Why would you invest your time with people who can’t afford your products and services?
You probably answered, “I wouldn’t,” but your salespeople probably do.
A sales trainer made a presentation to a group of HVAC contractors. He strongly suggested that how much customers are willing to spend be discussed near the beginning of the conversation. Several of the contractors were offended by this. His answer was straightforward:
“How many times do sales staff make a presentation and find out at the end that the prospective customer can’t afford the equipment, or lost a sale because the prospect can’t get financing?”
If salespeople are uncomfortable about bringing up money at the beginning of the conversation, tell them to do it anyway. They won’t waste time and get frustrated.
But what if salespeople don’t bring up money early in the conversation? At the end of the presentation, when asking a question designed to close the sale, a prospect’s common answer is “I have to think about it.”
Many don’t want to admit they don’t have the money. And the salespeople never get the sale. Or customers go through the financing application process knowing they can’t get approved. When prospects are turned down, they’re embarrassed and salespeople leave the job frustrated.
Some companies have prequalification capabilities. Similar to the real estate industry, customers can prequalify for financing. The customers go online, answer a few questions and within minutes know how much money they’re approved for.
When salespeople visit customers’ homes, customers already know how much they can buy. Much easier and much less heartache for everyone.
Salespeople don’t even have to ask whether customers are interested in financing. The person who sets up appointments does all the work. He or she could say:
“Mrs. Jones, many of our customers explore financing options. Many times your decrease in your utility bill covers the monthly payment. If you’re interested in this option, similar to the real estate industry, you can prequalify for a loan. Just give me your email address, and I’ll send you a link to the website.”
Customers usually answer with either “No thank you. I’ll pay cash,” or ask “How much will this cost?”
If they ask the cost question, the answer should be: “Mrs. Jones, that’s a really great question. The answer depends on what you want. It’s like asking ‘How much will it cost to build a home?’ and not giving me the blueprints, so I know what you want. A salesperson will be at your home soon, so you can go through all of your options and know what your monthly payments will be.”
It’s important to bring up money near the beginning of the conversation. Prequalify if you can. You have less chance of wasting your time and the customer being frustrated.
Did you really win?
On a similar subject: Do your salespeople brag about winning jobs?
Recently I had a conversation with the owner of a supply house who routinely sees contractors coming into the store and bragging they beat company X by so many dollars. These contractors were thrilled that they were the low-bid winner.
This drives me nuts. Instead of bragging, they should be ashamed that they left dollars on the table. Their price could have been higher, and they would have still won the bid.
I’ve seen contractors bid $1,000 less than others and win the bids. These contractors could have increased their prices by $990 and still won the job.
I’ve also seen contractors who present great solutions to a customer, cost $1,000 more than others and still win the job.
If you don’t know your costs, you don’t know how low you can go. I would bet — and I’m not a betting person — that this bragging contractor had no idea how much his costs really were. And we wonder why so many companies go out of business.
You never know what customers want, especially if you give them only one choice.
Copyright Ruth King. All rights reserved. Write to Ruth King at Profitability Revolution LLC, 1650 Oakbrook Drive, Suite 405, Norcross, GA 30093; email firstname.lastname@example.org; call (770) 729-8000.