How to Close a Sale
The drive to close a sale is portrayed in Glengarry Glen Ross, the David Mamet play turned into an Oscar-winning 1992 film, as the ultimate end-all in a Chicago real estate office. 'A-B-C,' says Blake, the ruthless businessman played by Alec Baldwin in the film, who is sent to shake up the sales staff by holding a sales contest in which the winner receives a Cadillac and the loser gets fired. 'Always be closing.'
These days, many salespeople have come to think of 'the close' a little differently. The goal is not so much to sell anything just for the sake of making a sale. The goal is to book sales that truly help satisfy a customer, and that create a mutually-beneficial, long-term relationship.
'The ‘close' of the sale is usually described as the point where a prospect or customer agrees to buy. This thinking is very traditional, and should be an obsolete view of the selling process,' says Jeff Thull, president and CEO of Prime Resource Group, who has designed and implemented business transformation and professional development programs for companies like Shell Global Solutions, 3M, Microsoft, Siemens, and Citicorp, as well as many fast track, start-up companies. 'If you believe the close is the ultimate event, you will no doubt be limited in your success. If you respect your customers and believe they are intelligent individuals with whom you wish to have long-term and mutually beneficial relationships, your goal should be to provide them with products and services that will make them successful.'
The article below will examine how successful businesses approach closing the sale, the stages in the process of closing the deal, and how to follow up after the close of the sale.
Closing a Sale: How Great Sales Teams Do It
A businessperson would be lying if they told you that they didn't care about closing the sale. 'It's still the ultimate reason for the process,' says Peter Handal, CEO of Dale Carnegie Training (www.dalecarnegie.com), the international training and consulting services company that helps businesses of all sizes sharpen sales skills and improve performance. 'If you do everything right and don't close the sale, then you were still not successful.'
To complicate matters further, it may be harder for firms to close the sale today than it used to be. Between the tough economic environment and global competition, it may take longer to close sales today. 'It depends on the industry, but the Internet makes the competition worldwide. It's not just next door anymore,' Handal says. 'The general economy makes the buyer much more cautious about buying. And prices in most industries become a much more important factor.'
For successful businesses, the sales process has become a communications process that evolves through a series of decisions both you and your customer will be making. At each decision point, you will be achieving mutual understanding and establishing clarity about what you are saying to each other and how you will proceed. Thull refers to it as 'Multiple Decisions -- Mutual Understandings.'
'It is important to understand the decisions a customer needs to make as they progress from not having your solution to acquiring and using your solution,' Thull says. The steps along the way represent decisions to change. Each step in the decision process is made in a particular sequence and is designed to support the succeeding decision. 'If at any point the decision does not support going forward, the process should stop,' he says. 'If you've managed the process correctly, this must be considered a satisfactory outcome. Like a doctor, you have begun your diagnosis, and may discover there are no symptoms of a disease, or the symptoms are not severe enough to write a prescription or recommend surgery.'
Closing a Sale: The 4 D's of Making a Deal
There are four stages of the decision process involved in closing the sale, Thull says. These stages are Discovery, Diagnosis, Design, and Delivery. 'They provide a navigable path from identifying potential customers to the customer's decisions to continue to move forward,' he says. While you walk your customers through the process, there are some key objectives you need to accomplish at each stage along the way.
Discovery. In the initial Discovery stage, you must ensure that the customer matches the profile of individuals or businesses that typically find value in your product or services. This means progressing beyond the traditional boundaries of prospecting to learning unique characteristics and background information about your prospect. 'Showing you've done your homework will make your solution that much more relevant and receptive by your customers,' Thull says.
Part of the learning process involves listening to your customer. 'You have to listen very carefully to what the customer or potential customer is saying so that it gives you signals for how to create a win-win,' Handal says. 'It doesn't do any good to smooth talk yourself into a sale today and lose the customer tomorrow. It has to be in your interest and their interest.' In order to understand your customer's interest, you need to understand what they want and then fulfill their needs. It's not really relevant to the sales process what you want. 'What's relevant is what they want,' Handal says.
You may be selling to the general public or a highly specialized audience and it helps to know that audience. 'In either case, there are characteristics or demographics that describe your best prospects,' Thull says. For example, your customer profile might be people between the ages of 35 to 55, or hospitals in rural communities with less than 100 beds. 'For things to move forward, one of the first things to establish with the prospect is that there is a likelihood that this customer may be facing the same types of issues that your other customers have, and it will be helpful to investigate things further,' he says.
Diagnosis. In the Diagnosis stage, Thull says, you want to help your customers understand their inefficiencies and performance gaps. You may be able to help maximize the customer's awareness of their dissatisfaction with their situation, and determine whether that dissatisfaction supports the need for your solution or not.
Thull says these are the two major reasons why people do not buy:
- They do not believe they have the problem the solution will solve (which includes thinking the problem is not big enough to require a change).
- They do not believe the solution will work.
'The vast majority of buyers fall into the first group,' Thull says. Therefore, critical components of moving customers through a quality decision process involve the following three decisions:
A. Is there physical evidence that points to the consequences of the absence of the solution?
B. Are the consequences causing measurable financial impact? Is the financial impact acceptable?
C. Is it a priority? If it is, the customer has decided they have a problem, it is costing them X amount of money, and they are willing to take action and invest in change in order to better their situation.
Design. When businesspeople decide to make a purchase, their intention is to improve their situation. It is important to help them get a very clear picture of the desired outcome, their expectations. This Design stage brings clarity to the desired situation and how to get there. Thull says the decisions to be made at this stage are:
- 'What do I want it to look like after I make this change?'
- 'What is the best way to make this happen?'
- 'What am I willing to invest?'
- 'When do I want to achieve these results?'
- 'How will I know this will work?'
'The customer is deciding what they want to achieve, the best way to do it, how to fund it, when they want it and how to be sure they will be successful,' Thull says. 'At this point, the customer has decided exactly what they are going to do, and they are ready to see the proof that your solution is a match for everything they have decided.'
Handal points out that you may be able to use your knowledge about the customer, their industry, or the product or service they want to buy in order to help move the process along and get the customer to commit. 'Very often a customer will have a budget cycle and they need to make a decision by a certain date,' he says. 'That helps you close the sale.'
In addition, if there is a shortage of the product or service offering or a large demand for it, you should let the customer know. 'In real estate, it's almost never happened that you're looking at a property you want to buy that the sales person says someone else is also looking at,' Handal says. While Handal cautions that sales staff shouldn't fabricate demand for the product or service offering, he does urge them to point out factors that would create a 'sense of urgency.' 'That urgency may be as simple as, ‘Gee, you could save $10,000 a month if you did this. The sooner you do this the sooner you start saving,'' Handal says.
Delivery. After your customer commits to the sale, the next phase of the process is to deliver the product or service and assure your customer's success in executing your solution. Thull says the first step in the Deliver phase is for you to show the customer the solution that you have put together in a formal presentation. 'In the traditional sales process, the presentation is where the close takes place,' he says. 'However, the main reason people have difficulty closing is that they typically have presented their solution to an individual or business who does not have a quality decision process and has not made all the decisions we have described above. Each decision that has not been made leaves a gap, represents a reason not to buy, and will prevent the sale from moving forward.
If you and your customer has discussed each of these decisions and reached mutual understandings and agreements, Thull says, when you complete your presentation the only question remaining will be 'Is there anything we may have missed?' If there is, take care of it as quickly as possible. Since the answer will likely be 'No, I don't believe we missed anything,' proceed with the final paperwork. The close is now a non-event, he says.
Closing a Sale: Don't Forget the Follow-up
Whether you close the sale or not, always follow up with customers to find out what you can learn from them.
'The most successful sales people are the ones that have repeat business,' Handal says. 'The only way is to have clients who are happy with what you've provided. It's always a mistake to be so desperate that you have to have this sale today and you don't care what happens tomorrow.'
Most people will have more respect for a salesperson that is truthful about whether their products or services can help you solve their problems, 'Credibility is very important in repeat business,' Handal says.
Closing a Sale: Additional Resources
Jeff Thull's Sales and Marketing Articles
A library of articles by the CEO of Prime Resource Group.
Optimize Lead Generation ROI
Website of InTouch, a group of companies that helps enable sales people to convert leads into revenue.
RainToday.com is an online source for insight, advice, and tools for growing professional services businesses.
A monthly newsletter and website for professional services providers.
How to Close the Sale Videos
Various sales executives provide video advice on mastering 'the close.'
Dale Carnegie Training
The company founded in 1912 by sales guru Dale Carnegie, who wrote the now-renowned book, How to Win Friends and Influence People.