Stephan Perchick's suitcases bulged with wigs, invoices, and Rolodex cards. His calendar was filled with appointments with department store buyers. In 1966 fresh out of the Army and with a master's degree in marketing, Perchick had spent a month observing assembly-line and stockroom operations at his cousin's hair goods company in Philadelphia. Now he was ready to take the boy cuts fluffs shags, pages, and perms out on the road.
But when Perchick's plane landed in Richmond Va. one buyer after another canceled or postponed the appointments. Perchick looked at the wigs and began to wonder if he would be an early candidate for one himself. He decided to cancel his last appointment and talk to the buyer by phone instead. The call resulted in the only sale of the trip -- a $3,000 order for hair goods.
When Perchick returned to Hair Fashions Inc., he called the other buyers who had refused to see him. He received orders from five out of six of them, all by phone. Within a year, Perchick was doing $150,000 worth of business with this first group of stores. Moreover, the division he had organized to sell hair goods excluively by phone was grossing $700,000.
During the next six years, Perchick perfected his techniques of telephone selling. Hair Fashions Inc. filled orders day and night for the semiwavy Pussycat and the straight, blunt Dutch-boy, two of the country's most popular wig styles, and sales topped $2 million. By 1972, however, the "go-go years" of the wig industry were coming to an end. New technologies made traditional wigs obsolete overnight and a flood of poor-quality imitations created public suspicion of the product. Half of the country's hair goods stores and companies closed their doors.
Hair Fashions Inc. took a close look at its overhead. Perchick's division, which sold products only by phone, had a limited overhead of salaries, cost of goods, and telephone expenses. Other divisions, which were engaged in face-to-face selling, had to bear the expenses of airline fares, hotels, meals, and entertainment.
When Perchick suggested that he set up a joint venture with his company in which he would buy half the stock of the division, his impressive record of keeping expenses down through phone sales won over the owners. Nine months later, he used his share of the profits from this joint venture to establish his own company, L. Stephan Perchick Sales Agency Inc. In 1980, Perchick merged with his sub-distributor to form Amekor Industries Inc. -- a wholesale distributor and manufacturer of wigs and hair goods -- and appointed himself chairman.
This year Perchick expects to gross $1.5 million. Profit margins run about 30% and Amekor has more than 800 long-term accounts. The company's six salespeople rarely venture outside its West Conshohocken, Pa., headquarters. In June, the staff rang up $110,000 worth of sales on a $3,300 phone bill. Perchick puts the cost of an average phone sales call at $2.
"There was no way we could have survived the vicissitudes of our industry if we didn't depend on the phone for sales," says Perchick, who estimates that overhead is half what it would be if he sent salespeople into the field. With the cost of an in-person industrial sales visit today averaging $160 to $180, more and more companies are looking to the telephone as a less costly sales tool. Perchick has developed key techniques for effective telephone sales that can be adapted by manufacturers, distributors, wholesalers, service organizations, and retail companies alike.
1.Use some type of notation to organize your presentation. Perchick gives new salespeople an outline that describes points to be covered in the first call, such as introduction of the company, referral information, product description, price range and profit margins, marketing or promotional aids, and delivery time.
2. Keep your presentation simple. Inexperienced telephone salespeople sometimes make the mistake of trying to emphasize too many details and technicalities. "I've heard people discuss the circumference of the wig cap, describe an intricate curl pattern, or give the weight of the wigs in exact grams," says Perchick "All that is really needed is a description of the product's color, style, price, and market." Don't go off on a tangent, he adds. Too much emphasis on one topic, such as price, can make the call a failure.
3. Put a time limit on sales calls. Perchick's goal is to complete a telephone sale in three minutes. It usually takes inexperienced phone salespeople three to four months before they can make their presentations both concise and substantive. "For a larger sale, you may want to stay on the phone longer. But you should be able to tell within three minutes if a lead is going to turn into a sale," says Perchick.
4. Make contact with decsion makers. Ask to speak with merchandise managers, store managers, owners, or company presidents, instead of buyers, for instance. "It's easier for the top person to exert influence on those beneath him or her. It can be very time-consuming to go through a series of clerks," says Perchick. He adds that people in more prestigious positions are usually more willing to cooperate and more accessible than lower-level employees.
5. Avoid asking direct questions when determining a customer's needs. Salespeople should check their files to see what a customer ordered before. Then they can suggest related products -- new colors or more expensive versions of a style the customer is already carrying. To determine the needs of new customers, ask questions regarding consumers' ages, geographic location, and price points at which they sell merchandise. If you ask outright what the customer needs, the answer will probably be "nothing," says Perchick. "Instead, try to make the call interesting with relevant suggestions."
6. Start with a small order. Amekor's salespeople select several products to talk about instead of trying to sell the whole product line on the first call. They offer to send samples of these along with brochures and other detailed material. "Once you understand your customer's market, you can try selling them a larger cross-section of products," says Perchick.
7. Establish a regular calling pattern. After making a sale, tell the customer you will be calling on a specific day of the week. Frequency of calls depends on the volume of sales you expect from the customer. But once the customer knows he or she can expect to hear from you every Wednesday, for example, you should start receiving orders regularly.
8. Use good sources for leads. "We'll wait at least a month before asking a new customer if they have any friends in the business to whom they can refer us," says Perchick. "We also approach companies that are going out of business and ask if we can be of service to their accounts. People who sell products similar to ours but who aren't competitors, as well as suppliers, are also good sources for leads." Half his leads come from referrals, the other half from the Yellow pages.
9. Gain market information. "In the process of making our normal sales calls, we found we're actually doing market surveys, learning what is and isn't selling," says Perchick. "This tells us how to order and how to price our goods. Such information enabled us to survive when we formed the company in 1972, and it continues to give us a competitive edge "
10. Extend credit sparingly. Phone sales can yield a high volume of bad debts if you are not careful. Perchick extends credit to only 5% of his customers and does most of his business by cash or certified check. He won't accept a company check unless the customer can provide four credit references. He asks for three credit references and a bank reference. His bad debts run about 0.5%.
11. Hire good salespeople. While Perchick has hired people without prior sales experience, all have attended or graduated from college. "I look for a patient person who can take both direction and criticism, produce a productive presentation, handle a customer well on the phone, and isn't afraid of hard work. An overly gregarious person would be a bad choice because he or she would have a hard time putting a time limit on calls. Someone who shows a lot of skepticism about the phone as a sales tool would also be a bad choice," says Perchick. New salespeople get intensive training for a week, which includes observing veterans, learning about the products, and mastering the techniques outlined above. Less intensive training lasts another month.
Perchick claims to have a 90% reorder rate with new accounts that have purchased initial samples. For Amekor, telephone selling has offered the opportunity for maximizing the salesperson's productivity and efficiency -- a winning combination in these inflationary times.