Closing sales for HighTech

How to create outlook signature

hey what's going on youtube it's ty and as promised i'm back with another video this time it's on chapter two of neo rackham spin selling and this chapter actually covers everybody's favorite topic which is obtaining commitment and closing the sale now this is actually a really long chapter as far as chapters are concerned so for this one i will have a summary of the key points at the end and then as i've been doing i'm going to go ahead and put together a quick quiz for you so with that being said let's go ahead and dive into it and get started so many writers feel that obtaining commitment or closing is the most important step of a successful sales caller transaction and it was under this assumption that health wait first began their research studies by placing their focus on finding data that supported this theory with the objective of finding closing techniques were the most successful in large sales in doing so they analyzed the traditional closing techniques such as number one the assumptive closes this is assuming the sale has already been made and for example this would be saying something like where would you like it delivered before the customer has agreed to buy alternative closes and for example that would be saying something like would you like it delivered on wednesday or thursday again before the customer is committed to buying standing room only closes and an example of that is saying the price goes up next week unless you buy now or order blank closes and that's filling in the customer's answers on an order farm even though the buyer has not indicated an unwillingness to make a buying decision in addition to these well-known techniques ethwaite found a number of more exotic clothes such as the sharp angle close the ben franklin the puppy dog and the double reverse wammo yes believe it or not these are names of actual closing techniques no other area of selling is as popular as closing despite all of the hype about closing health rates research would find that success in large sale depends on the investigation stage more so than anything else yet even today there still seems to be widespread widespread support for the old adage the abc is selling is always be closing so this chapter asks how many of these closing techniques really work and in large sales how do factors such as price and buyer sophistication influence closing success so to start let's take a look at what closing actually is in the 1960s chrissy and kaplan describe closing as the tactics used by salesmen to induce a purchase or acceptance of the proposition in his opinion rackham found that this definition was too broad instead he describes closing as a behavior used by the seller which implies or invites a commitment so that the buyer's next statement accepts or denies commitment in other words a close is anything that puts the customer in position involving some kind of commitment so closing is fertile ground for sales gurus having been written and talked about more so than any other sales topic even today the consensus among sales writers seems to be that closing techniques are highly related to sales success you should use many types of closes and have many in your arsenal and you should close frequently during the call some things that let's take a look at some things that sales authors around the same time that neil wrote this book back in 1988 had said so j douglas edwards who is referred to by many as the father of closing suggested on average successful closers close on their fifth attempt and that more tel the more closing techniques they use the more successful they're likely to be alan shoemaker also claims that successful sellers close more often and use more types of closes like edwards he favors the number five claiming you haven't done your job if you quit without asking for the order at least five times in his book compelling selling phillip lund advises to close whenever possible even when you're miles away from the order um author ferdinand mauser takes a more conservative approach advising to have a considerable number of closing techniques at your disposal so that if one fails another can be used until it is hoped one eventually hits the mark so let's take a look at starting the research rackham began his research into closing and sales in the late 1960s at that time he admits that the only thing he knew about sales was that it was an interaction between people where money changed hands so he began talking with salespeople and as he began to speak with them rackham found that the average sales person could list four different types of closes but was unable to even name one technique for opening the sale or for handling customer objections even worse less than half of the people he interviewed could specify a single technique for investigating customer needs beyond simply asking questions the group seemed to know more about closing than everything else altogether so based on his initial talks with these salespeople raccoon began to believe the hype on closing it must be the most important skill to still success because why else would everybody know about it and not know about any of the other techniques so the week after his program where he interviewed the salespeople he had an appointment with the potential client of his for research projects with whom he'd been talking to for several months he decided that he was going to try an alternative close and after using it the prospect decided to move forward with the project for over a year after this meeting rackham began to close the hell out of everyone and that's how he put it rackham says that he looks back on this with embarrassment as he now realizes this likely cost him quite a bit as a business quite a bit of business so what led him to this conclusion hathaway started their investigation into closing with the clear expectation of finding a strong positive correlation between the number of times the seller closed and their sales success their first study took place in a large office equipment firm to find the success of closers they traveled in the field with sellers analyzing how many times they used a closing technique they took a sample of 190 transactions from this sample they took 30 were sellers should close most often and compared them against 30 where they had closed the least much to their surprise at the time only 11 of the high closed calls or transactions resulted in a sale while 21 of the close calls did so rackham reason there must be something wrong with their methodology and determined that they couldn't conclude with this study that closing techniques were ineffective however as a result of these 190 calls raccoon began to get some uneasy feelings that he couldn't quantify he began to notice as part of that study a distinct antagonism from some customers especially from professional buyers when any closing technique was used beyond simply asking for the order he talks about in the chapter one instance where he went to a meeting with the sales person who met with this lady and she became so upset after he used four different closes that she threatened to have them physically removed from the premises if they didn't leave on their own so let's look at attitude problems at this time the marketing director from a major chemical company approached hathwaite asking them to help with the sales team whom he feared lacked the right attitude regarding closing rackham's team devised a closing attitude scale to compare the attitudes of salespeople with their sales records hoping to devise a system that could be used to help screen new applicants it was believed that those that tested higher on this test would have greater sales potential to find the attitudes of the 38 members of the company's sales team hathwaite measured their level of agreement or disagreement with 15 key closing statements including what is using what is called a likert scale they found that 21 of 38 sellers scored above 50 which they had established as the minimum to be considered favorable after analyzing these results against their sales numbers they were shocked the sellers who were found to have a favorable attitude towards closing were actually below target rather than above it after seeing the results the marketing director threatened to fire at them unless he could provide something more convincing during the time of the study several other researches researchers such as martin fishbein were investigating links between attitude and behavior fishbein's results indicated that you can't use attitude in sales to accurately predict behavior showing that just because you get a high score on the closing attitude scale doesn't mean that you'll actually close more often in sales calls hathwaite studies also began to confirm that the link between behavior and attitude was much weaker than they had originally thought they began to instead move to watching people in action to directly observe their sales behaviors it was at this point that hathwaite was approached by a high-tech company looking to evaluate a training program on closing techniques that it was designing the company asked wait to find whether sellers closed more often after the training than before it and whether or not there was a direct relationship between increased closing and sales success the group analyzed 86 calls from a group of 47 sellers prior to the training they went out again with the same sellers after the training it was found that the sellers didn't fat close more often but that this resulted in decreased sales and as rackham points out he was actually expecting that and was not surprised by these results at this point so the company tried to reason that any newly taught behavior is awkward and uncomfortable which must have attributed to these findings rackham also reasoned that this was indeed plausible and planned to follow up after six months however before the follow-up could take place the company went through a massive reorganization in its sales force while searching for a new client recommend came across a training company claiming its programs could increase sales results by more than 30 percent he reached out to the company and asked them to provide evidence to support their claim while they couldn't provide hard evidence or any hard data for it what what they did provide was letters from satisfied clients claiming as a result of the training they had seen the 30 increase in results because of this rackham found a very important clue all of the clients claiming to have an increase in specialize or all of them claiming to have an increase in special light they specialized in small sales one of which was door-to-door magazine subscriptions he began to realize that closing puts a psychological pressure on the customer to make a decision if you're pressured to make a small decision it's easier to say yes than to have an argument due to this the effective pressure has a positive effect in sales however as the size of the sale increases the more negatively people begin to react to being pressured therefore the larger the decision the less effective closing techniques are likely to be so then came the photo store study at this point hathwaite was approached by a photo store who had just decided to train its salespeople in closing one manager who had actually attended one of rackham seminars in which he had spoke skeptically on closing was the one who reached out to him he was against the training and brought in hathwaite to secretly test whether or not it was going to be effective rackham points out that it's never ideal to have a client who asks you to prove their preconceptions right due to this he said he normally would have avoided this assignment as a research study but that it provided a perfect opportunity to test his previous findings that he simply couldn't turn it down this particular store had a policy of rotating its sales people one day a seller would work at a counter selling cheap goods the next day they would move to an area where more expensive items were sold such as high-end cameras filming equipment and videos this would allow healthway the opportunity to test the theory of closing success in relation to sales size so using the methods from the previous studies healthway analyzed the sales team at work prior to the training they measured three things transaction time so how long did each sale take the number of closes used how often did the seller use a closing behavior during the transaction percentage of sale what percentage of transactions resulted in a purchase so let's take a look at the results first the low dollar sales prior to the training the average transaction time was two minutes and 11 seconds the seller used an average of 1.3 closes and they had a 72 percent of transaction success rate after the training the average transaction went down to one minute and 47 seconds and the seller used an average of 1.9 closes with 76 of the transactions resulting in a sale as a store owner these results are exactly what you'd wish for decreased transaction times allow you to serve more customers in less time and although not significant the conversion ratio indicates the sales team is now more successful as well now let's look at the high dollar sales so for the most expensive items healthway analyzed the exact same people they'd analyze for the low dollar sales except now they would be at the counter selling the more expensive items prior to the training the average transaction time is 12 minutes and 35 seconds the average um this seller averaged in uses the usage of 2.7 closes and 42 percent of transactions resulted in a sale after the training the average transaction time fell to 8 minutes and 40 seconds the seller attempted to close an average of 4.5 times but the transaction resulted in a sale also fell to 33 so rackham said he came to two conclusions number one by enforcing the customer into a decision closing techniques speed the trade the sales transaction this is especially important if your business were a low value retail operation or involve the door-to-door sales of low dollar products if you have a long line of customers waiting for you or an infinitely long street of doors knocked on you'll be able to serve more customers however this is usually not the case with large sales as you typically want more time with each customer one of the most common complaints about among major account sales teams is that they can't get enough time in front of key decision makers in small sales it's generally desirable to keep the transaction short in large sales a shorter transaction time has very few advantages and many penalties the second conclusion that rackham and heathwaite drew from the results of this particular study was that closing techniques may increase the chances of making a sale with low price products however with expensive products or services they reduce the chance of making a sale as decision size increases the pressure becomes less effective so let's look at closing and client sophistication on the whole large purchasing decisions are typically made by more sophisticated customers such as professional purchasing agents or senior executives these people see dozens of sellers a week and may even have been through sales training themselves most professional buyers have an unfavorable view of closing techniques rackham was actually working with the senior executive from bp who had said this regarding closing techniques it's not closing itself that i object to it's the arrogant assumption that i'm stupid enough to be manipulated into buying through the use of tricks whenever a standard closing technique is used on me it reduces the respect between us and it destroys the personal business relation sorry the professional business relationship so it was at this point that um healthwaite was a neil rackham or approached by a training manager of a retail chain who had attended a seminar of theirs on behavior measurement who wanted to do some of his own research so some of his sales people had been trained on closing and he some were not and he wanted to see how it related to customer satisfaction after the sale as part of the study he and his team followed up with 145 customers three to five days after their sales transaction and asked them to rate their satisfaction on a one to ten scale with the goods purchase as well as the probability that they would return to the same store if they were to purchase similar goods in the future the results found the sellers who had been trained in closing scored a 5.8 out of 10 in customer satisfaction and a 5.2 out of 10 for likelihood to return the sellers who had hadn't been training closings techniques scored 7.7 out of 10 in customer satisfaction and 7.9 out of 10 and likelihood to return as a result of this so reckon began he kept doing these studies and he he collected the data on them for several years but was very reluctant to share his findings with people this was due to the fact on the few occasions that he did he received a less than positive reception everybody seemed to have this this solid understanding that closing it was it was the way to make sales and to convert sales and that there wasn't another way so his primary concern was that it didn't seem possible that he was right and so many others were wrong when it came to closing he began to wonder how so many experts in sales could be devoting their time and energy that not only to um to methods that don't not only don't work but also seem to be counterproductive so what makes a compulsive closer rackham was conducting a seminar with california management consultant roger harrison when the answer came to him as roger was speaking on ineffective behavior patterns and their causes he explained that sometimes people continue to do things that don't bring results all the while believing that what they're doing is effective he went on to suggest that there's only two reasons why people continue to behave in an unsuccessful way either they're crazy or there's something in their environment that's rewarding or encouraging the ineffective behavior it was at this point that rackham realized that closing receives the most attention of any sales technique because it's the most immediately rewarded sales behavior somebody pitches a close and if it's if the person decides to buy they buy it and so they have the you know the misconception that oh that close is what made the sale when typically that's not the case so he began to think back to his own sale that we mentioned earlier in which he pitched the alternative close in which he thought that it had was the cause of that resulting in an order like so many others before him he quickly attributed that success of the sale directly to the use of the closing technique however after heading hewthwaite's research study on closing techniques he came to the realization that the true reason for success in that sale was because he had so he had successfully uncovered and developed the customer's needs prior to asking for the order the project would have gone on with or without the closing technique being used after this realization raccoon began to become more comfortable defining the healthway's research and its implications since heathway study many others have found the same conclusion that they did to some rackham is seen as the assassin closing however based on the results of his research he actually advocates the use of closing techniques in low dollar sales that deal with less sophisticated customers where there's no need to develop a continuing customer relationship so now let's look at the importance of closing so while it may seem like rackham is completely against closing the sale he's quick to point out that waiting for the sale the close itself doesn't work either many inexperienced sales people struggle to bring a call to conclusion resulting in the customer getting frustrated or impatient while the overuse of closing is a major problem in many industrial and capital goods sales its total absence is an equally severe problem in some service industries data shows that an absence of closing is a real danger as well healthwaite worked with bob boyles of american airlines to find whether the complete absence of a close was even less effective than closing too often of 575 calls analyzed those with no close whatsoever only resulted in a success rate of 22 percent compared to a success rate of 61 and one close calls however the least successful calls analyzed were those that had more than two attempted closes which resulted in a success rate of less than 20 percent so let's look at obtaining the right commitment how do you close so the seller must obtain commitment from the customer but how does one do that without using closing techniques the first step in successful closing is to set the right objectives ahead of time so the starting point is establish what type of commitment is needed from the customer for the call to be or the transaction to be successful before it begins closing in a simple sale has two outcomes it's either an order or no sale in most sale in most major sales less than 10 percent of the calls actually turn result in an order or no sale due to this it becomes more difficult to judge success so after struggling with a way to determine success in large sales healthway ultimately devised a method which divided the possible outcomes of the call into four areas so as you see on the left here of this diagram order and no sale there are the two results for the simple sales but in larger sales there's an order and advance continuation and no sale as you can see order in advance we're considered successful failure is considered um continuation and no sale are considered failures so let's look at each orders that's where the customer makes a further commitment to buy to be in order the customer was shown unmistakable intention to purchase usually by sending some kind of paperwork advances this is where an event takes place either in the call or after it then moves the sale forward without a decision typical advances may include the customer agrees to attend a demonstration there's clearance to a higher level of decision maker agreement to run a tile trial test or product access to parts of the accounts would prove it inaccessible to the seller each of these moves the account forward or count forward toward the ultimate decision advances can take many forms but ultimately involve an action which moves the sale forward successful closing in major sales starts by knowing what advance can realistically be obtained from the call now let's look at what continuations are continuations is where the sale will continue or may continue but where no specific action has been agreed upon by the customer to move the sale forward these calls don't result in an agreed action but also don't come with a no from the customer so some typical examples of them would be thanks for coming come visit us again when you're in the area oh that was an impressive presentation let's meet again sometime we like what we saw and we'll be in touch if we need to take things forward further so who three deemed for this study that continuations were unsuccessful as the buyer didn't agree to a specific action and therefore there's no concrete sign the cell has progressed as rackham points out far too often the customer makes a positive comment at the end of a sale as a polite way to get rid of an unwanted seller success should be measured by actions not nice noises no sales where the customer actually is where the customer actively refuses a commitment in extreme cases the no sale customer makes it clear there's no possibility of future business on the other side it can be a no sale if the customer won't agree to a future meeting or denies your request for an advance the test of a no sale is that a customer actively denies your principal call objective so why are these outcomes so important health weight studies found that top salespeople consistently had a clear understanding of these different outcomes and use it to their advantage to help them turn continuations into advancements by understanding what type of advance would be required to make a call successful top people set realistic closing objectives that move the sale forward if the call is worth making it's got to do something to push the sale forward in some way otherwise it's a waste of the seller's time and the customers these sales people are often described as good closers however the success comes from how they set call objectives rather than how they close when asked how to coach people to close more successfully manage your sales rackman's response was to teach people the difference between continuations and advances and help them become dissatisfied with objectives that only result in a call and a continuation now let's look at setting call objectives the secret to strong closing in major account sales is the question your objectives ruthlessly don't settle for objectives like to collect information or to build a good relationship while these are certainly important parts of a successful call they just aren't enough as an objective they don't move the account forward and delete and lead to continuations rather than advancements they may also lead you to close for the wrong objective when planning your call always start with objectives that result in a specific action from the customer for example to get her to come to a demonstration to get a meeting with their boss or to get an introduction to the planning department this will cause you to look for advancements as opposed to continuations obtaining commitment for successful actions no matter how well you set your call objectives you must still gain commitment and acceptance from the customer lithwaite found four clear straightforward actions that top sales people take to obtain commitment so let's go through those really quick the first is preliminaries the second is investigating the third is demonstrating capability and the fourth is obtaining commitment as you can see and as we mentioned earlier the investigation the investigating stage right here is where successful sailor sellers put their main effort and where most of the time should be spent so giving it number one giving attention to investigating and demonstrating capability successful salespeople give their primary attention to investigating and then demonstrating capability stages unsuccessful sellers tend to rush to the investigations edge and as a result don't take time to uncover understand and develop the needs of their customers you won't obtain commitment from the customer in the large sale unless the customer perceives a need for what you offer the most successful sellers healthweight analyze were the ones who did an outstanding job of building needs during the investigation stage as a result of the questions they asked their customers realize an urgent need to buy if you can convince buyers they need the product you're selling they'll often close the sale for you number two checking that key concerns are covered in large sales both the product and the customer needs are likely to be complex as a result there may be areas of confusion or doubt in the customer's mind as a point of commitment nearest hothwaite found that the most successful sellers took the initiative to ask the buyer whether they have an additional need any additional needs or customers that are sorry or concerns that need to be addressed before moving forward this is in contrast to less successful sellers who attempt to go ahead and move forward with closing which is oftentimes responded to with an antagonistic response from the customer number three summarizing the benefits large sales may take several hours to cover a wide range of topics due to this the customer may not have a clear picture of everything that's been discussed successful salespeople pull everything together by summarizing the key points of the discussion before moving to the commitment in smaller sales the summary may not be necessary but in large sales it's almost always a good way to bring key points especially benefits into focus right before the decision proposing a commitment many sales books advocate the simplest of all closing methods which is just to ask for the order in all other stages of the sale asking behaviors are much more successful than giving behaviors however healthweight found that successful sellers don't ask at this point at the commitment they tell the most natural and effective way to bring a successful call to conclusion is to suggest an appropriate next step to the customer so successful sales people suggest commitments based on two characteristics the number one the commitment advances the sale the sale will move forward in some way as a result of the commitment and number two that promotes the proposed commitment is the highest realistic commitment that the customer is able to give successful sellers never push this customer beyond achievable limits so recommends this chapter with a quote from his friend and swedish consultant hans stennick when rackham's findings on closing were mostly ridiculed stenik told him you know i've never been a believer in closing because my objective is not to close the sale but instead to open a relationship and that's it for chapter two let's just take a quick minute to go over the key takeaways so number one while many sales managers and authors believe that closing is the most important sales technique health weight found that success in large sales depends on the investigation stage more than anything else what is a close it's anything that puts a buyer in a position that involves some type of commitment closing puts psychological pressure on the customer to make a decision if you're pressured to make a small decision it's easier to agree than to have an argument due to this the effective pressure has a positive effect in small sales however the size of this sale increases the more negatively people react to being pressured therefore the larger the purchase decision the less effective closing techniques are likely to be number four by forcing the customer into decision closing techniques speed the trail sales transaction this is great for small sales as it's generally desirable to keep the transaction short however in large sales a shorter transaction time has very few advantages as you typically want as much time with the prospect as possible number five typically large purchasing decisions are made by more sophisticated customers such as professional purchasing agents or senior executives most professional buyers have an unfavorable view of closing techniques number six while the overuse of closing is a major problem in many industrial capital goods sales it's the total its total absence is an equally severe problem in some service industries number seven the first step in successful closing is to set the right objectives the starting point is establish what type of commitment is needed from the customer for the transaction to be successful before the transaction begins so let's look at the difference between again from simple sales to large sales simple sales have two possible outcomes an order or no sale large sale have four possible outcomes orders advance continuation or no sale what is an order it's customer purchased product or service in advance is where an event takes place it moves itself forward continuation is where the sale may continue but no specific action has been set and no sale is where the customer refuses the offer top sales people have a clear understanding of these different outcomes and they use them to their advantage to turn continuations and advancements by understanding what type of events would be required to make call successful top sellers set realistic closing objectives part of each transaction that move the cell forward so obtaining commitment focus on investigating and demonstrating capability address can ask for key concerns prior to closing summarize key benefits propose a commitment by suggesting an appropriate next step to the customer and successful sellers suggest commitment the most advanced the sale and or the highest realistic commitment that the customer is able to give remember never push beyond achievable limits that's it for chapter 2 which is closing the sale and obtaining commitment hopefully you enjoyed the video feel free to leave the comments with feedback or any questions and i will be posting a quiz here shortly