LBM Journal February 2010 : Page 11
BILL LEE ON SALES & MARGINS Building Value Your value is determined by the size of the problems you can help your customers solve. I f you have ever attended one of my sales seminars, you have heard me discuss ways for salespeople to add value. I continue to promote added-value because it is only by adding value to our normal services that we are able to escape from the “your price is too high” headaches of selling. Now don’t get me wrong, I like hot coffee and donuts on a cold winter morn- ing as much as the next guy, but you’ll have to admit that this “added-value” solves pretty SMALL problems that even a novice salesperson could fix. know, the little nit-picking things that keep you awake at night?” The prospect answered with a prob- lem that gave Randy a grand opportuni- ty to add value. The prospect said, “My gross margin is getting killed by XYZ Construction. Every time I get a home buyer to the closing table, I have to cut the price to get a signature.” “Why is that?” Randy asked. “If I’ve heard it once, I’ve heard it a dozen times from prospects who are shopping around, you know, visiting models in every subdivision they pass by. I continue to promote added-value because it is only by adding value to our normal services that we are able to escape from the “your price is too high” headaches of selling. While I fully realize that this is excel- lent customer service that can be effective at endearing you to your customers, prospects and subs, it can’t touch the added value that’s offered by some of the most highly innovative salespeople. The follow story is an example of how one salesperson helped a prospect solve a BIG problem. I once worked with a salesperson (I’ll call him Randy) who had been calling on a rel- atively large prospect for over a year and get- ting nowhere. Yes, he had delivered donuts, hot coffee, cold drinks, carpenter’s pencils, ball caps, nail aprons, t-shirts and a half dozen other freebies to this prospect—but had yet to receive his first order. Then one day, the salesperson decided to ask one of my favorite open-ended questions: “Mr. Prospect, what are your most pressing business problems, you When they tour my models and then visit my competitor’s models, they say that his houses are just about the same as mine, but cost a good $2,000 to $3,000 less.” “How true are your prospects’ claims?” “I have no idea. I’ve never visited my competitor’s models; I wouldn’t feel comfortable. We know each other; I would be embarrassed.” “Well, let me ask you: would it be of benefit to you if I did a comparison for you?” “Would you do that for me? I don’t even buy anything from you.” “Of course, I would. I believe that this is the kind of service I offer that can be the most valuable; anyone can deliver wood. Give me a few days and I’ll get back with you.” A few days later, Randy came back to his prospect with a list of features that his prospect’s homes contained that the competitor’s homes did not. “Armed with this list,” Randy said, “you’ll have plenty of ammunition when a buyer says that your homes are no different than your competitor’s.” Two weeks later, Randy followed up with the prospect: “How is your gross margin tracking since you have been using the features list?” “Like a charm,” the builder answered. “You have done for me what I should have done for myself. I want to say thank you by giving you the material on Lot 78. We need the framing delivered next Tuesday. Here’s the material list.” How BIG are the problems you can solve for your customers? Remember: solv- ing problems builds value. If you’ll take to heart this lesson from Randy, I believe you’ll find that there’s more to selling than handing out freebies. ■ BILL LEE has nearly 40 years of experience in the construction supply industry. A consultant and seminar leader, he is the author of two books: Gross Margin and 30 Ways Managers Shoot Themselves in the Foot. www.BillLeeOnLine.com, 800.277.7888. LBMJournal.com ❘ February 2010 ❘ LBM JOURNAL 11
Bill Lee
F you have ever attended one of my sales seminars, you have heard me discuss ways for salespeople to add value. I continue to promote added-value because it is only by adding value to our normal services that we are able to escape from the “your price is too high” headaches of selling.
Now don’t get me wrong, I like hot coffee and donuts on a cold winter morning as much as the next guy, but you’ll have to admit that this “added-value” solves pretty SMALL problems that even a novice salesperson could fix.
While I fully realize that this is excellent customer service that can be effective at endearing you to your customers, prospects and subs, it can’t touch the added value that’s offered by some of the most highly innovative salespeople.
The follow story is an example of how one salesperson helped a prospect solve a BIG problem.
I once worked with a salesperson (I’ll call him Randy) who had been calling on a relatively large prospect for over a year and getting nowhere. Yes, he had delivered donuts, hot coffee, cold drinks, carpenter’s pencils, ball caps, nail aprons, t-shirts and a half dozen other freebies to this prospect—but had yet to receive his first order.
Then one day, the salesperson decided to ask one of my favorite open-ended questions: “Mr. Prospect, what are your most pressing business problems, you Know, the little nit-picking things that keep you awake at night?” The prospect answered with a problem that gave Randy a grand opportunity to add value. The prospect said, “My gross margin is getting killed by XYZ Construction. Every time I get a home buyer to the closing table, I have to cut the price to get a signature.” “Why is that?” Randy asked.
“If I’ve heard it once, I’ve heard it a dozen times from prospects who are shopping around, you know, visiting models in every subdivision they pass by.
When they tour my models and then visit my competitor’s models, they say that his houses are just about the same as mine, but cost a good $2,000 to $3,000 less.” “How true are your prospects’ claims?” “I have no idea. I’ve never visited my competitor’s models; I wouldn’t feel comfortable. We know each other; I would be embarrassed.” “Well, let me ask you: would it be of benefit to you if I did a comparison for you?” “Would you do that for me? I don’t even buy anything from you.” “Of course, I would. I believe that this is the kind of service I offer that can be the most valuable; anyone can deliver wood. Give me a few days and I’ll get back with you.” A few days later, Randy came back to his prospect with a list of features that His prospect’s homes contained that the competitor’s homes did not.
“Armed with this list,” Randy said, “you’ll have plenty of ammunition when a buyer says that your homes are no different than your competitor’s.” Two weeks later, Randy followed up with the prospect: “How is your gross margin tracking since you have been using the features list?” “Like a charm,” the builder answered.
“You have done for me what I should have done for myself. I want to say thank you by giving you the material on Lot 78. We need the framing delivered next Tuesday.
Here’s the material list.” How BIG are the problems you can solve for your customers? Remember: solving problems builds value. If you’ll take to heart this lesson from Randy, I believe you’ll find that there’s more to selling than handing out freebies. ¦
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