Welcome to the Eventual Millionaire Podcast. I’m Jaime Tardy and today we have Jeffrey Fox on the show. Jeffrey is the founder and president of Fox and Company, Inc., a marketing and consulting firm that helps companies increase revenues and profits. He’s a popular speaker, graduate of Harvard Business School and author of a series of international best sellers including How to Become a Rainmaker, How to Become a CEO and How to be a Fierce Competitor. Thanks so much for coming on the show today, Jeffrey.
JEFFREY FOX: Thank you very much for having me.
JAIME TARDY: Well you have a wealth of information. I read a lot of your books on marketing, sales and leadership so I am really excited to delve into that today. But let’s go back and sort of start at the beginning. Can you tell me a little bit about what your background is and how you started in business?
JF: After I graduated from Harvard and the military stint, I went to work for three consumer package goods companies, if you will, Hugh, Blind and Pillsbury first which were wine, food and beverages and then the Loctite Corporation although it’s business to business, it is has a consumable product, industrial consumable and it was my feeling all along that if you use consumer package goods, marketing techniques, selling techniques with industrial products, you could create a competitive advantage over the industrial companies. That is in fact the case.
I came up with the concept. They didn’t call it the time dollarization but I called it price to value where we priced products to the value, the dollarized value the customer got and not to some sort of a gross margin target or to a manufacturing cost recovery strategy but rather to pricing to value. And when I started Fox and Company, all three companies, Loctite, Hugh, Blind and Pillsbury became clients the first week.
JT: Nice! So how long ago was that? When did you start Fox and Company?
JT: Oh wow, nice. So you guys have been around for awhile.
JF: Yes. We started when I was early in my career and young and it’s been great. Our clients are wonderful companies. They’re blue chip companies. You know, it’s funny, when I started Fox and Company with the concept of increasing revenues and increasing customer gross margins, I would look at billboards that are unreadable. I’d look at salespeople unprepared, brand names that are terrible and all those kinds of things, wasted money in advertising and I just thought companies would beat a path to my door to fix those things.
As it turns out, only the great companies come to me, only the good companies. All the other guys out there with the stupid advertising and so forth don’t even know it so they never come to a Fox and Company but companies like GE, IBM, Schindler Elevators, Seiko Bain and many companies probably your listeners have never heard of are wonderful companies always striving to be better; the real fierce competitors of the world, if you will. Those are my clients – small and big.
JT: Well that’s what I was going to ask. What size companies do you usually work with?
JF: Well, you know, it’s hard for people sometimes outside of this to see it, but large companies are really collections of small companies many times. I mean they may be quite big in terms of their relevance to outside companies but inside, they all have the same budgets, they all have the same pressures and so forth. So my clients range, I think our smallest client has 80 employees and, of course, our largest client is GE probably got 300,000 employees. I don’t know. But we work for the companies within those.
JT: Okay, so sort of the sections of the companies.
JF: Like GE Motors or GE Lighting or GE Capital, all great, great wonderful companies with terrific leadership.
JT: Great. So you can see similarities between the 80 person companies and huge companies all along?
JF: Oh yeah, and I can see where the best practices can flow in each direction. Great small companies do a lot of things that big companies should be doing, especially at the leadership levels. You know, the guy that runs a five man lube shop probably makes more decisions in a week than the CEO of Ford Motor Company makes in a year.
JT: Wow! So tell me about those distinctions and tell me about what makes a really great small company.
JF: Leadership, the CEO. In the United States, according to the government census, the definition of small company or small medium or whatever, is 5 or 100 or less employees. There are approximately 25 million of those companies, 17 million of which are probably 10 or less employees. Those companies are out striving every single day to do something. The CEOs and the managers of that company get up early. They work hard. They’re always trying to do something to improve their business.
They don’t have the resources the big companies have. They take much greater risk than the management of big companies do. They’re willing to do things in the toughest of times. They can’t quit. They don’t quit. There’s a lot of that. Then there’s the handful of great competitor, fierce competitor companies, big wonderful companies and when you start to see those companies go into decline, it’s almost invariably because there’s a new CEO or new senior management that’s weak. Weak senior management will kill a great company.
JT: Wow. Okay. So what are some of the things that leaders should be doing right now? I know with the economy and everything like that, what can we do right now to be great leaders?
JF: Well, one of the things that’s an amazing statistic but it’s in fact true, it’s pathetic but it’s true, that in tough times, corporate sales forces, I’m talking about large sales forces, many of those sales forces make 30 percent fewer sales calls in tough times than they do in good times. They have all kinds of socially sounding acceptable excuses like, “Oh the customer doesn’t have any money. The engineers have been laid off. The customer doesn’t have time to see me and so forth.”
And those are all socially sounding acceptable but they’re not acceptable. In tough times, companies should be making 30 percent more sales calls than they do in ordinary good times. The reason for that, especially in business to business, business to business people they don’t sell products, services. They don’t sell technology or patents. They don’t sell features or benefits. What they sell is the dollarized outcome, the dollarized value the customer gets for the product or service.
You heard the old expression people don’t sell drills, they sell holes. Well, in reality, what they sell are perfectly round holes that don’t require re machining and they do 17,000 a minute. Those figures can be dollarized and the value of that dollarization is what companies buy. Companies buy for only three reasons: to cut or eliminate current costs, to increase gross margin dollars or to avoid the catastrophic cost of a future event. That’s the only three reasons they buy. Therefore, the great salespeople, the rainmaker companies, the fierce competitors, they sell money. So it doesn’t matter how tough times are. If you are selling money, then that’s the time most customers will talk to you.
And one yes trumps hundreds nos. So what people should be doing today, they should be out making sales calls. They should be dollarizing the value of their products. Instead of saying our products last longer, they should say our products last two years whereas the other guy last one and if you need to buy two of theirs to match one of mine, because our lasts twice as long, and the other one is $5,000, you have to buy two of them, that’s $10,000. our product is $7,000, it’s higher priced but it’s $3,000 lower cost.
JT: Yeah, so tell me more about dollarization. So you’re just pretty much putting numbers to products or services, right?
JF: What we do and what the great companies do, every advertising claim, no matter what it is can be dollarized. If you’re claim is your products last longer, are faster, lighter, quieter, whatever, you can turn that claim into numbers. If you can make the claim that we last longer, then what are the facts? Our product lasts two years, the other guy lasts one year. That’s a fact. Well then you can dollarize that difference and that’s what we do for clients all over the world.
Our clients sell money. When we’re done with them, they aren’t selling mass spectrometers, they’re selling ten freed up days of a pharmaceutical laboratory and each freed up day is work a million dollars so when the customer gives our guy $450,000 for a mass spectrometer, our guy in turn gives that customer 10 free days of laboratory time or $10 million. So, $10 million minus 450 is $9,550,000. That’s the return on investment a big farmer gets from investing in our client’s mass spectrometer. You can do that for every single product.
And for new products, if the dollarized value is in fact not as good as the prevailing pricing of the competition, then you don’t launch the new product. If you dollarize the value of your product and services to XYZ company and you cannot show the company a true dollarized value proposition, a positive return on investment in your product or service, then you don’t sell to that company. You sell somewhere else. So, in tough times, he or she who sells money has a distinct advantage over he or she who is selling a product asking for money.
JT: That makes perfect sense. Who wouldn’t want to buy money?
JF: That’s exactly right. You mentioned at the beginning that one of my books, How to Become a Rainmaker. One of the chapters in there is show them the money. I wrote another book with one of my colleagues called The Dollarization Discipline. Different than my other ten books. I have written eleven. The Dollarization Discipline is more of a technical book. It’s easy to read, of course, but it’s technical and shows all the math and all that kind of stuff. That was rated one of the 30 best business books of the year when it was published. But dollarization, in my view, it’s dollarize or die.
JT: That’s excellent. So what’s the first step that a small business can take to really dollarize their product or service? Just pick one and have your salespeople start throwing the numbers around. Is that the best idea or what?
JF: The way it works is, for example, I’ll be making you talk tomorrow to national sales meeting of one our clients and I’ll be showing the examples of dollarization. They have a product that’s a cleaning fluid. They use it to clean fiber optic cable and clean, any customer product, high value product that needs to be perfectly clean is a customer potential for my client. So why does someone clean something? They clean something so that when they send it out, they don’t have a product recall. The customer sends it back and says look this product was dirty. I couldn’t use it in my implant or whatever.
Well, the cost of that recall is the true cost of having a product that’s unclean. So let’s say the competitor is $0.50 and we’re a dollar but the competitor’s product has 5 percent recalls, that 5 percent recall times the number of products sold times the cost per recall is the true price of the competitor. Whereas our guy, if he has zero percent recall, that’s the value the customer gets. I don’t think the sales force should do it. I think that marketing should develop the calculations and so forth and marketing might be the crux of the company.
The sales force can help but what you are trying to give the sales force is a selling tool so the salesperson goes out there and sells money. That’s what your listeners, especially the business to business listeners, should be doing. They should be calculating the value of their product to their customer and the way they start doing it, Jaime, is they start doing it by answering the most important question in business and that question is: If I were the customer, knowing what I know about the customer, the competition, the marketplace, if I were the customer, me the salesperson, why would I do business with me?
And if they can answer that question honestly, objectively, hard headedly, hopefully in terms of dollars and cents, then they have an ironclad platform for making the deal. But they have to ask that question. If I were the hiring manager, why would I hire me? If I were the reader, why would I read this advertisement? If I were the consumer, why would I pick my package off the shelf versus the other guy’s package? That’s the most important question in business and every salesperson, especially rainmakers, as part of their pre-call planning, they answer that question. Once you’ve got it answered now you know how to show the customer the dollarized value proposition.
Don’t use words like value added. That’s cliché. It means nothing. It means nothing. What you have to say is “Mr. Customer, if you invest in this product, you will get this return because we will have reduced your warranty claims. We will have reduced call backs. We will have reduced your cost of assembly.” I’ve got a client called me yesterday. They’re talking to a customer that assembles products in their factory floor. My guy can assemble it at their factory and ship the customer one finished part.
What does that save? Well, the customer now is buying five different parts from five different suppliers, all the cost of transaction, the cost of late shipments, the cost of defective shipments. Then they’re putting the assembly together in the factory floor and what does that cost? Well, it takes 15 minutes per assembly, there’s 1,000 units to be assembled. That’s 15,000 minutes. You divide it by 60 and their labor cost is $45 an hour. So $15,000 divided by 60 times $45 is the cost of, to my client’s customer, of doing the assembly in house.
Now my guy can do that and they save the assembly money, they save all the different transactions with dealing five different suppliers. They save the capital that can be freed up, the factory floor space that can be freed up, etc. All those things can be dollarized. The guy is going to close the sale because he’s selling money.
JT: Yeah, it makes it a no brainer for the person who is buying it because the upside is so much higher than the downside.
JF: Totally. There’s no downside.
JT: Yeah, exactly. Money!
JF: But he goes in there because it appears that his unitized assembly, the price for that, is greater than the “price of buying these five separate products.” However, when you dollarize the value of reduction of assembly time and inventory and floor space, my client’s product is the lowest cost solution.
JT: And what you’re saying is if, when you dollarize it, it’s comparable to what they’re doing right now, then you don’t sell to them.
JF: That’s right. I mean there’s a cost to switch. They have to re-qualify the customer. They have to do all these things. If the cost of switching exceeds the dollarized value they’re going to get from the customer, don’t bother doing it. You wouldn’t do it because you’ve answered the question. If I were the customer, why would I do business? And, if you answer the question and says I wouldn’t change, then don’t.
JT: So tell me more about, you know a ton about sales and you have in your whole book about being a rainmaker, you talk about killer sales questions and a shot at the goal is never a bad play. Give me some advice and tips on sales or maybe even walk me through like what a great sales meeting would be using your advice.
JF: The reason I have the killer sales questions both in that book and in the sequel which was called The Secrets of Great Rainmakers, another book I have, is because great salespeople, the rainmakers, 5 percent of the salespeople who ring the cash register regardless of the economy, they come in all different sizes, sexes, ages, ethnicities and what not. But what is a common characteristic of a great salesperson is that they one, they pre-call plan every sales call in writing. They don’t wing it. They don’t rely on their experience. They don’t rely on their relationships.
They pre-call plan every sales call in writing and that means they right out the key questions they’re going to ask because great salespeople ask questions. They don’t talk and tell. They ask and sell. Second thing they do is they sell money. They dollarize the value that the customer is going to get from their products and services. They don’t sell technology. They don’t sell chemistry. They don’t do that stuff.
The third thing they do is they always ask for a customer commitment to move the sale along. So a great sales person doesn’t go in and look at the guy’s office and see a deer mounted on the wall and say “Oh, I see you’re a deer hunter. What’d you do? Run that deer down last night with your headlights?” They don’t do that. They never open a question with a so-called icebreaker as the old fashion selling jazz. What they do is they open the sales call by saying, “Mr. Customer, as we discussed on the phone, this meeting will take about 30 minutes. Is that still your understanding?”
That’s how you open a sales call. Because now, the customer says, “Yes.” It’s a tension breaking question for both the seller and the customer. The customer is always thinking how long is this guy going to take? What is he trying to sell me? All these kind of things. So that’s how you open it. Then the second question is: Mr. Customer, as I discussed on the phone, the purpose of this meeting is for me to show you how we can reduce your assembly costs by $20,000 a month. Is that something that’s still of interest to you? The guy says, “Yeah, of course.”
He said, “Well, if I can demonstrate to you how we can reduce your assembly cost by $20,000 a month would that be the basis for doing business?” Guy says, “Well, maybe.” So let me an agreement with you. Will you judge the facts and decide for yourself? The customer is thinking well of course I will. What do you think? So then what you do is you walk the guy through it. You say, “Well how many parts do you assemble in a year?” And the guy says, “A thousand.”
You say, “And what is your cost per assembly?” I mean, what is your time minutes per assembly and the guy says, “15 minutes.” So wouldn’t you agree that’s 15,000 minutes, Mr. Customer? Yes. What’s 15,000 divided by 60? Whatever that number is. Then you say, “And what is your fully loaded cost per assembly worker?” The guy says, “40 bucks or 45 bucks.” You say, “Okay, therefore, it’s costing you X amount of hours times $45 an hour to assemble this part, don’t you agree?” Yes. Well if you bought it from me you would save all that money. How does that sound?
That’s what a great salesperson does. See, he walks him through the thing and he says stuff like, if I can demonstrate that I can save you this, would that be the basis for doing business? That means it’s up to the salesperson, it’s the salesperson’s sale to lose at that point. Once the salesperson demonstrates that he can save him X amount of money by eliminating the assembly process, the customer has to judge the facts and decide for themselves. They agreed to do that. Now the facts are crystal clear. So in order to reject the salesperson, the customer has to first reject themselves and they won’t do that. See what I mean? That’s what a great salesperson does.
JT: Wow. It seems like it is so based on fact. I know, in reading some books about sales and things like that, it’s all about know, like and trust is what they talk about.
JF: It’s about what?
JT: Know, like and trust.
JF: Oh, okay.
JT: But what it sounds like you talk about more than you need to be likeable and talk about the deer head, it’s more about getting the facts and making an objective decision. Is that true?
JF: Yes. Customers know what you’re there for. They know how you earn a living. They know how you pay your mortgage and your car payment. They don’t want to waste your time. If you want to talk about the deer, you talk about it at the end of the sales call. That’s when icebreakers are used. That should be a tension breaker, a tension reliever, after the customer has given you a commitment to an action that will lead to a sale.
You get up gracefully and leave. Then you might, if you want to ask about the damn deer, but really what happens is salespeople should never ask a question that they don’t care about the answer. They should never ask a supercilious question. They should never ask a question like “Oh I see you went to Penn State. What do you think of Joe Paterno’s football?” Whatever. Never ask that kind of question.
You should never even ask a question like do you have any children? First of all, you don’t care about the answer. Secondly, that could be a point of sorrow or chagrin for the customer. Why even introduce a negative even if unwittingly? Only ask questions that will help you learn from the customer and the customer will learn by answering the questions.
JT: So what’s your best advice on someone who is really trying to be a better salesperson in preparing and really learning how to do this type of sales call?
JF: First they should read my books, of course.
JT: Of course.
JF: Because they’re so practical. I wrote the books for our guys and for myself. I didn’t write the books to fail, we wrote the books, I wrote the books to succeed. So I know it’s a little bit of self promotion there but I do believe that’s true.
JT: I’ll interrupt you for a second because I’ll say they’re excellent books and even at the very end, I loved how you said, “Open it up to any page and point your finger and just go do that.” Because that’s how you’ve written them so well and so easy to read that each point you can go ahead and take action on which I think is really impressive.
JF: That’s right. My books are to be used that day. They’re not nuance. They’re not hypothetical. There’s not it may be this, if that, boom-boom. It’s the do what I say. I think that’s what is in those books, I know what’s in those books is correct and right. It may be very counterintuitive. It may be contra to what everybody has learned. It may be completely opposite of how they’ve been trained. That matters not. What I have in my books is correct. So the first thing the salesmen should do is read those books.
The second thing the salesperson should do is answer the question why should the customer do business with me, hopefully in terms of dollars and cents. The third thing they should do is pre-contact research on the customer. Learn as much as you can. Become surprisingly knowledgeable about the business. Then based on some sense of a dollarized value proposition, you could might give the customer. You use that to get an appointment but either with a letter first and a follow-up phone call or whatever, you get the appointment. After you get the appointment, then you should spend, depending on the level of decision making person you are calling on, a couple of hours in writing, pre-call planning the meeting.
What objections to I anticipate? How am I going to overcome them? How do I open the sales call? What are the needs analysis questions I am going to ask? What surprises might I hear and so on? Once you pre-call plan in writing, you are going to be a 50 percent more effective salesperson and effectiveness is based on call to close ratio. So, if it takes you eight calls to make a close and you pre-call plan in writing and you try to dollarize your value proposition and you write this stuff out like I suggest, instead of taking eight calls to make a close it will now take you four. So that’s what great salespeople should do.
JT: It’s so funny. I remember when I was first getting into sales and stuff. I would print out, I would do the exact same thing that you were talking about and printout almost a script of sort of the questions I needed to ask, lighter on the printer so it would be gray so that way my prospect wouldn’t see all these questions that I had written down to sort of prompt me just to make sure I knew what I was going through when I was first learning. So I think that’s a great idea just to sort of know what you’re going to be going into and really not waste anyone’s time.
JF: By the way, I think what you said is great but I also say to salespeople you can show the customer the questions. You can say, “Mr. Customer,” one of the questions could be, “Do you mind if I ask you a few questions?” That’s question. Show them the questions just like you’re a doctor. Every time you go for a physical they’ll ask you the same questions every year. It’s perfectly all right. Customers love that.
All the studies we show, we see that sales, the biggest complaint that customers have is that salespeople are not prepared. That’s the number one complaint. That at least 50 percent of the sales people that call on them are totally unprepared. They don’t know what the business the guy does. They don’t know anything. They don’t have any questions to ask. They’re just terrible. At least 70 percent of all salespeople don’t ask enough questions and don’t listen with care. They don’t ask, they just talk too much.
Only about 10 percent of salespeople are considered by professional buyers to be truly professional salespeople. And you want to know why? It’s because becoming a salesperson is relatively easy. A Galapagos turtle can jump over the barrier to some companies to become a salesperson. Fog a mirror and you’re a salesperson. However, to become a member of the president’s circle, to become a rainmaker, means you have to look at sales as a profession and as a difficult profession.
It’s the only job in the company that faces rejection every day. It’s the only job in the company that requires practice. The director of human resources doesn’t practice. The director of manufacturing doesn’t practice. Salespeople have to practice. They have to practice their questions. They have to practice how they’re going to handle objections. They have to be professional and trained and skilled and they have to work at it every day. You learn something every single day, if you’re really looking at yourself as a pro.
JT: Let’s talk a little bit about sales a little bit more. You talked about getting the appointment but also in your book you talked about don’t make cold calls. So tell me more about how to get an appointment.
JF: Well, first of all, let me define a cold call. A cold call is like those telephone calls you get at 6:00 at night, telemarketing thing. A cold call has about as much probability of making a sale as throwing money on a roulette wheel. The customer may not be there. The customer doesn’t know you. The customer, it’s an interruption and so forth and so on. That’s a cold call. Very, very, very low close rate. Like maybe 2 or 3 percent out of 100.
How do you get an appointment? You get an appointment when you have a fairly good idea, a high degree of confidence that you can improve the economics of your customer by XYZ. Once you have that, you can write a customer, Dear Mr. Customer, based on our experience we have a high degree of confidence we can save XYZ company $100,000 a year. It’ll take about 15 minutes or 10 minutes to explain how that’s done. If you don’t get a hold of me at 1-800-RAINMAKER, please expect a polite follow up. Sincerely yours. P.S. I’ll bring along some examples, some case histories of where other companies have achieved similar success.
That’s your letter. You keep calling until you get an appointment and when you call up, you follow up, I’m following up on my letter of so and so that indicated we have a high degree of confidence we can save you $100,000 a year or whatever the value is. Is that of interest to you? The guy says, “Yes,” you say, “Okay, are you free 8:00 Monday morning?” “No.” “Are you free Tuesday afternoon at 4:30 p.m.?” “No.” “Are you free Thursday morning at 6:15 a.m.?” “Yes.” “Okay, I’ll be there at 6:10. It’ll take about 15 minutes and I’ll show you how you can save $100,000 a year.” That’s what you do.
JT: Excellent. So let’s go and talk a little bit about how you get that $100,000 number when you don’t know the company specifically. I mean I know…
JF: You know your products, right? Let’s say you have a product and you’re selling an industrial adhesive, a sealant, and that sealant is used to reduce hydraulic oil leaks. Okay, that’s why you do it. So the oil doesn’t leak on the factory floor. So, if you have a customer where you believe that they’re using hydraulics and they’re having oil and it’s leaking, you can calculate, if you stop the leaking, how much oil you would save the customer. So let’s say there’s a leak and it’s a drop a minute or something like that, so that’s 60 drops an hour. What does that add up to? It adds up to X amount of money wasted.
So what you do, as a salesperson, then you go online, you visit the customer. You talk to people or whatever and you find out that they 100 fittings in their factory, none of which have been properly sealed because the product wasn’t put in by the OEM hydraulic manufacturer and you calculate that it’s costing the customer $10,000 a month in wasted hydraulic fluids that’s dripping on the floor, the cost to clean up, the cost of people getting hurt by slipping and falling, etc. You do a rough idea because you know the products and you know what happens if you seal these fittings, they’ll no longer leak. By the way, I’m giving you an actual case history when I’m talking about this.
JT: Oh really.
JF: An actual case history. So then you go online. You do whatever you find out and you find out who the decision maker is, at least who you think it is, maybe it’s the president of the company, maybe it’s a vice president of sales and marketing, somebody. You write Dear Mr. CEO. Based on experience, I have a high degree of confidence we can save you $10,000 a month in reducing your hydraulic leaks. It’ll take about 15 minutes to explain. If I don’t hear from you at 1-800-RAINMAKER, please expect a polite follow up. Sealingly yours, Jeffrey Fox. P.S. I’ll bring some other examples.
That will help you get the appointment because it’s management malpractice not to listen to you. And we’ve done the surveys with hundreds of CEOs. They never get those letters, well, never. They rarely get those letters. When they get that kind of a letter, they always act upon it. Either they see the person or they direct the letter to the person who should be seeing that person. That’s how they do it.
JT: Great evidence. That’s awesome. So not only do you have evidence on your sales sides but you have evidence from the CEOs too. That’s excellent.
JF: That’s right. We do. They always do, always. I mean just ask yourself, if you got a letter from a legitimate, ethical company and the person was clearly knowledgeable about your business and not one of these email things you get all the time, which I looked at your website and I can help you do this. I don’t know who those people are. I get an email blitz, they don’t know anything about me. They sent the same one to every single person. I’m not interested. That’s not a rainmaker, that’s just somebody throwing stuff out.
Now you mentioned before, one of my lessons in How to Become a Rainmaker is a lesson on shot on goal is never a bad play. Well that’s a term that’s from hockey. You take a shot on goal, maybe it will bounce in. So it’s never a bad play to take a shot on goal. This is in reaction to that thing about never make a cold call. Okay. Never make a cold call but it’s Friday afternoon, you’re up in Travers City, Michigan. It’s 3:00 in the afternoon. It’s getting dark. It’s snowing and you’re going, driving back to your house or your office, whatever and you see the lights on in a factory or a company that looks like a customer of yours and you go in and introduce yourself.
That’s a shot on goal. It’s never a bad play. You got to know the rules to make it. It’s a cold call. You’ll probably have, there will probably be rejection but if you don’t go in, you definitely will be rejected and you can see what happens. Sometimes those work but it’s only when you have that moment in time when something else has happened, when a customer call has been canceled for one reason or another or whatever. Yeah, I say never make a cold call but on the other hand, you got to know the rules to break them and a shot on goal is never a bad play. It just should never be a consuming strategy.
JT: Definitely. So what about rejection and dealing with rejection because a lot of salespeople, especially when they’re first learning, you know, can get really, really a bad taste in their mouth just because of all that rejection. How does a good salesperson, a rainmaker, really get past that?
JF: Well, first of all, about 95 percent of all salespeople it is estimated, corporate salespeople, it is estimated never ask for the order. That’s because they fear rejection. They never ask the order, they fear rejection. Ironically, the rainmaker who is always asking for customer commitments does get probably more rejection than the ordinary salesperson but he knows that one yes trumps a hundred nos. That said, what the rainmaker does is sell money and when you are legitimate, honest and a professional salesperson from an ethical company and you are selling money, you engage the customer very early on, on how much money the customer can get. It’s either in reduced or eliminating current costs, increase of gross revenues or the avoidance of a catastrophic event cost.
When you are selling money, rejection rate is very low. It’s like this, I call you up and I say, “Hi, Jaime. This is Jim Flaherty, O’Connell, Flaherty and Atmore. We’re attorneys in West Hartford, Connecticut. We have a high degree of confidence that a distant relative of yours may have left you $140,000 in her will. If you’re interested, please call 1-800-LAWYER.” You think you’ll call? Of course you’ll call. And so that’s what a rainmaker does. A rainmaker leaves an equivalent dollarized value proposition for the customer.
The rate of rejection drops enormously. But you got to sell money, you can’t sell titanium hardened locks. You got to sell a reduction in breaches, a reduction in thefts, an increase in safety, a reduction in assaults. That’s why people buy locks. Every one of those costs can be dollarized.
JT: I’m really curious about how you feel because I’m in sort of the internet world, right, where a lot of people want people to come to them. They don’t want to have to go out and sell and pick their prospects and really have to deal with the work of prospecting. How do you feel about the difference of an online business versus an offline business where you’re actually going out and trying to get the sales calls?
JF: Well, I suppose it depends a great deal on the business. But the essential weakness I think in having an online business is that people have to know where you are and they have to go there. So, in other words, it’s like running an ad on Page 5 of People Magazine that says, “See our ad on Page 35.” In other words, you have to kind of create, make your site a destination and you got to do all kinds of things to do that.
The second weakness is that you are essentially doing what that telemarketer just did. What’s the difference between a telemarketer and a teletexter or whatever you call it? They send out these email blitzes that I get two or three a day from people who said they’re going to fix my website. They’re going to do this. They’re going to do that. I don’t even know who they are. I have no idea how that relates to me. What the values are to me, why it’s different or whatever. I think those are weaknesses.
Now, on the other hand, I think that these internet businesses are going to flourish. They’re going to grow. People are going to learn how to market. How to identify prospects. How to create a dollarized pitch that resonates and so forth. But it’s almost by, it’s really another media. It’s not really another business. I mean just like selling feet on the street as part of your distribution or part of your selling channel as trade shows are, as advertising is, the internet is one more of those.
An internet website is Store No. 101. It will evolve. It will get there. When customers become more accustomed and less irritated by intrusive emails and so forth that these businesses will grow. But it’s really hard to eliminate the rainmaker in front of a customer because nobody makes an internet sale to business to business without having some high level executive at the customer signing off on $100,000 deals.
JT: Oh yeah, definitely. Yeah, when you’re dealing with that much money you got to face-to-face is really the only way. So I like the way how you said though it’s just another component. So even if you are an online business incorporating these tactics with sales would greatly increase what you’re doing because no other online companies are really doing that anyway.
JF: Right. I mean there’s some wonderful online companies. But they have real tangible products. They have tangible customer service. I mean like Zappos. I mean they have people on the phone, 365 days a year all around the clock. Their distribution centers are open all night. They have these fabulous customer service policies of shipping you eight pairs of shoes and then for free and you shipping back seven you don’t like for free. I mean that’s a tangible business and the shoes, of course, are tangible. They can look at them in a catalog.
The thing what they solved is the problem of people wanting to know if the shoes fit before they buy them and they solved that by free shipping both ways. Very, very smart.
JT: Definitely. Yeah, he’s a great CEO. So tell me a little bit more about Fierce Competitor because I really enjoyed that book. What is a fierce competitor and what are sort of the characteristics of a fierce competitor company?
JF: Well, first of all, fierce competitor does not mean a snarling, growling beast in the jungle. A fierce competitor, these are ethical companies. They’re honest. They’re good community citizens but they are relentless, tireless, determined to get every good customer in their marketplace and they outsell, they out hustle, they out innovate, they out work, they out advertise, they out train better than does their competition.
The fierce competitors are just never ever let up and you see them, leadership companies, all over the world usually have a fierce competitor CEO who hires other fierce competitors and they simply set the performance bar, crystal clear bar and they inspect relentlessly that people are hitting those performance bars. They’re just great companies.
JT: So how do we find, how do we become one if we’re not already? Like what are some of just a couple of key characteristics that we can really work on that would help us become a fierce competitor?
JF: Well, you have to realize that what’s your strategy that gives you a competitive advantage and are you executing that constantly, relentlessly. I mean if everybody else closes on Sunday then should you open on Sunday? A fierce competitor wouldn’t think about it for two seconds. They’d be open on Sunday. If a customer asks for blueberry pie and all you’re serving is strawberry pie, blueberry pie is there the next day. Fierce competitors do whatever is ethical and whatever is legal to get and keep every customer.
JT: Yeah, because I love how you say every customer counts. It’s not about, you know, just trying to get the mass of so many people. It’s just about getting every single one of them counts.
JF: Right, every customer counts. Exactly.
JT: Excellent. So what are some of the resources that you turn to? I mean I know I highly recommend your books in general and I am actually going to be linking to them underneath in the show notes but what are some resources that you turn to or books that you’ve read that have helped you in your journey?
JF: Well, I think the books by David Ogilvy, one on advertising, Confessions of an Advertising Man, I think these are written in the ‘50s. Fabulous books. Great books. There’s a book called Obvious Adams, it’s a very small book. I think it’s 28 to 56 pages long. Those were originally an article in a magazine in the 1920s. Awesome book. Up until I wrote my books, I used to buy those books and give them to potential clients. Now I give them my books.
I think certain books by Peter Drucker, his books, I don’t remember the titles very well, but usually his marketing and management books are great. Drucker had the ability to also have simple insights into what made business work. So I think David Ogilvy and Obvious Adams and Peter Drucker are really strong, solid books.
JT: Excellent. I’ll definitely link to those two. I specifically read three of yours – How to Become a CEO, How to Become a Fierce Competitor and How to be a Rainmaker and I thought they were extremely good books. So, like I said, I highly recommend those too.
JF: Thank you very much. If I could do a plug here. How to Become CEO is my first book, which I wrote originally for my children. That was a New York Times bestseller business.
JT: How did you do that, for your very first book, how did you get it on New York Times bestseller?
JF: Well, it’s complete luck that I got into the book writing business. As it turns out, I was giving a talk. I was a trustee at Trinity College in Hartford, Connecticut. They asked me to give a talk one evening to 35 young men and women who were graduating who were not only academic all stars but they were varsity letter winners. I brought this densely typed untitled monograph which was ideas for them when they went out into the big bad world. Unbeknownst to me, they started making copies for friends and family and things like that.
And all of it, some of it, most of it got into the hands of a book packager in California. He called me up and he said, “I think you have a book” and a week later, he got me an agent. Three weeks later, she sold the book to Hyperion and then when it was published How to Become CEO was a bestseller on all those places. It has been published in over 35 languages. It was number one in Singapore, Hong Kong, France. I also believe Russia and some other places. I’ve had four books that have been number one bestsellers in France.
JT: Oh really!
JF: There are over 200 foreign editions of my books. Then How to Become a Rainmaker was just selected as one of the 100 best business books ever written.
JT: Wow, congratulations!
JF: I have a book that didn’t sell very well because I didn’t title it properly. It’s called Rain, What a Paper Boy Learned About Business. Rain is the name of the kid. He’s 13 years old. He delivers the paper in the morning in New England. I love the book. The first part of the book is a series of small challenges, stories that Rain faces like mean dogs, customers who won’t pay and a bully. Then winning, have to win a contest and he solves those problems in unique and surprising ways.
That’s the first half of the book. The second half of the book takes you to those chapters and uses the metaphor for life and business. For example, mean dogs obviously, in business, mean dog could be, you know, a monopolistic supplier. It could be a terrible boss or whatever. The reader has a series of questions, like a Harvard Business School case study, to deal with. So that book was one, the number one audio book published last year. The Audies are like to the book business which Grammys are to the music business. I mean real, real small but they do all the audio books and my books are all on audio as well.
So there are 11 books and I believe there’s 11 audio editions which are, for a lot of salespeople, an easier way to go because they can listen to it in their, so the Rain, What a Paper Boy Learned About Business is one of my favorites. I do think my newest book, How to be a Fierce Competitor is the one, however, that is both timely and timeless. I believe all my books are timeless and timely but this one is appropriately more timely than others because the tough, tough economic times people are facing either in a corporate basis or on their own.
And I also wrote a book that some of your readers might be interested. It’s called How to Land Your Dream Job. It was originally published as Don’t Send a Resume and Other Contrarian Rules to Get a Job and then they renamed it, which I don’t like the new name, which is How to Land a Dream Job. But that’s a cult item from a lot of people on how to get a job regardless of the economy.
JF: It’s a way to market yourself. Again, you dollarize the value of yourself.
JT: What a good idea. Yeah, I could send that to some people that I know. That’s excellent. So you have, I mean you’ve got a wealth, 11 books of advice. But for the last question, what’s one action that listeners can take this week to move them forward towards their goal of a million?
JF: To becoming a millionaire? I think two things they should do. Number one, they should take a day or an hour or something and just work on their business instead of in their business. What is the difference? On their business is where they’re plotting strategy and so forth and thinking what they’re going to do, the next new brand, the next new product. They’re working on the business versus in the business which is you’re a dry cleaner and you’re ironing pants and cleaning shirts and folding them and hanging them. That’s working in the business. You know, paying the bills is working in the business.
The second thing people should do is spend the day or whatever, a whole dedicated time, more time than they do today on outbound selling. Whether it’s trying to attract and find new prospects or getting appointments or making sales calls, they should dedicate themselves, at least one day, at least a full day to doing nothing but that. So working on the business is something they could do and then working to get new customers is something they should do.
And then the other thing, if you want a third thing, they should spend some time making sure they just never neglect or forget the great current customer. Just a handwritten note of sending a clipping out of a paper, just a thank you note, anything that always keeps you in mind and in front of your great current customers.
JT: Great advice. I highly recommend people to go ahead and pick out those times in your calendar like right now so that way you can take a day to work on your business, plan a day for outbound selling and maybe even today just send a couple of your current customers, your great customers, a thank you note.
JF: I guarantee you all your customers have on their calendar blocked out Thanksgiving and Christmas and Sundays, right? So why don’t they do the same thing for their business?
JT: Definitely. If we want to be millionaires, that’s what has got to happen.
JF: That’s right.
JT: Excellent. So where can we find you or where can we learn more about you online too?
JF: Okay, well my company is located in Chester, Connecticut and the website is www.foxandcompany.com. My email address is JFox@foxandcompany.com. That’s all written out. So that’s a good way to find us.
JT: Excellent. Excellent. Well thank you so much for coming on today. You’ve been a wealth of amazing advice. I hope you have an amazing day. Thanks, Jeffrey.
JF: Thank you. Thank you very much for having me. I appreciate it.
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