How To Improve Deal Visibility and Closure Rates
Reprinted with updates from Achieving Excellence in Dealer/Distributor Performance
Have you ever considered signing up for a camera safari in Tanzania East Africa? It’s famous for large numbers of big game species at home on the sweeping Serengeti plains! Just think about it. This is the classic tented safari made famous by such adventurers as Ernest Hemingway and Teddy Roosevelt.
Here you are, arriving at the Arusha, Tanzania airport. You have practiced a little Swahili so you can try some local conversation. You know you want to see lions, zebras, gazelles, impalas, leopards, buffalos, elephants, giraffes, and rhinos at the legendary Masai Mara National Reserve.
On your agenda is an extensive 4-WD Land Rover trip out to the world-famous Serengeti National Park, home of the largest concentration of plains game in the world. Here the great annual wildebeest migration includes literally millions of animals trekking across the great savannah in search of green grass and water.
You’ve also heard of a “lost world” of remote East African ancestors discovered in an ancient collapsed volcanic caldera near the Olduvai Gorge. The famous Ngorongoro Crater, from the implosion of a massive volcano, is ten miles in diameter and 2,000 feet deep, the largest unbroken caldera in the world.
And from the ridge, you will see one of the most spectacular panoramas in Africa, literally teeming with wildlife, including the endangered black rhino, lion, elephant, hyena, and wildebeest.
You might even see a wandering, semi-nomadic Masai herdsman and his cattle. You know, that to get the most out of your adventure, you really need to do some research. To best see the wildlife, you will need a qualified guide and outfitter. It will also be wise to have reservations at lodges such as the Fairmont Mt. Kenya Safari Club, set at the foot of the 17,000 ft. Mount Kenya, and air transport across the vast African wilderness.
Organizing and conducting a successful East African camera safari is not much different, in principle than organizing and managing a machine or product support sales territory.
Just as having a trusted, competent guide helps ensure the safari’s success, you must be your own guide in organizing and managing a prosperous sales territory. In sales territory management, the two most important skills are Deal Visibility and Deal Closure. Your success or performance RATE in each of these critical activities can be easily measured.
DEAL VISIBILITY (Participation) RATE is the percent of deals you see that go down in your territory. Strong Deal Visibility is the result of four essential selling activities. Just as in your safari you have to learn how to track and find the beasties, deal visibility includes these four skills:
- Market Segmentation and Analysis
What are the end-user customer business types or vocations that offer the largest sales opportunities for the products you sell?
- Territory Account Identification, Organization, and Classification
Who are your largest accounts? Over 80% of your sales will be from your largest 20%.
- Prospecting and Market Assessment
How are you going to effectively develop and execute a proper A/B/C/D account prospecting and sales development effort?
- Territory Development Follow-up and Control
How are you going to uncover and relentlessly pursue purchase intentions from your assigned accounts?
Deal visibility skills (and fortitude) enable you to pursue the big game (and persevere), despite the challenges of exploring in the bush. The objective is to “see” as much big game as possible, close enough for you to take aim and get your best photograph with at least your zoom lens. The better your deal visibility skills, the more big game (deals) you have the opportunity to see.
But, seeing the game (deal) and bagging your shot (closing the sale) are two entirely different sets of skills.
DEAL CLOSURE RATE is truly a different story. On safari, it includes all of the technical skills needed to actually capture the shot once you have the wildlife in view. You must know your camera, lenses, and filter equipment inside and out. You need to have the right film (or chip), and plenty of capacity. In territory sales, your Deal Closure Rate tracks your performance in those essential personal selling skills needed to persuade prospects to do business with you and your dealership after you have identified the opportunity:
- Account profiling techniques
- Account qualifying procedures
- Needs analysis, fears, and problem identification
- Persuasive presentations and demonstrations
- Marketing your Dealership’s overall product support capabilities
- Utilizing financial tools and presenting appropriate lease/rental options
- Handling objections
- Good personal communications and follow-up
- Getting commitments
- Enthusiasm, resilience, honesty
In the DEAL VISIBILITY skill set you learn to search out, identify and zoom in on a large percent of the deals in your territory.
This must be done early enough in the purchase cycle so you can influence the outcome. (The later you arrive on a deal, the lower your probability of success and the lower your margins if you do win it.) The earlier you can identify a potential sale, the greater your prospects of success.
The sooner you can work with the account on the needs analysis, uncovering fears, and problem-identification phase, the higher your sales margin (and probably your rep’s commission) on the deal.
In the DEAL CLOSURE RATE skill set you exhibit the sales persuasion and personal communications skills essential to “woo” the account. Just as you must learn to avoid spooking the wild game, causing the herd to flee before you can squeeze off a shot, you must learn to work on a personal basis with your prospect to build his trust and confidence in you and your dealership.
Through appropriate probing and questioning techniques, you learn to identify production problems and opportunities for your machine or aftermarket service applications. You learn to help your prospect define his critical purchase criteria as well as his “hot buttons.” You learn how your prospect will make the economic justification to buy, you make certain that your contact has both the authority to sign the deal as well as the funding to make it happen. You will uncover his fears that will greatly sway his decision amongst alternate suppliers. You’ll discover the strengths and weaknesses of your proposal and how you compare it to the competition. Finally, you must determine what obstacles (and prospects’ fears) you must overcome to get the sale.
The most successful machinery and aftermarket sales reps in the industry work toward maintaining a deal visibility rate of 70-75% and a deal closure rate of 50-60%. At this success rate, you can expect to maintain a market share of 48% (.80 x .60).
Mathematically, you can see the importance of the combined impact of visibility rate and deal closure rate. If your visibility rate was only 20% and your closure rate was 75%, your maximum market share would be only about 15%. (.20 x .75).
Even with a closure rate of 100%, with only a 20% visibility rate, your maximum machinery market share could not exceed 20%!
Which of these two skills is more critical? In my opinion, both are essential. To attempt to do one without the other would be just as foolish as heading out to your East African safari without a well-planned 4-WD campsite route (that would absolutely assure you great views of the big game) or forgetting to load your expensive camera with adequate memory!
Use the following scorecard to check out your skills. What skills do you need to improve?
PERSONAL SELLING SKILLS INVENTORY
Score each personal selling skill below on a scale of 1 to 10.
Give yourself a 1 or 2 if you are extremely weak in an area.
If you are very, very strong, score yourself a 9 or 10.
|DEAL VISIBILITY RATE SKILLSET
|Market Segmentation and Assessment
Skill of assessing your territory to identify the most promising and productive customer segments (business vocations) that offer the most opportunity.
|Territory Account Identification, Organization, and Classification
Skill in profiling large numbers of current AND prospective accounts to identify near-term purchase plans or potential, classification of current and prospective accounts into A-B-C-D importance categories and structuring an account contact strategy to optimize coverage.
|Prospecting and Account Analysis
Skill of contacting A-B-C customers AND prospects according to plan, either in person or over the phone to identify equipment purchase requirements.
|Territory Sales Velocity
Work effort level to achieve 250-300 customer touches per month. Each day complete on average 5 personal face visits, 5 telephone calls, and 5 e-mail promotions. This 5-5-5 program is a dynamite monthly performance target.
REMEMBER: You will never be able to drive your truck fast enough to identify 70% of the deals by personal territory canvassing alone. You must use technology to help you cover the territory: phone, e-mail, direct mail, bird-dogs (lead finders), social network platforms, referrals, partnering with parts and service, trade association activities, and sales referrals.
|Territory Development Follow-up and Control
Skill of pursuing emerging sales opportunities to be within shooting distance in a timely, orderly way. Don’t give up if it is not a quick sale.
|CLOSURE RATE SKILLSET
|Account profiling techniques
Skill of identifying key players, influencers, and decision-makers, fleet size, and composition, equipment replacement cycle, financial status, purchasing preferences, competitive activity, vital vendor selection criteria, their awareness of your product support capabilities and reputation, the growth and success level of their business.
|Account qualification procedures
Skill of ascertaining if the account has sufficient need, buying authority, and financial strength to consummate the deal.
|Needs analysis and problem identification
Skills of probing and listening, identification of problems/opportunities, uncovering fears and concerns, equipment maintenance issues, and purchase decision criteria and priorities other than price.
|Persuasive presentations and demonstrations
Skill of demonstrating that your equipment and attachments, service, and parts proposal are the lowest risk highest return alternative.
|Marketing your Dealership’s overall product support capabilities
Prospects who don’t know your dealership, are held back because of fear. No matter how bad their current vendor is, you could be worse! They are fearful your dealership will not be there when they need you for warranty and, parts and service support.
|Utilizing financial tools and presenting appropriate options
Skill of providing the prospect with relevant alternative financial packages that best suit his needs, cash flow, and investment requirements.
|Anticipating Questions, Handling objections
Skill of responding to questions and offering proof to diminish FEAR of doing business with you and your dealership.
|Good personal communications and follow-up
Skill of staying close to the prospect and maintaining the momentum of the deal.
Skill of getting the prospect to take the steps needed along the way: credit application, used equipment appraisal, visiting your parts and service department, talking to happy users (customer referrals), spending the time needed to properly identify real needs resolve fears, establish commitments from all influencers, and gain support from equipment users in the account.
|Enthusiasm, resilience, honesty
Build it, maintain it, or lose it.
NOTE: If your TOTAL overall score is less than 120, you should immediately begin an aggressive personal selling skills development effort. Remember, you are only as good as your weakest skill area. EVERYTHING COUNTS! The lowest score drags all other capabilities down to that level in terms of the overall impact on performance.
Everything counts. It either helps you move closer to personal professionalism sales expertise and success, or, further away.
If you would like to discuss any of these topics, please send me a note. Walt@mcdonaldgroupinc.com