An article by prof. Willem Verbeke

Most of the time I tend to download every morning the web pages from International Herald Tribune and so I follow the news. Most of the time I read the articles which other people before me did indicate and suggest as inspiring and yes I keep up with especially the articles on Health (as they report a lot about endocrinology, the meaning of sports) and Science (as they report a lot about biology and molecular genetics). Sometimes I think I should also subscribe to The Economist in order to stay ahead of the news; the Economist is known for its clean reporting of major events in the world. Apparently and former student of mine who is now director of a large human resource firm did send me an e-mail which included an article on selling in The Economist. The Title of the article is: “Ice to the Eskimos; Can the dubious art of selling become more scientific?” 

The article is interesting in that it gives us immediately some interesting insights: sales is an important if not the most important function in a company as they and less so from other departments bring in the money! Still not much attention is being paid to sales! It also suggests that while sales is important not many people want to get into sales. I asked to 110 students in my class about 110 what they liked the most: marketing or sales? Guess what they answered? Only 2 of them wanted to get into sales.  This trends among students seems to be normal and it is this given “only special people want to get into sales” that is the basic idea from where I start teaching about selling, when I train salespeople and also when I do research in selling. The basic idea I have is that salespeople somehow are special and they have a passion, which is to help customers solve their problems. Of course helping is quite complex as it also involves convincing people, believing in your product and willing to go the extra mile for a customer. Just a last detail, look at the job ads these days the only job that is most mentioned is sales and yes not marketing as such. 

I did not tell yet what is the reason why The Economist writes about sales. Apparently two books have appeared on selling which were noted by the editorial board on business topics as special and they reflect two different opinions. The first book is called the “Sales Growth: Five proven strategies from the World’s sales leaders”. This book is written by people from McKinsey, specifically Thomas Baumgartner, Homayoun Hatami and Jon Vander Ark. Not surprising, they state that sales should be perceived as a science: due to the fact that sales visits can codified on data bases it is possible to better analyze  sales processes and then reengineer the sales processes. 

The other book that was noticed was from Philip Delves Broughton who wrote “The art of the sale”. He conceives sales as a social game and became more inspired by the psychology behind the sales.  The 80/20 principle seems to shine through: most of the important business generated (especially in business to business) comes from a few very good salespeople and they bring in the real business. I like to call it they bring in the key accounts. They are the rainmakers who make a difference in the company.

This difference in approach will always be the dichotomy within marketing: there are those who believe that data will allow us to better predict and manage business as we get better insights in how actions and results correlate. Then there are those who believe that you got to understand people. Of course both opinions are correct, but if you look around most specialists take one or the other more for granted. 

If you ask me? My viewpoint is more and more biological – that is salespeople still got to talk to a customer and have a deep conversation. Not everybody can do this and given the intense competition, those who better understand customer’s problems always will win no matter how good the sales process is organized. So already many times I have called this a mindset and this mindset is what drives my view about selling. 

Just to conclude: reading this article in the Economist made me happy and it is nice to see that other people see this contrast in mind-sets as clear as I feel we should do.  Only then can we better think about sales and also makes sales forces better. 

Or, Why We Need Challengers and Not Relationship Builders

Prof. Willem Verbeke

Some years ago, we witnessed the relationship building hype in sales and marketing. Many researchers in marketing fell for this hype. In research, a hype is always a bad sign. It means that researchers, in marketing in this case, are not thinking for themselves as much as they should be. Instead, they are just following the herd so that their research on one-track paradigms will get accepted by research peers and colleagues who, of course, think just like them.

Honestly, I could not go to one more sales conference and hear another marketing specialist scream “Relationshippppppps!” I’ve never fully understood this hype. It was instantiated by Shelby Hunt in his Journal of Marketing paper, which as of this day has been cited 7505 times. What a record!

My doubts about relationships: Hunt’s theory rests on the basic idea that the relationship between, let’s say, a customer and a firm, is the key to marketing. This long-term relationship is based on the shared values of these business partners. But that idea is, to me, somewhat vague:

1) Framing interactions between customers and companies is wrong because companies do not buy, people do! And most of the time people in firms have different perspectives on business and life.

2) We live in a knowledge-based economy. What counts are the capabilities that firms develop over time that allow them to produce solutions that solve their customers’ needs. These days many firms develop radical capabilities that give them potential competitive advantage. They’ve got to hunt for new customers almost by definition.

3) People in companies buy because they see other people buying in other companies (better than their own). In other words, imitation or emulation is a big part of marketing, and it results in bandwagon or path-dependency effects.

Companies don’t buy, people do: The first rule of companies is ‘people do the work (the buying)’. Things must get done. People ‘doing’ things is perhaps the most important aspect of what a firm does. Pankaj Ghemawat of the Harvard Business School calls it the ‘commitment hypothesis’. Think of banks, or firms like Shell and Wal-Mart. They have been doing and improving what they do for nearly a hundred years. But when people work with their firm’s routines, they might not always be aware of what is happening outside their core business. They need salespeople to bring them new ideas and challenge their current practices. So, how do you get customers thinking differently?

Shaping or challenging customers: For the last 15 years I have been suggesting that salespeople shape their customers (see my book, “The Successful Shaping of Key Accounts”. That is, salespeople act as knowledge brokers who possess knowledge about their industry. They gather this knowledge when they visit and talk to their customers. Visiting many customers means that salespeople get to see a great many different cases. This allows their brains to create patterns out of all of those cases and that allows salespeople to recognize and relate to the issues specific to a customer’s firm.

Customers know that salespeople possess this knowledge and the expertise to use it and that’s why they like talking to them; they are likely to have a lively conversation. In fact, salespeople who can make and summarize insightful comments about the firm’s issues can help customers structure their ideas. That’s how you shape customers, by getting them thinking differently.

In a Harvard Business Review article, Dixon and Adamson argue that good salespeople challenge their customers and urge them to think differently: they bring unique, even provocative perspectives to customers. They have a profound understanding of their industry. I can only agree!

Knowledge brokering is the next big thing: I am so glad that people in selling are finally discovering that although relationships might be nice, possessing and applying new knowledge might be more important. So why are more salespeople not doing this? In the end, we all know that knowledge is key! But, something else might be going on. A while ago I did some research into sales-call anxiety and I learned that many salespeople are afraid to challenge their customers. Perhaps we need salespeople who don’t just have knowledge, but are not scared to be assertive with customers.

Sales conversations are the key to selling: When I talk with my sales colleagues, I often hear them say how much they like to focus on CRM information systems. These allow firms to structure processes – a CRM system provides background information on customer relations. But, and I can’t emphasize this more strongly, the key to selling is and always will be the sales conversation with the customer. You must remember that sales conversations are embodied in real life. In such situations, people look each other in the eye, and you can spot hesitations , which could signify changes in thinking. During sales conversations, people think better and remember what is said better. There are neurological reasons for this. Let me tell you more about this in my next blog post!

Interested in more of this? Please visit the Professional Capital website and order one of the books by prof. Willem Verbeke, of which one of them is: The Successful Shaping of Key Accounts by clicking here. Available in English and Dutch.

Just read this night, flying from Detroit to Amsterdam, the biography of Steve Jobs! Amazing indeed! One thing is certain: none of the marketing handbooks even captures for 1% what Steve Jobs -- and his colleagues did accomplish! I wonder, what do some of my colleagues teach to students? Honestly I do not know, but one thing is certain: most of what we teach is simply irrelevant! In my case however I try to be somewhat ;) relevant.

Apparently from the book is that most of the ideas that Jobs did develop were not developed at Apple. Rather these ideas were developed when he was young: being rejected by his father and adopted by another family he developed his personality: “a restless person feeling rejected”, working in his adopting dad’s garage: observing what it is to do “perfect” engineering; developing a fascination with Buddhism, dieting and esthetics which urged to him to be and think “pure” and being the rebellious person both at home and at high school and college which urged them to fight “status quo”. With these capabilities and imprints he went on step by step to develop computer prototypes and, yes, the Apple Empire.   

Apparently people who met Steve could sense and notice his genius; this respect allowed him to get constant feedback from others, check ideas and make conjectures. There is no such thing as thinking deep, there is only thinking by connecting, checking, emulating and learning. By doing this for many years one builds “creative capabilities”. Perhaps we can call this an obsession? In the end I think so and this obsession takes years.

Some people argue we need to codify our knowledge and copy business models. But I now see more clear than ever that what makes a company is the “person” behind the plans and ideas and that it is the network s/he develops that determines how ideas develop. This building of ideas and producing new products requires constant work, passion but more important perseverance. But what is perseverance and why do people preserve? I am almost certain that people are fascinated and passionate because they “lack something” or “love to lack something” and this lacking is what they want to compensate. There got to be a personal issue if one wants to be motivated and remain motivated.

Currently I am studying that this motivation has something to do with hormones: when people feel a lack of something they develop cortisol – a kind of stress that one the one hand invigorates them but that also needs to be reduced (balanced). How do people reduce stress or cortisol? Cortisol can be reduced by getting in a winning mood evoked by being successful – in fact it comes down to the development of testosterone!

Now what has this to do with sales?     

Salespeople too must have a constant passion in helping customers, solve customer’s problems and make deals. But why do sales people have these passions? In many cases salespeople feel irritated when they encounter firms or people who sell something to them who do not care; it is from such experiences that they recognize opportunities which they feel can be solved or should be solved. But besides this, they also got to have this eagerness to solve this problem successfully; meaning it got to end up in a deal. In other cases they might be rejected by customers that makes them a bit angry and this invigorates them to score and reduce the feelings of being rejected. In addition they also got to feel competitive.

When salespeople possess these characteristics, they can be more upfront when they see a problem with customers; in fact they become motivated to challenge a customer who in turn feels inspired. This eagerness in turn allows him to overcome his feelings of embarrassment. I felt the same about Steve Jobs; as he knew he had something to offer he became less embarrassing about telling where he stood for. Better salespeople say things but then also “do” what they say.

So what do I look for when I hire people or when I tell people to hire a salesperson? Salesperson’s performance is both a function of their skills and the way he has been educated/trained by his parents? So I always look if a sales person has discipline? Is this person an entrepreneurial person and does he or she takes initiative. Most of these abilities are in place when people were young.

When these salespeople act in the world, they in some sense feel not at ease when they do not perform well; hence they develop cortisol. The only way to get out of his “cortisol” mood is to win and make deals. Their pride (testosterone) goes up and they become or act like winners. They know they do not want to be part of a losing group but want to be leading. I ask them to read Steve Jobs! You will meet an inspiring world.

Can information about a sales professional’s DNA predict how sales professionals actually interact with customers? Why should we use genetics to study sales professionals? Let me answer these questions with some facts.

For a few years already we - Wouter van den Berg, Loek Worm, Rick Bagozzi and Wim Rietdijk - are studying the behavior of sales professionals using genetic markers. We have come to call this study “The Rotterdam Sales Leadership Study.” In this study sales professionals provide their profile and their DNA by donating saliva. This is then send to a research lab in the Netherlands. The participating sales professionals receive a personal feedback rapport that explains their DNA score on a specific set of genes. Let’s call this the intimate part of our study. Sales professionals who participate in our study like to have their DNA tested because it provides them with information about their temperament, which is innate. The participating sales professionals learn what building stones their character is made off, the building stones from which they (we) as humans build their (our) “character”. The rapport gives an insight in the character of the person as it is at one particular moment but which people (we) shape over time. 

An important distinction: some sales professionals talk and other listen?

Some years ago already, my former professor Bart Weitz (then at Wharton School now at the University of Florida), made a crucial distinction between sales professionals who just talk when they meet customers and those who engage in conversations with customers. He called it the “selling orientation” versus the “customer orientation”. When selling orientated sales professionals meet a customer, they seem to perceive the customer as someone “to be manipulated” (almost as an object) and as someone to whom one should sell something no matter whether the product fits their needs or not. The second group of sales professionals interact in a different way: these people actually passionately seek to understand the needs of the customer, they ask deep questions and try to match the needs that are revealed during the conversation with their products portfolio.

Is that an important distinction? Sales professionals who talk a lot in the end might manipulate customers who succumb to the professionals’ sales pressure. These sales professionals might generate more sales in the short term but over time customers do not like to meet these sales professionals as they feel uncomfortable with them. Sales professionals who are interested in the customer (those with the customer orientation) are liked more by their customers hence customers develop long-term relationships with the sales professional and of course the professional develops a relationship with them. Needless to say such a distinction matters (a lot).

Asking a fundamental question: a biological explanation why sales professionals have a selling versus customer orientation?   

We sought to provide different explanations for these two different sales orientations. First, we must realize that many researchers propose that sales professionals who display a customer orientation have an intrinsic motivation or like to develop long-term relationships. But such explanations are tautological; in other terms, wanting to develop a long-term relationship never can be an explanation for a long-term relationship that develops from customer orientation (which is an outcome). What if this selling versus customer orientation is a reflection of something more fundamental, namely something biological?

We studied sales professionals with a customer orientation using more fundamental biological explanations. To our amazement, these sales professionals were more likely to be passionate about the products they were selling and they were constantly on the look out for problems which customers have (or could have) and which their products could help them solve these problems – hence their products are solutions. In addition, customers felt excitement when they talked with them during sales conversation as they felt that they were being understood by the sales professional. In the end we concluded that these sales professionals are very curious people. People who are constantly looking for new nuances and constantly want to learn from what they see and hear, feel a great amount of satisfaction. In a business context this learning from customers in order to propose a solution is called “opportunity recognition”.

Why do customer orientated sales professionals get excited about finding or recognizing opportunities? There is a biological explanation to it! We know from Neuroscience that when people learn they produce dopamine within their dopamine system within the brain. More concretely, neurons in the dopamine system produce dopamine which is absorbed by another neuron via the dopamine receptors which in turn trigger a chain of reactions such as learning and excitement that comes with learning. Sorry, that is how the brain works, it is a biological fact. Now a bit more difficult, our brain consists of different types of the dopamine receptors, there are type 1 and type 2 receptors. These types of receptors (their interaction) in turn affect how the brain learns and how it is being regulated.

The receptors are produced by people’s genes but depending on one’s DNA some people produce more or less of these receptors. We did focus on two genes namely the dopamine 2 and 4 gene (known as type 2 dopamine receptors) because the first is known to have a variant that is associated with a lower flexibility during learning (almost repetitive behavior) and the second has a variant that is associated with a tendency to explore new ideas and environments. Guess what we discovered? Sales professionals with a variant of the dopamine 2 receptor tended to have a selling orientation (hence they are repetitive), whereas the sales professional who carried a variant of the dopamine 4 receptor tended to have a customer orientation (hence they are natural explorers).

What does that imply? Sales professionals who are customer oriented tend to be more curious; apparently this tendency seems to be innate. What is an implication of this finding? Remember the distinction between temperament and character: sales professionals who are customer oriented have learned by sales training and experiences to dig deeper in the customer’s needs (character), however, their temperament urges them to keep digging deeper and create more nuances. So how should managers interact with these sales professionals? Better have a sales manager who is also curious because soon or later the sales professional knows more about the market than the sales manager and the sales manager will be unable to have a good conversation with the sales professional.

What about the sales professional with a selling orientation? These are sales professionals who do not easily switch their behavior; probably they might want to switch their sales orientation but they cannot do so. So there is a deeper reason why customers do not like them: these customers unconsciously notice that they behave like an addicted sales professional! In the end they become a night mare for many customers. 

Professor Willem Verbeke

Erasmus School of Economics, Rotterdam