Harry Beckwith: His first interview by Bob Morris

Harry Beckwith

Harry Beckwith has advised countless Fortune 100 companies, including Target, Wells Fargo, and IBM, and won the American Marketing Association’s highest award. His published works include Selling the Invisible (1997), What Clients Love (2003), You, Inc. co-authored with Christine Clifford Beckwith (2007), and The Invisible Touch (2009) and have been translated into 23 languages. Beckwith graduated Phi Beta Kappa from Stanford University and later served as Editor-in-Chief of Oregon Law Review, the Stanford Law School’s highest honor. He also served as a law clerk to a federal judge. Since 1975, Beckwith, a four-sport, four-year letterman in high school, has run over 58,000 miles (more than twice around the world) in his spare time. He also serves as a part-time grade school teacher, a member of the Stanford University Athletic Board, and a participant/member of Renaissance Weekend, a regular private gathering of worldwide leaders in business, education, government, science and the arts.

Note: This interview of Beckwith was conducted two years ago. He has since published his fifth book, Unthinking: The Surprising Forces Behind What We Buy, published by Business Plus/Hatchette Book Group (2011).

Morris: You were a four-sport, four-year letterman in high school. What were the most valuable lessons of your involvement with competitive sports?

Beckwith: Team sports teach that health is a key to a rich life, and can transform you into an athlete throughout your life, a good idea. They teach that hard work pays, in strong correlation to the effort. They teach grace under pressure, to be calm during storms.  And team sports teach that while success can be fleeting, failure can be too.

Morris: What seem to be the most common misconceptions about  “selling?” How do you explain them?

Beckwith: That it’s backslapping, arm-twisting and myth-spinning. The explanation is the extremes, parodied in our culture: the old Snake Oil salesmen, the oily car salesman, and the brokers in the movie The Boiler Room.  But great salespeople are so good you don’t know they are selling.  If you did, you would recoil from them.  And they are also good people, from the inside out.
Morris: What do peak sales performers share in common?

Beckwith: Resilience, integrity, and a conviction that their product can really improve the quality of someone’s life.
Morris: During Q&A after your presentations and workshops, which questions are most frequently asked and what is your response?

Beckwith: I conclude most presentations by saying “take the road that runs along the cliff, the one without guard rails.”   People tell me how much that meant to them; sometimes, their eyes are damp. Generally, branding gets the most questions–except outside North America, where price does.   People know branding matters but don’t know how to build one, and it’s a weakness among businesses; only one business in fifty understands branding and manages its brand well.
Morris: Warren Buffet reportedly suggested that price is what you charge and value is what people think it’s worth. Your opinion?
Beckwith: He’s forgetting that price tends to enhance most people’s perception of quality.  For example, most women think L’Oreal is worth more because it costs more, just as Diner’s Club credit card users switched to American Express when AmEx nudged its yearly fee just above Diner’s Club’s.  Price conveys quality and implies value. You cannot separate price and value as easily as Mr. Buffet’s comment suggests.

Morris: In The Invisible Touch, published in 2001, you identify “the four keys to modern marketing. What were the “keys” then and have you changed your thoughts since then?
Beckwith: Price still matters, but consumers have more information than they did six years ago. They can shop more shrewdly. But people do not comparison-shop services as often because they can’t–there’s not enough comparative data, and because services are harder to commoditize. All haircuts, for example, are different. If you want a nice haircut, you assume it will cost more.
Key two, brands, matters even more, because our options continue to proliferate, making it harder to choose among seemingly similar products and services. Just go to the store today, determined to switch toothpastes. Try to compare your options; you will feel overloaded. Ultimately, you will migrate to the one whose brand message resonated most.
Packaging, the third key, matters more, too. Design plays a growing role in our economy. Target has made cheap chic by enlisting the architect designer Michael Graves. Look at what Dyson has done in vacuum cleaners, a category that seemed so mature it appeared exhausted–the Dyson design is a brilliant example that design can transform an industry where design appeared irrelevant. Look at the IPod. You open your IPod box and are taken back to childhood Christmases, because it is wrapped like a wonderful gift. It’s an MP3 player, for heaven’s sake, but the design has turned it into a lust object and the virtual name for the entire category.
And the fourth key, relationship, matters deeply, not least of all because it has been somewhat neglected. You can go to college and business school and never learn how to relate to others. Your education can mislead you into deciding that all that matters is technical prowess and that the ability to relate to others is for anyone but you.
Morris: A related question. Since then have you also changed your thoughts about what “the invisible touch” is and why it is important?
Beckwith: The only change in my feelings is that they’ve grown in intensity. Business is all about relationships, and mastering our relationship with ourselves and with others is pivotal. It’s nearly impossible to succeed alone, to venture off like Crazy Horse, living away from the tribe.

Morris: You develop this core concept in greater depth in the next book. What is required when attempting to “sell the invisible,” especially to those whose purchase decisions are based almost entirely on price?

Beckwith: You don’t want customers who buy solely on price unless you are sure you can seize and hold the low-cost, low-price position in your market–and that’s hard. A dozen retailers tried–Caldor, Jane way and others. Then Wal-Mart came along and literally killed the category and those companies.

It’s easy to compete on price–but not than many customers buy purely on price. If they did, Wal-Mart, Penney’s and others wouldn’t have tried so hard to move up the perceived quality chain. Wal-Mart, for example, has discovered that while they have a segment of customers who feel forced to buy solely on price, they also must appeal to a second segment that can afford far more but loves deals, and a third segment that is price-sensitive but brand-inclined–customers who will pay more for brands they trust. Many Wal-Mart shoppers who can barely afford Kitchen Aid dishwashers covet and buy them.

So Wal-Mart has learned that the pure price buyer is a smaller segment than many people assumed, partly because almost every person is aspirational. We want a little more for ourselves–which is why people who make $21,000 splurge on Godiva chocolates.

Morris: What Clients Love is a brilliant title. Why do you characterize the book as a “field guide?”

Beckwith: First, thanks, because I thought that title deserved an A for brevity, but sounded a little ho-hum. It’s called a “field guide” because it’s practical. It’s meant to be used in the field.

Morris: What do clients love?

Beckwith: They crave two feelings: comfort and a sense of importance–the feeling they are valued. All your efforts should focus on satisfying those needs. The desire to feel valued explains why clients love speed, because speed of response communicates, “you are important to us.” Clients love lawyers who return their calls promptly, for example; it’s more importance than fee, technical competence–virtually everything. It’s hard to detail what client’s love without going to some length–we stress 12 keys and the book required almost 300 pages–and readers of interviews like brevity. So I should stop here!

Morris: For decades, salespeople were trained to focus on functions, features, and benefits. Then the emphasis seemed to shift to interrogation skills (e.g. “SPIN selling”) to determine a prospect’s situation, and, to identify her or his needs and interests. More recently, the focus seems to have been on “relationship selling” or selling “solutions.” To what extent are these approaches mutually exclusive?

Beckwith: You should combine all three approaches. You must know your product and service inside out. If prospective buyers sense that you do not, they become uncomfortable. They need to know what they are getting for their money, after all, and if you appear even slightly unsure–or communicate so unclearly that they don’t feel confident you are sure–they’ll move on. Uncomfortable prospects don’t buy. You must know your prospects and, especially, their wants and desire. So you need to ask questions, as “SPIN selling” suggests. And the third style, “relationship selling,” is as old as selling itself. We buy from people we trust and like.

Morris: Sales nomenclature has also changed. First, “customer satisfaction,” then “customer loyalty,” and most recently what Ben McConnell and Jackie Huba characterize as “customer evangelism.” Your own take on all this?

Beckwith: Customer satisfaction isn’t enough. General Motors’ surveys showed a huge surge in customer satisfaction in the 1980’s, Meanwhile, their sales fell. Mere satisfaction, the term itself suggests that. Once a human being is satisfied, his or her expectations increase. They now need more to feel satisfied. This is why continuous quality improvement is necessary just to retain clients.

As to loyalty, that word is so often misused. For example, in connection with frequent flyer programs. But not more than 5% of all travelers are loyal to any airline, and most are dissatisfied. Calling them loyalty programs is almost comical, don’t you agree? Only a small percentage of companies have truly loyal customers. I’ve enjoyed the pleasure of working with the one with the most: Harley Davidson. The test of loyalty, ultimately, is “How many customers have your brand name tattooed on their biceps?” Our firm once ran an advertisement focused on that. Above a two-page color spread, close-up photo of a man’s bicep with a Harley tattoo, we ran the headline, “When was the last time you felt this passionate about anything?” That kind of passion is rare. You see it in well-established and iconic products like the Fender Stratocaster guitar, for example. BMW had it in the 1970’s. Apple has it, not least of all because they and their users believe that Microsoft is the Evil Empire—really! But truly loyal customers are, and may always be, rare.

There’s not much reason to aim to create “evangelists” until you’ve mastered all the blocking and tackling needed just to satisfy clients. Walgreen does that well, and performs well, too. Their customers certainly aren’t evangelists, but they keep returning to Walgreen because Walgreen blocks and tackles–it’s got the basics down, even if it appears almost too basic to many people.

Morris: Now please shift your attention to your most recently published book, You, Inc., that you co-authored with your wife Christine. For whom did you write it?

Beckwith: We had our oldest sons in mind because all four were on the edge of the Real World–ages 18-20–and we wanted them to know what we’d learned about winning friends, influencing people, swimming with sharks, and what they weren’t taught at Harvard Business School. But anyone who needs a jolt will find some needed jolts in You, Inc. We certainly did.

Morris: This may seem an odd question. Aren’t many personnel decisions, such as hiring or promoting people, based on how well someone has “sold” or “positioned” her or himself rather than on performance and qualifications?

Beckwith: Sure. People make bad hiring decisions, perhaps most of the time. There’s reliable evidence that only one in four hiring decisions works out as the employer planned. Peter Drucker once saw the same numbers and suggested that if businesses did as badly in everything else as they did in hiring, none would survive.

Fifteen years ago we had a circle of acquaintances. Most of those in the circle had risen quickly and seemed destined for big offices. Today, none one of those people got there. They failed to learn the lessons. Most had only one major flaw, but few people addressed it with them. The key to success is optimizing your strengths while neutralizing your weaknesses. Those people accomplished step one only.

Let me address the question with two compelling stories. It’s about the two men who once seemed destined to become President of the United States. In the late 1950’s, if you found yourself on the Yale University campus and asked passersby, “Who here will one day be President of the United States?” you’d consistently hear “Denny Hansen.” He was the golden boy, smiling California athlete, gifted student. Life magazine even wrote about him as his era’s iconic student. But the closest Denny ever got to the Oval Office was an associate professorship in public policy at a university near Washington Avenue. Why did Denny fall so short? Among other mistakes, he mispositioned himself. He chose to go to the State Department, but focused on U.S.-South American/ Mexican relations–”North-South issues,” as they are dismissively referred to in the Department. In Calvin Trillin’s excellent book Remembering Denny, you can spot some of his other career errors and “selling one’s self” mistakes.

Now flash forward 15 years, to Providence, Rhode Island, and the campus of Brown University. Not long after you arrive, you will notice graffiti on a stone wall. It reads, “Magaziner is God.” At Brown then, Ira Magaziner held that exalted status–so much so that Time magazine wrote about him, too, while he was still in college. He reformed how students were taught at Brown. Ira Magaziner was destined to become President. But the closest he got was heading Hillary Clinton’s Health Task Force, a bad career move. And while his ideas may’ve been good, Magaziner angered most of Sweden with his proposals for Swedish industrial growth, and not long after, proposed a compact for the state of Rhode Island that the state voters rejected overwhelmingly. He’s had an interesting life. But if Ira had learned to sell his ideas as well as he conceived them, and if he’d plotted his career path, he’d enjoy far more influence today. Even future Presidents need “selling yourself” counsel–or maybe, they especially need it!

Morris: You, Inc. offers a wealth of practical suggestions anchored in real-world situations. Much of the advice seems to derive from lessons learned, not from success but from failure. Is that accurate?

Beckwith: Without question, as the Denny and Ira stories suggest. When people succeed, they tend to assume that everything that they did contributed to that success, so they continue to do precisely what they did–good and bad. Soon the bad undermines them. Failure shakes us from our complacency and makes us examine our strengths and weaknesses–and our mistakes.

Morris: Those who will benefit most from this book will probably be those who are preparing for, or have only recently embarked on, a career. What about their supervisors?

Beckwith: We learn at every age. If you decide you’ve learned it all, you are vulnerable. I once highlighted, as a signal trait of successful people, Humble Openness. Years later in Good to Great, Jim Collins offered the same conclusion–in the same words, I think. So supervisors can benefit from continuing education, even in lessons they’ve heard before. Sometimes, we need to hear a lesson at the moment we are ready to embrace it. Supervisors can benefit from giving these lessons to their staffs. Among other reasons, it’s much better than handing down a dictate. Give them a book with their three key action areas highlighted and a nice note. Watch if those people don’t start working on their weakness (es), and soon show improvement.

Morris: One final question. Of all that you have learned during your career, what has been the single most important lesson you continue to apply?

Beckwith: Life really is a gift.

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