Change and managing change are common topics among managers, management experts, and consultants, but rarely do people pay any attention to the effects of high rates of change, or difficult to manage change (like layoffs) on managers and executives. In this article Bacal broaches this neglected topic.
One of the least mentioned effects of change relates to how it affects the manager leading that change, and his or her ability to undertake the leadership role. We have already talked about the effects of change on the individual employee, and of course managers are subject to the same reactions, resistances and strains. Some types of change, such as restructuring, or downsizing can put considerable strain on the leaders of an organization.
Stress, Stress & More Stress
One primary concern regarding change is the stress it imposes on those undergoing the change. Managers, because they have obligations to their staff, not only have to deal with change as employees but also need to carry some of the concerns of their staffs. In the case of downsizing, the stress levels can be extremely high, because the manager is charged with conveying very upsetting information.
Stress is part of the job, but in times of change, it is critical that you recognize that it may cause you to act in ways that are less effective than usual. As with anything connected with change, the major concern is not short term but long term. If your stress levels result in marked loss of effectiveness, the risk is that a vicious cycle will be set up, where ineffective leadership results in creating more long term problems, which increases your stress, which reduces your effectiveness even more.
Avoidance -- A Common Response
A common response to unpleasant change is to ignore the situation. Avoidance can take many forms. Most commonly, the avoiding manager plays only a minimal role in moving the organization through the swamp. After announcing the change and doing the minimum required, the manager "hides" from the change, through delegation, or attending to other work. This tactic involves treating things as "business as usual".
The outcomes of this tactic can be devastating. By avoiding situations, the manager abdicates any leadership role, when staff needs it most, during and after significant change. In addition, the avoidance results in the manager becoming out of touch with the people and realities of the organization.
While avoidance serves a need for the manager in the short run, it destroys the manager's credibility, and results in poor decisions. The long term consequence of such action is that the organization tends to deteriorate in terms of morale, effectiveness and productivity. Sometimes this deterioration is irreversable.
Denial -- Another Ineffective Tactic
Sometimes the manager deals with change by denying its impact. Usually, the denying manager takes a very logical approach to change. Decisions get made, systems are put in place, or new procedures are developed. Unfortunately, this "logical" approach denies the impact of change on the people in the organization.
The denying manager tends to refuse to understand "what the big deal is", and shows little empathy with employees in the organization.
As with avoidance the denying tactic tends to drop the manager's credibility and destroy any personal loyalty on the part of employees.
Key Points
1) Managers are put under stress by change, and that stress, if mishandled can result in loss of managerial effectiveness. Managers need to be alert to the signs of stress upon their performance.
2) A common management tactic is to avoid involvement in change when that involvement is unpleasant. The affects of this withdrawal can be lethal to the organization and to the manager.
3) Another common tactic is denial of the effects of change. Managers who do this tend to under- estimate the impact of the change, and demonstrate an inability to respond to employees' emotional reactions to change.
Monday, January 11, 2010
Sunday, January 10, 2010
OFFSHORE BUSINESS REVIEW - INSURANCE COMPANIES
An offshore insurance company, usually referred to as a 'captive' insurance company, is usually a subsidiary of a large company or group of companies, and its purpose is to offer insurance within the parent company or group, thus saving external costs and generating profits in a low tax jurisdiction. The fiscal benefits are not necessarily the driving factor, but they can be significant. Direct access to reinsurance is another important advantage of a captive.
Some high-tax countries have legislated to prevent excessive shifting of income to captives, but usually without seriously reducing fiscal benefits. Apart from offering tax savings, it is usually also true that an International Offshore Financial Centre (IOFC) offers a less regulated and bureaucratic supervisory insurance regime than the home country of the parent company. The captive may for instance be able to employ its capital more effectively than a domestic insurance company.
The considerable advantages of captives have led to the development of a major world-wide captives industry, and IOFCs have vied with each other to establish attractive regimes for captives.
The jurisdictions which have been most successful at attracting captives are as follows:
(Underlined countries are already available in our Jurisdictions section; others will be available shortly.)
Bermuda
Bahamas
British Virgin Islands
Cayman Islands
Guernsey
Isle of Man
Jersey
Luxembourg
Panama
Vanuatu
Some other jurisdictions also have captive insurance regimes:
Cyprus
Gibraltar
Hong Kong
Netherlands Antilles
In the Lowtax.net jurisdictions section, information is given about the financial sector for each of the following completed jurisdictions:
Andorra, Anguilla, Aruba, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Cook Islands, Costa Rica, Cyprus, Dubai, Gibraltar, Grenada, Guernsey, Hong Kong, Ireland, Isle of Man, Jersey, Labuan, Liechtenstein, Luxembourg, Madeira, Malta, Mauritius, Monaco, The Netherlands Antilles, Panama, Seychelles, Switzerland, Turks & Caicos Islands and Vanuatu.
Some high-tax countries have legislated to prevent excessive shifting of income to captives, but usually without seriously reducing fiscal benefits. Apart from offering tax savings, it is usually also true that an International Offshore Financial Centre (IOFC) offers a less regulated and bureaucratic supervisory insurance regime than the home country of the parent company. The captive may for instance be able to employ its capital more effectively than a domestic insurance company.
The considerable advantages of captives have led to the development of a major world-wide captives industry, and IOFCs have vied with each other to establish attractive regimes for captives.
The jurisdictions which have been most successful at attracting captives are as follows:
(Underlined countries are already available in our Jurisdictions section; others will be available shortly.)
Bermuda
Bahamas
British Virgin Islands
Cayman Islands
Guernsey
Isle of Man
Jersey
Luxembourg
Panama
Vanuatu
Some other jurisdictions also have captive insurance regimes:
Cyprus
Gibraltar
Hong Kong
Netherlands Antilles
In the Lowtax.net jurisdictions section, information is given about the financial sector for each of the following completed jurisdictions:
Andorra, Anguilla, Aruba, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Cook Islands, Costa Rica, Cyprus, Dubai, Gibraltar, Grenada, Guernsey, Hong Kong, Ireland, Isle of Man, Jersey, Labuan, Liechtenstein, Luxembourg, Madeira, Malta, Mauritius, Monaco, The Netherlands Antilles, Panama, Seychelles, Switzerland, Turks & Caicos Islands and Vanuatu.
low business TAX
A high proportion of companies engage in 'trade', that is the process of making or procuring goods or services and selling them on to business or individual customers. If this process takes place internationally, then it is often possible to interpose an offshore company in which part of the profits of the operation can be realized in a low-tax jurisdiction. Even if the process takes place wholly in one high-tax jurisdiction, it may be possible to separate the 'selling on' part of the process from the 'making and procuring' part, and send it offshore, particularly now that e-commerce infrastructure is available in many IOFCs.
The eventual value of having an offshore trading company will depend on the overall corporate structure, and on the particular country or countries in which the owner resides. To get the best result, it will normally be good for the offshore company not to be a controlled subsidiary of the main company; and it will normally be even better if the main shareholders are not resident in the same country as the main company; but even if these conditions are not fulfilled, there is much that can be achieved.
Here are some examples of business situations in which an offshore trading company can help to reduce or avoid tax:
An EU automotive component company sets up an independent offshore company to purchase cheap Chinese parts and sell them on at a profit to the EU company, which builds them into assemblies, adding further value (which will be taxed in the EU).
A newsletter and magazine publisher in the UK retains his editorial staff there, but sets up a separate offshore sales and distribution company to handle the rest of the process, and make most of the profit offshore.
An international engineering personnel agency gives up its Paris office and moves completely to an offshore jurisdiction which is only slightly less convenient for interviewing people. Its own profits and those of its free-lance staff become untaxed (staff may choose to remain in a high-tax area, but at least now they have a choice!).
Note that the tax saved in most such cases is income (corporation) tax; but in the case of products or services which can be delivered over the Internet, the possibility of avoiding VAT also opens up. See Offshore-E-Com.com for a fuller description of how this can work.
It is worth noting that some IOFCs actively encourage trading operations by offering duty-free zones, or warehousing facilities. This can be particularly important when attempting to avoid the creation of a 'permanent establishment' in the destination country (eg for the storage of goods before delivery) which could compromise a company's offshore status.
Apart from ensuring fiscal suitability and confidentiality, the choice of an offshore jurisdiction for trading purposes will depend on a variety of factors, of which some particularly important ones may be:
*
good transport links
*
availability of skilled local labour
*
ease of obtaining entry and work permits
*
proximity to markets
*
local cost levels
*
effectiveness of local banking and commercial services
*
modern telecommunications and e-commerce infrastructure
*
availability of duty-free zones
*
ease of establishment of offshore entities
Due to the variety of possible trading purposes, it is difficult to recommend suitable IOFCs, but here is a list of some IOFCs with good, broad infrastructure and which meet many of the criteria above:
Bahamas, Barbados, Bermuda, British Virgin Islands, Cayman Islands, Costa Rica, Cyprus, Gibraltar, Guernsey, Ireland, Isle of Man, Jersey, Luxembourg, Malta, Mauritius, Panama.
In the Lowtax.net jurisdictions section, information is given about the business sector for each of the following completed jurisdictions:
Andorra, Anguilla, Aruba, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Cook Islands, Costa Rica, Cyprus, Dubai, Gibraltar, Grenada, Guernsey, Hong Kong, Ireland, Isle of Man, Jersey, Labuan, Liechtenstein, Luxembourg, Madeira, Malta, Mauritius, Monaco, The Netherlands Antilles, Panama, Seychelles, Switzerland, Turks & Caicos Islands and Vanuatu.
The eventual value of having an offshore trading company will depend on the overall corporate structure, and on the particular country or countries in which the owner resides. To get the best result, it will normally be good for the offshore company not to be a controlled subsidiary of the main company; and it will normally be even better if the main shareholders are not resident in the same country as the main company; but even if these conditions are not fulfilled, there is much that can be achieved.
Here are some examples of business situations in which an offshore trading company can help to reduce or avoid tax:
An EU automotive component company sets up an independent offshore company to purchase cheap Chinese parts and sell them on at a profit to the EU company, which builds them into assemblies, adding further value (which will be taxed in the EU).
A newsletter and magazine publisher in the UK retains his editorial staff there, but sets up a separate offshore sales and distribution company to handle the rest of the process, and make most of the profit offshore.
An international engineering personnel agency gives up its Paris office and moves completely to an offshore jurisdiction which is only slightly less convenient for interviewing people. Its own profits and those of its free-lance staff become untaxed (staff may choose to remain in a high-tax area, but at least now they have a choice!).
Note that the tax saved in most such cases is income (corporation) tax; but in the case of products or services which can be delivered over the Internet, the possibility of avoiding VAT also opens up. See Offshore-E-Com.com for a fuller description of how this can work.
It is worth noting that some IOFCs actively encourage trading operations by offering duty-free zones, or warehousing facilities. This can be particularly important when attempting to avoid the creation of a 'permanent establishment' in the destination country (eg for the storage of goods before delivery) which could compromise a company's offshore status.
Apart from ensuring fiscal suitability and confidentiality, the choice of an offshore jurisdiction for trading purposes will depend on a variety of factors, of which some particularly important ones may be:
*
good transport links
*
availability of skilled local labour
*
ease of obtaining entry and work permits
*
proximity to markets
*
local cost levels
*
effectiveness of local banking and commercial services
*
modern telecommunications and e-commerce infrastructure
*
availability of duty-free zones
*
ease of establishment of offshore entities
Due to the variety of possible trading purposes, it is difficult to recommend suitable IOFCs, but here is a list of some IOFCs with good, broad infrastructure and which meet many of the criteria above:
Bahamas, Barbados, Bermuda, British Virgin Islands, Cayman Islands, Costa Rica, Cyprus, Gibraltar, Guernsey, Ireland, Isle of Man, Jersey, Luxembourg, Malta, Mauritius, Panama.
In the Lowtax.net jurisdictions section, information is given about the business sector for each of the following completed jurisdictions:
Andorra, Anguilla, Aruba, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Cook Islands, Costa Rica, Cyprus, Dubai, Gibraltar, Grenada, Guernsey, Hong Kong, Ireland, Isle of Man, Jersey, Labuan, Liechtenstein, Luxembourg, Madeira, Malta, Mauritius, Monaco, The Netherlands Antilles, Panama, Seychelles, Switzerland, Turks & Caicos Islands and Vanuatu.
Business Review Magazine
Directed at small business executives across the First Tennessee/First Horizon service area, Business Review features a contemporary, easy-to-browse format with tips and advice on making your small business more efficient and profitable. Designsensory provides a complete turn-key solution for First Tennessee, from content research and writing through design, production and fulfillment.
Each issue features two popular customer profiles—interviews conducted with select First Tennessee small business customers that share business intelligence with readers. Published four times a year, Business Review has earned popularity with First Tennessee customers as a timely, periodical with pertinent information. For First Tennessee, it succeeds in elevating customer value and brand awareness in an accessible touchpoint. To get your own subscription to Business Review, visit: www.firsttennessee.biz
Services Utilized:
* Brand Strategy
* Conceptual Exercises
* Custom Publishing
* Editorial Development
* Product Photography
* Publication Design
Related Work
Friday, January 8, 2010
A Small Business Bailout--Maybe
ARC loans are only available to businesses that meet very strict criteria.
For small-business owners who have run into financial trouble, a new Small Business Administration loan program offers relief. But the America's Recovery Capital (ARC) loan will only help businesses that meet certain strict criteria.
ARC was funded with $225 million to provide five-year, zero-interest loans of up to $35,000 per qualified business. To qualify, businesses must demonstrate that sales are down, expenses are up or they are having trouble paying current loans or suppliers. Owners also must provide two years of cash-flow projections and explain their game plan for returning to profitability.
The program is not for new startups--to qualify, you must have been in business at least two years, and profitable for at least one of the past two years.
The SBA is working on building support from banks, which get just 2 percent interest over prime and can't charge a fee. Many national banks that make other SBA loans declined to participate. After a slow first month with just $16.4 million in loans approved by mid-July, $96.5 million in ARC loans had been made by early October. The program runs until September, or until funds are exhausted.
Working with a participating community bank where you already do business is helpful, says Neal Gordon, principal at the loan-intermediary firm Business Borrowers Alliance. That worked for Jim Brunberg, owner of recording studio Mississippi Studios in Portland, Ore., which needed help paying a loan for an ill-timed expansion. Brunberg worked with Albina Community Bank in Portland, where Mississippi has accounts, and said his ARC loan process was a breeze.
Not so for Auburn, Ala.-based decor-store owners Ingrid and Frank Brown, who sought an ARC loan from a national bank in June after sales sank 30 percent. Ingrid Brown says the bank was making ARC loans mostly to existing loan customers and turned the pair down. They reapplied and were approved for only $13,300. They passed on it to apply to a community bank where their businesses, The Villager and Auburn Art.com, have accounts. They got $15,000 of the $45,000 they wanted.
"We still need money to buy merchandise for the holidays," she says.
When money is tight here in North America, people look for online deals, especially around the holidays. For those of you who run international search
When money is tight here in North America, people look for online deals, especially around the holidays. For those of you who run international search campaigns, you may be surprised that culture and buying behavior during the holidays is different in other countries. Not only do people shop online and use search engines differently, they also do things differently during the holidays.
Planning and succeeding with your international holiday search marketing strategy can seem daunting. There is opportunity, however, if you can time things right and present relative offers to this highly elusive global crowd.
Holidays in Asia
Although many Asians don't celebrate the religious holidays of Western cultures, they almost all celebrate January 1 festivities. For the Chinese, February 14, 2010 is the official date of their Chinese New Year.
There's much more to it than just firecrackers and tiger dances, although these two pieces of tradition are fundamental. Chinese New Year to China is like Christmas to the West. The Chinese New Year is spending time with family, gift giving, and feasting.
Most search queries skyrocket within two to three weeks prior, and almost every shop in China has a huge sale. Competition in online retail heats up during this time, as well as competition to drive visitors to brick-and-mortar stores.
Similar to the Chinese, Koreans celebrate the lunar New Year as a significant holiday event. Yet, alternatively, they also celebrate Christmas as an official holiday because about half of Koreans are Christian. The only difference is that December 25 is actually the day to party and January 1 is the day of being with family and feasting. Search success in Korea means you can let your campaigns run for a longer time then anywhere else in the world.
In Japan, they celebrate a combination of Thanksgiving plus Labor Day called Kinro Kansha no Hi. Christmas isn't a public holiday; however New Year's is one of the most important holidays of the year. The days are spent playing games with family and relatives giving gifts (typically cash) to children and grandchildren.
Other than travel, the holiday season in Japan usually doesn't reap the rewards in B2C search marketing as other countries might, but B2B in this Asian country during December is quite good as preparations are made and planned accordingly for the new year.
Holidays in Europe
One benefit of growing up in a multicultural household was that I celebrated Christmas starting December 6, which for many countries around Europe is the day that St. Nicolas brings around gifts to stuff in your stockings. Christmas holidays for Greeks officially end on January 6, the day of Epiphany.
As you can imagine, if you didn't start your Greek Christmas search marketing campaign by mid-November, you've already missed the celebratory kickoff date of December 6. However, if you stop your campaign by December 25, you won't do yourself a favor either because January 1 (St. Basil's Day) is the day when Greeks commonly exchange presents with their kids.
Now just because many countries in Europe celebrate St. Nick's day December 6 doesn't mean that Christmas is over. Quite the contrary, its really just the beginning of a month-long celebration.
Concentrating your search efforts around quality B2C products and services and travel, you'll certainly find some success. It's also important to remember that Europeans typically celebrate the month together with family and friends -- eating, drinking, and enjoying each other's company. Gift giving on Christmas Eve is typically limited to just a few gifts per person.
Getting things done on a B2B level, on the other hand, is more challenging because the Euro mindset isn't so focused on work. Spain, for example, has 12 days of nonstop fiestas leading to the 25th and, like Greece, goes out in style with a huge celebration on January 6, the day of Epiphany.
The U.K. and Ireland are probably the closest to North America's version of the holidays. Almost equally celebrated on December 26 is St. Stephen's Day, also known as Boxing Day, when after-Christmas sales are attended to and important football matches are played. You'll see some online search "wins" here if you can take advantage of the time after Christmas effectively.
Holidays in Latin America
Mexico has many traditions, with festivities starting December 12 and ending January 6. Children typically receive their gifts on the last day.
The rest of Latin America celebrates Christmas closer in style to Catholic Europeans, with celebrations starting from the middle of the month to Christmas Eve. Keep in mind that it's the middle of summer when Christmas comes around here, so search traffic will already be low.
Brazil, the master procrastinators of all countries, begins their Christmas shopping season usually within a few weeks prior to Christmas. Expect to see a spike in search traffic only to drop off after the 23rd. After Christmas, Brazilians will begin their New Year's festivities, which consist of millions of people dressed in white on the beach, celebrating with fireworks and huge parties.
The key takeaway while you maneuver around your search marketing efforts on international holidays in comparison to North America: remember that festivities are longer, gift giving is fewer, and the most emphasis is spending time with family and friends and not spending much time on the computer.
As e-commerce, mobile, and social media further converge, we'll see a much stronger global usage during the holidays in the future. If you would like more information on specific country-by-country Christmas customs, check Wikipedia's Christmas worldwide. Happy holidays!
Planning and succeeding with your international holiday search marketing strategy can seem daunting. There is opportunity, however, if you can time things right and present relative offers to this highly elusive global crowd.
Holidays in Asia
Although many Asians don't celebrate the religious holidays of Western cultures, they almost all celebrate January 1 festivities. For the Chinese, February 14, 2010 is the official date of their Chinese New Year.
There's much more to it than just firecrackers and tiger dances, although these two pieces of tradition are fundamental. Chinese New Year to China is like Christmas to the West. The Chinese New Year is spending time with family, gift giving, and feasting.
Most search queries skyrocket within two to three weeks prior, and almost every shop in China has a huge sale. Competition in online retail heats up during this time, as well as competition to drive visitors to brick-and-mortar stores.
Similar to the Chinese, Koreans celebrate the lunar New Year as a significant holiday event. Yet, alternatively, they also celebrate Christmas as an official holiday because about half of Koreans are Christian. The only difference is that December 25 is actually the day to party and January 1 is the day of being with family and feasting. Search success in Korea means you can let your campaigns run for a longer time then anywhere else in the world.
In Japan, they celebrate a combination of Thanksgiving plus Labor Day called Kinro Kansha no Hi. Christmas isn't a public holiday; however New Year's is one of the most important holidays of the year. The days are spent playing games with family and relatives giving gifts (typically cash) to children and grandchildren.
Other than travel, the holiday season in Japan usually doesn't reap the rewards in B2C search marketing as other countries might, but B2B in this Asian country during December is quite good as preparations are made and planned accordingly for the new year.
Holidays in Europe
One benefit of growing up in a multicultural household was that I celebrated Christmas starting December 6, which for many countries around Europe is the day that St. Nicolas brings around gifts to stuff in your stockings. Christmas holidays for Greeks officially end on January 6, the day of Epiphany.
As you can imagine, if you didn't start your Greek Christmas search marketing campaign by mid-November, you've already missed the celebratory kickoff date of December 6. However, if you stop your campaign by December 25, you won't do yourself a favor either because January 1 (St. Basil's Day) is the day when Greeks commonly exchange presents with their kids.
Now just because many countries in Europe celebrate St. Nick's day December 6 doesn't mean that Christmas is over. Quite the contrary, its really just the beginning of a month-long celebration.
Concentrating your search efforts around quality B2C products and services and travel, you'll certainly find some success. It's also important to remember that Europeans typically celebrate the month together with family and friends -- eating, drinking, and enjoying each other's company. Gift giving on Christmas Eve is typically limited to just a few gifts per person.
Getting things done on a B2B level, on the other hand, is more challenging because the Euro mindset isn't so focused on work. Spain, for example, has 12 days of nonstop fiestas leading to the 25th and, like Greece, goes out in style with a huge celebration on January 6, the day of Epiphany.
The U.K. and Ireland are probably the closest to North America's version of the holidays. Almost equally celebrated on December 26 is St. Stephen's Day, also known as Boxing Day, when after-Christmas sales are attended to and important football matches are played. You'll see some online search "wins" here if you can take advantage of the time after Christmas effectively.
Holidays in Latin America
Mexico has many traditions, with festivities starting December 12 and ending January 6. Children typically receive their gifts on the last day.
The rest of Latin America celebrates Christmas closer in style to Catholic Europeans, with celebrations starting from the middle of the month to Christmas Eve. Keep in mind that it's the middle of summer when Christmas comes around here, so search traffic will already be low.
Brazil, the master procrastinators of all countries, begins their Christmas shopping season usually within a few weeks prior to Christmas. Expect to see a spike in search traffic only to drop off after the 23rd. After Christmas, Brazilians will begin their New Year's festivities, which consist of millions of people dressed in white on the beach, celebrating with fireworks and huge parties.
The key takeaway while you maneuver around your search marketing efforts on international holidays in comparison to North America: remember that festivities are longer, gift giving is fewer, and the most emphasis is spending time with family and friends and not spending much time on the computer.
As e-commerce, mobile, and social media further converge, we'll see a much stronger global usage during the holidays in the future. If you would like more information on specific country-by-country Christmas customs, check Wikipedia's Christmas worldwide. Happy holidays!
The True Path to Sales Success
Closing a sale requires that you focus not on your prospect’s needs, problems or pain, but on what he wants.
By Mel Schlesinger
Have you ever wondered why there is so much emphasis on overcoming objections? Whether it’s prospecting or closing the sale, sales trainers tell us that we must be prepared to overcome objections.
In prospecting, we are taught to use the “feel, felt, found formula” to overcome objections. This is the one that goes: “I know just how you feel Mr. Prospect. Many of my clients felt exactly as you do, but after giving me a chance to illustrate how this idea can help them, they saw the value and became some of my best clients.”
To deal with objections at the close, we are taught that an objection is simply a request for more information. Trainers tell us that that the first order of business is to uncover the real objection so that we can answer it. I believe that overcoming objections creates an adversarial environment that is not conducive to creating a relationship in which you will be looked upon as the trusted advisor.
Emotions rule
In virtually all of my programs, I ask salespeople to fill in this blank: “In order to close the sale, you must uncover what the prospect __________________.” Ninety-five percent of the time, participants respond with the word: “needs.” This is not surprising since salespeople have been taught from the beginning of time that we must uncover the prospect’s needs, pain or problem.
Unfortunately, people are not motivated by needs, pain or problems. As much as we would love to believe that sales success is a logical progression, it is not. And it is important to note that there is great science behind what I am about to share.
The May 2009 issue of Fast Company magazine features an article titled, “Change or Die.” This article discusses many studies of people with coronary artery disease who have just undergone bypass surgery. Immediately following the surgery, they are told by their doctors that if they do not change their diet or exercise habits, they will undergo a second surgery within seven years. Obviously all the participants see and acknowledge the need. Yet five years post-surgery, less than 10 percent of members of the study group make any change to their diet or exercise.
Closing the sale requires that we somehow engage the prospect’s emotions.
In addition, there are many newer studies that look at the brain in an fMRI (functional MRI) and watch as major decisions are made. Time after time, the areas of the brain associated with logic light up but fail to motivate a decision to change. But in every case where a decision is made, even those involving multimillion dollars, the areas of the brain that are engaged are those dealing with emotion. There can be no doubt that closing the sale requires that we somehow engage the prospect’s emotions and that requires that we focus not on his needs, problems or pain but on what he wants.
Wants vs. needs
In a recent program on this subject, one of the participants asked this question: “If I help the prospect identify a problem and he wants to fix it, then haven’t I identified what he wants?” The short answer is no. Saying that I want to fix a problem is easy but meaningless. Talk with a person who is overweight and you will discover that he knows that he has a problem and wants to lose the weight and get healthy. But this same person will still fail to take action. Intellectually, he knows all of the arguments for change but still lacks the necessary motivation.
Now look at someone who actually lost weight and began an exercise program and you will find that this individual knows the outcome that he is expecting. Perhaps it is the impending birth of his first son and he wants to be able to play ball with him without struggling, or maybe it is a woman who is getting ready to go to her daughter’s wedding and wants to look good in the photos. These people (who are actual people that I know) always knew that they had a problem and needed to lose the weight, but it took an emotional desire to motivate them to take action.
In business, the role of emotions is no less powerful. I may need to have a buy-sell agreement and I may agree with all of your points. I may agree that if my partner were to die prematurely, I would not want his wife as my new partner, but that will not engage my emotions. On the other hand, if you can get me to talk about my vision for my business if my partner dies, you can get my emotions engaged.
Uncovering what a prospect wants utilizes many of the same skills you use to identify his needs, problems and pain. While you will still ask questions, you will have to pay more attention to the language you use in asking those questions. But an understanding of what your prospect wants will have an impact on everything you do, from prospecting to closing.
With more than 30 years of commission-only sales experience, 23 in the insurance business, Mel Schlesinger understands what it takes to build a successful life and a health insurance business. He created the Objection-Free Sales Academy and can be reached at 336-774-3075 or at mel@objection-free.com.
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