I heard a quote from one of Wall Street’s finest–he said, “We have to pay our senior managers a lot of money. If we don’t, they’ll go somewhere else!!”
Oh, they will, will they? Do you not see the complete folly in that line of thinking? Your industry completely failed AND you are paying for performance?
Hmmm. It sounds like we all need one more lesson in Free Market Economics. So, who better to do it than me?
Let The Market Work
Let’s say you and others had a bad experience with a restaurant in your town. After a while, word would spread and they’d be out of business, right? Right. So, in that case, the free market spoke. Customers spoke with their wallets.
So, why is that any different than Merrill Lynch or any Wall Street firms. If they screwed the pooch by making poor decisions, then people should pull their money OUT of their banks/institutions and invest elsewhere. “You pay your people irresponsibly, then we’ll find someone else to do business with!”
People might even invest with a firm who is actually committed to responsible/conservative compensation!!
The market is ripe right now for a bank to come out and say, “We are so committed to keeping your money safe and you happy as a customer, that we fired all the scoundrels and no one at our bank makes more than $250,000/year.” Do you know how much money people’d be lining up to give them? A lot.
That’s the free market working. When customers don’t like the experience/or what the vendor stands for, they’ll leave!
The free market doesn’t work when government says, “Well, you screwed the pooch, so we’ll give you some money so you can get it right.”
They won’t get it right. You don’t learn when you’re bailed out.
As Einstein said (approximately), “You can’t create a solution while in the same state of mind you were in when you created the problem in the first place.”
Every Sales Person Should be a Free Market Champion
You get paid when a customer makes a choice to buy from you. In most industries, there are many other competitive options. When you fail to make sales over and over–I suspect (hope) you set our ego aside and say, “What’s goin’ on here? I’d better look at my product/process/procedures/promotion and figure out how to improve it.” That’s free market thinking working.
Then, when you improve it, you start making sales again. And guess what? Your competitor starts losing sales so he steps back and says the same thing. Then, he starts to improve.
What does that lead to? Better and better solutions for the customer. Is that a bad thing? My coach used to tell me that I should want my competition to be constantly improving–because that brings out my best.
The Market Trashes Those That Don’t Listen
But the first time you decide that you’re not going to listen to your market (your customers who stopped buying), is the time you seal your fate. It’s just a matter of time until you have major problems.
So, even though this economic fiasco is nothing you can control or influence, it is a lesson for every sales organization on the planet. Are you hearing the feedback your market is giving you?
If your market is saying your price is too high, then you’re doing a lousy job of communicating your value. You’d better change.
- If your market is saying they don’t need your product, then you’ve got to look at how you’re positioning it.
- If your market is saying I pay no penalty to wait before buying from you, then you’d better look at your sales process to see what’s off. Are you finding the pain? Are you positioning properly? Are you really interested in your customer’s problems–or only your own?
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I’m afraid if you try to assemble a genuine and thorough answer to this question about markets, your answer will stray in to a realm of nasty political finger pointing. But sales people who think in terms of anything other than the free market are doomed to fail. I see it like this: You have to options. You can make your employer 3X (or greater) of your gross income and you get to keep selling their product, and also make decent money-OR- You can make them less than 3X and worry about getting fired.
Todd, you’re right. And we wouldn’t want to go down that path, would we? I like your simple analogy. Most can certainly understand that.
The market does trash those that do not listen. This is my biggest challenge and my biggest opportunity as it relates to my clients. They are frustrated by the economy; but, they are doing very little to examine how they are branding themselves and presenting their value in the market. Many companies are trying to ‘go back to basics.’ What that seems to mean to them is find something in the past that worked once. In this environment everything has changed. That means that the sales behaviors and methods must change, as well. Time for a new sales strategy. (http://purecooke.com)
During a recession (or when you lose a high value sale) I recommend re-reading Atlas Shrugged by Ayn Rand. This seems to quell the sting quite nicely.
I agree. Not sure “back to the basics” is the ultimate answer. Sometimes a full dat retreat where you work ONLY on all the possibilities of how we can be of more value to our clients can be quite inspirational.
Such times (recession times) we have to be patient until the market it up & starts functioning as usual.