Timothy Riesterer's Blog, page 15

Does Your Message Match the Moment?

You might have heard some variation of the idea that salespeople need to be fluent across the many different moments they face in their sales conversations. The same sentiment gets applied to marketers much, much less—but it shouldn’t be. Because that type of fluency is just as critical for those who develop the stories as it is for those who tell them in the field.

Marketers must be great at creating stories that respond to the unique pressures that arise in different buying situations. And, as new research shows, messaging well throughout the customer lifecycle isn’t a one-size-fits-all thing. In some situations, such as when you’re the outsider trying to displace an incumbent, a disruptive, insights-fueled story is the way to go. But when you’re the insider and working to renew an existing customer, you need to develop a story that’s fundamentally different—even opposite—to that provocative approach.

The sections below highlight how to be most compelling and effective story in some of the most critical buying moments (which I’ve summarized by the key questions marketers or account teams need to answer). Based on the findings from academic research simulations, the following sections reveal which buying situations call for a provocative story, and which ones might require you to dial that story back.

When You Should Challenge: “Why Change?” and “Why You?”

When you’re the outsider trying to convince prospects to leave their current situation and choose you, you need to tell a story that challenges the status quo bias, because in this context buyer inaction is the biggest threat to your success.

But here’s where the “why change?” story goes wrong…

Many companies tend to want to base their messaging on the needs their prospects tell them they have. They’re then inclined to connect those identified needs to the specific capabilities that respond to them. The problem with this approach is that it effectively commoditizes your message, because your competitors are likely responding to the same set of customer inputs in their message.

How do you break out of this commodity messaging and disrupt the status quo? You do it by messaging to your prospects’ unconsidered needs: the problems or missed opportunities they either don’t know about or are underestimating. That disruption-minded story creates the urgency for them to change (in fact, our research simulation found that you can gain a 10 percent edge in critical attitude and choice measures by constructing a message that begins by introducing an unconsidered need). Then, to establish your differentiation and tell a great “why you” story, you need to connect the needs you’ve identified to your unique strengths, demonstrating how you’re best suited to help them overcome their biggest challenges and meet their biggest goals.

When You Shouldn’t Challenge: “Why Stay?” and “Why Pay?”

A provocative story is highly successful when you’re trying to acquire new customers and break through the barrier of buyer inaction. But, that type of story doesn’t hold up when you’re the insider and trying to keep your customers (“why stay?”) or even convince them to pay more for your solutions (“why pay?”). In fact, research shows it can set you back in both discussions.

One research simulation tested the provocative message in a renewal selling context and found that it made customers 10 percent more likely to switch providers or shop around for alternatives. The study also found that a provocative message reduces intent to renew by 13 percent—another statistically significant margin.

Price increases—a distinct but related conversation—is another area where there’s a lot at stake, and a lot of potential for things going badly. Besides your profitability being on the line, passing along a price increase has the added risk of eroding customer loyalty and even making customers vulnerable to the offerings of competitors. It’s little wonder that four out of five companies want more structure and strategy when it comes to handling price increases.

Our research shows that—similar to renewals—the “why pay” message goes wrong when you try to provoke and challenge the customer with head-turning insights and new information. That approach, in fact, makes existing customers 16.3 percent more likely to consider competing alternatives and 15.5 percent less likely to renew, according to the results of a simulation.

To succeed in these critical moments in the customer lifecycle, your story needs to do the opposite of what it does when you’re the outsider. Instead of telling a disruptive story that overcomes status quo bias, you need to tell a story that reinforces the current situation and validates your customer’s original decision for choosing you. When it comes to retaining customers and convincing them to pay more, that type of story is highly effective at generating the outcomes you want.

The research shows that different moments demand different messages, and that to succeed in the key situations you face throughout the life of your accounts, marketers—like salespeople—need to be great at matching the right message to the right moment. While some situations call for a disruptive, change-driven perspective to defeat the status quo, others require that you throttle it back and follow an approach that reinforces why your customer chose you in the first place.

Want to learn more about telling the right story for the key conversations outlined above? Check out our latest eBook, which covers the conversations above in-depth.

This article originally published in CMO.com.

 

 

 

 

 

 

 

 

 

 

The post Does Your Message Match the Moment? appeared first on Corporate Visions.

Quick Quiz: Five Questions to Assess an Executive’s Clout

With so many different ‘executive-level’-sounding titles in use today, it’s not always clear how much decision-making authority the contacts you’re targeting may have. Use this simple, five question test to gain an objective perspective.

Score 1 point for each “Yes” answer. If the contact you’re targeting scores 4 or higher, you can expect they wield meaningful influence.

Does your target report to the CEO or Managing Director?

If yes, this shows your customer truly values the importance of this role. Individuals reporting to the CEO or Managing Director have a significantly higher chance of sitting on the executive committee. Of course, you need to consider the size of your customer, but when your target nests under someone else their clout may be lower than you think.


Does your target’s budget focus on new initiatives over maintenance?

When spending favors innovation over maintenance, it indicates your target plays a meaningful role in your customer’s growth strategy. Their budget and clout is likely growing. In contrast, when budget favors improving traditional tasks or refreshing existing infrastructure, that signals a relatively less important role.


Are your target’s subordinates focused on delivering business value?

Does your target’s staff seem disconnected, or confused, about their role in supporting company-wide business strategies? That could point to a broader stumbling block: Many executives struggle to act as partners with their peers. Research shows such individuals may think they’re more influential and effective than do their colleagues.


Has your target been in their current role for at least five years?

It takes time to earn respect and effectively promote a business unit’s contribution within an organization. On average, executive tenures run less than 5 years – even shorter when reporting to the CEO or Managing Director. A target who has held their post for at least five years is more likely to have created and established authority as a decision-maker.


Does your target generate new ideas?

Influential executives continually brainstorm how to improve performance. How do you know if your target is an idea person? When new ideas appear, the first person he or she may validate with is you, a trusted partner. Be ready when your target asks if you’ve done something similar for another customer, or if you feel the idea has business merit. These are opportunities to strengthen your relationship.

How did your target do? Here’s hoping they scored a perfect five on this test! What other attributes have you found helpful in assessing a decision-maker’s true clout?

Once you’ve identified an executive with decision-making influence, you then need to have the confidence and competence to engage them. Learn what it takes to do that here.

The post Quick Quiz: Five Questions to Assess an Executive’s Clout appeared first on Corporate Visions.

Speak to Your Buyer’s Situation—Not Their Disposition

Or, why your persona-based approach could mean your customer conversations are missing the mark

The great persona crackup continues.

Even two years ago, when the average buying group size in B2B deals was said to be more than five, B2B organizations high on a persona-based messaging approach had a lot of message tailoring to do. And, if you’ve held fast to persona-based messaging, you now have even more. That’s because the average of number of decision-makers involved in B2B purchasing decisions has crept up to almost seven, by some counts.

As complex sales get ever more complex, the risk of relying on hyper-segmented messaging becomes that much more pronounced. Why? Because the reality of having more decision-makers involved in B2B deals only complicates the job of any marketer or sales pro trying to disrupt their prospects’ current situation and drive consensus among disparate stakeholders. In this case, multiple personas and other forms of hyper-segmented messaging won’t relieve the complexity—they will aggravate it.

Fundamental Attribution Error

Here’s the risk associated with focusing on a wider set of persona-based needs: Stakeholders within the buying committee ultimately need to unite, but will struggle because they are receiving drastically different tracks of information throughout the buying process. Far from binding these decision-makers together, this splintered messaging approach might actually drive them apart by underscoring where and how their needs bifurcate.

That’s not a prescription for consensus. It’s a prescription for a standstill, and deals sputtering out into “no decision”—which is the biggest threat to your marketing and success. One major analyst firm actually identified a negative impact on deals when you over-tailor your messages to individual personas.

The problem also has a scientifically proven cause called the Fundamental Attribution Error.

Behavioral economics researchers have proven that we tend to attribute human behaviors and decisions, good or bad, to someone’s personality or disposition, when they’re far more likely to be shaped by situational factors.

In fact, tests prove that you overestimate the effect of a person’s personality on their behaviors and decisions while underestimating the influence of their situation on those same actions.

There’s a parallel between this concept and persona-based messaging.

By segmenting your messaging based on decision makers’ titles, roles, and responsibilities, you run the risk of committing the Fundamental Attribution Error by assuming their “disposition-based needs” are more influential in the buying process than the “situational challenges” they share with the other decision team members.

Here’s an example of what I mean: Let’s say you’re responsible for selling marketing automation software to help manage a company’s marketing campaigns, social presence, and demand generation programs. You build messages for all the typical buying influencers within the deal, starting with the company’s marketing executive, and you identify key performance indicators such as increasing lead generation volume, expanding marketing-sourced pipeline impact and improving the quality and conversion of leads to closed business.

Your background research doesn’t stop there. Because this is a big-ticket martech item, you also need to consider the financial decision maker and the IT decision maker, not to mention the marketing operations user. So you build three more “talk tracks” for these individuals.

Keep in mind: This requires a major lift in terms of messaging and content creation. The expectation is that you’ll become fluent enough to toggle between your stories and conversations depending on which person you’re meeting with.

Problem is, none of this messaging has anything to do with the situation. It’s all about the disposition of individuals—and that’s not what affects behavior change. A more compelling “why change” story will create uncertainty about the company’s flawed current approach—which all influencers feel—instead of appealing to individuals’ professional dispositions. For example, if you build a generic, KPI-based story around “improving marketing-generated pipeline,” you might spark your prospect’s excitement, but you won’t drive action unless you can show how their established approach puts them at risk relative to the outcomes they want.

For example, when it comes to “situations” buying committees might share, it could be that your prospects are using 10-year-old automation technology. If so, there are specific gaps and deficiencies associated with this aging automation situation that are completely different from the circumstances if your prospect is, say, still using database files and spreadsheets to manage the company’s marketing efforts. And this is different still if your prospects just purchased your competitor’s solution within the last 18 months.

The point is, these sorts of situation are different enough that they will drastically alter your core message, based on what your prospects are experiencing. These situations are also what trigger your prospects’ survival instinct, making them see that the need to change is based more on the situation they’re in than on anything to do with their job title. By messaging to these shared situations, you will build consensus and compel buyers to act.

To persuade buyers to rally together and embrace change, you need to identify the higher order business challenges that stem from their shared situation they are trying to improve, rather than messaging to individual sets of needs tied to each of their unique roles or dispositions.

These higher order challenges rooted in the shared situation transcend individual dispositional needs and unite buying committees, helping you create a buying vision that multiple stakeholders—regardless of role—can get behind.

This article originally published in Sales & Marketing Management Magazine

The post Speak to Your Buyer’s Situation—Not Their Disposition appeared first on Corporate Visions.

When Challenging Your Customer Backfires

Whether you call it “provoking” or “challenging” the customer, the insights-led sales approach so popular today isn’t effective when you’re trying to renew a customer or get them to pay more for your solution. In fact, for those conversations, that disruptive-minded approach could drive good customers right into the arms of your competition.

That’s according to two recent academic studies—one on renewals, the latest on communicating price increases—by social psychology professors who put would-be customers into buying simulations and measured their reactions. The results aren’t based on how top-performing salespeople behave or claim to behave; they’re based on how potential decision-makers respond to different types of stories when they’re presented to them.

 

“Fifty-fifty, or worse.”

That’s how nearly 70 percent of respondents to a recent Corporate Visions survey, discussed here, say their price increase requests—what we’re calling the “why pay” message—go over with customers.

But perhaps of most interest—now that we’ve conducted original research aimed at testing the best approach for framing a price increase—is the finding that two of the least used approaches, as identified by the survey, are the most effective approaches when it comes to communicating price increases, according to the research.

Only 7 percent of respondents to the survey said they anchored a higher price before providing a discount when introducing a price increase. In addition, only 18 percent of respondents justify a price increase by reinforcing the cause of status quo bias. Our research found that both these approaches are important factors in terms of executing a price increase message with maximum effectiveness.

Granted, in the survey, respondents were all over the map in terms of how they described their approach to introducing and explaining price increases to customers. But if anything, that speaks to just how much confusion and uncertainty there is in the market in terms of how to carry out this conversation out with impact and precision.

That’s why we worked with Dr. Nick Lee, a professor of marketing at the Warwick Business School in the U.K., to design research intended to answer the following questions: What is the most effective message for communicating a price increase? In other words, what is the best message for passing along price increases to expand revenue while minimizing risk?

 

The Study

The experiment was structured to assess three areas critical to the effectiveness and reception of a price increase message: attitudes, how likely a customer is to renew, and how likely they are to switch to a different vendor.

To begin, we recruited 503 participants to take part in an online experiment. At the outset of the study, participants were instructed to imagine they ran a small business and that two years ago, they needed to do something to improve employee satisfaction and retention rates because employee turnover was high and it was too expensive to keep hiring and training new people.

One of the steps these business owners took included signing up with a vendor who could help promote the company’s health and wellness program for employees. The hope was that increasing employee participation would increase employee satisfaction and reduce turnover. At the time, only 20 percent of employees subscribed to the health and wellness program. The goal was to increase that to 80 percent—the benchmark for businesses with world-class employee retention rates.

The two-year contract the company signed was nearing its conclusion, and it was time to renew with that vendor or choose an alternative.

Participants were told they’d recently met with some of the other providers they originally considered to see what’s changed in the last two years. They’ve all made improvements and introduced new capabilities, and while some of the improvements are appealing, nothing really stands out. In addition, pricing appears to be similar to what they are already paying.

However, the current vendor partner is now asking for a price increase for the next two-year agreement.

But here’s what participants didn’t know: They were divided evenly into six groups and placed into different message conditions, each of which took a different approach to framing the price increase. Importantly, in each condition, the message opened by documenting the business results to date, and all of them proposed the same four percent rate of increase to the annual cost of the program. The six approaches are described below:

Introduce Unconsidered Need – This message introduced new research that revealed a new opt-out approach to increase plan participation, whereby the company would “flip” its current opt-in approach and all employees would be automatically enrolled. It explained that this would require some new services which cost four percent more, but assured the customer that they would recover that within a year based on improved performance.


Improved Capabilities with Anchor – This message explained how the customer would be getting new capabilities as part of their renewal to increase performance and progress on their top goals. It explained, however, that these new, advanced capabilities will add eight percent to the annual cost of the plan. But, the vendor agreed to reduce that by half because they are a good customer, resulting in a four percent increase.


Improved Capabilities without Anchor – This message was the same as the one above, except there was no “anchoring” of a higher price point to begin with. It simply presented the new capabilities and performance as a justification for a four percent price increase.


Improved Capabilities with Anchor and Time-Sensitive Discount – Again, this introduced the improved capabilities in the same way, and explained how they will increase performance. And, it described how this will add eight percent to the annual cost. But it then offered a time-sensitive discount that said: If you renew before the end of the month, those additional costs will be reduced by 50 percent, for a net four percent increase.


Cite External Cost Factors – This message blamed the price increase on outside cost pressures. Specifically, regulations and responses that necessitate an eight percent cost increase. In a friendly gesture, this approach used an anchor, explaining that the vendor is willing to absorb half of that extra cost burden, but must pass along the remaining four percent increase in annual program cost.


Reinforce Status Quo Bias – This message justified the price increase by reinforcing status quo bias—reminding customers about the potential risks of making a change, and about how much time and energy bringing in a new vendor could require. It also introduced the new and improved capabilities and expected positive impact on performance, while proposing a straight four percent price increase associated with the advanced solution and anticipated improvement in results.

 

The Results

The experiment revealed that the provocation-based message that introduced an unconsidered was the least effective in terms of framing a price increase.

Participants in the provocative condition were found to have:

18.8 percent less favorable attitudes toward the message, compared to participants in the new

capabilities with timed discount condition, which performed the best in this regard.

In addition, participants in the provocation-based message were:

15.5 percent less likely to renew with their current vendor, compared to participants in the new capabilities with time discount condition, the highest performing message in this area.


16.3 percent more likely to switch to another vendor, relative to participants in the status quo bias reinforcement condition, which performed the best in this measure.

 

The Winning “Why Pay” Messaging Framework

The results reveal that the winning messaging framework embodies two things: First, it will reinforce the status quo while introducing key, new capabilities. It will also anchor high with the new price, before giving a loyalty discount to sign the renewal.

Below is a compilation of the best performing messages in the study, designed to serve as an example for you:

Document results: “You have made great progress on your goals over these last two years. You’ve seen health and wellness program participation grow from 20 percent to 50 percent. Your employee satisfaction scores are up, and you’ve said some employees have even taken the time to thank you for the changes you’ve made. In addition, your employee retention rates have started to improve, which you said was the ultimate goal of making these changes.”

Reinforce status quo bias: “Over the last two years we’ve been developing new capabilities to drive more satisfied participants, as well as give you confidence that your program is keeping pace with anything else available in the market today. As you consider your renewal with us, we wanted to let you know about two new services we think can have a tremendous impact on your goals.”

Introduce new capabilities: “The first is a new weekly report that shows non-participants in the program how much benefit that those who are participating are seeing in terms of their fitness and wellness, as well as how much they are saving, and benefiting in terms of healthcare, by being part of your plan versus the alternatives. This kind of communication on a monthly basis will provide a gentle nudge to help encourage them to get into the program for the great benefits. Secondly, we’ve also added a new smartphone app with online tools, including automatic result tracking, and integration with popular fitness trackers. In tests, these touches have been shown to help your employees get more benefits from health and wellness programs, and feel like they’re making progress on their goals. The result has been shown to create higher employee plan satisfaction.”

Anchor price increase high, introduce loyalty discount: “The new services and functionality will add approximately eight percent to the annual cost of your plan. However, if you renew before the end of the month, we will reduce the price increase by 50 percent, making it just a four percent overall increase to get this level of service. You’re making great progress. Stick with our program for another two years, and I know you’ll get to your 80 percent participation goal and further increase your employee retention rates.”

There’s a good time and a bad time time to challenge your customers. What this research reveals is that it’s a bad time to do so when you’re trying to keep your customers and convince them to pay more. The results also confirm that communicating with prospects and customers across the buying lifecycle isn’t a one-size-fits-all thing. While a disruptive message plays well when you’re trying to defeat the status quo bias and displace your prospect’s incumbent, it shouldn’t be applied universally—no matter how popular the approach might be.

To learn more about the “why pay” research and get the full breadth of its implications, check out our State of the Conversation Report: “Why Pay? Cracking the Code for Communicating Price Increases.”

 

 

 

 

 

 

 

 

 

 

The post When Challenging Your Customer Backfires appeared first on Corporate Visions.

Why Pay? How Are Companies Framing Price Increases With Customers?

As a precursor to our next academic study around messaging for price increases, we surveyed the market to find out how well they think they’re doing in this area. The findings of that survey are explored below.

“I need you to pay more.”

No matter how you spin it, communicating a price increase message to your customers is tricky business, not least because there’s so much potential for things to go wrong. But, challenging and delicate as this conversation can be, it’s a strategically important conversation that many B2B pros have to handle effectively to hit aggressive growth goals.

Findings from a new Corporate Visions market survey, done in partnership with the International Journal of Sales Transformation, confirm how important it is to execute this conversation well. Nearly two-thirds of B2B professionals (63 percent) believe price increases are “very important” or “mission critical” for maintaining desired profitability and revenue growth.

Unfortunately, as important as this dialogue is for hitting high growth targets, it’s not going over too well with customers. The survey shows that companies lack the confidence, strategy and messaging structure needed to effectively frame price increases to their customers. Low marks across these key areas are resulting in subpar outcomes in this pivotal conversation—which I’m calling the “Why Pay?” message.

How Are Customers Responding?

Nearly 69 percent of respondents in our survey describe their requests for a price increase as “50-50” or worse in terms of how well they go over with customers. While they’re worried about settling for less than they want, there doesn’t seem to be a major concern about long-term damage to customer relationships and loyalty.

On the other hand, that means only about a third of companies think their price increase conversations go the way they want. That means either getting an acceptable increase (26 percent) or getting everything they wanted (5 percent). That’s not exactly a glowing endorsement of how this dialogue is being handled today, and it shows there’s still plenty of room for improvement.

A Confidence Gap?

When asked about their confidence level in the approaches they’re taking to price increase messaging, survey respondents admitted feeling shaky. In fact, just 37 percent are “confident” in their approach to communicating price increases, while only eight percent feel “very confident.” This leaves 55 percent who are unsure about how appropriate or effective their price increase messaging is.

This begins to explain why:

Nearly four out of five companies (79 percent) in the survey say they want more structure around their messaging for this critical conversation; while


Another 21 percent are convinced they’re doing well enough.

A related finding that’s just as telling: Fewer than one-third of respondents (32 percent) believe their approach to communicating price increases is “highly structured”—meaning they craft a deliberate communication plan using persuasive messaging techniques, and provide specific recommendations to those who own this responsibility, including skills training on how best to communicate and negotiation pricing to maximize results.

Among the two-thirds of companies lagging in this aspect, the survey found that:

23 percent say it’s ad hoc, meaning they have no formal approach in place for this type of conversation, and give license for the responsible parties to handle the development and delivery of this message on their own with the customers.


44 percent say their approach is somewhat structured, meaning someone creates a formal communication so the story is consistent, but then either leaves it up to the responsible parties to communicate or send the request via email, before letting the team follow-up with limited messaging direction.

Whenever I mention in a public event that we’re in the process of constructing research around this topic, including academic testing to determine a winning framework, people’s ears prick up: there is an appetite to know when they can get the insight they need to handle this conversation better. These numbers show why there’s interest and urgency around this subject.

But here’s the reality: Most companies know they’re leaving money on the table and getting less than they want, and perhaps even need, from their customers. Ongoing investments in servicing accounts and improving solutions, as well as the rising cost of goods, often end up in the same spot: a post-purchase price increase conversation.

Besides your profitability being on the line, this discussion carries the additional risk of tarnishing relationships, destabilizing the partnership, and possibly damaging customer loyalty in a way that makes them susceptible to a competitive alternative. A success rate of less than 33 percent, as indicated by the survey, shows there’s considerable room for improvement in framing this conversation in a more effective way.

We aim to show you how in forthcoming research, conducted with a professor from U.K. Warwick Business School—stay tuned.

 

 

The post Why Pay? How Are Companies Framing Price Increases With Customers? appeared first on Corporate Visions.

There’s an Unlimited Demand for Free

What is it with customers always asking for more?

Sure, you might make a point of offering various end-of-quarter, end-of-year incentives to induce them to buy, but everyone does that and even that has its limits. At some point, you must start to wonder when your customer is simply going to acknowledge the value of your partnership and stop chipping away at your margins.

You also might wonder how it got to the point where you’re fighting tooth and nail for every basis point of margin.

But here’s something to consider: What if shrinking margins aren’t just about your customer demanding more? What if they’re also about you conditioning your customer to ask for more? Making matters worse, maybe you’re not even aware of how you create the possibility for value to leak out throughout your sales cycle.

Most sales cycles are long and complex—and getting more complex by the day. You now have to manage lots of buyers and influencers, each with their own set of goals and agendas, which don’t always align within a given stakeholder group. Because individual stakeholders have unique, and sometimes divergent priorities, they tend to ask for stuff that suits their specific interest.

The natural reaction for salespeople is to oblige them and say “yes”—all the more so when the relationship is delicate or developing. Salespeople want to come across as cooperative; they want to be seen as exceedingly helpful. So the answer is almost always “yes” when a prospect makes a simple request for, say, an additional meeting, a pilot, another proposal response, or…you get the picture.

Another challenge you might confront as salespeople: The “promised” close by the end of the quarter, so long as you tack on one small added feature. Naturally, your customer can’t pay any more for it. But you’re told that if want to close the deal by the end of the quarter, you need to “help your buyer out, give them a small win”. After lots of internal conversations, you and your manager agree to move forward.

And then the “promise” gets broken. Not only does your deal not close, the buyer has gone on vacation and you’re left in the lurch. Now you’re getting pressure from your manager because you missed your commit (which means she missed hers too). Now your deal has lost momentum and is on the verge of fizzling out altogether into another “no decision.”

What’s happening here?

More than likely, experiences like this are symptomatic of a condition you are just as culpable for as your customers are. If you give your prospect everything he asks for, without exchanging something of equal value, they start to think of you as “free.” And make no mistake: there’s an unlimited demand for free. 

You may not think of what you’re giving away as free, but if you’re giving things of value away without recouping anything, that’s exactly what they are. I’m amazed at how many times I’ve heard a salesperson say to a prospect, “Oh, don’t worry, that’s free.”

This is a prescription for margin erosion, and if you don’t push back against it with some unconventional and counter-intuitive skills, you are complicit in that profit-killing process. Once you condition your customers to expect to exchange no value for all the added benefits and services and knowledge you bring to the table, you have groomed them to continue asking for more freebies, again and again.

So why not ask for more? Why not identify opportunities for exchanging value instead of giving it away? Why not send the right signals when managing your concession strategy?

That value creation process—what we call executing pivotal agreements—is one of the subjects I’ll take on in my upcoming webinar, Monday, April 10 at 10 am PST.

I hope you’re able to join me. Register for the webinar here.

The post There’s an Unlimited Demand for Free appeared first on Corporate Visions.

What’s In a Winning ‘Why Stay’ Story?

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A provocative message is marketing gold when you’re trying to acquire new customers with a great “why change” story. Research proves it.

But it’s a very different story when you apply that same approach to renewal conversations or your “why stay” message. A Corporate Visions study I wrote about recently revealed that the provocative messaging approaches so in vogue today aren’t effective in a renewal context. In fact, they could even backfire when you are the incumbent and trying to secure a renewal contract.

What that study found is that the best approach for retaining customers involves reinforcing four specific decision-making factors that cause customers to favor their status quo over doing something new. Those factors are preference stability, perceived cost of change, anticipated blame/regret, and selection difficulty.

But here’s the question we wanted to get to the bottom of in a follow-up study: Is there a specific messaging framework that’s best-suited to telling the most compelling renewal story—reinforcing the status quo bias and encouraging customers to renew with you?

As it happens, there is. The follow-up study, conducted with social psychologist Dr. Zakary Tormala, confirmed that you need to do two things well to make the biggest impact with your renewal messaging:

First, you need to document the specific results of your partnership and share those first before trying to affirm why you were, and continue to be, the right choice for your customer.


You then need to provide more expanded detail—as opposed to less—about the recent advances in your solution that are helping your customers keep pace with the market and anything your competition is offering.

Here’s how we set up the study.

Testing the Best Framework for ‘Why Stay’

For this online experiment, we recruited 380 individuals. The participants were instructed to imagine that they ran a small business and that about two years ago they’d signed up with a 401(k) benefits provider to help promote their company’s retirement plan to employees. The hope was that getting more employees signed up would boost employee satisfaction with the company and increase employee retention.

Participants were told to imagine that two years ago, only 20% of their employees subscribed to the 401(k) plan. In the two years since then, participation had risen to 50%, a positive sign, but still short of the 80% goal. During that same period, employee retention rates had improved, but it was difficult to say how much of that could be attributed to the company’s promotion of its 401(k) benefits plan.

Following this background description, participants read a message from their 401K provider, in which they were told to imagine they were trying to decide whether to renew and continue working with that provider. The message represented the provider’s attempt to persuade them to do so, focusing on reinforcing the status quo bias, emphasizing how much effort went into selecting the current provider and playing up the risks and costs associated with changing to a new provider.

Importantly, though, the message varied along two key dimensions across four experimental conditions into which participants were evenly divided. The first dimension was whether the provider documented successful results before or after reinforcing the status quo. The second dimension was whether the provider gave more or less explicit detail on the recent advances it had made.

All told, the study included four different message conditions, each with a different combination of information order and level of detail.

After receiving the pitches, participants answered a series of questions designed to assess switching intentions, willingness to pay, trust, and message quality. Across these dimensions, the “document results first” and “more detail” messages proved more persuasive than the “status quo first” and “less detail” messages. While there were differences across measures in terms of which effect reached statistical significance, the overall pattern of results points to the greater effectiveness of documenting results at the beginning of the message and using more explicit detail in highlighting recent advances.

The overall pattern of findings reveals that documenting results at the outset of your message (before trying to affirm that you, and continue to be, the right choice) and providing more explicit detail about your progress (as opposed to less) will give you significant messaging advantages in the areas of:

Minimizing switching intentions;


Increasing willingness to pay;


Improving trust; and


Enhancing perceptions of quality

For an in-depth look at the study’s findings, check out the research brief.

Below is the basic message framework of the winning condition in the study, which tested four different renewal messages (varying in structure and level of detail) aimed at convincing business partners to remain with their current 401k provider. The parts of the framework correspond to the four causes of the status quo, mentioned above, which the renewal message sets out to reinforce.

Winning Condition

Document Results – You have made great progress on your goals over these last two years. You’ve seen 401k participation grow from 20 percent to 50 percent. Your employee satisfaction scores are up, and you’ve said some employees have even taken the time to thank you for the changes you’ve made. In addition, your employee retention rates have started to improve, which you said was the ultimate goal of making these changes.



Stabilize preferences – When you signed up two years ago, you really did your homework and looked at a lot of options before getting your entire team to come to a consensus and choose our company. It was a long process that involved a lot of people, but you ultimately arrived at a big decision to bring this program on board.

Anticipate Regret/Blame – As you look at making a renewal decision, it’s important to realize that you are at a critical point in this journey and that it’s important to maintain momentum to achieve your ultimate participation and retention goals. Any change to the program at this point could create an unnecessary risk of losing the positive gains you’ve made.

Mention Perceived Cost of Change – Not to mention that bringing in another vendor would require you to invest time in getting them up to speed and money on implementation costs and other changes that you won’t have to spend if you continue working with us.

Reinforce Selection Difficulty – We’ve also continued to update and tweak your program over the last two years to make sure you are keeping pace with anything else available in the market today. Specifically, you will get two new features designed to help improve your goals of employee participation and satisfaction: The first is a monthly report that shows how many tax dollars your 401k participants saved versus those who aren’t in the 401k. You can share this with your employees monthly to provide a gentle nudge to get into the program for the tax benefits. Second, we’ve also added a new smartphone app with retirement planning calculators and budgeting tools to help your employees make more informed decisions, and feel like they’re making progress on their goals.

You’re making great progress. Stick with our program for another two years, and I know you’ll get to your 80% participation goal and further increase your employee retention rates.

Want to see an overview of additional Corporate Visions research on renewal messaging, and see how companies are handling the customer retention message today? Check out our State of the Conversation Report.

This article originally published in CMO.com

 

 

 

The post What’s In a Winning ‘Why Stay’ Story? appeared first on Corporate Visions.

A Framework for Winning Renewal Messaging? Research Says Yes.

Provocative messaging works wonders…except when it doesn’t.

Among the exceptional scenarios, it turns out, are renewals—a selling situation where marketers and sales pros need to have a compelling answer to the question that’s top of mind for your customers: “why stay?”

When you’re the outsider trying to move buyers off their current situation, a disruptive message is gold—our own research proves it. But a recent Corporate Visions study revealed that provocative messaging isn’t universally applicable. In fact, when you’re the incumbent and trying to secure a renewal contract, this messaging approach could actually backfire.

Corporate Visions teamed up once again with Dr. Zakary Tormala, a social psychologist with expertise in messaging and social influence, to build on that study’s main finding, i.e. that reinforcing the causes of the “status quo bias”—preference stability, anticipated blame/regret, perceived cost of change and selection difficulty—gives you a statistically significant advantage across several areas critical to winning renewals.

Here’s the question we set out to answer in the follow-up study: Is there a specific messaging framework that’s best suited to reinforcing the status quo bias and encouraging customers to renew with you?

Turns out, there is.

Taken together, the studies confirm that you need to reinforce the four causes of the status quo bias, below, to tell the most compelling renewal story:

Preference stability – When our preferences are stable, the decisions informed by those preferences are likely to remain stable too. To reinforce this cause of the status quo bias, you need to remind customers of the long, hard process they went through to make their original buying decision. This reinforces their natural inclination to keep preferences—and by extension, our decisions—stable.


Anticipated regret and blame – Humans anticipate regret and blame before it actually happens, and this can be a significant impediment to change. You can message to this natural anxiety by reminding customers of the time and resources it’s taken to ramp up the solution they purchased, onboard their people, manage the changes, and get the implementation running smoothly. Making another change exposes them to all these potential failure points, which they could get blamed for.


Perceived cost of change – To the human mind, change is riskier and more costly than staying the course, and you need to reinforce that in your renewal message. To do so, you need to walk customers through the startup costs that have been returned through improved performance and are now functionally part of the ongoing operating budget. People tend to believe change costs more than staying the same. You need to confirm that.


Selection difficulty – Selection difficulty refers to the idea that making the choice to change is significantly harder to do when the decider sees little difference between the current situation and an alternative change scenario. To take advantage of this cause of the status quo bias in your message, you should willingly admit that most other solutions on the market provide a similar set of capabilities, that the offerings haven’t significantly changed since their original purchase, and that you’ve kept customers apprised of changes in the market throughout the span of your partnership. People are far less likely to consider change if they don’t see contrast between alternatives.

The overall pattern of findings reveals that documenting results at the outset of your message (before trying to affirm that you, and continue to be, the right choice) and providing more explicit detail about your progress (as opposed to less) will give you significant messaging advantages in the areas of:

Minimizing switching intentions;


Increasing willingness to pay;


Improving trust; and


Enhancing perceptions of quality

For an in-depth look at the study’s findings, check out the research brief.

Below is the basic message framework of the winning condition in the study, which tested four different renewal messages (varying in structure and level of detail) aimed at convincing business partners to remain with their current 401k provider. The parts of the framework correspond to the four causes of the status quo, mentioned above, which the renewal message sets out to reinforce.

Winning Condition

Document Results – You have made great progress on your goals over these last two years. You’ve seen 401k participation grow from 20 percent to 50 percent. Your employee satisfaction scores are up, and you’ve said some employees have even taken the time to thank you for the changes you’ve made. In addition, your employee retention rates have started to improve, which you said was the ultimate goal of making these changes.



Stabilize preferences – When you signed up two years ago, you really did your homework and looked at a lot of options before getting your entire team to come to a consensus and choose our company. It was a long process that involved a lot of people, but you ultimately arrived at a big decision to bring this program on board.

Anticipate Regret/Blame – As you look at making a renewal decision, it’s important to realize that you are at a critical point in this journey and that it’s important to maintain momentum to achieve your ultimate participation and retention goals. Any change to the program at this point could create an unnecessary risk of losing the positive gains you’ve made.

Mention Perceived Cost of Change – Not to mention that bringing in another vendor would require you to invest time in getting them up to speed and money on implementation costs and other changes that you won’t have to spend if you continue working with us.

Reinforce Selection Difficulty – We’ve also continued to update and tweak your program over the last two years to make sure you are keeping pace with anything else available in the market today. Specifically, you will get two new features designed to help improve your goals of employee participation and satisfaction:

The first is a monthly report that shows how many tax dollars your 401k participants saved versus those who aren’t in the 401k. You can share this with your employees monthly to provide a gentle nudge to get into the program for the tax benefits. Second, we’ve also added a new smartphone app with retirement planning calculators and budgeting tools to help your employees make more informed decisions, and feel like they’re making progress on their goals.

You’re making great progress. Stick with our program for another two years, and I know you’ll get to your 80% participation goal and further increase your employee retention rates.

 

 

The post A Framework for Winning Renewal Messaging? Research Says Yes. appeared first on Corporate Visions.

Why The Election Polls Were So Wrong…and What It Has To Do With Your Sales and Marketing Strategy

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Disclaimer: This is not a political post nor an opinion piece on any candidate or the election. Watch this short video.

Fact: Up to election day, a host of prominent polls had Hillary Clinton leading, in some cases by as much as double digits, in the key battleground states of Ohio, Wisconsin, Pennsylvania, Florida, Iowa and Michigan. Her campaign used those numbers to influence their strategy in the final days of the election. The other campaign challenged the status quo and forged ahead with their strategy in those key areas. The campaign that believed the polls ended up losing all six battleground states and ultimately the presidential election. So what happened?

Let’s start here, in an interview IBM conducted with Stephen Dubner, co-author of “Freakonomics” and “Superfreakonomics.”

“Declared preferences are what people say they’ll do and revealed preferences are what they actually do. Yes, the gap can be very wide – It’s not that we lie necessarily; it’s just that our behavior doesn’t always follow our stated intentions, especially when our behavior isn’t being observed.”

And…

“The worst data are generally self-reported data; the best are data that come from actual behavior and can be verified.”

Fair warning: Your revenue engine is headed for trouble if you’re using survey data disguised as “research” from “experts” to determine your marketing and sales strategy. Following this path, you could suffer the same outcome as shown in the video above. Let me be clear: surveys or polls are good for some things (we use them); they are just highly inaccurate at predicting human behavior. Surveys predict what a person thinks (declared), not what a person will do (revealed). Surveys are so unpredictable because we are so unpredictable at predicting our own behavior, even after the fact, which is known as “hindsight bias.” That becomes a big, messy web of unpredictables!

The point is we overestimate our ability to forecast what we think we will do. In fact, we just suck at predicting what we will actually do—even when it comes to something as basic and important as voting for the President.

Therefore, trusting your marketing and sales strategy, the revenue engine of your company, to the “research” gleaned from a survey or poll is potentially putting your company at risk. You see it all the time: “the research we conducted with 5,000 B2B executives said that buyers do this and that,” or “we asked 7,000 B2B customers who your most successful people are.” “Do your most successful people do this or that?” Once again, you get results back from the survey, questionnaire, or poll, called “research,” and what does it tell you? The opinion, at that given moment in time, of the people who answered it.

Again, we overestimate our ability to predict behaviors, but sometimes we rely on surveys and polls to make critical decisions or just to validate what we believe. Hillary Clinton’s campaign team used their internal polls, as well as the polls from external sources, to validate what they believe, and were over-confident. They believe the election would be a landslide. It was, just not the way they thought it would be, in what is now called the “biggest political upset in American history” (not my words).

So here is the challenge: Shift through the noise and look for distinctions between declared preference (what we say we will do) vs. revealed preference (what we will actually do). Polls and surveys and other forms of “voice of the customer” have some utility in terms of gaining understanding. However, the findings that flow from revealed preference (observed behavior) are scientifically credible, and generate authoritative and high-value insights. This is real research—you don’t see it often because it is VERY difficult to do!

It’s no secret humans are complex, emotional and confusing as hell. We say one thing and do another—all the time! So, the next time someone comes to you with the latest “research” on how you should execute your marketing and/or sales strategy, ask them this: “Is it based in science? Have you tested that science by observing the behavioral outcomes (revealed preference), and is it proven in the real world with quantifiable, third-party results?” If not, you are betting a whole lot on what people think, not on what they do, and you too could be headed for the same fate as “the biggest political upset in American political history.”

Conversations That Win! Based in science, tested (revealed preference) and proven!

Want to access to original research that challenges some of the most common sales and marketing “best practices” of the day?

Go here.

The post Why The Election Polls Were So Wrong…and What It Has To Do With Your Sales and Marketing Strategy appeared first on Corporate Visions.

You Lost Me At Hello: How To Engage Better With the C-Suite

Forget, “You had me at hello.” When engaging executives, ‘hello’ is where you lose them.

During the opening minutes of conversation, executives decide whether or not to continue listening. In other words, cut the small talk, launch your big idea.

What does success look like to him/her?

Few executives will listen to your point of view until they believe you understand and appreciate theirs.

Grab an executive’s attention early by answering the first question running through their mind: ‘Why is your idea worth any money?’

Get to the point, and share the impact you envision delivering. Your idea doesn’t need to be fully developed, but it should:

Cite specific profit & loss line items, metrics or ratios relevant to his/her area of responsibility.
Represent new thinking, not something immediately apparent that should be delegated.
Seem credible and real enough to provoke business curiosity to learn more.

What does successful preparation look like to you?

Winning executive conversations demands you nimbly navigate the twists and turns that can unexpectedly arise. Remember, this is the executive’s meeting, not yours.

To be ready for the conversational pitfalls that can take you off message, add role playing to your preparation.

If you’re not comfortable with role playing, get over it. It’s the best way to simulate scenarios that can derail your well-rehearsed presentation and foresee how to effectively respond when the dialogue digresses.

Enlist a colleague or manager to play the customer executive you’re targeting and imitate that individual’s personality. Develop your ability to encounter less-than-ideal situations yet still have a successful conversation by having your colleague portray a hurried executive, a skeptical executive, and one who recently had a poor experience with another sales professional.

If possible, have a third person observe the action. Ask your colleagues to rate you on how well you are able to cover the basics of any executive-level engagement. These include your ability to:

Cite relevant external factors to establish your credibility
Link customer business initiatives to your big idea
Express the business change you’re envisioning in straightforward language
Identify areas of business impact using meaningful metrics
Close the conversation with a clear request for executive sponsorship

Once your executive conversation gets underway, pay particular attention to who’s doing most of the talking. Remember: you have two ears, one mouth. Your conversation’s balance of listening /speaking should approximate that ratio.

Want to learn more about making an impact with C-level buyers in your customer conversations? Go here.

The post You Lost Me At Hello: How To Engage Better With the C-Suite appeared first on Corporate Visions.