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How to Grow Your Business in a Time of Uncertainty
(33 minute podcast)
In this Hug the Curve podcast, host Steve Niesman chats with Todd Caponi, an award-winning sales leader and author of the book, The Transparency Sale, about how to grow your business in uncertain times.
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(Steve Niesman) Hello and greetings to all. Welcome to another edition of our Hug the Curve podcast. I’m your host, Steve Niesman; great to have you with us. Today, we’re thrilled to have a very special guest — it’s Todd Caponi. Todd, welcome to our podcast.
(Todd Caponi) Oh, thanks for having me, Steve.
(Steve Niesman) It’s a pleasure to get with you. You know, Todd, I was thinking a little bit here. I went out to your LinkedIn profile and on your LinkedIn profile, you describe yourself as a transparency nerd, a science and sales amalgamator, a sales historian, an author, a speaker, a trainer. Todd, is there anything you can’t do, or haven’t done?
(Todd Caponi) [laughter] I can do it all.
(Steve Niesman) Well, it’s good to be with you. So maybe we’ll start with our audience first about what is a transparency nerd? Can you explain, Todd?
(Todd Caponi) Yeah, you know, it all started a couple of years ago with a research study. I know that sounds weird, but a research study literally changed my whole life.
I was the chief revenue officer of a company in Chicago, where we both are, called Power Reviews. And, if you can imagine, what that means, what Power Reviews does is, they helped retailers and brands collect and display ratings and reviews on their websites. So you go to Crocks.com or Vinyard Vines or whatever, and you’re looking at a product, you scroll down, you see the reviews under it — that was us helping with the collect and display. And we had done a research study with Northwestern University that looked at, how do consumers act when they’re buying something online, especially something they’ve never bought before.
And so this research study is where it all started, in that three things came out of it, two of which changed my life. The first one was that we all look at reviews today, right, like 96% of us — and I haven’t found the 4% that don’t, so if you know of any of those people, point them my way. But the two things that got me onto this transparency kick is number one, 82% of us go to the negative reviews first. So instead of reading the 5-star reviews, we typically go to the 4s, 3s, 2s and 1s first. And when a product has an average review score between a 4.2 and a 4.5, that sells better than any other average review score on a product, including a 5; meaning a 4.2 sells better than a 5.
So I looked at that and thought, all right, that’s on a website; what happens in human-to-human or B2B environments? And I found that the exact same thing happens, that our brains are wired to try to get at, hey, what’s the downside of this before I invest too much time in getting excited about it. And when in human-to-human positioning and influencing of any sort, when we lead with, here’s what you might not like, or here’s what a competitor does better, or here’s where this has broken before … when we lead with that, absolute magic happens in all of our selling pursuits especially, and we win more often, we win faster, and we spend more time working on opportunities with companies or potential prospects that we should be. And in other words, we lose faster. And so that’s what kicked all of this off.
You asked about the transparency nerd part. What I found over the last couple of years, too, is that your customers’ willingness to stay by more and advocate it helps with customer satisfaction. There’s so many elements that transparency touches that I’m just screaming it from the mountaintops because I think not only will it help us in all of our businesses, but the fact that sales continues to drag the bottom of Gallup’s annual trusted professions list drives me nuts, and I would love to see it move up. And I think that we can make sales people a real valuable component to the purchasing journey versus kind of the typical necessary evil.
(Steve Niesman) It’s really interesting, Todd. I’ll say a little side note: if only we could have that same transparency in politics. But maybe that’s a another story.
(Todd Caponi) Yeah, I’m a politician that comes out and says, hey, here’s what I believe, and if that’s not cool, this other person over here, they believe something else. Like, that’s cool, embracing that. Imagine the first politician that does that, how endearing they would be, and how that would build trust. That’s a perfect example of why this works.
(Steve Niesman) That might work for you later in life, President Caponi, but we’ll get back to work. But seriously, I love what you just said. I think the lesson one that I’m picking up from you, Todd, is where there’s transparency, people believe in truth. So it’s kind of elevating the trust that people have when you’re very open on your good, bad and ugly. That a fair synopsis?
(Todd Caponi) Yeah. And when you’re looking to make a decision, your brain is driven to try to predict what your experience is going to be like. And at the end, the thing that triggers the decision is, is the juice going to be worth the squeeze, right? And if you don’t know what the squeeze is, then any talk of the value of the juice goes through a filter, kind of like a ‘BS’ filter.
And so if you can lead with, here’s what that squeeze is going to look like, and if you’re cool with that, let’s talk about how great this juice is going to be. You’ll find that whole conversation about the pros and the benefits that that limbic filter that prevents us from being sold to — I don’t know the last time you walked into a car dealership, but you could probably feel it. There was a little bit of anxiousness. Your hands probably got a little sweaty. Your heart started to race because you’re like, all right, here we go, right? That is your brain’s resistance to being sold to. And I just had to buy my stepdaughter a car. I bought a used car, and I was feeling it when I walked in, and this car salesman came up to me and was just like telling me about what doesn’t work on this used car, like, hey, this part’s broken over here, are you cool with that? And I was like, I love you. Like, I had to buy that car, right. Like, that’s what happens when you lead with transparency. That limbic filter falls and your foundation or relationship is built on trust.
(Steve Niesman) So, Todd, you’re hitting on a lot. And let me go back to how we started here, the transparency nerd, and why I led with that. I had the pleasure of reading the book you published a couple of years ago called The Transparency Sale. I highly recommend to our listeners today to go get a copy and listen to that. But maybe one thing to link sort of where you’re starting here, tell our listeners about a story in there. You talk about the IKEA buying experience. So I think there’s lessons, whether you’re a seller, you’re in a sales profession, or you’re a company and you want customers to buy more from you. But tell our listeners about that IKEA story and why transparency matters.
(Todd Caponi) Well, yeah, I think it’s highly relatable, right? Because IKEA clearly is all of our favorite retailer in the world, right?
(Steve Niesman) It is for my college kids, I’ll tell you that.
(Todd Caponi) And that’s the thing, the experience is a nightmare, right? Like you walk in, you can’t find anything, because it’s just like a labyrinth of hallways that all curve around so you can’t even see where you’re going. And you finally find what you’re looking for and there’s no sales person around to help you out. So you’ve got to write down the code on the little tag or take a picture of it that explains where in the warehouse you’re going to have the opportunity to go find it, pull the 200-pound box onto a cart that doesn’t have brakes, which seems like a huge oversight to me, but besides the point. You then roll that rickety cart out into the parking lot, where you have the honor of jamming it into the back of your hatchback Tetris style. You then drive home with an injury or two as a souvenir, thinking you just left all the fun back at the store. And then you get home, you open the box, there’s 150 parts and not a single word on the work instructions other than the brand name, which is like Svarta or something crazy like that. You f-bomb your way through the assembly and then you get that little endorphin rush and you’re like, that looks pretty good; we should have bought the end tables with this bedroom set; let’s go back, right?
It doesn’t make sense that such a poor experience would drive an organization to being the number one furniture retailer in the world for 13 straight years, but thus is IKEA. And the point being that IKEA doesn’t hide any of that. As a matter of fact, they embrace it and tell the world, hey, listen, the experience is not going to be great, right? You’re going to have to find it, you’re going to have to pick it, you’re going to have to pack it or jam it into your car, you’re going to have to assemble it. But if you’re cool with that, what you’re going to end up with is modern Scandinavian-design furniture that you didn’t pay much for. And that’s what is incumbent upon all of us that are selling anything is to understand, what is our ‘modern design furniture that you’re not going to pay much for’ — what is that thing we’re great at, and what are we giving up to be great at that core? Because none of us are all things to all people.
Like you joked about my profile and, like, ‘do you do everything?’ I clearly don’t, so there’s certain things that I really focus on, and certain things that I don’t. And the organizations that are not only embracing that, but leading with it, are the ones that you see across the ecosystem — not only in B2C, like IKEA, but in B2B circumstances — are the ones that are truly winning because, again, they’re building a relationship with customers on accurate expectation-setting and trust, and embracing what they’re good at and what they’re giving up to be great at that core.
(Steve Niesman) So many people, Todd, I guess at least in my generation, what we experience, are afraid if they’re not perfect with everything, that they’re not going to win. They’re not going to sell, they’re not going to buy, etc. But sort of what your research, what you’re saying is, when you’re transparent and you say, like IKEA, we’re really good at cheap, efficient stuff that works, but you’re going to have to go through Hell through the buying experience. But even when they’re transparent like that, they’re selling billions and billions. So the message here, again, coming to your theme is be who you are and embrace that transparency.
(Todd Caponi) Exactly. And one of the things when we think about the B2B selling experience is when we try to pretend that we’re perfect, we lose. But the worst part of losing is that we lose really slowly, right? Which means that you just spent a lot of time, and so does the customer, on a trust-eroding exercise.
There was a study that Gartner did three years ago in 2017 that looked at the buying experience and what buyers do when they are evaluating a purchase. And what they found is that only 39% of their time was spent talking to you, talking to your competitors or talking to their internal buying groups, and that 61% of their time was spent doing other stuff — which was back-channeling you, getting at the imperfections that you are not presenting to them. So 61% of that buying journey is spent back-channeling you.
Now that 61% is not a foregone conclusion, right? That when we actually provide that information to the customer up front, and then they go do a little back-channeling and find that it matches, that 61% shrinks, as do your cycle lengths. Now, the point being if you’re going to lose, you want to lose fast, right? The only thing that we have in our personal inventory is time, and if we’re spending it working on opportunities that we are destined to lose, and we lose slowly, we’re not going to have the results that we should have when we lead with transparency and tell the customer, hey, listen, this is what we’re not great at, but we give that up to be great at the core. If that part that we don’t do well or that we’re giving up is going to be hugely important, let’s talk about that first, and if it turns out to be a deal breaker, let’s both move on with our lives and save each other a lot of time. And when we’re ready with those pieces, we’ll call you. But what that ends up doing is that you become so much more efficient in where you spend your time, too.
(Steve Niesman) You know, that’s a good point, Todd. We all know in sales, or for a customer who’s trying to sell to their customers in the business experience, the worst place you can ever finish in a sales cycle is second, it’s going to cost you the most money, it’s going to hurt the worst. And your advice is when you’re open and transparent, you’ll either win quickly or lose quickly, but it allows you to have a good gauge on the business and move faster, and therefore become better.
(Todd Caponi) Exactly. That’s exactly it.
(Steve Niesman) Let me get another topic in your book that I loved when I read it, and that’s, you alluded to it earlier, a little bit of this brain science, meaning that people have to sell to people’s brains. Can you maybe give an example or two of what you mean by this brain science and what the folks listening today need to be aware of when their company is trying to gather more business from a customer? How does this brain science figure, and what does it all mean, and how does that relate to transparency?
(Todd Caponi) Oh, yeah. I’m not just a transparency nerd, but I just love the research around behavioral science and what drives our brains to engage, to prioritize, to decide, and to actually buy. And there were a couple of things that really stood out to me that I guess maybe I always knew, but the digging into the behavioral science really reinforced it, and then when applied to sales, it changed the way that I thought about many of the things that I was taught.
Now, the big one for me was this idea — and you’ve probably heard it before, but maybe haven’t made the tie to the selling world and the positioning in the marketing world. It’s this idea that — and this is a quote from a neuroscientist, Antonio Damasio — he says, “We are not thinking machines that feel, we are feeling machines that think.” And what that means is that our brains are wired [so that] decision making is triggered in the feelings center in our brain of the emotion center, and we make feeling decisions and then we use the neocortex, which is the logic center, to justify or reinforce those decisions, to tell our brain, yeah, that’s a good idea. And what that means is a couple of things, and the one example I often give is when you hear people that are trying to justify a decision. Often it’s on logic, but there’s a feeling behind it, and it’s important for us to understand that.
I’ve got a neighbor in his mid 40s who was driving a Toyota Corolla around, and then one day I’m taking out the garbage and he pulls up in a white Corvette with orange racing stripes on the side.
(Steve Niesman) Sounds like a midlife crisis.
(Todd Caponi) That’s where I’m going! I went and talked to him, and I was like, dude, where did this thing come from? And he literally said, Todd, living here in Chicago, that Toyota, I couldn’t get enough pick up on it. I wanted something that had more pickup when I’m merging onto the expressways here, and I went to the dealer and they had 0% APR for 60 months, like basically a free loan, so I had to have this. And I was like, dude, that’s not why you bought a white Corvette with orange racing stripes. There was a feeling behind it, but he was using the language of logic to back it up.
When you apply that to sales, our brains are triggering decisions in that feeling center, but so often we lead with logic in our selling pursuits, with ROI, and features and benefits and case studies and all of that, which is very logical. But that could actually be polarizing to a brain that has already decided, I’m not quite sure I want to do this. They will literally take your logic and combat it to reinforce the idea that they shouldn’t go with you. We’ve got to get a lot better at positioning the feelings and emotions, and the way to do that — and you’ve heard this a million times — is that when we sell through stories, stories build consensus. Logic is polarizing. Stories — like watch a movie, there’s emotion, there’s feeling. When you tell stories in the way that you position, you build that feeling, and then you give them the logic at the end instead of the beginning to help them reinforce that feeling they’ve gotten. That’s a big one. So stop leading with your logo slides and your map and all the awards that you won and start leading with you, the customer, your status quo, and how that status quo is no longer sustainable and lead to your solution instead of with it. And you’ll find that your customers are much easier in their pursuit of consensus and much more likely to trigger that buying decision.
(Steve Niesman) Really good stuff. Let me apply it for our audience today, Todd. I’m assuming we’ve got companies that sell sausage to an end consumer, we’ve got automotive parts distributors, we’ve got industrial manufacturers, we’ve got chemical companies. And your points are a couple of things. One is, people buy in their brain off feelings rather than logic. And, therefore, to connect better, to sell better, to grow your company, you need to be transparent. So transparency builds trust, trust drives feelings, that emotions lead to growing your business. Do I have it right so far?
(Todd Caponi) Exactly. You’re right on.
(Steve Niesman) Well, let me throw an elephant in the room here, not to stump you, but what many in our audience are, I think, struggling with today. I’m going to put it out there, Todd, and that’s COVID, the pandemic. And that is, well, we used to be able to grow our business so much better when we could get face to face. But now we’re having to market, we’re having to sell, we’re having to try to grow our business over a podcast, over a Zoom meeting, etc. What applies? What lessons are you seeing out there and the work that you do with so many companies in America? How can business to business still grow in this age of temporary? How does brain science, how does transparency, how do stories all play in growing your business over the computer?
(Todd Caponi) Yeah, it’s not just over the computer, right. It’s this idea — and so more brain science coming at you, so a little bit more nerdy. You know, if you look throughout history, and this is a bit of an older study, but there was a time within the last 10 years that over 60% of the Fortune 500 was founded during times of uncertainty or recessions. And those include recessions and depressions, times of uncertainty, or like times of war. McDonald’s was started during World War II; GE, Procter & Gamble, Twitter, Facebook — like Apple was not only founded during the period of stagflation in the 1970s where there was no growth and high inflation, but then they reinvented themselves soon after 9/11, which was a massive recession that we had.
So why does that happen or why does that work? Why would the majority of Fortune 500 companies be founded during times of uncertainty or recessions? Well, here’s the thing. During times of uncertainty, we can literally read the minds of our buyers. And what I mean by that is we’ve got something called a survival mechanism that kicks into gear when we’re in times of uncertainty. And here we are, it’s the Fall of 2020, and we can’t even predict what January of 2021 is going to look like, right? Like we’re still in this period of uncertainty. Our brains all click to three main priorities. The priority number one is we try to subdue discretionary spending, so the ‘nice-to-have’ stuff we put on hold or we de-prioritize. Number two is, we look at our essentials, like what are the things we’ve got to have, and we do two things there. We look to reduce our costs on the things that we must have. So instead of buying a gallon of milk at Whole Foods for $6.50, maybe we go to Aldi. It’s still a gallon of milk that came from a cow, and it’s $3.25. And then we also look to extend our runway on those things, which is why we all — I don’t know, I didn’t — but many people ran to Costco and bought up all the toilet paper; like, hey, make sure we’ve got enough. And then the third thing we did is, we looked at worst-case scenario and go, all right, how do we protect against this happening to us? So we remove risk.
That’s what we do as human beings, but it’s also what we all started to do as companies. My point being that, in this world of uncertainty, the first thing that I encourage every company — and it doesn’t matter who you are or what you do — and this is a provocative statement coming, is I was advising all of my clients to go to their messaging and do a “Select All – Delete.” Then get into a room and go, ‘who are we now in the fall of 2020,’ ‘why should companies care more about what we sell today than they did in January of 2020,’ and redo the messaging based on today. Because messaging that was created during an up-market will not work in a down-market. That’s where you start, and it doesn’t matter if it’s Zoom, it doesn’t matter what it is, your messaging needs to resonate with the priorities of the uncertain survival mechanism brand. And that’s those three things. If you’re messaging has discretionary-type stuff in it, stop it. Move to how what you’re selling has become more important today based on the priorities of every human being in every organization. I think there’s an opportunity there, and when you tie that to those 60% of Fortune 500 companies that not only were founded, but continue to flourish during uncertain times, those are the ones that capitalized on the priorities of human beings and companies. And every company that’s listening to this right now has that opportunity to do the same thing.
(Steve Niesman) It’s interesting, Todd, because you’re playing in — and thank you for that in advance, and this wasn’t rehearsed — meaning our theme of ‘Hug the Curve’ talks about digital transformation, and what it really means is technology is accelerating so fast, what’s happened in the pandemic is five years’ worth of digital transformation or technology changes have really happened in the last five months. Everything’s accelerating so fast, and most on the audience today are not going to be an Amazon or a Wal-Mart with unlimited spending and so forth. But they’re going to be small, midsize, lower large enterprises that says, yes, we need to compete, we need to change our message, we need to leverage technology, so we can’t necessarily put it on the shelf. But we need to be wise and spend wise, so to speak. And it’s coming to your point of, be transparent about it, use the stories, and embrace this technology to get to that feeling brain. Do I have that right?
(Todd Caponi) Yeah, exactly. And then think about your messaging: how are you putting yourself out there? You know, one of my clients is a company out on the West Coast called Envoy. They do the check-in system, meaning when you go to an office and there’s a little iPad there, the companies that are using this, and you type in, I’m here to see Steve Niesman, and it’ll then notify you that I’m there and maybe print out a badge, maybe take my picture. But it’s a check-in system for offices, and as you can imagine, when mid-March came around, this was a massive punch in the face to a company that was on a Unicorn path, meaning they were growing, they were up and to the right. And the next thing you know, nobody’s going to an office, so who needs that?
And so their website language was all about making the office experience seamless. Well, after this all happened, I got on the phone with them and basically gave them my provocative statement. I was, like, you got to get that off your website. Like, nobody cares about a seamless office experience. What do you guys do and why does it matter today? And they were like, we provide a touch-free experience, like we actually make things safe, you don’t even have to talk to a receptionist. You know, you can come in and use your app instead of using the iPad. I said, refocus your messaging on that. And now if you go to Envoy.com, it talks about providing safe office experiences for when we all go back, and they’ve regained their momentum, they’re regaining their growth and they’re getting back to essentially where they were, not on that growth trajectory, but at least they’re not hemorrhaging like they were before. So that messaging, just think like somebody who is in survival, uncertain mode, and go, ‘does my messaging resonate with the things that are priorities of all people and all businesses today?’ And if it’s not, “Select All – Delete,” get in a room with your cohorts and figure out who you are today and why it matters more.
(Steve Niesman) Great advice, Todd. Last question for you. So we’ve got a lot on our audience today that, again, I think they’re very nervous about the uncertainty over the next six months, they’re not sure what to do. How do we keep growing our business? What are the priorities to focus on? If you were going to give them a piece of advice — or said another way — if they brought Todd Caponi into a sales meeting to do a session with them, what would you prioritize, what would you emphasize for customers to give them a little bit of comfort, a little bit of certainty about where they should be going in 2021?
(Todd Caponi) Well, I think number one, for everybody that sells to a group of buyers, and what I mean by that is you’re not just selling to just one decision maker in a company, and you’re kind of on a consensus-selling path where there’s multiple buyers. I just want everybody to have empathy and think about — consensus selling was always hard; consensus buying is harder. Consensus buying, when you’re a remote buyer — and you don’t have the opportunity to just go grab somebody in the hallway, or run into them when you’re getting coffee in the break room, because you’re not there — and that every consensus-building exercise a buyer must do is now a formal step versus an informal ‘run into you in the hallway,’ that I would just, like, that last piece of advice is, try to remove friction from every step of your selling journey that you take buyers on. Look across and go, hey, where am I making it harder for buyers? Because buyers today are not prioritizing the biggest reward. We’re actually biased by taking the shortest path to a reward, not to go to the biggest reward. And our brains will actually trick us when the path looks hard to do what our perception of what the reward is. And what that means is if you’re selling some grandiose vision about lollipops and cotton candy are a way to, if you do these horrible steps, that the lollipops and candy won’t taste as good.
And so the point being, if you’re positioning anything, look at your selling journey and find ways to make it easier for the buyer to get at what we talked about at the beginning, which is that prediction, is the juice going to be worth the squeeze? So any friction points in your buying journey, which include things like presenting yourself as perfect, right, that creates friction, because the buyer now has to do more homework to find out how you’re not — extra steps in your sales process; you’ve got to go through this, and then you’ve got to go through this — figure out ways to consolidate that; hiding your price, right? We’ve been taught historically that we should save the price to the end until we’ve established value. That’s actually creating friction for the buyer because they’re trying to, again, is the juice worth the squeeze? Lead with your price, be transparent about the things that drive your business and allow that customer to self-negotiate and self-qualify in or out faster. There are so many opportunities right now to remove friction and make it easier for the buyer. And, again, subconsciously, if that journey looks easy, they will emphasize the potential reward and prioritize you over other opportunities to do great things in their business.
(Steve Niesman) Awesome stuff, Todd. So let’s wrap up. You’ve given our audience an amazing amount today. If they wanted to find out more from you or learn more about your book, what’s the best way they can find you?
(Todd Caponi) The more interesting question might be, how do they not, because I’m annoyingly everywhere. Like, I’m really easy to find right now. My name is Todd Caponi. You can go to transparencysale.com. I’ve got a blog, I’ve got tons of information, there’s links to purchasing the book. And if you’re on LinkedIn and you want to follow more of my nonsense there, you can connect with me there. Just tell me that you heard me here, and I share a bunch there. But transparencysale.com is probably the easiest way, then the book is available anywhere books are sold. It’s not only in paperback, it’s in hardcover. The audio book is available, if you need the sultry sounds of Todd Caponi to lull you to sleep at night.
(Steve Niesman) I’ll remember that for grandchildren one day. But seriously, Todd, you’ve given our audience an amazing amount. So beyond the intro of the transparency nerd, the author, the speaker, the historian, etc., I’m going to give you another summary, just pragmatic advice about being radically transparent, leading with empathy, going through the buyer’s journey, making it a really simple story — stories, stories, stories. And finally, you’ve given us optimism in a time of difficulty. So, Todd, thank you so much for being with us today. Great, great stuff.
(Todd Caponi) Thank you for having me, as always.