Beware of What You Take Pride In

Ten common claims we make that could be a sign of poor sales and management techniques

I find it interesting that some dealers take great pride in things that actually contribute to poor sales and profits. They mistake certain aspects of their business for badges of honor when they are really signs of lack of proper sales and management. Here are several examples of phrases I often hear uttered with great pride.

‘I close 80% of my demos.’

Our research indicates that the national average closing rate is 33%. This means that an average salesperson closes one out of three demos. If you are a gifted closer, you might get as high as one in two, but that would place you in the top 1% of salespeople in the nation.
So why do some salespeople claim such high closing rates? They fail to prospect. If you can close 80% of the people you talk to, chances are you only talk to people who are so desperate that they need equipment now, or people who are replacing equipment they bought from you years ago, or call-ins. This is all good, but your business will never sell at its full capacity without prospecting. I challenge these 80 %-close salespeople to call on a few neighbors when they go out to sell and see if they can sell to them as well. They will find that as they show equipment to more people, their closing rate drops but their volume increases dramatically.

‘We have no cancellations.’

This proud claim means one thing to me. You don’t close. Let’s face it, some people encouraged to purchase will later change their mind; it is human nature. If no one has ever cancelled, it means that you are not assisting people on the fence to make the right decision and close them. If you only sign the people who jump up and yell, “Where do I sign?”, your cancellation rate will be low. At my store, our cancellation rate was 30% and I was proud of it. It meant my team was closing people on the fence. If your cancellation rate is zero, you could be making a lot more money with some good closing techniques.

‘I have never fired anyone.’

This claim, in my opinion is the mark of a poor manager. All of us sometimes hire people who don’t work out. If you are not firing them, it means they will stay on until they “starve” and then “fire you” by quitting. Good managers set standards and remove staff that does not meet them.

‘Our company is like a family.’

Families are very good entities. They are designed for love and protection of family members. Businesses are designed to make money and sell; they are not designed for love or protection. Those who don’t contribute should be fired because they will weaken the entity. Don’t get these two things confused.

‘We have the lowest prices.’

Ouch! I cringe when I hear this one. This is not something to be proud of. It means you give away more hard-earned money than anyone else in town. Unless you buy products for far less than anyone else, you should concentrate on charging a fair price and providing excellent service. The better the service you provide, the higher the price should be. Keep in mind that people remember the service they have received long after the price is forgotten.

‘Most of our sales are from
word-of-mouth.’

Word-of-mouth is good but if you take pride in the fact that most of your business is generated this way, it probably means you are not advertising and prospecting. Just imagine how much more a company that offers great service would make if it brought in fresh customers every week and then benefited from all that extra word-of-mouth.

‘All our customers
pay cash.’

Beware, this usually means you are not offering a competitive and easy finance program. Customers rarely say, “I’d like to buy it but I don’t know how to pay for it.” Instead, they will tell you that your price is too high or make some other excuse. Make sure you offer great financing. Dealers in every part of the country report that 90% of their customers finance equipment purchases. If all your customers pay cash, you are missing the boat in sales.

‘Everyone knows me,
I don’t need a demo.’

The purpose of a demo is to raise customers’ interest and desire to the boiling point so they are willing to buy. If you don’t use one, you will miss sales and face more price objections.

‘We’re not like salespeople.’

Let’s face it, you are salespeople. Like all professions, ours has good and unethical members. However, if you take pride in not being like a salesperson, perhaps you should have chosen another field. The fact is that we all sell. Be proud of it and learn the craft.

‘Eighty percent of our business
is replacement.’

If most of your sales are replacement, it means you are not advertising or prospecting. You are living off the work of the ones that went before you. Replacement business is good but it will eventually die off if you are not out there prospecting and advertising in search of fresh customers.
It is good to be proud but make sure what you take pride in is building your business and not giving you a warm feeling that could end up costing you thousands.

Carl Davidson is president of Sales & Management Solutions, Inc., a consulting firm specializing in sales and management video training and live seminars exclusively for the water equipment industry. He has authored several books including Financial Secrets of the Water Improvement Industry and numerous articles. Send comments to davidson@salesco.net. For a free demonstration video, newsletter and list of products, contact Carl at 800.941.0068, or by e-mail at davidson@carldavidson.com; www.carldavidson.com.

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