Sunday, August 21, 2016

How Not To Make A Sale

By Jim “Gymbeaux” Brown, August 21, 2016

We decided that we wanted to make some improvements to our 3 bathrooms in our home.  Specifically two of them are in what could best be described as master bedrooms, one up and one down.  Plus a third bathroom in the downstairs hall that serves two bedrooms and visitors to the house.  I placed a call to one of the many advertisements we had seen regarding converting one-piece fiberglass bathtubs into beautiful showers with no tubs.  Just made sense.  We were also considering converting the third bath tub into a hydro-tub type bath tub. 

The problems first began with the very first call.  I asked the person on the other end of the line if she could give me a “ballpark” price range.  She said she couldn’t.  I told her that we live in an older home and it made no sense to spend a lot of money in a home where the cost of improvements would never be realized in a future sales price whenever that might happen.  She refused to give me a price; I reluctantly set the appointment.  Almost from the moment I hung up the phone I knew it was a mistake and my initial reaction was to cancel the appointment but I didn’t.

When the salesman arrived one of the first things I told him was that I had been in real estate sales for over 33 years and taught training classes for most of those years.  As he began his sales pitch, my initial comments to him had obviously fallen upon deaf ears.  He went into his routine using a small, and I mean small, stand up tablet for the optics he wanted to created.

This is where my critique begins from the viewpoint of a sales trainer AND homeowner:

Dress for Success:  He wore a green golf type polo shirt.  That in itself is not all that bad but if my initial thought was that it seemed inappropriate others might as well.  I actually do believe in wearing casual clothing in sales but something like a polo shirt should include an embroidered company logo on it if you are going that casual.  Had that been the case, this particular critique would not be included in this Nugget.  Point made.

We offered him a cup of coffee, soft drink or water (it was 95 degrees outside) and he chose water.  I had always taught my sales people not to eat or drink when they were making a presentation.  Once you develop rapport with the customer and you are pretty much finished, that is when you might want to consider accepting a drink (non alcoholic) but only after.  One of the worst things that could happen is to spill the drink.  It would be a total disaster if you spill it on yourself or the customer or the customer’s furniture.  That is not what happened in this case, instead he chose to chew on the ice in the glass while he was making his presentation.  You listened to the sound of teeth crunching ice rather than on what he was trying to say.  Not good.  Another disaster just waiting to happen occurs when you the agent put a glass or cup down directly onto a wooden piece of furniture only to leave the dreaded white ring on the furniture.  Not quite the optic or lasting impression you want to leave; that you have no respect for the customer’s property.

The Tablet 1:  Tablets are good but when you are sitting across the table from the presenter, tablets are impossible to read unless the font used is extremely large.  In this case the font was a standard font that everyone uses for their OWN use.  As a customer, it was impossible to read from several feet away.  Not good, in fact, totally useless.  He did include two short videos and we were able to see and hear them but as for reading the fonts and words on the screen – no way.

The Tablet 2:  Initially when notebooks hit the markets, most real estate agents took an immediate liking for them to use in their presentations.  They would use programs like PowerPoint which is what I think this person used.  I quickly realized that when you use a PowerPoint presentation, you are pretty much required to stick to the script and sequence.  When a customer asks a question, the answer may or may not be included within the PowerPoint presentation.  Either way the agent is caught off guard because it is very difficult to stop where you are in the presentation to move forward or backward to find the exact point within the scripted presentation to answer the customer’s question at that moment in time.  Again, this happened at least twice and it was not pleasant.

The Tablet 3:  As a sales person you want eye-to-eye contact with the customer(s).  When you use a tablet or notebook the customer is looking at the tablet or notebook instead of making eye contact with the agent.  That is never a good thing.  You can read a great deal into a person’s knowledge of what you are saying when you can look into their eyes.  As a customer you can assess an agent’s truthfulness by looking into his or her eyes.  Again, this happened and it was not good.

The product he was attempting to sell us was very good, at least as described in his presentation.  Without seeing the actual product, it was only on his tablet.  We as customers could not touch it or feel it so he was selling us a perceived promise of what he was selling and he assumed we were automatically going to like it.  With that said, the following is in regard to the actual sale he was attempting to close on.

Price 1:  He had obviously been taught NOT to give the customer the price range of the product he was trying to sell because he would refuse to answer the question when asked and I asked him several times.  I knew my wife and I had discussed a price we were willing to pay to replace items in our home that were now working fine; they just looked old and they were old and difficult to clean but they worked fine.  Therefore we had no mandate to replace them.  My question to anyone in sales is this.  Why would you want to waste 60 minutes or more of your time to try to make a sale when the price would preclude that from occurring no matter how good you or your product is?  This goes back to my initial comment to him that I taught sales (real estate sales) for over 33 years. 

Price 2:  I had seen this practice in the past and it made me very angry the first time someone tried it on me so when he did it, he automatically lost the sale.  He went through the construction and installation process and he was obviously trying to set in our minds just how expensive the entire process was to be.  He then went through the various stages of construction and installation with the idea that if we decided to “attempt” to do it ourselves even if we hired contractors to the perform the various stages the cost would be outrageous and then he came up with a horrendous price.  The ONLY reason for this was to then show us that his product was both better and less expensive than trying to do it ourselves.  He calculated the price for converting just one bathroom.  If we did it, the cost would be approximately $15,000 to as much as $20,000.  Think about that for a moment.  We had 3 bathrooms we told him we wanted to upgrade.  So according to him, we were looking at between $45,000 to as much as $60,000 to upgrade.  So when he quoted us his FIRST offer it was almost $10,000, much less than it would supposedly cost us to do it ourselves – according to him.

Price 3:  He paused very briefly once he quoted us $10,000 per bathroom.  I don’t know if the pause was for effect or to see what we would say or do.  I believe it was the later.  I am 71 years old and could not help but wonder if the “pause” was to see if since I would be considered a “senior citizen”, would I/we immediately buy into his comparisons and accept the obviously lower price as being a good and more than fair price – according to him.  I think it was 5 little words that caused the “pause” to stop.  “I do not think so!”  I said to him.  Of course he put on his “shocked face” to let us know we were being unreasonable.

Price – the negotiation 4.  I knew what was coming next – the “discounts.”  He first took a couple hundred dollars off because we were “senior citizens” as if that was going to do the job for him.  When I balked, he then said he had a “certificate” for a price IF we accepted it during the presentation.  Who hasn’t heard that BS before?  When we balked at that, he came up with another discount and started removing items that we had said we wanted in the installation like grab bars, seat, etc.  That also failed to make the sale.  Then came his final pitch.  Remember his initial price was $10,000 per bathroom.  He said and I quote, “If I can get my manger to agree, would you do the installation for $5,000 per bathroom or even better, $10,000 for two of them?”  WHAT?  He obviously thought we could not add $5,000 and $5,000 together to get the $10,000 he was offering as if it was a real deal.  He had already lost the sale within about 10 minutes of the start of his presentation when neither one of us could read anything on his tiny tablet screen.  But in reality, since he was prepared to drop the price by 50%, how much more would I be leaving on the table if I accepted his $5,000 offer?  Tell me the price of your product or service and I’ll make the decision to buy or not.  It really is that simple.  Why waste everyone’s time?  This entire process might have gone completely differently had he said the upgrade would cost $5,000 per bathroom and this is why it costs that much and why it would be in your best interest to have the upgrade done.  Even better, it would have been received differently had he said the upgrade would cost $4,994 as if an actual thought had gone into establishing a price.  When I hear numbers that end in zeroes, I know with certainty that no thought or calculation was involved, very few things actually end in zeroes.  Besides, ever since I was a kid, when I saw a price of .98 cents, it was less than a dollar and that was a good thing.  It is no different now.  Had he said $4,994, even though it is like $5,000, in my mind and the minds of most customers the price is in the $4,000’s not the $5,000’s; a much better thought to have.  Think about that for a moment, he may have lost a sale over $6.00.  More importantly he took no measurements of the bathroom, and he took only a few seconds to supposedly calculate the cost of upgrading just the one bathroom he wanted to see; a few seconds.  I can’t even calculate a tip at a restaurant in a few seconds. Then to come up with rounded off numbers like $10,000 or $5,000, no calculation ends in zeroes – none! If it ever did, I would change it to the $4,994.67 or even $5,009.49 (including tax) to at least give the impression that a true calculation was even made.

Wrist Watch:  I would teach my real estate agents to never wear a wrist watch into a meeting with a customer.  Why?  This salesman provided the answer.  Part way through his presentation he made it obvious that he was looking at his watch.  He may of had an appointment following ours; the reason he looked, made no difference.  The moment he looked at his watch he was signaling to me/us that he either (1) had another appointment to attend or (2) asking himself how much longer is this going to take?  Either way it is a signal that you ABSOLUTELY do not want to send to a potential customer.  Clearly his body language said that something else was more important to him than the two people he now sat facing.

Cell Phone:  My advice to all people in sales would be to leave their cell phones in their office or in their car when meeting a customer.  Much like his wrist watch, this person interrupted his presentation to check something that came in on his phone.  It could have been something important, or a weather alert, a breaking news story, alerting him he just received and email, or whatever.  The point is that he took his phone out of his pocket and looked at it.  The signal that one action sent was so obvious to me – something far more important than the two of us held his attention.  He was to be with us for about 60 minutes.  How many phone calls or emails have you received that could not wait for 60 minutes to look at and/or respond to?  How many?  What on Earth did people do before the cell phone?  Unless you are doctor or first responder on call, the most important people in the world are the people sitting in front of you let alone the people you are trying to buy something you are selling.

Reality 1:  Remember I had told him I was in real estate sales for over 33 years and taught sales courses.  I told him I really did not like the games he was playing and compared it to buying a car when it would appear the buyer would not buy and the sales person says let me see if my manager could do any better.  I know for a fact that car salesmen/women do NOT check with their manager for a different price but only go through the motions of doing so to impress you the customer.  They ONLY check with their managers when it becomes obvious you are about to walk out the door.  This is exactly what he was proposing now.  But think about it.  It was quite possible we would have accepted his first offer of $10,000 especially since he obviously considered us “senior citizens” and therefore it was his perception that we were not “too bright” if you know what I mean.  I explained to him that there is a point of no return when making repairs or upgrades to older homes. That point is the price it may eventually sell for.  Would it be possible for the homeowner to realize a return on investment of this magnitude when it sold?  It would take years and years to recoup an investment of $30,000 or more and I was not prepared to make that investment for pure superficial appearance purposes because all bathrooms were in working order.  Had he told us $5,000 per bath when I first made the call I would not have made the appointment; it just wasn’t worth it to us and we both knew it.  Therefore he wasted not only our time but his time as well.

Reality 2:  I asked him how much he would be prepared to pay for a Dodge Charger if he walked into a Dodge showroom.  I didn’t give him a chance to answer.  I told him he already had a fair idea of what a new Dodge Charger would cost or he would not have walked into the showroom in the first place.  I then repeated my concern that no price range was given on my initial call otherwise I would never have made the appointment (walked into the showroom).  I told him don’t be upset with us because we didn’t buy his product, something he obviously was.  I was trying to get him to understand that people (1) like to know beforehand if the sales price is in their ballpark price range and (2) does the price justify purchasing the product or service.   If the product is actually a “service”, the customer also wants to know what he or she is getting for their money or better said, “what are you going to do for the price you are asking me to pay?” 

Commission Sales:  Usually in commission sales, the sales person cannot rely only on the customers desire for a product or service in spite of the commission charged.  When I sold real estate I made a list of the very specific tasks I would perform for the customer should they decide to hire me.  I also made a list of the various types of advertising available and how much it costs to run advertisements in each media because I would be the one paying those costs, not the customer.  Almost any real estate agent could come up with a short list of 5 to maybe 10 tasks they would perform.  I had a list of more than a hundred tasks.  If a homeowner asked me to “cut my commission”, I would ask them which of those tasks does he/she/they not want me to do?  They never asked me.  I listed every task and I mean EVERY task I did for ALL my customers without exception.  When you make a promise to do certain tasks if a customer hires you and you promise to perform each and every task, the customer has a better understanding of what you actually do as a real estate agent and even more important, how much you the agent intends to spend to get their property sold.  You are asking the homeowner to pay a considerable price for your services and if you can’t clearly define what you will do for that price and/or how that price is divided up between the applicable parties, you would lose out to another agent who does provide the customer with that kind of detailed information every time.

Conclusion:  Never go into a sales presentation knowing you intend to lie or mislead the customer.  NEVER!  Be upfront and honest beginning with your first contact.  Always assume that the customer knows nothing about you or the product/service you are selling.  Never assume that the customer knows everything about you as well or what you are selling or a service you want them to hire you to perform.  Ask questions FIRST.  Determine their level of understanding.  Determine what they want to accomplish by buying your product or hiring your service.  Make the decision as to whether or not you can provide what they expect or demand of you.  If you cannot provide the level of service tell them as much and then proceed from that point by either terminating the contact and possibly referring them to someone that could or if the customer is agreeable, negotiate what you can provide as compared to what they had previously expected or demanded; that usually works, at least it has worked for me.  One of the best scripts for this purpose starts at the very beginning.  “Mr. & Mrs. Customer, one of several things is going to happen today.  You may decide to work with me and that would be outstanding.  You may also decided NOT to work with me and frankly that would be horrible.  Or, it is quite possible that I may decide not to work with you.  Is that a fair understanding of what could happen today?”  I found this to be a powerful conversation to have very early in your first appointment to meet a customer.  Customers almost always ask, “Why would you decide not to work with us?”  “Fair question.  Please understand, I have a list of things I promise to do for you if you decide to hire me.  You may feel the list is incomplete or you may want me to do things that I am unable to do.  If that should happen, I would very much prefer to part as friends now than to have you later become angry or upset with me because I cannot provide you with what you expect.  Would that be a fair understanding?”  I would always ask one more question of the customer, “I need to know one very important thing, do you want me to tell you the truth (about your home or your purchase) or do you want me to tell you what you want to hear?”  If later in the process I discover that they would prefer to hear what they want to hear or they expect me to do something that I cannot do, I would say to the customer, “Do you remember our initial conversation when I said there may come a time when either you decide or I decide not to work with each other?  I think we may have reached that point.”  You need to be prepared to terminate the process but you also need to set the proper understanding before you start the process.  When you start with the truth, the process seems to turn out the way everyone wants it to.

Question:  Did any of these things happen with the bathroom sales person?  Answer NO!  He and his company had lost a sale before he ever began his presentation; they just didn’t know it.      

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