Secrets of Great Commercial Directors: Part 1
Recently I was asked to reflect on 20 years of commercial leadership. It struck me that there were a number of basic rules that underpinned every deal and partnership, and that by putting them together this would serve not only as a reminder for me and my teams, but could help others with their own challenges.
I ended up presenting it not just to the businesses I lead, but also at several companies run by my business partners NovaFounders. The feedback was hugely positive, with many people suggesting I write it up here. If this is useful, thank them.
I’ve called this ‘Secrets of Great Commercial Directors’. Hopefully I can share one or two insights including ‘How to Make a Potential Client Really Want to Work with You’, ‘Building Trust’, ‘Mastering Objections’, ‘The Different Types of Buyers’ and ‘Sales is a Science and has a Formula’.
This is in two parts. In each part I share 5 key learnings from my career, learnings that you can action now to become a better commercial director. Each part then ends with one specific example where I have put it all together. This is Part 1.
Copy with pride
A key mantra at the Kinnevik Group, still my longest employer, was that when you saw something that was truly excellent, copy with pride and copy exactly. Some of the points below have come from excellent work done by others, including Mark McCormack, Dale Carnegie and Jordan Belfort. I urge you to read their truly excellent books.
1. People do business with people they like
Let’s start with the basics.
All things being equal, people do business with people they like.
Agree? I guess you do. But he’s the rub:
All things not being equal, people still do business with people they like.
That’s much more insightful. And guess what, it’s completely true.
This was written by Mark McCormack, a lawyer who became a sports agent and then set up the greatest sports and model management company in the world, IMG. His book is called ‘What they don’t teach you at Harvard Business School’, and it’s truly excellent.
It’s something I’ve learnt over and over in my career. Let me give an example. Early in my career I had the incredible privilege of helping set up a low cost airline called Go. I was Chief of Staff to an incredble female CEO who was both razor-sharp and great with people, and I learnt a huge amount from her.
A key principle was to treat our people and our partners as we would want to be treated. We applied this throughout our business, and it delivered us competitive advantage.
A visceral demonstration of that came a few years later when the VC owners decided to sell to easyJet, much to the chagrin of the management team. EasyJet were the bigger business, had been around for longer and were far more aggressive with their suppliers. But as they went through the due diligence, they kept coming back asking us to double check the numbers.
It turned out that in every contract we had better rates than they did. In every single contract we had done better. Yes we did good deals and negotiated well, but fundamentally it was because people liked doing business with us. I’ve remembered this example my whole career, and it’s a fundamental principle of how I operate.
So be likeable.
OK this isn’t hard, but it’s amazing how often people forget this.
Be likeable.
Don’t be a cock. Be likeable.
If you want to negotiate better terms on a deal, and they don’t want, still be likeable. Leave the meeting friends and don’t get upset. And more often than not, you’ll get the better deal anyway because they want to work with you.
There’s a great book on this that was written in 1936. That’s 84 years ago, before anyone reading this was alive. It’s by Dale Carnegie and it’s called ‘How to Win Friends and Influence People’. This is not a book about making friends, it’s one of the greatest sales books of all time, and another book that’s worth reading.
Also, people remember how you made them feel, not what you said.
This is similar to the above, but more nuanced. And fits into the same category.
Best ever at this? Bill Clinton. Obama was pretty good, but by all accounts Bill Clinton smashed it. Watch him meeting new people here. He made them feel like they were the most important person in the whole world.
OK so those are the basics. Now let’s get more complex.
2. How to Make a Potential Client Really Want to Work with You
In any deal, whether a simple ad sale, a business partnership or a highly complex JV, there are three things you need to achieve. Your future business partner must:
1. Trust the idea
2. Trust you
3. Trust your company
By trust I mean really trust. If you’ve got a scale from 0 to 10, where 0 is the worst, most idiotic idea ever and 10 is the best, oh-my-god why didn’t I think of this myself idea, this is a 10. Or at least an 8 or 9. But nothing lower. Same for you as their point person at the company, same for your company as a whole.
They’ve got to really love it. They’ve got to be a super promoter. The NPS of your idea, of you as a person and of your company as a business partner needs to be through the roof.
Think about it. Would you go into business with someone where you only have two of these? Of course not.
So get them to trust the idea, trust you and trust in your company. Jordan Belfort’s excellent book ‘Straight Line Selling: Master the Art of Persuasion, Influence and Success” will tell you more.
3. How to Build Trust
So how do you build trust? Let’s check the dictionary.
Not particularly useful. I’d like to present you an alternative definition:
Trust
is the sum of
Promises Delivered
Think about it. Trust is the sum of promises delivered.
Another phrase people use is ‘trust is not given, it’s earned’, which is similar, but more passive. I prefer the active. Deliver on your promises. Make some, then deliver on them, to build trust.
And you absolutely must be active about this. If you are going to do a deal, from scratch, you’ve got to get to an 8 across each of those three things. They have to trust the idea, trust you and trust the company. And you are starting from 0.
So a couple of tips:
- Referrals build credibility. Even if you can go direct, get a referral. It gives you at least a 3 on a couple of the Trust criteria. Better to start from a 3 than a 0.
- Start small and deliver. This is how you build from there. So:
- Find things that you can absolutely deliver on, quickly.
- However small the first deal, deliver it impeccably.
- Make them really want to work with you again.
Here’s a story to illustrate this. Many years ago, when the magazine industry was still thriving, I co-founded Sport, a magazine and website dedicated to, well, sport. It was the first dedicated mainstream sports title in the UK, and both it and the website became a big deal. Like many media businesses (Facebook, ITV, Radio etc) it was ad funded. So selling ads was important.
We told the advertisers that we would have exclusive interviews with the top sports people in the UK every week, and we would achieve a certain circulation. They didn’t think we could achieve something so ambitious. But we did, every week.
Week one we had an exclusive with Thierry Henry, at the time the biggest footballer in the UK. And the next week someone else, and again and again. Within 12 months we’d interviewed not only every major star in the UK but also Tiger Woods and Roger Federer. All exclusive interviews.
We were a small start-up in Shoreditch, but we made a promise and we achieved it. And it built enormous credibility, readership and advertising inventory.
And for the advertisers that tried us we did the same. We made sure we delivered impeccably for them. In the first edition we had three ads, only one paid. The next edition, three ads, all paid. By edition six, six ads. Within the year, 25 ads per edition and £100k revenue pw. We hit breakeven just after our 2nd birthday and six months later sold the business to Talksport, where it continued profitably for the next 8 years. But this all came from delivering on those first ads, and those first editorial.
So three things:
- Trust the idea
- Trust you
- Trust your company
If you aren’t selling, work out which of these you are falling down on. And then fix it, no matter what. Because they aren’t going to do business with you if they are only convinced about two of the three.
As an aside, this also explains why sales people from large, well-known businesses often fail when moving to start-ups. Their old company had such trust in it that it glossed over everything else, so the sales person never got really good at the other two. It also explains why people who have learnt to sell in less well-known companies can absolutely fly when given a great platform. And if you don’t believe me, reread this paragraph once you’ve read the last sentence of my bio.
4. Mastering Objections
I’m not going to go into pitching and the importance of scripts here, or proposals and how best to do them, I’ll save that for another post, but I will cover ‘How to Master Objections’.
Here’s the secret.
Almost every objection is a variant of three questions:
- Why should I buy this type of product?
- Why should I buy from you and not your competitors?
- The price is too high
You going to tell me that the third one is not a question? Yes it is, it’s just not written like a question. First mistake, being too literal. You are being asked to justify the price. Would you prefer if I wrote “Why is the price so high?” Same question. Also “It’s expensive” or “I’m not sure we have that kind of cash”. All the same question.
So three questions. OK, so sometimes a fourth one “why should I buy it now?”. We’ll dive into that one in Part 2. But let’s start with these three questions for now.
What’s the ideal response?
So here’s the thing. I could train you in the ideal response, or you could work it out for yourself. And there is an ideal response. Better if you work it out. Here’s how you do that.
- Work out what the best response to each question is
- Learn it
Learn it by heart. So you can repeat it in your own tone of voice, with your own nuance, no matter how much pressure you are under. Not hard, make it happen.
And how do I know there are only three questions? Because I’ve done it.
When I was just out of business school I got sent to Marseille to turn around a failing newspaper launch. I was MD of a French newspaper in Marseille, aged 27! I speak some French but still… When I got there, the sales team was a bunch of kids with no training. I was young, these guys and girls were even greener. Three months later we were doing 4x revenue. How? By teaching them how to handle objections.
One night we all got together at the end of the day and on a flip chart we wrote down every whiney objection that they had ever come across. We got to about 10, before they ran out of ideas. All these objections they complained about and there were only 10!
Then, pretty quickly, we realised they were all variants of similar themes, the three above. So we crafted the ideal answer to each of those three, and made everyone memorise it. For a couple of weeks I terrorised the team, asking them with zero notice to give me their response to different objections. They learnt them super well, and could respond under pressure and however the question was asked. Sales quadrupled.
I took the same approach to all the sales teams I then led, across many of the countries in Europe, and the questions were the same, and the result was the same.
But Prevention is even better. Prevent the objection ever coming. How do you do that? By covering it off in your pitch.
You should have already covered why they should buy this type of product, and why they should buy from you and not your competition, and that the price is great value. So then if they ask you again you’ve already got a head start.
And by the way, you now know that your pitch needs to improve. So work on that, too. I’ll share some advice on pitching in Part 2.
But also sometimes those objections come because you haven’t yet achieved 8, 9 or 10 on the three tests. The idea, you, the company. So understand why not and loop back on those too.
5. Low vs High Action Threshold Buyers
Not every buyer is the same. And different buyers have different thresholds.
I once worked with a CFO that was incredibly risk-averse. As such, unless every single aspect of a deal was buttoned down, he would reject the deal. He was an incredibly difficult buyer — to use the analogy above, he needed a 10 on all three criteria. Needless to say, we did far fewer deals that we wanted to, and each one took more time.
There are other buyers who are easier, maybe a 7 or an 8 works. So you can do more deals, more quickly. Knowing what you are up against is key.
You can think of this as low vs high action threshold buyers. How much convincing do they need to do a deal? Are they mandated to spend money (like a media agency on behalf of their clients) or do they only buy when everything is right? What is the downside for them personally of getting this wrong? If they work in an organisation where mistakes are treated much harsher than successes, they are going to be far more cautious. Know your buyer, and you know what you have to achieve.
Crucially, avoid super high action threshold buyers, or you will never hit your targets. Even though the competitive you will get satisfaction from closing that sale, you’ve taken time away from other, easier to close deals. And when considering taking on a new job, if that CFO is going to be a part of the deal approval process, even worse.
Putting it all together — Part 1
So let’s put it all together. Here is a €25m sponsorship deal that I put together for the Volvo Ocean Race, between Camper (the shoe brand) and Emirates Team New Zealand (the no1 sailing team in the world). This was the single largest sponsorship deal signed, across all sports globally, in Q3 2010. Including in all the American sports. I was quite proud of that one ;-)
Lots of sailing teams were talking to lots of potential sponsors about the race. What became pretty clear was that Camper were keen on the race, but not convinced about the team that were pitching them. So, in ‘How to Make a Potential Client Really Want to Work with You’ terms, they were 9–10 on the idea, and 5–6 on everything else. The deal was clearly not going to happen.
I asked for a meeting with their Founder/CEO and COO. Very senior Spanish businessmen. Never met them before, they didn’t know me from Adam. First I established trust in myself, that I was there to help them do the best thing possible. So we now had two criteria ticked. I then asked them about their brand, establishing that they really saw themselves as winners and a premium, quality business. So the next question was simple:
“If you could partner with the team that is the Ferrari of sailing, would that interest you?”
Knowing, of course, damn well it would. Their eyes lit up.
Then I called the CEO of Emirates Team New Zealand, Grant Dalton. He was also not at 3 x 10s on getting involved in the race. He had the America’s Cup to focus on too, after all.
“What if I could team you up with a fantastic brand?”
A few weeks later, we had both a great new sponsor in the race, and also the top racing team in the world. And, although I did not call them that at the time, it was all because of three 10s. Trust the Idea, Trust You, Trust the Company.
So get to 3 x 10s.
In Part 2 I will share some thoughts about pitching, we’ll cover off the ‘why buy it now’ question and a host of other key Secrets of Great Commercial Directors.
Greg Miall is MD at Antenna Internet Ventures and works with great start-ups to expand them into new European countries.
He has done commercial deals in 18 European countries as well as in the US and Apac, and spent 20 years in senior commercial roles including at Yahoo, as Head of Partnerships for EMEA, APAC and LatAm, at Kinnevik, as Head of Global Sales at Metro International and as Commercial Director of the Volvo Ocean Race. This is, of course, written in a strictly personal capacity.
Greg prides himself on doing great work with his clients and always delivering, but is actually most proud of building great teams. Team members have gone on to various positions of excellence including the Global Head of Brand Partnerships at Twitch, the Commercial Director of Melbourne Storm, the Sponsorship Lead for Liverpool FC and the Commercial Director of Atletico Madrid.
