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Dear
Reader,
Once again, I am publishing this e-Zine slightly ahead of
schedule to let you know about an event on valuations
produced by the VC Task Force on Wednesday, March 9th in
Menlo Park, CA. I know this is a hot topic for
entrepreneurs, so hopefully I'll see you there. More
information on the program is available
online (time-sensitive link removed)
Thanks to all of you for offering me feedback on this
e-Zine. Last month’s interview was certainly a great hit and
I expect today’s on “Selling to the Old Brain” to be equally
popular. So sit back and enjoy!
Two weeks ago I led a financial modeling workshop for the
UC Berkeley 2005 Business Plan competition. We had quite an
interactive session with great questions and comments from
an audience of nearly 75 people. I was told to expect 40
people, so I printed 60 handouts and there was still a
number of attendees without materials. That’ll teach me to
overshoot by only 50%!
Are you in the process of developing your financial plan?
If so, join me at the next "Crafting the
Financial Roadmap of Your Startup" which I'll be
hosting at the Software Development Forum in San Jose, CA on
April 19th.
A heads up on another important event. Garage Technology
Ventures is producing the Art of the Start Conference on
April 21st. As soon as I received my email invitation, I
signed up, because this is an event I will not miss.
More on this event (time-sensitive link removed).
Finally, there is a special link in this issue to an
interesting article in the LA Weekly on starting a new
business in which I'm quoted. I hope you'll take a few
minutes to read it.
To YOUR Venture’s success,
Anthony Nassar
Founder & Principal
Venture Momentum, Inc.
415-897-0195
http://www.venturemomentum.com |
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Patrick Renvoise (right) and Christophe
Morin (left)
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I
recently attended a fascinating 2-day workshop to improve my
selling skills. The seminar was conducted by Patrick
Renvoise and Christophe Morin of
SalesBrain.
Patrick and Christophe offer research, strategic consulting
and training workshops in neuromarketing to help executives
better their performance at selling. They are the authors of
the book Selling to the Old Brain, in which they
describe their methodology in great detail, and which
reveals how to apply the latest brain research to increasing
your sales and marketing effectiveness. I hope that you'll
enjoy this interview with Patrick and invite you to watch an
entertaining
videoclip (available in Windows Media Player) of a
workshop they have led at the SofTECH Entrepreneurial SIG in
San Rafael, CA.
Anthony: How did the idea of
SalesBrain come about?
Patrick: I have spent my life
in sales and attended most major sales training seminars on
the planet, yet at the end I still didn’t have a simple,
repeatable method to help me craft a message that would
convince a prospect. So I wrote the first draft of a book
that used the results of the latest brain research applied
to sales and marketing. I then gave a few early copies to 10
of my friends. When Christophe received his copy, he offered
to refine some of the marketing concepts but he also saw the
potential of starting a new business around this method. So
we started SalesBrain in 2002, and today what we do is
recognized as a new science called neuromarketing.
Anthony: Can you briefly
describe what you mean by Selling to the Old Brain?
Patrick: Neuroscientists have
demonstrated that a specific part of the Brain brain is
responsible for releasing all of our decisions. That part of
the brain is the most ancient and primitive part of the
brain. It's called the Old Brain or reptilian Brain (because
we share it with reptiles and all other vertebrates).
Selling to the Old Brain describes a series of steps and
actions that sales and marketing professionals should follow
if they really want to reach the part of the brain that
prospects use when making decisions. To use an analogy, the
Old Brain understands only a specific (and quite primitive)
language.
Anthony: Who can benefit
from your methodology and how?
Patrick: Everyone involved in
sales and marketing, from salespeople to marketing
executives, to CEOs and entrepreneurs, can benefit from
becoming more fluent in the language of the Old Brain. The
reality is that all successful people already speak that
language, but most people can benefit by becoming more
proficient in it. This method will help you:
- close more business deals faster
- craft a highly effective sales and marketing strategy
- raise money for a new venture
In short, that language will help you become a much
stronger influencer and boost your Selling IQ.
Anthony: What is the Selling
IQ?
Patrick: The Selling IQ is a
way to measure how fluent you are in the language of the Old
Brain.
Anthony: How do you
stimulate the Old Brain?
Patrick: Neuroscience
indicates that the Old Brain can be triggered only by 6
stimuli:
- Self centered
According to Robert Ornstein, a famous neuroscientist,
the Old Brain is the organ of survival and it is only
concerned about its own survival. The Old Brain is highly
selfish.
- Contrast
The Old Brain is triggered when something changes.
Without contrast it can’t make a decision. Put a frog in
boiling water, and it jumps out (high contrast between the
room temperature and the hot water). Put the same frog in
lukewarm water and slowly heat up the water: do you know
what happens? The frog dies because of the absence of
contrast — the water gets gradually warmer.
- Tangible
The Old Brain that helped us survive for 500 million
years is very skeptical by nature. You can’t fool it,
because it accepts only simple, provable, tangible
information. By contrast, when you tell your clients: “My
solution is integrated, easy to use, modular, and will
help you make $2M next year,” their Old Brain thinks,
“Yeah, sure. Prove it to me!”
- First and Last
The old Brain is only triggered by a change of state:
when something changes this can mean a potential danger
and the Old Brain will automatically be more alert at the
beginning and at the end of an interaction.
- Visual
The optical nerve is 25 times faster that the auditory
nerve and it is connected directly in the Old Brain. In
fact, if you see a snake, the Old Brain will take only 2
milliseconds before it orders you to back away. Yet it
will take your visual cortex (the part of the brain that
processes visual data) 500 milliseconds to recognize it is
actually a snake: so you had moved away almost
instinctively without yet even knowing what you had seen.
- Emotion
The Old Brain can only be triggered by emotion. A
spreadsheet, even with a fantastic value proposition, will
not stimulate the Old Brain. The Old Brain is receiving
information from the rest of the brain through a filtering
system known as the reticular system. Only emotional
stimuli can reach the Old Brain.
Anthony: Can you walk us
through the 4 steps to increasing our Selling IQ?
Patrick: From the 6 stimuli I
previously described, we deducted 4 steps:
- Diagnose the PAIN
The Old Brain is self-centered. So its main concern is
to avoid or eliminate pain. This step is about
understanding the deepest motivation of your prospects.
Often times prospects are not even aware of their pain.
For example, do you know what the number #1 pain is for
people buying home delivered pizzas? Does it have to do
with crust, tomato sauce and such? No. The #1 pain is not
knowing when the pizza will arrive. The company that made
that diagnostic, Domino’s Pizza, achieved great success by
promoting prompt and predictable pizza delivery. Such top
level pain is something every employee in a company (not
just the VP of Marketing) should be clearly aware of.
- Differentate your CLAIMS
Do you realize that a very large number of websites
start with the same sentence: “We are the leading provider
of…” Yet the Old Brain is sensitive to contrast, so you
have to be able to say: “We are the only provider of…your
claims." Your claims, similarly to a patented invention,
have to be unique to you—and provable. If you were writing
a book called Why you should buy my products?, this
book would have a maximum of 3 chapters and the title of
these chapters would be your claims. Your CLAIMS are in
fact the top 2 or 3 reasons why your prospects should buy
from you.
- Demonstrate the GAIN
Most people only talk about their value proposition.
That's not enough. You actually need to demonstrate it
because the Old Brain is skeptical. It needs tangible
proof of your value. Value always comes from 3 sources:
financial, strategic and personal. And there are 4 kinds
of proof of value: customer case, product demo,
statistical or supporting data, and vision. Your objective
for satisfying the Old Brain's need for tangible
information is not only to maximize the amount of value
you present in each category, but also to provide the
strongest possible proof.
- Deliver to the Old Brain
The first 3 steps help you decide “what to say." If
your prospects were rational decision makers, they would
always buy from whichever vendor provides the greatest
value. But it doesn’t always work that way because the Old
Brain is not a purely rational organ. So “how you say”
your message is equally important. You need to word your
message in a language that can easily be understood by the
Old Brain, an organ that was created 500 Million years
ago!
Anthony: How do you most
effectively reach the Old Brain for a decision?
Patrick: People have 3
channels though which they can learn: visual, auditory and
kinesthetic. The fastest channel to the Old Brain is the
visual channel. Therefore we recommend that you create a
“big picture", or a simple graphical (visual) representation
of how your solution can impact the world of your prospects.
But even more effective is to first remind your prospects
how painful their situation is today and then show them the
unique relief your solution offers.
Anthony: Do you have one or
two stories illustrating the success of your method?
Patrick: This method helped a
telecommunication company win one of the largest deals
($300M) of wireless infrastructure in Europe. It also helped
an entrepreneur close a $4M round of financing for an
exciting new technology. But the best thing is that it
helped a homeless person get a good dinner. A few years ago,
as I walked inside a restaurant in San Francisco, a homeless
person approached me with a sign that read: Anything will
help. That was not a very effective message and certainly
not unique. With his permission I changed his message. When
I exited the restaurant 2 hours later, the homeless guy was
deeply thankful and handed me a $10 bill; he had made over
$60 when he normally averaged only a few dollars an hour.
His new sign read: “What if you were hungry?” and that
definitely spoke to the Old Brain of passerbys outside the
restaurant. Before leaving I gave my new friend two
additional recommendations for effective panhandling: 1)
choose your location wisely in an area with a lot of
restaurants, and 2) work 2 specific shifts – between 12 noon
and 2 pm, and between 8 pm and 10 pm, when most people have
just eaten.
Anthony: What are the most
important takeaways from your methodology?
Patrick:
- Determine your prospects' PAIN. Does everyone in your
organization agree on the top pains?
- State the top 3 reasons why your clients buy from you.
Does everyone in your organization agree on your 2 or 3
CLAIMS?
- Determine the value of your offering. How do you
demonstrate the highest GAIN?
If you enjoyed this interview and would like to learn
more about SalesBrain and the book Selling to the Old
Brain, please visit
www.salesbrain.net.
Bio
A dual French and American citizen, Patrick Renvoisé grew
up in France where he received a Masters in Computer
Science.
Immediately focusing his career on sales, he quickly
succeeded in winning large contracts in complex and
competitive sales environments.
Patrick practiced the art and science of sales in
Germany, France and finally in Silicon Valley. After moving
to the USA in 1989, he spent several years in global
business development at Silicon Graphics initiating, closing
and managing multi-million international OEM agreements.
Just before founding SalesBrain, Patrick was Executive
Director Business Development & Strategy at Linuxcare, a
pre-IPO company funded by Kleiner Perkins.
While selling super computers and software to NASA,
Shell, Boeing, Canon, BMW, Airbus and more, he met some of
the smartest people on earth and became fascinated by the
human mind. Using this newfound knowledge, his engineering
background, his sales expertise, and a compelling desire to
seek the truth, Patrick developed the Selling IQ (TM) model.
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It’s a
few days past the end of January and you’re ready to close
your books and produce your financial statements. Your
finger is itching to push that one button on your keyboard
and have your accounting software generate the usual monthly
reports.
But WAIT! How do you know that the numerous accounting
transactions in your system for the month of January have
been recorded properly? And that the resulting financial
statements will be meaningful and reliable?
To ensure proper bookkeeping, there's a number of steps
your accountant must follow every month as part of a
standard closing procedure. These steps include, among other
things, the reconciliation of various accounts such as cash,
accounts payable, accounts receivable, accrued expenses,
etc. In addition to these closing steps, I like my clients
to perform one extra procedure – a sort of sanity check - to
gain additional confidence in the data before closing the
books for the period.
The extra procedure I'm referring to is a variance
analysis, which identifies percentage increases or decreases
from period to period exceeding a certain threshold. Once
these changes are identified, they should either be
justified, or point to errors that must be corrected. To
illustrate this approach while keeping it simple, I’m
providing an example using a short income statement which
includes some of the accounts you typically see in an income
statement.
Read the full article. |
