One of the most valuable lessons any professional can learn is that a sale is a cycle. There are many steps in the cycle. First, a good sales professional researches for possible prospects. After identifying suitable targets there is more research to determine the targets needs and to decide on how best to approach the prospect. After establishing the needs comes the initial process of approaching the client. A plan of attack is needed and it can be as simple as making a cold call or as complex as locating a referral partner to make a personal introduction and recommendation.
The bottom line is that there are a lot of steps to making a sale from discovery, to the closing pitch and getting wet ink on the contract. However, one of the biggest lessons I ever learned was this! No matter how many contracts a sales person gets signed, if there is NO money then there is NO sale! Period. End of sentence.
Side Thought: One of those early morning appointments at the waffle house my father and I were sitting there in that cold corner booth enjoying a steaming cup of acrid black coffee when I commented on the dollar volume of sales we had made. He snapped me that knowing gaze. You know the one, the one that only fathers, mentors and bosses can give. The one where the head is still tilted slightly down, the eyebrows are raised and he stares a hole right through your soul. There was an awkward silence, then that wry smile came across his face and he let out a little chuckle. “Well son, there’s where you’re wrong. We have a lot of contracts signed but we don’t have a sale yet. Let me ask you something … How many checks have you collected?” My response? … “Ummm, Checks?”
This may sound simple; many people may read this and think I’m crazy for pointing this out, but the truth is that it is surprising how many sales people tout the dollar volume of contracts they have signed and forget about the money… Let’s let that sink in for a moment.
For those in a sales leadership role it is critically important to teach sales people the skill of collecting the money. Many sales people are great at asking for the signature on the contract but are horrible at going back to collect a check and isn’t that the point of the sale in the first place, to get the money?
As a matter of fact I believe that many sales organizations forget to include the collection process in their training. Early in their training, sales people should be taught how to ask for the money after the contract is signed. More importantly, they should learn that the process of collecting the fees due are their responsibility.
The skill of collection of funds is critical to all organizations and if the people tasked with maintaining the client relationship, the sales people, understand their responsibility early on then maintaining long-term client relations can be achieved on a consistent basis. Remembering that a customer who never pays you is not a benefit or a partner or desirable, they are just a cost to your business.
So if you are still doubting me and think this chapter unnecessary, think about this for a moment. How many real estate agents have you heard brag about all the contracts they wrote, ‘sales they made’, in one month only to follow up with them the next month to ask about the record commissions they earned to find out that all their ‘contracts’ fell out and left them with little or no commissions?
How many sales people have you seen that were great at getting people to commit only to find out that the way they got the client to commit was to give away a large part of the profit in a deal because they were afraid to ask for the money.
You see, No Money – No Sale is about more than just teaching a sales professional how to ask for the money, it is also about teaching them not to fear the money! That’s right, DON’T FEAR THE MONEY! The fear of the money relates to collection of the money due as much as it relates to charging the customer top dollar because of a belief in the value of the product or service being sold. This is critical to selling at a profit and collecting when delivery is made.
My second point here is probably more important than the first. Teaching the sales person the close is important, but teaching them the value of the product in terms of dollars that MUST be collected in order to consummate the sale is what separates great sales forces from mediocre performers.
If sales people are taught how easy it is to ask for the money because the value of the sales price is reflected in the value of the product or service, then profitability is increased and customers actually feel better about the product or service they purchase. When customers are made to understand and see the VALUE they received then in most cases they are more than willing to pay. They feel like they didn’t just make a purchase because it was cheaper and they were given a slick presentation but that they made an informed decision about a great product that delivered on its promises.
When sales staff are educated about the importance of ‘the money’ aspect of sales there are many benefits to the company and the agents themselves. In the words of my wise old man; “WE NEVER SELL ON PRICE! WE SELL VALUE.”
The following is a list of reasons why understanding the money aspect of sales is important … I think old’pa would agree:
1. When you sell on price and compete on price your profits are squeezed. Sound familiar? It should. Not only did my dear ole’ dad believe this theory so does the Oracle of Omaha, Warren Buffet.
2. When the sales agent doesn’t understand why a product or service is priced the way it is they are more likely to ‘give away’ valuable dollars in the form of price reductions in order to lock down the client and close the sale.
3. BASIC: No money … NO COMMISSION! … worth repeating … No money, NO COMMISSION!
4. Value after the sale is diminished when sales people sell on price and don’t fully understand and/or communicate the value of the product or service properly to the client.
5. The more timid the agent is about collecting fees in a timely manner the more likely it will be that the company will have to discount the invoice in order to collect what is owed.
6. We can go on but lets not, lets refer back to the BASICs. No money NO COMMISSION!
Whether you are business owner with a sales force, the manager of a sales force or a sales agent yourself, you must realize that you can’t, excuse the cliche, count your chickens before they’ve hatched. Understanding the money aspect of a sale is as important as knowing your product or service. Moreover, understanding the value of the product or service and why it is priced in such a way is critically important in the ability to educate the client about the value of what they have recieved.
Finally, it all really boils down to one very important fact. When sales people understand the value of the product they are selling and the importance of not selling on price combined with the importance of un-apologetically asking for the money, the company and the agent will both make more. Profits will no longer be squeezed and company, customer and sales person will have a more secure financial future.
1. Never sell on price. Understand and be proud of the way your product or service is priced.
2. Always ask for the money … un-apologetically, unequivocally, and without hesitation.
Want to make more sales and close more business? Want your clients to be more satisfied with your product or service? Want to be the top salesperson, sales force or industry sales leader? Then learn the importance of understanding the money aspect of the product or service you sale and never sell on price, then watch your profit or commissions increase to unbelievable heights.