Renovantage’s Mike Draper on turning leads into customers
"Never email a quotation," Draper counsels. "Always visit with the client to go over the details so that you can make adjustments to include or exclude changes the customer wants to see.
November 20, 2013 by Steve Payne
By Kim Laudrum
At the recent RenoSummit seminars in Southern Ontario, Renovantage‘s Mike Draper talked about the importance of converting more leads into customers.
“Leads are actually the hardest thing to increase. You could increase the margin, or up sell the client. But the number one thing you can do for the most impact is to improve the conversion rate of leads to clients,” he pointed out.
Just a ten per cent increase in each of leads, the conversion rate of leads to sales, the average price of the job, and the margin will boost revenues 46 per cent and increase profit a massive 61 per cent, in the example Draper provided.
How can a contractor seal the deal more effectively? Draper warns contractors to avoid proposal killers that turn clients off. Contracts that require large sums of upfront money, not understanding what the client is looking for, or not providing a line by line quote will see the client lose interest.
“Never e-mail a quotation,” Draper advises. Always visit with the client to go over the details so that you can make adjustments to include or exclude changes the customer wants to see.
Why should you take that extra step? Face to face is still important, Draper concedes. Follow up is essential to getting the sale. The number one reason why clients change their purchasing point is not because of the price, but because they perceive the contractor is indifferent, Draper said.
Consider the number of touch points with a client that it takes to make a sale: a whopping 81 per cent of customers will not close the sale until on or after the fifth call, Draper pointed out. Yet, almost half (48 per cent) of the businesses competing for the client will give up after just one call. Eighty-four per cent have given up by the third call.
You can win that business without spending any more money, and increase your profitability, if you just hang in there.
- Stick to your price. “A 10 per cent increase in price will equal a 30 per cent increase in gross profit. If you try to compete by offering a 10 per cent discount because you think that’s what your competitor is doing, you will risk losing 30 per cent on your gross profit. And your competitor might not even know this! He might be losing money on the job,” Draper said.
- Always present your quote in person. “Homeowners need to see a detailed quotation,” Draper said. Show them everything that’s going to be done. Show them the total price but include details either line-by-line or room-by-room. “Make sure they know the scope of the work.”
By the numbers:
80 per cent of homeowners won’t make a decision until after the fifth call.