“2% of sales occur at the first meeting; the other 98% will only happen once a certain level of trust has been established“.
that quote from Robert Clays research.
People in business often hope and expect to do business the first time they meet a prospect. Yet studies reveal that only 2% of sales occur when two parties meet for the first time. This actually makes sense when you think logically about it. The higher the time and dollar value of the investment the greater perceived risk from the buyer’s perspective. So what happens after that first call or meeting?
A recent study in the Harvard Business Review** found that companies take, on average, 42 hours to contact a web lead, and that 23% of companies did not respond at all. Furthermore, they found that leads that got a response in the first hour were seven times more likely to make contact with the decision maker. What is going on? Why aren’t we following up?
1. Number of people who buy on the first meeting – done their homework
The 2% who buy at a first meeting tend to be people who have already looked into the subject matter, and already know what they’re looking for. If they meet someone who ticks all the right boxes and they get on well, then business may well be transacted. But that is far from the norm. The other 98% will only buy once a certain level of trust has been built up.” So of those 2% are well informed and have done their homework and are likely to be troubled enough about their problem (thanks Hugh – Leaky Funnel) to want to solve it, if they find something that will fix it.
2. Salesforce should be well-informed
“Anyone who believes they can go into a sales situation armed with “101 sure fire sales closes” and make sales is seriously misinformed … and about 20 years behind the times. Professional sales people get to know their prospects; understand their issues; solve their prospect’s problems; and provide irrefutable proof. They build relationships and trust by engaging in on-going dialogue (otherwise known as follow-up). They don’t just peddle their products and services with an armoury of closing tricks.” These days doing your homework has never been easier. In a B2B sale you can use google, LinkedIn to research at a company and a personal level. At a B2C level you can ask open questions to uncover their need and if you have a database keep a record of their likes and purchases to communicate with them about other purchases they might like to consider in the future. (Amazon model).
4. Why we don’t buy
There are many reasons why people who could benefit from your product, service or expertise do not buy. At least not without further prodding. Inertia. Lack of time. Too many other things on their mind. Concern about cost. Cashflow. Budget constraints. More pressing matters. Your failure to do enough marketing to establish your name in your field so they’ll buy without question … and more. None of the these, by the way, is a negative. They are just psychological and transactional realities you must become aware of and recognise … which is why follow-ups are SO important. You really have to create a reason for prospects to consider you. Given that we know that our buyers are out there researching sometimes it is providing a helping hand to assist them in their research, education and sometimes it is just being there at the right time in the right place (where they are) using email, social media and collaboration marketing efforts.
5. Follow up just not done
Yet isn’t it amazing how often you express interest in a product or service, but never hear from the person or company again? It happens all the time. I actually say I am busy when a telesales person calls but invite them to ring me back and very rarely do they. Research shows, amazingly, that only 20% of sales leads are ever followed up … in other words 80% of potential opportunities are lost without trace simply due to lack of follow-up
People and companies who don’t
follow-up; who do nothing to build up that trust and relationship cannot succeed, especially in today’s tough economic climate. People need to be sure they’re making the right decision before they commit to a purchase.
6.Tenacity pays off…
According to Clay, different studies carried out at different times, in different places, by different market research companies over a number of years all reveal that 80% of non-routine sales occur only after at least five follow-ups.
Think about that. It takes at least five continuous follow up efforts after the initial sales contact, before a customer says yes. FIVE!!
There are some fascinating statistics on this:
- 44% of sales people give up after one “no”
- 22% give up after two “no’s”
- 14% give up after three “no’s”
- 12% give up after four “no’s”
That tells you that 92% of sales people give up after 4 “no’s”, and only 8% of sales people ask for the order a fifth time.
When you consider that 80% of prospects say “no” four times before they say “yes”, the inference is that 8% of sales people are getting 80% of the sales! Thus it pays to be persistent and consistent. Remember it is all about catching them at the right time.
Once you’re aware of these statistics you should stack the odds in your favour by introducing a “Five no’s” strategy, where you maintain contact with prospects until each one of them has said “no”, or “not now”, or “not yet” … at least five times. Every time you’re in contact you have an opportunity to advance and build the relationship.
Businesses with a “five no’s” strategy will always enjoy a conversion rate many times higher than their competitors who have no such strategy. What strategies do you have in your business right now to ensure that you contact your prospects regularly in a gentle and meaningful way so that you win their business and their loyalty?
8.Seventy-eight percent of consumers say that they only buy from businesses that make it easy for them to deal with, and a third believe convenience is more important than price.They are at the heart of Customer Experience Management (CEM) and staffed by specialists that are charged with providing the best experience throughout the transaction or journey and ultimately, achieving a tangible ROI. As this transformation has evolved, technology has played an increasingly critical role in linking businesses to their customers. However at the end of the day it is all about how you feel during the sales and after sales process. I once bought a car and because the car dealership did not treat me like the person who was making the economic decision to purchase both my and my husband’s car they lost the deal. I now get my car serviced not by the dealer because they made it too hard for me to get in and get out of the service process quickly.
9. Acknowledge the Impact of Experience
One bad experience might not send your customer fleeing to a competitor. But then again, it might. On an internal, process level, take a close look at what keeps your business running every day. If these processes aren’t managed efficiently, they’re costing you time, money, accuracy—and customers. Are there repetitive tasks (inventory checks, transaction reconciliation) that you could automate? If so, moving towards automated processes would save staff time and provide better, faster customer service. However be aware that people like to be empowered but not treated like robots. To actually speak to someone on the phone when doing a service call for a product is a competitive advantage these days.
10.“Top of Mind Awareness”
There’s also the fact that 63% of people requesting information on your company today will not purchase for at least 3 months … and 20% will take more than 12 months to buy.
Contacting your prospective and existing customers every 1 month or sooner builds trust and professionalism and keeps “top of mind” awareness. In this context, your customers do not regard contact for orders, payments and appointments, or the obligatory Christmas card as a meaningful communication. It is important to have an integrated sales and marketing campaign. We are ready when you are.