Greek Lesson 9 Aug, 2021

How to Attract Customers: A Greek Lesson of Don’ts

Anyone following the news is hearing a lot about the Greek debt crisis. The point at which the country has arrived is a surreal situation. With the population retiring before the age of 50 and receiving a generous pension, above EU standards, low productivity, and an extremely swollen state (there are reports of public institutions that had more than 50 gardeners to take care of a 5 m² garden), the Greek public debt reached an exorbitant 180% of national GDP.

This figure is unsustainable for any economy that wants to remain healthy, after all, a heavily indebted country needs to constantly resort to global capital markets to borrow and make its economy “turn around”. As the 2008 crisis made access to new loans very difficult, in theory, Greece went bankrupt.

In urgent need of money to fulfill her obligations, she had to resort to bodies such as the IMF, European Central Bank and European Commission. All three of these institutions are famous for demanding structural changes from countries that lend money as a tradeoff. This logic even makes a lot of sense, considering that the loan risk is very high.

Following this path, they lent a considerable amount of capital, demanding changes such as a reduction in public spending, an increase in taxes, among other measures aimed at improving the conditions for doing business in the country and reducing the scope of the State’s activities.

Some of these measures were in fact implemented, but even so, the Greek government was unable to stimulate its entrepreneurial environment, which, together with the reduction in public spending, led to a retraction of the country’s GDP in the period by more than 25%.

However, like Brazil, the Greek culturally believes in miraculous political solutions and elected to govern the country the Syriza party, a radical left front whose banner is anti-austerity. As an initial measure, they decided to renegotiate the conditions they had already signed with the Troika (European Commission, IMF and European Central Bank). But what does this have to do with how to attract customers and Outbound Marketing?

How not to attract customers

How to attract customers: Step by step Greece taught us what not to do

Legal security is vital when it comes to attracting investment and great partners. Nobody will want to invest in a country that does not fulfill its contracts or decides to change them at the last minute. That was the Greek case.

Greek Prime Minister Alexis Tsipras, once elected, decided that the conditions imposed by creditors were predatory and therefore would not be met, as they were harming his people. He immediately took populist measures, such as rehiring civil servants who had been laid off and subsidizing the electricity of the low-income population.

But every party needs to be sponsored by someone. With the money from the Greek coffers running out, he began negotiating new loans with the Troika. It was at this point that he started making a series of mistakes, which showed us that in addition to not having a knack for doing business, he failed in basic lessons on how to attract customers.

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Lesson 1: Be blunt from the start

To build a relationship of trust, it is vital that all sides involved in the conversation align with expectations. It’s not cool for a lead to have last-minute surprises in a sale. And it was that kind of surprise that the Greek Minister of Finance always provided for the Troika. Whenever the sides seemed to be reaching an agreement, Greece took a step back and demanded more flexible counter-games.

The generation of rapport between the parties practically did not exist, as there was no confidence that the Greeks would accept the conditions imposed, even the most favorable ones, as in addition to the economic factor, Syriza wanted to give an answer to its electorate. They would no longer accept austerity in exchange for loans.

The German finance minister even said that his Greek counterpart, Yanis Varoufakis, acted in meetings as if he were in a poker game. The only problem is that Greece was heavily dependent on that money.

how not to attract customers

Imagine you negotiate sales terms with your lead and whenever he accepts them, you change your mind and put more favorable factors on your side in the negotiation. The relationship will no longer be won and unlike poker, trust will be broken and without a doubt, the possibility of closing a deal will be reduced to zero. Bluffing is something that should be avoided as much as possible in sales.

But since we are talking about nations and a monetary union, the patience of the parties is a little greater than that which exists in the scenario of complex sales. Even so, surprising everyone involved, Greece made the worst possible decision for the progress of negotiations.

Lesson 2: Never, ever, close a deal and go back to 48 in the second half

After endless meetings, it finally seemed that all sides had reached a consensus. With Greece accepting some austerity conditions, which would even be light for the standard that the Troika usually imposes on its creditors, the deal would be closed. She was accepting these conditions out of fear that the Greek government would take the irrational attitude of abandoning the Euro, the single European currency.

However, in a moment of folly, Alexis Tsipras says he will not accept the agreement and throws the entire burden of responsibility for making the decision on the Greek people. He called a referendum where the population could or could not opt ​​for the measures. This, in a representative democracy, even sounds absurd.

Clearly, the Greek people had all the incentives in the world to vote “No” and they did. At that moment the Greek government felt victorious. He managed to meet the population’s wishes and even came back “strengthened” for negotiations. But as said Milton Friedman, a famous American economist, there is no free lunch. Despite the political victory, the government still depended heavily on creditors’ money.

Now imagine a similar situation, only between two companies. You close a deal. Word out all the conditions with your prospect and make sure that the agreement you make will be fulfilled. However, at the time of signing, you arrive and say that due to internal problems, it will not be possible to close the deal because within your company, many people did not find that agreement favorable. As much as the agreement actually isn’t the best, the trust relationship between the parties was broken. Hence the importance of aligning expectations and not going back when an agreement is reached. Hardly the person you negotiated with will want to come back to make some kind of agreement with you. but in the case of countries, there are many other conditions involved.

On the side of creditors in particular, we have the German government, which is famous for being austere at home and always charging for the fulfillment of contracts. That’s what Tsipras didn’t count on. He really has no feeling when it comes to attracting customers (in this case, creditors).

Lesson 3: When you depend on closing a deal and break lessons 1 and 2, the tendency is for the new conditions to be ALWAYS worse

As soon as negotiations resumed, Tsipras arrived confident that he would get better terms, but that is not what he found. With the payment of a portion of the debt to the IMF overdue and desperate for money, instead of coming back stronger, what happened is that he was at the mercy of creditors. And that was when the “massacre” began.

The first thing the German government said was: the proposal that was on the table won when the referendum was called. Since there was no trust between the parties, the Germans attached even harsher conditions to the agreement. And the Greeks depended a lot on closing a quick deal to avoid a widespread bankruptcy in their country, which was already without foreign exchange and therefore had to limit even the value of bank withdrawals.

There are several reports that during the negotiations, German Chancellor Angela Merkel wanted to leave the meeting and even suggested that Greece abandon the Euro. The situation escalated to the point that one of the counter-starts for the evolution of the negotiations was the departure of Yanis Varoufakis, which in fact happened.

After losing even his Finance Minister, Tsipras was practically, through circumstances, forced to sign a MUCH more brutal deal in the eyes of the Greek people. Giving up even part of the country’s sovereignty, since some of the country’s ports and airports would be transferred to the creditors’ hands as a guarantee of compliance with the agreement.

how to attract customers

In complex sales, what would it be like?

In sales, what would happen in this case, if the lead were really willing to do business, would be the closing of a deal with minimal or even negative margin. As the company would need to sell to survive and now all the strength of the negotiation would be on the lead’s side, the relationship would not be win-win as it was in the first moment. Yes, oddly enough, the relationship is still a win-win, since the company depends on this money to survive.

But did you realize how it was possible to have come to a better deal from the start?!

How to get the whole thing wrong step by step on how to attract customers helped the Greek people

Unlike the popular imagination, where the Troika is made up of villains who just want to see the Greek people wither away, the reforms imposed on the Greek government have ended up benefiting the population a lot.

One of Greece’s biggest problems, including the reason for its downfall, was a bloated state that smothered entrepreneurship. In capitalism of compadres, those who were not friends of the state were unable to prosper and generate jobs, therefore, the most inefficient and best-connected always tended to stay in power.

With the forced decline of the state and a more flexible labor market, the trend is for Greece to become a better place to do business. With the right conditions, in the long term, it will be possible to see how the Greek economy will relocate without having the state as the main driver of growth, and from the German and New Zealand experiences, the tendency is for the results to be better than the current ones.

But you who work in the complex sales market remember, NEVER trade with your prospects the way Syriza traded with the Troika. Rather than walk away with a good deal from the negotiating table, you will walk away with a scratched reputation and in the best-case scenario, a minimal closing margin, which in other words means a lower commission.

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