How to Increase Your Closing Ratio
Published on June 10, 2009
Many books have been written and seminars delivered on the development of so-called ‘closing techniques.’ Most advice on these so-called closing techniques is ludicrous. “Presto change-o,” they promise, “say this and people will magically want to buy from you!” Yet any commitments we “win” by reciting high-handed or manipulative phrases are likely to be short-lived, indeed.
Any experienced salesperson can attest to the fact that closing is not a single action or statement, but the carefully cultivated result of a long-term process. “Closing” really means gaining full participation in a shared objective. Our goal in the sales process is to get the other person to invite us to conclude the deal. When the relationship has been developed properly, that’s the natural conclusion.
Let’s look now at the crucial steps to making such a conclusion to our sales discussions possible.
Step One: Don’t Get Spooked by “No.”
“No” answers arise early and often in our discussion with potential customers, even in situations where we eventually get the business. Why is this? Because “no” is the answer of lowest risk. When people are not yet convinced to make the commitment to buy from us, they will say no – but it doesn’t mean they will never buy from us.
Too many salespeople instantly respond to a “no” answer by either withdrawing from meaningful discussions with the prospect or “turning up the heat” by discoursing endlessly about features, functions and benefits. Yet all we need to do when we encounter a “no” answer is to find out what the customer perceives is missing.
Make sure to include the value proposition. The “value proposition” is a formal recommendation that satisfies the wants and needs of the buyer while providing the impetus to accept the offer. Whenever we hope to get a “yes” answer, our value proposition must offer benefits in at least one of the following four areas:
- Improving profitability: “How valuable would it be for you to increase your disposable income by getting better returns on your investments and generating profits that will give you the life you want?”
- Improving productivity/saving time: “How would you feel if you could achieve the same objectives more efficiently–so you not only have to spend less time with me, you can also save yourself time by paying for lawn care or housecleaning, for example, with the additional profit?” This allows for an even more self-fulfilled life-enhanced quality of life.
- Reducing costs: “When your investment vehicle increases your return on investment and decreases your initial expenses, thereby reducing your overall costs, how would that make you feel?” Cost is not just financial, it is also personal in terms of time. How much time does the prospect or customer have to deal with their portfolio or the advisor who isn’t giving them the service they want? If you have a solution that satisfies the prospect or customer, it can save everyone time and emotion.
- Gaining a competitive edge: “The time you save and the money you earn will free you up to focus more on career skills to generate the income to invest for the future and create the lifestyle you want today.”
Always remember that the answer “no” is many times not the final answer, especially if you can re-create a value proposition that is attractive to your client.
Step Two: Ask Issues-Based Questions.
The issues-based question focuses on a specific kind of challenge the prospect faces in one of the four areas we’ve just discussed–helping to clarify what the client may think is “missing” and encouraging him or her to offer specifics about that challenge. Let’s assume, for example, that you know a prospect is considering various retirement options, and you want to position yourself as a valuable resource who will provide the best retirement solution. Start your interview with issues-based questions like these:
“Tell me, Ms. Smith, what would you say are the three most important things you want your investments to accomplish for you?”
Tell me, Ms. Smith, what are the three most important characteristics of the lifestyle you’d like to lead once you’ve retired?”
Issues-based questions garner time and attention, and they almost always elicit responses that tell us where the other person wants to go. They focus the conversation on the client instead of the sale, so we can uncover objectives, such as “I want to do a lot of traveling during our retirement,” or “I want a good college education for my kids.” Emphasizing these issues opens doors as well as portrays us as a potential resource, someone who’s more interested in meeting a client’s objectives than overcoming their objections.
Issues-based questions should be followed by two other categories of questions (clarification and consequence) that are too often ignored during the sales process.
Step Three: Ask Clarification and Consequence Questions.
Clarification questions are the questions you ask to make sure you understand the other person’s terms. For example, “When you say ‘a good college education,’ what does that mean to you? What kind of school are you hoping to be able to afford?” They ensure that we understand the objectives completely and can respond with the best possible solutions.
Consequence questions, as the name suggests, point to the perceived value of a solution and highlight the consequences the customer will experience if he or she rejects the recommendation. They depend on the following formula:
PV = CNC – CC
“Perceived Value” equals the “Cost of No Change” minus the “Cost of Change.”
The consequence question does not emerge out of the blue; it is proposed after careful determination of where the other person wants to go (via issues-based questions), what the other person really wants and how they want it (via clarification questions). The consequence question might sound something like this:
“Tell me, Mr. & Mrs. Jones, what would happen if for some reason you were not able to afford an Ivy League education for your kids, what impact would it have on their future?”
By uncovering the impact, we are set up to make a formal recommendation. The client has clearly stated the problem; now it’s our job to provide an appealing solution.
When you have effectively interviewed the prospect using issues-based questions, asking for clarification, concluding with consequence questions, and forming your recommendations as a value proposition, people will more often than not realize it is in their best interest to move ahead with your proposal, and you can expect to be invited to close the sale. The prospect will either offer to “get started,” or you’ll be able to get the ball rolling by saying something as simple as,
“Mr. & Mrs. Jones, to start preparing for your kids’ future, which option do feel comfortable moving ahead with?”
In the end, there are no “tricks” to making the close easy, no pulling rabbits out of top hats. There’s only solid interviewing, careful listening and presenting solutions that are the most viable course of action for your client. This is not just a transaction close–you are building a long-term relationship that helps them make smart choices so they can have the lifestyle they want.