21. January 2011 04:21
True or false?: “Sales is a difficult game.”
I hear it every day. “The sales game is a tough game.” “It’s almost impossible to make a sale in this economy.” “I’ve read every book on sales – none of them help.” “You know nobody’s buying…right?”
Wrong! For me, selling is actually quite easy.
A zillion books have been written on this subject. However, an old real estate philosophy sums it up best: “If you want to sell a house, you need a ready, willing and able buyer.” The logic is that if you’ve found a buyer who meets all three of these criteria, you will close the deal most of the time.
My view on what these three terms mean.
READY: A ready buyer is someone for whom the timing is just right to purchase a home. A ready buyer may have just gotten married and wants to create a new household. A ready buyer may be planning to expand the family with a new baby and needs more space. A ready buyer is an Empty Nester – or an older couple who want to downsize to a smaller home.
An example of a buyer who is not ready is perhaps someone looking at homes as a diversion from other obligations. A person in the throes of hosting a big Holiday Season with many guests – is not ready to buy a home. A person who is “just looking” is not ready either. Nor is someone who just lost a loved one. These people have more pressing issues to address, and a home purchase is not a top priority. They may want to. They might be able to afford it. But the timing is off. They’re not ready.
WILLING: A willing buyer is agreeable to buying a particular home for the agreed upon price. “Yes, I am willing to pay $500,000 for that house in Cranbury, NJ.” The term “willing” actually has a lot to do with value. That specific home at that price creates enough value for me that I am willing to buy it. If the price was $600,000 the value drops and I am no longer willing to complete the transaction.
ABLE: An able buyer is one who can afford to purchase and close on the home. A broker might have a ready and willing buyer who can’t get financing and therefore is not able to close.
The trick to making the sales game easy?
Only work with prospects who exhibit all three qualities: Ready, willing and able. If you have a prospect who has only two of the three qualities, you can use every sales technique in the (zillion) book(s), and you still won’t close the deal. You will, however, waste a lot of time and precious resources.
Why am I so sure?
If you’re a salesperson, think back to a time when you closed a deal very, very quickly - and it seemed easy. Chances are they were ready, willing and able. For sales you lost over the years, think back once again. I know I do – about a "prospect" I called once a week for a year. With every phone call came more excuses. Looking back, this person didn't have all three qualities. I wasted my time, but I learned a valuable lesson.
Ready, willing and able, MCC style.
At MCC Recycling we have our own variation on the ready, willing and able buyer.
I teach my salespeople to look for prospects with the following three qualities:
1. They must have a problem for which we can offer a solution (ready).
2. They must believe that our solution creates enough value to justify the cost (willing).
3. They must be in a position to make purchasing decisions (able).
If my salespeople identify the right contacts within targeted client companies, they will close deals. Lots of deals. And so will you.
I love it when they tell me their sales jobs are easy.
14. January 2011 00:16
What is commoditization?
I’ve been reading a lot about modern commoditization theory, and how it affects businesses everywhere. In commoditization theory, a business’s products or services are evaluated exclusively in terms of price, because a similar if not exact product or service is available elsewhere in the marketplace.
The role of the Internet in commoditization.
Over the past decade, the Internet has dramatically increased the commoditization of products and services across the board. Before the advent of the Internet it was difficult to communicate with multiple vendors outside a given local service area. Companies didn’t face much more than local competition, and consumers didn’t have as many options.
Multiple choice: Empowering consumers via direct access.
The Internet has changed the way consumers purchase goods and services, with direct, instant access to a global marketplace. Amazon.com is a great example of this – and I know because I’m a huge fan and customer. I love the freedom of shopping for anything I can dream of, knowing that I will always get a great price. While Amazon.com is a great tool for the consumer, I imagine it has slashed manufacturers’ profit margins, worldwide.
MCC and the struggle against commoditization.
At MCC Recycling, we work very hard to avoid the commoditization of our services. This seems a bit ironic, as we buy and sell commodities – scrap metals - every day. It would devastate our business if our services were to be commoditized. If our margins were to be slashed to dangerous levels then everything else would suffer in proportion. Our equipment would not be maintained; our facilities would degrade; and we would not be able to invest in our people, our intellectual property and our future company strategies. In turn, our competitors would do the same and ultimately the service to the customer would suffer and wither.
Avoiding commoditization with UP and UR.
When working with my sales team I’m known to instruct that “We need a UP or a UR or else we’re playing on price.” To be more specific, we must always work towards developing a Unique Process or a Unique Relationship. Otherwise we’re essentially bidding price on every job.
A UP or a UR - or both - can be extremely beneficial. A Unique Process (product, service or technique) is when a competitor cannot or is not willing to do what you are doing. It may be that we are specialists in our field, we own some great intellectual property, or that we are just so dynamic and playing ahead of the curve that our competitors can’t keep up with us. A Unique Relationship is also a valuable asset. UR is a situation where our service might not differ that much from the competition, but we have a close relationship with a decision maker because we create value for him/her. Personally, I love having a UR with a customer.
UR the company you keep.
An example of a great UR? My commercial insurance brokerage is fantastic. They provide excellent service, personal access to partners and they do what they say they are going to do. They’ve completely eliminated the annoyances normally associated with the insurance business. They add value by handling many extra tasks for me, which frees up my precious time. This relationship also stands out for me in stark contrast to the inadequate service I received from previous brokers.
In return for the outstanding service, I don’t shop insurance prices. I’m sure they are not the cheapest around. But I don’t mind, as they are earning a fair profit for outstanding performance. I feel they deserve their fees, and will stay in business for a long time, which only benefits me further.
While their process is not unique, they have gone miles out of their way to cultivate a unique relationship with me. If you are a customer or potential customer of MCC Recycling, I hope that both our process and our relationship are strong, unique and create value for you.
If not, please let me know.