Tuesday 17 November 2009

Do You Expect To Close On Your First Contact?

Are you one of those business people that believes that every encounter with a prospect requires you to close a sale; regardless of whether you have uncovered a need?


Interesting, because I still encounter businesses everyday that use aggressive sales techniques to do business. I guess they don't bother with niceties, such as retention marketing; nor do they have a long term business vision.

Look, we would all like our prospects to transact with us, the first time they hear from us, but that ain't gonna happen. It is unrealistic to expect your prospects to all be primed, and ready to buy, unless you have one helluva "must have" product.

Consider these statistics for a moment.

48% of sales people never follow up with a prospect.

25% of sales people make a second contact, then stop.

12% of sales people only make three contacts, then stop.

10% of sales people make more than three contacts.

2% of sales are made on the first contact.

3% of sales are made on the second contact.

5% of sales are made on the third contact.

10% of sales are made on the fourth contact.

80% of sales are made on the fifth to twelfth contact.

I don't know if these statistics are from a valid study, or whether they have been derived from experience. The point is that it usually takes much more than one contact to close a sale. Think about it, how often have you been contacted multiple times to secure a sale? Very rarely. Even more important, how often have you been contacted by a salesperson you have done business with in the past? Almost never. Prime examples are the auto industry and the financial services sector. Both are reknowned for their high customer churn.

Yet if you analyse the top sales performers, you will notice a common thread, tenacity and perseverance. These stars know that it takes multiple contacts to secure a sale, and they have developed unique processes to cater for this.

In marketing this is commonly referred to as the "Law of 29", where it is anticipated that a prospect may have to view your marketing message 29 times before they transact. This may be excessive, however if we view the above statistics we see that 80 percent of sales are concluded after anywhere between 5 and 12 contacts. The number isn't important, except to grasp that you need to have a strategy to deal with multiple contacts.

So don't go splash some money on a one time advert. It is a waste. Rather develop an ongoing strategy, where you use a low cost, interactive technology to coax your prospect towards a sale. Why use technology you ask? Well it becomes an impossible task to manage a growing list of prospects, each with different communication requirements and needs.

By the way, I say interactive because unless you are gathering information, and responding accordingly, you will never be able to determine when your prospect has a need.

So, in a nutshell, expect to contact your prospects multiple times. Develop a series of messages, what I call a Sequence™, that are timed and triggered (more on this later). Use multiple mediums, instead of a repetitive and tedious one-way newsletter e.g. fax, sms, snail mail, cards, website and phone calls. But also know when enough is enough; I reckon if you haven't closed the sale after somewhere between 5 and 12 contacts, you probably aren't. So pick a cut-off, say 10 contacts, then call it a day with that prospect.

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