February 2016 - Vol 11, Issue 2
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Expanded Horizons

Every once in a while we have an opportunity to get outside of our bubbles. For me, that means leaving the United States and visiting a new country and meeting new people. My many years on the Board of InfoComm International took me to some great destinations like Moscow, Beijing, Amsterdam, Hong Kong, and Dubai - but I had never visited Africa. Fortunately for me, the Congress Rental Network invited me to speak to their members this past month in Cape Town, South Africa.

First of all, let me confirm that Cape Town is indeed a fantastic destination. You won't get to check Africa off your bucket list because the region is not representative of the rest of South Africa, much less the continent. However, it is a beautiful, vibrant city with a turbulent history of colonialism, Apartheid, and rejuvenation. Poverty and privilege uncomfortably co-exist as economic segregation is still lingers, but the mood is pointedly positive.

V and A Waterfront

Tourism is a large part of the visible economy, and restaurants, hotels, and small museums are everywhere. Service is great as is the food. There's a life to Cape Town that one needs to experience to appreciate. We stayed at a resort, a game preserve, a bed & breakfast, and finally a boutique hotel. There's no shortage of variety.

A view of the historic Bo Kaap District looking towards the Central Business District

On our way out of town our taxi driver typified our visit with his story. He explained how he came from his homeland in the Congo to escape violence. He worked his was through many jobs to learn English. Eventually he bought a taxi, then another. He talked about customer service and hard work. His goal is to own a fleet of taxis and tour busses. I think he might just make it. 

Stop Negotiating: A Discussion of Value
The Board of CRN and I discussed many topics before zeroing in on the universal shared business issue for my Keynote: How to deal with price-shopping buyers and price-driven competition. CRN has members from over sixty countries and despite the language and culture barriers - negotiation and value proposition are universal concepts.

A fundamental message in my keynote was the importance of credibility. The more confident you are and the more credible your reputation, the less you will need to justify your fees. Conversely, the less legitimate you appear, the more the customer will demand details that will later haunt you in negotiation. This tug of war between details and expertise is what drives the need to negotiate - or not.
If your company or group is in need of a fresh look at important issues or a jolt of Intentional Success, I'd be happy to visit your exotic meeting destination too! Learn more about Tom Stimson's speaking engagements here.
 

Here's another story about business based on our trip:

"My wife and I recently visited Cape Town, South Africa. It was a wonderful, once in a lifetime trip. As we often do on holiday, we sought out the local street markets. Cape Town is beautiful and friendly, but like any large city it has a seedier side. You take care where you go and [...]...�"



Thanks for Reading and Sharing!

Tom

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bestpracticesBest Practices Blog

We live and work in a service economy, but too much of our sales training is based on peddling transactions: When a customer has a need, we source the solution, assess our cost, add profit, and offer a price. In order to differentiate, we include "value-added" services, which may be as rudimentary as being pleasant up to the extreme customer service models that so few can afford. The fundamental problem with this simplistic view of how we make money is that our customers are far more complicated than that. Customer complexity is actually a good thing, if you learn how to assess and respond to it.

A transactional result is one in which you price the product but don't assess its worth to the buyer.

As someone that travels a lot, I get to compare notes with other frequent fliers. Most folks that fly for business don't have the option to purchase first or business class tickets and therefore rely on their frequent flier status for upgrades. Do you want to locate the grumpiest person on any flight? It's the executive that didn't get his upgrade and has to fly in coach. For years, airlines overpriced their best seats and sold less than 20% of them. The rest were given away as upgrades. Many years ago this made sense because fliers had many, many choices for flights and airlines used upgrades to buy loyalty. Today there are fewer routes, almost no empty seats, and airline loyalty is waning as fliers seek better prices. In the past couple of years, airlines have finally dropped the price of first class seats and now sell more than half, increasing the net revenue on the first class section. The losers are the frequent fliers that get fewer free upgrades. Why is this important to understand in a discussion about transactional pricing?
The fewer free upgrades awarded, the more first class seats sold. And...what is the worth of a better seat to a frequent traveler? That my friends, is the right question. Airlines had the pricing wrong for years. Now they have optimized the value of the premium seat by tapping into the frequent traveler's pain: worrying about getting an upgrade.
What's important to your customer? What is their pain? What is the need that goes beyond the deliverables of your product or service? We live in a high-value world. Whatever it is you do or sell, someone else can match your specification and there is always someone that can and will beat your price. Every transaction you attempt is at risk of a reasonable substitute - reasonable to the buyer, at least. Your job as the seller is to tap into their true needs before setting a price.

Your product or service is infinitely valuable: It is worth somewhere from zero to priceless depending on the buyer.

Which brings us to our problem. If we want to avoid transactional results, we need to focus on the value our customers seek - not the just the worth we want to portray. This is what airlines figured out: their pricing was contributing to their problem. The economic landscape changed as airlines consolidated and routes were decreased. In the meantime, travel security had made travel even more costly in terms of time. Customer pain for the frequent traveler moved from price and availability to comfort and timeliness.
If your sales team is telling you that customers are still buying on price, then listen more closely to what your customers are really saying to you about their needs. Price may be one factor, but solve their real pain and watch how quickly they are willing to pay a higher price.
Tom Stimson MBA, CTS helps owners and management teams rediscover the fun and profit that comes from making better decisions about smarter goals. He is an expert on project-based selling and a thought leader for innovative business processes. Since 2006, Tom has successfully advised over two hundred companies and organizations on business strategy, process, marketing, and sales. Learn More at 

Closing Thoughts


Don't try to be somewhat valuable to 50 segments. Be indispensable to one.

If a customer segment represents less than 5% of your business - stop and ask, "Is the energy I spend here proportional to the returns? If I spent that energy on another segment, what would that yield?"

Who's Tom Anyway?
About Thomas R. Stimson, MBA, CTS

Tom Stimson helps small business owners and management rediscover the fun and profit that comes from making better decisions about smarter goals. Tom's clients learn how to move past the bad math and stagnant thinking that overcome so many entrepreneurs. 

"My clients often struggle with day to day issues, which hinder their ability to focus on strategic goals or even try new ideas. Together, we will learn how to set aside the noisy distractions of past decisions and make stronger, more strident choices. Before we are through, you will learn to love your business again." -Tom 

For more information visit the website.