Improve Your Sales of Building Products

Here is our next article, a little late for February with my apologies...

Lifetime Value of a Client: the 7 Ingredients of your Success
 
I have had an intuitive understanding of this concept early on in my sales career.
However, until recently, I didn’t have a conscious and documented understanding of this extraordinary sales tool.

I was lucky enough to be invited to a Jay Abraham “boot camp” about three years ago.
For those of you that may not know him, he is an US-based marketing guru and the inventor of the “loss leader” concept, or at least the first to document it properly.
From there, he went to document the concept of “up-selling” and “cross-selling”.

What an eye opener!  Suddenly all my gut feelings on how to treat a client to keep him or her for as long as possible (ideally for a lifetime...) were now up in the open, dissected, documented and ready to use in a more structured manner.

Basically, one needs to recognise the time, effort and money involved in acquiring a new customer in the first place...

Once you realise the true cost of this exercise and you compare it with the cost of keeping a customer happy and returning to buy more products or services from you, then you are going to gear your organisation to behave in such a way that, not only this client will return for more, but also, will tell everybody around that you are the person or organisation to go to for such a product or service.

Examples of “loss leader” unconscious activity abounds in the traditional markets where farmers will happily give you over a kilo of tomatoes for the price of a kilo, or give you parsley and lemon for free with your fish, or as it used to be the tradition in France, you would get “treize a la douzaine”, meaning 13 oysters for the price of 12 at your local fishmonger...

I have vivid memories of going shopping with my mum at the butcher, and once she had order the Sunday roast, I would get a few slices of saucisson  for free, a wicked lateral “loss leader”!

In this context, cross-selling with the now famous fast food expression “would you like fries with that” was second nature to food providores around the world, or up-selling to a more expensive fish under the pretence that it was “just off the boat”...

So, how can we translate these practices that have been around for thousands of years into our current environment of consultative or specifications sales?

One of the most successful “techniques” is “free advice”. Obviously, giving advice seems to be a very widely spread activity. After all, one could say that I am just doing this as I am writing this article...

But the value is in providing real advice that is not biased towards your own bottom line, but rather towards helping your client finding the best outcome for his/her project.

In  a Specification Sales environment, you want to consider your client as in the Architect or Interior Designer you are talking to for a specific project, but also taking into account his/her client’s requirements. In other words, you have to keep in mind the client of your client: if understood properly, this is a very powerful tool in the successful retention of your Specifiers.

It can take an interesting turn, when the good advice is actually to point your client towards a competitor’s product for this particular application. I can guarantee you that the next time you recommend one of your own products to that same client, it will be a breeze to get that client on your side...

In terms of cross-selling, one thing that every ironmonger is taught on the first day in the job is to remind the specifier or the client that it is a good idea to have a door stop for every door on the project. In terms of up-selling, the Export Manager of an English manufacturer I used to work with was to sell better hinges on each door, with the promise (and the delivery...) of a 25-year warranty.

This particular manufacturer got to supply all the door hardware of the still relatively new Hong Kong airport for 5000 doors with an all encompassing 7-year warranty. This could have been the ultimate loss leader, but the company was so confident in the quality of their products that they didn’t think of it as a loss leader, and they were right, as they had no claim at all during this warranty period! That’s a serious achievement for any product or any organisation!

So, to summarise, here are the ingredients to help you keep a client for life:

·         Keep giving sound advice to your clients

·         Think of the client of your client

·         It might be OK to lose some money on the first project to ensure long-term loyalty

·         Always think laterally to cross sell and up sell

·        If a dispute arises, resolve it promptly in the view of the long term value of the client

·         Ensure that happy clients spread the word around them

·         If a client stops or reduces his/her dealings with you, go and ask why and fix it!

I would be happy to develop these concepts with you at one of our seminars: