Then you actively seek out people who need your product or service, it’s called prospecting. Do you know why? The word comes from Latin, and its basic form means “to look forward.” In its broader applications, “prospect” means to explore or search.
When the California Gold Rush took place in the 1800s, thousands of “prospectors” hurried to the state to look for gold.
Since it was below the surface of the ground, they couldn’t see exactly where it was located. They each had to decide on the most likely location and start digging.
That’s how it is for us, too. In any group of people, we know there are prospects that need what we have, but we don’t know specifically which ones. We just have to keep mining until we find “the gold.” How do we decide, where do we look?
We’re to going discuss proven methods for where, when, and how to prospect successfully. We’re going to start by looking “in our own back yard,” which means, our previous customers. After all, who’s a better prospect than a customer you’ve already satisfied once?
Even better, we’re also going to explore the feasibility of combining the customer database with a new, entry level product and new sales associates. This is the recipe for developing an Entry Level Selling program for your company.
Once you get your Entry Level Selling program going, you’ll be able to tell new sales recruits about your on-the-job training program. This will involve selecting previously satisfied customers from your database, preferably within a narrow geographic location. With your new sales person, go over the method of approach to be used, and there are several from which to choose. I prefer the customer satisfaction survey approach. It’s summarized here for you:
- Go to the home of each customer selected.
- Ask each satisfied customer family to take your customer satisfaction survey.
- Ask the survey questions, each of which is designed to uncover current needs for additional products and services offered by your company.
- If no current needs are uncovered, ask for referrals.
We call this territory, or neighborhood, marketing. Combine it with new sales associates and a new product, and you have a formula for a zero-lead-cost transaction with an exciting new approach to selling. Monitor their progress as they get better at servicing the needs of previous customers and getting referral prospects with the attendant sales. When you think these sales people are ready, you can break them in to your higher ticket items and issue them leads. At that time, you’ll want to hire their replacements in the on-the-job training program—Entry Level Selling.
Let me point out the obvious: you can hire as many new sales associates as you like because there is no cost involved! All you need is a sufficient number of previous customers. Come to think of it, they don’t even have to be your previous customers. They can be “OCC”—other companies’ customers. When a company goes out of business, its customers become orphans.
Using a program like this is, to continue our gold metaphor, like finding gold in two mines at once. This is a great way to implement an entry level sales program while, at the same time, converting your present sales force to a hybrid system of company leads and self-generated leads. You can use the customer satisfaction survey to mine your database by phone or in person, but it’s better, of course, in person. This will not only lead to repeat sales but, if handled correctly, to a ton of qualified referrals. Remember, those are the best kind!
In addition to the obvious benefits of lower cost, more efficient use of sales time, it will benefit your installation department by keeping sales and installations in a tighter geographical area and that will also make you more money. With several jobs in the same neighborhood, you can imagine the effect it will have on your closing ratios from referrals in that neighborhood.
So how do you get started? Hire a few neophytes with no home improvement sales history; they will bring with them no bad habits and no preconceptions about how things “ought” to work. At the same time, if you have a few eager “want to be sales superstars” already on board, outline the program and get a commitment from them that they will approach it with an open mind.
No matter where you get your neighborhood marketing sales force, the system works the same way:
- Select an area from your customer database,
- Script your survey,
- Decide how you’re going to set appointments, and
- Get started!
Multiplier No. 2Qualified Referrals
Do you want to cut your lead cost by as much as 33 percent? It’s a silly question, isn’t it? What businessman wouldn’t want to do that? Well, you can. Just teach your sales people to get at least one direct, qualified referral for every two leads issued to them. A qualified direct referral is one where you know the prospect needs your product or service and where you have an introduction and endorsement from someone he knows.
Referrals are like free money to the company and the sales person. Once you teach your sales reps the secret of generating referrals, you’ll be able to get more leads for less money without changing any of your other lead generation methods. What’s the secret? You need to teach them to ask. That’s right! They need to ask for a referral every time they meet with a prospect. Furthermore, once they know the secret and put into practice, you may find your lead cost reduced by more than 33 percent!
To get a direct, qualified referral, just look around the neighborhoods where you’re currently doing business. Find a home with an obvious need for your product, and ask your new or existing customer to accompany you to the door. Have them agree in advance to introduce you and tell the additional prospect about his experience with you and your company.
You can do this on your initial sales call, your job completion visit, and also your six- and twelve- month customer satisfaction calls. In fact, you can do it just about any time you need or want to obtain direct referrals.
I’m sure you know that all referrals, like all leads, are not created equal. A certain number are really strong and, frankly, some are just a waste of time. Obviously, it pays to know which is which so you can make the best use of your time. The type of referral you’ll want to concentrate on is the direct, qualified referral.
A referral is direct when a current or previous customer introduces you to a new prospect face to face and endorses your product and company. This is obviously a much stronger referral because of that personal endorsement.
It’s a qualified referral when we know that the new prospect needs our product, and probably has the ability to own it. How do we know that? We’ll know it either by seeing the need when we look around the neighborhood or by hearing about it from our current customer.
A referral can be direct but not qualified, and, of course, it can be qualified but not direct. Each of those has a value. Neither of them compares, however, to the referral that is both direct and qualified. Leads don’t get any better than this.
So how do we do it? There are countless ways to “skin this cat,” but let me give you my favorite approach: inspect the neighborhood. Try to get to your prospect’s neighborhood a half-hour early so that you can pick out your referral prospect, the referral your current issued lead prospect is going to give you.
Neighborhoods tend to consist of houses that were built at approximately the same time. Thus, they have the same type of construction, and the homes need home improvements at about the same time. Before you call on your appointment prospect, pick out a similar style home with a need similar to that of your prospect’s home. It’s also really helpful if the referral home is within eyesight of the front door of your appointment prospect. Once you’ve determined this home, you have your direct, qualified referral target.
During the needs analysis part of your appointment, ask the prospect if he’s a referral. It doesn’t matter how he answers. Just wait for an answer, and respond by saying, “The reason I ask is that many of our customers are. As a matter of fact, if I’m a good guy, I’m going to ask you later to refer me to a friend or neighbor.” That’s it; don’t say anything else. Please note that we’re using a statement here rather than a question, and we’re not looking for a response from the prospect.
When the sales call is over and you’re at the front door, ask, was I a good guy?” Mr. Prospect should say, “Yes.” (If he tells you no, consider a different profession.) Then say, “Remember we said that, if I was a good guy, you would be willing to introduce me to a friend or neighbor in need of my product?” Point out the house you selected, and ask the home owner if he knows those folks.
Mr. Prospect will say yes or no. Obviously yes is better, but it really doesn’t matter. Ask if he’d walk across the street with you, introduce you to his neighbor, and tell him you’re a good guy. That’s one way to ask for, and in many cases get, a direct qualified referral.
If he’s not comfortable doing that, ask if you can tell his neighbor that you’re working with him and that he thinks you’re a good guy. In fact, there are many other ways to obtain referrals such as referral cards, installer referrals, service referrals, and on and on. Teach your sales people as well as your support staff to tell everyone they know what business they’re in and to be proud to do so. Then reward them with praise and money for the sales that are produced from their efforts. You just have to be thinking lead generation and be willing to ask for those referrals consistently.
Why drive miles to call on an unknown prospect, when you can look right across the street at a home with an obvious need and talk to a homeowner who has been told that you are someone worth talking to? It’s a fact: the reason you have a prospect, any prospect, is that they have recognized a need.
However there are lots of potential prospects that just have to be made aware of that need. But once that’s done, they’re often a better prospect for your product because you’ve provided the additional service of need awareness and shown them the correct solution.
So remember the secret to getting good referrals: “Ask and ye shall receive.”
Multiplier No. 3A Gold Mine in Service
How would you like to have a service department that pays for itself, generates referrals and new business, and makes you money? That sounds like an idea worth exploring, doesn’t it? I’m sure you know already that providing service is an essential business component because calls for service are inevitable. If you are not prepared for them, they can be a real headache. It makes good business sense, then, to take those “service lemons” and make lemonade!
How can you stop seeing service as an expense item and start realizing that it can be a terrific profit center and lead generator?
Service calls are inevitable; you know they are. It’s always great to satisfy a customer completely right from the start, but sometimes that’s not possible. No matter how good your product, installation, delivery, and follow-through are, there’s bound to be a challenge from time to time, and providing satisfactory service is imperative. We can do that more efficiently with a service and repair (S/R) department manned by trained “S/R techs” who can be worth their weight in gold.
What will a properly developed S/R department do for your company?
- It will function as an autonomous department and make money.
- It will not disturb your current cash flow because it does not involve your installers.
- It will generate service and repair dollars, and, if the techs are correctly trained and supervised, it will generate new sales and low-cost leads.
Companies that offer S/R are hard to find. Consequently, once you make S/R public, customers will be calling you. This gives you a great opportunity to mine the orphans left behind by other companies. Of course, you want to provide S/R to your existing customers who are past their warranty period. This provides for ongoing communication, and, each time you do a service and repair call, you’ll establish a reference point in the neighborhood for future sales and installations, which means referrals and repeat business.
Here’s the $64,000.00 question: how do you establish a service and repair department that will pay for itself?
First, start by hiring and training S/R techs that are not part of your installation department. Some of these may be current or former installers, but choose wisely because they must be versatile. Remember, they must be able to install and repair. They must also know when repair is not worth doing, and they must be able to communicate this to the customer. That’s when some sales skills will come in handy, which will also need to be part of their training.
Second, advertise S/R as a regular part of your business. Make sure it’s in all your company materials and in your media ads. It may cost you a few seconds in a commercial, but it’s well worth it.
Third, put a plan in place to handle S/R customers promptly, professionally, and profitably. Your customers for S/R are generally going to be one of three kinds: warranty/installation issues from your customers; post-warranty issues from your customers; and repair issues from other companies’ customers. Anytime the call does not involve a current warranty/installation issue, charge the customer a trip charge plus time and materials.
If the customer is calling about a problem with a recent installation you did, you’ll need to take a different approach. If the original installer created the problem, he either fixes it or pays the S/R department the cost of the trip charge plus the time and material required to rectify the situation. This may actually be less costly to the original installer than delaying the job he’s currently installing.
Remember the S/R tech’s income, and yours, is dependent on a fair but adequate trip charge being assessed for each S/R call. The trip charge pays the tech to assess the service required, including the time and material it takes to make the repair. If, after assessing the problem, it can’t be repaired satisfactorily, the trip charge is still due but may be credited to the cost of the necessary home improvement.
In addition to all of the above, this is an excellent prospecting tool. It’s a fact that some repairs are just not worth doing. Sometimes a new installation is what’s best for the customer. The S/R tech must know when and why a repair is a bad bet and must be prepared to convey that to the homeowner. The S/R tech can arrange for the customer to see a rep from your company for a new installation and, in some instances, even set the sales appointment on the spot!
It goes without saying that this is an excellent referral generator. Whenever an S/R tech is on a call, teach him to ask the following:
- Do you know any neighbors that need similar service?
- Do you know of a friend or relative who might need our service?
- Would you be willing to call to introduce and recommend us?
And finally, here’s a fresh idea: S/R canvassing. It’s possible to generate even more leads through your S/R department by sending a canvasser out with the tech each time he does a call. While the repair is being done, the canvasser works the neighborhood for other repairs. If there is a need and an interested homeowner, the S/R tech can do the assessment and sometimes even the repair while he’s in the neighborhood.
If there’s no one home, the canvasser can look the home over for “needs” and return later in the day to see the homeowner.
f the homeowner is interested, the canvasser can call his S/R tech and set an appointment. It’s not only possible but very likely that you can schedule multiple sales calls in the same neighborhood from just one S/R call using these methods. Talk about lowering your lead cost; this is exciting stuff.
In closing, let’s stop doing what we’ve always done, so we can stop getting what we’ve always gotten. Start doing something new and different. That will let us serve more customers and earn more money, and that is definitely a good thing.