What's The Problem?

Next time a customer cancels an order, find out what you did wrong -- and fix it!
Magazine Contributor
7 min read

This story appears in the April 1998 issue of Entrepreneur. Subscribe »

Before closing a sale, do you feel resistance from your customers? If you do, treat the resistance for what it is-a problem waiting to be solved.

Before becoming a salesperson, I was a schoolteacher. Like salespeople, teachers are ultimately . I once had a student with poor classroom conduct who resisted learning. I made progress with that student only when I understood that his negative behavior was an obvious sign of a problem waiting to be solved.

If I had handled the child's resistance by badgering him into my way of thinking, the results would have been disastrous. Instead, I worked on a problem-solving formula to discover what was causing his bad behavior.

When I became a salesperson, I adapted the same problem-solving formula for handling customers. This method can help you improve your and develop stronger customer relationships.

Know Your Role

First, think of yourself as a problem solver rather than a salesperson. All customers have a need or want-a new computer, a certain piece of clothing, a good cup of coffee or a quality cleaning service. You have that product or service, and you know once they buy it, they will be satisfied.

But when it comes for your customers to sign on the dotted line, they often hesitate; they may be comparison shopping or unrealistic when it comes to paying a little extra for quality. Or they placed the order, and now they want to cancel.

What's the best way to handle these situations? Treat your customers as people you can help-not as adversaries. When you label a customer's reaction to your product an "objection" or a type of sales resistance, that's what it becomes. then becomes a win-lose situation.

Instead, implement the following Problem, Cause, Effect, Cure (PCEC) formula for closing more sales. I've broken it down into two easy steps:

Step 1: Solve a real problem of your own using the PCEC formula. What is your worst closing problem? Sometimes we are so close to the issues that we lose perspective and can't see what the problems are.

Problem: Don't confuse the effect of the problem with the problem itself. For example, you may not want to face up to the fact that you are too cheap to hire good help or to increase your inventory to improve on-time delivery. Instead, you blame customers by saying they are impatient, or you blame your salespeople for making promises they couldn't keep when you previously assured them the date would be no problem. The PCEC formula demands that you be honest with yourself and willing to correct bad habits.

Cause: When you write out the cause, be sure you dig beneath the surface. For example, high turnover in your company may be linked to high cancellation of sales. You may see the cause as "people just don't care about doing a good job anymore." Could the real cause be that you aren't training people well?

Effect: Remember that the effect is the current situation in your , but the cause of the problem started months-or even years-ago. For example, the effect of working for 24 months with an unqualified prospect is poor sales productivity and low profits.

Cure: Hiring, training and retaining good salespeople takes time and . Invest in these necessities, or you'll pay in the long run.

Step 2: Study the PCEC formula. Here are some samples of how to use the formula:

Problem: Large numbers of phone-order cancellations at your catalog company.

Cause: Rapid growth and small thinking.

You started a mail order clothing business. The catalog layout is unique and fresh. Your clothes are exciting, yet practically priced. And the phones start ringing off the hook. It's you and your partner manning the ship, but as careful as you are, things are beginning to get out of hand.

Effect: Slow delivery is causing order cancellations, and you're suddenly experiencing cash flow problems due to customers demanding refunds.

Here's an example of what you're encountering: A customer places an order from your catalog in plenty of time before Christmas (or any holiday or special occasion when timing is particularly important). Five days before the holiday, the customer has not received the order. She calls your company and is placed on hold for 10 minutes and then finds out the order was sent to the wrong address or shipped standard mail instead of UPS. She cancels her order.

Cure: Hire and train more employees.

Creating a sale is one thing. Closing the sale for keeps is not just about getting the phones to ring but successfully delivering the order and receiving repeat business from that customer. Don't spend all your money on the front end of the relationship. This is what I call honeymoon thinking. The romancing of the customer with a quality product and an effective presentation must be followed up with a commitment.

If you are growing rapidly, don't get caught up in your initial success. Take the time to hire a support team and train them to handle the rush of new orders. Don't be cheap when it comes to hiring employees.

Let's do one more sale-closing problem using the PCEC formula. This one occurs before the customer makes his or her decision.

Problem: Your customer says, "I want to think it over."

Cause: There are two possible reasons for this reaction: time and money.

Effect: Low sales, thus low profits.

When you don't know why a customer wants to think it over and you don't take the time to find out, you can't solve the problem-and you may lose the sale. Conversely, spending too much time with people who can't come to a decision will cost you business, too. Problem solvers close sales.

Cure: If time is the problem . . .

Some customers must analyze a situation before they buy. Have you taken the time to review the benefits of owning your product or buying your service? Sometimes prospects only need a little extra assurance to be satisfied enough to make a decision.

If the customer still wants to postpone the sale, outline the advantages of buying now. Of course, these facts must be truthful and must never be used to make a customer come to a decision for your benefit alone.

Enlist the help of loyal longtime customers who almost delayed their decision but then decided to go ahead with it and were pleased with the results. It's likely they'll be more than happy to share their story.

Cure: If money is the issue . . .

Big numbers can terrify customers, particularly right before the close of a sale. Break the numbers into smaller units that are less overwhelming.

Explain the difference between cost and price to your clients. Price is the initial amount customers pay for the product. Cost represents the amount they invest in the product as it's used over a period of time. When you teach buyers how to compare price and cost, you're teaching them how to determine what the best value is for them over a period of time.

Remember, all cures take time. Your closing problem probably took months to manifest itself, so don't expect the solution to work overnight. The good news is it can teach us an important lesson: Address problems as early as possible. Keep your eyes open at all times for possible problems and causes. The sooner you spot a problem and its cause, the quicker you'll find its solution-and make the sale.

Danielle Kennedy presents sales and seminars and keynote addresses worldwide and is the author of seven sales books as well as audio and video sales training programs. Check local bookstores for her book, Seven Figure Selling.


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