Why Buyer Confidence Is at an All-Time Low — and What to Do About It

Your car goes where your eyes go. It's where you look. That's exactly where the car is going to go. So if you're looking at that tree that's starting to get larger and larger in your windshield, guess what's going to happen? You're going to hit the tree. But if you happen to look back instead, back to the race course, your mind, your body starts to act and do the things naturally to get you back there. Welcome back to the Thoughts on Selling podcast. I'm Lee Levitt, Sales coach, podcast host and author of the Second Meeting and Together We Win both due out later this year. Today we're talking about why buyer confidence is at an all time low and what that means for how we sell. My guest is Tom Pesello, better known as the ROI guy. He's been a value selling pioneer for over 30 years, from his work at Gartner to founding Genius Drive. He's also a high performance driving enthusiast, which is where our conversation starts. Here's what to listen Aristotle's three buy pathos, logos and ethos and why trust is now 50% of the decision, the shift from fear of missing out to fear of messing up and why more information doesn't create more confidence. If you've ever wondered why your best ROI story still doesn't close, this one's for you. Let's go. So tomorrow, here's the first question. Who is Tom Pello? Most people know me as the ROI guy, which is my Persona and it's one I picked up some 30 years ago now. One of the original value pioneers and innovators back in my Gartner days. Also known back then as the Godfather of tco from my Italian heritage, which I'm very proud of, my Sicilian heritage. But as the ROI guy I provide thought leadership I on everything business value for B2B from a personal standpoint, I'm a ex wedding band musician from my teenage days. Play the keyboard and still do tinkle around with it. I've got a keyboard here and I'm threatening my wife to go and busk out in the parks now in New York. So if you go out to Washington Square park this weekend, you just might see me jamming there. I'll bring some coins. Yeah, absolutely. And also love old classic cars. I'm a member of the Manhattan Classic Car Club. I've got an old BMW right now. Over the years have collected various old Porsches and different performance cars and I love high performance driving. Yeah. So the subtitle of this particular podcast is Thoughts on Racing. Exactly. Take us completely off topic. Well, not so completely. You're going to be introducing your keynote with a racing theme. Yeah, I've got a Value driven conference coming up and in May, late May here in New York City. And we are having it at Manhattan Motor Cars, one of my favorite dealers here in the city. I'm trying to get them to bring in Koenigseggs and Rimacs and cars that really most folks haven't seen, but we'll definitely have Mercedes and Ferraris and other things there. And yeah, my keynote is going to be about the art of racing in the rain and how it applies to business. That book and that movie are one of my favorites. It's just a great story told from the perspective of a dog of Enzo. Yes. The dog's name is Enzo. Yeah. And he loves racing. He loves his owner, who is an aspiring race car driver who unfortunately loses his wife and has to raise a child on his own and goes through a lot of trials and tribulations. There's a ton of lessons in that and there's a ton of sayings. Lee, I know you've done high performance driving school. And as an instructor, we always had these little sayings to remind our students of the things that they needed to do. So the first one is your car goes where your eyes go. It's where you look. That's exactly where the car is going to go. So if you go spinning off the track and you're looking at that tree that's starting to get larger and larger in your windshield, guess what's going to happen? You're going to hit the tree. But if you happen to look back instead, back to the race course, your mind, your body starts to act and do the things naturally to kind of get you back there. I'll add something to that tomorrow. And this is also 100% sales related. It's not just your car goes where you look. It feels entirely differently. I remember somewhere in the back part of Watkins Glen where there's this long, sweeping guardrail. If you look at the guardrail, your car feels twitchy. If you look 60 yards, 50 yards up, it feels like a totally different car. Same thing in sales. If you're looking at what the person said to you just 30 seconds ago, it's a very different experience than when you're thinking, how can I help this organization be more successful? Yeah, eyes up and look down the track is another thing that we said. Another one, which I don't think I'm going to use this in the Keynote is when in doubt, both feet out in a spin. Both feet in. So that is another one and I'm not going to spoil the rest of them. I use the example of language of value and cars, and this is a real quick one. So I say, honey, I want to get the new Porsche Cayman. And because the Cayman is a mid engine car, it'll be faster on the track. Because my language of value is performance and speed, her language of value is not. So her answer is no. On the other hand, if I say, honey, I want to get the new Porsche Cayman and because it's a mid engine car, now note the setup is exactly the same, the payoff is it'll be easier on tires and suspension and it will cost less to campaign. So that's her language of value, cost and budget. And of course you know what the answer is, Tom, right? Still no. Someone may be buying a car because of economics. Someone may be buying it for utility. Underlying it all is very much usually an emotional connection which we're starting to lose as cars become a little bit more appliance, like, like buying an iPhone instead of buying an automobile with a sound of a V12 Ferrari engine or something else. But there's still a passion there. So there's emotion comes into play. What Aristotle called pathos. Right. And that is a huge driver. It is what the Challenger sale is based on is really stoking that emotion first. And you really can't get change to occur until you have that emotional connection, usually. And then there's usually a justification that you go through some of the logic that you were using right now to explain to your wife why it would be a good purchase is that justification and logic. And that's, you know, Aristotle's logos. And then the final element is trust, trust, trust in the brand, it's connection to that brand. And trust that they're going to deliver on what they promised on and they're going to stand behind their product. And that goes to the Aristotle's ethos and connecting to the middle part of the brain. And we've walked through the three big buy buttons in the brain, like the emotional buy button, the primitive reptilian complex, the logical neocortex part of the brain for justification. And then the middle part of the brain connected to your gut venal vagus nerve for that gut feeling. And that is the trust part. So Tom, how did you get into the whole value selling racket anyway? It's a great question. I was a software engineer and electrical engineer, so I've got an Engineering and a technical background. Did that for a while, wasn't that good at it. But I definitely had a knack for understanding solutions and products and being able to lead groups. And so I got more into product management and I was given responsibility for a new enterprise storage management. Product information Lifecycle management was the area it was in and for Symantec and the solution I had a new salesforce of brand new enterprise sellers. We were going into an enterprise market for the first time and they didn't have a clue on how to articulate the solution in any way that was going to appeal to this new enterprise customer. And so I started to get into this has great value proposition. It could really help to save money. It could help to remove old storage off your expensive hard disks. Hard disks at that time were expensive and our archive them and you could save a couple of million dollars for a typical enterprise by archiving this very infrequently accessed, if ever accessed information off. So I built a tool that would analyze the hard drives and actually did hard data collection across a network, took that back and then crunched the numbers on, analyzed the old files that could be archived and did a quick assessment and came up with the dollar figures for it. That utility and exercise turned out to be more popular than my product line was. I realized other companies could use this return on investment calculations and some of the utilities that we had developed. And I was 30 years old at the time and naive and I'm like, all right, I'll just start a company and start to build these calculators and tools. You looked at the customer environment from an engineering standpoint saying there's some things that need to be accessed regularly and let's spend a little bit more money on that. The things that don't need to be accessed as often, so why spend the same amount of money? Exactly. And then I did the calculator to prove that. Now, Lee, one of the things I'll be honest that I was missing at that time was if we go back to those three buy buttons, I was like pressing the heck out of one of them really, really hard and consistently. And we needed to do that. Right? That's the area where we needed tools to accomplish it. The ROI guy at that time though was very singularly focused on just the hey, if I'm able to prove the value of this solution, you have to buy it. It just, it makes sense. Here it is. There's no denying these financial facts. This, you've got a big pain. There's a solid ROI here You gotta say yes. And it didn't get yes all the time. And so that's when I realized. And I know you had Joe Terry on as a guest. We had worked with Corporate Visions. The Challenger sale was coming out at that time and that's when emotions of the purchase decision really came to light for most people. Corporate Visions is one of the original founders of that and the ORIG research. Gartner and CEB and Google did some research on the power of emotion in enterprise purchases. And for me, literally a light bulb went off and I'm like, you know, there's more to this than just the financial justification. And then very shortly after that, I wrote the book Frugal Nomic Survival Guide. And one of my sellers had a son who was in philosophy class at the time and. And we had added trust to it. And then he's the one that actually made the connection to Aristotle with the three buy buttons. But it took a while for me to get that maturity, I think to the thinking process where it was more than just justification. You really had to have these other elements and build a compelling story that your hero, the buyer, could own, make their own. And that's ultimately when you get to yes. Yeah, it's really interesting. There's a couple of threads to pull on there. One, when the buyer makes it, going back to Gerhardt's word, when you co create with a customer, the customer owns the process. They've internalized what they're talking about as opposed to seeing a demo. And the other thing I wanted to mention is that you talk about trust. I've been working on a framework that talks about the four components of getting to a place where you can actually serve the customer. And by the way, the origin of the word sell means to serve or to give. Doesn't mean to get. Yeah, it means to serve. Need to pitch either. Which still seems to be what happens 9 out of 10. Right path, bring a perspective, build authenticity, create authenticity, build trust. Right. The trust is absolutely key. If the buyer doesn't trust you. Yeah. They won't follow your direction, they won't follow your recommendations, they won't take your guidance, they won't give you the helm. And so I created that framework of perspective, authenticity, trust and helm. You know, trust is really interesting right now. And I had someone who's trust expert, Todd Capone on, on my podcast. Highly recommended. If you haven't interviewed Todd to do that, he talks about authenticity a lot. Transparency in the sales process. Challenger hit on the emotions. Right. We were pitching the logic For a long time, Todd hit on trust. It's interesting to me that maybe a decade ago it was really about emotionally stoking to charge. Change. Yeah. Fear of missing out. Now it's the fear of messing up. Yeah. Thank you, Matt and Ted. Yeah, yeah, exactly. So trust is really, I think, the bigger driver right now in it all. So if we had percentages, you know, 25% is still emotion and you've got to get them charged up to what you're presenting to want to change and be a catalyst.25 percentage. They're going to have to justify this to themselves. But 50% of the decision making now I think comes down to trust. And what's really important is 2/3 of buyers are regretting the deals not too soon after the Inc is signed. And confidence, buyer confidence is at an all time low. You would think that with the wealth of information and reviews, G2 and all this other stuff that there would be more trust that's built up, but it's actually more mistrust than ever. Why do you think that is? I think that there's so much uncertainty and I think that a collective buying committee is making a lot of the decisions. So everyone is going into it with this risk of, hey, if I mess this up, it's my job. Right. So they're going into it with a lot more fear of making the wrong decision than ever before. And then so to overcome that, you've got this bigger committee and bigger committee and it keeps getting bigger that ultimately are making the decision. And there's so much compromise that goes on with that that I'm not sure anyone is really that enthralled with some of the decisions that are being made. It's going to be interesting coming up because there's a lot of decision making that's being made lately based on AI and rapid innovation and, and almost being. I wouldn't say, well, maybe forced is the right word. Forced from sometimes management. You will take advantage of this or you'll perish and be kicked out of the company. You will take advantage of this or you'll become obsolete. Or a market that's just absolutely demanding that you've got to learn these new skills or you're not going to be relevant anymore. I think it's going to get even worse as we go into this period. I am in complete alignment with you, Tom. I asked ChatGPT last fall, I think it was what are the top four or five AI based sales training tools? And Chat came back with a list of 10 some I had Heard of some I was a little questionable about. It also came back with a. Would you like me to write you an rfp? This is not something a buyer could have done five years ago. Absolutely right. Ten years ago they didn't have access to any of the information. Five years ago they probably could have googled and searched and found the information. Today. Today I can go into Gemini or Claude and say, here's my environment. Here are the top three things I'm concerned about. Here's the scores of my top reps and my bottom reps. What do I need? Who are the vendors send that RFPs. Yeah. Yet do we think that that is going to improve the confidence in what gets purchased? Yeah. I'm thinking that that's not going to move the needle, that there's still something fundamentally there that's missing. I agree. The process becomes easier, it becomes more informed. Is more information better? Smarter? Yeah. But is more information better? And then ultimately are they getting what they want and need? And I think some of it is certainly a buyer challenge. I think other parts of it are if we're on the vendor side of the equation, the go to market side, which we are, you know, what kind of. What are the vendors doing to help overcome this? And there are some that are taking action, but many of them are still doing business the old way. With software as a service. Service was. And professional services and assuring solutions were implemented. Right. Adopted. Right. And ultimately delivered the business value that was promised. Those things were dirty words in a way. We eventually saw customer success get added. But how many accounts does the average customer success rep have? It's not like it's that intimate of a relationship and we've lost intimacy that was there that I think trust can be built out of. And that transparency and that sharing without the intimacy, you got no trust. Yeah. What I've seen is many organizations, we saw the customer success manager become a really pivotal part of larger sales teams, larger relationships, larger environments. And then they all got quotas. Yep. They're not salespeople. They didn't want quotas and the role got bastardized into another sales rep. And because that wasn't successful, couldn't be now. The CSM role has been diminished or minimalized or collapsed right into these account executives that we're now back to, which is. Could be more proper in some ways. But yeah. Are we going to get closer? Are we going to start to think about this as. It's not the product that we sell, it's not the service we deliver, it's the Outcomes ultimately that are generated, that are unique in some ways, as we discussed at the very beginning, to each buyer. So we've got a uniqueness there. You lee value something very different than your wife, than I do in a car person, a friend. And we've got to uniquely identify that, uniquely measure it, uniquely assured delivery of it. And I think it's that shared value planning and management process that ultimately I think can get us over this confidence gap that is so prevalent and shows up in survey after survey, Gartner and so on. I think we're going to see a lot of vendors crashing and burning by adopting the latest of more and more scripts. More and more AI support of a rep doesn't have to be curious anymore. We're going to give them all the information they need. Right. I'm sorry, how do you pivot in a conversation if you've read the script twice but don't really know what's going on? So again, it's more information, more, more, more. And it doesn't necessarily create that bond, that intimacy that we need and that human connection that I think is there. And we see that, we all get the emails that is like first touch from a company and you're immediately turned off. And that persists through when you've got these automated at scale bad practices that are occurring. Salesforce just recently introduced the A wu which is a workload unit and they're saying, look, token maxing isn't working. Right. Measuring tokens is not going to do it. But if we can assign it to a workload unit and the workload unit connotes value and that value is going to be unique per customer, we can get to something that's more important. And I think that's a good first sign that this outcome economy where we're focused on outcomes, focused on outcome delivery and realization for the customer, that that can help to assure some alignment there and I think get us on the right track. Kudos to Salesforce for that. I think it's the first of many and hopefully leadership companies like Salesforce will come out with saying maxing of tokens is probably the worst measurement you can get. What are the tokens actually being used for? Are they delivering real outcomes for our customers or even outcomes for our people? That to me is the most important. Yeah, well, you know, going back to Joe Terry, you know, activity is not the answer. Exactly right. Just because you're busy, just because you're spending a lot of tokens doesn't mean you're actually making forward progress. One of my Favorite business books is will it make the boat go faster? You can row all you want. If your oars are not in the water, you're not going anywhere. Exactly. Or if the way that you're doing it and the efficiency isn't there, there's a lot of energy that ultimately gets wasted. And the best teams are measuring that efficiency have loops to continuously improve it or coaching for it, everything else. And it really becomes a lot more about the activation and a lot less about maybe the technology or the other things or the combination of them becomes the answer. Yeah. It never has been about the technology. Tom. True. You may know this. The first known instance of sales enablement happened a long time ago. Do you remember when it was. I don't. It happened at National Cash Register in the late 1800s. There's a sales primer, the, the National Cash Register primer that says don't talk about the cash register on the counter. Talk about the flow of the business. Oh, amazing. I love it. Yeah. Yeah. And the first value selling orientation. Right. Focus on the pain of maybe an inefficient flow as opposed to the ill. To solve it. Yeah. The hardware to ultimately solve it. Yeah. There was no software at that point. It was just hardware. It was mechanical levers. Interesting stuff. So let's fast forward 10 years and check in and see where we are. What's going on. Yeah. Ten years from now. Yeah. Okay. Five even five years from now. I find it really hard to predict anything more than maybe a year or two out anymore. And I always viewed myself as kind of that visionary of being able to see out that long. I would read Ray Kurzweil books and other vision, Geoffrey Moore and other leader books and really try to say, okay, I'm taking these macro economic macro changes. Thomas Friedman is another great one. These are all visionary thought leaders that you could look at the big things that they're talking about and start to paint a picture with it. As former analysts. Yeah. We were responsible for five year views. Sorry, I can't do it anymore. I don't know how a CEO is doing it nowadays to see past, you know, six months a year, two years anymore with the pace of change. And I think that's also part of the unsettling that breeds the lack of confidence and everything else. I'm got this decided optimism, but also this lack of confidence in my ability to predict where we're going to be because six months ago I didn't think AI could do some of the things so reliably that it could do today. Well, I've got an engagement process that we get into with a customer to create a value framework and this value story and the calculations and all the base foundational stuff that you need to build this back in the day, if you did that completely, gosh, it would be like 6 months, 8 months. Got it down to. With AI assist and some of the frameworks and codification. Got it down to six weeks. Shoot. Now it's down to less than a week. Six days, Six months. Six weeks, Six days. In the time frame of this past year, that is huge impact for time to value. Yeah, huge impact to time to value. Huge multiplier. The amount of engagement capability and outcomes that I can produce for customers as a consultant are multiplied 5x to now maybe approaching 10x. But when you're in a system like that that's evolving so rapidly and fast. Okay, does six days then become two days, one day or I' an agent and I just point it and it goes and does it. And then what is that going to do to. For example, if I'm a traditional consulting business and I'm charging per hour for this, it's not six months worth of work anymore. Is billable work? It's. Is it six days worth now you're a knowledgeable chat jockey. Yeah. And so what is someone going to be willing to pay for that is part of the equation. You're not going to be able to do it on an hourly basis anymore. So then you do it on an outcome basis. And so the economic rug is being pulled out from under a lot of businesses and a lot of business models. Let's look at the customers. I would really not want to be a CIO today. Yeah. Because my world is changing so dramatically. I call my vendors, I call Gartner, I call idc Forrester. I go. Help me see around corners. And you know, the answer is what corners? We don't see them either. Yeah. So it's a challenge. And so we're going to end on good news, Tom. Yeah. The good news is there's always a place for people that can see patterns. Absolutely. By the way, what is AI? Yeah, AI sees patterns and tells you confidence levels. No different. We just used to be enough as analysts back in the day. Yeah. We just used to be faster and better than software could do it. Now software is pretty good. But it's the human patterns too. You know, we see the human patterns, we see the business patterns. And when we are chat jockeys, we have to give it the right prompts. We have to say, did you think of this, look at it from this perspective. What about this perspective? Right. And we've all seen minor and major failings in the computations. Absolutely. And so I do think that there's still a dramatic need for that critical thinking. The cross system, kind of pattern recognition. It comes up a few levels. Right. But that skill set doesn't go away. I also think that eq as opposed to iq becomes really so much more important. But we are going to have a lot of people that are. The one area I think deserves a little more attention is we're going to have a lot of people that are disheartened. We're going to have a lot of people that are lost, a lot of people that are going to be just so steamrolled by change and upset and other things. And I think there's never been a better time to be a leader, whether that's a thought leader, a people leader, real people, visionary. Right. To provide that light, that guidance in an environment that can appear so overwhelming. The people that can do that really are going to have a special place because there is going to be this disillusionment. There is going to be this, this existential crisis that occurs in so many as a result of this. Not catastrophic, like everyone is predicting, this huge mass unemployment and everything. I don't think that's going to occur to those levels. But I still think it's enough to upset the apple cart. Enough to where if you can provide that leadership, that clarity, the thoughts, the frameworks, the. And you've got purpose behind it that is authentic and you can create those intimate relationships with individuals still, I think those are the skills that ultimately are the ones to really amplify in this environment. I'm 100% with you, Tom. Tom, where can people find you? Yeah, LinkedIn. So Tom Pesello, the ROI guy, is where you'll find me there. I've got a value Coffee Talk podcast. You can look that up. Where all podcasts are consumed and on our geniusdrive.com website, if you go to the community page. Tons of great articles, advice, events. Definitely check us out there as well. I'll put those links into the show. Notes. Tom, it's been a pleasure. It's always fun to talk with someone else who has been living the value world for a long time. Thank you, Lee. Thanks, Tom. Another deep dive into the topic of sales excellence and the performance mindset. If you found this conversation interesting, I would appreciate it if you would share the podcast with a co worker or two and to explore this topic in more depth. Send me a note via the contact form on podcast. Thoughts on selling.com or find some time for us to talk@meet.acceleragroup.com Thanks.