Joe DiDonato | Chief of Staff | Baker Communications, Inc.
This is one of the few competencies that has the highest spread between the top 10% of sellers and the bottom 10% of salespeople. Eighty-three percent (83%) of top performers are comfortable discussing finances with a prospect or customer, while only 29% of the bottom performers are comfortable. And the higher the sticker price, the more dramatic the difference between top and bottom performers in this competency area.
We’re going to talk about two sellers, in two entirely different industries, to show you the problems they were having with discussing money. The reason for showing you two examples is that this is one of the coaching challenges that most of us are faced within our existing sales organization. We see that in the skill spread our measurement tools reveal.
If that’s “hard to swallow,” contrast a newly hired college grad who just spent the last four years ‘bumming’ car rides and food, with a successful seasoned seller whose thinking about what color he or she is going to get on their next work car – an Aston Martin DB11 – or whether they should go to Morton’s or Fleming’s tonight for dinner. That’s the difference in perspective each sales persona will bring to the money discussion.
The first story is about a mortgage loan officer at a national bank chain in New Orleans. It was told to me by William Behr, our head of sales. The bank was pushing a new loan package, aimed at the subprime market, where the mortgage holder could refinance their mortgage to the latest low-cost package that the bank was offering, with just a signature.
It wasn’t too long ago that this same loan officer remembered what had happened to the subprime market when the variable rates started to kick in for these lower-income homeowners. Some of the rates almost doubled their monthly mortgage bill. And then Katrina hit. For those people who were barely holding onto their homes by depleting their savings, all was lost when the businesses they were working for were wiped out by the hurricane.
She just couldn’t go service that homeowner segment again. She’d been referring all these subprime loan applications to a peer, just because she felt so guilty for what the banks had done to these homeowners by not fully explaining the impending doom that came with those subprime adjustable-rate mortgages. At the time, she had convinced herself that she was helping all these people get into a home of their own and that she was stopping the stranglehold that landlords had over their captive renters.
What happened next was that her branch manager was reviewing her loan activity and noticed that she hadn’t submitted even one of these new loan packages for approval. That meant it was time for a “sit down” discussion.
When they got into the discussion as to the ‘why,’ she finally dropped her guard and explained her problem. The solution, of course, turned out to be some coaching by her manager. Her manager explained that this was a “good thing” for the homeowners still stuck in the old adjustable-rate mortgages. This new mortgage had a very low fixed-rate mortgage, that would never increase. The manager explained that she would be doing all these homeowners a huge favor by switching them over.
That ‘reframing’ of the value of the product was the coaching she needed. She went on to crush her subprime numbers in that quarter and for the rest of the year. She realized that this loan package was getting these homeowners out of the exact same dilemma that they were in with their former landlords – constantly rising monthly payments.
The next story is about a luxury RV park developer, who had just hired this really smart young college graduate to service the Indian communities with casinos in California. The young man was a perfect choice. He had grown up in a native American community before college, and really understood the biases, the government, and the inner workings of the community.
In the park developer’s mind, the value proposition for these communities was significant. It was basically adding a very similar demographic of visitors to their entertainment campus, who would, in turn, enjoy the gambling and other entertainment available while living in their own RV. The community didn’t even have to provide housekeeping services.
After three presentations, the park developer noted that all three deals were stalled. There was no movement, and no plan to get them to the next step. So, the park developer sat down with the young man to see if he could help figure out the problem.
The story that the young man told revealed his own, personal bias, and the problem. The young man had never shown the Community’s Economic Development Boards the price of the park. He was embarrassed by the size of the number. All of them were $30 million or higher. Asking them for that level of spending just didn’t “feel right” to him.
The park developer smiled. He said, “come on over to my office and I’ll show you something.” In his office, he had a scale model of another park that had been built for an Indian Community up in Washington state. He said, “this one cost $26 million, but it only had 750 RV sites on it.”
The young man looked puzzled. “Why would they spend so much on that, when they could have just added on to their hotel?”
The developer said, “It’s simple. The cost to open an equivalent 5-star hotel addition would cost them $604,200 per room. Google it if you don’t believe me. To build 750 more rooms would cost them $453 million. To get those same guests demographics, it’s only costing them less than $35,000 per lot.”
The young man had never seen the value proposition explained that way before. His smile reappeared, and in the next month, he had all the financial proposals in front of the Communities for approval.
In both examples, it took the equivalent of a Sales Manager to step in to ‘reframe’ the value proposition in the seller’s mind. Once the real value was shown to these individuals, their ability to talk about finances – at even the highest levels – was immediately ignited.
If you’re a Sales Manager reading this article, know that this is going to be “on you” to remedy. If you’re suffering from this same ‘difficulty,’ then this will most assuredly prevail throughout your team. Talk to a peer or someone you trust and get the coaching you need to overcome this very important skill gap. It will change your whole team’s performance.
If you would like to learn more about using competency data to drive your hiring, training, and coaching efforts, we invite you to watch one of our recent webinars: How to Implement Data-Driven Sales Enablement. View the webinar for free here: https://www.bakercommunications.com/webinars/How-To-Implement-Data-Driven-Sales-Enablement.html
