Category: Systemizing

Why should you have a system for selling in your business?

Well, have you ever had this situation?...

You arrive at a prospects home to give them a quotation for cleaning carpets or upholstery. As you pull up outside the home you know instantly that they will not be using your service.

The front garden is overgrown. The house needs painting. And there’s an old car in the drive in a state of disrepair. You ask yourself “What on earth am I doing here?”

It’s a situation I have had many times until I put in place a system for selling to prospects. Including most importantly, disqualifying those I don’t want. I only want to deal with high-probability prospects. That is, those who have a very good chance of using us.

Nowadays all our interactions with prospects and clients are written down in our Operations Manual and we are always in control, even if it appears that we aren’t.

So when a prospect phones us to ask “How much do you charge?” we have a scripted reply. We don’t just wing it. Even the way, that is, the manner of how we answer is documented. It’s a system and it works.

Selling is a process that begins with making sure we’re dealing with the right person. The attitude we want to have is not one of hard selling...trying to beat the prospect into submitting to our proposal. After all no-one likes being ‘sold’ to, but everyone does like to buy.

Our view should be "How can I help this person get what he wants through the use of my service?" That means that first we must be speaking to a qualified prospect.

But what exactly is a qualified prospect?

They are someone who:

1. Must be able to buy
2. Must be able to enjoy a benefit
3. Must be the decision maker

So if you’re a high-priced, high-quality service, you don’t want to be wasting time going out and giving in-home quotes to tenants wanting their deposit back for instance. Or those who clearly can’t afford you. You will probably close one out of every hundred. Asking them if they could borrow the money off their brother so they can pay you is a lot harder work than simply finding the right person to start with. It’s simply not a good use of your time.

There are four steps to a selling system:

Step 1: Build trust and rapport.

Step 2: Find the need.  Probe to isolate needs, opportunities and wants. Isolate the dominant buying motive.

Step 3: Fill the need.  Present products and services that fill the dominant buying motive.

Step 4: Close.  i.e. Motivate them to take action.

Each of these steps needs to be carefully thought out and written down. Many small business owners have no earthly idea what they are going to say next to a prospect. Step 2 involves asking a lot of questions to find out what the prospect wants rather than us telling them what they should have or talking about ourselves and how great our company is. It’s also helpful to have a systemised way of dealing with ‘common objections’.

So how do you answer that question when a prospect phones to ask...”Can you give me a price for cleaning our carpets?”

Our answer is always “No.” Well not quite like that. Here’s what we do and it’s written down on a scripted form. Our target market is high-end residential who can pay our prices for high quality work. We are not interested in price shoppers or tenants wanting their deposit back...so we have a script so that we don’t waste our valuable time with them.

Our system is very simple: we first try to disqualify them!

In other words, we ask them questions to make them jump through a few hoops to prove that ‘we’re made for each other’. And we tell them why we are asking these questions. We don’t want to waste each others time. Every week we turn away many phone enquirers because we tell them that “we are not the company for them.” After all, there’s no point in walking into a BMW dealer with £5000 to buy a brand new 3-series. We will just be wasting each others time.

In fact, a failure to target a market (high end residential, budget or whatever) and qualify them, is one of the biggest time wasters that most carpet cleaners make and the reason why many are exhausted and frustrated by the end of the week. Our systemised scripts mean it’s not a problem for us.

I’ve found that one of the first questions carpet cleaners ask other carpet cleaners is “How much do you charge per square foot or per square metre?” along with “What are you turning over at the moment?” as though this is a measure of success.

I come across cleaners who are turning over £50,000, £100,000 and above. Maybe even £200,000. But does that mean that they are successful? The answer has to do with how much are they taking home? And how much do they have to do to get it?

It’s amazing how many small business owners are simply unaware of the cost of running their business. It reminds me of the old sales story that’s done the rounds for many years and goes something like this: A lady buys apples at 10p each and sells them at £1 a dozen. When asked how that works she explains “I make it up in volume!”

But business is not all about volume...it’s about margins and profit.

Strangely enough, many carpet cleaners think it’s all about volume. If only their business was systemised, they would know that they might be better off dealing only with high-end clients who are prepared to pay for high quality work. It’s far easier to make money by selling half as much but at double the price.

One of the interesting statistics to come out of my ‘numbers’ over the last year has been that my sales are down by about 10% but profit has risen. This has been accomplished largely by ‘qualifying’ people who enquire about my service. In other words, I’m not wasting as much time and money as before dealing with unqualified prospects. Our policy is to get phone enquirers to ‘prove’ that they are worthy of us giving them our time before we ever decide to give them a quotation. In other words, they have to qualify themselves first.

I’m amazed at how many carpet cleaners are very busy but are absolutely wearing themselves out. Several jobs a day then coming home to pick up enquiries then off to do in home quotations. Many cleaners would be better off with a job getting over 4 weeks holiday every year and being able to forget the job when you leave at the end of the day.

My advice? Concentrate on the profit not the gross sales! Work out exactly how much you are making on each job (that means ‘knowing your numbers’). Business is all about margins not gross sales. What’s important is not gross sales or price per sq ft but what you’re left with at the end of the day. Provide a high quality service to those who want and are prepared to pay more for it. Don’t meet with anyone who is not a good quality prospect. And use phone scripts with questions that filter out all the time-wasters (ie the ‘price shoppers’).

 

Over the past few posts we’ve seen how important it is to ‘track your numbers’. What this means in practice is that there is certain information that you really must know if you want your business to improve. Remember, “everything measured improves.”

Now here’s three numbers that you really should be tracking:

1. No of enquiries
2. No of enquiries that become jobs (conversion rate)
3. Average value of each client

Improving just these three numbers can result in dramatic exponential growth for a business. These numbers have to be seen to be believed.

Let’s say you have 500 enquiries each year and 300 of them become paying clients. That’s a conversion rate of 60% or six in ten. Not bad!

Now if the average job is say £200, that means gross sales for the year of 300 clients x £200 job average = £60,000.

Now, let’s see how we can increase all three of these numbers and the difference it will make on gross sales.

How can we increase enquiries? Perhaps by improving the effectiveness of our adverts or flyers or even by setting up referral systems so that our existing happy clients tell their friends. If we get enquiries up from 500 to 600 per year (20% increase) and conversion rate and job average remain the same, that means that number of jobs now becomes 360 (600 enquiries x 60%). At the same average job value of £200 our sales now increase to £72,000. An increase of £12,000, most of it clear profit.

What about if we increase our conversion rate only? Perhaps we can do this by not giving quotes over the phone and having a systemised structured selling process so that more prospects say ‘Yes’. If we increase our conversion rate by 20%, now we have 500 prospects but now a conversion rate of 72% resulting in 360 paying clients (500 clients x 72%). If the job average remains the same at £200, this will give us gross sales of £72,000 also (360 clients x £200).

Now what if we increase our average job ticket only? This could be achieved by offering protector on every job or offering clients the opportunity to add a room of cleaning on once we’re on the job. Let’s say that the average client now spends 20% more with us. Now the average job value is £240 instead of £200. If our number of enquiries stays the same at 500 per year and the conversion rate stays the same at 60% our gross sales will be 500 enquiries x 60% conversion = 300 paying clients at a job average of £240 which comes to £72,000 (300 clients x £240).

So there’s three ways to increase gross sales.

But what happens if we increase all three by 20% by doing all of the above? Here’s where it gets really interesting.

Now we have 600 enquiries per year and convert 72% of them to paying clients. If our new job average is £240 our new gross sales will be 600 enquiries x 72% converted to paying clients, giving us 432 new clients at a job average of £240 giving us gross sales of £103,680! That’s an increase of 72.8%!

Can you see the effect of ‘knowing your numbers’ now?