There is a difference between making a sale and selling someone. The former is how a company makes money and takes care of overhead. The latter is how a once successful company will see its revenues quickly and seemingly inexplicably decline as the years drag on (or how a start-up fails to get off the ground at all).
Let me explain with an example I think we’re all generally familiar with: buying a car. About two years ago, I was in the market for a new car. While I didn’t tell the salespeople this, I needed a car as mine had been so wonderfully totaled by a new driver in a blizzard. Thankfully, I had already been thinking of getting a new car and knew exactly what I wanted… meaning that really all a salesperson had to do was give me a good price and treat me with respect. I was moving in about two months, so the ‘service after the sale’ pitch did absolutely nothing for me.
I tried two dealerships that were close to my house. I had emailed both previously to get a deal started that I could further negotiate once I arrived. The first one told me that they didn’t offer any deals online and that I’d have to come in to discuss price (nice sales tactic..). The second offered me an actually good deal from the get go, and told me who to ask for when I arrived.
When I went to the first one, the salesman exhibited all the classic signs of the hard sell. He tried to get me to test drive one of the models that was the same color as my shirt (he guessed wrong), used phrases while I was test driving the car to try to make me think of myself as already owning it, and tried his best to create a sense of urgency. When we sat back down in the dealership, we started talking about price. He tried to tell me that they couldn’t go any under the MSRP because, and I quote, “Hyundai really doesn’t mark up their cars much at all. If we went any under MSRP, even $500, we wouldn’t make any money”. Apparently, I had a “I’m stupid and today is my first day on earth” stamp on my forehead. I told him I wasn’t buying it and that I would be going to another dealership. He tried to call my bluff, and told me good luck, but I would never find the kind of deal I was looking for, especially not with the service that he could offer.
The second dealership was like a dream. Before the test drive, since I knew who to ask for, the salesman pulled my email (which included what car with exactly what features I wanted) and went and grabbed that exact car. During the test drive, I did all the talking – asking questions as I saw fit. Once back in the dealership, I negotiated down a bit more (which was shockingly and unexpectedly simple and non-combative), and we figured out I qualified for all of the current factory incentives (yay!). I’ll leave out the boring paperwork details, but it seriously was a breeze. I bought my car that day.
Guess what I came to find out? The first dealership, with the salesman who was trying to sell me, operated off commissions (like most dealerships do). Thus, the salesman wanted me to pay the absolute most possible because that directly impacted his paycheck. The second dealership, with the friendly it’s-all-about-you salesman, operated off a salary and a bonus structure. Basically, it didn’t matter what price I negotiated. The salesman would get $50 for every car he sold, and at the end of the month would get a bonus if he sold the most. That’s it. Cut and dry. Why? Because this second dealership wanted to make sure the experience was about customer satisfaction instead of having each customer that walked through the door have figurative dollar signs over their head.
Now, I’m not saying that a commission structure is bad, or that not having one is better. What I am saying, however, is that no matter which model your business chooses, you had better have a kind of fail-safe built in so that your sales team knows how they should approach a customer, and that that customer feels as good about their buying decision years down the road as I feel about mine now.
What are your company’s best practices when it comes to sales? Do you have any great stories or nightmarish ones we could learn from? Share in the comments below!