This week’s guest post is from Mike Figliuolo, Managing Director of thoughtLEADERS, LLC – a leadership development and training firm based in Columbus, Ohio. He regularly writes on the thoughtLEADERS blog (http://thoughtleadersllc.blogspot.com/). I know you’ll enjoy what Mike has to share.
Helping You Learn to Hear “Yes!”
Many times in business, we try to influence people with facts. Massive piles of data, reams of analysis, and countless presentations try to get people to buy, sell, or do something. We spend countless hours trying to influence others to take action because we have no direct authority over their decisions.
The thing is, many times all this effort is a total waste of time and energy. We try so hard to get someone to act by bludgeoning them with data. Another dynamic that surfaces is the “influencee” asks tons of questions about minute details because they know such data is available and the analysis is possible. Allow me to try to stop this insanity.
Repeat after me: “What do you have to believe?” It’s the greatest shortcut ever (and one of the most powerful ones to boot). I’ve covered aspects of this dynamic before in another post (http://thoughtleadersllc.blogspot.com/2008/01/getting-to-yes-does-it-change-answer.html) but this one bears some further elaboration.
When we sell our services to our clients, some of them want to quantify the return (and they should absolutely consider this point in their purchase decisions). Unfortunately, the nature of what we train people on is hard to quantify by virtue of the fact it covers soft skills (leadership, communications, strategy, etc.). That being said, we’re still able to demonstrate to clients that they get a phenomenal return on their training dollars. How? We use the “what do you have to believe?” technique.
Here’s how it goes:
- Let’s assume a specific training event costs $500 for one person to attend. The course is focused on productivity (doing less irrelevant analysis, holding shorter and more effective meetings, etc.).
- The client says “So if I spend that much money, am I making a good investment?”
- I then ask “Do you believe if you send someone to this course they will be able to save 60 minutes of non-productive time per month?” to which the client resoundingly answers “Of course!”
- I then say “Then the conversation is over.” The client says “Huh? I don’t understand.”
- “Look, let’s assume the fully loaded compensation of the person you send to training is $100,000 per year. That equates to $50/hour ($100,000 / 250 days / 8 hours). The payback period of the training fee is 10 months. Your 1-year ROI is 20% ($600 saved / $500 invested).”
- “Oh. Okay. I get it. It is a good investment.”
- “No. It’s a GREAT investment because in year 2 you also save $600. And year 3 and so on. And you get those future savings with no additional investment. Doing a discounted cash flow of that time savings makes your return tremendous. On top of that, you have to realize the person will now do PRODUCTIVE work in that saved 60 minutes and that work has value we’re not even calculating here.”
- “Okay. Let’s do the training.”
We got there with a simple “What do you have to believe?” The client very much believes they’ll save 60 minutes a month (which is a very low hurdle to get over). If they believe that, then the rest of the argument holds up.It’s basic break even analysis. I could go out and conduct massive research studies on all participants who have ever attended our training. I could develop statistical models to prove exactly what the ROI is. Doing all that work is a total waste of time. All the client REALLY wants to know is if they’re making a good investment. If we can show them they’re making not a good investment but a GREAT investment, any additional analysis done with the purpose of influencing them is wasted energy.Take a look at some of the decisions you’re trying to influence. Can you get to a compelling recommendation by simply asking “What do you have to believe?” I’ll bet you can. I hope I just freed up some time for you to spend on more value-added activities.Mike
Managing Director, thoughtLEADERS, LLC