4 Closing Mistakes to Avoid in Home Improvement Sales
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Mastering the Art of Closing Home Improvement Deals
From being in this business for over 35 years and being in 16,000 homes here are four common mistakes in closing that I see sales people make over and over that cost them a lot of money. Please watch until the end to see all four.
Common Mistakes in Closing Home Improvement Deals
To put all of this in the right perspective keep in mind that Closing is not selling. They must be sold through your sales presentation and see the value of what you are selling. Then the close is just the next step of helping them get what they want and making the final step of spending the money as easy and painless as possible. If you like these types of videos please subscribe and for more free home improvement sales training check out my blog listed in the description below.
Mistake #1: Feeding the Customer the Objection
The first mistake I see is salespeople feeding the customer the objection which then gives the customer a way out. This happens when the customer is not buying and the salesperson doesn’t know the real objection to overcome. For example, the customer says I need to think about it and then the salesperson says why? Do you have to get other estimates or do you have to speak to someone else? This is wrong on many levels. First, it puts pressure on the customer because when you say why; is it because of….. That’s a pressuring type of close. It’s like saying why are you not doing it. The danger is that nobody likes feeling pressured and when the customer starts to feel that the easiest way to stop that is to shut the dialogue down.
For you to close effectively you need to keep the dialogue going. The other reason this is wrong is because that might not even be the real objection but by volunteering this to the customer you are giving them a way out. They say "Yes you are correct we want to get other estimates. “ Internally they are thinking "Thanks for that I wasn't sure what to say there and that lets me off the hook”. Closing is not multiple choice where you say is it because of this, no..how about this? No..Or this? If you have done your sales presentation correctly which means that they want it and think it’s worth it there can only be one real objection and that’s the money.
You need to learn to convert the smokescreens like “I have to think about it” to the money. You do this not by asking feeding questions but by asking probing questions. For example, I might say "I know you want to think about it that’s not a problem. Do you mind if I ask you a question though? No, go ahead What is the main thing you need to think about? Is it this and I point to the window or a sample of it or this (and I point to the price)? In most cases, they point to the price. Then I say so other than the money is this what you want?
When they say yes then I have uncovered and isolated the real objection which is the price. Another example of uncovering objections without feeding might be if you are farther along in the closing process and your company might have a discount if they buy now to create urgency. Even if they were able to save an additional $1000 by making a purchase that day and yet the customer was still hedging I could try to uncover the true objection by saying” If you don’t mind me asking what is keeping you from saving the most amount of money possible? Protip closing in a positive way like that is far superior to closing in a negative way which would be "why would you want to spend more money by waiting". That seems pressuring again and there is no good answer they could give you. Far better to say “what is keeping you from saving the most amount of money. Much more positive way to ask that way.
Mistake #2: Delivering Discounts All at Once
The second mistake I see people make is when they have multiple discounts such as when they have a sale price, coupon offer, and/or a buy today discount that they tend to deliver them all at once instead of step by step with time in between each discount. For example, if the salesperson has a 500 off coupon a $750 off summer sale, and then an additional today discount of 10% they deliver the price by saying well the kitchen is $25000 and with it, you get the 500 off coupon with the summer sale of $750 off. But if you make the purchase today and save us the time of coming back you can save another 10% so your total price is only $21375. If you do it that way you are not building the value of the discounts. Time between discounts even if it’s only seconds gives the discounts more impact.
For example, if I was selling you a car and said it's a $25,000 car but today there's $3000 off so it's only 22,000 in most cases in your mind it's like a $22,000 car. But if I told you the car was $25,000 and let you leave the lot and then a day later I called you and said hey remember that car you were looking at yesterday for $25,000 we just took another $3000 off for a sale and now you can get it for $22,000. That discount would have a lot more impact because you are allowing time between discounts.
So if you give all of your discounts at once the final price seems like the regular price and the discounts have less impact. Now look at how it would sound if you said okay let me explain how our pricing works. You get this and this and all of this makes your new kitchen only $25000. Do you have any questions? No…now don't forget we have a summer sale going on now and it saves you another $750 if you order this by May. Wow…so that $25000 didn’t include the summer sale? (when they say this it means the original price was what they thought the cost was and now the discounts have more impact) No, it didn't include the sale so your price is only $24250. Now don't forget you also had a coupon for $500 off so now your selling price is only $23750.
You have to make them believe the first price is real for the sale and discount to have an impact that they are getting a deal. That’s why one thing I always train salespeople is to never deliver the first price and say "Here's the retail price.” Nobody pays retail and now that price doesn't seem real and the discounts won't have as much impact. Now if you have a today discount a lot of salespeople explain that instantly with the price but it will be a lot more effective if you hold off on that until you have solved the problem and the only thing left is to create urgency. A today discount is not to lower the price, but so they will buy.
You should have created enough value in your sales presentation that they don’t need an extra discount to justify the price. You should solve whatever problems come up in the close such as making it affordable to them and working everything out so that either they buy or they say "Well that's great I want this and can afford it just give me a couple of days". In other words, you have solved the problem and the only thing missing is urgency. Now a today discount will have a lot more impact because it is not getting them to buy it’s just creating urgency for them to buy now. Believe me, it will have way more impact if you can hold off on introducing a today discount instead of just delivering it with the price all at once.
Mistake #3: Mismanaging Financing Options
The third mistake in closing is not understanding your financing and then trying to solve the problem the wrong way. This means you understand how to work payments without dropping the price. If the issue is affordability it is a payment close. You are working on monthly payments. When they say they can't afford it you need to get the gap in the monthly payment they can’t afford by asking “How much too much is the monthly payment?” If you are at 700/month and they say they can afford $500/month then your gap is 200/month. You don’t have to close 700/month just close the 200-month gap. Most reps start to drop the price here. Translation gives up the commission. Dropping the price should be the last thing you do.
The first thing you should do is ask if they can put more money as a downpayment. That doesn't cost you anything and starts to lower the payment. For you to work the close effectively you should at least know the basics such as for every $1000 the price is lowered by putting a larger down payment how much does it lower the monthly payment? Ten dollars, twenty dollars, or more? You need to be able to quickly respond if the customer says that they can put another $2000 as a down payment you can instantly say well that will lower your payment from $600 a month to $550 a month or whatever the correct amount is.
Or I see reps who don't understand financing that when the customer can't afford it the first thing they do is offer a 12 or 24-month no payment or interest plan... This is not going to work unless they can pay it off within 24 months. Unless they are expecting a windfall or lump sum within 24 months this is not going to work. To be sure I at least ask them if they think they can pay this off within 24 months. If they say no then this won't work. In the simplest terms, it breaks down to over $1041/month if you take the 25k and divide it by 24.
If they can't afford 700 a month how would this help them? In the rare case, that they don't understand and it just sounds good because they don't pay now you are actually hurting them if they buy because when they don’t pay it off the interest accrues back to day one and they paid an extra 2 years worth of interest without making a dent in the principal. Understanding financing means that besides getting a bigger deposit that you may have ways to extend the length of the financing or may other types of financing with lower payments for financing the same amount. I have seen salespeople lose deals because they tell me the customer wanted to be at $300/month and because they didn’t understand the financing didn’t realize that they could have done that for the customer. You need to understand all the financing options that your company offers and how they work.
Mistake #4: Lack of Preparation
The fourth mistake I see salespeople make is that they are just not practiced and prepared. There is no excuse for you not being prepared. The great thing about this job is you already know what they're going to say at the end before you even go home.
No matter what home improvement you sell they always say the same things at the end, I need to think about it, it's too much money and I want to get other estimates. So if you already know what they're going to say at the end how can you not be ready? You're like a professional boxer where every time you go in the ring you know that your opponent is going to lead with the left hook and every time they do they knock you out.
You would think there would come a point where you would learn how to defend against a left hook. It's the same thing here. It'd be different if every day they told you something different like I'm not buying because the moon's in Aquarius or I can't buy. After all, it's a Tuesday. So if you already know what they're going to say ahead of time there's no reason that you shouldn't be ready.
If you're professional I should be able to go up to you and say I need to think about it it's too much money I need to get 3 estimates to go and instantly without thinking you know how to respond at least one way if not preferably two or three different ways. The other side of this is that if you know you’re not prepared to handle those three things you are going in the home knowing you are deficient in that area and are lacking the confidence necessary to do this. Anytime a rep tells me I just aren't good at closing this is what they are saying. I am going to a home where I know I am not prepared the way I should be. So If you aren’t prepared start studying and practicing this immediately.
Elevate Your Closing Game
If you like these types of videos please check out the video on How and why to bring it to the money or the playlist on closing listed above. If you want more free home improvement sales training check out my blog listed in the description below. Happy Selling!
