Success in business is ultimately determined by the ability to win and then keep customers. Keeping customers means keeping them happy. To do this you must become knowledgeable about the product or service you sell. Initially, your presentation must “delight” them with the product or service range. Once potential customers decide they need what you’re selling, you will make a sale.
In order to keep them as customers, you must turn your attention to customer service. Service is often the prime way to keep the customer happy and coming back. But it also means you must learn how to deal with unhappy customers and complaints. Handling these situations well can keep a customer loyal and even turn an unhappy customer around.
Sales strategies such as warranties, extreme advertising claims, loss-leading, bait items, incentives and refunds can work to attract more customers. Yet all these strategies need to be handled carefully so as not to disappoint customers, misrepresent your product or make promises that are too hard to keep.
Tip – The Big Picture
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Attracting customers
One certainty of owning your own business is that, at least in the beginning, you will be the chief salesperson. And why not? Who else knows the product or service as well as you? Who else has such a strong belief in what you’re doing? Cast aside any negative notions you might hold about “sales reps” and tackle the job with professional commitment and enthusiasm.
Before you actually speak with or visit a potential customer, do your homework. Now is the time to use the mission statement you’ve prepared. You believe in it, just as you believe your product or service really will make life better for those who use it. These beliefs will enable you to speak honestly and from the heart about your business. They will also help cushion the inevitable rejection that will come from time to time. Take time to review your mission statement and business plan, and to reflect on your goals.
Believing in what your business can offer customers is vital, but you must also know your product or service inside out. Think of situations where a customer could use what you’re selling and try to imagine the kinds of questions, applications and problems they might encounter. Then work out the answers, both theoretically and by “road testing”. If a potential customer asks how the software you’ve designed for small archives can help them catalogue their collection of early 20th century glass negatives, be able to sit in front of the computer and show them, step-by-step.
You should have already completed research to determine your target market. Now is the time to use that information about the marketplace, market trends and your competitors to formulate a comprehensive list of people and organisations to contact.
First contact
Your first contact with a potential customer should be short and simple. Your aim is to introduce yourself and your business and to establish some form of future contact.
One of the best ways to effect the introduction is with a telephone call. Making “cold” calls is hard work: no one denies that. If you’re working from home, you may need to talk yourself into it by promising yourself a ten-minute break in the garden or a short walk with the dog as a reward after, say, every 15 or 20 phone calls. But if your “cold” call is successful, your next contact will be “warm” and considerably easier.
Develop a three-minute script that introduces you, gives your business name, and clearly explains the specific reason for your call. Tell the caller a bit about your product or service and then ask if you can post a brochure or product sample, or arrange a time to meet them for a short demonstration or discussion. Assume that they are busy and keep your call short.
Rehearse your script, prepare your list of contacts and dial the first number! Make notes after each call so that you know what information you’ve sent them, who to contact next time, and when. Following up at this stage is imperative: it’s your first opportunity to build trust. Make certain you send what you promise, and be sure you ring again when you say you will.
If you can, make a short note of something specific about the person you speak to or their company. Being able to say something specific in your next call will set you apart from just another “person on the phone wanting to sell me something”.
You may also effect the introduction by placing an advertisement in the local newspaper or by distributing flyers in letterboxes. However, this “scatter” approach does have some disadvantages. You don’t know who will read the ad, so you have no control over the response, and can only depend on readers contacting you. It can also be an expensive way of finding only a few customers.
Subsequent contacts
The second call will be easier. Ask your contact if they received the brochure or product sample you sent. Do they have questions? Have they tried it? Did they have any problems using it? Did they notice such-and-such a feature? Use the call to find out their response to your product or service and to stress the benefits of using it. Again, take notes and be brief. The aim of your call is to make an appointment for a face-to-face meeting or to encourage the contact to visit your store or try your service.
The meeting may be with the person you’ve already become acquainted with over the telephone, or it may be with someone else in the business. It’s important to meet with the appropriate person, one who knows what the business needs and who has the authority to make the decision to purchase.
Fixing a meeting or encouraging a visit to your business is an accomplishment, so be proud of your achievement. Remember, though, it’s just another step along the path to your final goal of making a sale. Getting ready for the meeting is the next hurdle.
| Tip Staying in business is all about understanding buyers’ needs and wants, keeping them happy, and then developing a desirable client base. This is possible if you’re customer-focused and concentrate on:quality product and servicegreat communication, and promotion and think strategically, monitor and anticipate client needs and issues, and service them. |
Caring for customers
Do you adopt the CARE – Customers Are Really Everything – approach to satisfying customers? A customer is not an unwanted interruption in your day: a customer is someone who wants to put their money in your cash register. CARE is an attitude – you CARE and they can tell.
If you do approach business with real CARE, you will start by knowing your product and making sure that your staff do too. This will impress your customers and allow you to respond to queries about products or services with relevant information. Knowing your product will enable you and your staff to educate the customer, and to offer more interesting sales talk without an empty hard sell. The result will be more sales and also more accurate quotes and prices to sell what the customer really wants and needs.
Preparing for the meeting
If you’re going to a meeting or appointment, find out about your potential customer. What are their needs? How can you help fill those needs, both today and if they expand their business? Have they used a product or service similar to yours? If so, were they satisfied or were there problems? How can you deliver, install and set up your product with minimum disturbance to their business or home? How can you give them ongoing customer service? Can you make the sale at an attractive price for all concerned?
Prepare your presentation carefully and tailor it to the needs of the potential customer. First, know what you’re going to say and practise it standing in front of a mirror. Your aim is to be confident and not tied to your script. Know the information so thoroughly that you can deliver it in any order, so that you can interact with the potential customer in a more relaxed, conversational manner. You want to steer the direction of the meeting, but not overtly.
Be certain to take along supporting materials about what you offer: a folder containing an introductory brochure about your business, information on the range of products you supply, product descriptions, price sheets, testimonials or case studies of current customers who use your product or service, and your business card.
Lastly, if you use computer-aided charts and illustrations as part of your presentation, check beforehand to see if the meeting room can accommodate your laptop computer, projector, screen and any other equipment you’ll need. Then, make certain you’re in control of the technology – there’s nothing worse than having potential customers sitting there while you struggle with technology you haven’t mastered! Don’t waste their time and don’t give them an opportunity to doubt your ability.
You’re prepared, well groomed and you arrive on time. When you meet your potential customers, take a few minutes to get acquainted, but quickly get down to the business of your appointment. While it’s true that you have prepared both words and visuals for your presentation and you’re understandably keen to share these, your meeting is likely to have a better outcome if you listen more than you talk. This means asking questions, listening to the answers and then responding with a solution.
Follow these four steps to move from the small talk to selling.
Find out the potential customer’s needs, goals and expectations for the product or service that you provide.
Develop a plan that uses your product or service to help them achieve their goals.
Discuss the factors that will determine the purchase choice – the price, convenience, specific functions of the product, reliability.
Confirm that they want to purchase. Prepare the contract on the spot or deliver a completed contract to them as soon as possible.
Throughout the meeting, focus on listening to the potential customer. Ask them about their business or personal needs. Ask what pleases or frustrates them about products or services already available in your sales category. Use every opportunity you can to stress the benefits of your product or service, keep them agreeing with you about the advantages of what you offer, and respond with solutions that you know you can deliver.
Be honest about what you and your product can do. If you really can’t provide what they need or want, have the courage to say so. They will respect you for your frankness and, who knows, their situation may change and they may contact you in six months’ time.
| Tip People love to buy but don’t like to be sold to. They’re there to buy your product or service – they don’t want to keep looking unnecessarily. Sales not only make you happy but can make the customer happy too. |
Making the sale
Give the prospect time to decide that they need what you offer. Don’t be pushy and don’t make the mistake of chattering too much and talking yourself out of a sale. They may decide to purchase at the close of your meeting or they may want a day or two to think about it, check their finances or confer with their colleagues or spouse. Determine when you should telephone or visit next and be prompt in doing so – don’t let the atmosphere cool down too much.
When the prospect does decide they want to purchase your product or service, take care of the contract, deposit and delivery details efficiently. Following up on these matters is important: making the sale is the beginning of the relationship, not the end. If your business is a one or two-person organisation, you will no doubt maintain personal contact with your new customer. If, however, someone else in your business will now be dealing with them, ensure a smooth transition by making the appropriate introductions. Either way, the focus now shifts from “winning” the customer to “keeping” the customer – ie customer service.
| Tip – Winning customers and keeping themIt costs between six and ten times as much to gain a new customer as it does to keep an existing one.
On average one dissatisfied customer will tell 11 others who on average will tell five others. That’s 55 pieces of negative advertising from one disgruntled customer. Often the business’s lowest-paid people are the ones who actually meet the customers – they are the business in the eyes of the customer. Make sure they are well trained. 96% of customers don’t complain when they have a problem; they just don’t come back. Because less than 4% of unhappy customers complain, management are lulled into thinking all is well. Half the customers who tell the business they are “fairly satisfied” won’t be repeat buyers. The average Australian business will lose 10% to 30% of its existing customers this year – mostly because of poor service. Of those customers whose complaints are resolved, 83% will remain loyal and each will recommend you to five others. 68% of customers who stop dealing with a particular organisation do so because of some indifference on the part of the organisation. Businesses which have a reputation for excellent customer relations and quality service charge up to 9% more, grow twice as fast, and pick up market share three times quicker than their under-performing competitors. Increases of just a few percentage points in customer retention have resulted in significant increases in sales and profits One customer retained means repeat business and it’s all cream. You don’t have the extra cost of signing up and establishing the account, customer details, etc – the repeat business becomes a bonus. Quality, value and reliability are the most popular reasons given by most business patrons who describe themselves as regular and loyal customers. |
Fair trading
As well as discussing the best ways to market and promote your business, we need to discuss the legalities in promoting and operating your business, what representations can and can’t be made!
| Highlight Misleading advertising not only leads to misinformed and dissatisfied customers, it is illegal. Whether you are selling cars or clothing, make sure that products or services are actually as you have described or promoted them as regards their standard, quality, value, grade, composition, style or model, price, spare parts and repair facilities.Misleading advertising not only leads to misinformed and dissatisfied customers, it is illegal. Whether you are selling cars or clothing, make sure that products or services are actually as you have described or promoted them as regards their standard, quality, value, grade, composition, style or model, price, spare parts and repair facilities.If goods have already been used, make sure your customers know this. Don’t say that you or your business, or your goods or services, have endorsement, sponsorship or approval, performance characteristics, accessories, uses or benefits that they do not have. If you exaggerate or misrepresent a service that you offer, or that of your competitors, you could face tough penalties under the Trade Practices Act 1974. |
Bait advertising
Bait advertising involves advertising a small number of goods at attractive prices to entice potential customers into your premises. When the advertised goods quickly run out, customers are redirected to higher-priced or lower-quality goods at the advertised price. Let’s ask a simple question: what would you call a business that advertised half-price computers only to find that when you got there none were left? You also find out there were only two anyway. You would call them sharks and not shop there again. Bait advertising is only for sharks.
You are responsible for ensuring that adequate supplies of the goods are available for the duration of the sale. If you know you will be unable to supply them in a reasonable period, and still go ahead, you may be committing an offence. If an offer is available for a limited period, state this in the advertisement. If stocks are genuinely limited, such as a clearance sale, say so in the advertisement.
Where demand exceeds anticipated sales, you may offer to supply the advertised item to customers at a later date, eg a raincheck. This generally avoids customer dissatisfaction as well as indicating that the advertisement was genuine.
Incentives
Offering gifts or prizes can be a creative way of improving your sales figures. But beware if you have no intention of supplying them as offered. This includes:
not disclosing special terms and conditions which must be met before the gift or prize is made available to the customer
disguising the cost of the “free” gift or prize by building it into the selling price of the advertised goods, and
supplying gifts or prizes substantially different from those offered.
Of course, it is an offence to use physical force, undue harassment or coercion in connection either with supplying a product to a customer, or with payment by a customer.
Refunds
Businesses that readily offer refunds and advertise this fact to their customers will attract repeat business.
ChecklistRefunds:
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If the goods:
have some basic, serious fault that the customer could not have known about when they purchased them
do not do the job that the customer was lead to believe they would do
do not match a sample they were shown, or
are not as they were described
then the customer may be entitled to a refund.
In some cases you may offer to repair the goods or exchange them or give the customer a credit note. However, the customer has the right to insist on a refund if that is what they want.
Making your customers aware of your policy on refunds and exchange will reduce the risk of any confusion and possible disagreements in the future.
| Caution To avoid making a misleading and, therefore, illegal statement to your customers on their legal rights to redress, be sure to follow these simple guidelines when advertising your policy.Advertisements, sales dockets, or any sales promotions that simply say you don’t give refunds on sale items are illegal.When displaying signs, be sure not to mislead your customers into believing they have no right to a refund when they may have that right under the law. |
You do not have to refund a customer’s money if:
they provide no proof of purchase
they change their mind about the goods
they have damaged the goods through inappropriate use, or
they knew, or should have known, about a fault when they purchased the goods which were clearly sold as seconds.
The customer’s obligations
Customers, too, have obligations on their side of the bargain and, if they want a refund, customers should:
report the fault or take the goods back as soon as possible
give details of the fault and what remedy they would like
provide proof of purchase when returning the goods
be sure they did not cause the fault
stop using the faulty goods, and
Make sure they care for the goods while in their possession.
If the customer has purchased goods on credit, they are not entitled to a cash refund. The customer can only ask for a refund of their deposit, any trade-in value, any payments they have made, and cancellation of any balance outstanding for those goods.
If the customer has already had a reasonable amount of use from the goods, they may have a right to only a part refund or repair.
Uncollected goods
Where goods are left for repair or other treatment in the course of your business, problems often arise when the goods are not paid for, or the customer pays but does not collect them. Precautions and prompt action on your part will reduce the amount of time you will need to devote to this problem.
Place a conspicuous notice in your premises informing your customers that goods, if uncollected, may be sold after six months from the date at which they are ready for collection.
As a general rule, if after six months the goods are not collected you may sell them. Before doing so you must publish a notice of your intention to sell them in a newspaper with State-wide circulation.
After doing this, you can only sell the goods at public auction in a lot that does not include any other goods.
You are entitled to keep a portion of the money from the sale to cover reasonable costs incurred, eg storage, and then you must return the balance to the customer.
If you don’t follow these guidelines, the only way to dispose of the goods is to apply to the local court.
