Do you know what the four levels of value are, or how you can win clients over from your competitors by creating more value for your clients? Today’s guest didn’t just write the book on that subject, he actually wrote three books on the subject.
Anthony Iannarino is the author of The Only Sales Guide You’ll Ever Need, The Lost Art of Closing, and his latest book, Eat Their Lunch. These books are a trilogy of useful information for salespeople. Listen to the episode to hear how Anthony suggests using these books, why he believes it’s important to separate service and product, and how to apply his four levels of value to different stakeholders.
- Anthony’s books
- Separating service and product
- Winning clients by creating greater value than competitors
- The four levels of value
- How the four levels of value apply to the different stakeholders
- Winning with the intangibles
Marylou: What I’d like to do today is talk about the book and also shed some light to the listeners. You mentioned upfront that the book is the trilogy, the three books. I would like you to touch on that, if I’m just listening to you for the first time and I have this book, do I want to read them in order, does it matter? I’d like you to talk about that. And then talk about the value creation pyramid or whatever you’re calling that because that’s really interesting to me.
I would’ve never thought to put service as its own level. That was an aha for me because it’s usually product and service we’d lump together. I really saw when I read that piece of it how we can differentiate ourselves on service, even. For example, one of my clients has a 97% renewal rate on their software.
Anthony: That’s amazing.
Marylou: Yeah. They do an amazing piece of software so it makes sense. They’re literally saving lives with their software. It’s amazing to see it in action but also there’s a loyalty there that I know is an outlier for them. It’s something that we can talk about. I circled that, like wait a minute, we should…
Anthony: I think that what happens to sales organizations is they don’t realize that the fact that their support, their service and the experience is such a differentiator that it creates a level of value that, for the client, ends up being something that’s important to retention. A lot of people, when they see this framework, are like, “Okay, so everything is Level four.” Level four transcends and includes all the other levels, so you’re like, “Well, I’m super-strategic but my product sucks, our service is terrible, and it doesn’t really get you the job done in the first place.”
It’s really good that you’re strategic, but I need all of the levels. I think people misunderstand. The way that we start a conversation, the way that we create the maximum value is to get to strategic first so we just change the order in which you come at this problem, but you still need Level one, and Level two, and Level three. You need all of the levels. It’s that combination together when you recognize what part of it’s making up the ability for you to generate that strategic outcome that that’s where you end up really over-indexing on results because you now have something worth a serious conversation when it comes to leaving somebody you’ve been working with for a decade or more, which is a hard problem.
Marylou: It is. I think, more and more, this really spoke to me on so many different levels, the opener of how we are forgetting how to sell. We’re not even at the point where we are comfortable having these types of conversations. We hide behind email. We hide behind social to get these conversations started and to create an opening that way. I love that realization in the book where you talked about that and it’s like, yeah, this is what we’re dealing with as coaches, consultants, working with companies, is that we’ve forgotten how to have a meaningful sales conversation.
Anthony: I think that’s right. This is in one book back, The Lost Art of Closing. I didn’t write this but the publisher did. They wrote Always be closing, Glengarry Glen Ross, 1988 or whatever, and then it was Never Be Closing, a sales book, whatever year that was, 2015 or something like that. I think what happens to humans, generally, is that you start off with this idea of, wait, always be closing is bad, so what’s the opposite of that? Never be closing. If “always be closing” is bad, then “never be closing” has to be the right answer.
No, that’s not the right answer, and sort of this idea of if closing is bad, then asking for commitments is bad. Let the buyer tell you what to do. We get confused by this. If interrupting people is bad, then what must be the right thing to do is to just wait for people to reach out to you, so you go from being a hunter, which people don’t like that word because of the aggressiveness and the connotation, but it’s the word that we’ve traditionally used as hunters and farmers.
Instead, they’re like, “Well, no, I’m a fisherman now,” or, “I’m a trapper. I just lay lines out and then I go check to see if anybody touched anything.” When you go from, “This is outbound. It is proactive,” to, “This is responsive, and reactive, and waiting,” I think a lot of what I’ve written over the course of three books is trying to find this point to explain to people it’s not always be closing if closing means that you’ve skipped the process and don’t help somebody make a good decision because you’re in too big of a hurry, and it’s definitely not never be closing because there’s all these commitments that people have to make, and we’ve lost that part.
We don’t even talk about competition anymore. It’s not something that we talk about, but it’s part of the game that we play. I wrote a post on Forbes about a Red Ocean strategy, and I started the book talking about the Blue Ocean strategy that the Harvard professors wrote about. Be so different and so unique that you have no competition. How do you go to the 99.6% of the population that doesn’t have that advantage? What are they supposed to do? They have to call on their competitor’s customers, and their competitors are calling on theirs, and we need to address it.
Because you read the book, you know there’s nothing about attacking your competitor and focusing on your competitor. That’s not how you win. I keep teasing people with this idea: Go to your competitor and say, “We both compete in the same industry. We’re both professional. I’d like to ask you to stop using your irrational pricing scheme and stop saying bad things about me behind my back.” Go try that and see if they’re going to say, “You know what? I never really thought of it that way. Now that you said that, I’m going to price exactly the same as you so we can have a fair contest.”
That’s not real. We live in a Red Ocean, and you have to have some amount of competitiveness. I said this in the book: You’re not a mafia don or a warlord. You’re not out to destroy people but you are competing in this great upward spiral of advance in our economy, and then the value that people create for their customer comes from that competition that causes. I beat Marylou, and then she looks at what I do, and she goes, “Wait a second, I need to up the game here to do even better than he’s doing,” and so the customer, and the economy, and everybody benefits from that even if you don’t benefit from it in the short term.
Marylou: As I was looking at the book–and I love the fact that we can get online books now because I can see what other people highlight versus what interests me–one of the things that was highlighted early on in the book is when you talked about this whole concept of very little of what leads to successfully taking your competitor’s clients has anything to do with the competitors themselves as we’ve just talked about. Instead, you said you will win those clients by creating greater value than they do.
Anthony: That’s a mindset shift for a lot of salespeople. They think, “It’s my product,” or, “It’s my company,” or, “It’s something external to me,” but the real test is who wins is the salesperson that comes in and creates compelling differentiated value where somebody goes, “Wait, that’s the smartest person. This is the best idea we’ve heard. This is the right answer for us. This person gets me,” and there’s a lot of different ways to create value for people.
Understanding how to help a buyer make a good decision was in The Lost Art of Closing, which is why these books came out in that order. The first book was The Only Sales Guide and an unfortunate title when you have two more books following very fast on the tail of that one, but that book was first Be Somebody Worth Buying From. It’s a competency model where those mindset and skillset. that comes first because if you’re somebody that’s worth doing business with in the first place, that solves a big part of your challenge and sales, so get that part right.
Then, learn how to control the process and learn how to serve the buyer by making sure they do the things they need to do to really get what they want. That’s the second book. The reason that I did them in this order is because when you get to this third book, it’s a little bit of a step up even though I think each book was a step up from the one in front of it, but it’s a step up in your responsibility to say, “I’m not competing against my competitor who’s $8 billion to my $100 million-company. I’m competing against the salesperson that’s sitting there, competing for this business or who owns the business now.” When you get that understanding, you understand that you’re the value proposition so you have to go in and do the work to create a preference to work with you instead of everyone else, and that can be a real mindset shift for people.
Marylou: That is an incredible mind shift. I know people are listening, thinking, “You know, I’ve heard this term ‘create greater better value’, ‘create more value’, ‘create better value’,” a lot of times, we don’t even know where to begin. Is there a recipe for that? What you’re saying is, yes, there’s a tactical way to do it but you have to change your mindset in that it’s not the company creating the value; it’s you as the person creating the value. It’s your personal value proposition, what you’re bringing to the table. That’s a whole different way to look at this and try to get your arms around, “Where do I begin?”
Anthony: The way that I think about the beginning, we’ve talked about the four levels of value. Level one is the value of your product or service. Level two is the value of experience, which is your services, your support, how easy you are to do business with, what that interaction feels like for the people that buy what it is you sell. Level three is the tangible result you produce. If you say, “Well, we’re a printing company so we print some things and we ship them from here to here,” good. Do they make it from here to there? “Yeah, they do.” Good, so that’s the outcome that people need. You can print it. You can get it to them.
If the reason that you’ve sent something by mail in the first place was because you were helping them acquire new clients, then the strategic outcome is, is what you send going to cause somebody to sign up with you? That’s the real thing, so you look at that and you say, what’s the strategic outcome? They want greater market share, or they’re trying to penetrate a new territory, or they’re trying to retain their existing customers to get them to buy more. That’s the strategic outcome that they’re really working on.
What we’ve done historically is we’ve come in from the left. When I say that, what I mean is, if you’re looking at a PowerPoint deck, Level one would be all the way over on your left, and we’re like, “Let me tell you about my company. Let me tell you about the services we offer. Let me tell you a little bit about me. Let me tell you about the kind of clients we’re working with. Then, I’ll ask you some questions so I can learn a little bit more about you.”
When people hear that now, they’re like, “Listen, I’m busy washing my hair that day. I’m sorry, I don’t have time.” They’re going to find any excuse they can to get out of that because when you listen to what the value prop is, you’re going to talk about your company. That should be interesting for all of four seconds because we already know who you are and what you do. Then, you’re going to talk about your solutions, and I’m already buying that solution from someone else and you’re not going to be that incredibly different.
Then, you’re going to talk about you, which should be just the most delightful conversation I’d ever imagine happening. Then, you’re going to ask me what’s keeping me up at night. I know how this story goes, and it ends badly for both of us so I say no to that. When you start at Level four and you say, “Marylou, I’d like to share with you the four biggest trends impacting your business over the next 18 to 24 months some of the questions we’re helping our clients to answer right now and some of the decisions that we’re helping them make, even though there’s different choices for different companies, and even if there’s not a next step, we’ll leave a deck with you with some questions that you can challenge your management team with, and I promise you will make some different decisions after this meeting. What do you like Thursday for a 20-minute executive briefing?” I just tried to pile all the value I could into that because I want somebody to pay attention to why change.
The more strategic you can make that, the more that you create a case for change. When you start with your product and your company, what you’re trying to do is say, “I’m not really a value creator. I’m just here as a representative of this company that can create a whole bunch of value so let me tell you about them.” The pushback that I’ve gotten on this book and this idea from many salespeople is, “Yeah, but first I have to prove that I have the ability and the right to have this conversation with them.”
How do you prove you have the right to that conversation? You prove it by having that conversation, so you just start by being strategic from the beginning. You don’t have to lean on your company to say, “Well, my company’s been in business for 85 years, and we have 72 locations, and you’ve seen these big logos that we have.” Great. Hurray for you and your company.
It’s not why change; it’s a proof provider. If you lean on that for credibility, what you’re basically giving up is, “I don’t really have anything to say myself about any of this so I’m going to talk about things external to me.” If you have an opinion and you start with Level four to say these are the biggest challenges, these are some of the questions we’re helping our clients answer, now you’re starting at a point where there’s a conversation to be had. That’s the shift.
Marylou: It’s a big shift. I think that’s in the first part of the book where you talk about a lot of that, and you provide worksheets. For those people thinking, “Wow, this is kind of woo-woo. I don’t even know how I’m going to do this,” he has worksheets throughout the entire book that you can download, and work on, and apply. It’s not sit back and read Anthony’s book. It’s read and do. Read and do.
Anthony: In all three of the books, every chapter ends with a “do this now”. Why read a book if you’re not going to do anything with it? That’s the same as not reading the book.
Marylou: One hundred percent.
Anthony: Let me just make a disclaimer, though: If you want to buy the book and you don’t read it, we still are happy with that.
Marylou: Indeed. To again summarize the levels, there are four levels. As I was telling Anthony at the beginning of the call, I always lumped product and service together. I didn’t think of it as experience and support as its own level. That was a real big aha moment for me because we can find so much value. I was sharing that one of my clients has a 90%-plus renewal rate on their software. That’s something to celebrate and talk about, the why behind that.
That was really a great thing for me to see that, that it’s not just product service; it’s product, service, and it’s experience and support, and then you go to the business cases and outcomes, which I think most of us get stuck there, too. Correct me if I’m wrong. We sort of end there. Again, this is new strategic thinking for us. Don’t end there. Start even higher with the strategic side of things.
Anthony: When you think about what you just said, Marylou, you talked about a client who has a 90%-something retention rate so, automatically, I know something else is true. You have clients that have a number far lower than that. One is doing something about that experience that is easier for them to retain people than the other or the many others. That is part of their recipe for creating Level four, and they figured something out to say, “Look, when we paid better attention to these conversations, we tend to keep them longer,” so maybe the strategic conversation gets you in, but you need all four of the levels. If they’re really good at over-indexing where other people fail, then even that Level two can be compelling differentiated value that helps cause somebody to leave their existing supplier and buy from you.
Marylou: The point is you’ve got to do the work. You’ve got to do the planning. You’ve got to figure out where your things, what makes you, you, fall in these different levels. This is not a wing-it exercise. One of my biggest pet peeves that I see is that we’re so reliant now on just throwing stuff out there and seeing what sticks that we’ve lost the ability to really plan and strategize before we actually execute. It’s something we don’t assess. We go straight to execution because we have tools now that, unfortunately, allow us to do that.
Anthony: One of the things that is a mistake for sales people just generally, the expert on experts is K. Anders Ericsson. If you’re listening to this, then you know his work has the 10,000-hour rule that Malcolm Gladwell made popular in a book called Outliers, but that’s not what he said. He didn’t say that 10,000 hours of doing anything actually makes you an expert. What he said was 10,000 hours of deliberate practice makes you an expert, and that’s not just doing something for 10,000 hours.
When he describes this, if you read his work, the violinist that he studied, after they did an hour of deliberate practice working on a very difficult passage that they had to do in some piece of music, would take a nap. It was that draining for them to give themselves over to something so intensely that, afterwards, they had to have a period of rest. That’s not the way most of us plan a sales call. Most of us plan a sales call with something that sounds like this: Marylou, I’ve made a thousand sales calls so I’m going to go in, and I’m going to find some pain points for them, and then I’m going to get them to agree to have another conversation.
Creative thinking there. You did nothing, so there’s no deliberate practice. The way K. Anders Ericsson expressed this one in Fast Company Magazine I always kept a copy of, he said, “I’ve been walking for 48 years but I don’t feel like I’m getting any better at it.” I think it’s very possible for people to have 10 years of experience in sales but to really only have one year 10 times, and that’s possible for all of us.
The more intentional and the more deliberately you think about, “What am I trying to do? How am I best going to achieve that? How do I serve this client where they are now?” the better the results are, and that’s a different exercise than many of us do when it pertains to sales. If you’re listening to this, I’m not throwing the first stone. I’ve made thousands of sales calls, I’m also really good at improv, and I’m happy when I haven’t prepared because I get to act and respond to things with an improvisation, but that is not a reason to believe that that’s the primary way you should do something.
I’ll share just one quick story about that. I was in Toastmasters and I gave a really good speech, made everyone laugh. Everyone was happy. When you’re in Toastmasters, you have somebody who reviews your speech, and mine happened to be PhD Brenda Jones who, after I got done speaking, said, “Anthony, that was a really, really good speech, and I can’t wait to hear it the second time after you’ve rehearsed it.” Her point was well-taken. The fact that you can do that doesn’t mean that you delivered the best thing that you could do, but you do have to spend the time to figure out what you do to differentiate and how you compel change, especially if you’re in a competitive displacement business where you have to go and work on taking clients from your competitors.
Marylou: Now, let’s shift to Part 2 of the book where you talk about building consensus, wiring the building. I love the title of that section. If we look at our four levels now, our product service, our experience support, business results and outcomes, and strategic partnerships, how does that apply now to the different stakeholders? Do we still need all four with all of our stakeholders or can we somehow take a portion of things? What is your recommendation there?
Anthony: You have to serve the person that you’re sitting across from. If you go to an end-user and you say, “Listen, I’d like to really talk about the future of your company over the next 18 to 24 months and I’d like to talk to you about some of the challenges that we’re helping other companies with as it pertains to their strategy in this area,” you’re talking to somebody who’s like, “That’s great, except I don’t have anything to do with that, and I couldn’t help you with that even if I wanted to.” What do they care about? They care about, primarily, Level one and Level two.
Marylou: A day in the life.
Anthony: “Yeah, I need it to work for me. Talk to my boss about our long-term strategy. I’m not even sure he knows. That’ll be a good conversation for you to have with him, but I need to figure out how to get this thing done now.” When you go to executive leadership and I’ll talk to your audience specifically and you go, “Listen, Marylou, what I want to do is I want to set up an hour and 20 minutes to go through a demo so I can show you the software,” if it’s me as a person you’re calling, I’m like, if I have to know how the software works, we’re already done talking because I’m never going to open the software. I’m never going to open it myself so you need to talk to somebody who cares about that.
Here’s what I need to have happen: I need these people to produce better results than they’re producing right now. If you can help me help them produce better results, we’ll have a great conversation, but if I have to know how the software works, I’m the wrong person to talk to. We have to match the conversation we’re having to the group of people that we’re talking with because what creates a preference for them when you talk to Level one people who need Level one and two value and you’re talking to them about strategy, you’ve lost them.
When you talk to a Level four about Level one, you’ve lost them. They might have a technical person who cares or something like that but, for the most part, you’ve got to figure out how to create the right outcome for each group who cares about what. In the book, there’s that little framework. If they’re end-users, they care about 1 and 2, and so they’re what we call ancillary stakeholders. They’re accounting, or finance, or people who care but they don’t use what you sell but still need your experience to be good. They tend to care about 2. Managers tend to care about Level three. “Can I get the outcomes? Can you make it work?” and then leadership tends to care mostly about Level four, and they’ll leave it to other people to make the decisions about if it’s right for Levels one, two, and three.
Marylou: For those of you who understand that bullseye concept that we talk about in other episodes where we have the decision-makers in the center and then, as we go out, the influence becomes less and less direct, this is a nice alignment for what Anthony’s talking about, is how to prepare and plan the way you’re going to be building these relationships with these types of users based on his levels.
Anthony: Why didn’t you just send me your list last time we talked so I didn’t have to go through all this trouble to do this work? I could have just taken yours and dropped it in. That would have been really nice.
Marylou: Because, of course, you know, Anthony, you’re getting to close. You’re the entire pipeline. I am opening the door. That’s all I do, so it’s a little bit different for us because we tend to love them and leave them as we pass them off to the people that are going to close the business, not always, but you’re getting a lot more into the nuts and bolts, the long-term relationships. We’re adding value, but it could be a very quick dating environment, and then we go onto the next one.
Anthony: That doesn’t sound very good in the world we live in now when you say it that way.
Marylou: Indeed. That’s the second section of the book, is really understanding the map, how to plan based on the stakeholders, what is important to them, which means we’re not going to be doing demos for everyone just because we want to do a demo. It doesn’t work that way. We’re looking at the person and what they care about. As we go into Part three, Part three is an interesting part, too. There are just so many nuggets in this book. I’ve got everything underlined in different colors because we could do that now with the online books and stuff. Let’s talk about that: winning with the intangibles.
Anthony: As we’re recording this, my son’s at Denison University, and it’s in Granville, Ohio, a sleepy little town 45 minutes out of Columbus. Their president and I met at one of my kid’s theater shows and we were talking and asked me to have coffee with them. He asked me, “How do we, in a liberal arts organization like this, do a better job preparing kids?” They’re so focused on skills, but that’s not what a liberal arts degree does.
I explained to him the purpose of the first book, and I found a way to have weaved this through all three books. It’s the intangibles that actually allow you to win. When you start thinking about what does a trusted advisor do, they have trust and they offer advice. I say that and people laugh because it’s so simple, but you can’t be a trusted advisor if you don’t have the Level four insight so that you can offer people the best advice, and that’s really what you’re trying to do.
When we say things like, “I want to be consultative,” what most of us mean when we say that is, “I don’t want to be high pressure, I don’t want to be a hard sell, and I want to ask really good questions.” That’s not what the word “consultative” means. Consultative means you tell them how to run their business. That’s what you do. When you are consulting with someone, you’re telling them, “These are the best decisions for you to make to get a better result in your business.”
Consultative comes with that advice. The challenge for most of us is we don’t work on the intangibles. In one of the chapters at the end of the book, it’s very helpful to have a sense of humor and levity. It’s very, very helpful to be thoughtful, and follow up, and care about people. Those kinds of things over-index on preference even though we don’t talk about them. We’re so transactional right now. I think one thing that technology has done that’s probably hurt sales organizations more than anything else is that you have an example of amazon.com where Bezos has 300 salespeople for AWS and that’s all they have. They don’t have any salespeople. He thinks they shouldn’t have any salespeople at all. That’s his vision.
You have a whole bunch of people trying to optimize everything to the point that they can eliminate all of the friction that comes with human interactions, and someone should just be able to order what they want and buy, but that’s not the world that we live in; that’s one of the view of the world that we live in that we’ve gone super transactional. For things that you don’t care about, you’re going to be more and more transactional over time.
I’m sitting in a loft to stock this place up with the stuff I need to be able to do work. I reach out to Amazon. I had them bring water, and coffee, and all kinds of other stuff. That’s easy. When you’re making a decision where the future of your company depends on that decision, you want somebody that you have a deep relationship, that knows your business, that has situational knowledge. In one chapter, we talked about the 52% SME.
You maybe don’t have to be the SME but you’ve got to be half or better of a SME because you have to be able to talk about these things in a way that allows you to have somebody make the decision. I prefer to work with you instead of someone else, and that’s really where the bar is set right now, whether we like it or not. I will tell you the second choice. Super transactional is certainly a choice but, for most of us, the right choice is super relational. How do I become high-trust, high-caring, high-value where people prefer to work with me? That’s the part where you have to do some work on you.
Marylou: Exactly. For those of you who are wondering what the heck is SME, it’s “subject matter expert.” When I first saw that term, too, a long time ago, I went, “What the heck are they talking about?”
Anthony: “What’s a SME?”
Marylou: “What’s a SME? What does that mean?” We’re pretty much out of time, Anthony, but I want to make sure that the listeners know the books. The first one is The Only Sales Guide You’ll Ever Need, except for the next two, which are The Lost Art of Closing, a great book, and that came out just last year, 2017, and then this book, Eat Their Lunch. They are great books. It’s a trilogy. If you are inclined and you’re really wanting to make a difference in the way that you work and the results you’re going to get, I recommend all three. I think it’s best you do them in order, but Anthony can tell you what he suggests regarding that.
Anthony: Doing them in order is great, but what I sent to somebody who asked me that yesterday on LinkedIn is I said, read the first two chapters of Eat Their Lunch, and then read The Lost Art of Closing, and then read the first book. I wanted to just give them a jumpstart on Level four because once you get that into your mind, it affects the way that you think about everything. You realize, “Wait, I need to start way, way higher than I am,” and that tends to help them a lot.
Marylou: That, and you also need to be nimble. It’s not a Level four conversations. That’s a big part of this, especially since we are talking, and more people are getting involved in decisions, and we need to switch gears when we sense that we’re talking to a Level two or Level three. We don’t have the same story that we tell to everyone in the prospect’s company. It just doesn’t work.
Anthony: That is right. Serve the person in front of you.
Marylou: Yes, yes. Anthony, always a pleasure. I really thank you so much for starting my new year off, this is my first interview of the year.
Anthony: Me too, thank you.
Marylou: How is the best way for people who want to follow you, learn more from you, apply with your teaching? What’s the best way we can reach out to you?
Anthony: thesalesblog.com, I publish there everyday. There’s the newsletter that’s probably the very best way that people can connect.
Marylou: Okay, I’ll make sure I put that in the show notes. Anthony, thank you so much for your time today.
Anthony: Thank you, Marylou.