| HE SAID | SHE SAID
90 Percent Closing Ratio: Good or Bad?
Two D&WC columnists say it’s bad. But for very different reasons.
Editor’s Note: This is the first of an occasional series of articles in which two of Draperies & Window Coverings’ featured columnists look at different sides of the same issue. Mary Ann Plumlee brings a workroom perspective, often taking a professional fabrication and design viewpoint; Steven Bursten’s perspective is from sales and will challenge from a business and profit-making point.
Steven Bursten’s View:
How Can a 90 Percent Closing Ratio Be Bad?
Read on, I’ll show you!
While it sounds great to have a 90 percent closing ratio, I have never met a $1 million window coverings sales consultant who does it. In fact, seldom can anyone reach $200,000 at 90 percent closing. Yes, it is possible to close 90 percent of customers, but if your goal is financial benefits for your family, it may fall short.
Here’s why:
1. Is it real? I have never met a person who said they sell 90 percent of their customers who knew their actual number of appointments. It’s human to rely on memory, but facts are stubborn things. Without knowing actual appointments you cannot measure closing rate.
2. Selling too cheap. Some consultants close 90 percent by selling so cheap the customer would be crazy not to buy. I see it especially with blinds salespeople. How much more would they make if they raised prices 10 percent and closed 80 percent? A lot more—try the math.
3. How many appointments? Consultants who close 90 percent rarely have more than one or two appointments a week. Many have one or two a month. If you have a small following, a higher closing rate is possible—but not higher income.
4. Hard qualifying on the phone. Consultants who close 90 percent often say, “I don’t want to waste my time on unqualified leads. I question the customer on the phone to see if they justify going on the appointment.” Top consultants consider it a privilege to be invited to a customer’s home. They go on every lead they can get.
5. Charge a fee. Many consultants charge a fee so the customer will not abuse them as a professional, getting free decorating advice. Truth is, this is a training problem. Top consultants don’t want any barrier between them and a customer. They have confidence they can close 70 percent. Those would be great odds in Las Vegas; why not to visit a customer?
6. Limited sales skills. You would think a consultant closing 90 percent must have great sales skills. Yet the opposite is often true. If you lack confidence to take unqualified appointments (and turn them into satisfied customers) you may need a good course on sales. Then you can take every lead that comes your way. You will please more customers and make more money.
Bottom line: it is all about your goals. If you enjoy the process of making multiple trips and creating artistic showpieces for fewer customers, stick with a 90 percent closing ratio. If you enjoy serving more customers who love your work and tell more friends, then take three or four leads a week including unqualified leads and learn to sell them at high profit. Yes, your closing rate will be less than 90 percent. But, you will make a lot more money!
The choice is yours. Whichever you choose, enjoy this wonderful window coverings business and make it the business you want it to be.
If you have questions or suggestions, please e-mail me at steveb@ExcitingWindows.com
Mary Ann Plumlee’s View:
How Can a 90 Percent Ratio Be Bad?
Because it’s so far below my goal of 100 percent!
A closing ratio lower than 90 percent might be acceptable when final tallying takes place. But in the heat of the battle, making the most of every appointment, I want to sell them all. I start with the belief that a customer wants to buy from me or I wouldn’t be there. It’s not a question of if they are going to buy from me, but a question of what they are going to buy from me.
My entire sales force shares this drive and, consequently, we do sell upwards of 90 percent of all customers we engage. Notice I said customers rather than appointments. While it is true that hard treatments can easily be sold on the first visit, soft treatments are another animal altogether. The complexity of soft coverings often involves more than one visit with the customer. Therefore, it is a more accurate picture to measure customer closures rather than the number of appointments.
Achieving an excellent closing ratio means developing a sales process. That process does require qualifying customers, however qualifying does not have to result in the customer jumping a high hurdle. To charge or not to charge for consultations is a decision that has to be based upon the needs of the individual business. My company does not charge for consultations, but that practice is based on our high closing ratio.
In our sales process the first appointment is for measuring, listening to the customer’s ideas, and determining the customer’s socio-economic level. It is counterproductive to recommend products that do not match the customer’s expectations in style, quality and budget. By having an array of products to offer that match the customer’s price requirements—whether they be high-end or lower—we are able to read the customer and make the right proposal earlier in the sales process rather than later. Consequently, our sales process has made it is possible to sell impressive numbers in a time efficient way.
While I totally agree that many retailers should raise their prices in order to be viable businesses, it is simplistic to say that each 10 percent rise in prices will result in a 10 percent drop in closure rate. Quite frankly, excellent sales techniques trumps price every time. We rarely if ever have a customer come to us from a competitor and tell us that the competitor’s price is too high. What we hear is, “She didn’t act like she knew what she was doing,” or “I didn’t like her ideas.”
Pricing is a complex issue with the ultimate goal of profitability. Overhead, cost of goods sold, local economic conditions and competition all play a part in determining prices. However, aiming for a closure rate of 70 percent and using pricing to cause my sales consultants to come back empty handed on 30 percent of their appointments is unthinkable. Surrendering 30 percent or even 10 percent of potential clients to the competition would be a huge red flag that we are doing something wrong. We might need to add another layer of products, we might need to hone our people skills, or practice listening to the customer. We might even need to raise our prices because raising prices seems to help us attract customers of a higher caliber and, therefore, increases our sales rather than having the opposite affect.
So yes, Steve, you are right on the money. It is about goals. We set ours high and we put in place strategies to reach those goals. It can be done, and it can be done efficiently and profitably. Now, off to raise my prices 10 percent.
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