Mike Cochren explains how to read customers - and how to focus your sales presentation on what is most important to them.
October 5, 2017 by Steve Payne
This is a continuation of our interview with Mike Cochren, president of Cochren Homes, Oakville, Ontario. Mike has run his high-quality renovation firm in this marketplace for 35 years, learning lots about salesmanship – some of which he shares here. To see the first part of the interview click here.
Did you have any sales mentors or people you specifically learned how to sell from?
For me, a key moment was when I was the chair of the provincial renovators council. We had our first stand-alone renovation conference in Toronto. We found a speaker, Charles Clarke III, who spoke about “personality selling.” His technique is called BOLT Selling, and the basic message is that you should sell to people the way they want to be sold. The concept categorizes people into four basic types, Bulls, Owls, Lambs and Tigers (BOLT) based on two personality traits, emotion and aggression. Once you can access their particular leaning, you can then illustrate to them features of your product or proposal on which they would place the highest values.
For an example, clients who are fairly low key and analytical are categorized as Owls. They typically are more interested in values like “cost per square foot” or “energy efficiency” than, say, a glamorous kitchen or party rooms. Thus, you would highlight details like better insulation, better windows and high efficiency HVAC units. The concept is very beneficial and I highly recommend looking further into it as a helpful tool in doing presentations and addressing clients. You can thus have an easier, more successful closing ratio than just presenting in the same fashion as you have always done.
How do you deal with the highly aggressive prospect who demeans your price in almost insulting language: “You’ve GOT to be kidding me! You are TWICE the price of your competitor! We may as well end this discussion right now.”
We often get this reaction. The younger Mike Cochren would have replied, “Well, I can go back and sharpen my pencil.” But what you really need to do is stop. Step back. Calm them down. Do not argue with them when they are emotional! This customer is a bull: they want what they want, and they want to win. You have to calmly explain: “I can do this, and I can do that, and based on my experience, this is my price that includes certain value-adds that maybe you haven’t taken the time to fully consider. So let’s go back and review this item by item and I’ll explain why I’m different than the other guys.
I explain that there are only three ways I can change my price. We can delete – take something out. We can defer – not do this or that section at the same time as the rest of the job. Or we can substitute. Instead of the quarter-sawn oak that matches what they’ve got, for example, we will go get a prefinished one at a half the price. And you explain how much that will drop the overall price. There are only those three ways. Now there’s a fourth way the customer can drop the price. They can go and get a different contractor, but you don’t want to propose that. But you do need to deal with price issues right away. As said above, it’s better to take a No today and stop working on it, than to go home, come back tomorrow, and get a No tomorrow night.
How do you handle the prospective customer who hasn’t a clue what their budget is and won’t declare it?
Normally, from the initial discussions about the scope of work, from the wish list, you will have a fairly good idea what the price is. So, you just have to table a number out there. If it’s $100,000, it’s $100,000. If you get the response “Oh, that’s WAY high, WAY high!” you reply that, “Well, I did one similar to this for $85,000 but you’ve got some extras in there. So, if you come down very much from $100,000, you are going to be cheating yourself out of the many valuable features. The most important thing is that you come at it from a position of strength. You have to ask yourself, “Do I really need this job? Are my groceries next week really going to depend on this? Or is it just one of ten potential jobs and you’re going to close four? So you want to leave it on a positive note, but be honest: “Look, I think your expectations are way beyond what you’re going to be able to do if you want a reputable contractor that’s going to do a proper job. You don’t want to dirty down your project to save a few dollars. You don’t want to spend 10 per cent less but get 30 per cent less value. Your home is worth $850,000 (or whatever it is). You shouldn’t put a $15,000 kitchen in it, because that’s not the right fit. You don’t buy a Jaguar and then put on the cheapest tires available at the discount store.
Many veteran contractors with a lot of repeat business eventually stop doing competitive bids. Will you still get involved with them?
I shy away from them unless there’s a really good reason for me to be involved. Usually in a competitive bid situation, the client will have a set of drawings. And if they’ve gone out and obtained a set of drawings they’ve already become biased by the price put on the work by the person who produced the drawings. Of all the times in my career I’ve been involved in competitive bids, I’ve won about 10 per cent of them. Yes, historically I have gone out and bought the work just to keep my guys busy. But they’ve pretty well all turned out to be bottom-line disasters. So, all being perfect, I would rather stick to my knitting. We have had great success with our method. People say, “Mike, we had a good experience. It was fun. And we knew all time where we were. And we’re coming back.”