In response to requests from Plumbing Manufacturers Intl. (PMI) and its members, as well as from other supporters of the U.S....
On average, salespeople in our industry close about 33% of full-demoed homes successfully. In turn, companies spend a fortune trying to increase this closing percentage. What if there was a way to increase it dramatically? Let’s take a look at some easy steps water dealers can take to increase sales.
Most people who see a demo realize they should do something about their water. Those who don’t do anything often just aren’t convinced they should invest as much money in a system. This is because people have a different idea of how much they should spend. Unfortunately, a lot of dealers don’t take this into consideration.
To help clients reach a buying decision easily, we suggest dealers offer several alternative systems at lower prices. For example, dealers can offer a carbon block filter system that sells for only $399, plus installation, to people who don’t want to spend money on an RO.
Let’s assume the average salesperson does 600 demos per year and sells about 200 systems. How many of the 400 demos that didn’t result in a purchase can be turned around by offering alternative systems at a lower price? Selling an additional 100 lower-priced systems at $399 each would result in an additional $39,000. What’s more, the dealer would have 100 additional customers who will need to purchase filters and miscellaneous products.
If your prospects are not interested in that solution, you could fall back on a $99 faucet-mount filter and/or a $75 showerhead that removes chlorine. With lower price fallback products, we believe you can sell a product or system to almost every family.
There are even more benefits to this than just the extra cash. After you sell a $75 showerhead, you can offer to trade it in for a complete system by offering more than what they paid for it. For example, if you sold a showerhead for $75, offer to trade it in for $300 against a complete $4,000 system. Offering to buy the product back is a great way to give people a second chance at considering a bigger system while you are still in the home. It is also a good idea to offer a trade-in about three months later.
Price is not always what keeps people from buying systems. It could be that they just don’t believe the beneficial claims. They may have seen a complete demo, but don’t believe that buying the system will save them money and improve the quality of their life. When this happens, a rental option may be the answer. We suggest the use of a direct and truthful approach by saying, “I feel that you might not be convinced about all the system’s benefits I described, and that’s OK. I suggest you rent our equipment instead. If it doesn’t deliver everything I said it would, just call and return it free of charge.”
Used equipment is an important part of every inventory, but many in our industry ignore this important moneymaker. Dealers can acquire used equipment by placing small ads that simply state, “We buy used softeners. Call 555.555.5555.”
Selling used equipment gives you the opportunity to meet every budget. If prospects don’t want to spend $4,995 on a new system, maybe they will spend $995 for a used one. This really opens up your ability to meet the client’s budget and should increase sales dramatically without pressuring you to drop the price of new systems. Used equipment gives you several other important advantages:
Selling to clients with poor credit. If a client was turned down for financing, offer to sell a used unit instead. If you have invested $150 in the cost of a used model, simply take a $150 down payment and post-dated checks for debit authorizations for the balance. This makes you the finance company and means no one needs to be turned down. We have done this for years and can safely say that almost no one takes the equipment and leaves town. It’s a safe and profitable way of increasing your sales.
Selling competitors’ products. Used equipment solves another important dilemma. Let’s say you sell your system for $4,995, and competitor X sells his for $3,995. If a customer tells you they have decided to buy brand X, offer to sell them a used one for $995. This makes the competitor’s product look pretty costly. If the customer asks why you would do that, explain that you are certain they will prefer your system, and that if you are correct, you will take back the used system they buy as a trade-in on your system at full price. This technique changes the situation from a lost sale to a used sale and a possible new sale later. In fact, this technique often convinces the customer to purchase your new system, as your approach is so helpful and not conflict-oriented.
If you want to get all the sales you deserve, you need to offer products in all price ranges, and you need to sell used equipment. Every demo should end in a sale of some type of product. This will increase your closing rates dramatically. Best of all, it will improve your sales staff’s moral as they leave more homes feeling like winners.