Using the team creates a collaborative environment. It enables the team members to coach each other. This creates a sustainable environment where the team acts as just that – a team.
- Don’t water the garden with a firehose. Odd phrasing, admittedly. However, the habit is recommending focus on parts of the call, not the whole call. Trying to improve on too many facets is ineffective and usually ends up causing calls to degenerate.
- Meet for a team coaching session every Tuesday at 2PM. If you don’t read the article linked above, know that this doesn’t mean to schedule on Tuesdays at 2PM. Instead, it’s an example of scheduling time on the calendar and making a regular cadence of it. Remember: you make time for the things that matter.
- Recorded calls > live shadowing. Trying to coach in the middle of a call is good, but similar to garden watering above, sales professionals should be focused on the call. They should not try to adapt on-the-fly. Do the autopsy of the call when it’s over. Adapt for the next.
- Theme du jour. Focusing energy and improving on skills requires repetition. Thus, it’s important to coach on a specific goal several times in succession. Don’t shift until the goal is effectively achieved or improved upon.
Sales coaching is paramount for our industry to improve and adapt to changing times. As technology makes outreach easier, sales skills will be the differentiator.