Tag: Business Strategies

Prospects Notice Every Move You Make

Every move you make.That’s what it takes to land your next prospect. Recently, I’ve had the pleasure of learning, from a renowned sales guru, the art of the close. And, it seems to be as simple as reading your prospect and mirroring their behavior.

Here’s how it goes: your prospect sizes you up in 49 seconds, give or take; and uses the remaining time he spends with you to confirm his initial opinion of you. If he cannot confirm his initial perception, but finds himself interested in doing business with you anyway, with your character inconsistencies, he’ll make an exception. But the human mind seems unable to reform opinions.

As a woman, I’ve always been sensitive to possible “first impressions.” Will the prospect relate to me? How do I convince my meanest and most vulgar client that I’m O.K. with mean and vulgar? How much jewelry is too much? Is a European Luxury Sedan too much car? Well, as it turns out, all of this is important. It is all part of the package we present. But our package is first delivered with our initial “eye contact” with our prospect.

Here you have it, once and for all — no excuses. Eye contact is the first contact that you have with a client. Secondly, he’ll hear your voice. Lastly, he’ll shake you hand. Eye, Sound and Touch. Make it count, because it counts most.

Your eyes must meet your prospect. Try it out on your own. Have your friend or co-worker stage an introduction between you and anyone. Have you maintained complete contact? Did you find that you looked down to shake hands? Can you continue eye contact? Other than breaks in contact directed by your prospect, don’t give it up. But don’t stare them down. Eye contact relays honesty and openness. First and foremost, your prospect will insist on integrity. Prove it with your eyes.

Next, comes the voice. As you approach your prospect, mirror his volume and tone. If he’s loud and brash, be just as loud and brash. If he’s dour, be dour. Even if you speak first, and mistakenly diverge from your prospect’s style, adjust your voice immediately. Pretty basic stuff, huh? Practice this. Again, stage an introduction session with some of your co-workers. Approach your co-worker, who will play the prospect, with any volume or intonation you choose. Introduce yourself, “Hi, Jim nice to finally meet you.” Have your co-worker respond with any style he chooses. “Great to meet you,” he may mumble. Now, change your style to conform with his. This is a great exercise for new producers. They’ve heard of these basic rules, but have they practiced them?

The touch comes last. Here, as in the voice, you must mirror your prospect. There is no right or wrong, but only what your prospect will perceive. If your prospect gives you a bear hug, then hug your heart out. If he extends his hand and seems to “need his space,” then give it to him. It is important to match a firm handshake with a firm response and a weak handshake with a weak response. Touch is the most intimate thing we do in a sales experience, and it is an important step in our prospect’s ability to judge our ability to relate, communicate and care.

The rest is easy? No, and we’ll leave the dozens of other “behavioral” issues for a later article. But, I’d like you to know the following: it doesn’t matter how you feel or how you act, but rather how you are perceived. It doesn’t matter what you think of your prospect, but rather what you can get him to think of you. Conversely, it would be to your advantage to not make judgments by what you initially perceive, nor care how your prospect acts.

As you gain an understanding of human behavior, you will learn that people are rarely comfortable with everything about themselves. In fact, it is often true that what you see is not at all what you get. You will be effective at tailoring your responses if you understand that many of us have layered armor over our insecurities. What we project to the world is often a defense. Our self-image is set when we’re very young and unable to process rational thought, but the image is immutable. A fat boy might grow to be obsessive about health and fitness. A poor boy might grow to “throw his money around.” A beautiful woman might actually have been an ugly girl, or so she thought. What you see is not what you get.

Finally, and this information will direct the form of the sales style you employ with your prospect. Your prospect will make a decision based on a decision making style. The styles may vary and many sales strategists will call them by a different name. Often, one person may embody various styles or they may alternate styles. You must identify what style they’ll use to make “your” decision. Look for expressions like: “I really feel…” They will need to emotionally relate to you and your suggestions. How about, “I can see…” Give them a picture to grab onto. “It sounds good to me,” might require a…a…a…Song? Although probing is good, feeling is better.

To Hold or Not To Hold: The Financial Risk of Indemnification and Hold Harmless Agreements

Often, organizations agree to accept the liability of another party (or business) as a standard practice. Such practice is known as “risk transfer,” and the transfer is either embodied in a written contract or agreed to, verbally, by the parties. Contractual risk transfers are commonly found in construction agreements, landlord/tenant agreements, service contracts, and purchase orders, but may also appear in a host of other agreements. The two most common elements of risk transfer clauses are “indemnification” and “hold harmless” provisions. These provisions may be used together or independently, and create a duty to pay (indemnification) and a duty to defend (hold harmless).

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Parties to indemnification agreements are known as “indemnitors” and “indemnitees.” The indemnitor is the party who agrees to accept the liability of another and the indemnitee is the party receiving protection from liability. As a matter of law, such contractual provisions must be clear and unequivocal in expressing the intent of the parties who transfer such risk.

It is important to recognize that a business that agrees to become an indemnitor is assuming liability, which in the absence of the agreement, may not exist. The construction industry is known for routinely incorporating broad indemnification provisions in contracts, and transferring liabilities for not only bodily injury, but also for pollution, design flaws, delay in construction and other perils not typically understood or contemplated by the indemnitor. Therefore, it is critical that the indemnitor understand the extent of potential liability for the risks assumed.

Both the indemnitor and the indemnitee should determine whether insurance coverage is available to the indemnitor to cover the risks assumed (or transferred) by the indemnification agreement. And, as insurance contracts typically provide coverage for only certain types of loss, it is probable that certain risks will not be financed by either the indemnitor’s or indemnitee’s respective policies.

Indemnitees will often, and prudently, request to be named as an Additional Insured on an Indemnitor’s policy, providing the indemnitee with direct access and legal rights to the benefits of the policy. While it is not suggested that an indemnitee rely solely on additional insured status for the funding of a loss, largely because the limits may be inadequate as they are shared with the named insured, and the policy terms are largely controlled by the named insured, additional insured status is, nonetheless, the standard to finance loss of the indemnitee.

Additional insured endorsements vary widely by insurance company and often require that the contract between the parties transferring liability be in writing. Indemnitees as well as indemnitors need to scrutinize an insurer’s policy language when additional insured status is requested because both parties are financially exposed if a risk that is thought to be financed (insured) is actually not.

Each party needs to, first, understand that an Additional Insured is only provided protections covered by the insured’s “natural” policy language, so economic loss, for example, from “a delay to market,” while an indemnifiable loss, will not be financed by a general liability policy that requires a trigger of bodily injury or property damage. Each party also needs to be aware of the insurer’s definition of Additional Insured, including whom the insurer defines as an Additional Insured, and the limitations drafted within the endorsement. If any of the language within the additional insured endorsement is inadequate, an indemnitor may very well find themselves financing an obligation without the benefit of insurance, and an indemnitee may be caught financing a loss intended to be assumed by an another (indemnitor).

Insurers typically limit coverage to the current policy term, not when a claim is made, so particular attention must be paid to whether the additional insured language includes coverage for “ongoing operations” or completed work, referred to most recently, in policies, as “your work.” It is also important to note that many additional insured endorsements will not provide coverage for acts emanating from the sole negligence of the Additional Insured, and yet contract language may attempt to transfer this liability.

Careful consideration needs to be given to the potential exposure of the indemnitee and indemnitor if it is determined that the insurance policy and additional insured endorsement do not extend to cover the assumed obligation(s). So, prior to entering into a risk transfer agreement, ask yourself the following:

  • What are the terms and implications of the indemnification and hold harmless clauses in the agreement?
  • Is the indemnitor required to obtain additional insured status for another?
  • Is the language of the additional insured endorsement adequate, covering the indemnitor’s responsibilities or must additional measures be taken to ensure that contractual obligation are properly financed?

Any questions on the matter should be addressed with your insurance agent or attorney.

Soft Costs Hit Hard: Do You Know What Your Insurance Policy Does NOT Cover?

Most property insurance policies guarantee the replacement of your property in the event of a loss. These policies, which cover such things as concrete costs, flooring, ceilings, and plumbing systems are often silent when it comes to those costs you cannot visibly see. Costs such as consultant’s fees, communications costs, and moving or relocation costs, are referred to as soft costs, and more often than not, they go uncovered.

Soft costs can best be defined as those indirect expenditures that are incurred in the repair and rebuilding of a property. They are those costs that while just as necessary, do not include the “bricks and mortar” needed to complete the job. Soft costs most often must be the result of a “loss” to Covered Property from any of the Covered Causes of Loss which delays the project’s completion beyond the planned completion date.

While some insurance policies make a quick reference to soft costs, most do not include soft costs under the scope of “property insured,” and thus do not cover them. If policies do not directly reference the reimbursement of soft costs, many property owners can expect to foot the bill when it comes time to rebuild. This is a scary thought given that soft costs can account for as much as 30% of the costs incurred in rebuilding a home.

What insureds will find if they closely examine their insurance policies is that their “Statement of Values,” which outlines the replacement cost value of their property, does not include soft costs. This statement is the very basis for loss settlements that occur after a disaster. Therefore, if soft costs are not even considered as a replacement cost, how can insureds expect them to be covered?

Business owners should also consider soft costs when calculating their Business Interruption Insurance. Much like Direct Damage Insurance, it is unlikely that Business Interruption Insurance will cover such things as additional consulting fees, financial costs, permits, and interim housing, unless they are specifically addressed in the policy.

Many business owners mistakenly believe that because their Business Interruption Insurance policy includes a “Period of Indemnity” clause, that most soft costs will be covered. While they will be compensated for loss of profit following a disastrous loss, the period of indemnity only lasts so long, and many companies will find those soft costs accumulating after that time is up.

Insureds need to be aware of the reconstruction costs that are considered soft costs, and remember that they may or may not be covered. They should also speak with their insurance provider and determine which soft costs are covered under their particular policy. Some examples of soft costs are:

The 10 Must Have Traits Of A Salesperson

“What are the traits of an effective salesperson and how are they identified in a candidate?” These questions have been studied for decades and a broad range of opinions have been offered by corporate executives, college professors, industrial psychologists and human resource managers. Corporate America, in need of effective and profitable salespeople, continues to develop interviewing and testing standards designed to define and uncover sales talent.

I have participated, as an employer, in screening techniques that have been highly successful and I have participated in an equal number that have clearly failed. Unfortunately, a majority of sales screening techniques, at their best, will fall short of the employer’s expectations. The most reliable screening tests, although not completely full-proof, will embody a full day of psychological screening by an industrial psychologist. How many of us, as small to medium employers, can afford the $800 – $1500 price tag that goes along with this approach? Is the small to medium employer at a disadvantage in the hiring process? Maybe not.

If you are in the market for a salesperson or a sales team, first consider the “10 Must Have Traits” of a salesperson:

1) Salespeople rarely perceive obstacles.

Obstacles always exist, but a salesperson will typically charge through the obstacle, rarely pausing to take note of its challenge. A salesperson is inspired by obstacles and they don’t “ruminate or contemplate” the challenge for too long.

2) Salespeople overcome rejection.

Rejection does not deeply wound a salesperson. Their emotional response is more akin to the feelings associated with an act of dishonor. After all, a good salesperson knows the client or prospect made the judgment in error. This is not to say that salespeople do not have hearts. They have hearts, but they are selective in whom they respond to.

3) Salespeople live to persuade.

Their desire to persuade will not be misunderstood as simple persistence. These are people that have a belief and passion for their position. Their self-esteem is derived largely from the people and events they inspire to action.

4) Salespeople must be able to “read and relate” to the prospect.

Experiencing the feeling, thoughts, and attitudes of others permits the salesperson to form their presentation and responses in a way that will foster true communication. A prospect’s motivations and a salesperson’s responses to the prospect’s verbal and non-verbal language (body language) represent the basis of all sales efforts.

5) Salespeople want to be liked, but they rarely need to be liked.

Salespeople have a clearly defined mission; they keep their focus on the requisite outcome — the sale. They are not trying to build friendships and they will not be maneuvered to digress from their goal. Although they will develop friendships and are likable people, they do not misunderstand their purpose for visiting with a prospect. They will not construct their message to win friends and be liked, rather they will construct it to close the sale. They would rather not offend, but if they do, it’s O.K.

6) Salespeople like people.

Not all people like people, but a salesperson does. They don’t like all people, but they generally enjoy interacting with people and engaging in lively dialogue.

7) Salespeople need to have some “sense of urgency.”

There are the “plodders” and they, through persistence, routine and hard work, will achieve success. Plodders may not have a sense of urgency, but their peer, the “every minute counts” guy does. These folks are driven by benevolent demons that challenge them every minute of the day. You’ve met these salespeople. They are the producers in the office who have to get the job done now!

8) Salespeople will always have a tale of “accomplishment from adversity.”

These people are proud of their accomplishments and they will usually value the lessons learned and skills developed from a particularly challenging obstacle. They may even be proud of their failure because of their ability to rebound and refine themselves. These people win, even when they lose.

9) Salespeople have to have a definitive lifestyle goal.

Even with the best of sales personality traits, no one will achieve great economic success unless they are driven to be wealthy. As crude as it may seem, working hard at a job that yields “money for effort” requires a distinct and passionate commitment to money or to the power, security, and influence that money can buy.

10) Salespeople need to have a need.

Ask any successful salesperson about ambition and where they feel it is derived from. It seems that “a need” is at the core of their commitment and energy. Their needs are widely varied, but these are not people that want things, they need things.

Many of these traits mentioned above can be uncovered in a carefully crafted interview process. In fact, why not go ahead and ask the questions directly. Remember, though, that an intelligent applicant will be prepared for even the most rigorous of interviews. Ask a direct question, ask it again, indirectly, and then challenge the applicant to support their answer. Throughout the interview, look for opportunities to prove or disprove the existence of the “ten must have traits.” You’ll find them, if they are there.

One last word of advice, and this applies explicitly to experienced salespeople. Never, never, never hire a successful salesperson who cannot support his claims of success with records and wages. Because salespeople, even in the absence of every other sales trait, have a record of closing sales.