In the last issue, we discussed The Presentation Step, and how to create excitement and motivation to buy. The Transaction is the fifth step of the “NaB & CaPTuRe” roadmap: Need, Budget, Conviction, Presentation, Transaction, Reward.
The Transaction is that exciting moment when the customer signs the paperwork, writes a check, or hands over their credit card. Traditionally called the “Close,” guerrillas know that this is really the beginning of what we hope will be a long relationship.
“Are You Sure?”
As you finish your Presentation, prospects sometimes stiffen. They’re thinking, “UH-oh, here comes the contract.” Many customers dread this moment even if they really need the product, because they feel they’re losing control, Understanding this, guerrillas end the Presentation Stage, with something like:
“No, not really.”
“What do you see as the next step?”
“Well, don’t you have to write up an order?”
“Do you want me to write up the order?
“Yes. Let’s do this.”
You know you’ve done everything right when the customer asks you to write up the order. With that, the guerrilla fills out the order form, writes up a contract or prepares the financial paperwork. Now the guerrilla hands the form to his new customer for his or her “approval.”
As the new customer is about to sign, the guerrilla gently interrupts:
“You know, something’s still bothering me. Remember when you said you wanted mahogany? Are you sure walnut is going to be okay?”
What the guerrilla wants to hear is something like: “Yes, in fact, walnut is really going to be much better. It will be cheaper and probably fit in better with our decor.”
In the Transaction Stage, a guerrilla will recall at least one problem or objection, from earlier in the conversation, express genuine concern, and ask again if the concern is going to be a problem. In so doing, not only are you turning control back to your customer, but you’re pre-empting buyer’s remorse. By capping the issue now, the guerrilla pre-empts buyer’s remorse.
When to Close
The best time to close is all the time. Recognize that you have an opportunity to close any time the prospect makes choices, challenges, or changes.
Close any time there is a choice or small decision to be made, and that’s more often than you might think. Close early and often, especially on little things. Because people hate making big decisions, close on the small ones.
Always try to close after answering a challenge or objection. If they accept your response, they will be psychologically receptive to making a commitment. Guerrilla salespeople automatically finish their Presentation with a closing question, like, “Did I answer your question adequately?” or “Is that clear now?”
Also close any time there are changes in your prospects’ body language or changes in their criteria that could be interpreted as buying signals.
Five Types of Closes:
There are five basic closes and infinite variations. They all have the same objective: to give the prospect an opportunity to say, “Yes.”
In the Prescription Close, you carefully probe, ask questions, summarize the problem, and then prescribe the solution. “Based on what you’ve told me, I would recommend . . .. Here’s what you’re going to need.” This tactic is effective if the prospect trusts your expertise.
2. The Action Close
Pull out your pen and you start filling out the form, or phone the installer to set an appointment. Or you might say, “Let me see if we’ve got that in stock. I’ll be right back,” and disappear into to the stockroom.
Return with the box in your arms and ask, “Okay, where are you parked?” You know the deal is done when the prospect holds the door for you.
3. The Choice Close
Give them a minor decision that carries the major decision along with it. This can be useful when breaking down a large decision into smaller, increments. You’ve been looking at a $30,000 automobile and the guerrilla salesman says, “Would you like to put the stereo in the dash, or would you rather conceal it under the seat?” Now, you have a small decision to make.
“Well, it would be more convenient in the dash.” Not only have you bought the stereo, but of course, the car as well.
4. The Question Close
In the Question Close, you ask a question, which, when answered, gives you permission to proceed. You might ask, with pen in hand, “What’s today’s date?” When prospect answers, they’ve given you permission to proceed. Or you might ask, “Excuse me, how do you spell your last name?” When they provide the missing information, they’re saying, indirectly, “Yes, I’m ready. Let’s go ahead with this.” You’ve avoided putting them on the spot by asking, “Well, do you want me to write this up or not?”
5. The Add-on Close
The key phrase of the Add-on Close is, “Now you’ll also need. . .,” proposing some low-cost option or accessory. “You’ll also need one of these to keep your blade nice and sharp. They’re only ten dollars.” When they agree to the blade sharpener, they’ve bought the lawn mower. Guerrillas repeat the Add-on close until they get a “no.” That’s when they know they have reached the limits of the prospect’s budget.
Close Early and Often
People do not want to be pressured. They want to make their own decisions, and they resent being pushed too hard. The goal is to make them feel that buying today is the most natural, intelligent decision that they could make. Closing repeatedly will not only increase your sales, but also help prospects make good choices, and increase their respect for you. So don’t stop until you have used at least three guerrilla closes.
When selling a new stereo system, a guerrilla we know combines the Question, Action and Add-on Close at the very beginning of his presentation by asking, “How far from the amplifier will you be putting the loudspeakers?” Based on the prospect’s answer, he goes to the service counter, measures off the necessary length of wire, cuts it, ties it in a bundle and hands it to the prospect. Now he’s setting through the Presentation, already holding the first component of his new stereo.
Silence is Golden
People are less suspicious than many salespeople believe, but they are also more sophisticated. The public is as smart as your mother, and you know she’s no dummy. People know when you’re asking them to take some action, and if they’re not ready, they’ll let you know. Top salespeople will confirm that the simple, direct, unsophisticated closes can be very effective, but only if you use them.
In future installments of this series, we’ll explore each of the steps of “NaB & CaPTuRe” in more detail, and perhaps double or even quadruple your sales.
In the last issue, we discussed how to determine your customer’s budget as the second step of our “NaB & CaPTuRe” roadmap: Need, Budget, Conviction, Presentation, Transaction, Reward.
The Commitment Step
In this critical step, you actually close the sale before making a presentation, by aligning your product or service with those criteria to which your customer is already committed. In the automobile industry it’s said that only 50% of the cars are sold. The other half are bought.
As often as not, your prospects have already decided to buy, before you get to talk to them. Car buyers are much more likely to be influenced by experience, friends, or media than by a salesperson.
A couple looking at a potential venue for their wedding reception has already committed to marrying each other. If they’ve also set the date and decided how many guests they will have, then you know they are ready to buy. Ask about other elements of their plans.
“Who have you arranged to do the catering?”
“Where will you hold the formal ceremony?”
“What transportation will you use from the church to the reception?”
“Will you want help with the decorating?”
The more complete their picture, the deeper their commitment. So, for example, if the ceremony is being conducted at the church just up the street, you can emphasize the advantage of your location. “This will give your family a short, easy trip from the church.” If you know they’ve ordered an elaborate, expensive cake, you can emphasize the posh surrounding of your hotel. “Everyone will be impressed when you invite them into our lovely gardens.”
The prospect will also have a set of physical specifications that the product or service must meet, in order to be satisfied. As in “it absolutely, positively has to be there overnight,” or “I’m looking for a dress in a size seven.” The guerrilla listens for these criteria words and notes them throughout the interview. Ask:
“What are you using now?”
“What do you like most about it?”
“What do you like least about it?”
These answers tell you what they want to keep, and what they want to change. Concentrate on those issues, and safely ignore everything else, because people do things for their reasons, not yours. You may have a hundred good reasons why they should buy this particular mountain home; price, location, good roads, rapid appreciation, close to schools, shops, recreation, and you know what? They couldn’t care less. No matter how good your reasons may be, ultimately, their reasons will prevail.
Other criteria may be introduced as the conversation continues, but the guerrilla concentrates only on those priority words and criteria words isolated by the prospect.
It’s also useful to isolate the mental and physical steps your prospect follows when making a decision. People have a mental roadmap that they follow when making decisions. This strategy is unique to each prospect, but they tend to use the same strategy whenever they make a buying decision. The question that you can use to elicit their roadmap is to ask, “How did you decide . . .?” For example, a real estate agent might ask, “How did you decide to buy the house where you live now?” then listen carefully to their explanation.
“First we narrowed the search to a particular neighborhood where we wanted to live, then we checked all the listings, marking each address on a map. Then we looked at each house until we found the one that felt right.”
This answer reveals not only the criteria, but the roadmap of their house-buying strategy. If you lead them through the same progression, it makes it easy for them to buy from you. Start by “narrowing down” to the particular neighborhoods they liked best, then pull out a map, and start “marking.” Like a familiar chair, following their roadmap puts you in the selling “groove”. Besides, they’re going to buy the house their way, anyway. If not from you, then from someone who makes them feel more comfortable. So you might as well match their strategy. Listen for the sequence of the process they follow when making a similar decision, and then systematically structure your case using the same progression.
Is That Clear?
Sometimes the customer doesn’t really know what they want. Let’s take the case of a copier salesperson. If you ask the question, “What do you want in a copier?” and the response you get is something like, “I don’t know” or “I’m not sure,” there are additional things you can do to get to their criteria. You can ask, “What are you using now? What do you like most about that?” or “What’s the exact problem you’re trying to solve?”
“We are using an HP LaserJet.”
“What do you like most about your LaserJet?” he asked, repeating the prospect’s criteria words.
“It’s inexpensive to operate, and the copies are crisp and clear.”
“What do you like least about your LaserJet?”
“It’s too slow, and it wasn’t able to print collated and stapled documents.”
Now we’re getting criteria language: inexpensive, crisp, clear, (visual cues, you’ll notice) as well as the functional need for automatic collating and stapling. If you can show her that your copier will do it more quickly, collate and staple documents, and still reduce their operating cost, she’s going to lease the copier. And she really doesn’t care how many pixels of resolution it has, or how many reams of paper the bins will store, or what its internal drum speed is, so long as they get “collated, stapled copies that are crisp and clear.” This decision will hinge primarily on these five factors. You can ignore the rest, (at least for now) because. These five words are the keys to unlocking their sub-conscious mind.
Remember, priorities, criteria words and roadmaps are often unique to the context in which they’re used. The way your prospect makes decisions about buying office supplies may be very different from what they look for when shopping for a car.
Some additional questions for isolating criteria include:
“What is your main objective?”
“What are you doing to deal with that situation?”
“What are your plans for the future?”
“How do you plan to get it done?”
“Can you tell me more about that?”
“Is there a deadline?”
The answers to these questions will provide the performance specifications for your proposal. Whatever else this product may have going for it, must satisfy these physical criteria. Now present your product using the same criteria words, and follow their roadmap directly to the sale.
In future installments of this series, we’ll explore each of the steps of “NaB & CaPTuRe” in more detail, and perhaps double or even quadruple your sales. This article was originally published in Marketing Africa magazine.
How to Manage and Motivate Your Sales Team
Any behavior which gets rewarded will tend to be repeated. So we advocate paying close attention to how employees are rewarded for performing (or not performing) the various aspects of their jobs.
Performance-based compensation is nothing new. Commission plans for salespeople are common because their productivity is so easy to measure. But small business tends to eschew these compensation plans thinking that “we’re just a mom & pop store. We’re different.” In the competitive environment you’re faced with today, you have no choice. You must use every management tool available to maximize your marketing firepower.
Guerrillas are not only intolerant of non-performers, they lavishly reward their stars, setting ever-higher standards for the whole organization. The problem is how to reward your people appropriately, particularly if they’re not directly responsible for easy-to-measure activities like sales revenue. Some simple guidelines can put this powerful management tool to work for you.
The foundation of an effective performance-based compensation plan is a set of clear and specific goals for your organization as a whole, for each functional department, and for each individual employee. These goals must be objective and quantifiable. For example, “Increase walk-in traffic by ten percent, or to 650 shoppers per month, by the end of the year” or “achieve an average rating of 4.5 of 5 on monthly customer satisfaction surveys.” Subjective factors, like attitude or good work habits might be included in review criteria, but if you can’t measure them statistically, you can’t use them as a standard for performance-based compensation. Then devise methods for gathering data to measure progress (or lack of it) toward these goals. What you measure is what you get, so inspect what you expect.
The advantage is that it’s easy to calculate: punch in, punch out, so much per hour. The disadvantage is that it doesn’t motivate.
Commissions can be computed on the gross sale price (good), or the gross profit margin (better). One important factor to consider when designing a compensation plan is that it must be simple. Paying commissions on straight gross sales is easy, and if you put the table below up on the wall in the break room, everyone can quickly estimate what they’re earning if they know the overall gross margin of the store.
Do not pay commission on any gross margins below 13%. If they’re selling at less than 13% margin, they’re giving away the stock and putting you out of business.
Generally, the lower the gross margin, the easier the product is to sell. So guerrillas recommend paying commissions based on gross margin, to reward your sales people for working harder to maintain higher profits, not just sales.
Commission Based on Gross Sales:
|Overall Gross Margin||% of Gross Sales|
|on Sales for the Month||Paid as Commission|
All above 27%…………………………………………… 2.8%
26.0 – 26.99……………………………………………… 2.6
25.0 – 25.99……………………………………………… 2.4
24.0 – 24.99……………………………………………… 2.2
23.0 – 23.99……………………………………………… 2.0
22.0 – 22.99……………………………………………… 1.9
21.0 – 21.99……………………………………………… 1.8
20.0 – 20.99……………………………………………… 1.7
19.0 – 19.99……………………………………………… 1.6
18.0 – 18.99……………………………………………… 1.5
17.0 – 17.99……………………………………………… 1.4
16.0 – 16.99……………………………………………… 1.3
15.0 – 15.99……………………………………………… 1.2
14.0 – 14.99……………………………………………… 1.1
13.0 – 13.99……………………………………………… 1.0
Less than 13.0%………………………………………… none
Basing commissions on gross margin rather than gross sales is harder to track, but it motivates salespeople to sell higher-priced and higher-profit items, accessories and extended service contracts, as well as to follow up with prospects and customers for referrals.
Commission based on gross profit discourages discounting. It can also produce competitive rivalries between salespeople, (which is not necessarily a bad thing).
Commission based on Gross Margin:
|Overall Gross Margin||% of Gross Profit|
|on Sales for the Month||Paid as Commission|
All above 27%…………………………………………… 15.5%
26.0 – 26.99……………………………………………… 15.0
25.0 – 25.99……………………………………………… 14.5
24.0 – 24.99……………………………………………… 14.0
23.0 – 23.99……………………………………………… 13.5
22.0 – 22.99……………………………………………… 13.0
21.0 – 21.99……………………………………………… 12.5
20.0 – 20.99……………………………………………… 12.0
19.0 – 19.99……………………………………………… 11.5
18.0 – 18.99……………………………………………… 11.0
17.0 – 17.99……………………………………………… 10.5
16.0 – 16.99……………………………………………… 10.0
Less than 16.0%…………………………………………… none
Of course, you have to adjust these percentages to your business and your market.
Bonuses can be paid on a monthly sales quota, or on reaching a target profit margin. The whole sales team can qualify for a bonus for reaching a collective goal. Managers often receive a bonus for exceeding key performance targets. Some retailers offer year-end bonuses, but these are not really very motivating. Bonuses are more effective if they cover shorter cycles. People need to be able to envision their progress, either on a regular report, a reader board, or a United-Way-style thermometer.
An acronym for “sales promotional incentive funds,” spiffs are paid for specific sales events. Some spiffs are funded by manufacturers to move specific SKUs. Or they can be paid by the store for selling an unwanted, obsolete or damaged item.
Guerrillas never allow the manufacturer to pay spiffs directly to their salespeople because you want the credit for paying the reward. Also, you don’t want the manufacturers to control what products sell on your floor. You need to manage that mix based on your niche, your identity and your business model.
It’s important to include all the support people, the back office, the warehouse, cashiers and delivery.
You can run a sales contest on any number of metrics. First Sale of the day, Biggest Ticket of the day, Most Line Items in an order, Most Orders written in a day, Order with Highest Gross Margin.
You can also run contests on product knowledge. Devise a simple test and give a certain sum for every question they get right.
The best sales contests combine performance with an element of chance. For example, every qualifying sale wins a ticket dropped into the hat, then a weekly drawing determines the winner of a cash prize, a merchandise prize, or the trip for two to Hawaii. The more you sell, the better your odds of winning.
An effective variation is every qualifying sale gets to draw a playing card from a deck. The best poker hand at the end of the contest wins all.
Wiltshire TV, in Thousand Oaks, California, has developed an unusual variant of Bingo. Each month, each square on the bingo is assigned a different product. Instead of letters and numbers, their Bingo card is laid out with brands across the top and model numbers down the side. Sell a qualifying product and you mark that square on the card. Sell any five qualifying items in a row, and BINGO!
LOTS more Guerrilla Retailing strategies in our book, Guerrilla Retailing – How to Make Big Profits from your Retail Business. Order it today on Amazon.
How to Lose a Loyal Customer in 12 Seconds
This weekend I traveled with Denise to New Orleans to speak at the City & Regional Magazine Association conference. I was doing break-out sessions on Guerrilla Selling and Guerrilla Marketing with Social Media.
We were nearly next in line to check our bag when a burly ticket agent turned on the crowd and barked, “WHO’S BAG IS THIS?!”
“Mine,” I said, sheepishly raising my hand. I had scooted it under the queuing strap so as not have to carry it an extra 20 feet, and was standing less than 6 feet away.
“YOU HAVE TO ATTEND YOUR BAGGAGE AT ALL TIMES!” he shouted. I was like, SO busted.
“I AM attending it,” I pleaded. “I’m standing RIGHT HERE!” demonstrating that I could almost touch it.
He shouted like a marine drill sergeant, “YOU HAVE TO BE WITHIN ARM’S LENGTH OF YOUR BAG AT ALL TIMES!”
“OK, Ok, ok . . . “ I muttered as I slinked forward in line, cutting ahead of four other people to hover, humiliated, over my bag for the next 12 seconds.
Keep in mind that I have enough frequent flier miles on United Airlines to qualify for the next Space Shuttle. They have always been gracious, accommodating and helpful. That’s why they’ve been my favorite airline for two decades. And I concede that I was breaking the rule, but a little courtesy would have gone a long way. Anyway, I love this airline so much that I can over-look one rules-happy power-crazed ticket agent who’s having a bad day.
The topper came when we arrived in New Orleans. We were waiting by the baggage carousel when Denise realized she had left her purse on board. She dashed back to retrieve it, and was stopped at the concourse security desk (of course). A call was made and within minutes a friendly United representative returned with her purse. So far, they’re 1 and 1.
In the cab she discovered that her cash was gone. We called. We got transferred. We got a lecture about how, “We’re not responsible for lost items.” Of course, that wasn’t the point. We assumed SOMEONE would share our concern that one of their employees was stealing. Seems no one at United was even interested. So we shrugged it off and didn’t let it ruin our day. It was only a hundred bucks.
But it DID ruin a twenty-year relationship. United has just joined Northwest and Air France on my “Do not fly” list. How can you trust them with your life if you can’t trust them with a purse?
Guerrilla marketers spend years and years and millions of dollars building customer loyalty. Everyone in your organization can do everything exactly right in thousands of transactions spanning decades. Even so, a single moment of carelessness, impatience, or greed can destroy it all. And you know what? It didn’t surprise me that someone took the money. People are desperate. The disappointment was that we cared more about United Airlines’ security problem than they did.
Never make your customers feel wrong or stupid, even when they are. Good manners are simply good business. Make certain that your commitment to your customers is demonstrated at EVERY touchpoint, EVERY time, and that EVEY customer experience is CONSISTENT across the board. And when there is a problem, give it your undivided attention, whether you mean to fix it or not.
Grand Hyatt Launches New Weapon in the Amenity Arms Race
Rapid Repair, a little company In Kalamazoo, Michigan, will install a 240 GB hard drive upgrade in your iPod. I can’t make this stuff up, folks. For about the price of a NEW iPod, you can expand your old iPod to 240 GIGS! For cryin’ out loud, the IBM laptop I’m using here only has 40 gigs. Two-Hundred-Forty GIGABYTES is enough disk space for 20 hours of MP3 video or 60,000 songs! What on EARTH would anyone DO with THAT much content? Whatever they want, wherever they want, whenever they want. That’s what.
In advance of Team Summit, I was doing Guerrilla sales training for DISH Network’s National Sales Meeting at the Grand Hyatt. A video billboard just outside the ballroom promoted the hotel’s newest room amenity. They have replaced the typical (and SO last millennium) bedside clock radio with a HI-FI iPod docking station. (And I’m old enough to remember when having a coffeemaker in the room was a big deal!) What do you do with a HI-FI iPod docking station? Well, you listen to your 60,000 songs. That’s what.
So now, you can take exactly the music you want, listen to it whenever you want, wherever you want And when you’re a guest at the Denver Grand Hyatt, you can play it right in your suite, and even wake up in the morning to your favorite (is this beginning to sound a lot like SLING?). No more annoying all-country stations to sift through. No more of those poor people at NPR of nagging you to donate a car. Hyatt has found yet another weapon to deploy in the room-amenities arms race.
Alvin Toffler predicted this kind of made-my-way-on-demand economy way back in 1970. Today’s consumers have more choices than ever, and they still demand more and more options. Ragu now offers 36 flavors of spaghetti sauce in 6 varieties. (Watch Malcom Gladwell’s short video on TED about this phenomenon!)
What this means is that guerrillas can create a competitive advantage by offering their customers hyper-customized versions of their product or service. These same customers will pay more, and they are more loyal.
Training Doesn’t Cost – It Pays
We have this argument with our clients all the time:
“Oh, we can’t afford to spend money on training.”
“Why is that?”
“Well, what if we train them and they leave?”
“What if you DON’T train them and they STAY?”
Savvy Guerrillas know that marketing is an investment, not an expense. Skills training, and particularly sales training, is one of the most conservative guerrilla marketing investments you can make.
At a “Guerrilla Selling” seminar I was conducting recently, we were discussing creative ways to get through to reluctant prospects, especially C-level executives. One of the participants got up and walked out. He returned a few minutes later to announce, “I didn’t think it would work, so I stepped out in the hall to prove you wrong. Not only did I get through; I got the order!”
Later I learned that the profit from that single transaction was more than enough to cover my fee for the day. We can only guess that the return on investment for this client was hundreds of times their investment in guerilla training.
How do I protect my copyrights if the client publishes my video?
Continuing my discussion with fellow professional speaker Suzannah Baum, she shared some concern about how to approach the client after they have already videotaped her presentation.
As a Guerrilla Selling Speaker, I often have clients video my keynote for internal publication. Guerrillas believe in the power of Investment, so they invest first in their customers and clients. Explain that your copyright attorney had advised you that you need to write a letter specifically granting permission to use the video, because it may otherwise infringe on unforeseen future uses of the material in books, magazines, pay-per-view, etc.
Prepare the letter on your stationary, using the language, “[Your Company] hereby grants limited, non-transferable License and permission for [Client] to publish the [length] minute video, ["Title of Your Training”] recorded on [performance date] at [location], hereinafter referred to as “the video.” [Client] may publish an edited version of the video, subject to approval of the author, on their company website at [http://www.clientswebsite.com] for viewing by employees of [Client] and the general public, for a period of [one year should suffice, but not more than three]. Commercial use and mechanical distribution are specifically excluded.
“[Client] agrees to indemnify [you] from any action which may arise as a consequence of this publication. [You] reciprocally indemnify [Client] and affirm that [your company] posses all rights to the video content, and have the authority to grant such license.
“In consideration of this license, [Client] agrees to surrender to the author all original master video tapes of the video, together with a DV or QuickTime version of the finished product on DVD within 30 days of completion of their edits. All Other Rights Reserved.”
Sign and date two copies, and have them countersign, date and return a copy of the letter. That should do it.
Then point to it from your website, your one-sheet, your bio, your eSpeakers listing, your bureau listings, etc. Here’s the guerilla twist: why go to all the bother of hosting a long demo video on your own servers when they will do it for you?