Create And Elevate Your Value with Tim Riesterer

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TSP Tim | Decision Science

Episode Summary:

Valuing yourself before valuing your business is an ideal order when gearing towards success. Chief Strategy and Research Officer of Corporate Visions Tim Riesterer believes that decision science is key towards delivering more value to anyone aiming to succeed both in business and life. He talks about how he has helped companies build messages that are aligned with the invisible forces at work in the customer decision. The values of conversion creating, elevating, capturing customer value, and creating expanded value are key in elevating value in a company. He shares about the implementation of all of these values, including the introduction of an unconsidered need in creating pricing uncertainty. Overall, Tim suggests that inspiring somebody to decide to change and considers doing it with a leader or mentor are what value creation and decision science are all about.

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Create And Elevate Your Value with Tim Riesterer

Our guest is Tim Riesterer who is a Chief Strategy and Research Officer of Corporate Visions. Tim is responsible for leading the direction of the company, thought leadership positioning and product development. He leads the company’s consulting team globally. He has more than twenty years in marketing and sales experience. Prior to that, he was the customer message management where he was the CEO until it was acquired. Before that, he worked in the whole world of marketing and communication. He’s the co-author of several books, Customer Message Management: Increasing Marketing’s Impact on Selling and Conversations That Win the Complex Sale: Using Power Messaging to Create More Opportunities. Tim, welcome to the show.

John, thanks for having me.

I always like to ask my guests to take me back to their story of origin. You’re living in Wisconsin now. Were you born there? Did you know that you wanted to get into messaging and marketing? How did this all come about?

I was born and raised in Wisconsin. I didn’t have a clue. I went to school for journalism. Nowadays, there is a job called a corporate journalist. This was back before there was such an idea. I was hired at a big company that did medical devices to go out, ride with salespeople, interview doctors, hospital administrators and technologists about their medical equipment. How it was impacting them and their market. What I discovered writing along with salespeople, asking customers questions and writing stories to put in trade magazines or newsletters, was that everything the company wanted to say about their products was nothing that the customer had to say about their products.

I say now that companies live in their own story and customers live in their own story. We have to stop forcing customers into our story. We have to join the customer story. Customers would talk about mission and outcomes. I wanted to talk about an MRI system, the algorithms and the features. That’s where companies’ stories and customer stories clashed. It sent me and my journalism in an entirely new trajectory to understand the science of how people make decisions, how they frame value, and how they make choices. I help companies build messages and tell stories that better aligned with these invisible forces at work in the customer decision.

You approached it from a journalistic standpoint and you have some data to back it up. Let’s double click on what is decision science and how can people use it.

I triangulate three disciplines. It’s neuroscience, social psychology, and behavioral economics. In every one of these cases, there are decades of studies and science that has been published by professors. The only problem with the existing science there in those three areas is it was most often conducted on grad students, convicts, and gamblers. The three of them are captive audiences who don’t require much incentive to participate in this study. What we’ve done is a contract with scientists at Stanford in the states and work with a business school outside of London. We run simulation tests, in this case, primarily on B2B decision makers because everybody tends to believe B2B decision makers use no emotion in their decisions.

What we try to validate is how do B2B decision makers respond to different messages and to different stories based on the scenarios they’re in. If they’re in a new purchase decision, do they react differently to certain messages versus if they’re in a renewal purchase decision, do they react differently to different messages? We put simulations on top of existing science and we go to the audience who were trying to help our clients sell to. After that simulations, we do controlled field trials to see these things at work in actual B2B engagements. The science of decision making is documented for 40 years. We’re bringing it into the B2B buying audience and building applicable frameworks for storytelling across the different parts of a buyer’s journey.

Can you give us an example or a story of a client you’ve helped you use this? How they were doing it wrong before using it and the insights they’ve learned?

If you think about most storytelling that companies do, if we look at their collateral, their PowerPoint decks, their website, they try to answer this question for customers and prospects, “Why us? Why we’re different? Why we’re better? Why you should go with us?” The problem is that in acquiring new customers, 80% of the people you’re talking to are not ready to ask or answer the “why you” question. They’re still trying to answer the “why change” question. Why should I change? Why should I do anything differently? The problem is most of your messaging, most of your content, most of your presentations are aimed at answering a question that only a fraction of the people you’re talking to want to know the answer to. The majority have not made a decision to leave their status quo.

The reason I get the number 80% is when we work with companies and look at their leads and pipeline, 60% to 80% end up making no decision. They don’t do anything different. They take you through your paces and they go, “I think we’re fine.” That wasn’t a loss to a competitor. That was a loss to inertia. That was a lost to risk aversion. That was a loss to no decision and that means somebody didn’t see why they needed to make a change. What happens is the psychology of asking someone to make a change is different than the psychology of trying to say, “Why you’re different from your competitor?” We focus companies in new customer acquisition, how to tell a why change story that disrupts their status quo bias enough, helps them see the need to change and do something different because their status quo is no longer acceptable. It’s no longer sustainable. It’s no longer safe. It’s no longer tenable.

You have to defeat the causes of status quo bias in your message. Most companies don’t even know that exists so none of their stories encompass that or address that. We’ve helped companies move from 60% stalled deals down to 50% stalled deals. That 10% is a huge upside opportunity. We had one company who took their new why change message and they went to 119 stalled deals. They looked at their pipeline and they said, “There are 119 deals over the last six months that landed exactly where you said. We built a new story using our wide change framework and the science behind it.” They reignited and created new opportunities with 115 of those 119 stalled deals. They didn’t change the salesperson. They didn’t change the product or service. They only changed the story. That shows you how powerful having the right story framework for the right moment can be.

TSP Tim | Decision Science

Decision Science: In acquiring new customers, 80% of the people you’re talking to are not ready to ask or answer “why you” question; they’re still trying to answer the “why change” question.

 

It reminds me of a client I’m working with who’s in the executive search industry. They have two different kinds of challenges. They have obviously other executive search firms. They have big companies that are saying, “We’re not using any executive search firms. We’re having our own internal HR department to find people.” Their messaging is very different if they keep going in going, “Here’s why we’re the best search firm.” They’re like, “We’re not even looking for a search firm.” It was like, “Here’s a story of another company in your industry that had the same thought process and we don’t need all of your searches. We do have some searches that you may not have access to the people in India or Dubai that you need to find or you’re only limiting your search for the next CEO in the US when there are people in Europe that you could be looking at.”

They have to paint that picture of what you were describing of getting over this inertia of, “We don’t want to spend money. We’ll find that it’s been working so far.” That’s a very different message in that awareness of what’s more challenging. They’re being disrupted. Back then, everyone in a certain company level was just hiring recruiters. Now they’re like, “Why are we paying all those commissions?” Not only they have their competition, but they also have the internal struggle and it’s a fascinating use of your model here.

Status quo bias is the design point for your message. What you have to do is identify how many different status quo bias scenarios you speak to. There are two. One status quo bias is I already use an existing outsourced partner. Another status quo bias is “I’m a do-it-yourselfer.” Your message has to change based on what their status quo bias is. Here’s the problem most messaging and stories do is they go, “I’m going to talk to the head of HR. I need a head of HR message.” I’m like, “No, you don’t. You need a message based on the situation they’re in.” There’s an interesting piece of science called fundamental attribution error where we assigned way too much credit to that person’s disposition in terms of driving their behaviors and the real driver behaviors are their situation.

The reason this head of HR might make a change is if they have an outsource partner they’re not happy with or they have an internal situation they’re not sure of, but those are two totally different scenarios. If you aim at the head of HR and tell a generic head of HR story, you don’t aim it at the particular status quo bias, you will have missed the catalyst for change, which is their situation. It’s not their title, not their role, not their disposition. The catalyst for change is the situation they’re in and your story should start with what situation status quo bias are they living in.

There are three value conversations and that’s the key. No matter what industry you’re in, it seems oftentimes as a commodity or you’re a premium price company, whether you’re an architecture firm. You’re all the same. You’re all expensive. I don’t see the value of this. You said, “How to create it, how to elevate it, and how to capture customer value.” Let’s take a little step on each one. How do we create value, Tim?

I want to talk about the fourth value conversation that our new research found. It’s the expanded value. Let’s start with create value. Think of what you’re trying to accomplish with the customer. Create value is this idea of you have to create enough value for them to see the need to do something different. You need to create enough value for them to see you as different. Create value is about creating opportunity, creating that motion and that idea of, “I think I need to change and I need to do something different and I need to do it with someone different.” Create value is how you create a pipeline. You inspire somebody to see the need to change and consider doing it with you, but then you get stuck. I call this constipated pipeline.

Do you use Decision Science when you sell? Click To Tweet

A lot of people get stuff in the top of the funnel where maybe they inspired somebody to go, “Maybe I should change.” It just slams into a wall. It’s usually because now you’ve got to talk to a different kind of buyer. The business buyer or the financial buyer shows up. This excited person brings you in and says to the executive buyer, “What do you think?” The executive buyer says, “It’s interesting, but I’m going to need to have some business case, some justification, some ROI, some other things to help validate this decision and have the urgency to do it now.” The question that’s answered in elevate value is why now? In create value, we answer the question of why change, all the science behind the change and getting someone inspired to change but you’re not done yet. You’ve got to answer the question of why now so people make a decision and not differ. That’s a different story, a different framework, and a different question you must facilitate the answer to. That’s elevate value. We have create value and elevate value.

Capture value is this idea that you’ve built the demand. You’ve got some executive sign off, but they’re going to send you through a negotiation process before they’re done with you. There’s the gauntlet of procurement, purchasing or at a minimum, somebody is like, “We’ve got to change. We got a business case here. We can justify it. I want the lowest price possible.” It’s create, elevate, and capture value. Capture value is to make sure you capture all your value. You don’t leak it out in the negotiation process. You manage the tension. You continue to position and bring enough value to protect margin, avoid unnecessary discounting. You hold the line on your premium pricing.

What happens for people is these are three distinct moments with three different buyers’ psychologies. As a result, you as a communicator need to engage them differently in each of these moments yet string it together. We wrote a book that’s three sections, create, elevate, capture that distinctly tells you how to be great in each moment. Once you master those three moments, now you’ve mastered that whole buying cycle. That’s where that comes from. That’s how we distinctly identify those value moments. Why should I pay that much for you? You’ve got to answer those questions because, in the psychology of decision-making science, you are helping them facilitate a decision. You’ve got to realize it’s not one decision. It’s a series. Why Change? Why now? Why pay?

You have this new one called expand. What’s the why there?

Why should I stay with you and why should I do more with you? Once they become a customer, the big question is, “Why should I stay with you and why should I do more with you?” We call that why evolve. What happens is people came up to us and said, “Do you take the same approach psychologically if someone is a prospect working with someone else as when they’re an existing customer and you might have a subscription renewal or you might have an upgrade or an add on sale?” We said, “We better study that.” The reason now there’s expand value and it’s not just a rinse and repeat of the other three value conversations. Here’s the difference. When you are trying to disrupt their status quo bias, you’re the outsider trying to get in.

What happens when you are on the inside and you are their status quo bias, it turns out you better not disrupt it. Don’t disrupt the status quo bias when you are the status quo bias. In fact, lean into it. We call it the incumbent advantage. In politics, we all know what an advantage incumbent have holds true in business too. You have an unfair competitive advantage as the incumbent. If you start telling, a start all over story, “Here’s all my new stuff,” to your existing customer, you just opened the door to other new people coming in because they’re like, “If I’ve got to change that much and if it’s so new, I ought to investigate all my options.” Instead of talking about incrementally, “Here’s what we’ve done together. Here’s what you’ve accomplished with us. Here’s what you’ve already invested.”

TSP Tim | Decision Science

Decision Science: Capture value is making sure you capture all your value and don’t leak it out in the negotiation process.

 

If you change now, you’ve got to put that progress and that investment at risk. Let’s keep moving forward. The discussion is looking like building on that upward to the right momentum as opposed to starting fresh with every conversation. The moment you talk to an existing customer in a revolutionary way, they throw it all open and everybody else going, “Why would I assume you’re the best at this? I better take a look at all the others out there if it’s so revolutionary.” Even if you have something revolutionary, the science says you should portray it not like that because it disrupts the bias towards you.

Has your research or your experience with clients helped you with this? A lot of clients will say, “We’ve got some part of the market share of this client giving us their business, but we want to expand it. Our strategy is simply more onsite visits. I make sure they know all the things we can do for them.” I’m like, “That’s a lot of information stuff again and I don’t hear any stories in there.” It’s spending time with them and keeping your face in front of them constantly pushing the sales people to go onsite and take them to lunch. They won’t leave. Relationships are fine, but I’m guessing that you have some other tips around that.

When you are an incumbent, you get to know the inside of their company well. Sometimes because you’re implementing something and doing something, you often get to talk to a lot of people across different departments and functions, not just that decision maker you’re taking to lunch. You might talk to people where you’ve got some insights that that person wants to know. You may be observing some challenges inside and some sticky areas. You should introduce them to emerging trends and share them some hard truths. The idea to evolve a customer from doing one thing with you to doing two things with you is you use your position as a partner and the inside information you have because you’re working with that company. The outside information you have because you work with many companies who look like them. You bring that into a story that says, “Here are the evolving trends that we’re seeing in the industry and here are the hard truths about how you are or aren’t responding to that.”

Because of your position as having other customers like them, you bring in the evolving trends. Because you’re working with them inside, which is a unique position that your competitors don’t have, you can share hard truths. They will thank you for marrying those two things. Here’s what we’re seeing other companies do. Here’s how we’re seeing it in your organization. We call it emerging trends and hard truths. Only as a partner, do you have that unique two-way view on this? That’s what you should talk about at lunch, not your new stuff. What’s your new stuff at third? It’s in the context of the emerging trends and hard truths that you say. What’s interesting is we got something for that. It’s contextualized to what you know from the outside, what you know from the inside and you have a view that is unique to you and particularly interesting to them.

You are also a keynote speaker on this very topic. What is one of your favorite keynotes to give and who’s the ideal audience for that?

I give speeches to marketers, salespeople or customer success people. That’s a new discipline inside of companies. They want to know how I handle renewals or quarterly business reviews. Salespeople want to know how I build pipeline, close that pipeline and upsell my clients. Marketers want to know all of the above because they’re the story builders. They’re trying to provide messaging and content in all of those situations. Many times, they’re not in the same room. I’ll give speeches at discrete events to each of those audiences. Sometimes when the planets align and I give a kickoff meeting keynote to a company, they’re all in the same room. That’s when I can stem wind it and talk about the alignment you must have between marketing sales and customer success to help enable the customers to decide.

Why change versus why stay? Click To Tweet

My favorite speech is to talk about the deciding journey using these questions and showing them the science behind each question, the science behind how customers think and the science behind the answer you must facilitate with a framework for each of those. Here’s your framework for why change, here’s your framework for why now, here’s how you frame up a why pay conversation, here’s a why stay conversation and later for upsells, the why evolve question. I love any keynote that allows me to talk about one or more of those and introduced the science and the framework behind it. The people in the audience leave going, “I learned how to do something slightly different and counter-intuitive.” As I sit back, I go, “That is stupidly obvious.”

That’s the favorite moment. It’s not like, “Is that hard? Is that different? Is that abstract? Is that theoretical?” No. Here’s your four-step why change the conversation. It’s four moves. It’s a simple choreography. Here’s your five-step why stay conversation. They leave with a framework. Either on all of those audiences, I love bringing the science because they’re like, “That’s legit. There’s some testing behind it. It’s not just my opinion.” Even not only my personal experience, I like pointing at all my scientist buddies and saying, “It’s not just my personal experience. This has been tested.”

Do you have a story of how you’ve helped a particular client with the structure on why pay because that’s such a valuable thing? You don’t have to give the whole structure. Maybe a couple of little hints if someone’s saying, “Why should we pay this design fee, this commission fee or whatever your premium price for anything.” As you said, there are different questions during the journey. As a salesperson, you’re responsible for answering those questions and having different stories that go along with it. This why pay and how do I capture value when someone says their budget has been cut or whatever the issues are. Give us a story of someone that walked out of there going, “It’s obvious, but they weren’t doing it.”

I don’t know if it’s always obvious. When you see it, it becomes obvious, but it’s certainly not like it’s under your nose. For example, in the why pay, I could tell you four quickies, but I’m going to start with one. In the why pay and capture value, what everybody tries to do is make you look and sound like all your competitors. They want to tell you that you’re the same. Humans use contrast to make a decision. How is this different? You think of contrast as the ultimate decision maker. If they can make the same, the thing that creates the contrast then it’s the best price. What you’ve got to do is give them another contrast. What we say is people will give you a list of needs, requirements and ask you how you will fulfill those needs and requirements.

Your job is to introduce additional needs, not additional capabilities. If you just introduce additional capabilities, people go, “That’s why you cost so much more.” If you introduce a couple of additional needs like, “These are important.” Companies like you are usually not thinking of this one and this one so that’s why we want to talk about. Those new needs are solved by a couple of additional capabilities. We call it introducing the unconsidered need in order to create pricing uncertainty. At that moment where they know exactly what the requirements are and every company is coming back with similar responses to those requirements, they have pricing certainty. Your job is to introduce pricing uncertainty and the best way to do that is to introduce a couple of unconsidered needs for them. They now can’t unseen and can’t unheard it. Why would we not want to solve for those? It seems risky.

In fact, the needs they didn’t think of are often the ones they think of as most risky because they’re like, “I didn’t see that one coming.” If you can put a little story around it like the size and the speed of that unconsidered need of how big is it and how fast is it coming, they have to add it to their consideration pile. Now that they see maybe it takes a couple of additional things to solve for it, they now don’t know what that should cost. That would be the big number one idea I’d give you. There are others like coming in with what we call set a high target. In negotiations, people used to talk about the one who speaks first loses and that’s not true. In negotiations, the first person to put a price on the table doesn’t lose. They win.

TSP Tim | Decision Science

Decision Science: Contrast is the ultimate decision maker. Humans use contrast to make a decision.

 

If you say, “What’s your budget? What do you get for this?” They’re going to low ball you. Are you going to spend all this time trying to eke them up? If you come in and say, “This is what this cost,” now you might have to discount slightly. We know there’s going to be a big gap between discounting off your high target as opposed to trying to eke them up from their low target. We talk about setting high targets and expanding the range of reason. You give all these reasons unconsidered needs between there. Every time there’s a gap between you trying to eke them up and them taking you down a little bit, set high targets and make first offers. Don’t wait. It’s too late. There’s a little bumper there. Don’t wait because it’s too late when it comes to making the first offer and setting a high target for your price.

You’ve given such great value to the audience. This concept of when the buyers make you all look and sound the same, you are seen as a commodity. I see this time and again with architects or recruiters. They come in and they say, “We’re global.” The buyer says, “We know. We’re looking at everyone that is global.” That’s no longer a selling point. That differentiates you or justify your pricing. We’re a global company working with only global people. For you to come in and say that is some unique selling benefits or justification of pricing without a story to back it up or tell some additional needs of what this global can bring to you is great.

We did some research. When people introduce the so-called value-added services, that’s what they call those things. “Here are value-added services.” People don’t hear value-add. They hear cost add and complexity add. The receiver of the information process said, “This is why you cost more and this is potential stuff I won’t need so I’m paying for something I don’t need and something that could make this complicated.” Complicated things fail. It’s the science of choice overload. If you can keep dropping what you think are value-added services into your story, you will perform worse than if you would’ve just told a commodity story. That’s our research. You just made it harder for them to decide and they think you’re expensive, hard and complicated. To your point, you must tell a story about a need that leads them to that thing that’s interesting. When you push that interesting thing into the story as a value-added service, it backfires on you.

It’s like, “We’ll keep throwing as much stuff against the wall. You could do this and we could do this.” The confused mind always says no. Everybody is looking for the opposite. It reminds me back in the day when you would buy something to record your TV shows. You’re like, “I don’t need to record ten shows. I just want one.”

You and I can talk about those examples when there was a separate box to do that. They would oversell all the features and you would be overwhelmed. As a result, you’d say, “That’s why your boxes are too expensive and your box might make me fail because it’s too hard. I don’t want to fail and I don’t want to overpay.” That’s what they hear or hears.

If you have one last piece of advice for the audience on how to create value, what would it be?

Don't wait to give the first offer. Click To Tweet

Value is an abstract complicated idea. Creating value and helping people see the need for change requires contrast. Inherently, the decision-making part of the brain that makes this choice to change is not the part of the brain that contains the capacity for language. It’s the emotional intuitive brain. The thing it reacts best to is simple concrete contrasting visuals. Too many people use PowerPoints and put bullets up there. Too many people use PowerPoints and put stock photography up there. Too many people create PowerPoints and they put metaphorical images up there. Even metaphor sometimes are powerful, but if done wrong, they’re distracting.

They take the reader, the listener or the viewer to a different place than you intended so you’ve got to be careful with that. We’re very big on simple concrete contrasting visuals that show you the current state and all the risks, all the challenges, all the threats, and all the missed opportunities. We show a corresponding contrasting future state where that’s all resolved and things are better. It’s in that contrast that the brain will perceive value, but you have to give it to that brain because it doesn’t intuit it from your words. You have to show it the contrast and help that part of the brain processed the contrast. Showing the current state versus future state visual stories is essential for change because the decision-making part of the brain needs that contrast to see the value. That’s how it makes a decision.

That’s why good stories always have a resolution. If you’re talking about somebody who helped as a case study and you say, “Now their life is like this after working with us.”

In fact, the great case study doesn’t just have the end. It has the beginning and the end.

This is what their life was like before us, this is how we help them, and now their life is like this.

Everybody wants to tell a story about the good ending, but the person that’s listening to you doesn’t even identify yet with that ending because they don’t even know they have a problem.

TSP Tim | Decision Science

Decision Science: Creating value and helping people see the need for change requires contrast.

 

Tim, how can people follow you and what website should they be checking out your information?

The company is called CorporateVisions.com. We have a tab for all of our research and all the topics we researched. You should check out our new research on apologies. That would be an exciting place to start. On Twitter or LinkedIn, it’s Tim Riesterer. It’s not an easy name. I need a stage name like your name. Your name is too cool. Follow me on Twitter. I tweet about all our research. It’s a great way to get these nuggets of wisdom that we just give away. We believe in the abundance mentality. You can be better. We’ll help you be better. Maybe someday you’ll work with us, but at a minimum, we want you to be better.

When you give from that mindset, that is the key to attracting the right ideal customers who appreciate that. Thanks, Tim for sharing your great insights. We look forward to learning more about how we can all create value.

Thanks, John.

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Tags: capture value, create value, Decision Science, elevate value, positioning, status quo bias