How often have you been in negotiations with a prospect who then thanks you for your time but decides not to make a purchase? Quite a few I suspect.
But what do you do in this situation? Do you just thank them and ask them to get in touch if they are interested in the future? If so, you may be wasting a valuable opportunity!
Apply this customer research technique to increase future sales
When a prospect declines to buy, ask them why. Now this doesn’t have to be confrontational so they feel as though they have offended you. It can be done in a very gentle customer research type of manner that makes the prospect feel valued and will give you a far greater insight into how to achieve future sales than anything else out there.
Simply ask the prospect what would have prompted them to buy from you today. Ask them what you could have done differently.
Some people may be too embarrassed to tell you the price is too high or the product not good enough so may say something like ‘I just can’t afford it at the moment’ or if you are a service industry, ‘I don’t have time at the moment’.
This is where you can then start to do some gentle drilling down to find out the real reason they haven’t bought from you and what you can do about it.
They can’t afford it
If they say they can’t afford it, ask them if they would buy if you gave a discount or offered flexible payment terms. If they still say no, you know that price isn’t the real reason they didn’t buy and something else is stopping them. Say to them something along the lines of ‘so price doesn’t seem to be the real issue and I feel something else is missing for you in what I am offering. If the price was right, what could I offer that would make you want to purchase today?’
It’s not the right time
If they use the time excuse, ask them when they think the time will be right for them, how much time they think they need etc. Ask them the question ‘so if I call you in two months’ time will you be making a purchase then?’ If they say maybe or they will think about it at that point, again, time is not the real reason and you need to ask the same question as previously of ‘so time doesn’t seem to be the real issue and I feel something else is missing for you in what I am offering. If the timing was right, what could I offer that you would like to purchase today?’
Hopefully, you get my drift and you will find different questions and adapt them to your business and answers given. It can take practice to get this right but if you can do it, this valuable customer research will really help you find out so much more about people’s needs and wants and how your product or service can fulfil those. You can then change your offering to attract more sales in the future.
All through the questioning make sure you keep an easy conversational style rather than conducting an interrogation and make sure the prospect knows that there is no pressure to buy but that they will really be helping you with your future business offering. Maybe you would like to give them a small token of appreciation for co-operating such as a voucher for future use or a small gift or taster session.
Be brave. Give it a go. And let me know how you get on with this style of customer research in the comments box below or over on the Facebook page.
All about Market Research
So many people start up a business without doing any market research. They then wonder why their product or service does not get the sales they were expecting and ultimately, why their business is failing. Read on to find out why market research is important for your business and why by doing it you will have a better chance of success.
Why market research is important if you want your small business to be successful
Unfortunately, many small business owners disregard the importance of market research. It is all too common for small business owners to ignore market research altogether and to base their business idea on their own assumptions. All too often, this results in the business failing which could have been avoided by doing some basic research.
The Danger of Assumptions
Many small business owners assume that they understand what their customers want and what motivates them to buy. But relying on assumptions is a dangerous game. I have met all too many business owners who think that by creating a similar product at a lower price point, buyers will flock to them. This is not always the case and has proven to be a downfall for far too many.
You need to find out how to connect with your target market and understand their needs and buying habits. You need to understand why your target market buy what they do (and rarely is it price!), why they choose one supplier over another and what would motivate them to move to a new supplier should one enter the market (you!)
Go out there and get cold, hard facts and figures, not just base your business on loose guesses. This will then give you a competitive advantage when entering the market. The more you can find out about how much demand there will be for your product or service, who is likely to buy it, what they will pay and what your competitors are doing the better chance you have of creating something successful.
Market research will help you:
- Test the viability of your business idea
- Who your ideal customers are (your target market)
- Will these customers buy from you and how much will they pay
- What the market trends are in your industry
- Find out who your prospective customers buy from already (your competitors)
- What your competitors are doing well, doing badly and what they are charging (competitor analysis)
You need to plan your market research carefully to get the answers you need and you also need to allow time to carry it out.
And if you don’t get the answers you were hoping for, this does not necessarily mean that your business idea will fail. It just means that you may need to adapt your product or service to suit the needs of your target market. I started up my business consultancy but a lot of the women I met who needed my help couldn’t afford my hourly rate. That is when I decided to start up my on-line advice which was more affordable for them and gave them access to a lot of the advice they needed.
On the other hand, please do not bury your head in the sand and ignore the results of market research if you don’t hear what you want to. Too many small business owners get personally attached to their idea and refuse to listen to the evidence in front of them.
Now you know why market research is important, it is essential to remain objective when carrying out the research and to use the results to plan the most effective way to give your business the best chance of success.
How do you know if your business offering is really good enough?
One of the worst situations I have to deal with when working with businesses is that of visiting a client who truly believes their product or service is far superior to the reality.
This is an incredibly difficult situation to deal with as I would never want to crush someone’s dream and self confidence, but at the same time it would not be fair of me to continue to lead them into a world of self delusion.
So how can you be sure your own product or service is really good enough?
First and foremost, if you are already trading, your sales and repeat business along with client testimonials should give you an indication of how good you are.
If you are starting up though, this will be more difficult to determine.
Market research is critical. And please oh please, do not rely on friends and family when undertaking any research. In my experience, friends and family will tell you want to hear for fear of hurting you and will rarely give you an unbiased opinion.
You need to do some test marketing and get feedback from real customers, and making sure these customers are from your future target market base. There is no point at all in asking a group of teenagers to try out a product aimed at the over 50’s market.
When asking for honest feedback, you need to be quite thick skinned as it may feel like a personal attack if any criticism is forthcoming. However, I truly believe far more can be learned from critical feedback, or critique, rather than purely positive feedback. Yes, praise is needed and we should celebrate our successes but if we do not hear what is wrong with our product or service, then how can we ever improve and stay ahead of the competition.
As the saying goes:
Praise makes you feel good but critique makes you better
If you do not feel strong enough to take the hit at this early stage, then get someone else to gain the feedback for you and create an overall report. This can be someone you know who is wholly unbiased (once again not friends and family please) or you can engage with a professional company to do this for you (at a charge of course).
It is far better to get honest feedback in the early days than to find out later down the line why repeat sales are not forthcoming and perhaps a poor reputation has already been gained.
It can be quite a painful process to go through, and yes, I have been through it myself, but it can also be one of the most worthwhile.
And remember, many of the best products out there came from hundreds of knock backs and years of rejection so you are not alone. Just think of:
- James Dyson (Dyson vacuums)
- Colonel Sanders (Kentucky fried chicken) and
- Thomas Eddison (the lightbulb)
All the above went through countless rejections and criticisms but who all did not give up and used any criticism in a constrictive manner to help them improve their products and become market leaders.
What’s the best critique you have had for your business and how did it help you? Leave your comments below.