Too often we ask for a sale before we have earned that right. Timing is everything – interact first – establish a relationship – articulate and agree the value – then ask for the sale. And here is a really simple, yet effective process to do just that.
Seth Godin tells the story of a guy (hence forth known as the Guy) in New York, back when old-school parking meters took quarters. The Guy asked Seth if he could give him a dollar for the 4 quarters he had. Seth did just that – handing over a dollar bill in exchange for the 4 quarters. The Guy then asked Seth if he could spare a quarter! Interesting approach??
So first, the Guy engaged Seth with a fair trade which may even have benefited Seth more because back then people were always looking for quarters for the parking meters. A relationship was formed.
Now the Guy knows Seth has a quarter (4 of them in fact). So his next request for a quarter is very hard to turn down. The Guy knows that Seth has 4 quarters and Seth knows that the Guy knows.
Compare this scenario to one where the Guy had just walked up to Seth and asked if he could spare a quarter. No engagement, no relationship – just a request for a “sale”.
Too often, we attempt to close a sale before we open it. Interact first, sell second.
How might this “story” play out in your business?
Let’s consider an advisory business.
You have reviewed the financial statements and noticed that there is a productivity issue – wages paid suggests available hours well in excess of hours billed – very easy to identify. You make recommendations which will increase charged and billed time or reduce wages costs – in either case there is a positive impact on the bottom line of the business of around $20,000. You have added significant value and your client acknowledges it – you have effectively opened the sale.
Now is the time to introduce the next opportunity – a service which will add even more value for our client for an investment of $5,000 – just one quarter of your clients increased profitability which was generated compliments of your advice. You have asked for the quarter!
How often do you add value with recommendations and then neglect to quantify or articulate that value to your client? What you think is obvious is not necessarily so, from your clients perspective.
When you make observations or recommendations, always articulate both the financial and non-financial benefits to the client and get buy in.
Try my “VALUE LEDGER”
1. As you progress through the meeting with your client, note down your recommendations and observations, along with the agreed value.
2. Then, towards the end of the meeting, summarize – go through the LEDGER and ask your client if they intend to implement the strategies and if they agree with the benefits.
3. Add up the financial benefits and write down the total amount.
4. You have established the value you have added and gained your client’s acknowledgement of the quantum of the benefit. You have made the previously invisible, visible.
Now you have earned the right to ask for the sale – to introduce your new proposal!
Very simple… and very effective.
PLUS: You have a reason to follow up the client – to see how they are going with their implementation process – the VALUE LEDGER becomes the basis for an Action Sheet and an accountability tool.
NOTE: Don’t be tempted to get a VALUE LEDGER printed up or to pre-fill it – it is much more effective prepared as you go, hand written, appearing impromptu – it becomes a jointly prepared document – owned by both parties.
TIP: Be prepared – Prior to the meeting, be clear on the recommendations you will make and consider the value that will be added and how you will articulate this and gain client agreement. And remember, as the meeting progresses there may be new recommendations, new observations – add these as you go.
WARNING: Don’t “give away” all the value in one sitting – be careful that you don’t go over the top in an attempt to prove your worth in order to earn your right. The new opportunities may be best included in your new proposal.
A DOUBLE WHAMMY: The advisors I work with in a broad range of industries, including the accounting, consulting, banking, law and financial planning sectors, have found that this process has created a double whammy of value.
1. FOR THE CLIENT > The VALUE LEDGER enables advisors to prove up the value they add – to leave their client in no doubt as to the benefits of doing business with them, AND
2. FOR THE ADVISOR > The process also establishes the value of the sale to the advisor and as a consequence, there is less resistance around pricing from the advisor’s perspective. The first sale must always be to yourself (before you make the sale to your client) – and a this a great way of establishing that the value exists – that price = value added.
My ADVISING by DESIGN and CONVERSATIONS by DESIGN products incorporate this and many other tools and insights – if you would like to know more please email us on email@example.com – We’d love to hear from you.