Financial Eyes & Ears

Use these nine techniques to account for how your customer’s brain could be wired, and seal the deal.

Since you’re a reader of Inc., I think it’s safe to assume that you and I have something in common: We both need to sell. You probably have your favorite sales techniques, and heaven knows there are hundreds of books on selling, but in my experience most entrepreneurs overlook one crucial aspect of selling: the way your customers’ brains are built.

You will naturally get along with people who are like you. But that leaves out 75 percent of other people—and the worst thing you can do while selling is to approach someone the wrong way.

The more you study people, the more adept you will become at identifying the ways they think and behave. When you make the effort to see the world through the eyes of others, you will know how to engage their interests and how to help them achieve their ultimate goals. But here are nine ways to use your brain—and your buyers’—to make a deal.

1. Determine right away whether you are talking to “right-brained” or “left-brained” individuals. They require very different approaches. You notice a Nerf basketball hoop, a scribbled whiteboard, and an abstract painting, you know this person is “right-brained.” If instead you notice a place for everything, an organized bookshelf, and technical equipment, you are mostly likely talking to someone “left-brained.” Using an innovative, intuitive, emotional approach on an analytical, logical, practical person would be a disaster. And vice versa.

2. Determine the influencers and decision-makers behind the sale. They may not be the highest-ranked people in the company, and they may not even be in the room when you make your presentation. Ask if it would be okay to “cc” others in the company on your materials and correspondence.

3. Keep your behavior middle-of-the-road until you know more about the prospect. You don’t want to arrive dressed for a rock concert and discover the other person is in Armani office attire. If you are generally enthusiastic but the other person is restrained, try to tone down your natural inclination to make exclamations. If you are generally reserved but the other person is an extravert, try to ratchet up your enthusiasm, so you don’t inadvertently appear indifferent.

4. You can’t be certain what type of brain your buyer has. Therefore, make sure your presentation appeals to all four types of brains. People who are analytical thinkers want to know the “ROI” right up front. Those who are structural thinkers want to improve on processes. Social thinkers, meanwhile, want to make an impact on a relationship or on the welfare of others. Conceptual ones are interested in connecting the dots. Be sure to discuss how (or if) your solution meets all these different needs.

5. To check for analytical thinkers, listen for words like “exactly” and “precisely.” An analytical thinker first wants the bottom line, to make sure your discussion is worth the time it will take. This type of brain doesn’t want to weigh a lot of options. Quickly provide an overview, then sit back and wait. Be prepared to answer all questions with spreadsheets, data, and research, and do not make a mistake or this individual will lose all confidence in you. If you don’t know an answer, say you will get it immediately after the meeting—then do so.

6. To identify structural thinkers, listen for words like “turnaround time,” “preparation,” “realistic,” “wait,” or “hold on while I get this down.” This type of thinker is concerned about whether existing systems might be affected. Be prepared to list exactly how and when your solution can be implemented.

7. To pinpoint social thinkers, listen for words like “we,” “them,” “our,” “us,” and “you all.” Is this individual concerned about relationships? Another clue is if the buyer asks you personal questions, such as, “How do you feel about the way it affects employees?” Social thinkers are eager to bring in others to the conversation.

8. To find conceptual thinkers, listen for immediate questions about the outcome. Like the analytical thinker, this type wants the bottom line right away, but in the context of the bigger picture. The worst thing you can do with a conceptual thinker is spell out everything in detail. Engage this individual’s attention immediately; otherwise you may lose it forever. You may receive farfetched or unrelated questions. Take every question at face value.

9. Keep your buyer focused on the desired solution. Remember that some buyers have several preferences and it takes them a long time to make a decision. They are weighing rationality, processes, people, and vision all at the same time. Thirty-seven percent of the people in the world fall into this kind of multimodal thinking and probably need to carefully process a decision. Allow plenty of time, even if to you it seems to take forever. You are already familiar with what you are selling; your buyer is not.

As you wrap up your meeting, keep in mind what is happening in your buyer’s head. Reassure this person that your solution will generate ROI, that it will not interfere with any other systems, that the human factor is addressed, and that the vision is clear. Remember, it’s not about the way you’re product is wired but rather the way your buyer is wired.

Turnaround specialist Glen Blickenstaff, in the fourth of five articles, explains how to turn a failing company into a breakout success. This week he explains a simple and flexible management tool to help manage key aspects of your turnaround.

Excerpt from an e-mail to my wife during one of my turnarounds. (______ emailed me and said he will reach out to me later with an update. I am not holding my breath. So I am on the A of the PACE model, aka “How to do it without investment, or entrepreneurial stress for dummies.”)

In the first three articles, How to Weed Out Apathetic Employees, How to Silence Negative Employees, and
How to Keep the Momentum Going, we have been pretty hard on the team. By now you may have brought in new talent as well as identified the talent that you want to keep. This next phase is tough. Remember that motivation comes from inside and as leaders all we can do is create an environment where people can motivate themselves. Leaders will emerge and they may not look like you. Just make sure the effort is focused in the same direction.

Turnarounds generally revolve around cash-flow. Limited resources create an environment that can either embrace defeat or creativity. As the leader you obviously want it to be the latter. Here is a management tool that you can use to help.

We developed this PACE model to help in key areas of the business. I am going to expand on the critical cash requirements. Each of these will look different based on your business needs and capabilities. Here is an example of what one might look like.

Once you forecast the trouble spots, utilizing this PACE model can help get you through.

Primary

o Utilize operational revenues and expense control to self-fund.

Alternate

o Establish key vendor relationships that allow you to age payables during a trough.

Contingency

o Defer compensation for active employees that are also shareholders.

Emergency

o Short-term loan from shareholders.

The example used here allows you to expand or contract the model based on the dynamics of the business. Exercising a “no secrets policy,” everyone should be aware of what is happening to include the key vendors that you may have to lean on. As you move from Primary to Alternate, all of the others move up as well and you need to identify a new Emergency response. How important is a common language? Everyone I work with knows what I mean when I say PACE, even my wife when I sent her an update in the e-mail excerpt above. So when I ask “where are you on your PACE model,” the response I get gives me a good idea of our planning and execution.

There have been no fewer than seven times when I had to fully execute all four steps of the model. I could predict in each case if we weren’t going to make it with the step we were on and already had the next one primed to execute. After I first developed this I used it on subsequent turnarounds, even though everyone was aware of the PACE model , no one other than me had experienced its power.The excitement when we avoided catastrophe at each turn began to build confidence and encourage the model to be used in other areas such as; sales, succession planning, logistics, marketing and even manufacturing.

Can you see a use for the PACE model in your business?

Sometimes the Web services you rely on crash… or get taken down by the feds (sorry, Megaupload.com!). Be ready before it happens to you.

The Stop Online Piracy Act (SOPA) sparked massive amounts of online protest and left politicians running for cover. And then the feds shut down Megaupload.com, a major file downloading site for alleged piracy of copyrighted works.

What do they both have to do with your business? Maybe more than you think. Many corporate employees used Megaupload, according to one study, and the site accounted for a quarter of Web-based file-sharing. Perhaps some number of those employees were downloading episodes of “True Blood” and “The Simpsons,” but it’s also likely there was some actual work going on.

That’s the problem. Companies come to depend on popular Internet tools and services that sometimes have less than pristine provenance. Even if federal agents aren’t walking in with subpoenas and confiscating servers, there are plenty of other things that can go wrong with a service provider, from catastrophic storms (remember how weather in Japan and Taiwan hampered the electronics manufacturers last year) to the ordinary outages that even happen on Amazon’s cloud services.

Here are some steps to take to ensure that your company keeps up and running, even when important technology service providers don’t.

Keep copies of all data in-house — Many cloud vendors would have you believe that your data will be perfectly safe on their systems and you need no longer keep anything on premises. Don’t believe it. An outage may be unusual, but it is hardly impossible. Ultimately, you care more about your data than any service provider. So keep copies of everything.

Have back-up providers — If you use one service provider to download files to customers, employees, and business partners, be sure to have a back-up account with at least one other. Should things go terribly wrong and your primary choice becomes unavailable, the second provider can keep you going. When one email address doesn’t work, have an additional address or two through Web providers like Google and Yahoo.

Have alternates — Third-party providers aren’t the only options. For example, talk to your ISP about an FTP file transfer server. You can set up areas to download files and give people from outside your company IDs and passwords for those particular areas only. If your phone system gives out, check if there are any fax lines that you can press into service for urgent calls. Maybe there are nearby cafes or bookstores with Wi-Fi connections. Any such workaround may be a little more cumbersome, but it can keep you operating, and that’s the whole idea.

Check your smartphone or tablet — When things are really bad and your ISP is MIA, you may have access through a cell connection. Depending on the service provider, you may be able to tether computers to phones like a modem. Some smartphones can act like Wi-Fi hotspots, giving access to more than one device. Don’t have the service levels you need? Call the provider and ask for an emergency upgrade.

Work it out ahead — Should things go wrong, you might have the presence of mind to find alternative ways of working on the fly. But it’s much easier to think things through in advance and to make plans that you can pull out when you need them most.

Hopefully, you’ll never need to make a sudden shift in operations to accommodate a sudden loss of a technology service that you badly need to do business. But if the day comes, know that this, too, shall pass.

Looking to build strong relationships with your clients? Master their personal styles.

At AnswerLab, one of my main missions is to provide amazing service to our customers. Zappos has pioneered the revolution of customer-focused businesses with its message to spread happiness. Countless business books advise us to learn what the customers want and simply give it to them. What they don’t talk about is the importance of understanding the customer’s personal style and communication preferences in order to do that. Without that, how do you earn the customer’s trust?

Why care about customer style?

Our personal styles govern a great deal about how we react in situations, communicate with one another, and make decisions. Each of us perceives the world around us differently. Our willingness to fulfill a request may increase or decrease simply due to the way in which a request is delivered. Provide too much information, and a client may not respond at all. Provide too little information, and a client may lose trust. How do you know how much information to share? Start by understanding your customers’ styles and how to tailor your interactions with them. To do so, you need a simple framework for knowing the minds of your customers.

Find a behavioral model

At AnswerLab, we use the “DiSC” behavioral model to understand personal styles. Many models have been developed (HBDI, Meyers-Briggs, 16PF, among others), but we’ve found DiSC to be the easiest to adopt, communicate, and observe in others. Every employee on our team receives a DiSC assessment within a month of joining the company. DiSC tells us what motivates us, what scares us, and how we behave in various situations. It also tells us a great deal about how we absorb and process information. Using this model allows us to:

1) Better anticipate customer needs

2) Develop deeper empathy for the customer perspective

3) Make the customer’s personal style differences objective rather than subjective

4) Discuss differing perspectives with customers rationally instead of emotionally

The DiSC has four quadrants: dominance, influence, steadiness, and compliance. Each of us exhibits some combination of these behaviors. Once you learn the model and specifics of the quadrants, you can easily figure out how someone might fit in it, without ever seeing a formal professional assessment. That means you can quickly assess the style of customers and learn how to better communicate with them.

Apply the behavioral model

Once you know the model and how to identify behavioral traits in customers, you can develop a few simple communication norms. Some examples:

Let’s get it done! This attitude is indicative of the “dominance” profile. If your customer is high in the dominance quadrant, she’ll be extremely motivated to get things done. With these clients, you should be direct, offer alternatives, ensure she “wins,” act quickly, and focus on issues. A slow response to this client will particularly frustrate her.

Let’s get it right! This is the mindset of a customer who is high in the compliance quadrant. He is motivated to work within established rules, guidelines, and procedures to ensure accuracy and quality. When communicating with a “High C,” be sure to listen carefully, be thorough, answer questions correctly, and use written supporting materials. Send one wrong piece of information and the customer will begin to lose trust in everything you do.

Let’s be positive! This sounds like an “influence” profile. A customer who ranks high in the Influence quadrant often tries to persuade, promote, or influence others in a positive way. This kind of person is very focused on keeping others happy. When managing this type of customer, be sure to maintain a positive atmosphere, allow her to express herself, take time to chat and talk, focus on the big picture, and be enthusiastic. If you use a confrontational tone, she may retreat.

Let’s do it as agreed! This is the “steadiness” profile. These customers tend to be cooperative, supportive, agreeable, and highly motivated to keep the status quo. When working with this someone like this, proceed in a logical order, ask specific questions to find out true needs, provide support, and remember fairness and justice. For this customer, changing process rapidly will make them feel uneasy.

Each style in the DiSC model has a preferred mode of interaction. Learn them, adopt them in your communication, and you’ll earn customer trust and loyalty for life.

Co-founder Marc Nager reveals why the Startup Weekend model fosters the most innovative ideas.

Startup Weekend is simply an event that challenges teams to start a company in one weekend. It was created by Andrew Hyde in 2007, but was soon bought by Marc Nager, Clint Nelsen, and Franck Nouyrigat, who all saw global potential in the idea. The three scaled the concept and turned it into a non-profit.

Four years later, Startup Weekends have been launched in over 210 cities in 70 countries, and have over 43,000 alumni. Its supported by a network of global facilitators and local organizers spanning every continent except Antarctica– but they’re working on it.

Startup Weekend captures the highs and lows of starting a venture – compressed into a 54-hour period. It involves pitching your idea, and crowdsourcing interested team members to hack on it. After the top 15-20 ideas are selected for further focus, teams form and then embark on the intense process of actually trying to launch their venture by the end of the weekend. At record pace, the teams tackle all of the fundamentals– validating the idea, developing and getting feedback from customers, and even building fully functional prototypes.

According to the Startup Weekend’s ongoing surveys, roughly 80 percent of the participants plan to work on their venture with their team after the program. Startup Weekends, which happen in cities like New York, Palo Alto, Moracco and Krakow, are the most accessible way to pitch, conceptualize, test, and launch a viable product into the marketplace today.

Why is this all so important? Startup Weekend is entrepreneurship’s democratizer.

Regardless of who’s who, a group of unrelated individuals meet up for a weekend to share ideas. Competence and knowledge are the currency that is traded.

“It has completely liberated this generation of people to share ideas in a forum that takes advantage of experimentation and iteration to arrive at the best teams and ideas, and sees failure as a learning opportunity,” says co-founder Marc Nager.

Nager believes that “by removing hierarchy and building teams not necessarily from the same tribe, Startup Weekend breaks down silos and cultural barriers to allow folks to experiment with creative and disruptive ideas.”

Startup Weekend has gained global relevance at a staggering pace. Nager describes the business model as “controlled open source.” The processes of Startup Weekend is executed by a team of curators, which include trained facilitators who are certified to execute the program, and local organizers.

What’s more, local organizers receive no compensation. If there is revenue left behind, 50 percent is returned to a “community chest” for future entrepreneurial efforts – not just future Startup Weekends, but perhaps on conferences, bar camps, reunions, or anything that contributes positively to the local startup culture. Altruism powers its proliferation.

According to Nager, incorporating gamification—or the competitive part of the process– into the business model has also helped scale the program.

By combining community, challenge, and reward, Startup Weekend sustains and compels the interest of its participants, leading to a 24 percent repeat ratio of individuals who return for another weekend.

And – no kidding – they launch companies. By last count, the Startup Weekend team has over 300 active past ventures to show for their effort. For example, Kleiner-Perkins-backed Zaarly www.zaarly.com, a proximity based, real-time buyer powered market, took shape from Bo Fishback’s whim to pitch an idea he was mulling over at a Startup Weekend. Now with two rounds of venture capital behind him, Zaarly is in the fast lane.

The Startup Weekend model has led to a global movement in entrepreneurship by embracing the democratization of the startup. Perhaps we’ll be talking about the startup culture of the future not just taking shape in Silicon Valley, but the new one emerging in Rabat thanks to Startup Weekend.

It’s lonely at the top, according to a new survey that found fully half of all chief executives suffer from isolation and loneliness.

When starting a business, many young entrepreneurs dream of the day when the enterprise has grown and they sit atop a successful company as CEO. This makes sense. CEOs are well compensated for doing a difficult, high-pressure job that’s unlikely to get boring to even the most ambitious. But are there facets of the CEO experience budding moguls often overlook when they let themselves daydream?

According to a recent survey by consultancy RHR International, being the top dog at a company isn’t all critical decisions and high-octane living. In fact, there’s a little-discussed epidemic among CEOs–loneliness. The survey of 83 CEOs at public and private companies with annual revenues of $50 million to $2 billion found that fully half of the top executives reported feeling a sense of isolation that can potentially hinder their ability to do their jobs.

“The intensity of the CEO’s job, coupled with the scarcity of peers to confide in, creates potentially dangerous feelings of isolation among chief executives. Fifty percent of all CEOs report experiencing loneliness in the role, and of this group, 61 percent believe that the isolation hinders their performance,” says the study’s release.

First-time CEOs are particularly affected, with nearly 70 percent of those who complained of feeling lonely in their post admitting their isolation negatively affects their ability to do their jobs. How so? Dr. Thomas Saporito, CEO of RHR, explains:

Particularly early on in their tenure, CEOs experiencing feelings of isolation are often grappling with the realization that in this role the stakes are much higher, and the burden much heavier, than what they could have ever anticipated. Self-awareness is critical to navigating through this. Yet it is precisely at this time when honest, transparent feedback about the CEO’s performance and their impact on the organization is much less likely to come their way.

As a result, isolation limits opportunities for increased self-awareness–and blind spots are the enemy to effectiveness. It is very difficult to adjust or improve if the CEO doesn’t have trusted sources to rely on for holding mirror up to them and shedding light on their blind spots.

To counter the isolation Saporito suggests newly minted CEOs “find one or two trusted sources who will provide the CEO with unvarnished feedback.” Trusted board members or peer CEOs can often play this role, according to Saporito. It’s also helpful to keep the upsides of your position firmly in mind.

“It is important to remember that in exchange for feelings of isolation and loneliness, there comes an opportunity to build something enduring, that creates value and impacts the lives of employees and improves the communities in which the company works,” says Saporito.

Do you find being the boss isolating, and if so, how do you handle it?

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Dont goose near-term results at the expense of long-term value creation.

Last fall, Forbes.com published an article that reviews the book Fixing the Game by Roger Martin, Dean of the Rotman School of Management at the University of Toronto. In our initial comments on that article we made the case that creating sustainable shareholder value is still a good idea. Today we will build on the idea that serving all stakeholders (customers, employees, suppliers, etc.) well, will also serve shareholders well. Indeed, you cannot create long-term value for shareholders without creating value for your customers, in a strong partnership with your employees and suppliers.

Mathematically, the value of a business is derived from, and highly correlated with, the future returns it is expected to generate for its shareholders. But this formula doesn’t go far enough. In order to maximize shareholder value, we need to explain where those returns come from and how to increase them.

A simple equation for shareholder returns is:

Revenue
Less Cost of Sales
Gross Profits
Less Operating Costs
Less Taxes
Net Income
Less Cost of Capital
= Returns to Shareholders

To sustainably increase shareholder return, a management team must do one or more of the following:

• Increase revenue by choosing the right customers, offering them differentiated products and services, and treating them well
• Improve gross profits by choosing the right suppliers and working with them to create win-win partnerships
• Increase returns on operating cost investments by choosing the right employees and working with them to maximize their productivity and creative ability
• Lower the cost of capital and improve returns on capital by optimizing use of assets and leverage

A management team cannot create sustainable shareholder value by ignoring customers, abusing suppliers, and mistreating or stifling employees. In our experience, any short-term gain from doing so is more than offset by long-term value destruction.

For example, a clothing retailer experienced declining gross profit margins due to a growing level of price discounting. The CEO sought to improve gross margins by reducing inventory in the stores. As a result, price discounting was significantly curtailed and gross margins did indeed improve. However, same-store sales dropped as customers were not able to find the sizes and colors they desired. Instead, those customers migrated to the retailers’ competitors. As a result, the CEO was inadvertently helping to create shopping occasions for his main competitors!

This is a classic example of a CEO acting to “goose” near-term results at the expense of long-term customer value. In this case, the negative impact of this strategy was readily apparent. The market quickly reacted to lagging same-store sales and punished the stock, and the CEO quickly reversed course.

Instead, the CEO might have created long-term value by improving his team’s ability to predict or react to fashion trends. Had he done so, his customers would be better served and the merchandise would be moving off the shelves.

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Hit a performance wall? Here are four ways to break through it.

You’re good.

You could be better.

Consider a skill you’ve developed: Business, sports, personal, anything. At first you were terrible.

Terrible is a great place to start because improving on terrible is easy. With a little practice you turned terrible into mediocre.

And you had fun, because improvement is fun.

Then with a lot more practice—practice that started to be a little less fun—you got even better.

Now you’re good. Maybe you’re even really good.

But you’re not great. And somewhere along the way you stopped improving, stopped having fun, and started to think you weren’t capable of being great.

Why did you stop improving and stop having fun? Hitting the wall wasn’t due to a lack of effort, or willpower, or even talent. You stopped improving because of the way you applied your effort and willpower.

Say you’ve developed reasonable proficiency at a physical skill. Take golf. At first every swing of the club felt awkward, but you gradually found a groove. You started to think less. You quit thinking about your hips. You quit thinking about the height of your back swing. You quit thinking about what your wrists do in your follow-through.

You started thinking less because your skills became more automatic. In some ways that’s a great sign: Automatic means you internalized a skill.

But automatic is also a bad sign. Anything you do automatically, without thinking, is really hard to adjust. To get better you must find ways to force yourself to adapt and modify what you already do well.

Here are four ways to force yourself to adapt—and in the process rediscover the joy of improving:

Go fast. Force yourself to perform a task more quickly. You’ll make mistakes; probably lots of them. Don’t get frustrated. The more mistakes you make the better, because the best way to learn is from making mistakes. If a product demo usually takes 10 minutes, fly through it in five. (As a practice run, of course.) You’ll break free from some old habits, adapt to the faster speed, and find ways to make a good presentation even better.

Go slow. Take your time. Take too much time. Swinging a golf club in slow motion allows you to feel muscles working that you normally don’t notice. Taking more time to run through your sales pitch will uncover opportunities to highlight additional customer benefits. Going slower is a great way to notice habits that have become automatic—and to examine each one of them critically.

Go piece by piece. Every complex task is made up of a series of steps. Pick a step and focus solely on that step. Break a sales call into component pieces; first focus on perfecting your opening. No customer is the same, so develop modifications you can instantly apply to different scenarios. Deconstruct each step, master that step, and move on to the next one. When you put all the pieces back together your skills will be markedly improved.

March to a different drum. We all settle on ways to measure our performance; typically we choose a method that lets us feel good about our performance. So pick a different measurement. If you normally measure accuracy, measure speed instead. If you normally measure leads generated, measure conversions instead. Use video. Ask a colleague to critique your performance. Your customers, your vendors, and your employees all measure your performance differently than you do. View yourself from their perspective and you’ll easily find areas for improvement.

Think this process won’t help you excel? Consider this passage from Andre Agassi’s autobiography, Open:

Every ball I send across the net joins the thousands that already cover the court. Not hundreds. Thousands. They roll toward me in perpetual waves. I have no room to turn, to step, to pivot. I can’t move without stepping on a ball…

Every third ball… hits a ball already on the ground, causing a crazy sideways hop. I adjust at the last second, catch the ball early, and hit it smartly across the net. I know this is no ordinary reflex. I know there are few children in the world who could have seen that ball, let alone hit it…

My father says that if I hit 2,500 balls each day, I’ll hit 17,500 balls each week, and at the end of one year I’ll have hit nearly one million balls. He believes in math. Numbers, he says, don’t lie. A child who hits one million balls each year will be unbeatable.

When you try to do your best every time, every mistake you make is obvious, even if only to you. Learn from every mistake. Adapt and modify your techniques so you constantly improve.

Because when you keep improving you keep having fun—and all the focused effort you put in will once again feel worth it.

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