There's nothing more painful for a new business owner than seeing a shopper walk in the door and walk out empty-handed. The sale goes up in smoke as does the potential for turning that shopper into a repeat customer. It's like having all the bases loaded in a ballgame and then having an inning-ending out. You're in position, but you don't score.
For a startup, every sale counts. You don't have customers flooding your phone lines or swarming your showroom, so you have to make the most of those who do turn up. If you have 100 inquiries and close only 10 of those sales, your batting average will be dismal as will your bottom line.
It's not just from the lost sales alone. You invest time, energy and money into promoting your business with ads, door hangers, direct mail coupons and marketing tools. The fewer shoppers you convert into buyers, the higher your cost per customer acquisition.
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Setting the Stage
The first step in increasing sales is to calculate your actual conversion rate. For a brick-and-mortar business, this is a relatively simple matter of comparing the number of callers or store visitors to the number of actual sales. For an internet-based business, web analytics software does the trick.
The optimal conversion rate will vary with the business. It will be higher if you're peddling running shoes than if you're pushing Ferraris, for example. But knowing the ratio is important because many businesses vastly overestimate the figure. Seeing the actual numbers usually alerts the business to focus on improving sales techniques. It also helps you measure the success of any changes you make.
Closing More Sales
Once you've determined your conversion quotient, you're ready to tackle the challenge of improving it. These basic strategies can help you close more sales.
1. Stress your unique selling proposition. Figure out what makes you different from the competition and deliver that message loud and clear. For example, one wedding/event facility touted the credentials of a new head chef they had hired from the best restaurant in town, pushing its conversion rate from 60 to 73 percent.
2. Identify bottlenecks in your sales process. Analyze the steps required to get customers to buy from you and determine your weak spots. Let's say you're in the deck building business. To make a sale, you need to schedule an appointment, show photos of your work, take measurements, propose a design, price the job, provide references and so on. Do you need new photos for your portfolio? Does your proposal package need sprucing up? Are you failing to make follow-up phone calls? Fix the flaws, and sales will follow.
3. Use the magic question for telephone inquiries. Never let a caller get away with simply asking for price information. Train your staff to say, "Thanks for your call. So that I can be of the biggest help to you, can I ask you a couple of questions?" This opens the door to engaging the customer. One tire retailer I know doubled his business by adopting this technique and coaching salespeople to ask about callers' driving patterns, typical number of passengers and preference for low-priced versus longer-lasting tires.
4. Outlaw "Can I help you?" on the retail floor. Inevitably, the customer will answer "No thanks, I'm just looking" and end the conversation. Instead, instruct salespeople to ask, "Hi, have you been in our store before?" If they say no, the answer should be "Let me show you around." If they say yes, the response should be, "Welcome back, let me show you a couple of new things we just got in." That way, you don't give them an opportunity to say they want to be left alone.
5. Rewrite your sales script. A lot of what goes wrong in selling can be traced to sending the wrong message. Consider the home security firm whose telemarketers introduced themselves by saying, "We heard there have been break-ins in your neighborhood, and we'd like to talk to you about installing a security system." After a business coach determined that approach was a turnoff and changed the script, the firm's conversion rates doubled overall and quadrupled for the strongest team members.
6. Adjust your sales pitch to the customer. It sounds basic, but most people don't do it. Train your sales team to ask questions to flesh out the customer's needs and to cater to different buying styles. One method called DISC divides the public into dominant, influencer, stability and compliance buyers. This applies to sales scripts as well as face-to-face selling. One jewelry store boosted its conversion rate from 26 to 65 percent by using role-playing and other training methods to help the staff adapt to different customer scenarios.
Remember, marketing can help make the phone ring or bring people in the door, but you can't win the war unless you turn a high percentage of your "live" prospects into paying customers. Give your sales team the right tools, and you'll have a lot fewer shoppers getting away.
Brad Sugars is Entrepreneur.com's Startup Basics columnist and the writer of 14 business books including The Business Coach, Instant Cashflow, Successful Franchising and Billionaire in Training. He is the founder of ActionCOACH, a business coaching franchise.