Overcome your Customer’s Fear of Spending
One of the biggest complaints from sales people in a tight economy is the time it takes to achieve a sale. So, what can you do to speed up the sales process?
Stop product selling and start solution selling
Branding is wonderful but unless your brand is as mighty as Coca Cola, it’s unlikely people will purchase what you have on the basis of brand alone. It’s more important than ever to explain why your product or service is valuable to your client and if it is not unique, why they should be buying it from you.
Berlei bras demonstrated the art of solution selling back in 2000 with their sports bra campaign – “only the ball should bounce.” For anyone that has seen a sports bra you know that aesthetically, they are the ugly duckling of the lingerie world – highly functional but very unattractive. Berlei used science to show women how much damage exercising in anything but a sports bra could do (using television advertising, print, point of sale advertising, media etc).
You do not have to spend millions of dollars to achieve the same effect. The point is to understand what the most meaningful message is to send to your customer.
Sell the savings
Does your product offer your customer any form of efficiency gain or benefit beyond value over time? Can you justify it with real examples such as testimonials and worked examples? If it does, you need to ensure that you articulate this message. If there is a benefit, ensure you highlight it and emphasise the result. Try and stay away from long range forecasts. If it is going to take a few years to see the real value then this is not much of a selling point in the current market.
You are only as strong as the weakest link in your sales process chain
If your first point of contact is the weakest link in your sales chain, then you need to fix it. Help your team identify and capitalise on opportunities by giving them the training they need. They need to know what the benefits or your products are to be able to sell them effectively.
Package and Prosper
In tough economic times, it is common for the volume of products purchased by each customer to go down. You can overcome some of this reticence by packaging items together. Try the strategy used by many of the large retailers where they offer a discount on the second item purchased of the same type rather than offering an outright discount.
It has the advantage of encouraging sales volume. If you are going to package, make sure you are not packaging a lot of low margin products and then discounting them. Packaging works best for your business when you can package products with higher profit margins or where you boost the sales volume of slow moving stock by combining it with faster selling stock.
Marketing doesn’t have to be expensive to be effective. Great marketing campaigns are often the result of business operators having the foresight to compile relevant information on their customers and prospective customers (or purchasing in this information if they have to) and using it to their advantage.
Take viral marketing. Last year, Myers emailed a ‘staff and friends’ voucher that gave the person presenting it a discount on a certain night. You did not have to prove that you were a friend of a Myer staff member – the fact you had the voucher was enough. The email, once received by one person in their inbox, was often happily forwarded on to other friends so they also could benefit from the discount. The key to making offers to the market is to make sure you offer something that people will get excited about and time-limit the offer to create a sense of urgency.
The sale has not been achieved until the money is in the bank
Keep focussed. The old adage that “the sale has not been achieved until the money is in the bank” is truer than ever. It’s important not to celebrate the wins until the transaction is completed. A good feeling about a sale prospect is just a good feeling until the money is in the bank or the contract is signed.
The carrot with no stick approach Any business that has a subscription style product or service has the ability to bring forward sales by offering incentives such as a certain period free or an upgrade at no additional cost (commonly used by providers such as Foxtel). If you are using these strategies, make sure that your contracts clearly state what the customer is locked into once the free period is over and ensure you receive at least some of the payment before the free period begins.
Keep in contact
Just because a customer has not purchased from you does not mean they are not interested in what you have to offer. People get busy and you are not necessarily their first priority. Keep in contact through updates, offers and newsletters. The key is to ensure that you have something relevant to say. If you are just making contact for the sake of contact, then your time and money is wasted.
What’s ahead for the financial year?
New tax rates
|Taxable Income $
|$6,001 – $35,000
|$35,001 – $80,000
|$80,001 – $180,000
PAYG payment instalment for SMES
Automatic reduction of PAYG instalments take effect for 2009/2010. Applies to quarterly payers who have their PAYG adjusted for GDP.
Tax equality for same sex couples
Same sex couples and families will be treated the same as married and defacto couples for tax purposes from 1 July onwards.
Education Tax Refund now Claimable
If you are eligible, you can now claim a refund for education expenses incurred by primary and secondary students from 1 July 2008. Don’t forget to keep your receipts.
The reduction in the concessional superannuation contributions cap (from $50,000 to $25,000) and the reduction in the co-contribution rate (down to 100%) take effect from 1 July 2009.
Investment Allowance Spending Rush Slows Down
For those businesses selling products that qualified for the Investment Allowance, you can expect to see a slow down as the end of financial year rush is over. Sales will pick up again through the year for customers under the $2 million threshold as they can still access the higher Investment Allowance rate of 50% until 31 December 2009.
Boost your point of sale display
Almost all retailers are aware that people tend to buy what they see. It’s more important than ever to show your customers how your products can work for them. Fashion retailers use this strategy by dressing mannequins in a complete outfit with accessories. People want to see how they should be wearing the outfit not just the outfit by itself. Working this way boosts the number of products purchased by the customer. Take a look at where those small value-add products are located in your business – are they off to the side or are they right at the point of sale. There is a reason why supermarkets have magazines and sweets at the counters. Bunnings also demonstrate this with their smaller sale stock prominently located at the counter. This strategy is not just for retailers but for every business where your customers come to your premises. Are your customers looking at pretty pictures on the wall or are you demonstrating the value of what you offer?
Almost all business people reading this would be aware of these tips but the question is, how many of us put them into place?
If you need assistance identifying profit margins, product analysis, the impact of discounting or the best strategies for your business, call us today on 4227 6744.