So much of the time if you talk to an accountant or business advisor they will tell you the best way to improve your business is to simplify it… and I don’t disagree. Streamline your processes, make fewer procedures, simplify everything if you can, and it can help your business run smoother. However let’s not simplify things too much… a little complication can go a long way to improving your bottom line.
OK, probably time for me to explain what I am talking about before you completely switch off… let’s talk about sales as it gives us a great starting point. Sales is a numbers game, whether you like it or not the age old cliché is true.
As a salesperson you will have a certain hit rate; if you work in a retail store, you might have to speak to ten people to make one sale, if you work in a call centre it might be 20 calls to make one sale, so in order to make a certain amount of sales you just multiply your gross figure by the amount of sales you wish to make… Have I taught you how to suck eggs yet?... Ok… you get my point.
What we have just talked about is sales in its rawest or simplest form, and in order to make more sales you simply increase your amount of sales activity. So why do we need to complicate it? It’s all in the ratio’s. Yes sales can be as simple as numbers, but the better you can make your sales ratio the more sales you can make in a specific time frame, and the more efficient you become.
A salesperson may only be able to make 50 calls in one day so in order to increase their sales they need to be able to improve their sales skills, and this is where we complicate things a little. If it were as simple as pure numbers then the man from the mobile phone company that calls you on a Wednesday afternoon, would simply say “hello, would you like to buy a new mobile phone, they’re only 50 bucks?”
Eventually someone would say yes, simply because they had called that many people someone was actually, at that particular time, in the market for a new phone. I would not suspect their ‘call to sale’ ratio would be that good though. But that is the essence of the call; they want to sell you a new phone, so they ask the question.
However, in order to improve business both for the salesman and the mobile phone company we first have to complicate the call. That’s why when they phone you, rather than ask you out right they say something like, “Hi, the reason for my call is that I would like to save you $250 a year off your mobile phone bill, would you be interested in saving $250?”
OK, I’m not saying this would work every time but the salesperson would certainly get a few more yes’s with that question than they would with the more direct approach. Obviously there is a hell of a lot more involved to make it to the sale but this is not a sales lesson, its more about demonstrating how if we complicate things slightly we can get a better result.
Let’s take referral business, there is a statistic that says if you provide great service to all of your customers 5% of them will refer you to one of their friends or someone they know, but if you simply ask for the referral rather than waiting for it, that figure can increase to a rate of 50%.
There is also a statistic that says 78% of statistics are made up on the spot, but for the purpose of what we are discussing you can see how by adding a simple question to the end of a sales call you could increase business by a significant amount. Sometimes we lose sight of how by complicating sales calls just a little bit, by adding one more question, our business could increase dramatically.
I don’t know if there is a statistic for this but think about the one question that made the most money for a company… I would put my money on “would you like fries with that?” The ultimate up-sell!
Think about it for a while… is there one more question you could ask your clients when you speak to them that might generate thousands of dollars in revenue at no extra cost? Are you an email focused business? Is there a button you can add or a question you can add to your signature that might increase business for you?
Realistically there’s nothing too complicated here. The psychology involved in sales is nothing new, there are plenty of books on sales techniques out there and that’s the only thing we mentioned that barely resembles anything complicated… the rest is simple, the only complication is adding questions to conversations we already have.
Have you asked for that referral yet?