7. Not Having an Effective Sales Process

Know who your “Top Tier” customer is. There is no magic to this definition. Simply define the qualities of your best type of customer; determine the current sales and potential sales of this group; the cost of acquisition of this customer…or even more importantly, the cost of loss of this existing customer type; and finally determine how this definition will affect your profit plan. Profit center or division can identify a customer. The company lead generation process can be branded to attract them, and the sales process and pricing process can be developed to encourage them to buy from your company.

Sell effectively to them. Don’t leave business on the table because you don’t know your market and your pricing position, which is sometimes known as “price point”. Just as important is the “selling” of someone who is not a buyer. Benchmark your process, and price to sell to real buyers or “price shoppers”. Unless what you are selling is a commodity, and you want to sell a commodity, then you are wasting your time and money trying to distinguish yourself from the competition. The value of your product or service is that you’ve compared it on an “apples to apples” basis, inclusive of the core components and design required by the customer. Additional value added, or “between the walls” value, should be explained to your customer, which assists them in understanding the value they may desire. The absence of this process will either price you out of the market or dramatically reduce your margins below the market. Do not let your brand be known as, “they’re good and reliable, but very expensive”, even when your margins are below market. This happens more to fixed price custom builders or to “T&M to a maximum price” residential builders and remodeling companies than the commercial market, which tends to be more defined, and it is incredibly costly to them. In the commercial market, the problem and opportunity is that engineering and design on paper is rarely what can be done totally in the field, and change orders ensue. The commercial process is “selling” the change order in an environment where it often must be started without formal approvals in place by either contract language or practicality. In this case, the “sales” process is one of up-front discussion, definition of process, then constant follow through and documentation of communications and action requests. More commercial companies go out of business or lose money due to unapproved change orders than from “bad bids”.

Define your “Customer Promise”, and keep it. A “Customer Promise” is both your up-front documented and agreed upon statement of what the customer expects of the builder and the results, plus what the builder expects of the customer. This “up-front” process is added to at each stage of interaction with the responsible party of the company at each stage of customer hand off, thus the initial “Customer Promise” must state that this will occur and will be a positive expectation of the customer. The process is a branding and control process that allows the marketplace to know who you are and what is expected of you. It allows you to measure by post job questionnaires and/or reference letters/testimonials from the customer that you in fact keep your Customer Promise. It is one thing to say we are this or that…it’s another, and most effective, to agree up front as to who you are and how you are going to conduct yourself, then get a “report card” at the end that is publicized. Post your testimonial letters and cumulative scores on your website. If you are a high end remodeling company or builder in specific geographic areas, encourage your customers to rate you on the “Franklin Report”, in other markets on “Angie’s List”, and in addition to your own rating system and process that supports your brand or “Customer Promise”. You will generally fail if you:

• Fail to review with the prospective customer prior to beginning any presentation your contractual process within your defining of the “Customer Promise”
• Fail to identify the prospective customer’s emotion surrounding the project or “pain”
• Fail to clarify the issue of Money
• Fail to get the prospective customer’s agreement as to how a decision will be made and when

“Hook”, don’t “sell”. Generally, people and businesses don’t want to be sold. They want to be fulfilled, and most often they want to buy from someone who can create emotion for them, take away “pain” from previous interactions with contractors, and fulfills their expectations. You can be assured that when you are asking questions of the potential customer, “you are in control”. Conversely, when you are answering questions, “you are out of control”. This doesn’t mean that you shouldn’t answer questions, but it’s important to ask why they are asking the question. First of all, it establishes interest, assuming your delivery is not snide; it establishes control; and finally it touches the emotion or pain of the customer, which is the fundamental basis for decision-making. Intellectualizing will get you little in the way of business, unless there is emotion that is not overwhelmed by the intellectualization. At all costs, do not start “selling” the prospect. If you need to talk about your company, do it in an up front statement that tells the prospective customer how you work with customers, what they can expect of you, what the problems of construction might be, and what you do or don’t address. There are multiple methods of non-selling that work. One that is popular in the construction industry, is the Sandler Method, which is described in the book “You Can’t Teach A Kid To Ride A Bike At A Seminar”, by David Sandler. There are also various tapes and franchised/non-franchised trainers which teach the method based on asking questions, eliciting emotion, and identifying “pain” up front. The method is excellent to follow if you are serious about choosing an effective and different way of closing business. In the Sandler method, a general series of questions called a “Pain Funnel”, is asked:

a. Is that a problem, or was that experience a problem in the past?
b. Can you be more specific?
c. Tell me more about that?
d. How did this affect you in the past on a day to day basis?
e. How did you try to correct this or mitigate its impact? Did it work? Did you give up trying?
f. For how long did you have to deal with this problem? That long?
g. Ball park figure, what do you think the problem cost you (is costing you) in dollars, time and emotional inconvenience? That much? Are you sure?
h. How does that make you feel?

One of the best Sandler trainers I’ve seen is Pat Cahill (how2sell@aol.com). He has enjoyed exceptional success in the construction industry and is worth contacting should you be interested in learning the Sandler technique. Burruano Group has used a version of the Sandler method with all our clients since our inception. We do not have a client who has not read the book, and there is not a client of our firm that isn’t using some lessons learned from the Sandler Methodology. It is a “good read” and with your commitment, a process that can successfully differentiate yourselves from your competition. Remember, “Don’t sell, let the customer buy”.

We cannot be all things to all people! Not only do we need to focus on the applications of our products or services, but as our first step, we must clearly define, exactly, who our top tier customer is, where he is, and how to get there. The top tier customer is that person who is willing to pay for the value added service we provide (i.e. give us the margins we want) and will normally repeat that sale if that is important to us. Once we know who we want, we need to fine tune our message to them in order to set standards for ourselves around how many steps it will take to secure each sale. Our message confirms the “customer promise” (what the customer expects) and defines the value proposition that our business must deliver (we set up centers of excellence behind the value proposition). The standards define the resources we need to get the results we must have.

Hooking a potential customer takes much deliberate work. The first step is to find out where he lives and how to access him. It may often take a third party introduction or finding the proper conduit for reaching the prospect. The second step is to arrange that first meeting. That may sound odd, but the less you come across “selling”, the less the chance you will be lied to in return. Just think about all the times people have tried to sell you things you didn’t want to buy. You would tell them anything to get them out of your way. That applies to even the best sales person when talking to someone who doesn’t know they need your product or service. So the approach here is not to sell, but set up the prospect to buy! This is called “hooking”. If the hook is buried deep, you can close. Premature closing can result in that fish pulling away and the “sale” lost.

So how do you hook? First, you must appreciate the research that says that people “buy” emotionally and not intellectually. Second, you need to get your prospect into your system of selling and get them out of their system of buying. During your discourse with them, qualify their emotions to determine it they fit a “real” customer profile. If you undertake your discourse correctly, you will lead your prospect into a funnel of emotional pain. That emotional pain is not an “OUCH!”, it is an emotional need to change and buy your product or service in order to solve their serious issues or needs that you can address better than your competitors. Once you have captured the emotional issues surrounding your prospect’s ability to do a better job for themselves by using your product or service, you have placed the hook. Setting the hook deeper requires a constant reinforcement in the “selling” process. Their relief from pain comes from working with your company using your solutions that he is very willing to pay for at this point. Now how do we get to “close”?

The next article in this series will describe how to “close” the customer.