Simple Formula To Increase Sales

And then he did something that may have been his best move all day: He left me alone. He simply said, "Excuse me, but I need to attend to something behind the counter. Please let me know if you need anything else."

He walked away, leaving me behind to decide.

Simple Is Better

Why is it I get the feeling that many contractors decide for the customer what the customer can afford or wants? In truth, the customer is spending his or her own money, not the contractor's cash. Therefore, the homeowner should be the one deciding how he or she is going to spend the money.

Instead of assuming that I was looking for a base model or a low-priced camera, the salesperson did the right thing and offered me choices. He threw out a few possibilities, explained each, passed along his recommendation, and then stepped aside.

It's a simple formula: offer choices plus recommend the best plus let the customer decide.

In the end, I have a very strong feeling you will earn more money using this simple, but tried-and-true, formula.

John Teder, sales and business management trainer for International Comfort Products, talked about this very formula in a recent issue of "The Dealer Star," a newsletter published for dealers who sell Tempstar products.

"The big chain stores figured this out a long time ago," wrote Teder. "That's why they offer a broad range of models, styles, and prices on almost anything you buy."

Three Key Points

In offering choices, Teder recommends putting together three instead of one. There's the standard offering, the equipment you normally sell. Then there's the premium offering, a better, more efficient piece of equipment with an added accessory and service agreement.

Finally, there's the ultimate selection, which is equipment that is more energy-efficient, full-featured, and with more accessories, like programmable thermostats, humidifiers, and air cleaners.

"Recommend your ‘ultimate' choice first and work your way down," commented Teder.

"Remember, it is much harder to take away elements of a deal once ownership has been established than it is to add them to a lesser deal. Let your customers decide which accessories they want and which ones they are willing to live without. Any add-ons you sell are money in the bank."

You will be surprised, he said.

"Sometimes, customers will choose the ‘ultimate' choice before you've explained the alternatives," he noted. "Obviously, if they make this choice, don't try to oversell."

According to Teder, there are several benefits when you recommend the best and let the customer decide:

1. You'll close more sales on the first visit. "When you give customers choices, and fully explain their options, they are less likely to comparison shop," he said.

2. You'll keep your price-only customers. "The lowest-priced job never leaves the table, but you have a chance to make a sale on the higher-price, higher-profit jobs."

3. Profit margins increase. "Because your profit margins increase on anything above the standard options," he explained. According to the national averages, the sales mix is 25 percent standard, 50 percent premium, and 25 percent ultimate. You make a greater profit off 75 percent of your sales just by offering the premium and ultimate options."

Give it a try. You won't regret it. I'm happy with the camera I selected.

Mark Skaer is editor-in-chief. He can be reached at 618-239-0288 or markskaer@achrnews.com.

Publication date: 11/22/2004