Part 2: DEAL Closure Rate skills
by Walter J. McDonaldIn this second of our two-part Newsletter on Selling Skills, we will examine Essential Closure Rate Skills and introduce our guest contributor, Tom Paul, CEO of Pop Art, Inc., and his article on mobile apps as selling tools.
As a review, two sets of selling skills are essential for machinery sales success:
Newsletter 1
- Skills to achieve a high territory deal visibility or participation rate. This is the ability to identify potential sales early enough to influence the transaction. The later you arrive on a deal, the lower your probability of success and the lower your margins. The earlier you can identify a potential sale, the greater your prospects are for success. This was covered in our last Newsletter. Contact me (walt@mcdonaldgroupinc.com) if you would like a copy.
Newsletter 2
- In today’s Newsletter we will examine skills related to closing the sale. Closure rate is the percentage of deals closed. These skills involve high levels of building trust and confidence with qualified buyers with the right level of persuasion and personal communications essential to “woo” the account.
In machinery territory sales, Closure Rate tracks performance in those essential personal selling skills needed to persuade prospects to do business with you and your dealership. The most successful machinery and aftermarket sales reps in the industry work toward maintaining a deal visibility rate of 80-85% and a deal closure rate of 50-60%. At this success rate, you can expect to maintain a market share of 48% (.80 x .60).
PERSONAL SELLING SKILLS TO IMPROVE DEAL CLOSURE RATE
1. Account profiling techniques
There are essential facts about your accounts, especially A/Bs, that must be captured in order to develop and maintain a successful long-term relationship. In addition to full contact information for the decision maker or buyer, in my experience it is also essential to identify key influencers.
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Many very successful sales reps also classify the “behavioral styles” of their prospects according to Tony Alessandra’s Collaborative Selling text. It is essential to define the scope of the account’s operations, history with dealership, budget period, business environment, strength of position in the account, product support reputation and their most critical issues and strategic concerns.
For additional help on developing Key Account Profiles see my Successful Key Account Management text, Chapter 3.
2. Account qualifying procedures
I’ve always liked to review these questions when working with a new customer:
a. Have you properly identified and defined a problem?
b. Do you have a possible solution?
c. Do you have the very best solution?
d. Are the funds in their budget?
There is no such thing as a good prospect who can’t afford what you are selling.
3. Introducing you and your dealership’s product support as a competitive strength.
Prospects Are Predictable. And, this is what the prospect is thinking when you first meet them.
- Prospects want to be sure they can trust you, your dealership, your equipment.
- They want strong aftermarket support.
- They want to be understood–goals, fears, needs.
- They want value to outweigh price.
- They FEAR making the wrong decision.
Your Prospect Is Thinking…
- Who are you?
- Who is your dealership?
- What is your reputation?
- What do you sell?
- How expensive are you?
- What do you know about our firm?
- How can you solve my problem?
- Can I trust you?
- Will you be there WHEN I need you?
- Am I going to make a mistake with these people?
A time-proven approach is to provide a short “Features-Benefits” (F-B) statement about you and your dealership.
Before you can sell your equipment and prove your product’s value… You need to establish trustworthiness and rapport. You need to establish the credibility of: YOURSELF and YOUR DEALERSHIP
What are the advantages of a carefully worded F-B introduction… OF YOU?
- Establishes credibility… no “blowing up a balloon.”
- Differentiates you from the crowd.
- Maximum info in minimum time.
- Kicks off relationship, builds rapport.
Example: Mr. Smith, because of my 8 years’ experience as a machinery sales rep for _____ and my extensive factory training, I am able to assist you select the very best solution. Also, I have four current customers who will be happy to tell you how they have benefited from doing business with me.
What are the advantages of a carefully worded F-B introduction… OF YOUR DEALERSHIP?
- Establishes credibility, capability of dealership vs. competition.
- Makes dealer capabilities relevant.
- Appeals to most fundamental wants and needs of the equipment buyer.
- If you believe in your dealership, speak highly… it’s seen as well-run company.
- Don’t “SHORT CHANGE” Yourself! You bring valuable resources to your prospect
Just as important as a F-B product demonstration, A Features-Benefits presentation of the dealership is essential to establish trust and rapport.
Example: Mr. Smith, (dealership name) maintains a parts inventory of over $ xx million. And, our off-shelf parts fill rate is over xx%. This means we will have the part you need when you need it.
Our xx factory trained and certified field service technicians are standing by to assist you and their first job completion rate is xx%. This means we be there when you need us. And, most importantly, our fix-before-fail maintenance program will assist you avoid most emergency breakdowns and provide the highest level of productivity for your fleet.
4. Needs analysis, fears identification and diagnostic problem identification
It is essential to develop the skill of asking diagnostic questions then carefully listening and taking notes on the response. Superior customer interviewing techniques are essential in the early phase of the deal. Skillful “open-ended” probing questions help determine the nature of the customer’s business, his problems and the cost of those problems. Customers respond most positively to this type of professional interview.
The customer perceives the sales rep as sincerely interested in the customer’s situation, his concerns, his fears, his expectations. Rather than respond with a “knee jerk” recommendation, the sales rep gives careful consideration and thought to a broad spectrum of problems, requirements and specifications described by the customer. This is the genesis of relationship selling. Customers like this professional attribute and it is the key to building trust and long-term relationships.
The skills of Questioning-Listening-Recording are the key to sales success. There is a close correlation between the skillful use of questions and success at every stage of the buying process.
In a sales conversation, the person who asks questions has the control.
The quality of your reps’ questions and their ability to ask them in a logical sequence is what demonstrates to the prospect that your rep is a complete professional. Your reps knows what they are doing each step of the way, and, must carefully listen to and take accurate notes.
Questions arrest attention. While the prospect is responding, the rep has his complete attention. If questions are logical, orderly and sequential, they can lead the prospect forward toward the inevitable conclusions that your equipment is exactly what the prospect needs.
Telling is not selling. The average person speaks at 125 words per minute, but the average person is thinking at 600 words per minute. When you are talking, the prospect can both listen to you and think of several other things at the same time.
The more you talk, the more the prospect has time to think about objections, criticisms, doubts, fears and all the difficulties of his business and personal life.
The instant you ask a good open-ended question, and wait patiently and quietly for the answer, the prospect’s entire attention focuses on you. They cannot think of anything else while answering.
If you must answer a question or make a statement, remember that the average person’s attention span is limited. They cannot hear more than three sentences in a row before they go into mental overload.
Probing and listening are more important than a sales pitch. Stop and think about the answers.
Sample Situation Questions:
Get facts and details. Obtain information to help understand activities and size of the prospect’s operation. Update your information on current changes in the account.
What kind of jobs do you do now?
How many units do you have in your fleet?
How do you do your maintenance now?
What needs are coming up for you?
Sample Problem Questions:
Define problems, difficulties and dissatisfactions the prospect is having which you can solve with your equipment and product support services.
What kinds of problems are you having getting the job done now?
What is causing most of your inefficiencies?
Tell me about the productivity problems you are having now.
Sample Cost of Problem Questions:
Financial consequences or negative effects of the problems that justify remedial action.
How much are the productivity bottlenecks costing you now?
How do you estimate your production costs now?
Don’t be an alligator: Little ears, little eyes but a BIG MOUTH!
Edward R. del Gaizo, The Alligator Trap
The most successful machinery sales reps also know how to judiciously utilize two questioning dynamics: “Open-Ended” and “Closed-Ended” questions.
Open-Ended: Mr. Smith, what kinds of productivity problems are you having now?
Closed-Ended: Mr. Smith, is that delivery date OK with you?
5. Persuasive presentation and machinery demonstration
The importance of presentation and demonstration practice cannot be understated. You should have a formal product feature presentation sequence such as Feature-Function-Benefit: what the feature is, what it does and how it benefits the customer.
Just remember:
The sales rep doesn’t know it until they can present it.
They can’t do it until they can demonstrate it.
Secrets to accelerated performance for the new Sales Rep:
a. Build, practice personal introductions and create, practice “who we are” dealer introduction.
b. Practice product and product support brochure presentations to the dealer principal or sales manager.
c. Give formal walk-around product demos.
d. Give product support presentation to prospects.
e. Give formal product demonstration with certified operator.
Walk-around features-function-benefits presentations are so important that a major international equipment manufacturer just recently invested over $1 million in developing a phone app to assist its dealer sales reps give more effective feature-function-benefit presentations.
Add to Your Sales and Operations Management Tool Box
Here are our recommendations:
Complete 11-volume Machinery Dealer Management Set
For Dealer Principals, Financial, Sales and, Operations Managers
Set Includes our Comprehensive Self-Study, Self-Development Program
I’ll develop a Customized Sales Management or Operations Management Track for you upon Request. Contact me: Walt@McDonaldGroupinc.com
Click HERE for Dealer Management Tool Kit details and purchase information on our website.
(Next Article Shown Below)
SELLING SKILLS INVENTORY
by Walter J. McDonald
Use the following to check out your skills covered in this series of Selling Skills articles. Where do you need to improve?
Score each personal selling skill below on a scale of 1 to 10. Give yourself a 1 or 2 if you are extremely weak in an area. If you are very, very strong, score yourself a 9 or 10.
DEAL VISIBILITY RATE SKILL SET
SCORE
- Market Segmentation and Assessment
Skill of assessing your territory to identify the most promising and productive customer segments (business vocations) that offer the most opportunity. - Territory Account Identification, Organization and Classification
Skill of profiling large numbers of current AND prospective accounts to identify near term purchase plans or potential, classification of current and prospective accounts into A-B-C importance categories and structuring an account contact strategy to optimize coverage. - Prospecting and Account Analysis
Skill of contacting A-B-C customers AND prospects according to plan, either in person or over the phone to identify equipment purchase requirements.
REMEMBER: You will never be able to drive your truck fast enough to identify 80% of the deals by personal territory canvassing alone. You must use technology to help you cover the territory: phone, direct mail, bird-dogs (lead finders), social network platforms, e-mail, referrals, partnering with parts and service, trade association activities, sales referrals - Territory Development Follow-up and Control
Skill of pursuing emerging sales opportunities to be within shooting distance in a timely, orderly way.
SALES MANAGERS – You would benefit by reviewing the article, Participation Rate and Market Share by industry leader Tim J. Murphy in my Successful Key Account Management, Chapter 13.
CLOSURE RATE SKILL SET
SCORE
- Account profiling techniques
Skill of identifying key players, influencers and decision makers, fleet size and composition, equipment replacement cycle, financial status, purchasing preferences, competitive activity, vital vendor selection criteria, their awareness of your product support capabilities and reputation, the growth and success level of their business. - Account qualification procedures
Skill of ascertaining if the account has sufficient need, buying authority and financial strength to consummate the deal. - Needs analysis and problem identification
Skills of probing and listening, identification of problems/opportunities, uncovering fears and concerns, equipment maintenance issues, and purchase decision criteria and priorities other than price. - Persuasive presentations and demonstrations
Skill of demonstrating that your equipment and attachments, service and parts proposal is the lowest risk highest return alternative. - Marketing your Dealership’s overall product support capabilities
Prospects who don’t know your dealership, are held back because of fear. No matter how bad their current vendor is, you could be worse! They are fearful your dealership will not be there when they need you for warranty and, parts and service support. - Utilizing financial tools and presenting appropriate options
Skill of providing the prospect relevant alternative financial packages that best suit his needs, cash flow and investment requirements. - Anticipating Questions, Handling objections
Skill of responding to questions and offering proof to diminish FEAR of doing business with you and your dealership. - Good personal communications and follow-up
Skill of staying close to the prospect and maintaining the momentum of the deal. - Getting commitments.
Skill of getting the prospect to take the steps needed along the way: credit application, used equipment appraisal, visiting your parts and service department, talking to happy users (customer referrals), spending time needed to properly identify real needs resolve fears, establish commitments from all influencers and gain support from equipment users in the account. - Enthusiasm, resilience, honesty
Build it, maintain it, or lose it.
TOTAL SCORE
NOTE: If your TOTAL overall score is less than 112 (out of 40 + 100), you should immediately begin an aggressive personal selling skills development effort. Remember, you are only as good as your weakest skill area. EVERYTHING COUNTS! The lowest score drags all other capabilities down to that level in terms of overall impact on performance.
Mathematically, you can see the importance of the combined impact of visibility rate and deal closure rate. If your visibility rate was only 20% and your closure rate was 75%, your maximum market share would be only about 15%. (.20 x .75).
Even with a closure rate of 100%, with only a 20% visibility rate, your maximum machinery market share could not exceed 20%!
Visibility
Rate
Closure
Rate
Market
Share
Which of these two skills is more critical? In my opinion, both are essential. To attempt to do one without the other would be just as foolish as heading out to your East African safari without a guide to show the way and a well-planned 4-WD campsite route (that would absolutely assure you great views of the big game), or forgetting to load your expensive camera with adequate memory!
Everything counts. It either helps you move closer to personal professionalism sales expertise and success, or, further away.
Q. How can you achieve nearly 100% Visibility Rate?
It’s easy. Identify every equipment owner/user in your territory. Divide them into 12 batches. Do A accounts first. Contact every account in this month’s batch. Ask if they have any product support issues you can help with. Ask if they have rental plans. Find out what units were recently added to their fleet. Ask for possible purchase or rental plans over next 8 – 10 months. Get their email addresses for future dealer promotional mailings. That’s it! Just imagine how helpful this information would be.
Editor’s Note:
We are pleased to welcome guest contributor Tom Paul, CEO of Pop Art, Inc., who has pioneered a remarkably effective and affordable way to accelerate dealer product knowledge through a centralized portal sales team can use in their day-to-day sales process.