Sims Wyeth and I are having a debate on the use of FUD (fear, uncertainty and doubt) and GOG (greed, opportunity and glory) in selling.  He argued for FUD and I suggested that for some clients, those who are achievement oriented, GOG works better.  He came back with the one, two punch of FUD first followed by GOG.  In plain English, scare the pants off of them first and then wow them with the opportunity.  This is my rejoinder.

Sims, our arguement started with your FUD hypothesis, followed by my GOG antithesis, allowing your FUD’em then GOG’em synthesis.  Your Aristotelian heart must be glowing.  If this were an Aristotelian world, that would be the end of it, but it’s not.  Making a client keenly aware of the risk she faces and then showing how she can both avoid the risk and achieve something good at the same time makes a powerful arguement when this logic reflects the client’s situation.  Often it doesn’t.  If you see smoke coming out of someone’s roof and rush to their door to warn them, you shout to alert those inside of the danger and don’t waste time describing how beautiful the renovated building will be a year from now.   It’s a FUD only situation.  If you discover a great deal for some object you think a friend might like to buy, you seek to pursuade him what a great opportunity it is–a GOG situation. 

There is an ethical issue here, too.  Fear tactics are despicable when used with unsophisticated clients who don’t know enough to discount the inflated description of what might happen.  The same is true about inflated descriptions of future benefits.  The goal of selling is to help the client assess real risks and real opportunities in the situation she faces. 

Imagine a Venn diagram of two overlapping circles.  The left one represents situations where downside risk is high, where FUD is appropriate.  The right circle represents situations where upside risk is great, perfect for GOG.  Only where the circles overlap is it approriate to use both FUD and GOG.

In his current posting, Sims Wyeth argues the validity of using FUD (fear, uncertainty and doubt) as a means of pursuading and selling.  This is a hotly debated subject. 

Not long ago, Charlie Green wrote a post arguing against the use of FUD in most cases.  I took issue with Charlie’s aversion to so useful a tool.  Certainly, there are big, bad thinks out in the world and if a client is unaware of them, it’s appropriate to bring them to his attention.  In other words, to use FUD.

Today, for variety, I will take issue with Sims.  There are many cases in which FUD is inappropriate, and some clients are annoyed when the professionals they deal with resort to fear tactics, reminding them of threats that they are well aware of.  These are people who are more interested in greed, opportunity and glory (or GOG, if you will).  GOG sells, too.  It sells much better than FUD to people who are achievement oriented, and that’s a category that includes some important people.  Most CEOs, for example, are achievement oriented.  With such people it is often more effective to focus them on the good things that would result if they take the right action, instead of on impending disaster.  Instead of painting a picture of a scorched earth, paint one in which they are rich and famous, in which they create business history. 

Achievement oriented people are easy to pick out.  They’re the ones who see opportunity at every turn, instead of problems.  They’re the ones who talk continually about growth, profits and all the neat things they plan to do.  In addition to CEOs, many Chief Marketing Officers, and heads of research think this way.  Ask these people questions like:

• How fast could this company grow, if you could get the right stars to align?
• If you could bring your new version out ahead of the competition, how would that change your position in the market?
• If you weren’t being held back by x, what would you do with this company?

So, over the next few weeks, try selling GOG a couple of times.  It can be a lot more fun than dealing in FUD.

New Jersey Lawyer has published a review of the new edition of Rain Making. The author of the review is Esther Gueft, an attorney and business development consultant primarily working with East Coast law firms.

Read the review of Rain Making at New Jersey Lawyer online.

Clients often ask professionals to help them make or save money.  Accountants may help them reduce their taxes.  An engineer may help them reduce the cost of their products or add something to a product that allows them to charge more for it.  A consultant may help them enter a new market or reduce the costs of their supply chain.  Architects design spaces that attract more customers or allow their clients to use space more efficiently.  Lawyers may help a client gain regulatory approval for an acquisition, allowing it to make money.  Or they may help them avoid a stiff fine.

When a client tells you that there is money at stake, first determine how much is at stake.

How much money are we talking about here?

What would that be worth?

At a minimum, how much is at stake? And at a maximum?

That’s a lot of money. Are there any additional costs we haven’t considered? For example, would the news that you have been fined cause some customers to bolt?  If so, what kind of a hit might you take and where would that money have to come from?

Then ask them a question that will let them mentally spend the sum identified.

What would you do with that extra $10,000,000, if you had it?

What difference would it make if you had an additional $20,000,000 drop to the bottom line?

Could you use that money to reduce your debt?

The mental spending will help the client appreciate the value of your services.  That will make her more willing to accept your fee and make her less likely to buy on price.

The classic elevator speech is used in brief, informal business encounters, like the fifteen-minute conversation at an association meeting or the late-Friday conversation between two delayed travelers in an airline club lounge.  It’s also useful at a lunch a colleague is hosting for you and one of her clients as an informal first step to cross selling your services.  I have previously described this kind of elevator speech in an earlier posting (Elevator Speeches).

It should be clear:

• I am a lawyer.
• I am an accountant. 
• I am a structural engineer.

It should use concrete, simple language: 

• I am a lawyer.  I specialize in family law. 
• I am an accountant.  Specifically, I am a tax accountant. 
• I am a structural engineer. I deal mostly with cases where structures have failed.

It should be memorable:

• I am a lawyer.  I specialize in family law. Many of my clients have children or other dependents who will need taking care of long after the client will be able to provide it.  I help make sure that care is put in place.
• I am an accountant.  Specifically, I am a tax accountant.  And I work with smaller companies for whom workers comp and other taxes are a significant cash drain.  I help them make sure that they aren’t paying any more than they are required to. My clients in your industry include Antimacassar, Inc. and Necessary Needlepoint.
• I am a structural engineer. I deal mostly with cases where structures have failed. I specialize in figuring out why buildings or bridges fell down.  In this city, we have worked on the collapse of the spectator stands at Run Off Raceway.

(For more, see our category on elevator speeches.)

The Council of Public Relations Firms recorded a podcast with Suzanne Lowe and me called Adapting to a Downturn. It is now available here. Free registration is required.

Before a client engages in a serious conversation about her business or legal concern, she might request a short description of what you do. She quite naturally wants to know who she is talking with so that she can decide whether or not it is worth the effort to describe her need in detail.

You must be careful to give her just enough information to make her comfortable that you are, indeed, the person to talk with. If you say too much, you may draw so much attention to yourself that she starts asking a lot of questions about you. If that happens, she may make the decision that you aren’t suited to her need, before you even learn what that need is.

In this situation you need a short, compelling description of what you do. In other words, an elevator speech. We call this kind a positioning statement. It is the most variable of the three kinds of elevator speeches I described earlier, because selling situations differ. Let’s look at how a location consultant might alter his positioning statement to accommodate different selling situations. Just for starters:

The client may know nothing about either him or his firm: We help companies select locations for new facilities. My personal specialty is selecting sites for research laboratories like the one that I understand you need to build. We have helped companies as diverse as Trigestis Pharmaceuticals, Permian Oil and SnackTime Foods select laboratory locations. We look at recruitment of researchers, customer interaction, incentives and any other critical factor that varies with geography.

The client may know you and your firm for one service, when you are selling another: You know us mostly for our location selection work. Many of the companies we work with also seek our help in moving to that new location. We help develop employee relocation policies, employee communication plans, plans for moving furniture and lab equipment and other critical elements of getting a lab up and running on time and on budget. We provide these services to well over half of our location selection clients.

The client may know you and your firm, but not the colleague who has come with you:  I have brought Chris Browne with me today, because you asked about the potential to obtain incentives from communities we are considering for your new lab. Chris leads our negotiation practice and negotiates on everything from tax reductions to site infrastructure improvements and from lease costs to the size of subsidies for training new personnel.

After providing a positioning statement, you want to ask a question that will get the client talking about her need. That’s who we are. Perhaps you could tell us a bit about the lab in question and why you are thinking of relocating it.

Remember that the goal of the positioning statement is to give the client just enough information that she will feel comfortable talking about her issue. You aren’t trying to sell her anything yet. You aren’t trying to differentiate your firm from all of the possible competitors. You just want to give her enough information to make her feel it’s worth telling you what she wants.

After she tells you what she wants, you can tell her why yours is the best firm to solve her problem and how you differ from her alternatives. But not now. Now you listen.

(For more, see our category on elevator speeches.)

In one of those helpful articles that points out something that should be obvious, but is overlooked, Doug Stern warns us in his Marketing Profs article “The Myth of the Elevator Speech” that people asking about what we do for a living doesn’t mean that they want to know much.    It’s often a conversation filler; a polite question that should be treated as such.

The broader message implied in Stern’s article, one that should also be obvious, is that we each need several elevator speeches to use in different kinds of situations.  I can think of three that we all should have:

1>     The Stern Elevator Speech
2>     The Positioning Statement or Sales Meeting Elevator Speech
3>     The Classic Elevator Speech

I’ll describe the first one here, and write about the other two in upcoming blog posts this month.

The Stern Elevator Speech

Here Stern isn’t an adjective; it’s Doug’s last name, used in his honor to describe the elevator speech used in social, rather than business, situations.  Rather than stern, it should be light and conversational.  If it makes people smile, so much the better.  I like the ending that draws out the other person, because I’m shy and like it best when the other person talks.

I’m a mortgage banker, the person responsible for the current recession. And you?

I’m an accountant.  I count beans and, occasionally, money.

I’m an economist, and if that doesn’t depress you sufficiently, let me know and I’ll tell you more.  What about you?

In Stern conversations (not stern ones), don’t—don’t—bore the other person with a lengthy description of what you do.  For example, a litigation support consultant should not try for a clear statement of what she does.  If you say:
I conduct the forensic accounting analyses that determine financial facts and legal culpability under litigation and that provide valuations of damages.
the other person will either flee, change the subject or, with dread, feel obliged to ask you to explain yourself.  Instead, you might say:

I make up the facts that lawyers like Jim, here, twist in court.

Remember, keep your Stern Elevator Speeches lively and conversational.

(Note to Doug Stern: This posting would have been much easier to write if your last name had been something like Light or Jolly.)

(For more, see our category on elevator speeches.)

In an old post, Build It and They Will Come, I described a common business development fallacy at professional firms.  Professionals sometimes think that one heroic effort; a major presentation to a client or a speech at an association or a publication of a thoughtful article; will bring in business. It seldom happens so simply.

In a recent post Seth Godin reports similar fallacious thinking among those who sell products, who believe that one big effort, like a product launch or grand openning will have significant impact on the market.  Instead, companies must do the hard work of marketing and selling, going back to the market again and again, says Godin.

Because professional service firms often lag product companies in marketing and sales sophistication, it’s good to learn that the product companies make this kind of mistake, too. 

In a recent post, Peter Darling commented on a piece in ABA Journal on the desirablility of origination credits in which Martha Nell reported on a article that appreared in New York Law Journal.  That article argued that origination credits should expire after a number of years.  That way attorneys working the account could get credits to incentivise them to keep and expand it.  Peter Darling argued that the attorney who originated the relationship should get the origination in perpetuity.

I respectfully disagree–and agree–with both positions.  Compensation systems are tools to help a firm achieve its objectives.  They cannot be decided on once and forever; they need to change over time.  What’s right for a number of years won’t be right for all time.  This is for two reasons:

1) A firm’s objectives change with time and circumstances.  At one time it may need to stress cooperation in the sales effort, and so require shared originations.  At others, it may want to focus on individual responsibility, so leaning towards sole origination credits.  As the firm’s needs change, so must its compensation system, or sooner or later the firm will have its strategy and its compensation system in conflict with each other.

2) Any compensation system creates undesirable incentives as welll as desired ones.  Reward people for bringing in a large account with long-term origination creddits and you create an incentive for some lawyers to grasp at credit for any and all contact they have had with a company before it became a client.  After a number of years, any compensation system begins to suffer from having too many people trying to game it.  It then needs refreshing or replacement.

Compensation systems are a way to reward performance.  As the firm’s focus on different kinds of performance change, so must its rewards system.  The challenge comes with successfully making the change.  Every change in compensation system is likely to be met with an outcry of how it will destroy the firm and bring financial ruin to its attorneys.  Push the change through, anyway, and two years later you will get a similar outcry from the same people when you try to replace the new system.  Isn’t managing a professional service firm fun!