Healthy cashflow, which is generated by sales, is critical for business survival. Running low on cash is one of the main reasons around 12% of the 28 million small businesses in the U.S. shut down each year.
Most small business owners are focused on their product, a baker is thinking about the ingredients they need to order and the treats they're going to create. And while that's important, it's not the whole picture.
Small businesses should live and die by their sales numbers. Selling is the most fundamental part of the business. Most people in a business can spend money, but the art of running a business is making money. Thinking about sales will make you a better business person.
I recently sat down with Xero's Vice President of Sales, Greg Volm, to garner his thoughts on the best ways to close a deal.
You don't sell, you buy
There's a big difference between selling a product or service to someone and helping a person buy something.
When you transition your strategy to help someone buy your product, you aren't selling them on a features list. Rather, you're giving them information that will help your customer make a more informed decision so that they're more successful.
The best salespeople are naturally curious. If you're genuinely curious, you're going to ask a lot of open-ended questions to understand and qualify the buyer, their challenges or the pain they may have. Selling in this way isn't about a product demo or a pitch, it's about displaying sincere interest in someone's business and showing them ways to make their operations run smoother.
Understand the compelling event
A compelling event, where acting will result in a positive outcome and not acting will have a negative consequence, is something that makes a customer close a deal. Understanding if there is a compelling event on the horizon will help you determine if there's a deal to close and how long you have to get it done.
Salespeople often try to manufacture compelling events by using discounts or specials that are time driven to get a deal across the line.
A good salesperson understands the customer's needs and knows how to articulate the product or service in a way which connects it with a person's situation. Creating a relationship with a customer ups your chances of closing a deal or generating repeat business.
Figure out the issue your client is trying to solve
Understanding the business issue of what a potential customer is trying to address, will better help you understand how to solve that problem. Sounds obvious, but it's surprising how many people don't take the time to figure out how they can add value.
If you can't quantify the value of a problem, preferably in a dollar amount, and show how you can solve that problem, it's going to be unlikely you're the one to close that deal.
The other way to do this is to identify who your customer's customer is. If you know your customer's customer, than you know the benefit they're after.
When you don't have a sales force, you need to create advocates
Activating your customers to become your sales force is one way to fill your deal pipeline. The more qualified, potential leads, the more deals you're likely to close.
The best way to build advocates is to deliver a really great product or seamless experience. If a customer enjoyed the interaction, they're likely to tell their network all about it.
If you're building word-of-mouth marketing, you're enabling a sales force which you aren't paying for. That means you need to seed customer advocacy and think about how you're going to reward loyal customers so they tell more of their friends about you and your business.
You have to ask for the sale
Don't talk around the close. The fundamental thing about selling is you ask for the sale. Whether you like it or not, if you're selling a product or service, the cheesy car sales line of "what will it take to get you in this car today?" is what you need to do to close a deal.
Entrepreneurs are really good at articulating how great their product is but often they don't get an action list for next steps or ask for the sale. Both of which help gauge how warm the lead is and how probable it will be to close the deal.
It's also a good chance to understand whether you're talking to the right person. If you don't know who's signing the order, then you're done. Take the time to figure out who has the power, who supports the deal, who the detractors are, who the decision maker is, and who holds the budget. If you don't know the various personas, you're at risk.
A small business owner wears multiple hats within their organization. But the one hat that should always be sitting on your head is sales. Concentrating on how you make revenue needs to be your focus and what you base your main decisions on.