A Lesson in Cultivating Receptivity from Shark Tank

Since 2009, entrepreneurs have pitched their ideas and dreams to a panel of ‘sharks’ on the hit reality show Shark Tank. The sharks – titans of industry who have made their own dreams a reality and turned their ideas into lucrative empires, listen to pitches and decide whether or not to invest their money in other potential profit-making ventures.

This selling engagement occurs daily across the sales world – salespeople trying to find the perfect candidate for their product or service, and consumers and organizations searching for solutions to give them a competitive advantage in the marketplace. Shark Tank has provided a platform to peer in on effective and ineffective selling strategies, and gain important sales training lessons and tools for daily use.

One particular episode always sticks out in my mind as a perfect example of the use of receptivity in a selling situation to arrive at a desirable outcome. 

Kevin O’Leary and guest shark, John Paul DeJoria, both see the potential for an unknown, patented product, so they begin to woo the entrepreneur. (John Paul DeJoria is the billionaire co-founder of Paul Mitchell hair products, Patrón Spirits, and House of Blues.) 

Let’s walk through the interaction:

 

Johnny Shares His Story

Johnny, the entrepreneur, saunters in to present to the sharks as if he rode in on a horse: dressed in jeans, t-shirt, a rodeo style belt buckle, and a working man’s hat. You can tell he doesn’t hang with boardroom types.

He has been in the irrigation business for 29 years, a business his father started, providing the equipment farmers need to water their crops. Johnny explains that water is not as plentiful as it was in the 80s, and farmers’ costs are skyrocketing. His passion for farmers is obvious, but his resources are limited and the need is great.

 

Johnny Shares His Need

Johnny asks for $150,000 to expand his production of the Tree-Teepee. It’s a small dome that wraps around the base of an orchard tree, reducing the amount required to water a tree from 25,000 gallons/yr. to just 850. He has a patent and has sold about 127,000 to his existing customer base in a few counties in Florida. He’s making it for $2.95 and selling it for $4.50.

 

Kevin Shares His Disbelief

Kevin O’Leary, aka Mr. Wonderful.

Kevin O’Leary, aka Mr. Wonderful, jumps in. 

“Why only $5? Why not charge $10 or $15?”

“Because I’m working with farmers. They’re not buying one, they’re buying five thousand.” Johnny explains.

“Why not $7?” the shark continues.

“I’ve never done that. I’ve always tried to be right. If I sell 7,000, I make $7,000.”

In other words, Johnny doesn’t care about the money. He wants to help the people he cares about.

Mr. Wonderful is salivating, but needs to convince Johnny to change his business approach.

 

Kevin Tries Again

How would you convince Johnny that, at a minimum, he needs to double his price? Where would you start?

A bit frustrated by the entrepreneur’s responses, Mr. Wonderful gives it another shot.

“If I’m a big distributor of water irrigation systems and I see this product and you make it for $2.95 and sell it for $4.50, I can’t get involved with you because there’s not enough margin for me as a distributor. I need to be able to sell it for $12, at least, so I can make some profit and you can make some profit. There’s two mouths to feed.”

“Yeah, but you’re selling to faaaarmers.”

Johnny draws out the word ‘farmers’ as if to say, “Don’t you get it? These people are not wealthy. They need our help. Why should I care about the rich distributor?”

 

Kevin Tries a Third Time

The shark takes yet another approach at getting Johnny to see his point of view.

“I’m just exploring where your head’s at. That means there’s no room for a distributor who can pay more Johnnies to get out there and scale this out. Because you said all farmers need this, right? I need 2,000 Johnnies all across the land. Who’s going to pay them?”

You can sense the tension as Johnny digs in. Johnny is struggling to understand Kevin’s point of view. Because Kevin started with the distribution challenge (his point of view), Johnny resisted. All he heard was a business guy trying to make money with no compassion for the farmers and their problem. 

Johnny’s perspective? Find a way to help. Raising the price seems unconscionable.

 

Another Shark Bites

The second shark, John Paul DeJoria, chimes in.

John Paul DeJoria. You thought his name was Paul Mitchell, didn’t you?

“Johnny, farmers are the cornerstone of America. (He aligns with what Johnny cares about). There may be a lot of farmers out there that can’t afford $12 per tree (agrees with Johnny), but maybe they could afford $6 or $7. I’m going to give you everything you’re asking for: $150,000 for 20%. What you are doing is right. (We have the same objective). You deserve the chance to make it big and do a lot of good (versus making money). I would like to be your partner, Johnny. I like everything you stand for. God bless America.”

(No wonder why this guy sold a billion bottles of shampoo!)

Johnny beams. He embraces his new partner, a billionaire who shares his passion for farmers.

 

Did you catch DeJoria’s approach?

He understood the economics of getting distributors involved, but he focused on a completely different point of view: Johnny’s. Once that alignment occurred, he had an opportunity to influence Johnny on the best strategy to get the product in the hands of every farmer in America. If the price needs to rise above $7, he has established a platform to have that conversation.

The key was to start with Johnny’s goal to help the farmer, not the distributor.

The segment ended with a moving tribute to Johnny’s dad, which is a testament to Johnny’s character and why he is so passionate about working hard and serving farmers, and why the second Shark’s approach resonated with Johnny.

As Johnny turns to walk off the stage, Mr. Wonderful says,

“Johnny, tell your Dad he’s a great man.”

Johnny turns,

“He died 12 years ago. He made me … (chokes up). We work hard every day (fighting back the tears). I worked for that man for 20 years. Every day, I thank God that I got to work with that man. He was an innovator. He taught me everything I know. He was hard on us but nobody owes you nothing. Life is what you make it. He taught me that. And he was a great man. He came from nothing.”

 

Summing It Up

DeJoria’s approach was effective because he took what we at ASLAN Training call an Other-Centered® approach – he looked at it from the entrepreneur’s point of view, he was focused on something other than himself. He understood that when there are different points of views, someone has to struggle. Either the listener has to burn brain cells to understand a foreign point of view or the presenter/influencer has to comprehend and articulate the listener’s point of view. The “struggle” is unavoidable.

Mr. Wonderful’s approach required the entrepreneur to struggle, to change his worldview. O’Leary was open and receptive to the product pitch, but he was not aligned with Johnny’s compassion for farmers. DeJoria tuned in and understood Johnny’s point of view.

 

As salespeople, this is how and where all our presentations should begin: Articulating the other person’s point of view. Being receptive. Since we default to self, it is difficult to think like our audience, but if we do the work, our message always resonates and creates an opportunity to lead them to a new way of thinking. This will never happen unless we start by communicating that we understand the most important person in the room – the other guy.

 

What Next?

If you found this blog helpful and want to go deeper into the concepts we covered, check out our new book, UnReceptive, at unreceptivebook.com.

As Co-founder and CEO, Tom’s primary role is to create content that helps people live, sell, and serve more effectively. Find him on LinkedIn

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The best way to get to know us is to know what we value. If we teach it we live it, because what we do speaks far more eloquently than what we say. We’ll always choose people over profits, and we’re most fulfilled and effective when we serve. It drives our culture, frames our training programs and transforms the lives of the clients we partner with.