Tech Uncensored - An Altitude Accelerator Podcast

Hessie Jones

Today on Tech Uncensored, the Art of Effective Selling. Hi everyone, I'm Hessie Jones and it's been called one of the toughest jobs in the industry. For startups who are building their business from the ground up, finding the right customer who's willing to actually buy your product, can be a daunting task. So this is where all companies start out. They have an idea, they talk to a bunch of people to validate the idea, they build a solution and with all this feedback in mind, they identify a customer profile who would benefit most from the product that they built. They put a target list together and they're ready to go out and sell. So for startups, the first 100 days are probably the most difficult. They go through their cold calls or their cold emails. They may get a few responses back. Some of those transpire into meetings, but many times those meetings don't convert into future meetings. So what are they doing wrong? More importantly, how do they adjust?

Hessie Jones

So I'm pleased to have with me today a dear friend, Faheem Rauf.

Faheem Rauf

Good afternoon.

Faheem Rauf

Who has his own consultancy, Rauf and Associates. He is a seasoned sales professional and he's taught his course on customer obsession to many clients, including Ford Motor Company, Bank of Canada, Royal Bank of Scotland, HBO, Credit Suisse, among many others.

Hessie Jones

So he argues that the principles that we're going to learn today can be applied to early stage startups. So welcome to him.

Faheem Rauf

Thank you.

Hessie Jones

So let's take you back. You worked in a consultancy at Deloitte in your early days. Tell us about your first sales meeting. What was that like for you?

Faheem Rauf

Well, the first sales meeting we had actually was with Molson's Breweries in which they had major labor relation issues. And we realized every time we were talking to them that we were forcing ideas down their throat, especially to the labor union. And I said to my boss, I said, you know, this is not really a pushing of ideas, but rather a sales opportunity where we can convince them that this would be in their best interest to follow this path. And my boss said, so what you're preaching is salesmanship? I said, that's exactly what I'm doing. So that generated an interest from other companies such as Ford, IBM. One of my biggest clients was a Deutchbank called ABN AMRO where they said, "we want to compete, but we want to do it differently." And so our approach was, what is it that differentiates you from another bank or from another institution or from another car company? And then we designed a program called Consultative Selling, which means it's really your partnership with your customers or your clients. So that's where my selling skills began.

Hessie Jones

Okay, let's say we're dealing here in the startup technology space. When companies are first reaching, researching the market, what are the first things they need to know about the market that they're selling into. I assume this is going to set them up for how they actually position themselves.

Faheem Rauf

Yeah. What you have to realize in selling that there are two key elements of selling. One is called a commodity, all right? And a commodity is I'm driving past a gas station and I look at what the price is and I do it. So commodity is something that everybody has. So when you're in a commodity it becomes a price war. Nobody sees a differentiation between you and yourself. Value added is what do you bring to the table? So the problem in North America and all over Asia is a value-added is competitive edge that only lasts about a week because somebody else is going to copy you immediately unless you have a patent. Now an example is you're the only surgeon in all of Orangeville that does laser orthopedic surgery. Nobody else does it. So that doesn't require salesmanship because you're coming to me for that service. It's that simple. But competitive edges, the best example is Sears and Roebuck had market share for almost 25 years. We used to live by the Sears catalog and they had a logo that caused them tremendous value added and that was your satisfaction is guaranteed or your money back.

Faheem Rauf

Okay. That lasted only 25 years. Well it didn't take long for the other retailers to say, hey guess what? We can offer your satisfaction guaranteed, or your money back. So now all of a sudden you're starting to shop around for the best price. So what's the value added? The value added is "what am I bringing to the table that will cause the person to say I'm different." But keeping in mind that your value is only as good as seven or eight days until somebody else says I can follow up. Now obviously Microsoft, Pfizer, all these companies, they don't necessarily shoot for market share. They shoot for patent share. So if I'm the only one that's selling epinephrine pens like that guy did, I can charge whatever I want because there's nobody else on the market. But as soon as somebody else comes on the market you become a commodity.

Hessie Jones

That's interesting. So your differentiator from that perspective regardless of whether or not you can fight for the same type of product has to be something over and above what your competition doesn't have. Because at the end of the day the patent thing is going to happen.

Faheem Rauf

Evaporates. Yes, it evaporates. It's seven years.

Hessie Jones

Okay.

Faheem Rauf

It does evaporate and obviously what you've done is you've thought of an idea that will cause you to be different. And what you're trying to do is get this idea up and running before somebody else follows suit. Because in North America I use the example is the best place to buy a Rolex watch is not in Switzerland where it's made. It's in New York because if you walk up and down 47th street in New York, everybody's selling Rolexes. Then it becomes, how much are you going to charge me for the Rolex?

Hessie Jones

Right, okay. These days so let's build on that. Innovation doesn't mean these days, "it's cool, it's new, it's going to allow me to do new things." Your argument is that every product is a solution to a problem, and it's even going to be more critical to actually convey that to your audience. So tell us a little bit more about that.

Faheem Rauf

Okay. You have to keep in mind that markets are always 100% efficient. That's a key, key element of selling. When they're 100% efficient, it means if I have an idea but the market will not buy it, it's not a great idea. So you have to come up with something really unique that's going to either disrupt business or add value to business or add value to a customer who says, "yeah, this was worth it for me to pay that extra $2 or $3, whatever it is." I mean, if you look at Costco, the Costco model, the value added is 100% satisfaction guaranteed. Literally. I've known people who've eaten half a strawberry, taken it back to Costco, and Costco will give you back a refund. That's their value added. Now, of course, there's price and everything else, but they make it very easy to buy. Very easy to buy.

Hessie Jones

Okay, so what if a person that's sitting in front of you doesn't see the need for your product? They don't perceive that they actually have a problem. How do you deal with that?

Faheem Rauf

Well, number one, you wouldn't have come up with the idea if you didn't see a need. You as an inventor of the innovation, have to understand a lot about the industry that you're going to work in. So the example that I used with you, Hessie, was, if I am a drug company, I'm going to do a different sales approach to a pediatrician than I'm going to do a different approach to a cardiologist. So you must have identified something in that industry that allowed you to say, "hey, if this person uses this product, it'll add tremendous value either to their practice, their bottom line, their profitability, or their market share."

Hessie Jones

Okay, I'm going to bring up this slide. I want you to talk us through this process, okay?

Faheem Rauf

This is your roadmap. This is how you approach any selling process. So obviously, please, the three basic things are I expect the salesperson to be a professional, which means you know what you're talking about. I expect you to be sincere, that you're not going to manipulate me, and I expect you to be honest. What do I mean by honesty? If I say to you, Hessie, you have to go in for surgery. If I'm a professional, I will tell you the side effects of the surgery or the side effects of the medication before you open your mouth. So what you want to do is you want to build integrity by saying, look, this is a great solution, but sometimes, as you know, in cancer, the cure is worse than the disease. All right? But I, as a professional on honesty, have to say, here's the option: we're doing surgery or no surgery. And here are the pluses of that process. And here are the minuses. And there's no product on the world that does not have side effects. So a good salesperson will always open by telling you, let me tell you what the downside is here, okay? So that's how you start.

Faheem Rauf

Now, obviously, please, the first step is building a relationship. Hi, how are you? What's new? Et cetera, et cetera. You can do this depending on how nasty your client is for very short periods of time. Or they'll say, "let's talk about the Toronto Blue Jays or the Raptors." Rapport is just 'how are you?' and end up building a relationship. Some clients will allow you to do this for a certain period of time, and some clients will clamp you down and say, what the hell do you want? So it always depends on who you're selling to, okay? Once your fort is built, the customer will say, all right, what's this all about?

Hessie Jones

Okay.

Faheem Rauf

At that point, you have to establish something called the General Benefit Statement. That is, "what is the reason I'm here?" Now, the most critical thing is we call that the four YOUs. So when you say to me, "Why are you here?", I have to point out to you the four things that I think that are very important to you. So I'm going to use the word "you" four times during that process. So I think the example I used was a plastic surgeon, or the example I could use is an industrial manufacturing person. So in the case of a plastic surgeon, I would have to say, "Sir, I understand in your industry or your practice that your shelf life is somewhat limited. I understand also that you make a lot of money, but for short periods of time. I understand that your field requires tremendous research and tremendous uptaking, and that as a surgeon, you want to make sure that whatever you're earning will provide you with a very good and nice lifestyle." If the customer starts to nod his head or her head, I know that I'm hitting their hot buttons.

Faheem Rauf

So this is not a question. This is a statement. You, you, and you and you. Now, I can give you a lot of examples of, say, a manufacturing person. If I'm selling to somebody who's making auto parts. As a general manager of this facility, I would imagine you're worried about safety. You're worried about profitability. You're worried about cost of manufacturing. You're worried about capacity. If I can do that, it immediately explains to the person on the other end, this person knows something about what I'm going through.

Hessie Jones

Okay? So in part of this process, what you also say is that every time your potential customer opens their mouth, it gives you an opportunity.

Faheem Rauf

Correct.

Hessie Jones

So you want to have them do most of the talking, is that right?

Faheem Rauf

At that point, it's the next step. After the person has nodded their head, then you'll say, "My name is Hessie Jones." You've already done that. And what we bring to the table is networking, funding. What else did you say you bring?

Hessie Jones

Advisory.

Faheem Rauf

Advisory. And the person says, yeah, that's right. And then he's going to say, all right, so tell me about your program. The worst thing you can do is open your mouth at that point. You turn over and say, 'you know what? Tell me a little bit about your idea.' Now you're exploring. Now, that's called probing. And I want to probe because for two reasons. One, is there a fit? Number two, is there an opportunity for me as a salesperson? And is my product going to arouse enough interest for you to follow up?

Hessie Jones

Right.

Faheem Rauf

Okay, so then all I do is I ask questions. And if they keep saying, well, "why do you need to know this?"

Faheem Rauf

"Because, sir or ma'am, our solutions are all tailored. They're customized specifically for you. The more I know about you, the better I am able to serve you professionally."

Hessie Jones

Okay.

Faheem Rauf

So every time they open their mouth, "I'm worried about my daughter." Well, that's an opportunity to life insurance, educational programs, RESP. Every time the client opens their mouth, they're saying, this is what's worrying me. But you cannot allow that customer to take control of the meeting and say, "Tell me about your program". Because then all they're doing is sitting back and evaluating and they'll say, "oh, thank you very much. Send me a proposal." No!

Hessie Jones

Okay, so let's take this into a scenario.

Faheem Rauf

Sure.

Hessie Jones

So when you're selling, you need to know not only who the decision maker is, what are his triggers. What does he care about if there are more than one person. Let's say I have a brand new type of process that will mean that I'm creating or I'm developing a product that has organic elements that can replace chemicals in plastic bags. So my target are manufacturers of plastic bags. I secure a meeting with a VP of product.

Faheem Rauf

Yes.

Hessie Jones

He brings his CFO into the room and a researcher.

Faheem Rauf

Yes.

Hessie Jones

So from that perspective, what would I do in that meeting?

Faheem Rauf

All four of them would have a different you. So, for instance, the CFO, "am I going to get return on my assets? How much investment is going to be required? What is going to be necessary for us to launch this product?" So they're looking at it from a financial perspective. So I have to talk from a financial perspective. If it's the manufacturing guy, he's going to be or she's going to be looking at how easy is it to implement. What's the cost of implementation? How smooth can it be? What type of capital equipment do I have to invest in in order to get this done? And will there be after-sales support? Is there an 800 number I can call if the manufacturing doesn't go smoothly? All right?

Faheem Rauf

The marketing person is going to be completely different. You're interested in market share, competitive analysis, okay? Who's going to buy this product and who are my competitors? You're going to be switching back and forth. Now, what we say, please, if you are a salesperson and you have a technical person on the other side, I mean a highly technical person, they can sync you in 2 seconds because you don't have the knowledge, right?

Faheem Rauf

So when you go into that meeting, you better make sure on your deal team, you also have a technical expert. You don't need a financial person because those are generic return on investments. You want to make sure the cost of capital, et cetera, et cetera. But when you get into highly technical, we call that the feasibility stage. At that point, if you're going in, the technical guy is going to ask you a lot of questions to trip you up. You have to have a technical person, maybe it's you yourself who is able to respond to that technical question.

Hessie Jones

Okay.

Faheem Rauf

So each person is going to have a different hot button Hessie.

Faheem Rauf

Okay.

Faheem Rauf

They're all going to have different hot buttons. Marketing, finance, sales are all going to have different hot buttons.

Hessie Jones

So let's talk about the objection handling. Because you said that when you're trying to move somebody up this curve to conversion, they could bring this in at any time.

Faheem Rauf

An attack could happen at any time during the meeting, if you say good morning, that individual, she's had a bad day, 'what's so good about it?" All right? "Are you here to waste my time?

Faheem Rauf

Or worse! "All right, I'm going to give you 60 seconds now. Hit me with your best shot." We're not playing golf here. I mean, the best example I can give you in New York, when we were selling to the New York Energy Board. We had a 1 hour meeting, and the VP of Manufacturing came out and said, "I don't have a lot of time, so you got 60 seconds to give me your best shot." And we looked at him and we said, "sir, we need to reschedule."

Faheem Rauf

So objection can happen anywhere. Now, number one, never ever disagree, okay? Never argue. Never! Always tell them they have their right, okay? Please don't use the words like no. Obviously, which means you're a dumbass. That can't be true. Then it becomes a war on "I'm going to prove to you". Now when the person says, "well, we did this and this and this,", how to handle an objection is to simply say "yes, that's an option. Can I offer you an alternative idea?"

Faheem Rauf

So I'm not disagreeing with you. I'm just saying, "please put this into consideration". Because, believe it or not, objections are sales opportunities. They're always sales opportunities.

Hessie Jones

Okay. I'm just trying to think of an example of an objective. Let's assume let's go back to that guy, let's say the manufacturer of plastic bags. And they say, "that's great, but you know what? If I'm going to use your process, I'm already saving this amount of money because I can do this in bulk with my existing process. If I bring your process into my facility, it's going to cost me so much more to even try it in a lab. At what point will my cost come down? Like, why should I even try?"

Faheem Rauf

Okay, that's very insightful. Thank you for raising that as an objection. I share that insight with you as well. I'm constantly stroking you back. All right? Let me walk you through our alternative solution here. Yes, initially, there is a cost of setting up and time. Yes, there is an initial cost of capital equipment. But here are the results that can be produced over either short term, medium term, or long term. So I'm actually arguing fact against fact. Okay. But I'm not going to disagree with him or her under any circumstances. Yes, that's very insightful. You're absolutely correct. That makes that person feel very important. And instead of becoming an adversary, they say, "so you're appreciating my intellect, but you're offering me an alternate solution."

Hessie Jones

Okay, so where in this tree, where do you find actually that taking place?

Faheem Rauf

Okay, then when you have all of the needs, you've probed and you've probed and you've probed and you've probed. In selling, there's nothing such as asking too many questions. That does not exist. The reason I'm asking the question is to understand the processes, to make sure that I come back with a proper solution. So then when you're finished and you've got all the information, you say, "May I recap? Am I allowed? Can I paraphrase you? May I tell you what I think what I hear you needs to be? So I'm going to give you what they call an overall picture of what you told me." Now, that means you have to listen and listen intently. And I suggest you also should take notes. I mean, don't sit down and scribe, but 'this was important, this one.'

Faheem Rauf

So if I come back to you and say, these are the key areas, you were concerned about cost of capital, you were concerned about cost of finance. You were concerned about cost of this. Yes. Now then, either you take a break or you say, all right, let me give you what our product brings to the table.

Faheem Rauf

Now, please. There always has to be a minimum of two options or three options or better. Let me offer you some solutions. One is do nothing. That's an option. You can carry on your process. Number two, let me offer you this option, either partially implemented or fully implemented. The third option is fully implemented. Before my customer opens their mouth, I have to tell them, what are the pluses of that option and what are the minuses? That builds trust that you're not hiding anything. Second option, let me tell you the pluses, and let me tell you the downside. Because I don't care what product it is. Every product has a drawback. Every single product! If it's cheap, it doesn't hold its value. If it's expensive, every product, whether you're taking Aspirin or you're taking Tylenol, they all have a side effect. Now, it's up to the doctor to say.....

Faheem Rauf

If the person says, "Hey doc, I understand this operation is going to be very painful." I don't want to say, "no, it's not." Yes, it is going to be very painful. Yes, your recovery time is going to take three months. But here's the advantages. You're going to feel better. You're going to be able to run. You're going to be able to walk. Oh, so that's it. Now, obviously, if the drawbacks are worse than the pluses, then it's not a solution.

Hessie Jones

Now, how much of that, though? How much does market demand or market change play into the sales funnel because they may not be ready for it. Or let's say there are too many things that are going against you in the sales process. But eventually and this is....

Hessie Jones

I use the example of Blockbuster. Eventually, they have to listen to the market demand.

Faheem Rauf

Of course!

Hessie Jones

And they know that things are changing. At what point do you think it's possible that the person that you're selling to is going to be more open?

Faheem Rauf

That's the beginning of the closing of the sale, and what will happen is a lot of customers will say, "let me delay. Let me get back to you on this. Let me think about it." Okay? That delay can cause you to lose huge opportunities because competitors are always biting at your heel. With the delay You have to tell them, 'what are the disadvantages of delay?' Okay? Your competitors are coming on stream. Cost of borrowing is going to get more expensive. And by the way, we believe the most important thing in closing is storytelling.

Hessie Jones

Tell me more about that.

Faheem Rauf

Storytelling is let me share an example with you, okay? One of the best examples I can think of is where somebody delayed writing a will, and the person said, "no, I'm in very good health. I don't have to buy insurance, or I don't have to update my will." Well, as a professional, I have to say "That's your call, Ms. Jones. But let me tell you a story about what happened to one of my clients that decided not to take action." And I got to tell you a horror story. I mean, it's got to be a real. I mean, it's got to scare you out of your pants. "What happened was he died suddenly of a heart attack on the tennis court. The wife lost the residence. It went into escrow to get the end out of escrow cost them $50,000." So I'm giving you a story. Now should I exaggerate? Yeah, maybe. But all good sales have good stories of when it worked and when it didn't work. And then at that point, you're starting to close the sale to a commitment to let's take some action here. Because every client will think, "You know what? I can delay."

Faheem Rauf

"Can you really? With ABC company just launching their new product?" Are you kidding me? "Let me tell you about one of my clients that didn't launch." But this one has to be a negative story. Okay, well, can I think about buying this house? Sure. But, you know, interest rates are going up next week because the Bank of Canada is going to raise this. So the person says, wow, I need to raise their blood pressure. That if I don't execute now, the opportunity is slipped by me. So going back to that plastic manufacturer, you can say, "by the way, do you know there's a new law coming out that single-shot plastics will be eliminated?" Or this one could happen. As you're talking about the bill for the safety of the people, there's another company twice as large as you that is beginning to think about that type of thing.

Hessie Jones

But sometimes from that perspective, legislation is your friend. Because until legislation happens, people are going to try to fly under the radar as much as possible until that happens.

Faheem Rauf

Correct! Yes

Hessie Jones

when it is impending, then they start preparing for...

Faheem Rauf

Sometimes it can be too late.

Hessie Jones

Okay.

Faheem Rauf

It can be too late. That's the rumor of mine. I said you can never time the market, but you can sure watch CNBC.

Hessie Jones

Yeah.

Faheem Rauf

I need to be aware. Now, again, Hessie, as I emphasize to you, sales has to do a lot with industry. Which industry am I in? I have to understand the industry. I have to understand the players in the industry. Does the company have a CFO? Does the company have a marketing person? So that when I'm coming to you, I'm appealing at your level and not at my level. Okay?

Faheem Rauf

So as I said to you before, I cannot have one of my salespeople calling on a pediatrician as the same person who's calling on a cardiologist.

Hessie Jones

Right.

Faheem Rauf

Because they have completely different needs.

Hessie Jones

Absolutely.

Faheem Rauf

All right? And if I target it, that means I have to understand, "what is the pediatrician?" What are the concerns they have? What type of practice do they have? How large is the practice? So the more I understand about my client or my customer, the better is my solution to it.

Hessie Jones

Okay.

Faheem Rauf

That's the key. So you can't have a person trying to cover the whole range.

Hessie Jones

Okay. So I have one question.

Faheem Rauf

Sure.

Hessie Jones

So you are near the top of the conversion funnel. You think you are. So how do you know when you've actually established a clear need with your client? What is a startup founder these days? What are the triggers that he needs to look at for a potential customer that he's been nurturing for, let's say, a month?

Faheem Rauf

And the customer is not closing. Is that what you're saying?

Hessie Jones

Customer isn't closing. He thinks he's getting there. But what does he have to look for to see whether or not he's actually making some headway?

Faheem Rauf

Okay, two things you got to do. Contact them. Don't irritate me, but contact me. Send me information that's relevant, either by email or whatever it is. But not just the government of Canada is thinking. Something that's specific to my industry, that adds value. If, during the rapport building, I found out this man or woman is into cars, I might want to send them an invitation to the auto show, something that has nothing to do with the sale, but it's adding value to that person's life.

Hessie Jones

Got it.

Faheem Rauf

Okay. So that I keep in touch on a regular. I mean, I had a client that hadn't talked to me for 15 years. All right? And it was amazing. I couldn't take him out to lunch because he was Hasidic Jew and he was so wealthy I couldn't buy him anything. I was in Amsterdam and I went to Anne Frank's house, the one where she was...

Faheem Rauf

And I knew he loved it. For nine guilders, in those years, with $9, I bought the last page of her diary. That's all I did. And I put, "Dr. Allen, when I saw this, I thought of you." And I mailed it to him for nine guilders. I got a contract the next month for over $250,000.

Hessie Jones

Wow.

Faheem Rauf

From an investment of $9. But you have to think about your clients all the time. Don't irritate the hell out of me by calling me asking "Well have you decided?" Do things that have nothing to do with the sales process that adds value.

Hessie Jones

But you obviously knew from previous...

Faheem Rauf

The probing.

Faheem Rauf

Yeah, the probing. I knew what they liked. I mean, when I'm rapport building, the person says, "oh, I love hockey, or I love hunting, or I love skydiving." What can I find out? When I met Dr. Alan Seinfeld, he had on a yamaka. I said, "Alan, come on. I'd like to take you out for lunch." "No, I'm sorry. I'm kosher."

Faheem Rauf

I Said to you, every time the client opens their mouth, they give you an opportunity. And the opportunity was he was a very proud Jewish person who's very proud of his heritage. I can take advantage of that.

Hessie Jones

Right.

Faheem Rauf

So the sales process is not only just all the stuff, but how do I keep it rolling? And you never know when the opportunity strike. I mean, I tried him for five years, but when I saw that Anne Frank's diary, I knew I got him.

Hessie Jones

Wow.

Faheem Rauf

I knew I got him.

Hessie Jones

That's amazing. Thank you.

Faheem Rauf

My pleasure.

Hessie Jones

It's already half an hour.

Faheem Rauf

That went fast.

Hessie Jones

It went fast. Thank you so much Faheem.

Faheem Rauf

My pleasure.

Hessie Jones

So thank you, everyone, for joining us today. If any of you have comments or topics that you want to talk about, just email us at communications@altitudeaccelera.ca.

Hessie Jones

We are currently accepting applications for both our incubator and investor readiness program. So if you want more information, please go to our website, altitudeaccelerator.ca.

Hessie Jones

Next week on Tech, Uncensored, finding your technical co-founder. So until then...

Faheem Rauf

Hessie if anybody wants these cards, you can hand them out.

Hessie Jones

Oh, right. We do have these cue cards that actually provide a good synopsis of the selling skills. So this is amazing. We do have them on hand, if any, but he wants them. So until then, I'm Hessie Jones. Have fun and stay safe.

Faheem Rauf

Bye, guys.