Judging Books By Their Covers

Here's some news from Harvard Business Review that probably won't surprise you: consumer expectations about products have a greater impact on their buying habits than the products themselves. In other words, if a marketing campaign or a salesperson creates an expectation -- that a product will taste great, be less filling, outperform the "leading brand," or deliver great value -- odds are the consumer will make their purchase decision based on that information.

Now, what may surprise you is this: curiously, they may do this even when their experience doesn't really support that expectation. And even stranger, they may have the experience they expect of their purchase, even when the facts of the experience don't match the expectation.

Since that is a bit of a convoluted statement, here's an illustration, quoted from the article in HBR:

"Recent brain-imaging studies show that when people believe they’re drinking expensive wine, their reward circuitry is more active than when they think they’re drinking cheap wine—even when the wines are identical."

What does this mean to you? It doesn't mean you should sell cheap stuff and charge more for it, but it does mean you should not be shy about setting high expectations for your clients when you have a strong offering. And you should charge appropriately. Don't charge what you're really worth -- nobody can afford that, because you are worth more than you can possibly imagine. But do create an expectation that you provide an experience of superior quality and value, and set a commitment point consistent with that expectation.

Thomas Paine said, "What we obtain too cheap, we esteem too lightly." This HBR research confirms that great truth in empirical terms, in case you ever doubted it. By charging a fairly high (meaning high, but fair) price for quality service, you reinforce the client's expectation that they are getting something of value. As an added bonus, the client is more likely to experience the results you have promised, if for no other reason than that you promised them. In my experience, clients take a more active and cooperative role in the work I do with them if they have paid a premium for the service. The project is almost always a win-win, because both the client and I have made a commitment to their success.

Check out this article in the Harvard Business Review for the full scoop.

Commitment Point

I was composing a blog article this morning in which I needed to use the term "commitment point," and I realized that since Selling for Geniuses hasn't been released yet, most of my readers may not be familiar with that term.

Here's the book excerpt that explains what I mean:

Commitment point is to a service relationship as “price point” is to a product on a store shelf. When we talk about professional services, cost is not the only, or even the most important consideration for many clients. As a business coach, I ask a prospective client to commit not only their dollars, but also their time and personal energy to the process of professional development. The client absolutely must trust me, believe the process will work for them, and be prepared to commit many hours of concentrated time and effort to our work together. The same could be said of a patient’s commitment to work with a doctor to treat his cancer, or a client’s commitment to work through an estate plan with her attorney.

A box of cookies on a store shelf carries a low commitment point. I can throw it into my grocery cart, pay a few dollars, and consume it at my leisure. A cell phone has a slightly higher commitment point. I have to learn how to use a particular phone’s features, pay a higher price, and typically enter into a multi-year contract. Most of the services being provided by readers of this book will likely have a high commitment point, involving potentially thousands of dollars of financial investment as well as significant time and effort on the part of the client. A sales process that will work at the “box of cookies” commitment point, will probably not be sufficient to persuade a client at the “estate plan” or “cancer treatment” commitment point.

And now you'll know what I'm talking about in my next post!

The following is a "reprint" -- an article I wrote for my November 2007 newsletter. Rather than archive some of these articles on my website as I have done in the past, I'm going to let Blogger do that and take advantage of the opportunity to revisit some ideas my newer readers may not have seen yet. It's also an opportunity for me to rethink those ideas and do a bit of editing. I have about a half-dozen, I'd guess, and I'll post them at intervals over the next few weeks. * * * "Sustainability" is a buzzword - one with all kinds of connotations about being "green" and "saving the planet." These ideas get embraced by some folks, and dismissed by others who say "there's no good science behind all this global warming stuff." To me, sustainability means something less fraught with political implications, but rich with implications for other aspects of your business and your life. Sustainability simply describes the capacity of your business to continue doing what it's doing. An interesting statistic in a recent magazine article notes that Americans generate an incremental five million tons of trash between Thanksgiving and New Year's Day. Fortunately for people in the landfill business, this staggering spike in waste generation only lasts a few weeks. And as anyone who's ever breathed a heavy sigh of relief on January 1 can attest, the level of consumption and activity that generates all that extra garbage is NOT sustainable throughout the year. Excessive consumption is a habit that is just as bad for the checkbook as it is for the planet. Even moreso now than in November 2007, people are paying attention to issues of consumption and waste in the context of "eco-friendliness," but for business owners, this issue shoots straight to the pocketbook. By taking a good hard look at everything you are using, you may be able to find ways to reduce your consumption while boosting your local economy (and by that, I mean the economy in your own office!) What does your business consume? Where do you get it? How much do you pay for it, and how much of it do you throw away? Could you get a quality alternative for less money? Should you be buying a higher quality alternative, that would cost more, but last longer? What do you know about your suppliers' sustainability? Are you aware of, and do you agree with, their policies and behaviors regarding environmental or economic impact in their communities? A large corporation might carefully track the usage rates of paper, pens, or staples when it would seem as though such things represented a minuscule fraction of their operating costs. That same corporation could then spend millions of dollars cleaning up the industrial waste it gets caught dumping into a nearby lake. (Just in case you didn't see a connection between environmental and economic impact....) Small businesses tend to have the opposite problem. They rarely make million-dollar mistakes (other than opportunity costs - but that's another article). They do, however, sometimes waste money on small things. If you buy the "cheap" tool or machine and quickly break it or wear it out, it's likely to be more economical to spend for the good one than buy the cheap one multiple times. If you are getting a bargain price for items online, make sure the total with shipping is really still cheaper than it would be to shop locally. If you are sourcing "cheap" ink cartridges or office equipment, be aware that these items are sometimes "factory refurb" rather than new, and may not perform like a new one would. This does not make them bad choices -- as long as you know what you're getting, how long it is expected to last, and how the price/performance scenario stacks up against comparable items. Last but not least, be just as aware of what goes out of your office as what goes in. A typical office environment goes through a lot of paper, and that is difficult to avoid. But there's no good reason for that paper to end up in a landfill. Many communities will recycle for free that which they would charge you to haul as trash. Recycling programs also exist for most types of electronics and office equipment - check with your municipal government or one of the national office supply store chains. Sustainability is about being able to keep doing what you're doing. Take a few minutes every day to work on your business rather than in it, and always be looking for ways to improve.

What do you say when...?

I often get asked for advice on how to handle situations where someone is trying to anticipate the outcome before they begin a conversation.  Sometimes these are very specific -- person A needs to address issue X with person B, and wants to work through every imaginable turn that conversation may take before they begin.  Other times they are more general -- someone wants to be able to handle a recurring situation better than they currently do.

I find it funny that people seek me out for this kind of advice, because I struggle with the answers to these questions as much as anyone does.  But I have learned a few things that do help when I bring them to the table.

First, know what outcome you want.  A conversation is a meeting, and every effective meeting has an agenda.  Be clear on your goal for any conversation before you start it.

Second, be honest about that agenda, with yourself and with the other parties to the conversation.  Agendas are not nearly as effective when they are hidden.  Wouldn't a lot of conversations be shorter and more satisfying if the other person would just tell you honestly what's on their mind up front?  A corollary to that is to watch out for your assumptions.  Having a goal in mind does not give you permission to dismiss, disrespect, manipulate or railroad the other person into giving you your way.

Third, be open to the other person's agenda and goals for the conversation.  Their needs may not be what you think they are.  If you're not sure, ask.

When you're in a conversation, especially when it gets uncomfortable for any reason, think before you speak.  And specifically, think about whether whatever you're about to say could be phrased as a sincere, open-ended question.  Questions keep doors open.  They demonstrate a desire to understand and learn.  Questions are the mechanism through which adults communicate.  To borrow the classic line from Dr. Stephen Covey, "Seek first to understand, then to be understood."

Questions can also be a way to defuse a conversation that's turning ugly.  Rather than make a strong statement in response to a strong statement, ask a question that gives the other person permission to get the anger, frustration, or other intense emotion out of their system.  Even something like "I don't understand" or "say more about that" tells the other person you are listening.  Of course, if the response is still heated, it may be time to walk away and come back to it after everyone's had a chance to calm down.

It's perfectly OK, if you don't know "what to say when...", to say so!  Nobody has all the answers, and "I'm not sure what to say" is a very human way to keep a conversation going when it might otherwise fall apart.  Give the other person permission to help you achieve your conversational goals by being honest, asking plenty of questions, and listening carefully.

Thinking Big

Have you read Michael Port's Think Big Manifesto?  I'm about halfway through it, and it has me bursting with ideas.  If you have big dreams, or even little ones that you've been neglecting, I encourage you to hit the bookstore or your local library and pick up a copy.

Here's my take on what I've read so far:

• Thinking big means just what you think it means.  Never underestimate your ability to change the world.
• You really can be or do anything you want.  The important thing is to want it.  Choose the thing that you are really, deeply passionate about and pursue it.  Once you have that clarity, nothing can stop you.
• Don't be shy about telling the world what you are pursuing.  People can't help you if they don't know what you need.  When they do know what you need, you may be pleasantly surprised by how the universe aligns to support you.
• Thinking big can be exhausting if you're surrounded by other people who are thinking small.  Keep company with other big thinkers.  Make sure the people around you are pulling you up, not dragging you down.

As for me, my next "big thinking" commitment is to write a book.  In order to get there, I know I need to do a lot more writing generally, so my short-term goal is to write at least two blog posts each week from now until the beginning of August, when I want to double that number.  By September, I want to be posting at least once every weekday.  By making this public pronouncement, I'm committing to getting it done and asking you for help.  You can help me by sharing your own "big thinking" ideas, commitments, and questions, as well as offering any feedback you may have on what I write here.  In return, please let me know how I can help you think bigger and achieve your own goals!

Fear, Episode 3: Fear of Change

When people have a life-threatening event, like a heart attack, that has a significant "lifestyle" component as its cause, their doctors will tell them they will die if they don't change their habits.  Changes to diet, exercise, destructive habits like smoking, or reducing excessive stress are the prescription for preventing the next occurrence.

The number of people who actually make the prescribed changes, when the directive is literally, "change or die," may surprise you.  It works out to about 10%.  The other 90%, by their behavior, indicate that the prospect of dying is not as scary as the prospect of change.  To be fair, death is certain whereas change is uncertain, but this hardly seems like a compelling case in death's favor.

Fear of change is related to some other fears.  Of course, the fears in the previous two episodes - fear of failure (what if I change something and it doesn't help/get better/improve my results?) and fear of the unknown (I don't know what it will look like if I change it) figure large in the equation.  There's some fear of inadequacy (If I have to change it must be because I'm a bad person now), and some fear of leaving your comfort zone (I like it here where it's safe!) as well.

But let's think a minute about change.  Things around you, and inside you, change all the time.  You probably don't eat the exact same food every day, right?  You get a new (or at least a different) car from time to time.  You buy new clothes.  You probably complain if your work gets too predictable, and if you respond to "how are you?" with "same old, same old," you say it with a long-suffering sigh.  If you're like most people, you love to have something new in your life -- new shoes, the new NYT bestseller (it's even called a "novel"!), the latest techie gizmo.  We don't go into the store full of fear of new things.  So why do other kinds of change bother us so much?

The key to embracing change is to buy a new attitude about it.  Notice I said "buy new," not "change."  Of course, a new attitude won't cost you a penny, but using this "buy new" metaphor could make the difference in whether change is something you look forward to, or something you dread.  Align your attitude about change to match your attitude about having something new that you want.  Want good health?  A promotion? A new job or career?  To go back to school?  All those things are new things you want.  So go shopping for them!  You'll need to shop in a couple of different "stores" to get everything you need:

• Go to the grocery store to pick up some great-tasting healthy foods.  I suggest you start in the fresh produce section, with your favorite fruits, veggies and juices.
• Shop in your closet for clothes that dress you for success.  If you're looking for a promotion or a new job, make sure you look like a million bucks every day.  And if you need a little refresh, hit the mall with a clear idea of what you need and a sensible budget.
• Shop at the library or the bookstore for guides to healthy living, resume writing, applying to the best colleges, or any other skill set or information you need to succeed.
• Shop in your network of friends, family and colleagues for help and support in achieving your goals.  Look for people who've done what you want to do, so they can mentor and coach you.
• Most important, shop in your head and your heart for the motivation and passion you need to get what you want.  You may have to paw through the racks of outdated ideas and self-defeating beliefs to find the good stuff, but keep looking until you find your confidence, drive, and excitement.  You know they're there, just like that perfect shirt you found on sale last fall.

Change isn't all fun and games, just like shopping for jeans or a bathing suit is a love/hate exercise sometimes.  But by focusing on the reasons why you want, need, and deserve better results in your life, you'll get past the stuff you don't need and be able to fill your shopping basket with the goods that will get you there.

If you need a "personal shopper" to help clarify your goals and your best course of action, give me a call!