How To Increase Your Sales Closing Rate - A Look At Why People Don't Buy And What You Can Do About It
After reviewing for the work I am doing for one of my clients, The Defacto Group, I realized I probably have a great opportunity to increase my closing rate and that of my clients. For that particular client I have had a very poor closing rate for that last 7 months of only 9%, which is the worst of all my clients. I think I should be at a minimum at the industry benchmark of 40% if not higher. So I determined I was going to do some further research on how to increase sales closing rates. I have done research on this topic before (you can find those findings in the article Techniques To Increase Your Chances Of Closing A Sale) but I felt like I could still learn more. After giving it more thought I realized there was probably a lot I could learn from understanding why people don't buy and what I actions I can take to combat this. This is an article summarizing the information I found and ideas I came up with.
The Reasons People Don't Buy
1. No Time
This is the very first stage to get past with any prospect. When prospects say they have no time, they are probably honestly busy. The thing is there is not anyone who works, I don't think, who does not think from time to time that they are busy. In essence they are saying working on other things and meeting with other people is more important than meeting with you or buying from you. If you can't get prospects to give you a second of their time you won't ever be able to sell to them.
What To Do About It: - Make your marketing materials, sales conversations and meetings worth their time. Do things that will make your prospects feel like interacting with you was a very good use of their time. This could be by entertaining them, educating them or just making them feel important and good about themselves.
2. No Interest
No interest can show up in many different forms, conversations where the prospect is not engaged and is acting closed, prospects that won't return voice mails and emails, the prospect acts bored or distracted when you meet with them, or prospects that are very abrupt in their responses to you. No interest can also be the reason the decision maker procrastinates or defers the decision. If someone differs a decision that means they are not excited about making a decision. If the prospect is not excited, you have not done your job as a marketer or salesman.
What To Do About It: - When the prospect says they don't want to make a decision right now or that they will get back to you keep talking and ask questions. Ask tough questions like (Are you really interested or are you just saying that to get rid of me?, What will change between now and next week?, What would need to happen for you to move ahead today?). When I use this tactic I find I quickly find out the truth and either get commitment to a next step or find out that they are not interested. When they tell me they are not interested it usually comes with an explanation and a legitimate reason which makes sense to me. This then saves me time as I know it is no longer worth my time to discuss with them. It is also important to make the prospect realize they have a problem that needs fixing by asking them questions. It is important to ask questions so that they recognize the problem themselves instead of you telling them. You want to make the conflict even more intense by asking additional questions. The more intense they perceive the problem and conflict to be, the more likely they will be to act.
3. No Difference
This problem really comes down to marketing and is simply when the prospect sees no difference between your product and the competitors or they actually prefer the competitors. The extra frustrating part is you may actually have something that is truly different than the competition, but if your prospect does not see this and perceives things incorrectly in a way that they think there is no difference, you will still have the same problems. Having something different and better than the competition is not enough, your prospects have to think you are different. When there is nothing that makes you better than the competition, why would anyone buy from you? If you have this challenge you will only make sales when people are unaware another alternative exists. You want your offering to stick out like a sore thumb as being different when compared against your competition.
What To Do About It: - Make your solution different than anything your prospect has ever heard of. If it can be something counter-intuitive all the better as you will stand out even more. Focus on pointing out your product or company's strengths, choosing ones that none of your competitors have. In the example of The Defacto Group, this would mean focusing on communicating that they complete SRED returns and other government grant or loan applications faster then their competition and have a perfect audit record. An idea to even improve this further would be to offer a audit protection guarantee of some sort, that protects prospects financially if an audit is not passed.
4. No Belief
When your prospects have no belief it can show up in many different forms. The first is that they don't believe your product is any good and actually think it is junk. The second is that they don't feel listened to and do not believe you will listen to them in the future after they decide to buy from you. Third they think their is too much risk or in other words they don't trust you. Either they don't trust you as a person or they don't trust that your company or product can deliver on its promises. Fourth they believe everything but they have specific product objections where they believe a certain feature of the product will not meet their needs. Fifth they don't believe they need your product as they are doing fine without it and finally sixth they don't know what you do because you have an unclear value proposition.
What To Do About It: - The answer here is pretty clear, you need more proof. This can be in the forms of testimonials, case studies, certifications etc. If prospects think your product is junk let them have a free trial as this will quickly remove their doubts. If the prospect does not feel listened to it is simple, stop talking to them and let them do the majority of the talking. It also may be that they think your product is junk because of the way in which you are selling it. If you sell with enthusiasm, it will be hard for your prospects not to get excited. Not listening is the number one problem most buyers encounter (click here to see the other 18) so even if you think you are doing and good job of listen try talking even less and listening even more. If they think there is too much risk provide testimonials or give them an offer to reduce the risk like a money back guarantee. If there is a certain feature they don't believe, provide a live demonstration showcasing the feature. If they don't believe they need your product tell them stories of the impact your product has had for other customers. If you have a unclear value proposition and they don't know what you do, refine your positioning statement, name and brand slogan.
5. No Decision
If you are not getting a decision from your prospect it could be because they are just being polite but they have no belief. There are times though where the prospect has belief but they just don't make a decision. This can happen because they are just not in the buying mode yet, they are still in the gathering information stage. In many businesses, buyers are required to gather a bunch of information before they are allowed to make a purchase. Therefore if they don't have all the information they need they won't make a decision. They could even have all the information they need from you and not make a decision because they are waiting on more information from another potential supplier. The other reason this could happen is because the project is being led by a subordinate and not a superior, which means if the superior is not ready to buy or not interested to buy, there will be no purchase in the near term. Finally the other option is that they have not made a decision because you have not asked them to make a decision or have not asked for the business. This is one of the four most common sales mistakes.
What To Do About It: - If they are in the gathering information stage one option to speed up the decision is to create a sense of urgency and scarcity. To read more about this idea read my article title "Secrets Of Closing A Sale"This could be by offering a special discount if a purchase is made before a certain date, or stating that the price is only valid until a certain date. Make the offer of buying now instead of later an offer they can't refuse. Another tactic is to mention that there are limited quantities and update them as the quantities deplete. If there are advantages to the client of purchasing earlier, such as better service or easier installation then this information is very useful to communicate as well. If the project is being led by a subordinate, change your focus to the superior and work on making him ready and eager to buy, following the same process that worked to get the subordinate eager to buy. You need to ask for the business to get the sale, always ask for either a next step or a sale, never not ask for something.
5. No Easy Way To Buy
If people want to buy from you and become frustrated during the process they will abort the buying process before they complete it. Similarly if they don't know where to go to buy, they will eventually give up trying to find out where to buy and buy from someone that it easily accessibly. Finally, if the buying process will take too long to complete or too long for the product or service to be delivered, the prospect will go to someone that is faster.
What To Do About It: - The first thing you need to do is survey your existing customers and previous prospects to find out what are the frustrating things about your buying process. If you can do this, you will be able to dramatically improve your results. To avoid not being able to be found ensure there are multiple ways you can be found (ie. website, Facebook, Linkedin, phone book, phone directory, multiple physical locations etc). Make your contact information very easy to be found. A great way to do this is to include it on all your corporate materials...presentations, invoices, receipts, emails etc. Finally ensure the speed in which you can deliver your product or services matches or beats that of your competition. If your competition can do it faster, there is probably a way you can do it faster as well. Analyze how they do it fast and see what you can learn from them.
I have to give acknowledgement that these categories and some of the ideas in this article are not my own. Instead I got them in an email from Rich Schefren, which was perfect timing. I thought these were great groups to summarize the reasons why people don't but. Another important thing to do is to always conduct a post sales meeting review to continue learn and be continually improving. For more on this process read the article "Increase Sales Growth - Conduct A Post Sales Meeting Review" If you are still hungry for further reading look into reading the book SPIN Selling. You can purchase it very inexpensively off of Amazon. If you feel you know the theory but need practice applying the theory it might be good to get some videos to watch on how to improve your sales skills. Here is a link to some sales training resources.
My name is Chris R. Keller. I work at Profitworks Small Business Services helping various B2B small businesses in Waterloo and Kitchener Ontario generate new customers. Feel free to connect with me on Google+ or if you are just interested in getting new customers for your B2B small businesses enter your email in the box provided below and click the "Send Me Free Updates" button.