You can sometimes be so close to your business that you can miss the simple solutions for growing it, where the greatest opportunities often lie. Solutions that are blindingly obvious, once you’re aware of them … but are amongst the best kept secrets on the planet if you’re not. For example:
Only 2% of sales occur at a first meeting
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.
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.
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.
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.
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. 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.
Tenacity pays off…
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!
Introduce a five “no’s” follow-up strategy
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?
“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 3 months 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.
What meaningful communication strategies do you have in place right now to maintain “top of mind” awareness once someone has been in contact with you? How do you nurture your clients so that they learn to trust you and see you as a professional organisation?
This simple strategy could be critical to your survival in the current economic downturn. Implement it and prosper. Ignore it at your peril.
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Robert Clay is an entrepreneur and marketer who has been growing businesses since age 19. He has studied and mastered more than 200 of the world’s most successful marketing strategies, building-up an unprecedented 1.8 million page knowledgebase. For a decade he conducted an experiment which transformed the thinking of hundreds of entrepreneurs, and has now launched an extraordinary new program that helps aspiring market leaders to create breakthrough marketing results.
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Robert,
Outstanding article! I’m amazed at how little consistent follow up there is among those who profess to be sales “professionals.”
One of my products I created 7 years ago one year into starting my coaching and consulting practice is called End Procrastination NOW! (www.EndProcrastinationNOW.com) and it came out of my coaching with sales professionals and business owners who fell down in this area.
It’s vital for sales professionals to understand your statistics outlined in this article and shift their mindset as to “how” to sell. They need to have a sales/business model that builds relationships, builds trust and confidence so that prospects can be comfortable in becoming a customer.
The only thing I “sell” on my first meeting is myself, my value, and a second meeting to go deeper into my prospects business issues my value can help with. Nothing more. I just want to get a sense if there is fit for what I do and go from there.
Plus, there is no way I can know enough about my prospect’s business issues to effectively and confidently suggest solutions. It would be unethical and unfair to do so.
Nice work! I’m sure you’ll be ok if I post a link to this article on my blog and Tweet it?
Best Regards,
Skip
Skip,
Thank you for your comments. Yes, very happy for you to post a link to the article and tweet it.
Best, Robert
Great article – I’m going to share your wisdom on twitter and on my coffeeshopreneur FB fan page! Thanks so much for the great insights.
I can’t even tell you how many sales I have made simply by continuing to be in business and asking people to act over and over again. In sales the best strategy I have found is keep calling and sending interesting emails until they tell you to stop.
Nice article. Throw a bunch up against the wall. Some sticks, some falls off. The more you sling, the more sticks. Simple business, isn’t it?
Hi Melissa. Thank you for those comments and for sharing on your blog. Had a look at it just now and it’s excellent. I’ll be a regular visitor.
Thank you for reposting the piece on your blog and attributing it. Appreciated.
You quote some interesting stats, just wondering where they came from?
Hi Shawn, yes the stats are interesting aren’t they. They came from Chapter 15 of the book “How to win customers and keep them for life” by Michael LeBoeuf. I have also seen the same stats from Chris Newton in Australia, and I’ve come across them several times from other sources too
Pretty nice post. I just found your site and wanted to say
that I have really liked reading your blog posts. Anyway
I’ll be subscribing to your blog and I hope you write again soon!
Thank you April. Glad you enjoyed them. Look forward to chatting in the future.
Loved your latest post, by the way.
Excellent posting. I can’t tell you how many times I’ve had to kick my sales people up the butt to follow up and not give up on the first/second objection. The fortunes in the follow-up
Trevor Nicholls´s last blog ..Twitter Updates for 2009-07-10
Robert,
I agree with all the commenters — a GREAT article filled with some powerful conclusions. I’ve referenced you in a recent presentation I gave to our real estate agents.
I see you pulled the stats from Michael LeBoeuf’s book, but I’m very interested to know the primary source of the research. Do you have access to it?
Aman, Thank you for your kind comment. Besides Michael LeBoeuf’s book, I’ve seen the same statistics referenced in Chapter 9 of Dan Kennedy’s book ‘The Ultimate Marketing Plan.’ I’ve seen it referred to elsewhere as well … but can’t find the original source of the survey. I’m sure it will show up one day, as I’ve seen the same stats in a few places over the years.
Robert
Hi Robert ,
I like your article . And the statistics maybe are correct . What I want to say is
nowadays we live in a prolonged financial crisis and in Europe there is no sign that will
stop this year . Many of customers are afraid and don`t want to spend money to buy .
That means you waste time waiting the five no`s to get the order after.
The challenge is change .
We don`t have the key to open the customer door and get the order .
Crisan Enescu
Thank you for your comment and thoughts, Crisan.
I agree that there is no chance of a recovery in Europe this year. In fact the problems are so large that it could take a decade or more to get economies back on track, certainly here in the UK.
The challenge certainly is change, I agree. At a time like now when people need to be very efficient in business, people are increasingly over-worked, with inadequate resources and that creates its own issues. This article by Jill Konrath hits the nail on the head: http://marketingwizdom.com/archives/2744. The bottom line is that to have any chance of even speaking to prospects these days it is necessary to build trust first. This is almost like a follow-up process in advance, and counts in terms of “touches”, even if you wouldn’t describe them as “no’s.” I’ve seen conversion rates increase ten-fold if you have warmed up the prospect in advance in this way. Fortunately it is quite easy and inexpensive to do this using today’s online tools.
Warmest wishes
Robert
Great article, I am often surprised at how little work people do to follow up initial enquiries choosing to go after new clients instead.. talk about making things hard for yourself!
Great article Robert – it’s a good reminder to me to sharpen up my own follow-up process. I’m pretty good at some things but not others.
I think the initial 2% is a pretty good reminder or tip for all those people at networking events that are seeking instant business.
While it’s great to get those instant sales after just the first contact, it rarely happens. Most of my clients have developed over the weeks or months after I first meet them or they sign up to my newsletter. Inertia and ironically – lack of time and too much else going on, tend to be the main reasons.