In between the regular interview episodes, we’ll continue to release sample stories from the book like this one. You can either listen to the episode and hear Scott read his story, or read the full text below.
“Over-delivering on Value“
By: George Penyak
George Penyak: All top performers take risks. They evaluate the pros and cons of what could happen and they take very calculated risks. We evaluate our time where we spend it, how effective we are, and who we spend our time with. The following is a story about how I close one of the nation’s most well-known franchises. This process brought three things to light, thinking outside the box to bring more value, making the right time investment and taking calculated risks. As a sales professional, the company I currently sell four offers a technology that automates the labor-intensive processes and kitchens. Essentially, this eliminates risk out of the manual processes that make the kitchen safer. Our equipment that does the automation itself is sold on a long-term lease, so we have to sell a lot of value. We work with all major brands across the country. Everything from the top QSRs such as Mcdonald’s, Burger King, and KFC to major hotels, resorts and schools. In 2016 I was engaged with a 20 unit golden corral Franchisee that was one of the most influential franchises within the brand because of the number of locations this franchise had. We allowed the Franchisee to pilot tests our program before making a long-term commitment. Essentially what we did as a three-store test to let them collect data on the impact of our program both financially and the impact it had in the kitchen before making a decision. We typically do this for larger companies so they can gauge the impact and fit of the solution before making a large scale decision to do business with us. During the test, I evaluated other ways that I could bring value outside. Just the value that my company already brought to the table. The test was going well. We were about 30 days in and I felt we would earn the long-term commitment. Yet I really wanted to bring something else to the table that would 100% sealed the deal. This had to be something outside of what my company already offered and it had to pair up well with one of the benefits we brought to the table, so the search began. Nearly all of us in sales have strategic partners that we lead to share with and network with, but how many of them actually bring our prospect’s value that aligns well with what we already do? How many of them do more than just make an introduction? How can I find a new strategic partner to deliver value that aligns with mine? I began spending time with some of our long-term customers and finding out the why behind them doing business with us in the first place. I started to learn the core reasons, but what were other areas that the customer considered that maybe I wasn’t? After making a short time investment away from prospecting to acquire a deeper understanding of why our customers did business with us, I found a reoccurring theme through it all. Safety. Almost all of our customers evaluated the safety of the kitchen before and after program implementation. That became a sticking point for me. If I could find a strategic partner that could leverage the safety that I brought to the table and benefit the customer even more. Everyone wins. How prospects evaluate safety and injuries on the job to their staff greatly affects their workers’ comp rates. I then started doing my due diligence on worker’s comp insurance. All restaurant operators have to carry this to protect them from injuries that happen to their staff while on the job when fewer injuries occur, their rates drop. The latter intrigued me more. If I could find an insurance company to recognize what we do to reduce injuries in kitchens, would they be more aggressive with their rates? This would be a great way to bring more value to this key franchisee while they’re evaluating our program. This would save my prospect even more money on my program, thus making their business more profitable. To compound at all, if this worked with this one prospect, why couldn’t I scale this across all of my prospects nationally? I begin working with various workers’ comp companies and fully educating myself on everything that went to writing policies. I wanted a full understanding of that going forward so that if this worked, I could talk intelligently to my prospects about the added value we now bring to the table by reducing their worker’s compensation rates. It didn’t take long for me to find an insurance provider, do a presentation on the safety that we brought to the table for restaurant owners and puts together a formalized program for my future prospects take advantage of. This was now a brand new untested partnership that I had with an insurance company that I was going to bring to the table during a test with one of the most well-known restaurant Franchisees in the world. Sound slightly risky, right? My new insurance partner and I put some rough numbers to paper in order to evaluate how the customer was going to look at this new offer. I simplified these numbers just for this audiobook, but these are actually relatively accurate compared to the cost savings evaluation the customer did. The annual cost of our automated program across their portfolio was going to be around a hundred thousand dollars a year. The hard savings that my prospect would see across their portfolio per year was about $75,000 this left about a $25,000 gap that we needed to make up. Now there are also soft savings that we brought to the table, but the soft savings are never factored in on whether or not the customer is going to recognize that to their bottom line, their savings such as Labor efficiencies where you might have a more efficient kitchen but you may not send people home and save that to your bottom line and cut labor. So as you can see, we provide nice hard savings to the prospect along with the soft savings combined. We were at $20,000 per year savings for our program implementation, but we don’t know for sure if we’re going to get credit on that extra $45,000 that we’re estimating. Now onto where the insurance provider estimated they could do for us. This could vary because the insurance provider had not yet met with the prospect and we are simply doing estimations to see if this would fully work. Right now he estimated that their current insurance premium was around $800,000. He felt he could adjust that premium down to about $750,000 which would save the prospect $50,000 per year. This would be great cause this would then add to the hard savings that my program brought to the table and we would become instant savings overall to the prospect. Everyone wins, the prospect gets a great deal. My new insurance agent partner picks up a new customer and I earn a new customer too, this is a true win, win, win. However, these were all estimations on the insurance side. There’s no way to be sure it was accurate until I made the introduction and my new insurance partner could really evaluate the prospect’s current business. And to be honest, it’s nearly impossible for myself as one person to fully screen and insurance company and their program before bringing them to the table. And this operator is currently in test. So I started weighing all the risks and all the rewards to doing this. So for this audio book, I’m going to list out a couple of the risks that I evaluated as well as some of the rewards. We’ll start with the risks. Obviously the biggest of them all is if I were to make this introduction and the insurance provider falls flat and actually increases the rates on my prospect, this would be detrimental to the deal. Another risk is the new insurance partner bring to the table falls flat and execution. He could have full poor follow up and doesn’t provide good service. This would be a poor reflection directly on myself from doing the introduction and bringing them to the table or the insurance provider makes an offer and gets the business but ends up cutting me out of the equation and says, “Hey, you don’t need George’s system. I can give you that deal without it.” All of these are valid concerns. Now, time for the upside, if the insurance provider makes a great offer to the prospect, it can do what he’s estimating. The prospect would see an incredible return for doing business with me and the insurance company. Everybody wins. Secondly, at this work, I now have a scalable solution that I could bring to the table to all of our future prospects. This would be great as never been done in my company’s history. After thinking this through, I felt comfortable making the introduction. This was never done before in the history of my company, so there’s a lot of risks involved. However, I felt I was doing the right thing by attempting to over deliver to my customer. I’ve always had massive success during the sales process is as transparent as possible with my prospects. So in full transparency, here’s how I set up the introduction with my new insurance partner to the prospect. “Mr. Prospect, I know you are evaluating our program for automating labor processes in your kitchen. I feel there could be some added safety benefits that you may not be fully evaluating. We have a newly formed partnership with an insurance provider. They’ll offer credit on your worker’s comp insurance for having our automated solution in place. In full transparency. We have not tested this program with a live customer. I feel this is a good opportunity for you to see what kind of added benefit you could get from our program and I would be open to your feedback after reviewing what my insurance partner has to offer as this has never been done before. I want to make sure our program is the biggest success possible for you and this could be an added way for you to see that. Please let me know if you would like me to make an introduction.” Now that last line is really important. I asked for their permission before making the introduction. I found that this the best way to make introductions, especially if your lead sharing, this comes off as a much better email to the customer than just sending them an email with your partner is CC on the bottom and just shooting that out of the blue. You should always ask first. It wasn’t long at all before the prospect who I built a great relationship with, accepted my offer for the introduction. The prospect called the tell me that after my insurance partner made his proposal, they are now seeing a $150,000 a year savings on their premiums going into the next year because of our joint program, this well exceeded the estimated $50,000 savings and the insurance rep and myself had in mind. The prospect couldn’t have been happier with me bringing into the table and my company now has an excellent case study of an added benefit to our program. They ended up signing with both of us and seeing massive success and return on their a hundred thousand dollar investment. It felt so good to hear them, thank me for bringing the insurance providers to the table. This really summed up consultative selling the lessons I learned throughout this process. We’re big for myself as a sales professional and my company. During the time I was researching worker’s comp companies, I was actually being told by other reps at my company that it would not work. It was a bad idea and it was way too risky to bring another company to the table when I had not yet secured the deal myself. They said it would delay the sales cycle, backfire and make myself look bad if the insurance rep didn’t provide a level of service that we would. In End, I went with my gut instinct. I did as much due diligence as I possibly could in a short amount of time and took a calculated risk. It was critical for me to start with my current customers and learn everything I could about their decision-making process and where they saw an added benefit rather than just going by the benefit. I saw my own product. Now that we have a new way to bring more value to our customers as a company, we are scaling these efforts nationwide. We have an excellent case study that we are sharing with other prospects and it’s growing our company’s pipeline incrementally.
Want more from George Penyak? He was the star of episode 9: George Penyak and Mike Cochrane of Restaurant Technologies