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Wednesday, March 19, 2008

Sam Allman - How To Survive & Thrive During a Slowing Economy

Sam Allman, author of Heart & Mind Selling, and often referred to as The Dean of Mohawk University, presented "How To Survive and Thrive During a Slowing Economy" during Surfaces 2008.

Although particularly relevant to a slowing economy, Sam's recommendations apply in good times as well as bad. [By the way, if you aren't convinced that the economy has slowed, then consider these recent articles: Unemployment Rising in North West Georgia by Ashley Horn and Housing Slump Hurting Carpet Capital by Matt Johnson.]

Running a business is not the same as doing the business [think how different it is to do a job vs. running a department of people doing your job. It takes getting used to].

Retailing represents an interesting business model in that, once the doors are open for the day, the assumption is that "they will come" and that it is up to them [i.e., the customers] to come back, to followup, to complete the sale. It's a flawed assumption. Not only because of the slowing economy, but also because the consumer is shopping differently.

Forget sitting back and waiting passively for it to get better. That option leads to shutting down the business. Better to become more creative and create results.

According to Sam, the average salesperson never reads a book on selling. The best salespeople are 'students of the game.' They've observed and internalized how best to romance the customer. All salespeople need to master the basics of selling.

In Allman's model of selling, the funnel starts with creating rapport, then engaging inquiry [or engaged exchange] during which you qualify the customer via a two-way excited conversation; it's equivalent to a state of the customer [formerly known as the "probe" - not the nicest way to describe learning more about a customer!]. Next, presentation of products or solutions, which - if done well - will open [not close] a lifelong relationship.

That lifelong relationship means that next time that customer comes to you, price will not be an issue. Subsequent sales are easier because the customer trusts you. You've developed rapport and mutual trust and affinity.

How to do so? Find areas of commonness, listen, be interesting, be interested in the other, smile/look professional [did you know that closing rates are higher for well-dressed professionals?]; be safe, never say "may I help you?"

[Image from page 231 of Heart & Mind Selling.]
The engaging inquiry or engaged exchange is about understanding the customer's decision making process. It requires mastering the art of asking questions [Ask at least 17 questions before showing any product to better understand fashion preferences, performance requirements, budget decisions, etc.].

Make sure to never talk longer than thirty seconds without asking a question.

Never say a thing that you can't find a way to ask. The reason is that rather than tell, you want to sell. By asking questions, you involve your customer in the decision-making process.

During the presentation, be sure to convey conviction, enthusiasm, and passion for the customer [all buying decisions are emotional, including the decision to purchase from you and your store]. Remember that you are selling benefits, not features [people buy for their reasons, to benefit their lives], and that you are presenting the benefits from the customer's perspective.

The open. It's the point of everything we do. Right? Were you aware that 76% of sales presentations end without asking for the order? What a missed opportunity. This is the time to handle objections, to be persistent, yet - at the same time - so customer focused that you aren't perceived as pushy.

Peak performers must first have empathy so they can connect and communicate with customers. Next, they must have "ego - drive." This motivates them to make the sale, be pro-active and take action. It also means that they are busy increasing the likelihood of making a sale even during off-peak periods and in between customers.

[In fact, the best example of that behavior comes from Jack Mitchell. For more information, read A Good Hug Is Worth.... and Hugs or Relentless Customer Focus!]

During slower times, fewer customers come into stores. So, focus on improving close rates. Do more followup. Did you know the industry averages a closing rate of 26.8%?

Send a thank you note within 24 hours whether they buy or not. Add something personal, send a gift [remember love leads to reciprocity]; make contact w/in 72 hours of the first visit.

Allman suggests tracking every customer entering the store until they buy or go elsewhere. The point is to monitor the information to learn from it - and then figure out how to improve the closing ratios! Keep score, too, with salespeople. Measure performance so they can improve. A salesperson with goals is 33% more productive than one without. Food for thought!

Also try to increase your average ticket. Consider selling at higher prices than your competition. Yes, you will need to explain why you are better or different [i.e., "it's not the same" because you have certified installers and guaranteed installation]; just make sure those differences are real.

Stay away from being price driven. If you use price, you are nothing but an order taker. Did you know that for every 69 cent increase to a McDonald's ticket, 62 cents goes to the bottom line? The message is: upgrade, add-on. Start high [e.g., you might say "this is something a little more than what you wanted to spend. Do you want to see it...?"] , then work down. Sam says to lead with 4 or 5 products. No more or you will confuse the customer. This also makes the comparison process easier.

Create curiosity! Sell anticipation or the feeling of ownership. Present emotional benefits. Take the focus OFF of price. Reduce it to the ridiculous [e.g., it's only 39 cents a month vs. $10k] so it disappears as an issue. Offer credit [did you know that 80% of home furnishings are sold on credit, but not carpet?].

Once you have begun the relationship [i.e., the open], ask for referrals -- without saying 'referral'. Instead, you might ask whether your customer has any friends you might help.

Be sure to call 18 months later to remind your customer to get the carpet professionally cleaned; that keeps the warranty valid.

Stay in contact with your customers. Be everywhere, be visible, be creative to find business. Definitely be involved in the community! Call your customers when they are down. Be there for them. Never sit back and be complacent!

I noticed these recent articles offering suggestions on how best to survive tough economic times:
+ From MarketingProfs comes Five Tips for Marketing in a Recession by Glenn Gow: spend smarter, double-down on your current customers, outsmart your competitors, invest in growing market segments and fight for your resources.

+ High-end dealers fall back on the basics to stay ahead by Sarah Zimmerman from Jan 28/Feb 4, 2008 supports staying as far away from price as possible, and focusing on offering better service and products. Make sure your showroom is not only clean and neat, but also inspires creativity and feels welcoming. Be sure to deliver an impeccable experience.

+ Media Recession? Probably Not… by David L. Smith includes a fascinating paragraph with critical advice. It states: "astute marketers know that advertising in a down economy gains market share, which generally is sustained when markets come back. This has been established a number of times in newsletters and research papers from the MPA." The lesson: continue to advertise!

Note: Sam graciously sent me a copy of his book - Heart & Mind Selling. It goes into delicious detail about the points made during his presentation, and will definitely make you appreciate selling as you have never before [and don't forget that selling takes place with your children, parents, siblings, significant other as well as for work!]. Thanks, Sam.

Related Surfaces '08 Posts:
+ Kizer & Bender - First Impressions: The Art of Store Layout...
+ Tom Jennings - Installation is Not a Dirty Word
+ Las Vegas and FAO Schwartz

Posts Relating to Surviving During Slow Times
+ January Retail Tips
+ A Few More January Retail Tips
+ How To Sell Your Retail Experience
+ Ruthless Focus On The Consumer

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