Reading · Sebastien Page's The Psychology of Leadership

July 2003.

“We need to make a push on this,” my boss says.

He wants me to go on the road to promote our asset allocation advisory services, which are tied to our trading business. This is high finance, and I love it.

For about a year, I’ve been traveling with one of the firm’s top salesmen, the Human Piranha on Steroids (HPOS). (I explain the origin of the nickname in The Psychology of Leadership. He has unlimited energy, talks to everyone, and swears so frequently that the f-word functions as punctuation.)

HPOS and I work well together. He respects my presentation skills. I know the material cold and can explain complex ideas clearly. I’m starting to feel confident in front of clients.

But I’m still naïve about sales, as I’m about to learn.

We land in Denver in the morning. The airport sits far out on the plains, surrounded by dry grass and a blue sky. As we drive west, the Rockies slowly rise in front of us through the summer haze.

HPOS talks almost continuously, jumping between clients, markets, restaurants, and several phone calls while I review my presentation.

At our first meeting, I give one of the best presentations of my young career. I explain our market forecasts, risk assumptions, and optimization framework. The pages turn at the right pace. The client asks intelligent questions. I feel sharp and completely in control.

When I finish, he closes the presentation book.

“Look, we already have a consultant,” he says. “We don’t need help with asset allocation.”

That is disappointing. But I tell myself that I have done my job. HPOS takes over and talks about other aspects of the relationship. He asks the client a few broad questions about the portfolio and how the plan operates. I begin reviewing my next presentation in my head.

On the way to the car, HPOS turns to me.

“You know what they f***ing need? They need an optimizer to tell them where to take the money for their f***ing benefit payments!”

I nod and keep walking. My mind is still on my presentation. One chart could have been clearer, and I want to tighten my explanation of the risk assumptions before the next meeting.

A few hours later, I give the presentation again. It goes well. The client’s response is almost identical.

“We already have a consultant.”

HPOS takes over. I start to tune out again.

Then the client says something that catches my attention.

Every month, the pension plan needs to raise cash to make benefit payments to retirees. The money has to come from somewhere in the portfolio, and the decision creates a recurring problem.

Should he sell stocks or bonds? Which money manager should he tap? Should he take from the managers performing well? What if they are on a hot streak? Should he sell from the laggards and risk locking in losses? Each choice can move the portfolio away from its intended strategy.

This is what HPOS heard in the first meeting.

Our next two meetings follow the same pattern. The clients decline our asset allocation advice and describe the same benefit payment problem. The repetition is striking. By the fourth meeting, I start to wonder whether these people talk to one another.

Now I am listening.

Listening helps salespeople adapt. In a field experiment, matching the pitch to the customer’s goal raised average sales per customer by 105%. It’s an annoying question to hear when you walk into a store, but the study’s title, “Are you looking for something specific or just looking around?” captures the idea well.

Listening also informs product strategy, as I’m about to find out on this trip with HPOS.

One of the best product developers of all time, Steve Jobs, famously read customers’ emails. For example, in July 2005, a customer in Venezuela emailed Steve Jobs at 11:16 p.m. because his father’s iPod would not turn on. Jobs read the message and replied at 7:19 the next morning with reset instructions. Product teams can miss these points of friction when they spend too much time discussing customer needs inside conference rooms, rather than talk to them.

To be clear, there’s a lot more to sales than just listening. In a large study, selling-related knowledge and adaptability were the two strongest positive drivers of performance. The salesperson still has to interpret the customer’s answer, understand the product, and adjust the pitch.

After our fourth meeting, HPOS and I get back into the rental car. He’s driving with one hand, holding a phone against his shoulder, jabbing at the GPS, and eating a burger and fries.

“Hey, f***face,” he says, still chewing. “Can’t you use the same models to solve this benefit-payment question?”

Lightbulb moment.

“Yes,” I say. “We can.”

It’s another optimization problem. With a few constraints, the same framework can tell clients which portfolios to draw from while keeping their broader strategy intact. We have found a new application for the same technology.

The next day, I leave my slick PowerPoint books in the trunk. HPOS opens each meeting with a question.

“How are you deciding which portfolios to sell from when you make benefit payments?”

The conversations change. Clients lean forward. They describe their process and frustrations. We explain that our models can help them make the decision systematically.

Every client signs up.

We call the new capability the Benefit Payment Optimizer. Over the next couple of years, it generates substantial revenue for the firm and strengthens our trading relationships.

I arrived in Denver focused on delivering the perfect pitch. I had polished every transition and prepared answers to questions I could anticipate. That focus kept me from hearing the opportunity in the first meeting.

Sometimes the next big product starts with a recurring client complaint. You just have to listen.

I carried the lesson I learned on that trip through the rest of my career.

HPOS, naturally, remembers the trip differently: “I told you the answer in the first f***ing parking lot.”

The best sales lesson I have ever learned

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