by Paul Cherry
Vice President: Yes.
Katherine: While we’re at it, let me ask you something else. How much does your average customer spend when she comes into your store?
Vice President: We’ve found that our average customer spends $200 each time she visits our store. Owing to our wide variety of merchandise, everything from sneakers to soap, we generally have customers come in looking for one thing but ending up buying multiple items.
Katherine: Do you think it’s possible that when some of your customers came in looking for swimsuits and saw the empty racks they turned around and left without buying anything else?
Vice President: Sure. According to Gartner Group, which tracks retail shopping trends, 20 percent of customers will leave if the particular product they came for is not on the shelf.
Katherine: What is your estimate of how many customers may have walked out during that four-week period when the suits were not on the racks?
Vice President: I would not be surprised if the number is somewhere around two thousand people.
Katherine: So 2,000 times $200 per person equals $400,000 of lost revenue. Would that be about right?
Vice President: Yes.
Katherine: So just this one incident cost you $625,000? How many times do you experience something like this in a given year?
Vice President: Unfortunately, with this vendor, we experience a problem like this about once a quarter.
Katherine: What would that equate to in terms of lost revenue?
Vice President [long sigh]: My guess would be about $1.8 million.
Katherine: $1.8 million per year. What does that translate to in terms of your overall revenue for the year?
Vice President: That’s almost 2 percent of our revenue for the year. It’s crazy to lose that because of a vendor.
As you can see, coaching your customer to quantify the problem is not simple. It requires a little patience on your part, but the effects are priceless. No doubt, Katherine’s customer was well aware that his vendor was costing him business. Maybe he’d even done the math—though most customers do not recognize the extent of their problems, and it is your job, through questioning, to transform those problems into dollar signs. Either way, Katherine got her customer to relive that loss. How could the company not make a change?
It can be cathartic to help customers step back and assess a problem—especially one they’ve been living with for a while—and assess its true magnitude. When you take customers through this process, they become indebted to you. Unlike the case with less-skilled salespeople who skip this important step and focus only on what they’re trying to sell, these conversations give buyers something important—an opportunity to vent their frustrations, and to be heard and understood. You build trust and a desire to work with you.
After the customer has quantified the problem and put a dollar value on it, you can move to the second step of the impact question. At this point, you question the customer about the impact of the problem (in this case, the problem with the vendor) on:
•The company
•The customer’s position in the company
•The customer’s personal well-being
You need to drive home all of the negative effects of the current situation until your customer almost hits rock bottom.
Impact questions get the customer to take a step back and view the entire picture. Rather than remaining wrapped up in the day-to-day issues, the customer meets the challenge of looking into the future and seeing what could happen if the current problem does not get resolved.
Here’s an example of Katherine using the impact questions:
Katherine: $1.8 million per year. What does that translate to in terms of your overall revenue for the year?
Vice President: That’s almost 2 percent of our revenue for the year. It’s crazy to lose that because of a vendor.
Katherine: What about the time you and other personnel have to spend tracking down late deliveries? Or the overtime needed to stock shelves at the last minute?
Vice President: Last Saturday I had to spend twelve hours here working to fill empty shelves because of this problem. I had to cancel plans to watch my kid’s Little League game. I was really upset and so was my son.
Katherine: That must have been frustrating. So if I could summarize this issue, what you have shared with me is a problem that is costing your company $1.8 million a year and it’s costing you personally with time you could be spending with your family.
Next, Katherine uses her first impact question, targeting the effects on the company:
Katherine: What do you think the impact on your company will be if you decide to do nothing and stay with your current vendor?
Vice President: We’ll probably continue to lose millions of dollars a year. That’s why we can’t afford not to change vendors. To tell you the truth, I can’t believe that we have put up with this problem for so long.
Now the customer is in the Have To phase and is ready to make a change. Katherine’s next impact question focuses on the customer’s role in the company:
Katherine: What impact do you think this problem could have on you within your company?
Vice President: This is my responsibility. If we continue to lose money like this, I can’t imagine I would be able to keep my job for much longer. I don’t know what I would do if that happened.
What’s Katherine done here? She has helped the customer recognize the problem and take ownership of it. Instead of telling him, she helped him realize for himself how devastating this situation is for his company and for himself.
Her next impact question focuses on the customer’s personal life:
Katherine: I understand. You have a big responsibility. You also mentioned losing time with your kids. Do you think that situation will change if your problem continues?
Vice President: I don’t want to keep spending late nights and weekends cleaning up the vendor’s mess when I should be with my kids.
Katherine has discovered what the customer values; in this case, it is time with his family. Now she will be able to situate her product as a solution to his problem, and consequently a way for him to spend more time doing the things he wants to do and less time dealing with problems at work.
Only now—after she’s created urgency using impact questions—is Katherine prepared to invest her time with this prospect:
Katherine: Okay, why don’t we talk about the presentation?
As you can see, impact questions really emphasize the seriousness of the customer’s problem. You must use your own discretion when determining how far to go with a customer. When I teach this skill to salespeople, they are often concerned about using impact questions. Many seem to believe that the questions are too personal or too controversial. In the example above, though, it is the vice president (not the salesperson) who brought up the topic of family, as well as the possibility of losing his job. Once the customer opens that door, he has invited you to discuss those topics.
Rather than shy away from tough subjects, you as the salesperson should embrace them to discover how to best help your customer. It is important to remember that as long as you are sincere in your exchange with a customer, you will both benefit. If you were to use impact questions only to scare a customer into doing business with you, that would be manipulation.
How Impact Questions Encourage Change
Most people are reluctant to change unless their situation demands it. Even when people face a problem, they usually try to just deal with it instead of looking for a way to solve it. It is often easier to avoid the pothole than to fill it. But potholes don’t get smaller over time. They get bigger. So, as a salesperson, your job is to use questions to highlight a customer’s problem and help your customer discover for himself the present and future magnitude of the problem.
Too many salespeople jump on their customer with a solution as soon as the customer mentions a problem. If you do this, you will be solving small problems. Instead, give the customer
her time to vent. Let your customer have as much time as she wants to lament her situation. Ask questions about how the problem is impacting her job, her department, her company, and her customers. Once she has expressed all of these frustrations, she will be eager to buy from you—because now you understand her.
In most cases, customers have never taken the time to analyze their problems, nor do they calculate exactly how much a particular issue costs them. If you can take your customers through that process, so that they can figure out for themselves how much money, time, resources, and aggravation are involved in avoiding their problems, they will see how important it is to fix them.
Sample Impact Questions
Here are some questions you can use with your customers:
1. “How does this problem affect sales? Profitability? Scheduling? On-time deliveries? Quality? Production?”
2. “What do you think these problems are costing you?”
3. “How is this problem affecting the bottom line?”
4. “How much time do you spend each day dealing with this problem? If you could free up this time, what other tasks would you prefer doing?”
5. “How many employees have to address this problem? How much does it cost to train and employ these people?”
6. “When you have these difficulties, how much does it cost you to fix them?”
7. “Have you lost customers because of this problem? How much were those customers worth to you?”
8. “How is this problem affecting other areas of your business?”
9. “Let’s assume you decide not to address this problem right away. What will that cost you this year?”
10. “If you do not fix this problem, what is the potential impact on your business? Can you afford to take that risk?”
11. “Can your company achieve its stated goals without addressing this problem?”
12. “Are you able to devote sufficient time to other projects while dealing with this problem?”
13. “Has company morale been affected by this problem? Have people left over this issue?”
14. “What is turnover costing you? How much does it cost to recruit and train a new employee? How long does it take before a new person can perform his job without supervision? How much does that lost time cost you?”
Once you have taken your customer through the series of impact questions and he or she has recognized the need for change, you don’t want to leave him or her in the valley of despair. You need to present a brighter picture of the future. In the chapters that follow, we’ll show you how to use questions to lead your buyer on that journey.
CHAPTER
5
Opening the Floodgates:
The Power of Expansion Questions
SOME BUYERS NEED no prodding to tell you their whole life story. But most are guarded with salespeople. We’ve all had the experience: A sales conversation that reveals little or nothing about the buyer or his needs. Or a conversation that runs out of steam, leaving you casting about for a way to get it going again, or shifting into product-pitch mode just to fill the silence.
The more you can get buyers to reveal, the more likely you’ll find a way to help them. And when buyers reveal to you things they haven’t shared with any other salesperson, you gain an incredible competitive advantage. That’s what expansion questions are designed to do.
Expansion Questions
The expansion question develops your basic fact-seeking request into a probing question that elicits more detailed information. It allows you to sit back and let the customer do the talking. The basic concept is to get the buyer to reveal more than simple facts. You want them to tell you a story, or reveal their thought process, or give you a peek behind the organizational curtain.
Expansion questions should begin with phrases such as:
“Describe for me . . .”
“Share with me . . .”
“Explain . . .”
“Walk me through . . .”
“Tell me . . .”
“Could you clarify something . . .”
“Can you expand upon what you just said?”
“Help me understand . . .”
These phrases signal to your prospective customers that you really want to hear what they have to say and prompt them to elaborate on their answers.
Ordinary Questions Transformed into Expansion Questions
Whenever you’re about to ask a standard sales question, take a moment to consider how you can turn it into an expansion question—one that prompts the buyer to reveal more information and think more deeply. Here are some examples:
Ordinary: “Who is the decisionmaker?” “When will you make a decision?” “What is your time frame?”
Expansion: “Walk me through your company’s decisionmaking process.” (Here one expansion question takes the place of three ordinary questions.)
Ordinary: “Are you satisfied with your current system?”
Expansion: “Share with me your level of satisfaction with your current system.”
Ordinary: “Is price important to you?” “Is quality important to you?” “Is service important to you?”
Expansion: “Explain to me the criteria you use to ensure you’re getting the best value.” (This is another situation in which three questions can be transformed into one question.)
A Sample Conversation Using Expansion Questions
Let’s look at a conversation using ordinary questions and then one peppered with expansion questions.
Mark, a sales professional with ten years’ experience, calls Lisa, a purchasing agent working for National Trucking Corporation. After a few pleasantries about the weather and the holiday season, Mark gets down to business:
Mark: Lisa, who is the decisionmaker at National Trucking?
Lisa: I am.
Mark: Great! So what is your time frame to make a change?
Lisa: As soon as possible.
Mark: Okay. We’re ready to start whenever you are. What are your goals as a company?
Lisa: To make more money in less time.
Mark: We can definitely help you with that. Can I put together a proposal for you?
Lisa: Sure.
Post-Game Analysis: It’s doubtful Mark advanced this sale. One big reason is because he limited himself to asking ordinary sales questions. So he hasn’t even scratched the surface, and he’s gained no real insight into how to sell to this prospect.
A salesperson who asked expansion questions would have gotten more information and gained a better understanding of Lisa’s situation. So let’s see what happens when Mark uses a few expansion questions:
Mark: Lisa, I was wondering if you could walk me through your company’s decisionmaking process.
Lisa: Well, I initially review any proposals dealing with a change in vendor. If I think a change is appropriate and I like what I see in the proposal, I forward my recommendation to the regional supervisor, Al. Al then looks over the information and determines whether or not a new contract would be feasible.
After Al approves the move, the next step would be to submit the proposal to our divisional vice president, John Williams. Following John’s decision, the company would set up a two-week test to judge initial performance. If all goes well, the next step would be for me to create a purchase order and finalize the sale.
Mark: So, it looks like there are a lot of decisionmakers in your company. Could you share with me what specific goals you and those involved would like to accomplish if you were to make a change?
Lisa: Well, obviously our goal as a company is to make more money in less time.
Mark: Sure, but how does that translate into specific goals for, say, you, Al, and John?
Lisa: Good question. I guess we’ve never really come to agreement on our goals. In fact, we’ve been putting up with these problems for over a year now, which tells me that no one is in a real hurry to fix anything. I seem to be the only one who realizes there’s a problem, because I’m the one staying late
and trying to fix everything. Orders aren’t processing correctly. Late shipments create logistical headaches, which I then have to solve. It takes time away from my other duties, and I’m sure things are falling through the cracks. I’ve brought this up to my boss several times, but I’m not getting anywhere.
Mark: Wow, it sounds like you have a real problem that no one else is paying attention to. Based on what you have shared with me, I think it would be helpful for you to introduce me to the divisional vice president. Maybe an outsider’s perspective would help him see how much this problem is affecting the company, and we have a lot of experience with problems of this nature. When would be a good time for all of us to meet?
Lisa: I will find out and schedule a meeting as soon as possible.
Post-Game Analysis: By using just a few expansion questions, Mark learned a number of valuable things about Lisa and National Trucking. First, he learned that Lisa does not have the authority to make a final decision about changing vendors, though any change would have to be initiated by her.
Mark also discovered that Lisa is the person in the company really experiencing problems because of the current situation. Once he found this out, he knew she would be an enthusiastic promoter on his behalf because she wants the situation to be resolved.
Upon learning about the multistep decisionmaking process, Mark decided he would get Lisa’s support and go directly to the top to make his pitch for a new contract. Not only did Mark garner a meeting with a divisional vice president; he gained inside information about the issue at hand and has a good understanding of how the company usually makes decisions like these.
Ordinary questions didn’t give Lisa an opportunity to reveal her frustrations and negative feelings about her current situation. If Mark had simply ended the call after the first scenario, his effort would have most likely been futile. Lisa already knew her company had a problem, but she had no confidence that anyone else would recognize the need for change. What would Mark’s chances for success have been in that situation? He’d prepare a standard proposal, which Lisa would forward to her boss without much enthusiasm or confidence that anyone would act on it. On the other hand, Mark’s expansion questions sparked a reaction in Lisa and spurred her on to schedule a meeting with someone empowered to make a decision.