Everybody knows the economy tanked in 2007 and it hasn’t recovered much, if at all. As a small business, maybe you got a double sucker punch if your industry, like insurance, has effectively combined technology and mass marketing to create viable alternatives to buying products from you.
There’s plenty of blame to go around, but it does no good for you to point fingers. You have to take action if you’re going to move your business forward. Talking about it is a waste. If you feel like everything you try ends up like moving the decks chairs around on the Titanic, you need results.
The simple answer is that we make sales in a tough economy by building relationships with prospects. That’s because people will buy from people they know and like.
The complex part of the answer has to do with building those important relationships. It is a process and can be designed in many ways, but in its simplest form, it is making multiple contacts with an individual over time. Selling in any environment is all about building a vast web of relationships. The process can often seem overwhelming when we look at our prospecting list and wonder how we will build all those relationships.
As a business coach and professional educator, I often find that producers will either focus on their existing clients and their prospecting activity suffers or they focus on their prospects and their client service activity suffers. I spoke to an agent who sold health benefits and he told me he had over 2,000 clients. I asked him how often he made contact with his clients and he said, “only when they called me”.
The good news was that he had over 2,000 clients, the bad news was that his retention was poor because he was unable to maintain a relationship with all of his clients. He didn’t have a system developed that ensured he was making contact with his current clients and as a result, he suffered when it came to renewals. He failed to develop and pursue a high-integrity approach to earning his clients’ continuing trust because his focus was only on prospecting and selling. He should have implemented a contact system that kept him continually connected with his clients to a point where he always exceeded their expectations with knock-your-socks-off-service and he was their most valued resource in every way.
What about prospecting? Many producers will make a few calls with a prospect and give up after the second or third contact. They aren’t persistent and their focus isn’t on building relationship but only on trying to get a quick sale. You already know how important it is to identify exactly what a prospect values most, right? So with each contact, be sure to find out – ask probing questions that lead to the answers about value.
Building relationships is tough because it takes time. Prospective customers already view your product as a commodity to some degree, so how to you differentiate your product? Of course, you focus on a unique feature or advantage and you tie it to what your prospect values most. Many producers just don’t have the patience or a system that keeps them focused on developing relationships so that they get the sale.
It’s all about building trust between you and the prospect and it takes time, perseverance and planning. When you establish a high trust relationship, you have the inside track and your client may not even give your competitors an opportunity to quote when it’s renewal time.
LET'S LOOK AT THE STATISTICS
They tell us the following about prospecting activity:
- 48% of salespeople never follow up with a prospect
- 25% make a second contact
- 12% only make three contacts
- ONLY 10% make MORE than three contacts
Statistics also tell us where sales actually come from:
- 2% of sales are made on the 2nd contact
- 5% on the 3rd contact
- 10% on the 4th contact
- 80% of sales are made on the 5th – 11th contact
Armed with these statistics it only makes sense that a good selling strategy involves multiple, systematic contacts over time which equals building a high trust relationship.
Here’s an additional bonus: Referrals are an awesome selling tool. They can be your best and easiest sales because a referral gives you instant credibility and a high comfort level with the prospect. It doesn’t equal an automatic sale, but it often gets you past the gate keeper. A personal recommendation gives a sales person a huge advantage over a cold-calling stranger. Any sales person with a client base has a great source of referrals. When was the last time you asked your current clients for referrals? Don’t be sheepish; you provide top quality products and service, right? When you deserve a referral, it’s not snarky to ask for one. Let your clients know how highly you value their personal recommendations. It’s the highest compliment they can give you.
MAKING USE OF REFERRALS
Do you know who gives you the most referrals, and more importantly, are you taking care of those referral sources? Always thank someone who has given you a referral. Send them a note or some goodies; keep them informed of your successes, and treat them to a meal (which can lead to even more good referrals).
Make your referral request part of your initial contact with a prospect. Your prospect will likely be impressed with your commitment and enthusiasm for success. Be specific about what type of referrals you prefer, so you don’t waste time chasing useless leads.
Above all, make a habit of asking for referrals every day. You might want to set a daily goal of how many referrals you want to generate, that way you can really stay focused on this effective selling tool.
Remember the mantra I use frequently with my clients; action drives results. The key to making change happen - and building sales in a tough economy - is to get up off your duff.
Identify and prioritize the areas of relationship-building that ensure your business continues to grow and prosper on a longer term basis. Makes no difference if the economy is in the tank; systematic relationship building will always pay off for dedicated producers in the long run.