Charles Naman, 39, is not your average windows and siding salesman. After a 10-year career in sales and telemarketing, Naman launched his own Seattle-based company from the living room of his apartment in 1998. Then, taking a cue from past experience, he hired a telemarketing staff to generate leads and hired a separate sales staff to close them. But by 2003, he was back to being the sole sales representative for his company. The reason: Nobody he hired could keep up with his closing ratio and he felt like other sales reps would often "burn"good leads.
Last year, using very targeted lead sources along with a support staff of nine, Naman's Quality Home Exteriors topped $1.9 million in sales. To accomplish his level of sales, Naman set 487 appointments. He closed 203 sales. Fourteen canceled, leaving Quality Home Exteriors a total of 189 "net good" contracts. Of the rest of the 487 appointments, 93 were pitched and not sold; 45 appointments got "reset"; 82 were "no good" - the customer wanted only one or two new windows or wanted to replace glass; 45 were "dead" no presentation because they were not going to buy; and 19 were pitched and wanted to "call when they were ready."
Qualified Remodeler spoke with Naman about his success.
Q: It sounds like you're a one man shop.
Liz Palmas, our controller, runs the company. My father Chuck came up from Southern California in 2003 and he does quality control. He runs the crews, making sure that they are all doing what they are supposed to do. I do all the sales and all the marketing and anything to do with the design of the ads.
Q: To get to the 189 "net good" contracts last year, how many people did you see?
I had a total of 487 appointments. That is roughly 40 per month or 10 per week. Subtracting the no-good appointments which I did not pitch, I figure that I had a closing ratio of 57 percent.
Q: The standard closing ratio for a good sales representative is 25 percent, to what do you attribute your success?
It is such a simple formula. First and foremost, I am always on time to the appointment. Second and most important is knowledge. I make a point of being well versed in my product and what my competitors offer. And lastly, when I go out and see a customer, I never shortchange them. I give every person a full presentation as though they have no knowledge of the window and its benefits. The knowledge that I have lets the prospect know they are dealing with a true professional. I tell sales reps when I hire them that enthusiasm is contagious. If you are enthusiastic and positive and knowledgeable, you are ahead of many other people. And I would say the final thing is that I don't do sales gimmicks. I don't do what other companies do.
There are a lot of companies, and I am thinking of one in particular, where they will price a job quite high and use a closing technique where they explain that they are a big commercial company as well as a residential company and that they have a big commercial job 100 miles away. They will say, "If you buy today, I can piggy-back that commercial job on your job and save you a lot of money." They offer large, unbelievable drops in price that appeal to people who can't say no to a good deal. I personally don't operate that way. I am very honest and straightforward about my price. I give them a fair price upfront, and then I give them an incentive to do business the day that I am there.
Q: And what is the incentive to do business the day that you are there?
I typically give them a 10 percent discount off my retail price if they buy the day I am there.
Q: How long does your presentation take to give?
Start to finish, about two hours. And sometimes you can be in there for three. But two and a half hours is normal. Another key is: If I do a presentation and sell them, I immediately go back to the office and send them a thank-you card. And if I don't sell them, I send them a thank-you card. I'll follow back up with a phone call within a week or a couple days if they ask me to.
Q: In rough percentages, where do your leads come from?
What we started noticing in 2002 is that some of our competitors got way more referrals than we did. In 2002, only 19 percent of our business was coming from referrals. So we decided to focus more heavily on referrals. And in 2003 our referral rate went from 19 to 22 or 23 percent.
Q: How did you do that?
There is a difference between a customer who is happy and someone who simply signs off on a job at the end of a day. We instituted a complete walk-through to check everything and to make sure each customer was 100 percent satisfied and thus more willing to refer their friends and neighbors. By doing that we noticed a big increase in our referrals.
In 2004, we decided to go a step further. We decided to increase our referral fee to customers from $200 to $500. If the contract was $5,000 or more, we will give you $500. If it is less than that, we will give you $250. People will not refer for money alone. Their reputation is on the line. We have to go do a very good job, and we have to be confident they would refer us.
Q: How did this compare with your other lead sources?
In 2004, over 32 percent of our business came from referrals, which equaled what we drew in from the Yellow Pages, which cost us $148,000, whereas referrals came out to be about $15,000. That is why in 2005 we did not renew with the Yellow Pages in 2005. We took a big leap. But at the same time we built a Web site at the end of 2004, beginning of 2005. We drive traffic to the Web site through Google and MSN and all those per-click types of arrangements. But we heavily started favoring the customer and believing that if we did a good job they would refer us. In 2005, currently 42 percent of our business is from customer referrals. The rest is the Web site, the direct mail, and we are a Puget Sound Energy (local electric utility) preferred contractor and they send out lists of preferred vendors for window replacement and we get leads by being on that list.
Q: Do you find your pace of selling and getting referrals tough?
I plan on getting another sales rep, but not until I can get a consistent lead source that's efficient enough for two guys to run full time. I don't want to waste the leads when I know that I can sell more of them.
Q: Can you do more sales than you currently do?
We did the math and I run an average of nine calls per week. Doing that I have had months where I have written $250,000 in one month. If I did not run a company, if all I did was run leads, if I had three leads a day, I could write $2.5 million in one year by myself. Who knows? Maybe I could do $3 million.
Q: What would your advice be to others on how to succeed the way you have?
First and foremost you need knowledge. Too many people go out there and just kind of wing it. They don't truly know their product inside and out. And if they do, they only know their product and they don't know their competitor's product.
I think that is my edge. I can tell a customer about any other window on the market. I know the top five companies that I run into on a consistent basis. I know who they sell for, what their habits are, what they sell their customers. I know their closing techniques. So the best thing that anybody can do is to know their product and their competition and then know how their competitors sell.
Q: How much of your success do you attribute to quality assurance?
It is a start-to-finish process. When a customer sees that you are on time, that you are enthusiastic and you are knowledgeable. They encounter is my front office staff who are very pleasant and knowledgeable. The next thing they see is an installer who comes out and is extremely knowledgeable. He does a complete measure. He walks through the whole job with the customer. They see a consistency. And fourth is the install which is consistent with everything else. If what the customer experiences from the initial visit to the final walk-through is consistent, they are going to be happy and they are going to refer people.
Q: How does this all play out for you in the future?
I want to keep consistent with what we are doing. I really want to focus on taking care of customers. I do a direct mail piece to real estate agents, 5,500 boxes per month and I do it twice a month. A well dressed upbeat person going door to door can be a good lead source. A good Web site is a great way to go. You really cannot underestimate the customer and how powerful they are - you don't know how many people they know. My goal is to build up a better lead generation and to hire more sales reps.
Q: What size company do you ultimately see running?
I don't think I would want to go over $4 or $5 million per year. I want to keep it lean and profitable. I want to be able to pay as much attention to the customer as I do now.