Businesses expect to close in on a sale after communicating once with a potential buyer, but research found that 98 percent of sales occur once a certain level of trust has been established.
With only 2 percent of sales occurring during the first exchange between a sales representative and a customer, it has become more important than ever for businesses to follow up on leads.
A recent study published in the Harvard Business Review found that companies take, on average, 42 hours to contact a web lead, and that 23 percent do not respond at all. The study also found that leads that get a response in the first hour were seven times more to get a decision finalised.
1. People who buy on the first meeting are those who’ve done their homework
The 2 percent who buy during the first interaction are usually people who have already looked into the subject matter, and already know what they’re looking for. If they meet someone who ticks all the right boxes and they get on well, then business may well be transacted. But that is far from the norm. The other 98 percent will only buy once a certain level of trust has been built up.
2. The salesforce needs to stay well informed
According to Robert Clay, entrepreneur, author and mentor to founders of high growth businesses, “Anyone who believes they can go into a sales situation armed with ‘101 sure fire sales closes’ and make sales is seriously misinformed … and about 20 years behind the times. Professional sales people get to know their prospects; understand their issues; solve their prospect’s problems; and provide irrefutable proof.”
“They build relationships and trust by engaging in on-going dialogue (otherwise known as follow-up). They don’t just peddle their products and services with an armory of closing tricks.”
With the influx of online tools, doing research is easier than ever. In a B2B sale you can use Google and LinkedIn to research at a company and a personal level. At a B2C level you can ask open questions to find out their needs; and like the Amazon.com model, if you have a database, keeping a record of their likes and purchases means that you can communicate with them about other purchases they might like to consider in the future.
4. There are plenty of reasons why people don’t buy
There are many reasons why people who could benefit from your product, service or expertise do not buy, such as inertia, lack of time, distractions, concern about cost, cashflow and budget constraints. Delivering effective marketing helps establish your name in your field and increases the chances of people buying without question.
It is important to remember that there are psychological and transactional realities you that come into play when making a decision about a purchase, which is why follow-ups are important. You have to create a reason for prospects to consider you. Now that buyers are out there researching, assisting them in their research using email, social media or other tools can help create a better relationship.
5. Follow-ups just aren’t happening
It is far to often that you express interest in a product or service, but never hear from the person or company again. Research shows that only 20 percent of sales leads are ever followed up, which means that 80 percent of potential opportunities are lost without a trace.
Businesses that don’t put in the effort to build up that trust and relationship with buyers and potential buyers will not succeed, especially in today’s tough economic climate. Buyers are much more cautious today and need to be sure they’re making the right decision before they commit to a purchase.
6. Tenacity pays off
According to Clay, various studies have shown that 80 percent of non-routine sales occur after at least five follow-ups. It takes at least five continuous follow-up efforts after the initial sales contact, before a customer says yes.
Other interesting statistics include:
- 44 percent of sales people give up after one “no”
- 22 percent give up after two “no’s”
- 14 percent give up after three “no’s”
- 12 percent give up after four “no’s”
This suggests that 92 percent of sales people give up after 4 “no’s”, and only 8 percent of sales people ask for the order a fifth time.
When you consider that 80 percent of prospects say “no” four times before they say “yes”, the inference is that 8 percent of sales people are getting 80 percent of the sales. It pays to be persistent and consistent.
7. Introduce a five “no’s” follow-up strategy
Once you’re aware of these statistics you should stack the odds in your favour by introducing a “five no’s” strategy, where you maintain contact with prospects until each one of them has said “no”, or “not now”, or “not yet” at least five times. Every time you’re in contact you have an opportunity to advance and build the relationship.
Businesses with a “five no’s” strategy can enjoy a conversion rate higher than their competitors.
8. Customers value convenience over price
Seventy-eight percent of consumers say that they only buy from businesses that make the process easy for them, and a third believe convenience is more important than price.
Providing a positive customer experience is one of the best ways to achieve a tangible Return on Investment (ROI). Technologies, such as social media and interactive business websites, have played an increasingly critical role in linking businesses to their customers. However, the most important thing at the end of the day is how a customer feels during and after the sales process.
9. Acknowledge the impact of customer experience
One bad experience may not necessarily send your customer fleeing to a competitor. But then again, it might. Take a close look at what keeps your business afloat every day. If these processes aren’t being managed efficiently, they’re costing you time, money, accuracy—and customers.
Are there repetitive tasks (inventory checks, transaction reconciliation) that you could automate? If so, moving towards automated processes would save staff time and provide better and faster customer service. But be aware that people like to be empowered, not treated like robots.
10. Keep “top of mind” awareness
There’s also the fact that 63 percent of people requesting information on your company today will not purchase for at least 3 months, while 20 percent will take more than 12 months to buy.
Contacting your prospective and existing customers every month or sooner builds trust and professionalism and keeps “top of mind” awareness. In this context, your customers do not regard contact for orders, payments and appointments, or the obligatory Christmas card as a meaningful communication. It is important to have an integrated sales and marketing campaign.