Q & A From Our September 2011 Webinar
Last week's home improvement webinar entitled "Open Your Mind to Close More Sales" generated an excellent response from our customers as well as industry leaders.
Once again we would like to thank all of the attendees as well as all of our sponsors of the program.
The 90 minute webinar was filled with tons of Q&A; yet despite that we were not able to answer all of the questions that were posed.
As has been our habit in the past, we are now posting a sampling of questions that were asked prior to and during the webinar.
Q: In today’s market, people seem to be more price conscious and our area is loaded with “price cutters”. How do we justify our price for a quality product?
A: You can’t justify your price — stop trying. With the right presentation, you establish “value”. You have to demonstrate and have your customer agree that the product you sell is high quality, long-lasting, installed by experts and meets their needs better than other products in your market. In our series "The Science of Successful In-Home Selling" we explain a method entitled The Total Offer Concept™ which goes into great detail on this topic.
Q: We are often met at the door (sometimes over the phone) with the statement — “We just want a price, not a long visit.”
A: Respond quickly by saying — “No problem. Let’s take a look at your project and determine your needs.” During the review of the project, ask questions, write down the responses and sell yourself. Present yourself as a professional. It is your job to uncover needs. Then present your product to meet those needs. Explain the options, the various protections they need, such as a written proposal, a reliable guarantee, a product installed by specialists. Most prospects will listen if you are talking about them — their needs — their problems — and how you can help solve them and why this home improvement project isn’t an expense — it is an investment. You will extend your time with those prospects.
Q: Can I use a one-call close without high pressure?
A: It all depends on what you consider high pressure. Explaining in detail what your product and service represents — isn’t — establishing the value of the product/service you are providing — isn’t —and — asking for the order, if done properly — isn’t. Our closing system is utilized by the most successful companies in your business. I recommend that you listen to the free recording "The 7 Myths of In-Home Selling" — where this question is answered in detail.
Q: What is a decent closing rate?
A: Some companies still measure their close rate against presentations, which fails to account for the number of leads issued and this is a mistake. So we measure closing efficiency against leads issued. Yes, there will be some no-shows or some 1-leggers that you do not wish to present to, but if these are not exorbitant in number, it’s all part of the process. So if you’re still measuring by the old fashioned rate – closes vs. presentations – 1 out of 3 or 4 is decent provided there is a 70% sit rate on leads issued. Small ticket items ($4,000 or less) should close at 50-70% with a 70% sit rate. Caution – don’t be too quick to blame the low sit rate on your marketing department. Frequently it is the inept processing when the salesperson is at the door of the prospect.
Q: So what’s the difference if you’re measuring against leads issued?
A: First of all, our latest industry survey shows that the average cost of a lead issued is $285. If a salesperson receives 7 leads per week, that equals $1995 – close to $8,000 a month and that’s $96,000 a year. You will want to measure the efficiency rate of anything in which you have invested $100,000, I’m sure. Depending on the lead source, conventional leads (radio, television, print, direct mail) should look for a 70% “sit rate”. That’s a presentation being made to all interested parties where you have sufficient time to do a needs assessment (walk around), company and product presentation, present the price and attempt to close. If you sell 1 out of 3 of these presentations, that’s a 23% close rate against “sits” and roughly 33% against leads issued. These would be effective goals.
Q: How do statistics differ with canvass leads?
A: A whole different ball game. Our surveys indicate that canvass leads as well as those produced from other face-to-face sources, such as shows, malls and even S.F.I., don’t do nearly as well (greatly due to the attitude pervasive in salespeople who don’t like canvass leads ) – partially due to mismanagement by marketing (poor scripts and poor lead issuance management).
Our surveys indicate that 90% of all canvass programs are failures (too costly – poor sales vs. leads issued). The person-to-person leads, when processed, have reached a 40% issue rate or less. Remember, if you took in 100 leads that means you issued 40. Then the sit rate as defined in the previous question is usually 50% against leads issued. That means you’re now down to 20 leads from the 100 acquired. The gross close rate averages 3 to 4 sales. When you eliminate credit rejects and rescissions, you’re down to about 2 sales. So fully loaded costs are usually more than 20% of the total revenue produced.
However, don’t sell the concept short. Canvassing works if it’s structured properly, then managed properly including personnel selection and rigid script enforcement from the lead intake by the canvasser through the appointment setter or confirmer - - and, of course, add the “attitude factor” of the salesperson.
Q: What are your suggestions in terms of scripting for canvassers?
A: 2 factors need to be considered - -
- You’ve got to have the right script
- You have to rigidly enforce its use.
A well-scripted canvasser is not a canvasser. Modern canvassing requires the selection of the proper personnel. Those selected should be profiled and have a behavior which is adaptable to a selling function. The good canvasser is an extension of your sales department and will frequently grow into becoming a closer.
In addition, all scripting is subject to the discipline of the canvasser and management. Scripts are what they imply, i.e. what to say and how to respond to questions. With some success the canvasser starts to embellish these with war stories, personal philosophies and small talk that reduce effectiveness. Successful canvassing programs have somewhere in excess of 50 components if done correctly.
Q: What are the statistics on rescission?
A: Here’s a rule of thumb - - if you’re getting no rescission at all, you’re probably selling “call back” business or you’re not attempting to close at all. On the other hand, if you’re getting too much rescission be aware that “rescission is a malfunction of the selling process” – so you’re doing something wrong.
Here are some statistics, if the size of your contract is $4-5,000 or less, your rescission should not exceed 5%. If your average contract is $8-12,000, rescission should not exceed 10%. If your contract exceeds $25-30,000, your rescission rate might be between 20-30%. Remember, I said that rescission is a malfunction in the selling process. In a well structured organization, 25-30% of the rescissions can be recovered and are then reinstated as valid contracts.
Should you have any follow up questions regarding this blog posting, or if your question was not addressed please comment or e-mail us at email@example.com.