The Inside Story of Relationship-Based Sales
Written by Dave Lorenzo on November 21, 2016 / Podcasts / Relationships
On this episode of the Sixty Second Sales Show we welcome Pat Murphy from Heartland Payment Systems. Pat is an expert on relationship-based sales and he gives us the inside scoop on making more money with relationships.
Here is the transcript for this episode:
Hi there, and welcome to another edition of the 60 Second Sales Show. I’m your host, Dave Lorenzo, and we’ve got a fantastic show for you today. Today we’re talking about relationships, that’s right, you know that the 60 Second Sale is basically love at first sight for businesses when you connect with someone and you have that instant spark, that spark that connects you and the other person and you know you’re going to do business together, that is the essence of the 60 Second Sale. Well, we’re going to take it beyond love at first sight. Today we’re going to talk about how you can improve your sales process by deepening your relationships with your clients. I know, if you’re listening to this, you’re used to kicking in doors and connecting with people through brute force, by telling them what you have to offer and showing them how great it’s going to be for them and demonstrating to them the power of the solution that you provide. That’s fine, if you’re doing that now I don’t want you to stop doing that yet.
What I’m going to do today is I’m going to demonstrate to you that relationships, powerful relationships are more valuable than the relationships you make when you kick in doors, sell your services and move on. Our focus is on lifetime value, delivering value over the course of your lifetime to your clients, and they in turn will deliver value to you in the form of financial compensation. Of course, before we get into anything, I need to welcome in and offer my thanks and appreciation to everybody’s favorite burka wearing producer, Nancy Pop. Good morning Nancy, how are you today?
Good morning Dave. I’m good. How are you?
Awesome. It is great as always to have you hear. I’m doing fine. Thanks for asking. We have a special guest today, but before we introduce him, Nancy, I want to tell you a little story, I want to tell everyone a little story. This weekend was a beautiful weekend here just south of Tamiami Trail in Miami-Dade County, Florida. We had a baseball game with my son on Saturday and then on Sunday I went through the list, the list of things that my wife had for me to do around the house. On that list was a project that I absolutely cannot stand, it’s the project … Well, I’ll tell you what happened. In the front of my house we have this fountain. It’s this stone structure that has a little pump in it and it spits water out the top and the water overflows from one bowl into the next. It looks good and it sounds good, I guess people think it sounds good, if I stand next to it too long it makes me have to go pee, but that’s a different story for a different time.
Anyway, the fountain out in front of the house as broken, and the thing about this project is, if you call a plumber, a plumber is not going to come out and fix the fountain, he’s just not going to do it, it’s not a big enough job for a plumber and it’s not really a plumbing job. If you call a handyman, a handyman’s going to give you a really hard time about doing this job because the structure of the fountain itself, it’s stone, these pieces of stone are anywhere between 25 pounds and 150 pounds, the base I think is well over 300 pounds, and they have to be lifted up, you’ve got to take the thing apart in order to get to the pump.
I fixed this once before, I fixed it six months ago and I went through the whole process of calling plumbers, calling handymen, the pool guy, nobody will fix this stupid fountain. We have company coming in the next couple of weeks. As we’re recording this this is the middle of November, the holiday season is around the corner, but my son’s birthday is on the 20th of November and that’s a big deal, everybody flies in from all over the place for my son’s birthday party every year, he’s the prince of the family so everybody comes in and we have a million people in the house for the next two months, so the fountain has to work.
My wife and my son go out, they had something to do, that leaves my five year old daughter and I. She decides she’s going to be my helper. We take the stone fountain apart, it’s laying all over the driveway, I decide that I’m going to go get a new pump, I go to the store, I get a new pump. Now I’m exhausted and my arms are all beat up from moving these stones, because a five year old, she can’t lift much, and I’m actually, now that I think about it, I’m really starting to wonder what the value of having a five year old child is, because all she does is really eat and sleep and poop. There’s not a lot of help going on and I’m putting the fountain back together, I put the pump in, you can’t really test the pump because it shuts off if there’s not enough water.
I’m putting the fountain back together and I’m just dreading it, I’m hating this job, I don’t have the right tools, I’m improvising. I should have had a work table that extended up so I could rest pieces of the fountain on while I threaded the tubing through it. You know what I was doing? I was holding up 150, 200 pound pieces of stone while the five year old threaded the tubing through. You can imagine how successful that was. “Oh Daddy, you’re really sweating, you’re really sweating a lot.” “Yeah, I know, I know, get the tube through the stone. You can do it, come on, put the tube through.” “It’s not really working, I’m not sure. Oh look, a squirrel! Daddy, look, did you see the squirrel?” “Get the tube through the stone. This stone is really heavy.” “It’s a squirrel, Daddy, it’s a squirrel. Oh look what he’s doing, he’s going up the tree.” “I can’t hold this anymore!” That was my struggle through this project, okay?
The value of this story for all of us today is that if I had planned this appropriately and I had the right tools to do the job, it wouldn’t have been so awful and I wouldn’t have dreaded it so much, it wouldn’t have been the nightmare that it was, my back wouldn’t be sore today four days later, my arms wouldn’t be all beat up and bruised, I wouldn’t be feeling like … I went to the gym and I ran two miles to the gym, I ran two miles in the gym and I ran two miles back home this morning, and I did the same thing yesterday except I did eight miles and that was easier than putting the stupid stone fountain together.
The moral of the story is this: we hate to do things when we don’t have a plan, when we don’t have a system and when we don’t have the write tools. This is especially true with sales. When you don’t have a plan for doing things … I didn’t have a plan for putting that thing together. I took it apart, threw it across my lawn into my driveway, and then when I went to put it back together my plan was to use the five year old to thread the tubing through. Well, that wasn’t really a plan, it was a bad plan. That’s the way most of us go out and sell today. We don’t have a plan. I didn’t have the right tools. If I had a work bench that I could raise and lower I could put the stone on the work bench right over where it was supposed to be and I could have fed the tubing through and then removed the workbench and put the stone down, but I didn’t have that, I didn’t have the right tools to do the job.
Our goal here on the 60 Second Sales Show and at DaveLorenzo.com is to provide you with the right tools to get the job done and also to give you a plan. Our system gives you a plan for selling. That’s what we’re doing here for you today and every week on the 60 Second Sales Show, every day with a new article at DaveLorenzo.com and three, four, five times a week on our video section also at DaveLorenzo.com. Thank you for joining us, and at this point I want to welcome in a guy who’s got a plan for everything. He’s someone I’ve known, well, I’ve known him for well over 25 years. I was trying to think about it as I was coming home from the gym today, I think it may even be over 30 years that I know him. He is the master of relationship based sales. He’s one of the best at it, and so that we can have an impartial third party introduce him, I’d like to bring Nancy in to introduce my good friend Pat Murphy, who’s our guest today. Nancy, why don’t you introduce us all to Pat, please?
Yes, Patrick Murphy is a senior director of business development for Heartland Payment Systems. He has been at Heartland for 16 years, starting as a relationship manager and working his way up through the sales organization to this role. A role that was created three years ago to help develop strong referral partners for Heartland Sales Team in the northeast, mid Atlantic, and Great Lake states. Overall, Pat has 20 years of experience in this electronic payments industry in addition to several years as a manager with Marriott Hotels. Pat lives in North Conway, New Hampshire, with his wife Kelly and seven children. He plays hockey, makes attempts to be a competitive runner and is involved with many community organizations in his local area.
Welcome, Pat, to the show. Thank you very much for joining us. The one question that is going through everybody’s mind right now, you know what it is, seven kids! How the hell do you and Kelly do it?
You know, you just do it, it’s just like sales, Dave, you just find a way to get it done. You had an interesting comment a couple of minutes ago about not having any value or not having any use for a five year old at your house. I think the biggest question is, what value does a fountain bring to your yard?
Ha-ha! Fair point, fair point. At this point I will honestly tell you, there is absolutely no value to have … Maybe if you drink a little bit of water and you want to go to the bathroom before you get in the car, you stand for five minutes and look at the fountain and that makes you have to go. Of course, you know I was only being playful. My five year old brings immeasurable joy because she has a very dry sharp wit, I believe much like her father, and she’s also extremely beautiful just like her mother, so we have lots of use for a five year old. One of the best uses for a five year old is when you leave something upstairs and you’re comfortable on the couch, because they’ll go up and get anything you want. All right, so, Pat, give us … What I like to do here is I like to tell … Obviously you know I like to tell stories, so give us your greatest sales triumph story. Give me a great sales victory story.
I think my greatest sales victory was when I was promoted to division manager here at Heartland Payment Systems. The division manager role is a regional sales leadership role. I oversaw Maine, New Hampshire and Vermont and led a team of about 20 sales reps. I got into sales, I started at Heartland with very minimal sales experience and I was hoping to just meet my own goals as a sales rep and have a good living and live a great life as you like to say. As I got into it more I was thinking about this role, but just did not think that sales manager was in my DNA, but I think my management training from my career at Marriott definitely prepared me for it. I was promoted to that role about ten years ago and have had one of the top performing teams in the country and moved on to greater career advancements since then. I think that was one of my most significant sales victories.
Okay, terrific, thanks. Tell me a little bit about the qualities you find in great sales professionals. Because you’ve hired a ton of salespeople and now you advise your folks on how to hire salespeople. What are some of the qualities you look for in outstanding sales professionals?
Our role is an outside salesperson, so everybody works in pretty much the communities that they live in, so somebody that’s definitely self starter and somebody that can work with very minimal face to face supervision is one thing, but I think one of the key qualities is just resilience. Obviously, a sales role of any type has a lot of rejection, a lot of obstacles, and our industry is no exception. The electronics payment industry is constantly evolving and constantly changing and there can be a lot of frustration in sales and a lot of obstacles get in your way and it’s easy to get discouraged, but people have that resilience of finding a way to get it done despite all the many obstacles that get in the way, are truly the ones that succeed.
Okay, now tell me about resilience and the way that you teach people to sell at Heartland. You’re taking a unique approach now in your company, because your company is (you can correct me if I’m wrong), your company is 100% commission based sales, is that right?
Your folks, from the time they hit the ground running, if they don’t sell, they don’t eat, it’s the true eat what you kill model. You’re taking a bit of a different approach, contrast for us the approach that you were taught when you first got to Heartland and now the approach that you’re taking and then the culture that you’re trying to create in your role at Heartland.
Sure. We’ve got very detailed methodologies on how to set an appointment with a potential customer and how to run an appointment. For years we really pushed heavily on prospecting, cold calling, knocking on doors, all those traditional types of sales methodologies. Really, in order to grow our company and give our sales reps the opportunity to have a more sustainable career over the long term, we’ve really turned the corner over the last three years and have also started promoting and training methodologies when it comes to developing partnerships and referral partners, and we’ve found that our top performers, when we look at where their deals are coming from, out of our top performing reps at least 35% of their production comes from referral partners.
These are what we call ‘coded partners’, where they are a signed affiliate with us, but they could have other partners as well, like in a handshake agreement, that they may refer business back and forth from each other, that they get deals from as well. Our top performers are the ones that get to the top by using referral partners that refer them business on a regular basis. They know that during the course of the day there’s only so many hours in the day to knock on doors and make prospecting calls and such, and the only way to grow, and what sales rep doesn’t want to grow? The only way to grow is by developing partners that can bring them business.
I look at this in a couple of different ways. I look at the greatest sales people, like the Zig Ziglar type salespeople, the Tom Hopkins type salespeople, are people who are just … David Sandler used to tell a story. For those of you who don’t know, David Sandler is one of the world famous sales gurus. He’s a sales trainer. He used to tell a story about how he used to drive to downtown Baltimore where he lived when he was a sales rep. He used to park his car in the parking lot, it was an open air parking lot, before the parking lot opened so the guy wouldn’t be there to take the money, and then he would go knock on doors and sell, people would pay him in cash, and if he didn’t sell anything he wouldn’t have enough money to get his car out of the parking lot.
That’s a quality that for years I always look for that quality in the best salespeople. I know you guys at Heartland would think that that type of quality, a hungry person, is a great salesperson. How do you teach that person, the outside cat, the alley cat if you will. How do you domesticate that person? How do you make them an inside cat, bring them inside and teach them, “Hey listen, I still want you to kick in those doors, but I want you to kick in the door to develop a relationship.” What is that process like, teaching those people? How do you teach them to become that relationship oriented person?
It’s funny, just going back to your previous comment though, Dave, about David Sandler. I read that same story in his book. He’s got a great book, You Can’t Teach A Kid To Ride A Bike At A Seminar. I remember reading that story about the parking lot in Baltimore which was excellent. Really when it comes to training the sales team, the best way to change people’s habits is by showing them how the top performers do it. Our sales team, and I’m sure sales industry in general, when they see how the top performers do it, that’s generally what they want to emulate. The results speak for themselves. As I mentioned before, at least 37% of the production from our top performing sales reps comes from partners, but also our company statistics show us that the average deal on a customer sourced to us through a partner is worth 42% more than one that is self sourced.
Wow, that’s huge.
Right. Also, Dave, retention is higher. The customers that come to us sourced through partners stay with us on average 41% longer than those that are sourced on our own. The statistics and the results really show for it and when they see that, then that’s what motivates them to change their habits.
When you refer to your partners, our folks who listen may know them as evangelists, people who don’t use your services directly, but refer you all the time. When we talk about partners for you at Heartland you’re talking about banks and CPAs, right?
Right. Banks, CPAs, insurance agents, technology partners such as the point of sale companies that sell and install and service the software that processes the credit card transactions or handles the payroll time and attendance software. Also, just any type of company or even an individual that works with the same type of customers as us, that’s a good cultural fifth that we can refer business back and forth in the community to each other. Those are all types of partners that we work with.
Okay, so how do you teach a salesperson who’s used to the instant gratification of closing a deal, how do you teach them, what’s the method they use to develop these relationships? Here I am, I’m Dave Lorenzo, it’s my first day at Heartland and I’m meeting with Pat Murphy the relationship guru, the partnership guru at Heartland Payment Systems. What do you tell me? What’s the first thing I need to do to go out and develop a relationship with a banker?
The first thing is, is just to find the banker, to find the type of person that is going to be the type of person that will refer business to us on a regular basis. A lot of times our sales team comes to me and thinks they need to go to the president of a bank or a CFO or CEO, someone higher up, but it’s really the people that are, what I call, on our level. The people just like us that wake up each day thinking, “How do I find new customers and how do I keep my existing customers happy?” Those are the type of people that we want to connect with. That could be branch managers, it could be commercial lenders, business development officers, cash managers, those are the type of people that we have the best relationships at the bank.
Where we usually tell our reps to start with is by asking their own customers. When we sign up a new customer we have to ask them for a voided check so we have their banking information so we know where to transfer their money to. A good question to ask at that point is just ask them, say, “Hey, I was just wondering, who is it that you work with at that bank, and are you happy with them? The reason why I’m asking is that from time to time customers ask us for a recommendation on a banker and if you’re happy who you work with, I’d like to meet them so I could introduce myself to them and learn a little bit more about their business.” It’s a good ice breaking question to get us to the right person, because if the customer’s happy with that person at the bank, usually that means that person at the bank is doing a good job and would be a good person for us to network with.
Okay, so I get it, I get to the right person in the bank, and Heartland has a couple of great solutions that a banker can help me sell, they can help me with card processing which is credit card processing, they can help me with payroll solutions. I get to the right person at the bank. How do I get them to give me some business, Pat?
Well, the best way is to lead with what’s most important to them personally. Obviously, I just mentioned, one of their greatest concerns is, “How do I get more business at my bank?” A lot of other vendors to the bank lead with their products and their services and are trying to get business from them, so we teach our sales team to not lead with our distinctions, which are great, but lead with what’s most important to the banker, and that is, how do they get more business. When we talk to that customer and they give us the name of, let’s say, their branch manager, I’d recommend that our sales team goes to that bank in person just to show that they’re hands on, they’re local, they’re professional, the person at the bank can see them for themselves and shake their hand and see that they’re a real person in the local community.
I’d introduce them very sincerely and upfront with what they’re looking for. Usually goes something like this, “Hi, my name is Pat Murphy, I work with Heartland Payment Systems. We’ve got several customers in common here in the local area, and from what they tell me, you folks do a great job. We’re actually looking for a local bank in the area to recommend to our customers and I’d like to learn a little bit more about you and what you do here at the bank so we can hopefully refer some business to you.” You’re leading with bringing them business and what hard working bank manager is going to say no to that? When we approach potential bank partners one of the biggest objections that comes up is, “Hey, we’re all set, we’re under contract, we’re happy with who we’re with.” If you’re leading with that approach that I just talked about, to bring them business, then that objection can’t come up, I can’t imagine any objections that would come up.
No, that’s amazing. I love that approach, it’s fantastic. Do you find that the sales folks are skeptical because that’s going to take a little bit longer?
It is, but we’re clear with them too, the rewards of working with a strong partner such as a bank are great, because banks have a great deal of influence over the business decisions of their customers. When we get a referral from a banker it is usually a slam dunk deal that we can close on the first appointment and it generally holds higher margin, what we call, on each deal, rather than maybe more of a tighter deal that we may get through cold calling. If they have the patience and I guess, the resilience, again, to cultivate that relationship, and it may take a year to do so, they may get some referrals along the way, but the time it takes to build up their trust and maybe write out any contract that they might be in, the rewards are usually great and we do have excellent results from our bank partners and they’re really going once they come on board with us.
You present the results to the sales folks and you say, “Listen, you can work five banks over the course of a month and those five banks, a year from now, will make up probably 90% of your business, because they’re each going to give you, in a year’s time they’re each going to give you a half dozen to a dozen referrals each month. While you’re out there looking for five more banks you’re getting that business coming in and you’re just maintaining one relationship to get those additional sales opportunities.
Right, we look at it, particularly with a bank, there are many referral sources within the bank, if you look at a typical bank branch, and I know bank branches are kind of scaled back a little lately, but typical branch there’s probably eight customer facing employees at that bank branch. We always say, if you want to get to the point where you know who all the customer facing employees are and they know who you are and they know how you can help their customers, then we’ve got a pretty good referral source right there. All those customer-facing employees come into contact with customers in one way or another, whether it’s just accepting their cash deposits, whether it’s renegotiating their loan. One way or another they could potentially find some pain points that that customer is having, that they could get us in there to resolve. Our goal is a minimum of one deal per bank branch, but if you’re working it very heavily, there’s a lot of potential referral sources within that branch.
Wow, I love leading with giving the bank business first in order to get referrals from them. I think that’s a fantastic opportunity, it’s a key learning element for those of you out there who could benefit, who are in business to business and could benefit from referrals from bankers. You get in, you meet the right person at the bank and then you say to the bank, “Hey, Mr. Banker, I’ve got half a dozen, I’ve got 20 people I want to introduce you to all of them, can give you business. Who do you think would be most valuable to you first?” The banker picks a person, you take them out to lunch or you go for coffee or you bring the banker to that guy’s office or bring the client to the banker, they start doing business, you immediately become a valuable person the banker. What’s he going to want to do? He’s going to want to give business back to you. That is a fantastic nugget, it’s a great takeaway and it’s an awesome way for us to conclude this episode of the 60 Second Sales Show.
Pat, if our listeners want to reach out to you, because they want to work for Heartland and make a ton of money and be so successful they can go out and have seven, eight, nine kids if they want, how can they get a hold of you? What’s the best way for our listeners to reach out to you if they want to?
Well, they could obviously, for information about our company, go to our website which is HeartlandPaymentSystems.com. They could also reach me, I’m on LinkedIn and Facebook, but my email address is Patrick.Murphy@e-hps.com. My direct phone number is area code 603 387-3493.
Give us the email one more time, please.
Patrick P-A-T-R-I-C-K and a dot, M-U-R-P-H-Y @e, and a hyphen, hps.com.
Fantastic, Pat, thank you so much for being a guest on our show today. You provided us with immeasurable value and I am grateful as always for your friendship all these years and for joining us. Thank you to the wonderful and talented Nancy Pop for being the best producer on the planet. Thanks to all of you for listening. Until next time, I’m hoping you make a great living and live a great life.