Book Notes: The JOLT Effect
These are my notes for "The JOLT Effect" by Matt Dixon and Ted McKenna. This isn't a review, it's my notes. So... it's long. Enjoy!
Hi! Today, I'm sharing my book notes for The JOLT Effect by Matt Dixon and Ted McKenna.
Note: this isn't a review... it's all of the notes that I made. So, it's long (almost 2000 words).
I recommend that any salesperson, sales manager or revenue leader pick this up and give it a read. It's well-researched, and has some great ideas to ponder and observe in your organization. On the downside, I felt the book tailed off halfway through and I didn't get much out of the latter bit personally.
Let me know what you think of content like this; if you enjoy it, I'll share more as I read a ton.
Erik's Unqualified-to-Rate Books Rating
Final score: 8/10 -- if I was only grading the first six chapters. If I had to grade the whole book, I'd knock a point off of it. Didn't feel there was much life-changing information on first read, and everything past the pitch and JOLT framework was filler illrelevant to me, or a pitch for Tethr.
Worth reading?: Yes, especially if you're in sales. There's some good points made about and coaching on the sales cycle post "acceptance of changing the status quo" that every salesperson should review and bake into their every day.
A handy shortcut: read it once, then just read the "Conclusion" section at the end of each chapter again a few times to bake it in. I appreciate that they summarized the chapters, because you can speed through the fluff. And there's a bunch of it.
The Big Takeaway
The JOLT Method
- Judge the buyer's indecision by diagnosing the source(s) of indecision and ascertaining the likelihood of overcoming them
- Offer your recommendation to confidently simplify the buyer's decision, as opposed to endlessly asking them what they want to buy
- Limit the buyer's exploration by shutting down unproductive lines of inquiry and discouraging evermore "research"
- Take risk out of the deal by managing expectations and offering "safety net" options that give the buyer confidence they won't be left hanging
All The Notes
The Data, Story and Setup
The authors reviewed a ton of recorded sales calls and correlated that there's more than one way to lose a deal to inaction. The first is losing to the status quo, which is well documented in sales literature and coaching. The new insight is losing to the buyer's inability to make a decision.
Status quo preference is driven by human biases that lead buyers to want things to remain as they are. Buyer indecision is driven by a separate psychological effect known as the omission bias.
The buyer's desire to avoid making a mistake. This is compounded by a number of factors:
- The number of options available to buyers
- The amount of information available to research all options
- The financial cost of choosing any particular vendor or solution
- The risk or opportunity cost in choosing the wrong vendor or solution
Overcoming these preferences or biases requires two different playbooks, as the fear of missing out is replaced with the fear of messing up:
Overcoming status quo preference: dial up the fear of not buying
- Show the customer how they will succeed with this solution
Overcoming buyer indecision: dial down the fear of buying
- Show the customer that they won't fail with this solution
Three flavours of Status Quo Bias:
- The buyer expresses an actual preference for how they do things today
- The buyer doesn't agree that the seller's solution is a compelling alternative
- The buyer agrees with seller's pitch and that things could improve, but is too concerned with the amount of change involved (organizationally, etc.)
In research by Daniel Kahneman and Amos Tversky, we learn:
- People value opportunities based on their ability to minimize loss rather than to maximize gain.
- Buyers are 2-3x more likely to make a decision that enables them to avoid loss.
- Buyers place more weight on loss that is the result of doing something wrong, known as errors of commission, than loss as a result of failing to do something right, known as errors of omission.
In research by Veerle Germeijs and Paul De Boeck we learn that buyer indecision stems from three fears:
- Valuation problems: some buyers don't know how to value one option against another, and fear making the wrong choice
- Lack of information: some buyers fear they haven't done enough homework to make an informed choice
- No benefits: some buyers fear they won't see the benefits that they expect, or that the seller is resending
The phrase "I need to think about it some more" was more highly correlated with closed lost deals than any other across tens of thousands of phrases recorded. It was worse than being told no.
When sellers attempt to "re-litigate" the status quo with customers who have already accept the change, it results in a negative impact 84% of the time.
- Once the buyer has stated and accepted their intention to make the move, they're no longer motivated by any "status quo"-related pressing by the seller. They're only concerned about their omission bias and factors shared above.
Average sellers believe it's only about beating status quo and pain of same. Elite sellers know there's a second phase, how to detect it, how to deal with the buyer's fears, and how to try to prevent it.
The early stage of the sale is largely about convincing the buyer of the potential loss of not acting. The back half of the sale is about avoiding the potential loss that stems from acting.
Loss is something all buyers want to avoid. But loss that they are personally responsible for is something they want to avoid like the plague.
Judge the Indecision
A four-step process for judging buyer indecision:
- Understand how the buyer searches for and consumes information as some buyers have a higher comfort level of ambiguity than others
- Understand how the buyer evaluates alternatives -- is their process logical and structured, or are they just scattershot looking at anything?
- Look for signs that the buyer is wiling to settle for "good enough" or if they won't be satisfied until everything about the seller's offer suits their needs
- If the buyer hesitates or backpedals, read the signs and interpret these signals to understand what's driving the delay
In research by Herbert Simon in 1956, it was determined there are two kinds of decision makers:
- Satisficers are fine with "good enough" when making choices or decisions. Once they find the option that fits, they commit, regardless of whatever else is out there
- Maximizers have no such thing as "good enough"; once they find the option that meets their criteria, their inclination is to keep looking for another option that might be a better fit
Both the importance of the decision and time pressure can increase the propensity of buyers to get stuck
So find out, early on, how important this is and what the time pressure is like!
Everybody is decisive when it doesn't count. But actually acting entails a lot of risk.
- qualify not just on ability to buy, but ability to decide
- intuitively know the difference between regular due diligence and analysis paralysis
- are always on the lookout for those buyers that want perfection and choose to focus on perceived shortcomings rather than benefits
- can sense the difference between procrastination and decision avoidance
- leverage powerful requests to elicit a response from the buyer that allows them to understand what's driving the delay
Offer your Recommendation
As the sale transitions, the seller must move from reactive posture (i.e. Help me understand your needs) to a proactive posture (i.e. Here's what you need)
Combining proactive guidance with advocacy lowers the burden of choice for a buyer
- know that indecisive buyers are looking for guidance, not more choice, so rather than asking what they want, instead tell them what to buy
- offer their recommendations before the buyer expresses any confusion about how to value the different choices in front of them
- use confident advisor phrasing...
- "Here's what I would do if I were you"
- "I always tell our customers they can't go wrong with X"
- ...but understand this requires that trust and credibility are already established, and that the buyer believes they can be unbiased
Limit the Exploration
Remember: buyers aren't looking for sellers to teach them how to do their jobs. Instead, they're looking for help to be smarter consumers of a technology, product or service they don't know much about
Leverage the Colin Powell rule:
- Making decisions with less than 40 percent of the information required is just guessing; waiting until you have more than 70 percent is just delaying.
Own the flow of information to the buyer!
Anticipate the buyer's needs and objections
Practice radical candor once trust is established
- “I’m sorry for asking, but it seems like maybe that didn’t resonate with you? I’d love to get any concerns you have on the table so we can have an honest conversation about it. The last thing I want is for you to feel uncomfortable with any element of our offer.”
- “Absolutely, we can set up a customer reference call for you, but, before I do that, can you help me understand what you’re looking to validate in the call? There might be other ways for us to help address any questions or concerns you might have.”
- Sellers who practice radical candor are focused on what's best for the buyer and aren't afraid to tell them when they are heading in the wrong direction or about to make a mistake
This is a critical concept for sellers to understand: listening is important in sales, but if you want to close a deal, engagement is actually more important.
Indecisive customers need an active, engaged conversation with a salesperson to get them over the hump.
The optimal amount of silence time is between 8 percent and 17 percent of the call, and is associated with win rates of 30 percent.
- are fully-developed experts in their company's products, those of their competitors, and the market as a whole
- know that no amount of additional information will ever satisfy a buyer's desire for more, and it's ultimately impossible for them to consume all the information available
- limit the exploration by controlling the flow of information, addressing needs and unstated objections
- are more proactive early in the sales process in suggesting additional reading and sources of information the buyer should tap into to help them learn. Importantly: these are often not the seller's company materials!
- address all explicit objections, ensuring that none go uncontested
- anticipate objections before they come, and offer pre-buttals
- are always on the hunt for signs of implicit non-acceptance during the sale -- a change in tone, a slight pause on the part of the buyer
- always ask buyers to articulate the reason for their requests to ensure they can get concerns on the table and dealt with
- are far more assertive than lesser sellers in demonstrating their expertise
- are comfortable talking over or interrupting the buyer when they're going off track
Take Risk Off the Table
Don't use FUD tactics:
Remember that the buyer is not struggling to make a decision because they might miss an opportunity to win.
- They're more worried about a decision that causes them to lose
One effective tactic is to create detailed project plans before the deal closes, to show the buyer that the seller and their company know exactly how their customers get value out of the purchase
- Include owners, milestones, target metrics, etc.
Outcome uncertainty is arguably the most intractable and difficult-to-overcome source of customer indecision
- know that dealing with the buyer's outcome uncertainty isn’t about making them more scared. It’s about making them more confident
- limit the buyer's downside risk
- manage the buyer's expectations of what's going to happen after the sale, and what outcomes will be reached
- recommend buyers start small, generate early wins, and then expand from there. (Crawl, walk, run approach!)
- focus less on "maximum impact" and more on setting realistic "believable impact" expectations early on in the sales process
- understand that offering the buyer a satefy net is far more effective than pushing the buyer towards the ledge
Misc From the Rest of the Book
Once the buyer has agreed on a vision and purchase intent is established, JOLT sellers shift gears and stop selling TO the buyer, and instead and start buying FOR them
In most cases, the buyer's indecision is less a function of something they did as sellers and much more a function of who customers are as people
Confidently asking for the business positions saying yes and signing the agreement to move forward as the default option.
- Saying yes becomes the easy choice whereas saying no feels like a hard gearshift, a break in the forward momentum, and an undesirable change to what has been a smooth process.
- Asking for the business is also the rep—who has already established herself as a trustworthy and credible expert—making a recommendation to move ahead with the purchase.
Left to their own devices, sales managers often skew their coaching efforts toward the tails . . . [But] the real payoff from good coaching lies among the middle 60 percent—your core performers. For this group, the best-quality coaching can improve performance by up to 19 percent.
If you read this far, thanks! Please buy the book if you'd gain value from it, the authors deserve your support. You can buy The JOLT Effect from Amazon or anywhere else books are sold.
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