I’m not sure what happened when I posted my summary, but part of it got left out, so here it is.
What should you expect your % of closure be in selling your work?
Another words, if you talk to 100 serious customers, how many do you think you should be able to sell your products to? Here’s one way to look at it and break it down so you may not feel so bad if you don’t get a sale every time you talk to a perspective customer.
The first thing I would like to clear up right now is; if you’re closing 80% to 90% of your sales now and you’re just getting started in your business, don’t flatter yourself, your not that good, it’s just your prices are too low.
I’ve heard of guys that have only been in business for a couple years tell me they have a two year waiting list of customers. The only thing that tells me is they are giving their work away and every one is getting in line.
Realistically, you should loose at least 25% of your sales because you’re too high priced and let me repeat that; at least 25% because you’re too high priced! I know that sounds ridiculous, but if you’re not, then you’re trying to beat the price of every cheap piece of crap on the market. If you’re not getting a “gulp” factor now and then from a perspective customer, then you must be too low priced.
You have to also realize that another 10% of your perspective customers aren’t going to buy from you no matter what the price is. They may be talking to you about your product, but they just want information, they want conversation, they want to tell you how you should price your work or how you should build it, but they have no intention of buying anything. (This percentage can actually be a lot higher depending on how you’re marketing your product).
You can count on another 10% that simply won’t like what you’re selling. Don’t be offended; remember, you can’t be everything to everyone all the time.
And the last percentage is one that you have to learn about with time; that is, there is probably 10% you don’t want to sell to. There’s an old saying that applies to so many things but simply put; “there’s always that 10%”! They’re jerks, there’s no satisfying them, and you’re better off not even trying to deal with them. You know the type! Learn to stay clear of them, don’t waste your time. That also may sound blunt, but trust me, over the years you will learn about that type customer and they will never be worth the sale.
Let’s add up the percentages:
25% =your price is too high (what I call the Gulp factor)!
10% = won’t buy, no matter what your price is! ( you can easily add another 10% to that at time.)
10% = simply don’t like your product for whatever reason
10% = you don’t want to sell to! 55% = Total; that means if your closure rate is 45%, that would actually be a really great closure rate, but to be realistic for the average woodworker it will be more like 25-30% or less.
And why do I say that? Simple; the one percentage I did not include in that formula is YOU. You alone can have the biggest effect on the percent of sales you close. Now I’m talking more about sales instead of prices, but again, they go hand in hand.
All these percentages are flexible, but we have a tendency to only think of price for a reason someone doesn’t buy from us and immediately feel we need to lower our price. So before you jump the gun and over react because someone doesn’t buy from you, make sure you look at all the reasons they might not have bought from you.
So that was the part of the summary I left out earlier and hope this will also help.
I keep thinking of things I should cover, but now it starts leaning more towards Sales and Marketing so we’ll end for now.
Feel free to drop me a line if you have questions or I’ll be glad to discuss here with an open forum for anyone that’s interested.
-- John @ http://www.thehuffordfurnituregroup.com