The world of sales is changing radically. In this day and age, we are asked not only to sell a product or a service, but to provide value to our clients. We are asked to deal with our customers in a way that turns them into loyal patrons, advocates and evangelists for our brand. Considered to be a disruptor in the consulting industry, Alan Weiss is one of the pioneers of this approach to sales when he introduced value-based fees for consultants in the 90s. Alan is a sought-after keynote speaker and the author of dozens of books, including the bestseller, Million Dollar Consulting and his personal favorite, Million Dollar Maverick. In this episode, he joins Doug C. Brown to talk about value-based pricing, which he tackles extensively in an eponymous book. Join in and get some valuable insights from one of the world’s premier consultants.
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I have a guest who you are going to love. His name is Alan Weiss. Alan is a person that I’ve known for many years. He’s a guy who is living the truth. Alan is a consultant. He’s been a consultant for many years. He’s a trainer. He’s trained consultants. He sells to very large clients. He’s worked with lots of CEOs, with many executives, and these large clients. We’re going to talk about that. He’s also an author of over 65 books on consulting and life. I highly recommend them. He’s been indoctrinated into the Speaker’s Hall of Fame. He’s an animal lover. He has his dogs and others around him on a consistent basis.
He is a husband who adores his wife. It’s wonderful to listen to him when he talks about his wife. He is a wonderful father and a great human being. He’s someone that I’ve personally studied with over the years. To me, he has pioneered the concept of how to sell on value from an executive standpoint and a sales standpoint. Selling on value will bring higher fees. It will bring quicker sales. Read on as you’re going to leave here with a lot of great information. Alan, I want to welcome you to the show. Thank you for being here. It’s a pleasure having you here.
Thank you for inviting me, Doug. I enjoy being here. I’m looking forward to it.
Your story is fascinating to me as I’ve known you now for almost two decades. If I remember correctly, you told the group at one time that you were fired without a good cause. That challenge that happened took you on a path and you went on to work for yourself and build a seven-figure-plus consulting practice annually and serving some of the largest companies in the world, working with CEOs and executives.
I was fired for a good cause. The owner hated me. W. Clement Stone owned the company and he believed in positive mental attitude. He thought his $450 million fortune was from positive mental attitude. I told him that the etiology was reversed. He had a positive mental attitude because he had $450 million. If he gave everybody $450 million, everyone would have a positive mental attitude. He didn’t like that so he fired me. You either get distraught or you get angry when you’re fired. I got angry. I decided no moron will ever fire me again. I went out on my own. That’s what happened. One thing led to another and here I am.
You said something important for everybody. You either get distraught or you go the other way. In sales, how many times as a CEO or you’re in a position in a company where things aren’t going right? You want to focus your brain going toward the solution versus the problem. Everything I’ve seen, read and heard about you, that’s exactly what you’ve done. How important is it for an executive or a CEO running a company? You had some major companies. How important is it for that CEO to stay focused on solutions versus problems?
I put it in a slightly different way. A CEO has to stay focused on growth, innovation, new standards, and not on solving problems. Most people in an organization are adept at solving problems. This isn’t like the ‘50s anymore or time and motion studies. Organizations are pretty good at solving problems. The problem with doing that is that you simply restore things to where they were before. You restore what’s wrong to its past performance. In this day and age, especially you need to create new levels of performance. That’s what leaders should look at because if they’re not doing it, no one is. The example you have to set or the avatar is we want to continue to improve our standards. In other words, just because something isn’t broken doesn’t mean you don’t improve in any way. Too many companies fall back on their laurels. They become complacent. The last time I looked, the only time you can coast is when you’re going downhill.
If you had to attribute 1 to 3 things to your success that are maybe keys to your success and you’re selling millions and millions of dollars in large consulting projects, what would a few of those be?
One would be fearlessness, the second would be a sense of humor, and a third would be smart. I have a huge education, both formally and informally. I have a huge vocabulary and consequently language controls discussions, discussions control relationships, and relationships control business. If you have the language, you in effect can control any situation.
Let’s go back to sense of humor because a lot of people don’t take that one as seriously, but I’ve witnessed in sales, having a sense of humor and selling large accounts is particularly important. Do you agree or disagree with that concept?
I agree. I’ve interviewed a lot of candidates for clients in my time. To me, 1 of the 2 or 3 representations of intelligence is a developed sense of humor. People who don’t have a sense of humor, I don’t find them especially bright. If they can’t make fun of themselves, I find they have no perspective whatsoever. They take themselves too seriously. All humor is rooted in pain. If you listen to stand-up comics, almost all humor is rooted in pain and that’s why we had comedy. That’s why we have humor. If you look through the lives of a lot of these comedians, they’ve had painful lives. They’ve been pressed. They’ve suffered bigotry. You need humor for perspective. You need humor that tells you that if somebody says no to you on a proposal, it doesn’t make you a lousy marketer. It simply means at that time, in that place with this person, they decided not to buy. It’s their loss. You need this humor to get you through the day because you’ll face all kinds of crazy situations.
For those of you out there, lean in on that statement because I have known humor as well to be a successful sales driver for companies, as well as for top individuals who want to make more money in commissions. I believe you worked with Mercedes-Benz. What are some of the companies you’ve worked with?
Mercedes, JPMorgan Chase, Bank of America, GM, I’ve worked with a governor of a state to set strategy with his top people. I can’t tell you which one. I worked with Texaco. I’ve worked with a variety of federal agencies. I’ve worked with a variety of associations like the American Institute of Architects, American Council of Life Insurance. I find it across the board for all these organizations. There have been about 300 of them over 30 years. I find that they’re more similar than dissimilar.
Let’s go to the similar. When working with these CEOs or executives, not all of them but most of them want revenue growth. When they’re looking to grow their sales, the ones who are doing it consistently and winning, and being victorious in the revenue growth game, what are some of the overlapping success traits or patterns of those people?
In that special order, they understand that people are assets, not expenses, and machinery is an expense, not an asset. In most companies, they get that wrong. They invest in the equipment and they try to downplay the people. I’ve worked with the Los Angeles Times, the New York Times, the American presence for many years. In the newspaper business, you find that the conditions are terrible. People work there because they love the work, but they’re not treated well. You often find the same thing in places like firefighters, first responders or nurses. They’re passionate about the work. They’re not treated all that well by their employer. Doctors don’t treat nurses well at all in most cases.
One thing is you have to understand that the people are assets. The second thing is that money is not a motivator. The absence of money could be a demotivator. Go back to hygiene theory, McClelland and Herzberg and people like that. The issue here is that people are motivated by agency. They’re motivated by the ability to have some freedom, to apply their talents and to be recognized for those talents. If you give them that, they respond well. You have to be confident to give them that.
Another important point is that the best organizations understand that their customers and clients are not equal. They don’t treat everyone equally and that’s heresy, but it’s true. You have to treat your best customers the best. Too many organizations spend all their time, money and energy trying to appease their worst customers. That’s not how to do it. Similarly, in an organization, you should be spending your development and investment money on your best performers, not trying to make your worst performers better. You focus on the excellent customers and employees. That’s who brings you forward. It’s not trying to bring the worst performers and the poorest customers up to some higher level.
We used to do that. Those who are reading this, think about this for a second, are you rewarding your nonperformers or trying to prop-up the weak? Especially when it comes to sales growth, because very similar, we used to focus on feeding the strong. A lot of companies would prop-up the weak by trying to give them leads. They would neglect the top performers because they were saying, “These people get their own leads. They can do this. They can do that.” What we found is the exact reverse. When you reward the strong, the strong become stronger and people want those leads. They’ll tend to prop themselves up or they’ll exit the process. Is that similar to what you were saying?
It’s true. You have to go with your strengths. As an individual, you asked me how I got by when I got fired, you go with your strengths. I could write and I could speak, and so I wrote and I spoke wherever I could. I’m a lousy networker. When somebody says, “How are you?” I say, “Why do you care?” Networking is not going to get me anything. You go with your strengths. You don’t need somebody else’s self-help book. As George Carlin said, “If you’re reading someone else’s book, it’s not self-help.” You don’t need somebody’s self-help book, which assumes you’re damaged and say, “Do what I do.”
It’s the same thing with organizations, you go with your strength. You invest in your strengths with your customers and employees. I’d also include the fact that you have to be constantly innovative. You have to look at volatility and disruption, which we love to talk about these days as offensive weapons and not as something to protect yourself from. I introduced value-based fees for consultants in the ‘90s. Now, I have the strongest independent consulting brand in the world. That’s because I disrupted the profession. That’s what organizations have to do. If you look at Bezos at Amazon, Jobs at Apple, Fred Smith at FedEx, or the late Tony Hsieh at Zappos, these were people who disrupted the marketplace and some of them are still doing so.
Disruption is an interesting topic. There was a book published years and years ago called The Innovator’s Dilemma. I remember reading that. It was exactly what you said, you can’t be great without disruption. I find that fascinating. You’ve written now 65-plus books.
It’s up there somewhere in fifteen languages.
Many of them contain disruptive ideas within the books. I’ve read quite a few of them. I was wondering, and I’d like to come back to Value-Based Fees, which is my favorite book, which books that you’ve written is your favorite and why?
It’s tough. At this point, my favorite book is Million Dollar Maverick. I’ve never written a memoir. My wife said to me, “Don’t write an autobiography for God’s sake.” Million Dollar Maverick has a lot of that in it. I also narrated the book. There’s an Audible with my voice on it. It’s funny when McGraw-Hill puts out the Audible versions of my books, they hire an actor. I’m in the National Speakers Hall of Fame, but they don’t want me to narrate my own books. This other publisher did. I have a book coming out early in 2021 called Legacy. It is about what we contribute every day and that life is not a search for meaning, but the creation of meaning. I’m looking forward to that book. I enjoyed writing it.Just because something isn’t broken doesn’t mean you don’t have to improve it Click To Tweet
I’m looking forward to it too. I’m a big fan and I read your books, listen to your audios. I do things like that. Million Dollar Maverick, for those who have not read it, go get the audio. I have listened to that audio eleven times because you can keep listening to it over and over again. You’ll pick up amazing stuff. If you’re running a company, I don’t care if it’s a multibillion-dollar corporation, or you’re just getting going, or your first million, this book will help you around keeping your mind straight because that part is all about it and value in life. Alan, you wrote this book called Value-Based Fees. It was the first book I ever read that you wrote. Why do you believe that selling on value is important versus selling any other way?
It’s interesting you picked up that book. Wiley asked me to do a third edition, which I have finished, and that will be out in 2021 too. It’s the third edition of Value-Based Fees. First of all, the notion that our physical presence and the time we spend is important is intellectually ridiculous. What’s important is not what we do but what we create. The second thing though is an ethical problem. When I first entered this profession, it was a big A consulting firm. Now we’re about a big 2.3 or something.
Even the big firms as well as the boutique firms and the lone wolves, in charging by time, you’re at an ethical problem with your client, the confrontation. The client deserves a fast resolution. The faster, the better, but the consultant only makes money the longer he or she is there. I said, “I’m not getting into that game. I’m not charging by head count. I’m not charging by materials. There’s got to be another way. I don’t want a piece of the action. I don’t want skin in the game. I’m from New York. I want cash.” The best way to do that is to say, “If you and I agree that we’re going to produce this reasonably as partners, then my fee for that is this and you’re going to get at least a 10 to 1 return. Tell me where else you’ll get a 10 to 1 return.” The answer is no place. When I talked to some New York consulting firms that were in the manufacturing business, they told me that a 2.5, 3 to 1 return for their clients was outstanding.
I said, “Ten to one and I’m in,” especially if it’s conservative. I then said, “You only can do this if you talk to what I call an economic buyer,” and people were talking to human resource people. I call HR hardly relevant. You don’t talk to HR people, or learning and development people, or anyone in the balance of the organization. You talk to people who have the ability to pay money for your value. I call that an economic buyer. If you take a look at Merck or Pfizer, these big companies where I worked, there were hundreds of those people, economic buyers. If you look at a smaller business where a lot of consultants are closely held, the buyer is usually the owner. In a nonprofit, it’s usually the executive director or the chairman of the board, but you can find these people. They’re not hiding.
Is the economic buyer different than the decision maker? In my experience, it can be. They can be somebody who can make the decision, but then there’s the person who can write the check.
There’s no such thing. I’ve had a guy tell me, “I’m the buyer, but my boss has the money.” I said, “You’re not a buyer.” He got into a fight with me. I said, “Can we shake hands now?” He said, “No.” I said, “You’re not a buyer. Get out of my way.” The buyer is the person who can invest the funds. The reason that’s true is that the buyer is the one with the fiduciary responsibility. The buyer has to justify the investment. The “decision-maker” that you’re talking about cannot justify the investment and won’t be held responsible for it. Only the person with the fiduciary responsibility will.
People are afraid to meet buyers. They think that buyers have a gun in their drawer or they have a trap door and they’re going to disappear from in front of their desk or they’re going to belittle. I’ve got news for you. I’ve been in more boardrooms and people can count. I’ve been in more executive suites than people can even think about. These are people like you and me and everyone else. They have political, social, emotional, and family concerns. They’re just playing with more money. That’s all. You have to relate to them. I’ll tell a secret for your readers, behind every single corporate objective is a personal objective. If somebody says, “Alan, I want better teamwork,” it’s because they’re tired to being a referee among the teams. If you play to both of those, the corporate need and the individual need, you will get the business.
That is important. We’re not selling to titles, to CEOs and VPs. We’re selling to people. Behind every corporate objective is a personal objective. You find that personal objective and you magnify that value in addition to the corporate value. That’s when you edge out your competition, Alan, would you agree with this?
As Alan and I were talking, I said to Alan, “I’m thinking of getting a new vehicle.” I went to shop for this new vehicle. If you’ve ever gone shopping for cars, it’s crazy especially this time of year. Most of them were trying to sell me on price. I had some emotionally negative attachments to this other vehicle that I had. I wanted to get rid of this vehicle, but it was stuck in a lease. Someone said to me, “I’ll take care of you on the price because that’s part of the job, but wouldn’t it be nice to be able to let go of that negative attachment to this other vehicle? How will you feel once this one’s off your plate and you’re in the new one?” That is the value that I was looking for. That was my personal objective to feel better. I bought the vehicle. I didn’t even question it. It is important for companies to get their people focused on selling on value versus selling on price. Time in the beginning, a lot of consultants or coaches they’ll sell by the hour versus by the value. How does one instill that in an organization from your perspective?
There are a couple of ways. The first thing you have to recognize is everybody knows what they want, but few people know what they need. Amazon is the central distributor of books, auto-parts, cosmetics and everything else. I never realized that I needed an automatic garage door opener until I had one. The second day it became a necessity and no longer a luxury. It’s the same thing with a phone in my car and so forth. You have to understand that it’s important to ask the buyer why, “You say you want this but why?”
When you ask why, you go up the decision change to a higher level. When you ask how, you go down the decision change to a granular level. In terms of instilling this in the organization, people change when they do something in their own best interest, not the company’s best interest, not necessarily the customer’s best interest, their own best interest. If you say to people, “If you want to make a larger sale quicker and easier, here’s how you create more of an appeal to your customer by talking about value.”
That person to who I’m now talking wants to learn that very quickly. If they can make a sale that’s larger, faster, less work and less hassle, they’re going to listen to me. You have to put it in the other person’s best interest. When you sell based on value, you create an interesting dynamic, which is called loyalty. When you have loyalty, people give you the benefit of the doubt. I have a global community of people who I’ve coached, who’ve been in my workshops, who read my books, thousands and thousands of people in my global community.
When the pandemic hits, I don’t have to do anything because people used to come to me in this community. They can come to me virtually. They can talk to me by a variety of different means. I’m still holding workshops. Organizations too have communities of customers, and what they need to do is nurture those communities to make it easier to sell. I’ll tell you something. It’s clear to me that the sales process is changing radically and it is changing toward evangelism. It is changing toward consumer to consumer, word of mouth, peer-to-peer recommendations.
There’s a guy named Jonah Berger, who spoke to me at one of my conferences. He wrote Contagious and Invisible Influence. He’s at the Wharton School. He’s demonstrated in his research that this is indeed the case. Only about 4% of this comes over the internet. This is about 85% of the buying process now is this evangelism. Most of it is interpersonal and that is people not reading social media posts, it’s people talking to each other. As you would say, you have a good doctor or a good lawyer that would help you or vice versa. It’s the same thing with professional services and other services and products. That’s the way we’re going in sales. We want to create a loyalty. We want to create this evangelism because if people tell each other to hire us or buy our stuff, our cost of acquisition plummets.
The old basis of building a business on referrals, but even more so now it’s the evangelism game where clients are going to buy based on recommendations from their peers where they’re going to buy on loyalty over and over again. What we were talking prior to, you go to the similar coffee shops every single day because most likely you have some brand of loyalty toward them. I know I do the same thing. I have my favorite coffee shops.The sales process is changing radically and it is changing toward evangelism. Click To Tweet
I’d go farther and tell you that the world of sales is becoming one of helping the buyer to buy. We were talking about cars. I’m a car guy. I like cars, but my wife wants a pickup. I know nothing about pickup trucks. I hired for $500 a guy who’s a car concierge in effect. He set up meetings with dealers. There was no sales dynamic involved. He had the model set. My wife would drive them. We’d go back. He did all the negotiating. In a day, we had purchased a nice pickup truck. It saved us all a lot of time and money, and a lot of hassle.
There was no guy going into the back room say, “Let me talk to the managers, see if I can get you a better deal.” There’s none of that nonsense. What happened? As the buyer, I was enabled to buy and that’s the future. Now, people are ordering medicines, even pet medicines over the internet. I got a COVID testing kit over the internet. It’s a completely different dynamic taking place. That’s why we have concierge doctors, telehealth and telemedicine now. If you’re going to see teleconsulting, you can see concierge consulting.
All of you people reading this, it’s now how to make it easier on your clients to bond with you, which will lead to more sales. Over and over again, I’ve seen this happen throughout companies that I’ve worked with as well as what Alan is saying on and around this subject. Alan, I could talk to you all day, but I want to respect your time as well. If they want to learn more about you or if they want to get more involved in what you teach, how would they do so?
Go to AlanWeiss.com and you will find free text, free audio, free video, all free. You don’t pay for anything to your heart’s content. Also, you can subscribe for free to my newsletters. I have a weekly podcast called The Uncomfortable Truth. I blog every single day. You’ll find my audios and my videos on my blog. Every Monday morning, I have the Monday morning memo. There’s a variety of things you can do to see what I’m up to.
This is not your average stuff. I have been consuming this myself for almost two decades. I can tell you that it’s worth the energy and time to invest in getting this. You’ll learn a lot about selling on value, being contrarian, and all great stuff. That will help you move forward in your life, careers and move your companies forward when you’re creating more sales. Alan, I want to thank you for being here. I always like to end on this one question and I’ve never asked you this question so I’m very curious. One day, if you could be a superhero or you could come back as a superhero, who would you be and what would you do to make the world a better place?
I would be Mr. Generosity. I would come back with the power to transform people into feeling rewarded and fulfilled by doing good acts for others. Once that started to spread like a chain reaction, that we do away with a lot of this terrible self-absorption, and this terrible indifference and obliviousness to others and be helping out each other a lot more. That’s the key.
From knowing you, you are Mr. Generosity. I appreciate that statement from you because it’s congruent with who I know you have been forever. You’re the superhero. Thank you for being on the show. Go to AlanWeiss.com, pick up some free resources, but more importantly, consume those, implement them and infuse them into your life because it will take you to a far better place over time. I promise. Alan, it’s been a real pleasure. I bid you a wonderful day.
Wasn’t that an awesome episode? That was wonderful. Alan had some great nuggets of information where no matter what size company you are. Whether it’s a $20 billion or a $5 million, anywhere in between or wherever you are in life, you can take these concepts to heart because times are changing. We want to be in that where we can create that loyalty that Alan talked about as well as that community. If the research shows 85% of people who want to purchase and come from an evangelist type of place now where they’re listening to others, isn’t it smart for us to create that opportunity within our organization so people can easily recognize that? You don’t want to be differentiated. You want to be different.
Sometimes being a contrarian and going into this disruptive place, doing it in a respectful way is one way of you positioning yourself different and as the expert. You always want to get to the economic buyer and that person could be different than the decision maker. The reality I have found that it could be one and the same, but they’re usually different people. You want to go to the person who can write the check. Even if they’re a decision maker and a high influencer, you don’t want to negate these people or not talk to them, but remember you’re going there to make the sale for a win-win proposal.
The times are changing. You want to sell on value more than ever before. This selling on head count, time or price per item, that is going away unless you want to be commoditized in life and in your business. As important as anything, we’ve talked about a couple of concepts. Behind every corporate objective is a personal need. Please take that to heart. Remember behind every sale that goes on in life and if we focus our organizations on this alone, you will see an uptick in your sales. You’re dealing with people. People have wants, needs, fears, desires, and you must address those in the process of playing the win-win sale for these people.
Don’t forget to go to AlanWeiss.com, pick up some books and free resources. I promise you, you will not be disappointed. I’ve consumed a ton of this information on his website as well. I love Value-Based Fees. That is one of my favorite books. He also has another one that I would say is equal in my mind to Value-Based Fees, which is Million Dollar Maverick, where he goes through not only corporate lessons or business lessons, but you can tie this into your personal life as well to become a better human being all the way around.
I want to thank you all for being here. If you like this show and you believe that it could help someone else, I’m going to ask you to please share it with your peers. I’d be very grateful if you put it out on your social media to help build the community on and around these things. If you love this thing, please go up and give it a five-star review. I appreciate you being here. Until next time, wishing you a wonderful and awesome day.
- The Innovator’s Dilemma
- Million Dollar Maverick
- Value-Based Fees
- Invisible Influence
- The Uncomfortable Truth
About Alan Weiss
He is an inductee into the Professional Speaking Hall of Fame® and the concurrent recipient of the National Speakers Association Council of Peers Award of Excellence, representing the top 1% of professional speakers in the world. He has been named a Fellow of the Institute of Management Consultants, one of only two people in history holding both those designations.
His prolific publishing includes over 500 articles and 60 books, including his best-seller, Million Dollar Consulting (from McGraw-Hill) now in its 25th year and fifth edition. His newest is Threescore and More: Applying the Assets of Maturity, Wisdom, and Experience for Personal and Professional Success (Routledge, 2018). His books have been on the curricula at Villanova, Temple University, and the Wharton School of Business, and have been translated into 15 languages.