Are You Meeting Your Obligations?
Do you know what the difference is between a customer and a client? That seems easy to answer, but it really involves some interesting concepts about service.
- A customer is someone whose relationship to the seller is simply transactional. There is no real relationship needed other than someone makes something available to someone else who needs that product. An example would be buying a newspaper at a convenience store.
- A client, however, is someone who needs a deeper relationship with someone else because they require the knowledge and services before they make the buying decision – in custom framing, we have clients.
It’s very important to understand the true depth of a client relationship. In fact, if you really understand what it means, it allows you the freedom to work aggressively for your client and ultimately make more sales and more satisfied clients. Because a client comes to you seeking a professional relationship, you must accept the obligation which accompanies the relationship. That’s right – obligation. You are obligated to provide everything that client needs to make a buying decision! If you believe that statement and practice it in every client relationship, you will provide a service level that few ever attain and the coolest part is that you are automatically given permission to fill the client’s needs and make sales to everyone!
If a client comes to you seeking a professional relationship, you must accept the obligation to provide everything that client needs to make a buying decision!
So how does this apply to custom framing sales? One way is that this gives us the permission we need to follow-up aggressively on every missed opportunity. I know, most of you are saying you don’t miss many sales. I believe that- even my own framing company completed 91% of sales before we understood our obligation. But let’s explore by the numbers. Say you sell $250,000 in custom framing every year. Let’s also say that your average custom sale is $225. That would mean you are selling 1111 projects per year. Now let’s say that you are closing 91% of all the opportunities you have for sales. That means you actually could have had 1221 sales for the year. If you were to find a way to improve your closure to 97% from 91%, you would increase projects sold to 1184 and increase you sales volume to $266,400. That would give you a 7% sales gain without attracting any additional opportunities. In the typical frame shop that would make more than an $11,000 improvement to your operating statement!
Could you use more cash? Probably. More importantly than the cash is your ability to meet more obligations and satisfy more clients. In our example, you just kept 73 people from finding someone else to fill their need. Over the course of a framing career this number of additional satisfied clients can make a huge difference in your financial success.
Convinced it might be worthwhile even if the result is only a 6% increase in the times you close the sale? If so, then here is how you can turn your obligation into satisfied clients. First, in order to improve something, you MUST know your current level of performance. If you don’t know how many opportunities you convert into sales and how many you miss, then you can’t improve. That’s because any improvement goal MUST be measured to see if it actually occurs. This means you must begin recording the number of times your team has the chance to sell a custom frame each and every day. Then you need to also record how many times each day you were able to meet the client’s needs. For example, if five people come in to frame that day and 3 of them have one project and the other two clients have 2 projects, your total opportunity that day was 7 pieces. Now let’s assume you were able to successfully meet your obligation in 6 of those opportunities. Your closure rate for the day would be 6 of 7 or 86%. Not a bad day, but that one missed sale means that our obligation has not been met.
So how do we fulfill our responsibility? It requires just a bit of additional record keeping. If you record the reason why you could not meet your obligation to that one customer, it can be very helpful. I have identified four basic reasons why sales are missed in our industry by using this system for many years. These reasons include price, needing approval, design and other. Price is used when we are sure the client has not committed to the sale due to the expense of the project. Needs approval is recorded when the client tells us that they are not the final decision maker, design is recorded when our skills as a designer don’t seem to meet the client expectations and other is used when there appears to be no common reason for missing the sale. Recording why the sale is missed is vital to the follow-up you will use to ensure the client gets what they need.
Let’s say you assign “price” as the reason why the sale was missed. It’s safe to assume the client will visit other shops to see if they can be satisfied for less money. Price issues commonly occur with clients who are new to custom framing. They are unfamiliar with material and labor costs for custom products. That means they are probably going to have difficulty finding something to meet their original expectations. Proper follow-up for these customers can be very successful. This strategy dictates that you give them a few days to verify the expense of custom framing. A follow-up call is then made to see if they were successful in framing their piece. Be prepared to have several price alternatives ready to show them if they still haven’t framed their piece. My experience (and statistics) shows that price objectors often convert to sales after they understand the cost of framing.
If “needs approval” is the reason for missing a sale, you must have a different strategy to meet your obligation. The reality is that the person who went through the design process with you was not your true client. Your strategy is to get an audience with the real client. It’s very difficult for the “runner” to make a sale for you, especially if they don’t have the materials or experience with custom framing. The best strategy we have found for these situations is to immediately volunteer to come to the home or business to show the real client how you can meet their need. If you don’t find a way to talk directly to the client, converting these opportunities are very difficult.
If you feel you were unable to design anything which met the expectations of the client then record “design” as the reason for missing the opportunity. The strategy then is to first access your true ability as a designer. I find that this reason occurs most often with newer designers in our company. Even though they have completed a comprehensive training program, it takes a long time to learn great designing for complicated projects. If your team is dedicated to improving, this recorded miss gives you notice when a team member needs more training. Spend the time with them to discuss the problems they had and remember to praise them for their honesty. Admitting that your skills need improvement shows a real desire to excel and satisfy clients. After working with the team member, have them re-contact the client and explain that they were able to create some new designs which may fill their need.
“Other” is used when you cannot determine the real reason why you missed the sale. The truth is that when someone assigns “other” as the reason, they have not listened properly to their client or asked the right questions which would help them meet their obligation. This situation probably presents another opportunity for advanced training with a team member who can improve their relationship skills.
Assigning strategies for following up on missed sales is a great way to fulfill your obligation to your client. It will lead to better relationships and sales. One more thing about follow up- it is not reserved for missed opportunities. A sale is just one phase in the client relationship. Calling to see how the project looks in the home or sending thank you cards after the sale are huge parts of building ongoing relationships. Follow up is vital to any client relationship- remember, it’s your obligation!