EPISODE 267: Value Creation Expert Jose Palomino Says This One Activity Will Help Sales Professionals Advance With Challenged Customers Right Now


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[EDITOR’S NOTE: This is a replay of the OPTIMAL SALES MINDSET Webinar hosted by Fred Diamond, Host of the Sales Game Changers Podcast, on July 16, 2020. It featured value proposition expert and best-selling author Jose Palomino,]

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EPISODE 267: Value Creation Expert Jose Palomino Says This One Activity Will Help Sales Professionals Advance With Challenged Customers Right Now

JOSE’S TIP TO SALES LEADERS: “Value creation is answering the question how do you help your customers navigate difficult times better?  I would give people three words to think about and that’s fears, frustrations and hopes. “What is my customer afraid of? What are they frustrated by?” What are they complaining about and what are they hopeful for? What are they looking towards in the future? Sit down and ask yourself this very simple question, “What resources can I enlist in my organization to address those fears, frustrations and hopes in any way?” It may have nothing to do with what I’m selling; it really is about becoming that partner.”

Fred Diamond: I’m excited today on the Optimal Sales Mindset, we’re talking to Jose Palomino and the topic is value creation. Value is a word that comes up all the time at the Institute for Excellence in sales. We had Jose speak at the Institute for Excellence in Sales a number of years ago, his book at the time was called Value Prop so he is my value proposition go-to guy. Jose, I know you’ve published another book since then which we may touch on but one of the big topics has been, “Are you providing value for your customers?”

Jose Palomino: Absolutely, Fred, thanks for digging into this topic, I think it’s a really powerful and important topic especially for anyone in sales. Historically a lot of the discussion around value creation especially if you go back to Michael Porter, Value Capture, Value Creation, the classic thinking about strategy, it tends to be things that people look at from a business macro point of view. But I always like to relate to, “What if you’re not the person who can shape the business?” Like you’re not actually the CEO and let’s say you work for a large corporation. You’re giving what you can take forward into the marketplace, yet I found those people who developed successful sales careers especially in those very rigorously run organizations find ways to add value in their interactions.

They learn their own organization, because a lot of times the value creation is being able to pull the right people into the right meetings at the right time. You learn your organization and we’re going to dig into this a lot more deeply, but it’s really predicated on how well you understand your customer. Not your customer in terms of an archetype or a persona like the general purpose customer person but actually know your customers, who you’re talking to and what’s going on with them. What’s interesting is a lot of change happening in everyone’s customer base obviously, Coronavirus, recession and crisis. It’s easy, ironically, in that context to think you know what’s going on with them, obviously it must be this, that or the other thing. Yet I’ve talked to clients that I’ve served over the years and my practice is focused primarily around owner-led businesses in the B to B space and I’ve had someone tell me it’s the best first two quarters they’ve ever had because orders are being pulled in early rather than late because people are afraid of losing budget so maybe Q3 and Q4 won’t be so great. My point is don’t make any assumptions, if you’re going to look at value creation, how you add value to what you’re offering, it’s not just the pen or the product that you’re selling. It’s the service dimensions, it’s what else you make sure they know, “You can get the ink cartridges in the same bundle.”

That’s a simplistic view but it’s overlooked because we fall in love with our stuff and we like to talk about our stuff and the real key is listen really well, pay attention to what’s going on in your customers’ lives and then think about, “How do I help make their life any easier?” If I were to summarize it in one thought, value creation is how do you help your customers navigate difficult times better? You’re creating value for them. There’s a lot of other sub-definitions there but I like to start with that.

Fred Diamond: We’re doing a webcast every single day and one of the things we’ve discovered is maybe you aren’t transacting as a sales professional the way you expected to because everybody’s been dealing with the pandemic. Like we’d say, if you’re a parent, all of a sudden you’re a homeschool teacher. If you’re a parent right now, you’re a camp counselor if you have kids who are school age. Everybody for the most part has been going through this but the sales professionals who are truly professionals have had to figure out, “If I’m not transacting the way I expected to because people are focused on other things, reevaluating their businesses, I still need to be a sales professional.” The same way that great golfers are out there working on their putting and their driving in the middle of the pandemic and athletes are still running 10 miles a day and working on jump shots or whatever they might be doing. In the context of the salesperson’s life and mission, talk about how value creation fits in. If you’re truly a sales professional, how does the value creation fit into their life and their mission?

Jose Palomino: I would give people three words to think about and that’s fears, frustrations and hopes. There have been similar kinds of constructs but those work for me, it’s basically, “What is my customer afraid of? What are they frustrated by?” It doesn’t mean just in relation to my offering but what are they frustrated by, what are they complaining about and what are they hopeful for? What are they looking towards in the future? If you’re the prototypical carrying a bag for a company, you’re selling for IBM, Xerox, SAP, any one of those companies, your customer right now is dealing with hair-on-fire moments that they weren’t dealing with before, everybody is. That’s the new normal, over said, everyone has to pivot and all that but I think it’s simpler than that, it’s human. What are they afraid of? What are they frustrated by and what are they hoping will turn out well? Then asking myself this very simple question, “What resources can I enlist in my organization to address those fears, frustrations and hopes in any way?”

That may mean connecting somebody to somebody in a third organization that has nothing to do with what I’m selling, it’s breaking out of that whole transactional model, it really is about becoming that partner. I know everyone aspires to that or at least everyone pays lip service to it, let me say it that way, but few people do it. But the real masters of selling, people who are always hitting their numbers, they have customers that swear by them that absolutely love them, that are loyal to them and that loyalty is what keeps a deal from the five yard line before the Coronavirus, now the deal has slipped all the way back to the 50 yard line. How do you get it back to the five yard line? You’re going to need some personal relational capital on the part of your customer to want to pull you forward and the only way you get that in this environment is they see that you’re adding value to their world or else they just have too much going on. You just focus your lens on, “What are they afraid of? What’s frustrating them? Certainly if there’s anything my company is doing to frustrate them, how do I smash that out?” There’s a lot of examples on that but a simple one would be let’s say I’m selling to a manufacturer that had to go to two shifts for the purpose of the social separation so now they’re on two shifts but my delivery mechanism is only mornings. That means the second shift doesn’t get deliveries, that’s not so convenient.

What if I could help my company make that shift to actually help support my customers that now have gone to two shifts? This is a lot of companies now doing this because if you took an organization or a physical infrastructure that was built for 300 people fitting shoulder to shoulder, now you’ve got to skip every other shoulder but you have to hit your production numbers. Thinking about processes, not just product. That’s a big area where you can create a lot of value for your customers and they’ll notice it, they’ll appreciate it, it’ll be a game changer for them.

Fred Diamond: We have a question here from Michael and Michael’s in New Jersey, thank you so much. By the way, Jose is in a suburb of Philadelphia, I’m broadcasting today from Northern Virginia right outside of Washington D.C. He asks, “How does the need to develop empathy and other relational skills tie into where we are right now?” I’m glad we already got the question, Michael, thank you so much. Empathy has come up in almost every single webcast that we’ve done, there’s three key words we’ve heard throughout: empathy, mindset and creativity. Let’s talk about empathy for a little bit, we had a show about a month and a half ago and one of the callers said, “Can I stop being empathetic? I’ve been empathetic every day for the last 60 days” and our guest at the time said, “If you’re struggling with empathy, go take a break, take the weekend off because sales is all about empathy.” Talk about how empathy fits in.

Jose Palomino: I think the skills around developing an empathic connection with your customers, they should yield deeper insight into what’s going on in your customer’s world, that’s the whole point of it. It’s not just about showing up sympathetic which is, “Yes, things suck right now, it’s bad for everybody”, that’s just being sympathetic. Empathetic is where I actually want to know what exactly is going on in your world, how has it gotten tougher, what would make your life any better? Then the question is if I’m asking those questions and I’m building that connection with my customer, am I ready to act on it? If I’m not ready to act on it, at some point the next time I come around asking or trying to engage in that level of a conversation, candidly the person would say, “What was that all about? The last time I spilled my guts out to you before but it didn’t go anywhere.”

It doesn’t mean you can solve any problem, the chances are once a customer is telling you things – and they have to self-edit to things they think you have some influence in, they’re not going to talk to you necessarily about things that are not related, some personal notions and so on. But to a degree, it deals with their day to day life of getting their jobs done which is a big part for most of us, it’s the single biggest item on your calendar is your job. I think the development of empathic skills, if it doesn’t have a payoff with, “I’m going to do something about what you’re telling me and I’m listening better and I’m really caring about what you’re telling me”, I can’t just do that for show. That has to somewhere pay off in, “I hear you and we’re going to try and do something about that” or, “I hear you and I know somebody who might be able to help you with that.”

That also means for the sales professional you have to take on a role and you should have been doing this a long time ago, networker in chief. By networker in chief I don’t mean in the classic sense of, “I network so I can create lease for me.” That’s a selfish view of networking but, “I network so I know people so when needs come up I can say, “I know somebody who can help you with that” and that is incredibly valuable. You say, “That’s not transactional, that’s not going to turn into a P.O.” Not immediately but you get your phone calls answered and you’ll get responses and the person can be much more transparent with you when you’re just seen as this person that creates value whether it’s your product set or just by your connection in the marketplace. If you’ve been doing this for more than a year out of college you should start building your network so you can make those connections on behalf of your customers.

Fred Diamond: That’s a great point. Yesterday in our Sales Game Changers Live we were talking to Todd Albright from Datasite and Trevor Vale from Diligent, and that question came up. Todd’s great answer was, “Sales isn’t just about transactions, sales is a process and it’s not a straight line, you make so many calls, you get so many deals, you do this, do that, you become creative and think things through.” We have a follow-up question to something you mentioned before, Jose, this question comes from Miriam. Miriam is down in Dallas, thanks for checking in.

Jose Palomino: Hi, Miriam.

Fred Diamond: We appreciate you being on the Optimal Sales Mindset webcast. She says, “I’ve been asked to make a hundred phone calls a day, I don’t have time to create value. How can I create value when I’m not the boss?” You touched on that a little bit and you started to think about that so let’s get a little bit deeper. For the people who aren’t the boss and we do have some sales VPs here today, thanks to you all, but what are some things that I could be doing if I’m not the boss? You mentioned networking and providing some value to your customers, things that may not be related to the sale per se but let’s talk a little bit about some things if you’re not in charge, you’re a rank and file, what you could be doing to create more value for your customers.

Jose Palomino: That’s a great question and not to be weaselly about it, actual miles would depend on the culture you’re in. If you’re in a situation like Miriam seems to be where you have to bang out a hundred calls or else, chances are her boss is being beat down and saying, “Your ten people have to make a thousand calls a day” and somebody has figured out that in a difficult economy, reach out to as many people as possible. What Miriam has to do is maybe model with a couple of those hundred calls a deeper conversation. She’s going to have to probably keep her boss happy in the short-term by just making the calls, I can’t tell her, “Don’t make the calls” but I think if you start thinking about a subset of some of them where you actually say, “I’m going to go a little bit off-script, I’m going to actually ask them some questions about what’s going on in their world.” If I get some ideas from that, then I can come back to the boss and not say, “Boss, I decided not to make the hundred calls” because in any sales culture I’ve been exposed to, that doesn’t usually go over very well.

“While I was making this call something I discovered was…” and now you gained some leverage because now you’ve actually proven something. You’re going to have to play little mind game experiments, I think if you’re in that kind of call-call-call environment don’t give into it because you’re not a robot and frankly, people don’t respond to that. The whole reason why the high-end of the game is empathy, connecting strategically, all those things because that actually moves the dial much more over time. Again, unless you’re just selling like in MRO we sell toilet paper cheaper than the other guys and I’ve just got to make a hundred calls to see how many rolls are you in the market for [laughs] depending on what part of the country they may actually be in deep need for TP, but I think you really want to try it out and say, “What’s the one more question I can ask?” I love that theme, Fred and Miriam, as you’re listening too, it’s not about violating your training or what you’re expected to do. I’m not telling you that, I don’t want you in this environment in jeopardy for your job but think about what’s one more question I can ask. Just one, one good more question I can ask that isn’t on the script but that might make a difference in connecting with that person.

Your script may not even say, “How are you really doing today?” and you can’t just say it the way people do when they pass each other in a club or something, “How are you doing?” and you don’t really expect an answer. If you ask that now especially when we’re on the phone, we’re on Zoom, pause and actually say, “How are things going for you right now?” and if you come from a place in your heart where you actually want to know and you don’t know what you can do to help them but you certainly want them to know – that’s the other side of empathy, it’s not just listening but letting them know you’re listening – then that’s a connection that can change those hundred calls into something else.

Fred Diamond: Jose is the author of one of my favorite books on this topic, it’s called Value Prop and I also know that you’ve published another book since then. Why don’t you tell us a little bit about that? Then we have another question coming in from Rich.

Jose Palomino: It’s on Amazon, it’s called Strategic Propositions and it’s a collection of essays on the entrepreneurial life both how to think strategically all the way to some very tactical things on selling. It’s a companion book to Value Prop which is more of a methodological book, this is a little bit more taking a step back and making some observations on things. Food for thought, the kind of thing you go through a chapter at a time and put it down, pick it up again.

Fred Diamond: Congratulations to you for having two books published, I’m almost finished my book I’m reading right now, it’s a kid’s book – no, I’m just kidding. We have another question here from Rich and Rich is not too far from here, he’s actually in Montgomery County, Maryland. Rich’s question is, “If I get too creative, will that slow down the sales process?” That’s an interesting question, it goes back to I think it was Miriam’s question that, “I’ve been told to make a hundred phone calls there’s not a whole lot of room for creating more value because I’ve been told boom, boom, boom” although you gave her a great idea. But can you get too creative and offer too much value where you might slow down the sales process?

Jose Palomino: It’s like having too much ice cream which I think is up to debate whether that’s true or not [laughs] but you can have too much. Some things are meant to be indulgent but I think it’s a great question, it really comes back to the listening part of it. In other words, if somebody says, “Listen, I’ve researched things.” Let’s say you sell mouse pads by the thousand, you’re a mouse pad publishing company, you imprint it – I’m making that up just as an example. Somebody calls and says, “What’s your price for a thousand or 2,500 because I need it for an event?” This wouldn’t be happening this year. “In 2021 I need it for an event.” Answer the question, you don’t have to pause and say, “Hold on a second, before I can quote you a price that’s on the catalogue for a product we make in quantity I have to get into this whole deep examination and discussion.”

That would actually be confounding and frustrating for the person making the call, that is to say, the customer. You’d be frustrated by it, I’d be frustrated by it. I always think really listening is see where they are, if they are looking for a transaction now and that’s really what they’re looking for, give the information requested, then you can ask a question. “By the way, what is this for? Because I’m not getting a lot of demand for event-based giveaways. Where is this?” Now you find out more. You’re going to do that virtually and send it to him by mail, “We have this convenient mailer program that we can actually mail it out for you” creating value that would have never come out. But if I started out with, “Tell me all about your life story” and the person’s already asking very specifically for something from me, I always believe that if you have the information requested just give them the information. That earns you some space to ask your question.

Now, if you’re selling complex software then obviously there’s much more discovery involved on the front-end, people aren’t saying, “What’s the price for 12 suites of your ERP platform?” Not typically. I think the issue about being too creative is don’t unwind the sale, we still are salespeople, if the sale is to be had, close the deal that’s in front of you if it can be closed. But I do think if you’ve just gotten off the phone with somebody similar to that customer you say, “We created this whole solution package for them and this guy’s not even asking about it.” Say, “Look, I don’t know if this interests you, Fred, but we recently worked with a client very similar to your business and they asked the same question and we were able to create something for them that actually they were very pleased with. Can I tell you a little bit more about that?” And the permission to tell somebody something is a great way to have somebody lean in and say, “Sure.”

Can’t take an hour doing that, you have to bullet it for yourself but I think there is a place where you listen first, be as creative as necessary to expand the vision of the customer, how they see you. Fred, let me just add one quick point here especially for those of you on the call where you represent multiple different product lines. One of the pitfalls I’ve seen – and this is actually directly to the issue about value creation – is that we think our customers know us better than they do. They may have only ever bought the hamburger from us, we assume they know we sell the milkshake and fries so we never mention it but in fact, there’s tremendous value if I can say, “There’s a meal package that will include fries and a milkshake with that, would you like to do that?” I think that is a very powerful way to always remember that your customer doesn’t know you as well as you know you. There’s many opportunities to just remind them of some other possibilities, some other products and so on.

Fred Diamond: We’ve had over a hundred sales authors and speakers come to the Institute and there’s a couple of things that have risen to the top. One of the key things is that customers really don’t need you if you’re not bringing value, especially if you’re down in the lower stages. They can get information on the internet, even higher end stuff, sales professionals used to be walking brochures so you provided value because customer could get things. Now the elite sales professionals that we’ve found – and there’s really only room for elite sales professionals – are the ones who are truly bringing value. Jose, I have a question here, this actually comes from me. Let’s talk about the long-term upside or maybe the downside of being a value creator. Is there an expectation that it’s maybe too hard to sustain? That was a question that came up the other day on our Sales Game Changers Live is, “Can I have a certain amount of value to create and can that keep me going?” What are your thoughts on that? Do you need to constantly be creating value? Because it is hard but if you’re really thinking about your customer it shouldn’t be that hard.

Jose Palomino: It’s interesting because you refer to the ‘elite sales professional’, people who are really hitting bank year after year. Somehow it’s the same guys and gals doing really well and same guys and gals not doing as well often, we just see this. Anyone can have a bad year but usually the elite, one bad year and then the rest they get back into the game. I think the thought is this: the creativity starts with the listening, so that’s the first thing. It’s more of a mindset which is one reason we’re doing this interview today, it’s a mindset that says, “I’m always on the lookout for ways that I can improve my customer’s life with my product, some other product we make available or through my network, my contacts, my knowledge.”

Whatever it is, they’re at the disposal of my client so when I call on a client I’m not saying to them, “Here’s my cut sheet, this is what I want you to buy”, I’m saying, “What are your issues, what are your challenges? I happen to have certain part of that solution stack” but maybe the rest of the solution stack is somewhere else, it’s not always going to be in your company. That is not that hard to do once you become habituated to always think that way. You focus first on the customer problem challenge, really understand that and that’s the other thing especially for people who sell, in my experience, very technical products that takes them a long time to learn it. Exactly your point, I don’t need to present that anymore because chances are if I’m on the shortlist of two conversations they’ve already done all the research online, they’ve done the demo whatever that is, but not to get fixated on my proverbial cut sheet on the web or whatever.

If I could take a sales professional who really knew their product super well or somebody who knew their customer’s world super well, I would bet on the one who knew their customer’s world super well because they’ll always find somebody who can backfill the product knowledge. I believe in product knowledge, I’m just saying I’ve been in situations myself where I just started out and I was hitting numbers first month because I focused on the customer. If you understand the customer you’ll find the expertise you need, if all you know is your product you’re going to be very one-sided and people are going to feel you’re there to sell them as opposed to help them.

Fred Diamond: Let’s give people listening to the podcast or watching today’s webcast a couple specific ideas in the remaining time that we have here. We’re talking about the sales professional bringing value but sales is a team game, so who else would you recommend? Half the people who took the poll in the beginning said that their value prop had to be completely revised. Imagine if you were selling to hotels or still selling to hotels, a lot of them are slow to get back into the game so they’ve had to change their model if they could, you’ve had to change it.

Jose Palomino: It depends, products can be very different, physical products versus technology, software things like that. Depending on the size of your organization, if you’re still SMB category, 10, 20, 30 million dollars you can involve your CFO, your CEO, find out what’s possible. It’s always better instead of having a very theoretical conversation with those folks whose hair is on fire as well, even though they’re in your organization. Say, “I recently had a conversation with customer X and they asked for this or they said this is really frustrating them and before I make any commitments I just want to know if it’s possible for us to do deliveries twice a day instead of once a day. Is it possible for us to break down a pallet into small chunks? Because that would help them in their supply chain.”

Those are the kinds of questions that you can ask if you can listen to your customers, now you have the force of the customers that have spoken, it’s not you thinking it up in your own head but you do need to involve some of those folks. Now let’s say you’re in a larger organization where you’re not going to have access to your CEO, CFO or anything like that, you have your VP of Sales. Probably and all likely that you have support people, customer success people, other people that touch the customer. I would definitely, if it’s a key account, make sure you do a best practice of a round table with your key stakeholders internally who touch that customer if that’s your big customer.

At least if you could once a month, at least every other month, “What else is going on? What are you hearing in customer support?” Because it may be stuff that doesn’t even bubble up to you as an account executive. Then ask the simple question, “What can we do collectively, what do we think of that wouldn’t require us redoing our whole products? Something in the service dimension that you think our customer would appreciate and would actually help them through this time.” I think that’s a simple exercise and if I was a sales rep making real bank commission on let’s say a million dollar client, if we’re meeting in the same place I would buy pizza or give everyone a Starbucks card to be a part of a Zoom call to just have that conversation. Very open-ended, don’t be too rigid on it because you want people to come up with ideas and say, “When they call me for customer success, customer service they really always mention this is frustrating them.”

Okay, what can we do about it? It’s amazing how much a smart organization made of smart people can make small adaptations, the big whole sale changes like you’re actually going to revolutionize your product, you’re not going to do that out of sales. You may suggest it but it’s not like we can come up with Windows 11 if I’m selling from Microsoft because somebody told me they’d like Windows 11, it’s not going to happen that way. But there’s a lot of other things that go into the whole chain of events that’s from purchase order to delivery of whatever you sell, think through that chain. What else is there you can do?

Fred Diamond: Jose, I want to thank you so much. Before I ask you for your final thought we do have one question here that came in from the audience. The question comes from Minnie, thank you so much, Minnie is in Massachusetts. She says, “I loved his ideas about bringing in customers where we just talked about. Does he have any other ideas to help jolt some of this creativity, value creation ideas?” Give us one or two other ways that the sales professionals or sales leaders watching today can come up with some ideas. Then I’m going to ask you for your final action item, something that people can literally do now, again it’s July 16th, something they should do today. Again, if they’re listening to the podcast way into the future they can do, but give us one or two other ideas that show value creation just going, and then give us your final action step. I want to thank you again for these great ideas and I want to thank the people who’ve watched today’s webcast. The question is, “A couple other ideas on how they can create value” and then give us your final action step.

Jose Palomino: I’ll do them back to back if that’s okay because they’re related. The first thing, this is painful and it’s something we don’t like to do very often but think about deals that either have stalled or died, where you’ve lost a deal you thought you had. Maybe related to the pandemic or not, it could be normal business action. Whatever it is, ask yourself if you’re interacting with a team that also touches those same customers, why did we lose it? What was the issue? That’s a great why exercise, it’ll take 10 minutes and it could range from anything from, “Our pricing was off”, “Our delivery schedule didn’t work”, “We were missing a key feature.”

Whatever it is, you look at that and then you ask yourself the question, “Which of these things that were reasons in the last 6 months we’ve lost any kind of significant business can I affect?” Can’t affect it all, if it’s a core software feature that has to come from your development team and they already know about it or whatever then you’re not going to start coding it and add it to your software platform. But there could be a lot of these small things that taken individually look like no big deal but a few of them lean back into that whole issue of, “I’m a listener, I heard you, Fred, and now we’re going to do this.” That’s one thing you can do very easily, those are reasons you lost business, nobody likes to do it and usually because the way it’s often done in sales it’s a beat-down session, nobody enjoys that. I’m not looking at it from that point of view, I’m actually looking that within those losses are seeds of ideas that you can apply.

The next thing I think comes from direct conversation with customers who maybe are buying from you and this would be the action I would challenge everyone here to do with a yellow pad. Take a moment, maybe 15 minutes with a cup of coffee and just say, “If I had to pin down” – and Fred alluded to it like in the hotel business – “What’s frustrating them now…” Five, six frustrations for your key accounts that you think they might be frustrated about that either they told you or you surmised because of who they are in the business. Even when you surmise like, “Restaurant business is kind of tough” or, “Catering business is kind of tough”, I actually worked with a local caterer that runs four locations and he said, “Actually, we haven’t had to make any refunds because everybody wants to keep their wedding day, it’s just going to be a year from now.”

Okay, so it is lost revenue but they were surviving it and it made sense for them. So I would say even if you know what the problem is and you should, if you’re elite you should have a clue, you can ask them, “How is the fact that you can’t have events at your hotels for the next year, what steps are you taking to deal with that?” They’ll tell you their creative ideas and maybe there’s something you can say, “We can help you with that.” That’s the most amazing statement in sales, “We can help you with that” because they told you something that you can actually do something about, that connects the dots for them.

Fred Diamond: Jose, I want to thank you so much for these great insights. We talked about value, before the pandemic we would always talk about, “The key challenge is to create value” because salespeople watching today’s webcast and listening on the podcast, customers don’t need you anymore if you aren’t providing value for them.

Transcribed by Mariana Badillo

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