Sales volume = Sales activity x Quality of offer x Closing rate
In the case of Chick-fil-A the sales activity consisted of touching an existing customer with a targeted text message. The offer of a free milkshake if redeemed by 6 p.m. was highly attractive for the audience of high school students and their friends. Counter staff, trained to cross-sell high-margin products, had closing rates of at least 50 percent.
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As for Ramsey’s sales activities, “We have a solid base of existing customers. We contact them quarterly to see if we can save them money with those of our products or services they don’t yet use. We have come to know and to trust each other, so our closing rates from cross-selling activities are above 30 percent. We’ve actually managed to grow substantially during this recession and plan to hire an engineer and a sales executive.”
Edmund Marquez, owner of Edmund Marquez Allstate Agency, represents a business-to-consumer business. “We call our existing policy holders twice a year to review their policies and to let them know that we’re thinking about them. That’s our primary sales activity.
“Our offer consists of competitively priced policies, discounts for multiple policies and, of course, personal service. Our closing rates are a little over 20 percent for each calling cycle. Since we began systematically calling our clients our policy production has doubled and we’ve become the No. 1 Allstate Agency for new life insurance policies in the market.”
Sean Randall, Internet sales manager for Holmes Tuttle Ford Lincoln Mercury, adds, “Our offer is that we have great products and service for a great price. We have an excellent and stable brand. One of my primary sales activities is to call customers who purchased a car from us three to six years ago. It’s a friendly call to see if everything is OK. And it’s a reminder that if they or a new driver, friend or relative need a new or used car, I’m there to help. Sales from this one activity contribute as much as 25 percent of my monthly total.”
My next column on Oct. 19 will deal with the second easiest way to increase sales in a recession — getting referrals.
Contact Sam Williams, president of New View Group LLC, at swilliams@newviewgroup.net or (520) 390-0586. Williams is looking for topics readers would like to see covered, or with questions or comments. New View Group provides revenue development consulting to CEOs and sales managers and sales and sales management skills training to business to business sales teams. Read his blog at insidetucsonbusiness.wordpress.com. His Sales Judo appears the first and third weeks of each month in Inside Tucson Business.
Comments
Sean Randall wrote on Oct 20, 2009 11:51 AM:
John S. Del Cano wrote on Oct 7, 2009 5:48 PM:
And one can consider discounting for trial purchases. This is common with new retail items where we frequently see 'buy-one-get one free' and coupon offers.
Ever heard of a "monkey's fist?" It's a knot that sailors use to weight a line thrown from a dock up to the deck of a recently arrived but unmoored ship . The small line is then attached to a very big, very heavy hawser which is subsequently hauled up to the deck of the ship to securely moor it to the dock.
This same term is used to describe small trial purchases which may be discounted in order to get a relationship started.
Discounting and "monkeys' fists" are also be used to encourage existing clients to try out a new, additional service or product that you offer. An example of this occurs when you add home owners insurance to an automobile policy that you have with the same insurance company. In this case the discount is permanant, but in other cases it doesn't have to be.
Take satellite T.V. offers, for example. If you add HBO, it may only cost you the discounted price of $X for the first three months. But, if you really like the offer after three months, the price goes up to $Y. "
Jose Caracas wrote on Oct 5, 2009 9:32 PM:
We also have a practice of regular contact with our customer base in an effort too simply serve them but also maintain top of mind awareness so we can up/cross sell.
Something we've noticed in this effort now, more than in years past, is that, by opening a dialogue with the customers, we also open ourselves to some required discounting. It is no secret that many businesses are suffering and if we don't talk to our customers regularly.
While the idea of a hurting customer may not sound positive, it has really turned out to be a great opportunity. Sure, sometimes we can't cross/upsell them despite the fact that they're suffering, helping them by discounting when they NEED the help is worth oodles of relationship capital. Isn't it true that most of us remember those who helped us when we needed help the most?
When all is said and done, if we're out turning over the rocks to find the new business and we're growing, trading a discount for a longer term commitment from a customer isn't a bad trade at all. It helps solidify our base as well as build relationship capital that may come to pay off later. "
Edmund Marquez wrote on Oct 4, 2009 8:20 AM:
Ashi Guruma wrote on Oct 2, 2009 3:40 PM:
I own a large Tuson based distributing company with a national client base and more that 2,000 SKU's. It's not like I have just a few products and services like Mr. Ramsey at Login.
How do I go about identifying what my cross-selling opportunities are to begin with? Once I identify them, how can I motivate my order takers to suggest related products? I have tried to do this before and have been disappointed with the "push back" I get from my own employees.
I see that you plan to talk about getting referrals in your next article, but could you slow down and spend a little more time on the subject of "customer farming" and motivating order takers to step out of their comfort zones to suggest related products? "