Thursday, July 29th, 2010

How to Tear Down Customer Resistance

There's a lot of internet marketing services available to you but before spending any money on any of those, you should try these first. The first step you need to take to reduce 'customer resistance' also known as "customer objections" is not difficult to do. Like most other things in business, making the decision and then taking the first step is the hardest. After all we do have to overcome the inertia of doing nothing.

Let's start with your closing ratio. You should know the closing ratio of everyone who is responsible for selling your product or service. A good first step is figuring out the closing ratio for your entire operation. To do that you need to know how many people walk into your business per day, week or month. You need to figure out how many of those people actually made a purchase, signed a contract, or whatever else it may be that determines what you consider to be a successful transaction. All you do then, is divide the number of sales (successful transactions) by the number of customers (opportunities) and you have your baseline closing ratio.

You can't measure the amount of improvement or properly manage the process unless you have measured it. In order to get to where you want to go, you first have to know where you are. The most accurate map in the world is useless if you don't know where you are starting from.

Let's play with a few numbers...... lets' say 20 prospects show a possible interest in doing business with you or your company. Now how many of the 20 actually end up as your customer? The actual percentage is NOT important here. Since all businesses are different. For example I have websites that have closing ratios of 1 out of 100. Sounds terrible, but since there is no work involved, I can still make a nice profit at that 1%. Your situation is different, you may need a 50% ratio or a 70% ratio. You need to know where you are now.

Here's where it gets interesting.... Lets say for our example that you are closing 10 out of 20 customers (50%). Now if you can get that up to 12 out of 20 how much will that help your bottom line? The answer is a LOT! How hard can that be? You are not trying to get more customers in the door here, that's the hardest part and we will address that in another article. You will just be tweaking a little here and there. Little things that can add a lot to your bottom line. Granted there are some internet marketing services that are more complicated, difficult and expensive to do, but most likely you can have a huge impact on your bottom line with some simple tweaks at this point.

We will start with The Pareto principle (most commonly known as the 80-20 rule). This principle states that roughly 80% of the effects come from 20% of the causes. Using that principle, it means that if you were to make 10 changes, 2 of them would account for 80% of the difference. Now don't get lost here, I'm not advocating changing 10 things, I just want you to be aware that small changes can have huge impact.

What we are looking for, is the subtle difference between what causes a prospect to become a customer and what makes them decide to wait, or purchase elsewhere.

Now let's break down the purchasing psyche of your customer. We don't really need to analyze your specific customers because a lot of studies have been done studying the mental process people go through. So lets take advantage of the knowledge gleaned from those studies.

There are three things that all customers must have before they make a purchasing decision.

• They must have a need or desire for the product or service
• Next, they must have a way to purchase the product of service. This can be cash, credit card or financing, they all work
• And last, they have to have confidence in your ability to provide them with the quality product or service they expect

Common sense tells us that the more they desire what you have, the easier it is for you to sell them. The less the impact to them financially, the easier it is to sell them. Note that this has nothing to do with discounts, etc. Basically it means that everything is relative. A customer making $100,000 per year will probably have more discretionary income than someone making minimum wage.

The more confidence they have in you and your company, the easier it is to sell to them. This is important, so we are going to delve into this more closely now....
To help make my point I took the most recent yellow pages directory and randomly opened it to various pages and wrote down the headlines of the ads. I did this for all types of businesses in totally random fashion.

Here's a sample of the headlines I found and my thoughts about that headline:

• Dependable & Quality Service. (Sure you are, says who?)
• Value, Service & Convenience (Why should I believe you... prove it)
• Friendly service (I've heard that before and been burned plenty)

What's the point you say. The point is that everyone makes promises and the public is skeptical of all of them regardless of who you are or what you are selling. It takes no effort to make claims like that so there's healthy skepticism to overcome in order to sell anyone with those types of claims.

Have you ever called a company whose ad promised 'friendly courteous service' only to have the phone answered by someone who obviously doesn't want to talk to you? Or how about this one... They answer the phone by saying "XYZ company, please hold". Yeah great service. How about calling a company that advertises great customer service only to have their telephone answered by a machine with "Press 1 for English" or "Our extensions have changed, please listen to this entire menu before making your selection". I won't say what I really think about that type of service but I (and you) know it is NOT good customer service. A few years ago, a national bank ran a national advertising campaign that said "We are 10,000 caring courteous employees". Maybe they believed it, but their customers (and potential customers) sure didn't.

At this point, you may already be ahead of me here. You MUST go beyond the mere making of those claims and promises if you are expected to be believed. You have to prove that you give great service, you have to prove that you have the best product, that you give the best service possible. If you don't prove it, you are just like everyone else making those claims and nowadays, they carry very little persuasion power.

So how to we go about accomplishing that? It's easier than you may think. Done correctly it will drastically differentiate you from every competitor, both direct and indirect. And it's not expensive to do and has proven to be one of the most cost effective methods of increasing business profits and sales. And the answer is....."Customer Testimonials".

The quickest and easiest way to increase the closing ratio we discussed at the beginning of this article is with customer testimonials. Nothing new to learn, nothing new to teach your employees and the cost to implement is just about zero. Starting today you must make a conscious effort to collect as many customer testimonials as you possible can. They absolutely work, study after study confirms that fact.

Are they really that important or persuasive? Well how about this, what if your best friend called you and said I was the greatest marketing business consultant? That would be a fairly strong recommendation, right? But let's keep going. What if you heard the same thing from your father, your co-workers, your doctor, your lawyer? What if while checking out at the grocery store, the clerk said they heard I was the greatest business consultant ever?

I'm guessing that right about then, you would be convinced that I really was that great. And you would have made that decision without even ever talking to me. How's that for strength?

Your decision about my ability would certainly be higher than if I just called you on the phone and said I was a business consultant, right? The principle is so powerful I wonder why all companies don't use customer testimonials. Using customer testimonials is the surest, fastest and cheapest way to increase your closing ratio.

Okay, now that you recognize the importance of customer testimonials, how do you go about collecting them? First understand that if you are constantly looking for them you will see opportunities. Have you ever purchased a new car then during the first week you have it, you notice just how many of those models are on the road? Same thing with gathering testimonials, once you start collecting them, you will see them everywhere. But you should know that the best time to collect a glowing customer letter is just after you have wowed them with your products, your service or your ability to solve their problem.

Always be listening for customer comments too. When a customer says “You guys are great. I've tried three different companies and you are the best". In the past you probably said thank you and be sure to refer your friends. But now you will learn to say “Thanks! We love hearing things like that. Would you mind if I shared what you just said with others who might be interested in our services as well? It really helps us give better service to our customers!” Or, you can say: “Thanks. We appreciate the compliment. Would it be okay if I wrote down what you just said and shared it with other potential customers? It would mean a lot to me!” Then just write down really quickly what was said, and have them approve it. A third alternative is to say “Thanks. One of our best ways we get new customers just like you is sharing the success stories of our existing customers? Would you mind if we quoted you in some of our marketing and sales materials?”

It's not difficult so don't make it that way. They are in a good mood and appreciate and recognize the service you have performed - it's the perfect time to ask.

Then get their approval. Just so there's no misunderstanding, I also like to ask they would mind if I can use their name as a reference for others.

If you have gone 'above and beyond' the call of duty for a customer, they get great service and are extremely happy. At that point you should be able to collect one heck of a great testimonial.

Okay, maybe you spend most of your time in the back office running the operation and don't have a lot of 'face time' with the customers. No problem. How about sending out a customer survey asking how you did? When you get a survey back saying how wonderful you are, all you have to do is retype their answer in the form of a letter and have them sign it.

One of the internet marketing services we offer, is to set up for you to collect survey (and testimonial) information through the use of direct response marketing. Something our company does quite well. Using a good system will put collecting customer testimonials on autopilot for you.

Another method that has a high "wow" factor is setting up a system to collect the recordings of good customer comments. Again, with a little thought its easy and inexpensive to do.

Once done, you can put something like this in your advertisements:

"We know any business can say they give great service, let's face it, it's pretty easy to toot your own horn these days. So instead of us doing that you can call our customer hot line and hear directly from our customers what they think of our products and service".

How do you set up such a system? Well a voice mail box costs about $5 per month and you can use that number as your "hotline".

The only other issue is how to you get the customers recorded. It's happened to you and you probably didn't even know it was happening.

Have you ever called for service or a customer service line and heard the recording that says this conversation may be recorded for company use? Or how about a post purchase phone call to the customer by your sales rep that explains that it's a quality follow up call and would they mind if the conversation was recorded? In most instances customers don't mind at all. A simple $60 dollar digital recorder will give you sufficient quality to put the remarks on to the voice mail number.

Put your customer 'hotline' number in all of your advertisements and you have absolutely differentiated yourself from your competition.

Peoples trust in your company goes through the roof.

And don't stop there. Collect written testimonials and put them in a "What our customers think about us book". Give a copy to every sales rep you have. Put a copy on the counter by the cash register and place copies throughout the store.

There's one more technique to discuss and it's probably the most powerful is used properly......

When you have a situation where you go above and beyond the norm for a customer and they call you up to thank you for such excellent service. Try this.... Ask them if it would be okay if you can feature them and their experience as a case study in your upcoming advertising campaign.

Now for that case study your advertisement should look like an advertorial. Those are the ones that look like they aren't really advertisements at all. Then you tell the story of what happened to the customer, how your company/people responded and how everyone was happy in the end.

With todays technology some people are actually video recording their customer testimonials and then putting them on their website and on Youtube for some free viral advertising.

Now that you know that you should collect testimonials and how to use testimonials lets touch on the difference between a good testimonial and a great testimonial.

If you go about collecting your customer testimonials in a haphazard way, the results you achieve will suffer. If you are going to do it, at least do it right.

All positive testimonials are good but there can be a wide chasm between good and great....

This is a good testimonial but not very effective:

“You guys did a good job!”

Now here's one that is very effective:

“I can't believe how quick you were. Your technicians were at my house in less than 20 minutes. Before I switched to your company I sometimes had to wait until the next day. You knew what you were doing and had the problem fixed in less than an hour and your employee, Joe, even took the time to show me some cool features I didn't even know I had available. I'm glad I found your company and you can bet that I'll be using you in the future. Thanks a bunch" Joe McHappy, Fire Fighter, Fort Worth, TX

The best testimonials give a lot of specifics and not generalities.

A customer saying "You saved me money" is not as good as "I couldn't be happier. After only 3 months I have saved over $423.50 using your service. You are always prompt and have never missed an appointment. I'm a customer for life"

One last point, you should have testimonials targeted to your specific audience. If you are selling trendy clothes for people under 30 then a testimonial from a grandmother is okay but will not have as much impact as someone in your target audience. And authority figures almost always carry more authority (and trust). So testimonials from doctors, lawyers, dentists, chiropractors, nurses, fire fighters, police, scientists will garner more trust.

Collect testimonials, it's one of the easiest ways to increase your sales closing ratio. We offer direct response advertising that can be used to collect testimonials for you. Almost on autopilot and also provides an excellent way to keep your customers loyal to you.

Remember towards the beginning of this article when we talked about taking your closing ratio (in our example) from 5 out of 10, to 6 out of ten? And I said that was a lot of money. Well here's how it works out. You will add 20% additional profit by making that small change. That's not a typo, 20% more profit every month, every year. Could the tips shown here do that? Maybe. Are there other things that could do the same or maybe even do better? Yes.

Is it worth it? After seeing these numbers, how can it not be worth it?

The internet marketing services we offer, can help you start the process of increasing your sales and profits using techniques like those outlined in this article. Give us a call today.