Monday, April 20, 2004

Liz called me just before class to make sure that I give you this announcement. You have one week to get your extra credit for the silent auction and the golf sponsorships. And that stuff all needs to be here in one week. One week and a day, I don’t think, are going to matter. I think they’ll accept some things, but she wanted me to light a fire under everyone in the class to make sure that you do that. Hopefully a bunch of you have tests to turn in, and hopefully you’ll do well with those tests. But if you are at all questioning your test scores, or the strength of your project, this is a chance to make up for that. And we’ve had good results so far, but we want this to be the best golf outing ever, and so we really want to work hard on getting those items in. If you do not turn your stuff in next week, you cause problems for them in getting the event set up. So move that forward.

Steps of the Sale

We’re going to go over the steps of the sale today, and those of you who have been in intro to business have heard this lecture before, but obviously, we need to talk about the last part of sales promotion, or the promotion piece, which is sales promotion, personal selling, selling careers, sales management, and training. And so we’re going to put this model on the board, and then, hopefully, we’ll wrap this part of it up on Wednesday, and then we can start talking about price.

[Can I ask a quick question? What’s the latest date to turn the tests in?]

The latest date to turn the test in would be probably three days before the end of the semester. Give me at least two days before our last class day, so that on that last class day, I have corrected stuff and have handed it back to you.

The Six Steps to the Selling Process

The first time I came across this model…and I’ve doctored up this model like

I’ve doctored up my econ model for intro to business, but I’ve added some silly stuff like door to success. And of course, I have to put dollar signs in front of the s right. Now, people have been talking about these steps of the sale for the last hundred of sales training. And sales training has been going on for many years before that. But I really like how this author laid out this model. And this author was a community college professor; he taught out west in a community college, and his name was Stan Kosin. And he coined the phrase “creative selling.” So his textbook “Creative Selling Today.” And this is the modern era of sales. Well, since then, I would add that this is problem solving selling. And that’s really what we’re doing as sales reps. We’re trying to find out what our customers dilemmas are, what are their problems and what are their needs, their hopes, wants, and desires. And then we offer solutions. But if you think about it, what is selling at its core, at its true communication’s core?

{Relationship building…}

It’s relationship building, isn’t it. It’s what you have to do in order to date, you have to build a relationship. No one is going to go out with you just because you’re cute. Well, maybe if you’re like Leonardo DeCaprio, but it’s relationship building.

So what we have to teach here, applies not only applies to business and sales, it’s applicable to life. And what we’re realized over the years is that I can sell you something, I can be the carnival huckster. And if you want to see the fattest lady on Earth, which is really just a sham, because it’s done with smoke and mirrors. But then you’re disappointed. So what you need is you need satisfaction. Well, in order to make that satisfaction thing work, you have to genuinely be concerned about the relationship. So I like to say that we’re into this for the long-term, and this is really about relationship building. In my management class, I do a little lecture on leadership and seamanship, partnership, feeding champions, relationship, and all of those ship kinds of things. And, by the way, while we’re talking about that, I want to show you a wonderful ship. This is the boat that I got to sail on, actually, three different times. This is a 110 foot motor yacht. This was previously owned by the president of the Sony Corporation of America, who unfortunately got into trouble at work, probably because he didn’t build enough relationships, he didn’t have enough friends. Either that, or he screwed up on some tax thing or something. But he lost his job; and so he couldn’t afford to keep this boat. And so my sister’s boss who is in the cable TV and electronics business, bought this yacht a couple of years ago. It’s in the charter fleet, and it charters for $40,000 a week. Anyway, I got to spend three lovely days on this boat. And the honeymoon couple got to spend their honeymoon overnight on that boat. So, anyway, the reason I wanted to show you that was not to brag about where I’ve been or what I’ve done, although, it’s kind of cool, because that’s 110 feet of mast, equal to the length of the boat. Can you imagine a sign on his sale 110 feet tall? Oh yeah, it’s coming… But I want you see that, because this is what you can get or earn or have if you go out and sell, if you learn the steps of the sale. Can you make a lot of money in sales? Oh yeah.

The guy who currently owns this boat, was an entrepreneur, and he had his degree in electronics from Iowa State. He actually helped work on the first version of the computer, which later on Sperry UNIVAC turned into the IDIAC and they got all of the credit and the University of Iowa people didn’t get much credit, but he had a skill. And when I talked to him, I said, “Johnny, this is a lovely boat, but your degree in electronics didn’t earn you this boat.” He said, “No, Rusty, what you teach in your class is what earned me this boat. My ability to sell, my ability to communicate, my ability to take my ideas and get you excited about them.” So he had to get investors excited about his business. He had to get customers excited about his options. He put in the microwave tower behind the college that connects us to the vo tech. He had to sell that project to the State of Minnesota, didn’t he. So selling is everything—absolutely everything. And then he told me that he wanted my students to understand that when you go to the finest marinas on Earth and when you ask these people how they got the money to buy this boat, most of them will say that they were in sales. Most of them will tell you that. Now, whether it was someone else’s, how do you get to be president or vice president of Sony Corporation? The guy rose up through sales, right. And that’s kind of the way it goes. Anyway, I thought that might motivate you.

{_________________________ I find that I can sell something if I like the product.}

Yeah, and that’s the old days of sales, that’s the old days of con artists, that’s the old of power persuasion. We used to have a class that was literally called the power of persuasion, and it was all about the psychology to get someone persuaded to do something. Well, that doesn’t work, it just doesn’t. I mean it might work one time…I might be able to get you to buy something one time, but it doesn’t get into this long-term relationship building. What we’re all about today are win-win negotiations. And win-win negotiations is what it’s all about.

So when we talk about the foundation, in order to make this work, you have to have a good foundation. One of the things is that you must have product knowledge, but you must believe in the product. You actually believe, like, and enjoy the product. So I could sell refrigerators to Eskimos. Do they need it? No, but I could convince people to do things just based on my wonderful personality. By the way, people buy things because they like you. That’s absolutely 100 percent true. You do not buy things from people you don’t like or care for. So part of being good in sales is having a genuine personality that people like. By the way, if you’re two-faced, or not honest, or not ethical, people aren’t going to like you. If they think that you are in this just for you… For example, during the phone calling campaign, I called Larry Write, one of our former teachers, and Larry said, “What is it this time Mitchell?” And I said, “Larry, I’ll bet every time I call you, you’re thinking I either need or want something.” And he said, “Well, that’s true…” And I told him that I needed him to make some phone calls during our calling campaign. But I’m doing it for a very good reason. It’s to help our students and to help build scholarships. And what was his answer? I’ll be there.

Actually, he didn’t quite say that he would unless Ed Juris would be there too. Because that was a Wednesday night, which was their night out. But if you believe in something, and if have a good cause and you can solve people’s problems, and you’re doing good things, people are going to jump on the band wagon. And that’s partly what it’s all about. In order to build this good foundation or base, you have to have a certain amount of energy. And that’s the one thing that I’ve been able to bring to the business department, and that was my energy. And I’ve been proud and happy to do that for a long time. A little later on, we’ll talk about personality profiles, and how that plays into this. But, I am clearly a personality that likes to sell things. I’m always promoting something, and we call it a promoting style of personality. If you have that kind of a personality, you can do well with this. But people who don’t can do well also. They just have to understand how they have to be flexible. So if I’m an analytical type, I’m very good with facts and figures and details, or engineering or accounting stuff, I just have to realize that I have to move into the sphere my client to make them comfortable.

So in order to do this, we have to find that comfort zone. For ourselves, we have to know where we’re at and then we have to figure out where our clients are at. And if you can make them comfortable, then you can build a trust bonds, that is absolutely essential. So what’s a part of this foundation as well? Well, product knowledge is important, and, obviously, some selling skills, and people skills.

{________________________}

Well, I add that as life experience. And _______ is a part of that, and, hopefully, when you leave here with a two-year degree, you’ll have a certain amount of self esteem, you’ll have a certain amount of confidence, you know you can do projects, you can go and ask people to donate things to the silent auction. And by the way, this is the perfect exercise to practice these skills, isn’t it. So now is the week to really try this. Go out and contact somebody that you know absolutely nothing about; you’ve never talked to them before, and tell them that you are a student from Inver Hills, and you would like a few minutes of your time; and here’s what we’re doing and why. Show them a few benefits as to how they’ll feel good about this or how it helps students and the community, and how it helps them to have better trained future employees, etc., etc. Then you have to ask for the order, right. Well, once you get comfortable about that, it’s easy, it’s absolutely easy. And what’s the worst thing that they can say? No, so it’s like, ok, I guess I didn’t do my job; I guess you don’t understand the benefits; or you don’t have a need, or I didn’t strike a cord or we didn’t build a relationship [heartstrings]. But if they say no, you should move on to somebody else, right? It’s really not that hard. Once you realize that they are saying no doesn’t mean anything personal. It’s not personal rejection. I mean, I’ve been trying to get Dick Schultz to the college, now, for about three and a half years. Actually, I’ve been working on him for about twenty years. But the last three and a half years have been pretty intense. We just got a call from Brad Anderson, the president of Best Buy’s secretary, who asked for our tax ID number. So I think that something big is coming. By the way, that’s why I was late; Liz and I were just now talking about it.

Well, Dick just gave money to St. Thomas, didn’t he. He gave $50 million, and now they are going to build a building. Well, I am not on Dick’s priority list at the moment. And I have to understand that; I have to respect that. And, so, it’s like, ok, we just want to build, slowly, a long-term training relationship and a partnership. And later on, hopefully, we’ll get you involved in the golf outing. And, hopefully, someday you can give some money. But I called the director of their public relations program, and talked to them about some ideas that I had. And, yeah, they took a look at it. I called the director of their foundation, and it took me a long time to finally connect. And that’s part of the problem, today, playing phone-tag and getting through to people. I sent emails, which I hated doing, but I did it anyway, because I figured sometimes that’s the only way to get through.

[Sometimes it is!]

Sometimes it is; I made calls, I sent a personal letter, I actually hand wrote a personal letter thinking that maybe this will catch her attention…who is this poor guy who can’t write or read? Then I’m on the phone, and I had to explain that I was this dyslectic professor, etc. And that kind of touched her heart a little bit, right. Well now I have just a sliver, but then she finally opened up. She said, “Rusty, you could continue to communicate with me until you’re blue in the face, we are not going to give your college one penny. Did I cry? No, it’s not personal rejection, is it. And I asked, “Well, what’s the reason?” And she said, “Well, the reason is because we have criteria, and you don’t meet our criteria. We give to other causes, and here’s the criteria.” And when I heard the criteria, they were all good causes, I can’t say, well, you really ought to change your criteria. That’s been established and for a good reason. So it’s like, well, where did the money from Dick Schultz come from? And that was from his personal money, it wasn’t from the foundation. So I needed Dick to give me personal money. If you can convince Dick to give you personal money, more power to you. I wish you luck, but that’s not going to happen. Then she went on to say that she serves on the foundation board for Normandale. And I said, by the way, next time you’re there, you just say hi to my brother-in-law who build the business program at Minneapolis Community College, the business program at Normandale Community College, and we’ll talk later about how you can help Normandale, and maybe we’ll get one of your executives to serve on our foundation board. And she said, “Well, I can help with that.” So did I walk away with something? Yeah, it’s like it was personal rejection.

By the way, at one point when I was selling, I had called on a bank and the bank marketing vice president literally picked me off the chair and set me in front of the door, and put his foot on my butt, and actually kicked me out. And I actually almost tripped down the front stairs. I mean, that’s pretty course, isn’t it. Fortunately, I didn’t get hurt. But as I’m sitting in the car, and I wanted to cry, I really did. I thought, what did I do wrong? Well, I’m loud, I’m obnoxious, I didn’t have an appointment, I didn’t come prepared, I’m wasting his time, so can you really blame the guy. The more I thought about it, the more I thought I was an idiot; and he doesn’t need an idiot sitting in his office. Of course he should… So I called him back to apologize. And he said, “What in the hell do you ad specialty guys do?” You’re just a bunch of jerks! What do you do follow each other around? You happened to have been the tenth in my bank. And, unfortunately nine out of those ten, like you, didn’t come prepared.” Now, I didn’t realize at the time that I was only two blocks down from Brown & Bigolo’s corporate headquarters. [Hone the channel process] And, so, they had training sales people coming in and out all the time. So I guess the poor guy got tired of it. But later on, I began to realize that you have to go in prepared; you have to find out what their problems are; you have to find out what their needs are. You have to have a presentation ready to give. And if you do that, then they’ll give you twenty minutes of their time. But to go cold calling…because my dad once had said, “Well, just walk up and down University Avenue.” Well, that’s stupid, isn’t it. But that’s what he knew. By the way, he never had any college training, and the only reason he did as well as he did was because people liked him, he was fun. He was a good guy. And after he started to build relationships, then business came easier and easier. He hated cold calls; but he wanted me to go out my nose bloodied, so I knew what that was like a little bit. I have to chuckle, because later on that same bank manager made me take him out to lunch three different times. And he only bought something from us, I think, once. And that was just such a program that he couldn’t turn it down. But he loved abusing me. And he was kind of an abusive type of a guy. One day he made me take him to this lunch place, and I said, “Where we going?” And he said, “Oh, it’s my favorite place. I always have my sales reps meet me here for lunch.” And I asked, “Is it expensive?” And he says, “Well, that all depends on how much you like to tip the girls.” And I’m like, “What?” So we went to this bar, where every afternoon they had a lingerie show. And the girls would parade around in their Victoria Secret clothes. And they would come to sit at your table, and I’m like, “Is this appropriate?”

Is this a guy, by the way, who would have taken some money under the table. Oh yeah, so you have to draw a line. After a while, I began to say to myself that I didn’t need to deal with this jerk. There are other banks in town, even though we had a salesman who already called on most of the banks, there are other banks, and I didn’t need to call on this one. So pretty soon that account sort of went away. But he was an interesting guy. But he literally put his foot on my bottom. When I went home I asked my mom if my bottom looked dirty. And she said yes it did.

{You have to have a certain personality, because I hate rejection, and I do take it personally.}

You have to get tough, and you have develop, what I call, the duck’s sphere. What rolls off a ducks back? It’s water. You have to have that kind of impenetrable feathering. So what if you get some water on you? It rolls right off. And so you have to learn that you’re doing your thing, and I know my business works; I know ad specialties are effective, and so I’m just going to keep moving forward.

This last week, my mother pulled me aside and said, “Rusty, you are too loud. You are so excited, and you get so wrapped up about stuff. And you have to calm down; you have to be more quiet.” And I’m like, “Mom, I have the answer to this problem. Hypnosis…I could be hypnotized much like they hypnotize people to quite smoking. I could be hypnotized so my voice level would never get above such and such, and my excitement level would not get above such and such.” I actually take a beta blocker, Tynorman, to keep my blood pressure down, and that calms me down a little bit. When I was a little kid, I was the whirling dervish. I had too much energy. Well anyway, I said to my mom, “If that’s a bother, I apologize. But you know what? This is what I get paid to do. I do this seven-days-a-week, I do them fifty minutes or an hour and fifteen minute intervals, or in three hour intervals. All I know is that I’m on and I’m off. I mean, that’s my mode, because I’m a teacher. And then, I dropped it, because it wasn’t that big of a deal. Did that hurt my feelings? No. Now, if I asked you out for a date, and if you said, get out of here you fat old bold guy, you’re ugly. Now, that hurts, right? That’s a stab to the heart. But that’s personal rejection. In this case, they were talking about a personal issue of mine, which I heard before.

Well, all of a sudden, while I’m on the airplane on the way home, I was real quiet, I listened to my headphones, and normally people can hear me throughout the whole airplane. And I love talking to strangers, right. I’m the kind of person you don’t want to sit next to if you want a quiet flight, right, because I’ll ask you where you live and what you’re doing. The only conversation that I had on that particular flight was with the crew while on the way out as I thanked them for a safe flight, which is something I always to when I fly. I think that’s really important to thank them for getting me home safely. But anyway, I was sitting and contemplating, and the more I thought about it, it’s like here’s my mom and her friend who owns this boat and who are in their 80s…well, they all wear hearing aids. And to hear the conversation, they have to crank up their hearing aids a little bit, right. Well, what does my voice do to their hearing aids? Yeah, so all of a sudden it dawned on me. So, my mom called and said, “I hope I didn’t hurt your feelings…” And I said, “No, mom, I would never have gotten as far as I have if I would have allowed to have my feelings hurt.” But, you know, I appreciated her comment. Well, then the more I thought about it, I thought, no, I need to call her back, and say, you know, when I’m with you in a crowd or a group, you might not want to sit so close to me, or you might want to turn your hearing aid down a bit. And I do need to try to modulate it myself. But anyway, that’s all a part of how you learn to deal with that.

And there were days when I went out to make cold calls, because I didn’t have any contacts; I didn’t know anyone or what kind of programs to present. So I made these cold calls, and, yeah, you get a fair amount of rejection. And you just seem to move forward anyway.

Well, out of all of these base line skills, life experience, meaning travel, worldly experience, your ethical makeup, and all of those things that teachers try to pack in. By the way, why do you think that people who hire sales reps want “a” college degree? They want you to have as much of this as possible, right. Most of the good jobs in sales don’t state a four-year degree as part of their criteria. Look at the ads very carefully. Most of the jobs for sales require “a” college degree. Does a two-year college degree fit that bill? Absolutely. If they want a four-year degree, and some of the jobs at General Mills require a four-year degree in marketing or whatever. They will be specific. But, basically, they want to know that you can do project management, that you can take care of yourself, that you’re motivated, and that you have some real world experience. For years, sales managers debated which was more important, product knowledge or selling skills…what do you think? A combination of both? Product knowledge? You can learn product knowledge pretty easy. And, actually, when I first read this guy’s model, I thought he was right on, because he said that these two don’t matter as much as this one does. People skills matter the most. Because if you don’t have the people skills, you’re not going to learn. You can’t teach an old dog new tricks, so to speak.

So when you’re hiring good sales people, you want to look for those; you want have a check list of what are the people skills that I want in a sales rep. I want the ability to communicate, the ability to be empathetic. Is that important? It’s absolutely critical. You’ll all take a human relations in business class; you’ll all take a communications class. Those are all critical components to this. But product knowledge is all about understanding the product enough to be able to communicate its benefits, its features, and what it does and doesn’t do. You have to be able to say what it is that your product does as a competitive or comparative advantage over somebody else’s product. But you can learn that pretty quickly, can’t you. I could go out and sell, right now, top flight state-of-the-art robotics, selling them to automobile manufacturers all over the world. I’m not an expert in robotics, but how long would it take me to learn that product? Maybe three months. How long would it take me to learn the selling skills? Well, I’ve spent thirty years fine-tuning and developing my selling skills. But I can teach you guys how to sell. I’m not teaching a sales class anymore, but Don Cassidy can. Don Cassidy can teach you guys the selling basics in one semester. You can learn the basic selling skills in one semester. Is there a whole lot of psychology to learn? Yeah, so when my dad retired, he finally said, when he sold his business, I think I’ve finally got it; I think that I’m finally really good at this. He got tot the point…and your goal, here, is a close ratio, meaning how many closings do you do verses how many do you start. And he got to the point where his close ratio was 90 plus percent. That’s pretty good; that’s really pretty good. Now, when I started in the sales business, I was lucky if I had a close ratio of two or three percent. Has anybody ever sold ___co or Amway, or anything like that?

{Petco}

Any others? Has anybody sold Kirby vacuums? It’s all about developing a closing ratio. I mean, at the end of the….

…it didn’t take me that long to get the product knowledge, although we did represent over 1,200 manufacturers, and I would never know them all, but I pretty soon learned that each manufacturer has an 800 number. So if you ask a question about one of my lines and I can’t answer it, I borrow their phone and I call them up and we get it figured out. People respect that. By the way, that’s one of the best things that ever happened to the world of sales and marketing, the whole 1-800 number concept, because people were more than willing to let you use their phone to get something resolved at the factory immediately. By the way, I always dialed, because I didn’t want them to know what phone number of my factory. My factory sources are confidential.

{____________________ but I really don’t like it. ____________ I admire the woman, but [I think she’s talking about Mary Kay Cosmetics] they try to make you a sales rep. And they tell you that you can make 50 percent on everything that you sell.}

It’s a turn off, but you can’t buy from Mary Kay directly. So you have to go through someone. And in studying marketing, you realize that in the channels of distribution, you have to pay intermediaries. That’s a part of the cost, isn’t it. So you really shouldn’t see it that way, although I can understand why you do. My mother-in-law got into Mary Kay for a couple of years. She had a really good rep, and so my mother-in-law had a few parties and she really didn’t like inviting her friends or relatives. Well, my daughter went to one and she felt obligated to buy stuff from her mom, and she hated it; she just hated it. And that’s a problem that I have with Amway or any of the other party-plan kinds of things. You’re kind of putting your friends and relatives into kind of an abusive situation, where they hate to say no.

On the other hand, it’s a quality product. And if you’re getting a good product at a price that’s equivalent to Dayton’s…are you ok with Dayton’s charging 500 percent on some of your makeup? They charge 500 percent on some of their makeup.

{_________________}

Yeah, you are the middle man. I had tenants in my duplex, and one of the gals was a chief buyer for Dayton’s for their cosmetics. And I said, “What’s the markup on this?” And she gave me a few examples, one of which was marked up like 900 percent.

[Isn’t that great?]

{Most of the time, you usually get…Well, I’m not going to say all of the counters, but the Marshal Field’s downtown Minneapolis, they have guys at the counters who work there… I mean these guys knew makeup.}

They know their stuff…

{I mean they show you stuff…}

Yes, they have the product knowledge, and that’s supposedly the same way with Mary Kay, except Mary Kay doesn’t have the same training. And you do get quality products.

{_________________________________________}

Yeah, but it gets back to limited distribution, where only a certain number of retailers would carry this product. If you want to have an exclusive product… Are there people who are willing to pay… I mean, I can’t believe how much John paid for that boat, but other people won’t care about the cost, because they want it. That’s what it’s all about. The bottom line is the more profit margin the company has, the more they can spend in training. And that’s where Dick Schultz is in a bind, because he sells for less, doesn’t he. And Sony isn’t going to pay for the training. So their reps don’t get trained very well. They are hoping to turn that around. We got trained in my industry pretty well, because we had pretty nice margins. We had 35, 45, 50, and in some cases, 60 percent margins to work on.

{Have you seen that Home Furniture commercial about their product knowledge.}

Yeah, I know exactly what you mean. There’s a real difference between quality mahogany and pressed board, which may have some particles of mahogany pressed into it.

[Or a veneer.]

Yeah, or a veneer.

So the bottom line is to build a good foundation. And if your hiring people, and to be a good sales manager, it’s all about hiring. If I know how to do this, I can make some money. But if I can train twenty of you how to do it, in three months, I’m going to make a lot more money, right. Because if you’re making money, I’m making a percentage of what your brining in. And that’s what becoming a sales manager or a district or zone manager is all about. Ultimately, if you can train people to make a good sales presentation to sell your product, you can make a lot of money. When I went to the U of M, the way I convinced my dad to let me go to school full-time and to work full-time, I said, “Look, dad, you never learned how to train people. I’m going to go and learn how to train people to sell.” And if I can train people how to sell, I won’t have to work as hard as I did to make my sales dollars. Ultimately, that’s how you grow an organization. And, ultimately, that’s what will be, I hope, the cornerstone of my Signs For Sail, by training franchisees to make money with the product. I have to figure out how to make money first, but then I will transfer that knowledge to them. So that’s why you want to think about taking a sales management class. You want to think how you do this.

But if you build a good foundation, you are much more likely to get through the door of success. Ok, how does this start? It starts with the preapproach. And the preapproach is the homework stage. And on Wednesday, we’ll probably come back with a little more detail on this. But your homework stage is finding out about the industry, it’s finding out about the customers and the clients, and why do they buy, when do they buy, where do they buy, what do they like, and what don’t they like. So when I was calling on funeral homes, I didn’t want to, because it’s an icky place to be. Who would want to go into a funeral home? But they buy ad specialties. And all of the other guys in town were calling on the banks, so there weren’t any more to call on. So the funeral homes were wide open, and that was a good opportunity, right. Well, at first I wouldn’t call on them, and I would turn them down. Every rep told me to call on funeral homes. Well, I just didn’t want to do it. Well, then my dad went on an Air Stream rally with one of his friends down in Iowa, and he had a funeral parlor. And this guy was a lot of fun. So I called him and he said, “Hey, how did your dad enjoy that rally that we did. Did he tell you about how my employees popped out of the coffins in the basement? And I said, “Yeah, he did…” And began to realize this guy was a lot of fun, and I said that I needed to know why and how you buy ad specialties. And he said, “Are you going to try and sell me ad specialties?” And I said, “No, I just need to know how. I need to know what you buy.” And he said, “I buy stuff for the ministers. I buy stuff for the priests.” Well, I wanted to sell the paper stuff, like the thank you notes and the guest registry books, because we had a line that carried that. And he said, “Rusty, don’t bother to try selling that to any of us, because there’s one supplier that every one of us buys all of our supplies and embalming fluid, and our makeup, and everything. There is one supplier who sells to every funeral home in America. They have 100 percent of the market share. And I’m like, “Wow, I want to work for that company…” But he told me that in order to do that I had do have a mort-sci degree. He said they take mort-sci degree people who actually don’t want to do the business, and they turn them into sales reps. That’s product knowledge, isn’t it. He said, “What I’m trying to tell you is to be creative and sell us the stuff that you have. Sell us little Styrofoam cups with ads on it. And I said, “Why Styrofoam cups?” And it was because every church needed cups for every Sunday. And that costs them money. If the funeral home donates it, your church doesn’t have to pay for it, right. That means more money for one more kid to go to camp. So once I began to understand the kinds of programs that they wanted, the kinds of problems they needed solved, then I put it together. Pretty soon I had every funeral home in the Twin Cities metro area as my account. Now, beyond that, I could take that same concept, and expand it nationally via direct mail or telemarketing, or via the Internet.

So this preapproach and homework thing is critical. Get to know your customers and get to know what it’s all about.

Then we have prospecting. And in prospecting, we’re going to make lists, and we’re also going to qualify. Are they an A1 prospect; are they a B2 or a C3 prospect? If you’re trying to sell to Inver Hills, and if you know Pat, you’re going to realize pretty soon that you’re going to have to go through a lot of paper work. The State of Minnesota is a tough nut to crack. Even though Pat might want to buy from you, he can’t just buy from wherever he wants to. I have to put the State of Minnesota within a C3 classification, until I get in with the big shots up there. And then, all of a sudden, it becomes an A1, because now I’m not just selling to Inver Hills, I’m selling to every state property in the state, right. But that might be difficult to break into. So you have to prioritize. You can buy mailing lists, you can take chamber of commerce lists. How did I get the list of funeral home directors? I could have gotten it from the Funeral Home Association, except they said that they wouldn’t release that information. There weren’t that many, right. So I just called everyone and ask who is the key person? And I just added their name. I had from the telephone business-to-business directory the name of every funeral home in town along with the number and address. What I found out was that most of those funeral homes were owned by three families. So you could see a lot of properties out there, but there’s only three families that own the majority. Now, the one over here at Inver Grove Heights, that’s privately owned. That family owns that particular property. So they would have been a great prospect. With Lee, Lander, and Quist, that’s a little harder, but if you get to Mr. Right with the right program, you can do it. So here’s is the question of determining who is Mr. Or Ms. Right.

And I just found this out…If you’re calling a local suburban phone company for these business to business directories, they won’t have it. You have to call the big metropolitan companies. You can also get a reverse street directory, which lists every business on an avenue.

[Polk.]

Yeah, the Polk Directory. So making lists is critical. Trade associations, chambers of commerce…but the census has information as well.

[Licensing boards as well.]

Ok, in prospecting, we also have to qualify them. What does that mean? Are they a suspect or are they a prospect. So being a good salesperson is much like being a total professional. You have to be a detective, you have to be the lawyer, you have to be the doctor, you have to be the pharmacist. The doctor has to find out what your problem is, right. And then the pharmacist has to create the product to cure you. You have to be the relationship negotiator, you have to be like a counselor; you have to be like a priest. Is this the ultimate profession? The first time I ever heard that I thought gees, I always though badly about being a salesman. Because salespeople are slugs, and they have this image of the used car salesman, right. And they are perceived as abusive. So I felt kind of bad. I would go to parties and people would say, “What do you do?” And I would respond by saying that I was in the advertising business. I wouldn’t tell them that I was a salesman. Now, I’m proud to say that I’m a salesman. But back then, I said I was in the ad business. “Oh, what do you do?” Well, I have a family business, and our family business does advertising specialties, and we call on ad agencies and all of that.

By the way, calling on ad agencies was a hard sell. It was a really hard sell. It was much easier to sell to funeral homes.

{I’ve always thought to myself that I’m not into selling. I’m more into the service end of it. If I can provide a service, I feel better about it. But the way you put it _______________________}

Where do most people start? In a job called customer service. Most sales people start internally on the phone dealing with customer problems, and supporting full-time commissioned sales people. My stepson, Ben, who works at Ultimate Electronics, what is his job title? Is he a sales rep? No, he’s going to college, and he’s not full-time. You cannot be a commissioned sales rep at Ultimate until you’re full-time. I mean, you have to commit yourself to your job. You have to commit yourself to product knowledge, right. He’s a customer service representative. He’s there to assist the sales staff; he’s there to deal with problems as they come in. He also happens to be, by the way, one of their best employees, because of his people skills. He’s really good at that. Fortunately, for him, he grew up in an environment where that was a part of what he had to learn. But when you look at it that way, you see it very differently, don’t you. I saw myself as a salesman, thinking that I was a peddler with all the images that go along with it. Fine, I’m a peddler and that’s ok, but to be good in this job, you have to be better than any other profession on Earth. And you are paid to be good via a good commission.

So the dollars is how you rate yourself. Are there sales reps today who make 30 and 40 thousand dollars a year? There are tons of them and they’re all over the place. As a matter of fact, if I was still in my dad’s business, and you told me that you did pretty good last year, and that you made 40 grand. I would say that you’re still on the cusp of learning this trade; you’re still in that learning curve. $100,000 a year in his industry, and talk about the door to success, that was the marker. When you had $100,000 a year in commissions paid to you, and you would have expenses that came out of that, but that’s when you’re a part of the elite club. And I got to the point where I was almost up to 75 to 80 thousand. I only had about 20 some thousand to get to my goal. And I had a chart in my basement that showed where I was the first year, second year, and on and on. And I had a goal that by the time I reached my tenth year, I had to be at that $100,000 mark. Now, if you’re paying on $70 grand a year, and if you get to write off much of your life’s expenses, you’re living pretty well, aren’t you. At $50 thousand a year, I lived in a beautiful duplex overlooking Lake Harriet. I had a really nice house. Fortunately I bought into a good deal, with my dad as my partner. And I was able to build in some equity, and I had a wife who taught and who took care of our health care costs, and whatnot. Between the two of our incomes, we did pretty well. Well, if you’re that ultimate professional, you can make a lot of money. My doctor friend, right now, is bitching to me, because his salary has been going down every year for the last nine years. And it’s because of managed health care costs. Everyone is complaining about the high costs of health care, so what does his company do to keep the costs down? They hold their doctors’ salaries. And, so, he’s stuck. Well, if you’re in sales, your commissions are always going up aren’t they. And you’re indexed for inflation. If inflation goes up, you get a percentage of those sales dollars, and you go up. When I became a teacher, I went from 40 or 50 thousand dollars that I paid in taxes, to 12 thousand that I paid in taxes. But actually, the next year, when my salary went up to 13,500, I went backwards by a lot, didn’t I, because the cost of living went up. If I had stayed in sales, I would have been indexed. So when we talk about the money you can make in sales, it’s big.

But, anyway, you have to be the detective, here. Now, if I think that you have committed a crime, what do I call you?

{Suspect}

You’re a suspect; and if I gather enough evidence to prove you were in the right place at the right time, and that you had a motive, and you acted kind of guilty when I look at you in the eye. Then what do I call him?

{Prime suspect.}

Ok, a prime suspect, ok. And what if I get that one last piece of evidence that allows me to book you, and put you away. I have now converted you from a suspect to a prospect. And at rated prospect. So a person who has every reason to buy, and is ready willing and able to buy, is Mr. Or Ms. Right and has the authority to buy, is now a number one prospect.

[It’s actually quite revolutionary, unless you’re such a po-mo that you can’t see it.]

Why have I spent three years going to Best Buy, for the foundation?

[They are a big prospect.]

They are a big prospect; they have money; they are profitable. Now, for a while, there, you guys were all pirating music, and they were losing some money. They sold that Music Land division, now, but, yeah, they have a lot of potential. It’s not an easy prospect, but the opportunity is there. So you have to rate these people based on opportunity. My dad pulled on Cennex, which was his number one customer. Why do you think he focused so much time and attention on Cennex? It was because Cennex couldn’t buy other media. TV didn’t make any sense for them. A little radio they do locally, but they don’t spend too much on that. They publish their own newspaper. What’s their number one media that they purchase? It’s gifts and ad specialty items. It’s farmer and member owned, so who are you going to give these ad specialty items to? Your owners, your members, right? Every annual meeting, and for every coop in the country, and there were thousands of them, they gave away gifts to their members, right. And it was my dad that did that. He said this is a number one prospect.

What he loved about Cennex was that it was veiled opportunity. Every ad specialty in town, didn’t know about them, they didn’t get it. They didn’t understand that they were a multibillion dollar company. When he was with them, he had one supplier saying, “Frank, I can’t go out on the line and grant you this much credit, based on this order.” And my dad said, “Did you look at the order? I sent you an order for 150,000 items. Did you look at who the client is? And they said, “Well, we don’t know who this client is…” And my dad said, “Well, look them up. Take the time to do a credit rating on them.” The guy called back in ten minutes. Holy Crimeny, these guys were rated at over a billion dollars. This was a bigger prospect then all of 3M, which, proportionately, spends more on ad specialty items then 3M would ever spend.

So you have to know who your prospects are, and know who your potential is. But this is absolutely critical.

Once you’ve gathered enough material to determine if they are a prospect, then you move forward. Now, you come into my dealership to buy a new car. Are you just looking or can you afford to buy a car? I need to be able to ask some probing questions.

So do sales people ask questions? Oh yes, all the time. And that’s where this starts. And then, in the presentation, where going to ask more questions. And then at the end, we’re going to ask more closing questions. If I come on, and this is what the General Motors training people will tell you, but if I should come on to your lot, there’s a reason why I came on. I didn’t just come on, because I like the smell of a new car. I’m probably in the market for a new car. I’m probably going to buy a car. As a matter of fact, what they tell their sales people, and why these car reps won’t let you leave the lot, is because of what they’ve been told in their training: That person will buy a car within the next 24 hours. The question is which sales person will get the sale. Now, if they push you too far, which is power persuasion gone wrong, you’ll leave, right. You have to understand the relationship par of this. We had a sales rep at the Ford dealership in Inver Grove that ignored my wife. Well, I’m the captain of the ship, and she’s the first mate. But she’s in charge, you know. She had a lot to say about the purchase. And this guy thought that because I was doing all the talking, that my wife should be ignored. That was a bad decision; that was completely wrong on his part. She said, “Get in the car, Rusty, we’re leaving.” And I’m like, “Ok, honey…ok.” My stepson teases me about being whipped, and it’s probably true, but…. But this salesman actually offended me on a couple of points.

As soon as I got home, what did I do? I called Bob Carter, who owned the dealership and who I also knew from a couple of college events, and I said, “Bob, you need some sales training; here’s what happened…” That guy was fired six weeks later. They started keeping an eye on him, and they knew his numbers weren’t any good, but then they realized that he was an idiot. I got this close to getting involved with training his staff. I could have made some serious money on that, but then the economy turned around, and sales picked up, and he said, “Well, I guess we don’t need sales training anymore.” Was that the smart thing to do? Wrong, you build for the long-haul, the long-term.

{When I heard _______________________________________________________________________}

Yep, the best auto salesperson I ever met in my whole life was a woman at that Minneapolis Auto Show. I don’t know who she worked for; I don’t know who hired her, but she actually had a four year degree in anthropology, and she was brilliant, absolutely wonderful. Women tend to be empathetic, they tend to pick up on signals, women have to know when children are about to cry or when they’re in distress. I think women make better salespeople than men. It’s not that men can’t do it. Historically, it’s always been the men job, but women make very good sales reps. And women are pretty good at prospecting too. By the way, the only competitor that my dad was afraid of, and he only had one, it was ________. And she understood what was going on at Cennex, and that really scared him. He used to wake up with nightmares. And I told Dian, since, that I wanted her to help out with some of our Inver Hills merchandising stuff. And at some point she may just do that in her semi retirement.

Ok, if we do our prospecting, then we determine whether we have a good prospect, and we have eliminated some suspects, we’ve eliminated some people who can’t buy. By the way, I was selling my home in Inver Grove Heights all by myself with no outside realtor. You can make more money when you do that. I don’t mean to put down realtors, because I’ve sold a lot to realtors and made a lot of money. But I wasn’t going to make much on this house. But a couple came in and they had a baby in a little bassinette thing. And my wife said, “Oh, this looks like a nice young couple, they’re going to have another baby, they need to get out of their apartment and move into a nice house… These look like good prospects.” And I said, “Well, I don’t know. Look at the car they drove up in…” It was an old beat-up car, and I’m like, “I think we should do a credit check on these folks.” Well then we started watching them. And my wife said to keep an eye on them, because she didn’t trust them, and something seemed wrong. And she said, “That’s not a real baby.” They were walking around with this baby that was covered up, and it wasn’t a real baby. So I kind of bumped into her. Well, if you bump into someone who has a real baby, what are they going to do? They are going to protect that baby, right. That’s a motherly instinct, but it didn’t happen. She kind of looked at me like “What’s going on?” So I just kind of tried to peak and see… Well, when they got into their car and while they were talking to themselves, and I couldn’t tell what they were saying, but I thought that this is either a young couple who is dreaming about someday owning a house and pretending that this is what they are doing, or, they were looking our place over and they were going to rip us off. I don’t have a clue as to which is which, but…

Now, do some realtors need to hear that story? If you’re responsible for selling houses, yeah, they need to know that there may be some who will come to an open house with the sole intention of stealing something.

{_______________________________________}

Well, that’s what my wife said, “You should have confronted them…” And said, “Hey, they didn’t go anywhere in our house without one us watching them. I’m glad you picked up on this right off the bat, but…” If we had spent a lot of time on them, we would have wasted our time on a non-prospect, right. So you’ve got to kind of look at that. And in the retail world, I talk about sales from the professional outside selling, where you’re calling on clients outside. But in the retail world, they come to you, and you’ve got to go through all of these steps fairly quickly, don’t you. In your business, they walk into the door, and, bang, you got to get right to business.

Well, anyway, if you do this right, then you can do the approach. And the approach is all about first impressions. And this is where we shake hands. So, “Hi, I’m Rusty, and you’re Nate… Nice to meet you. Now, Nate we have to work on that handshake…” Ok, there we go. Nice handshake… Now, here’s something I learned about handshakes. You can go to seminars just to learn how to shake someone’s hand. If I do this, and turn your hand downward, that means that you’re going to allow me to be dominant. If you, on the other hand, turn my hand downward and squeeze a little harder, that means that he’s saying he’s going to be dominant. And I was like, you’ve got to be kidding me, this is weird. When you shake hands, you usually shake like this and establish eye contact. And that eye contact is critical, if you want to build trust. Well, I went to a three-hour workshop one morning for this. By the way, the most important information that they gave that day was that you must wash your hands multiple times during the day. And you use an atomizer to apply your cologne. You put on a little cologne here, then you go like this and then you go like this, but you never put cologne on your hands. If I shake your hand, and you end up smelling my cologne all day, and if you don’t like that or if that bothers you, that’s a problem. Also, you don’t smoke cigarettes. If your client smokes, and invites you to smoke, you can smoke. And some salesmen always carry cigarettes around with them, because they will offer them to their customers. Some salesmen not only have little cigars, but they have cigarettes and big cigars and even the Cuban cigars.

It’s like, ok, we’re all about building relationships, and I’m supposed to start this relationship with a gift. Anyway, about the handshake thing, I’m watching Bush on TV, and he grabs this guy’s hand to shake it, and he turned his grip downward, and I was like, “Oh, my God.” And I’m like, he was trained to do this. And what’s he saying when he does that? I’m in charge, I’m the most powerful man on Earth. He’s asserting his dominance. By the way, did he assert his dominance when we went to war with Iraq? Did he say this is how it’s going to be? And even before congress knew that we where planning for war? That’s how the guy operates; that’s how his daddy trained him. So is there a whole lot of psychology in sales? Oh yeah. There’s a whole lot of stuff. By the way, you need to have a firm enough handshake to show a commitment and energy. And one of the problems that business people tell me today, that young people have, is that no one has taught them how to shake hands. But, wait a minute, that’s not what we’re really supposed to be teaching. But, oh yes, we need to be teaching that. That shows enthusiasm and that shows… It shows a lot about your personality. So this first impression…not only do you have to dress right… And by the way, I had a beard when I was younger, and my dad kept saying “Lose the beard, lose the beard, you look scruffy, you look like a bum.”

[Missing last fifteen minutes of lecture]