Selling in One Lesson
Blair describes to David how he was able to distill his Win Without Pitching approach into a simple formula:
Power = desirability / Desire
DAVID C. BAKER: Blair, We are going to talk about selling in one lesson.
BLAIR ENNS: I know why you're laughing.
DAVID: I'm laughing because you're constantly pretending that people need to hear all kinds of lessons, but if really is selling is just in one lesson, then doesn't that sort of undermine, anyway, let's just go on. I'm sorry, I'm just trying too hard here.
DAVID: So selling in one lesson. But what's interesting about this is that you have a formula, and I think we probably need to put this formula in the show notes, right? Because just being able to picture this as a, so tell us the formula and then where this came from because I find it really fascinating.
BLAIR: Yeah, it's a formula. It's not really made for the audio medium but what the hell. So selling in one lesson, well let me back up a little bit. So I've been doing the Win Without Pitching thing since about 2002. And since then, people have said to me, you know, like in as few words as possible, explain how you win without pitching. So it took me a long time to get it down to two steps. And so here's how you win without pitching in two steps.
BLAIR: Step one, you change the power structure in the buy sell relationship, and you do that through positioning and we could talk more about that, but we'll get into that in a bit. But that's step one. You change the power dynamics or the power structure in the relationship through the positioning of the firm. By vastly reducing the number of direct competitors you have, you change the power dynamics towards you because the client's power, their power in the sale, their power to push you around, dictate price, etc, comes from the availability of substitutes. So by narrowing your focus, building deep expertise, you become this expert firm and you change the power dynamics. So that's step one, change the power dynamics in the relationship primarily through positioning.
BLAIR: And then step two is to leverage that new found power that you have to change the way your services are bought and sold. And it takes a really long time to unpack that second step because it encompasses many, many things. So, for a long time I was pretty happy with my Win Without Pitching in two step description. And then about five or six years ago, I read Henry Hazlitt's book Economics in One Lesson. And this is a book that I think it was published in 1947 and sold well over a million copies, and I'd never heard of it. And somebody mentioned it and I picked it up and I thought, well, this is something else. If somebody can really pull off the promise in the title by delivering the entire kind of school of economics, I won't call it a science because I like many others don't believe it's a science, but the entire school of economics in just one lesson that will be impressive. And he did it, like to Hazlitt's credit, he was able to distill the entire field of economics down in one lesson.
DAVID: And economics is not a simple field either. So pretty complex. So you took this as a challenge. Two is not enough.
BLAIR: I thought, well, he can do it in one lesson, I can do, what does it mean to win without pitching or to sell creativity or to sell expertise of any kind. I'll just broaden out to selling in one lesson. And let me read you Hazlitt's lesson because early in his book he delivers the lesson and then he goes through all of these examples of how poor economic decision making or poor economic policy arises from violation of the lesson. Here's the lesson. "The art of economics consistent looking not merely at the immediate but at the longer effects of any act or policy. It consists in tracing the consequences of that policy, not merely for one group, but for all groups."
BLAIR: So, what he says essentially is that any mistake in economic policy arises from the violation of one or two things. The first thing is you didn't consider all groups who would be affected by this. You only considered one group. And the second thing is, you didn't consider the long term, you only considered the short term. It's not the only book you would read in the field of economics, but it's a book that you could read and then you could measure any other economic theory or recommendation against the lesson in that book. I think that's why it's such a powerful accomplishment that Hazlitt pulled off. And I was thinking, well, is there the equivalent in selling? And I don't know if I've arrived at it, but I have a lesson that I can distill into even fewer words than Hazlitt. I can get it down to a formula.
DAVID: Yeah, and I'm picturing you in this white lab coat in this big theater at Harvard, and you're writing on the whiteboard and all the students are nodding off. What happened to our regular professor? Where'd this guy come from?
BLAIR: What's Matt Damon the janitor doing here?
DAVID: Okay, so read the formula, and if we have anybody still listening, you need to picture this, and you might want to go to the show notes as well if you can just to see it. So, read the formula.
BLAIR: Our last podcast was so good.
DAVID: It was. Oh, how the mighty have fallen.
BLAIR: I'm going to read it. I'm going to read it because it's on the back of the coffee cup that I'm holding up. Here's the formula, selling in one lesson. P=db/D.
DAVID: So it's capital P.
BLAIR: Capital P, equals lowercase db over D, capital D.
DAVID: Okay. So let's break this apart. What does the P stand for?
BLAIR: P stands for power. It's short form for power equals desirability over a desire. So your power in the sale is a function of having your desirability be greater than your own desire. Makes sense, right?
DAVID: Yeah. So somebody needs to want you more than you want them in simple terms.
BLAIR: Yeah. Drop the mic, podcast over.
DAVID: Right. But now we're going to drag this out for another 20 minutes so people feel like they got their money's worth.
BLAIR: Go ahead and get a coffee folks.
DAVID: I mean it makes perfect sense. As I think about this too, and I'm also wanting to draw this parallel with something that you mentioned in passing, talking about Hazlitt's theory and thinking about, sort of you didn't use this phrase but unintended consequences. I was just thinking about how many times principals make short term decisions thinking that there will not be unintended consequences.
DAVID: So for instance, you need a lot of work at some point and so you make all kinds of compromises not realizing that you're really throwing away the long term viability of this particular client, but the good news is that you get all kinds of opportunities to do this. And what you're talking about is taking the longterm view. But more than that, it's about the whole, maybe not, I guess power structure, is there another word besides power if somebody isn't drawn to that, maybe opportunity or choice or control, something like that?
BLAIR: You've kind of put me onto this a few years ago. I think you very subtly pointed out that I use the P word a lot, power. And you've suggested that, well, there are other ways to think about power, distributed control, the ability to lead. But let me unpack the formula a little bit.
BLAIR: Your power in the sale is a function of your desirability being greater than your desire. And so power is the power to do certain things, not just when the business, I'll unpack that more fully in a minute. But it's essentially your power to win the business and other things. I talked a little bit before about who has the power. Typically the client has the power and that's a function of the availability of substitutes. But in this formula, we're just thinking about it differently. Your desirability, how badly the client needs or wants you or the engagement with you when it's higher than your own desire for the client, for the engagement with the client. When your desirability is higher than your own desire, then you have the power in the buy sell relationship. So that's in simple terms, he who wants it least has the most power in the relationship.
BLAIR: And if you look at most of the problems that agencies find themselves in under the banner of new business development, most of the things that go wrong, most of the costs that get incurred, it's a function of the client didn't want it as bad as you wanted it.
DAVID: You've actually talked about this inside of a micro-example way when you talked about using silence in conversations to see how long you can wait before somebody else says something, before the prospect says something. Sort of like a micro-example of how all of this happens. Are you talking about real desire? If you feel like you need to land some business, are you talking about eliminating that or actually pretending that you don't need it?
BLAIR: That's a very good question. Yes.
DAVID: Okay. You didn't set me up with that. On my own, I came up with that question. Let the audience know for sure.
BLAIR: You read that just as I wrote it.
DAVID: Yeah. Right.
BLAIR: So, you could extrapolate that formula to mean that, okay, therefore, we must seek to maximize our desirability and minimize our desire. Now, if you did that, what would happen? If we sought to minimize our own desire, A, we would lose the motivation to go get the business to begin with, B, we would communicate to the client that we're arrogant, aloof or uninterested. So, I'm not suggesting that we take that formula to the maximum and seek to minimize our desire. We do want to maximize our desirability. And I'll come back and talk about how we do both of those things. Maximize our desirability and not minimize our desire, but just make sure that the expression of our desire, and that's the answer to your question I think is lower than what we discern our desirability to mean.
BLAIR: Are we just convoluting things? Let's unpack power then we'll go through desirability and desire.
DAVID: All right.
BLAIR: So P=db/D. Your power in the sale is a function of your desirability being greater than your desire. And when I talk about P or power, I'm talking about the power not just to win the business, but to win the business with key variables in place. Number one, the right type of business. You and I have worked with so many firms who are pretty good at closing new business and then you look at the business that they want and you think what is this? What is this dog's breakfast stuff? Things that you've done for all kinds of different organizations. When a firm has a positioning challenge and they look at everything they do now and everybody they do it for it, they think, well, I don't know where to begin. And you don't know where to begin, first of all, you shouldn't necessarily look at your current or your past client base. But when you do look at your current client base, all you're seeing is the history of everybody you've ever said yes to. That's all you're seeing, right?
BLAIR: So you really need to start being more discerning about the types of organizations you work with. So first of all, it's the power to win the right types of business. And the right type of business might mean at a certain fee level or budget level or even profit level. So that's the second variable of power, not just the right type of business, but at high margin. We all agree that high profit margins are better than low profit margins, right?
DAVID: Yeah. Unless you're in the southern hemisphere and then it's flipped. But yes.
BLAIR: Shout out to all our Australian friends. So the power to win the right type of business at high margin. The third variable is at low cost of sale. Now, just like you and I and everybody listening will agree that higher profit margin is better than low, we all agree that lower cost is better than high cost. But it's not just for the obvious reasons that we want to keep our costs low. The reason you want the power to win the business at low cost of sale is the cost of sale that you incur to close the business is an indication of how much power you actually have in the sale. Therefore, how likely you are to win. So, if you're going through the sale and even in the early days of the sale, the client is forcing you to incur all of these costs like travel to see them or do some sort of research or other things, that's an indication that you're not likely to win the business because you're not seen as meaningfully different.
BLAIR: So, we want to be in the power to win the right types of business at high margin, at low cost of sale, and the last variable under the subject of power is well positioned to have the greatest impact. And what I mean by positioned to have the greatest impact is with you positioned as the expert practitioner in the sale and you have enough power that the client is letting you lead. I think everybody would agree that for you to do your best work for your clients, you need the client to allow you to lead the engagement. One of the phrases that I probably say most often over the last few years is this, the sale is the sample. If you are not allowed to lead in the sale, then you are not likely to be allowed to lead in the engagement.
BLAIR: That's one of the reasons why I like measuring how much power you have in the sale is so vitally important because if you're not able to amass some of that power and I sound like a dictator, but if you're not able to get some sort of indication from the client that they see you as the meaningful expert and they're allowing you some sense of control, they're allowing you a leadership position in the relationship, then you're not likely to win the business. And if you do win the business, you will not be positioned to have your greatest impact because for you to do the best work, you need to be able to lead. If you're not leading in the sale, they're not going to let you switch hats. You can't be a good soldier in the sale responding to RFPs, saying yes, leaning on service and enthusiasm. That's what I consider to be a good soldier. Somebody who follows orders well. And then once you win the business, take your soldier hat off and put on your general hat and then start to take control of the relationship.
BLAIR: The dynamics of the relationship are established in the sale. So, you need the power to win the right types of business at high margin and high margin is important because profit margin just goes down over time. So it's important to have high margin at the beginning. Low cost of sale, low cost of sale is important because it's an indicator of how likely you are to win the business, and with you positioned to have the greatest impact. By that I mean with you in the expert practitioner seat rather than the vendor seat, where the client is saying, okay, you're hired, what do we do now, let's do it your way. Rather than you're hired, here's how this is going to work, Mr vendor.
DAVID: Yeah. In a minute, I want to ask you to talk me through how we kind of keep our expression of D low and still be true to ourselves and not abuse the prospect/client and so on. But, I just have to kind of interrupt a little bit and just talk about how close this revolves around my entire life's work because it just resonates so well with what I want to do for this field. What I try to do is to help people make better business decisions. You do the same thing in a slightly different area and we overlap some.
DAVID: But what motivates me to do that and to pour my life into this is this deeply held belief I have that financial panic is the, I guess that's the right way to say it, financial panic is the father of just crippling compromises that you make. So if you have these things in the back of your mind as the principal, you're going to make so many bad decisions. You're going to let somebody go that just is an ass on staff. You are going to price things too low because you're afraid of not keeping somebody busy.
DAVID: So, running your business well equates to not having to close every piece of business so that you can act like an expert and not a vendor and not be so desperate so that you're just seeping with this panic all the time. And I know it sounds weird to get kind of emotional about this, but this is, this is what I do for a living for this very specific reason. I just believe so much that if you run your business well, then you can maximize this formula which I didn't know the formula until you started talking about it, but it just resonates so well.
DAVID: If you have a certain amount of cash on hand, if you have a lead generation plan that's running, that's spun up and it's built on a very strong positioning which you alluded to a minute ago. If you don't have some huge client that you're beholden to, all of those things set you up so that you can make more considered careful, thoughtful, expert like decisions. This is just a fantastic topic to me.
BLAIR: Nicely summarized. I think if you or I could wave our magic wands and just kind of impose a wonderful new state on our clients' businesses, it would be that description of power that I talked about, the power to win the right types of business at high margin, net low cost of sale, well positioned, to have the greatest impact. And then, earlier you were referencing Hazlitt's idea of the long term versus the short term and you're just talking about how so often we just get caught making these short term decisions and don't appreciate the long term consequences.
BLAIR: I was going to say, when you were talking about that, I was thinking, well, I think most people understand largely with the long term implications are, but I think they're somewhat in denial. I think they kind of lie to themselves about it, and it's probably because of that financial panic. Like there's a saying, there's long term pain or short term pain, like which one do you want? And if you can live with the short term pain, the long term pain goes away. If you can't live with short term pain, you're never going to make the correct decisions in the long run.
DAVID: Week after week, I work with a new firm and I say to myself, without any sense of arrogance or smirking or anything, I just say sometimes, just to myself sometimes to them, you could have higher expectations for your business life. You have settled into something here and you could see it differently. You could have a different vision for how things could be and as an outsider, I come in and you come in and we see things that, because we aren't quite used to things the way they experienced them every day, and I'm sure our businesses are probably the same. People could step in and see what we put up with as well and say, you know, your business doesn't have to be that way. It could be different, and here we are thinking these thoughts towards the end of a boundary, a chronological boundary, and it's very motivating just to think about this.
DAVID: But getting back to what you're talking about, can you talk a little bit about how to keep our expression of this D low? There are some really key concepts here.
BLAIR: Yeah, can I just explain what you mean by desirability and desire a little bit more first?
BLAIR: These aren't the right words. This formula is like a bit of a work in progress. I don't think it's nearly as kind of succinct and self contained as Hazlitt's work. So maybe it's just a starting point and I'll throw it out in a few years and come back to something better. But when I talk about desirability or desire, I'm trying to find a word that sums up not only the needs of the organization, so when I talk about the client's desire for you or your desirability, it's not just the needs of the organization, it's the wants of the individual. It's not just economic needs or economic forms of value, it's personal or emotional forms of value.
BLAIR: So, I was trying to find a word that encompasses all of those things, needs and wants, economic and emotional forms of value. And desire or desirability are the best words that I could come up with and they're not exactly the right words. They'll do though, I think. So, I'm really talking about does the client need/want you? Does the individual really want to work with you and does the organization have needs that really couldn't be met to the level that you can meet them by competitors?
DAVID: We've all seen the sappy sort of high school movies, right? Where some guy's interested in some girl and the fact that she seems uninterested in him makes it even more difficult for him. It's sort of a little bit of this at play here.
DAVID: But talk about the Jedi mindset, investing in the sale. I want you to dive into how you can get to the point, there's not much control you have over how much they desire you outside of your positioning. But from your standpoint, how can you control your outlook on this possible sale?
BLAIR: Yeah. So how can you control your expression of desire? The irony, it's ironic to me because when I was taught to do new business years ago, I was effectively taught to maximize, to show a high level of desire.
DAVID: Yeah. And I've heard you talk about this and it just makes me laugh, talk about going to a physician who's just so excited to work on you.
BLAIR: I really want your heart business.
DAVID: Yeah. How that would turn you off.
BLAIR: I'm really passionate about your heart.
DAVID: It would just turn you off. You'd rather have not an inhuman, but more of a measured, thoughtful somebody who is very glad to serve you, but not somebody that's desperate to work on you.
BLAIR: Yeah. So, it's an unfortunate condition of human beings that we are repulsed by neediness. And again, I was taught to do new business by demonstrating how passionate we were about the client's brand, how badly we wanted it. I can remember a situation, a new business pitch from one of the world's largest ad agencies where we just leaned into that. It was embarrassing. It was embarrassing the stuff that we did. And so what I'm saying is, you really need to minimize that and you would channel in these moments. You wouldn't channel kind of this service worker who's leaning on passion and enthusiasm because as we've said before, you're not in the service business, you're in the expertise business. So you would channel somebody more professional in your life, like your cardiologist, like your lawyer, like your accountant, and just ask yourself like what expression of desire would they communicate to you?
BLAIR: So I think you want to be clinical, you want to be professional. It's perfectly appropriate to be enthusiastic about the fit as you uncover the situation, what it is the client's need. It's perfectly appropriate to say, oh man, as you learn more about the situation. These opportunities, these are right in our sweet spot. My people could get really excited about this. It's appropriate to communicate that. And again, we're not minimizing our expression of desire. We want to be really tuned into how much the client, do they see us as meaningfully different. Do they see us as the expert. And if they treat us like a vendor, where they're demonstrating kind of low desire for us or our desirability in their eyes is low, the worst thing that we could do is try to compensate that by proving to them how badly we want this.
BLAIR: So, the short answer to your question of how do you minimize your expression of desire is you do not overinvest in the sale. So, let's count the ways that a creative firm can over-invest in the sale.
DAVID: Free work.
BLAIR: Free work, free strategy, get on a plane and go, and I'm not saying you shouldn't travel for new business meetings, but willingly getting on a plane too early, too eager to go get a face to face meeting to sit in front of the client, only to be stood up half of the time. And probably the biggest one is you go into the closing meeting and you go into presentation mode. So where you should be having a conversation, you go into convince mode. As soon as you start trying to convince the client that they should hire you, you're giving all the power away to the client.
BLAIR: If you think about the professionals that you want to hire in your life, what you really want to do is you don't want a presentation, you want to sit down and you want to have a conversation, a peer to peer conversation where you're both openly assessing whether or not it makes sense to do business together and you're both being completely transparent and honest about what you see as the pluses of doing business together and what you see as the minuses, the cons or the concerns that you have. And if any party has a concern, you would want that party to put the concern on the table, and the other party to address it. And if it's a significant concern that can't really be addressed, you would want somebody to say, yeah, you know, that's an issue, that might be a deal killer.
BLAIR: When you hire a professional in your life, that's how you would like to go about it. That's not how we do it in the creative business though, is it?
DAVID: It's not. And I wonder why. We need to be engaged, we need to be thoughtful. We need to be glad for the opportunity to help somebody. But why do we overinvest so much in this field compared to other areas of the professional services fields?
BLAIR: There are a lot of answers to that question. And one of the parts of the answers is, well, we've done it this way for a long time and we've conditioned clients this is how it works. So that's kind of just a comment on the state of things today. How did we get here? It's a function of a few things. At the heart of it is we're not good conversationalists. We in the creative professions are not good conversationalists.
BLAIR: Now, if you think about most of the communication a creative firm has with a client right from the beginning when they're thinking of doing business together into the early days of the engagement, here's how it works. There's very few conversations. So first the client on their own and speaking amongst themselves, they decide we needed to hire a firm so we're going to put together a brief. So there's some internal communications and then they lob this RFP out to multiple firms.
BLAIR: So, we're sitting here at our creative firm, hey, we get an RFP. We're allowed to ask a couple of questions maybe. But then we sit down, we talked amongst ourselves about coming up with a response to this communication. We submit our communication to them again. So it's one way communication from them to us. Then the client gets our RFP submission and they make a decision on whether or not they're going to invite us to the next step and then they send us a communication that says, congratulations, you're invited to the next step. It's a face to face presentation, here are the rules. And then we talk amongst ourselves and we prepare our presentation.
BLAIR: We go in, the client's sitting there with their arms crossed. They don't say much and we present to them and then they say, okay, this is great, we'll get back to you. And then they make a decision and they communicate their decision to us and the decision might be, congratulations, you're hired. Now here's the real brief, and then we might get together and have a bit of a conversation and a fuller brief, and then we go away and we do the work and then we show up and we present again. It's just a series of one way presentations back and forth, back and forth, back and forth. We as creative professionals, and I've talked about this before, we are addicted to the presentation.
BLAIR: There is something about the creative mindset or the makeup of the creative professional where one of their strengths is thinking on their feet. So, if you're a creative person, your real gift is the ability to see around corners. That's what creativity is. It's not the ability to draw or the ability to write. It's the ability to see. And for reasons I don't fully understand, directly tied to this ability to see around corners, is the ability to think on your feet. So if your strength is standing at the front of the room, giving a presentation and dealing with objections as they're thrown at you, if that's one of your strengths, if you love being in that moment, then you will create conditions where you are allowed to be in that moment.
BLAIR: So, I believe that's a big reason why we're horrible conversationalists because we love to present. There's something about being creative that makes us skilled at presenting and dealing with objections. So we create this series of communications where it's one way at a time presentation, presentation, presentation. What I'm advocating is we get rid of all of that, and I talked about this in my first book, The Win Without Pitching Manifesto. It's the second proclamation. We will replace presentations with conversations.
BLAIR: And when you can learn to do that, now you can get to a place where you're no longer over-investing in the sale. You're showing up and facilitating a conversation. And because you're not over-invested in the sale, because you haven't stayed up all night doing a 50 or 100 page PowerPoint deck, because you haven't incurred all of these costs and begun to solve the client's problem is proof of your ability to solve the problem, then you don't have this high level of need. You're not over-invested in the sale. You're not over-invested emotionally or in time and hard costs. That's when when you can bring yourself to not over-invest emotionally in time or in hard costs of travel, etc, outside research, that's when you can demonstrate a low level of neediness. That's when it's easy to minimize your expression of desire and show up and just be professional and clinical and facilitate a real proper two-way conversation.
DAVID: Yeah, as opposed to a series of telegrams. We're about out of time here, but I was just thinking about how, this is something I would love to explore with you sometime. I don't remember ever talking with you about this, but it's how we are addicted to solving problems as well. So, every time we see any problem that we can solve, we dive in even before we set the terms of the relationship. It's very much like a friend that you have. I'm not thinking of a specific one or even like my friendship with people. Instead of just listening to them, I'm always looking for places to solve, like provide my advice or to start solving the problem.
BLAIR: To be their personal consultant.
DAVID: Yeah, exactly. And rather than just listening, we're so addicted to solving problems, making money solving problems, it's almost an afterthought.
BLAIR: Well, it's one of the reasons why new business meetings go so wrong because you bring people from your team to a meeting kind of early in the buying cycle where the client's still thinking about things, you're getting to know each other a little bit. You think, okay, I'm going to bring my creative director, I'm going to bring my account planner and maybe even my media person if you're still in the media business. I'm going to bring these people in the meeting for whatever reasons. These people are trained to solve problems in their specific domain, right? You bring them to a meeting with somebody who has a problem, what are they going to do? They're going to start to solve the problem even though you haven't been paid yet. So, either quit bringing these people to new business meetings or give them some sort of training so they know where the line is, the line that they cannot cross of beginning to solve the client's problem as proof of your ability to solve the problem.
DAVID: Right. Yeah. Oh, there's just so many deep nuggets in here. Maybe a lot more of our training should be around how to have useful conversations, how to listen. I was at a meeting this last week. It was a two day session with 10 agency principals. And as an experiment, what I said to them was, okay, you're not allowed for the next hour or so. I didn't give it a time, that's what I was thinking. You're not allowed to give anybody any advice. All you're allowed to do is ask questions. It changed the entire nature. All of a sudden, it wasn't as defensive. We listened to each other so much more carefully. This is just such a fascinating topic.
DAVID: So if we want to leave people with a little bit of homework, they can think about to what degree their positioning gives them any power in the relationship. That's the foundation that you talked about. And then maybe do some analysis of new business situations that didn't go well and think about where was the power imbalance and did you see early signs of it and how did you react to that? What would you leave with people as they begin thinking a little bit more about this?
BLAIR: Yeah, I would think of the new business opportunities that you lost or maybe even the ones that you won and then the engagement didn't go well because you feel like something you did in the sale. And just run the whole sale or pitch process however you think about it through this filter of P=db/D. Did you have the power to win the right type of business at high margin, at low cost of sale with you positioned to have the greatest impact? Was your expression of your desire for the client and the engagement lower than your desirability? If you were suffering from low desirability, is it a function of your positioning? Is it a function of where the lead came from? You chased it down and dragged it in rather than they came to you. So, just take the formula and run it against your recent new business failures. That's such a harsh word, but the ones that didn't go well, and just see if you can find the root of the problem.
DAVID: Yeah, and have more conversations instead of starting to solve client problems before they've engaged you to do it. Ask great questions.
DAVID: Great. Thank you Blair, this was really interesting. Appreciate it.
BLAIR: Thanks David.