What Happened to Sales Basics?1 Jul, 2013 By: Jim Kahrs, Prosperity Plus
The most common question I am asked by dealership owners while traveling around the U.S. and Canada is; “How can I find good sales people?” Finding good quality sales people has always been a challenge but in recent years there has been a shift in thinking and process that has made it even more difficult. As we have moved solidly into the Internet era we have simultaneously moved out of the “traditional” sales training era. Many dealerships have become almost completely dependent on electronic media for sales training. The net result has been a drop off in sales rep skill. You can’t learn the sales trade by watching a bunch of videos. The effect of this on many dealerships has been an attempt to “find” good sales people who don’t need training. However, this doesn’t usually work. What is needed is a plan to get back to the basics of sales and to put training programs in place to create good sales reps.
As with many other subjects there are some basics in sales that need to be fully understood and follow if you’re going to be successful. In my opinion the most important of these is truly understanding the sales cycle and knowing the key steps in each phase. The balance of this article will contain a brief look at the sales cycle along with some pointers for each stage.
Stage 1: Contacting Prospects
I often refer to this as Stage 0 since we can’t truly enter the sales cycle until we’ve identified a prospect. However, this is the area where more people fail than any other. Sales reps must be taught how to prospect and must be held accountable for doing a viable quantity of prospecting. Too often sales managers tell a new sales person to go prospect without taking the time to train them. The sales manager should be side-by-side with a new rep while they are cold calling or doing telemarketing calls. The manager needs to watch what the rep is doing so that he or she may coach and correct the rep. Sending a new rep out to prospect and hoping they come back with leads simply doesn’t work. Once new reps are up to speed they can be set loose to prospect on their own. However, now it is up to the manager to ensure that they are doing enough prospecting. A weekly one-on-one meeting must be conducted with each rep and part of that meeting should include a full review of the rep’s prospecting for the week.
Stage 2: Needs Analysis
Unfortunately some reps think a needs analysis consists of asking a prospect what model machine(s) they have now and when the lease is up for renewal. The goal of these reps is simply to replace what the prospect has now with something newer, faster and better. This is not a needs analysis. A true needs analysis digs into what the prospect does and why. Many questions need to be asked. I suggest creating a needs analysis survey form your reps can use. This form would list out all of the key questions to ask. The reps would then be charged with having the survey complete prior to ever attempting to move on to the next step. An incomplete or inadequate needs analysis makes it far more difficult to close a sale. In contrast, a properly done needs analysis gives the rep the ammunition needed to move the prospect through the sales cycle with confidence.
Stage 3: Presentation
The presentation stage of the cycle is where the rep lays out one or more potential solutions for the prospect. THE goal of this stage (and the only goal of this stage) is to get the prospects agreement on A solution. There are two big mistakes that I often see in this stage. First, sales reps don’t narrow it down to a single solution. If you are going to present multiple solutions you need to guide the prospect toward the solutions that will be best for them. Understand that the prospect is not as knowledgeable as you are on the systems so don’t expect them to be able to choose the right solution without a good deal of education first. The second mistake I see here is the lack of demonstrations. Granted, with network connected systems it is more difficult to do a demonstration than it was 20 years ago. However, the importance of a demo in the sales cycle has not changed. Challenge your reps to do a demo for every significant sale. This can be accomplished by bringing the prospect to your office or, in some cases, bringing the prospect to a customer’s office. Don’t fall into the trap of believing that demos are either too hard logistically or unnecessary. They are as important as ever.
Stage 4: Proposal
In this stage you should be presenting a proposal for the one solution that the prospect has agreed is best. We should be beyond “choosing” a solution. That said the proposal should not include multiple systems. In this stage the biggest mistake I see revolves around delivering the proposal. I would have a hard, fast rule that EVERY proposal must be delivered in person and to the decision maker(s). I hear too many stories of reps emailing proposals and then wondering why they can’t get the deal closed. Once you click send on an email you’ve lost all control of the sales cycle. The prospect now has the upper hand. The rep typically now finds himself chasing the prospect and the process drags on for weeks or months.
Stage 5: Handle Objections / Negotiate
Once the proposal has been delivered most prospects will want to negotiate. As a society, we’ve trained to push back on a proposal and ask for a better price. Most times, this is simply part of the game. Reps need to be prepared for it and need to be ready to handle it. The worst thing you can do is simply reduce the price. This shoots your credibility as a sales person. If you could have given the prospect a better price all along why didn’t you? When a prospect asks for a better price tell him or her that you’ve given them the best price. And simply ask for the order. If you get push back then you can tell the prospect that you’d be willing to call the office and ask on his or her behalf. But, before doing this you need two commitments; first they need to tell you what the price should be (they may not be looking for as big a discount as you think) and second, they must commit to sign the paperwork on the spot of it’s approved.
Stage 6: Close
If you’ve done the previous steps correctly then the close is much easier. You simply need to ask for the order by telling the prospect what to do. For example, you can say “Now that we’ve gone over everything I just need your signature here and here and we can get you set up for delivery on Monday.” The key is to control the close by telling the prospect what to do. The biggest mistake I see sales reps making here is finishing their presentation and saying, “So, what do you think?” This is the kiss of death. If the prospect has questions or objections they’ll let you know. There’s no need to ask. By asking what they think you’re inviting sales resistance where you might not have had any. Remember, you want to control the sales cycle.
Stage 7: Installation
The final stage of the sales cycle is the post-sale follow up. The sales rep should be there when the systems is installed. Many customers will experience buyer’s remorse. It is a natural reaction that many go through when making large purchase. You wonder if you’ve made the right decision. The sales rep can reduce or eliminate this by being just as involved and interested in the customer now as they were during the earlier stages of the sales cycle. The biggest mistake I see here is the sales rep “allowing” the service department to handle the installation and training while they move on to the next sale. Yes, the service department should be handling the installation and possibly some of the training, but as the sales rep you need to be visible and involved. This goes a long way with new customers.
Obviously there is far more to the sales cycle than what can be covered in one article. My goal here was to give dealership owners, sales managers and sales reps some food for thought. As an industry, we need to get back to sales basics. The sales cycle has been around for thousands of years and will be around for thousands more. If we continue to take shortcuts and allow our reps to be untrained then the sales results will show it. Training sales reps properly, ensuring they follow the process and monitoring what they do may be time consuming but when done properly it pays off in spades. Make the investment in time and you’ll be glad you did. Good luck and good selling!
Jim Kahrs is the president and founder of Prosperity Plus Management Consulting, Inc. He may be reached at 631-382-7762 or at http://email@example.com