8 Factors that Control Closing Percentages (1 of 2)

Hey there, everybody. Welcome to the Magnetic Marketing Podcast. If you're a first-time listener, we're excited to have you here. If you've been here for a while, we would love to hear your feedback. Make sure to leave a review, share this with a friend. This episode covers one of the most important topics when it comes to actually selling, because this is how you control the levers in order to increase your close rate on demand and at will. Ever wanted to do that? This episode is going to reveal how to do that. This is part 1 of part 2 of the 8 factors that control closing percentages with Dan Kennedy and Bill Glazer.

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Welcome to the Magnetic Marketing Podcast with your host, Dan Kennedy.

Well, hello, uh, Go Plus members. This is Bill Glazer, and today I'm joined with Dan Kennedy, and we have a really great call for you today. As a matter of fact, this is one of those calls that unless you were in your car driving around listening to this call, my recommendation is that you get paper and pen ready because I think there's going to be a lot of good notes that you're going to take today and really help you all in your businesses. What we're going to be talking about today is what's identified as the 8 control factors that control closing percentages. So how do you better increase the closing percentages in all the sales you do? And before I ask Dan to get started, let me make a couple of comments about this. First of all, it's important that you to understand that these closing percentages control factors, these pertain both to face-to-face selling, so the kind of selling that I did the first 15 years in my career when I was on the selling floor of my menswear store where customers would come into the store and I'd be selling them face-to-face, or else in mass media selling. So whether it's direct mail, email, websites, radio, TV, it doesn't matter. It's the same. And in many ways—

well, there are—

let me also comment that there are advantages to face-to-face selling and there are advantages to mass media selling. And I've done them both and I know Dan has done them both. And one of the advantages to face-to-face selling is the fact that you can actually see body language, facial expressions when you are using these exact same control factors. So you get sort of feedback from the person you are selling to. Whereas in mass media, obviously the advantages are that it's not one-on-one and you can sort of go one or many. So the only thing that kind of has the advantage of both is when we do any kind of speaking from a platform where there— and it's not as good as one-on-one, but there you sort of can get both. So you can speak one-on-many, you can deliver the message one-on-many, and you can sort sort of get feedback from the audience. It's not as good as one-on-one, but it still kind of gives you some feedback. The other advantage of using this in mass media is the fact that you can actually craft the perfect presentation, whereas when you do one-on-one, usually everyone has got a little slight variation, a little slight difference. Sometimes when you're doing one-on-one selling, after you say something you say to yourself, "Gee, that was stupid. I shouldn't have said that." Using these in mass media, you can deliver them the perfect presentation in mass media. So whether it's a sales letter or a video, online video, anything like that, it's sort of the perfect presentation.

So with that said, let's— Dan, how are you? I'm doing good.

Okay, good. And I guess we won't mention about your latest little mishap for everybody, what you and I were talking about.

I'm alive.

Okay, good. Let's move into our 8 controlling factors. The first one is the quality of the list selection of the prospects. This sort of deals with, Dan, what you call the who. Do you want to get started talking about that?

Well, I would say that in a sense it's obvious, but then getting people to do anything about it is not so easy. For reasons that you are familiar with, I was thinking not long ago about the instances in some 29 years of speaking and selling from the platform when I have bombed, when I have not done well. There have only been 3. In every one of those cases, it was a mismatch with an audience. Very early I had a fee-pay gig and I spoke to a chapter of a thing called the Administrative Professional Society, which— Administrative and Executive Professional Society, I think. I forget now even the acronym. But it turns out it's basically a lot of middle management guys in engineering-type companies. So they have pocket protectors. And lead pencils and the shoes with the laces and the little pinholes in them. They loved me and the meeting planner loved me and immediately wanted me to do the other 49 states, which even though at the time the fee from the 49 states would have been significant to me, I immediately turned it down having discovered from the first group that we were not a good fit. In terms of them being good customers for me after the fact, let alone me selling to them while I was there. I just think a lot of businesses start out and then stay in the mode of anybody with a pulse will pay attention to me, is as good as anybody else to me, and I want to open the doors as wide as possible, and I'm afraid to narrow the narrowing the doors. By narrowing the doors I mean spending more money, not less money, to get a lead, to get an appointment, to get in front of somebody. So they waste a lot of time and energy and money and capability trying to sell whatever it is that they sell to people who are very poor prospects, a very poor fit. And if somebody will dig in and sort of fix that, everything else that they do automatically works better. I was with a client a couple of weeks ago who's in the financial services industry and puts investors in seminars in order to sell to them. And he'd been running a fairly extensive test over the past year. Of big broad newspaper ads and direct mail to everybody in an area in particular zip codes of affluence versus targeting only people known to already own annuities. And the cost of putting the people in the room who already are known to own annuities is 3 times the cost of putting the others in the room. The net profit per seminar is double when you put the people who already own annuities in the room than when you put a big broad brush audience in the room. You have fewer of them. It costs you more to get them in the room, but the net profit per seminar is double. With 20/20 hindsight, of course, it's the simple principle of a buyer is a buyer is a buyer and a non-buyer is a non-buyer. So you can take the exact same salesperson with exactly the same skills and same presentation and same offer and same everything and put them in front of two very differently sourced prospects or groups of prospects and get two very different outcomes.

Yeah, and you know, you're right. I mean, I saw it exactly in the situation that you were talking about where Two different days, two different groups of people, one of them was the right who, the other one was not the right who, and an extraordinary result with the right who and a dismal result with the un-right who. And it's right, so, and many people don't think about this. They really look at, you know, let me just throw my message out there and sort of like, you know, see what sticks. It really makes a huge difference with sort of asking yourself in advance who that right who is. I'll tell you that in my own menswear stores, which again I was doing mostly face-to-face selling there, the who that I or one of my sales associates got in front of made a dramatic difference. Actually, now being out of the menswear business for 2 years and looking, you know, you always look back and you look at gee, what If I only knew then what I know today, what I would have done differently, I would have spent a lot more time on carefully attracting really the perfect who to that business. I'll tell you something else, Dan, that you'll find interesting. I was recently looking over the members of my BGS marketing system and I found an anomaly that I didn't realize existed until recently. Which are women owners of retail stores are much better members of my BGS marketing system than men are. And so that has now given me a whole sort of different perspective on lead generation to look at lists that only have women's first names as far as the owners and spend more money and go after them more deeply.

Well, that's right. It actually does several things for you. That kind of piece of information is extremely useful to people who will use it. Number one, as you say, it affects list selection. And so you now want to segment and you want to mail. It's not only the women retailers but You want to find as many of them as you possibly can to mail to. It affects how you spend money. You might FedEx them and mail the men. You might use an 8-step sequence with them and only invest in a 4-step sequence with the males. It suggests that you tweak your message all the way through, actually sending them different information in every one of the steps, female testimonials versus male testimonials, etc. And that kind of information exists in just about every business because every business, every sales situation has some sort of bias to it. And that may be a very different bias than what existed when you started BJS. We don't know because I don't keep track of that, but truth changes. Reality changes. So it needs to be watched all the time. That piece of information is extremely valuable.

I can assure you that bias has changed because if you recall when I first started BGS, I was only marketing to menswear retailers. To find a woman who owns a menswear store is very rare. But now that, you know, actually bigger niches for us are furniture and ladieswear than menswear. And there they're much more, you know, much more plentiful, especially in ladieswear obviously. And so, yes, so— and jewelry also I should mention. There's jewelry. There's a lot of women entrepreneurs. I just did an interview recently with a gal named Cindy Ritzy who has a— she's a Peak Performers member as well. She has a terrific jewelry store in Daytona Beach. Does a great job with her marketing. There are a lot of them in other genres of retail.

There's great false economy in not narrowing the focus to the best qualified prospects. Now that the cost of sale in most businesses is going up and having valuable customers who are most willing to spend is is even more important. This is an extremely important thing. Well, I'm just—

before we move to number 2, so again number 1 is the quality of the selection of the prospect, and before we move to number 2, I just want to make 2 other comments about it which sort of— one of them ties this whole thing together, which is this, that the result that you get at the end of your sales process is more important than who you are in front of them at the beginning. So this who thing is all about who you get in front of at the beginning which will significantly increase the result at the end. And then the last thing I want to say about this is that at next year's Superconference which is a ways away, the bonus day that we'll be doing on that Sunday at the end is exactly on this topic. It's really showing examples of how people have narrowly and cleverly have done good list selection and segmentation in order to increase response. So this is sort of like a little prelude into that extra day at the Superconference next year. So number 2 on our list of 8 control factors that you should write down, which is very, very closely linked to number 1, I should point out, and in many ways it's confusing to people how closely linked it is, but it's— but there is a significant separation from it. Is how relevant and appropriate what you are selling is to the prospect you have chosen. So, Dan, I'm going to ask you to start off with explaining sort of the difference between— what this is, number 1, and how this is sort of different than number 1.

Well, number 1 is sort of the precursor to it, right? Right. The more we know about who it is that we are going to sell to. I'm amused now when I talk to face-to-face salespeople, especially in business-to-business, who aren't bothering to even go Google their prospect before they go make a presentation to them. To do that, when I was doing face-to-face selling, you had to go to the library and you had to try and dig up something on your prospect. Now you can do it sitting in front of your computer. And people still don't do it. So whether it's one prospect or a group of prospects, as you say, one-on-many, the more you know about who they are now, the better you can implement this second factor, which is making your product, your service, your proof, your message very, very relevant to that particular person and their interests and their beliefs. Belief systems. It's why big broad brush advertising, mainstream print, broadcast, etc., is actually so hard to make work because the vast majority of the eyeballs seeing it, it's not relevant to. So there is massive waste in it. Every high-end magazine, upscale magazine I get has many, many, many full-page ads for very expensive expensive wristwatches in it. However, I don't like wearing wristwatches. I have no interest in a wristwatch. I'll probably never buy another wristwatch as long as I live. I've already got 2 I don't wear. So they are paying to reach me but their message is completely irrelevant to me and they have no way to even attempt to make it relevant to me, which is why targeted marketing and direct marketing is superior to mainstream. But you can in niche publications. There's an example, there's a great example of this in I think the August newsletter if I'm not mistaken where I show an ad for a vitamin product designed to improve your eyesight. And the ad runs in NRA, National Rifle Association magazines. And the ad is totally all about hunters and marksmanship. Being able to use a scope and shoot from a distance effectively. The answer to all that is this bottle of pills. Now, if they ran a generic ad for the same bottle of pills, they would be woefully ineffective. But because they've matched the ad to this particular reader and are in a media that gives them an opportunity to do so, relevance will create response where where ordinarily response would not occur at all. And so your job really, if you want efficiency and if you want real leverage from your marketing dollars, your job is to stop throwing mud against the wall and create little mini businesses within your business that each have different marketing messages. Directed at different people so that you achieve relevance. And again, extending all the way to the end of that process now when you are finally in the place where a buying decision is going to occur, be that a face-to-face sale, a telephone sale, filling out an order form, whatever, the closing percentage is automatically prices are going to go up because you've made whatever is being bought specifically for me, for the person buying it. So you're selling what appears to be a custom product or service rather than an off-the-shelf product or service.

As you were saying that, I was thinking of two examples of that that recently occurred to me. One of them was I wrote a sales letter for actually for a for a client of mine and he had 3 kind of very distinct groups of people that this sales letter— distinct but related groups of people that this sales letter was going to. But in each of the sales letters, I took the first third of the page and sort of spoke directly. So I developed 3 different versions of it when I did and the first third of the page was kind of directed to the group of people that that would be matched to who was going to be receiving this so that somebody would say that this is relevant to me. And then same exact thing yesterday, I was doing an hour consult with a member and she was telling me— she also identified in her list some biases and I told her exactly the same thing, is develop your sales letter for each different bias that you see in your list in order to speak directly to them. As you say, Dan, the person— the reaction that you want the person to get is that this is for me. I also— well, I think that we can actually— I think we've sort of nailed this one down. Let's move on to number 3. And number 3 is, again, I very much learned this first from you, Dan, is this whole pre-sales positioning. So it's sort of how you position yourself. And it's— I think we should start off by making sure that everybody understands that you do not want to sort of be positioned as a salesperson, but more as a person that's sort of like providing information to them almost as a consultant. Consultant to them, as an advisor, as somebody providing diagnostic information to them. What's really important about this is that this doesn't matter if you're selling a very specific type of unusual product or service or if you're selling something in the commodity business. I get this a lot from people that walk up to me at one of our live events and they pretty much say is, you know, I'm in the commodity business so I'm selling something everybody else is selling. So how do I sell it for prices higher than my competitors because you can just go online and you can sell this, you can get this for less online if I raise my prices. And my response always is to move them into this position which is they are no longer perceived to be just a seller of it but more of a trusted advisor/consultant. Consultant to it. Now there are other things that we do as well such as trying to move ourselves out of what looks like being a commodity business by bundling things in with it, etc. But this is sort of the first step to this which is moving yourself out of that. And that's why we teach Dan everybody should be really in the information marketing business because whether you're selling information or giving it away for free, it it positions you as this person, as being sort of diagnostic and this is this whole pre-sales type of thing. So, and this can often be done many ways. I mean, you could provide reports, CDs, you can— manuals, DVDs, webinars, teleseminars, I mean, on and on and on and on and on and I guess, Dan, what I would like I want you to talk about is one of the things that you're really credited for as far as this whole pre-sales positioning, which you've done for many of your clients. I first saw it with Craig Proctor when you did it for him, which is sort of the shock and awe box. After that, I know you've done it for Miracle Ear because I was involved with you on that and Dentistry for the Diabetic. Diabetics and Dr. Tom Jacks for weight loss. And so that's the whole prepositioning thing. So can you talk a little bit about that and certainly anything else you want to mention about this?

Yeah, I mean, I think first of all I get the same thing, by the way, of the low begotten soul who, you know, my business is different and the worst thing is that the difference is I'm in a commodity business. Anybody and everybody can get what I sell 500 different places, etc., etc. The first thing they don't get is that in truth just about everybody is in a commodity business. I mean, if you decide to go get financial planning today, open a newspaper and a phone book. I mean, everybody is in the financial planning business from the bank where you are going to make your deposit on up. So why does somebody get to charge fees and somebody else doesn't get to charge fees? Why does somebody get to have fee minimums and somebody else doesn't? So really everybody is in that position until they effectively take themselves out of that position. And so presale positioning, there is the issue of what the positioning ought to be and then there is the issue of what tools you use. To create it. And the positioning, you know, the only thing you sort of left out, I mean, the positioning choices are doctor, diagnostic person determining what somebody's needs are and then prescribing, expert, credible expert, authority figure, trusted advisor, and celebrity. That's the only one you left out. And of course the utopian position is some combination of all of those things and in many instances celebrity really has a lot more leverage to it than does credibility. But you want to put all that together in such a way that again the closing effectiveness goes up because the person now does not question your prescription, your recommendations, your expertise. They are prone to do what you tell them to do and they don't attempt to negotiate fees or price for fear that you won't accept them at all. So part of that presales positioning is They have to be convinced in advance that they are going to be damn lucky if they are even able to get to do business with you so that they are not questioning you or attempting to negotiate price. Once you determine what that position is you want to achieve, then you start to look at all of the various and sundry tools that you might use. To achieve that in prospects' minds. That may be authoring a book. It may be going and paying a much bigger name credible expert or celebrity than you are to co-author a book with you. It may be lecturing. It may be all sorts of things. Certainly an important set of tools is what gets put into the hands of the prospect between the time that they step forward and raise their hands and identify themselves as a prospect and the time that the actual sales presentation leading up to a close occurs. In a walk-in environment, for example, that may be the DVD that they have to go into the nice room sit down with a cup of coffee and watch for 20 minutes before they get to a salesperson. In most environments, including the ones you mentioned, where leads are being generated and there is some period of delay between them raising their hand and either a sales professional being face-to-face with them in their home or place of business or them being brought into a showroom or store. An office of professional practice, then what gets sent to them, what gets delivered to them can be engineered to do a lot of this heavy lifting to create the positioning that discourages questioning and doubt and negotiation and delay and encourages acceptance. One of those tools is what I've taken, as you said, to calling a shock and awe package. It goes back many, many, many years. The first time I ever saw a primitive but highly effective version of it, a contrarian version, was in the speaking business. At the time, pretty much everybody if they got an inquiry from a meeting planner, from a prospective client, they sent them a fancy full-color brochure, maybe a page of testimonials and an audio cassette or a video cassette, a demo tape if you will. And if they had a book, they put a book in it, in the package. And a guy by the name of Larry Jones Larry Dolan, who 80% of everybody that inquired booked him. What he was sending out was the cardboard box that you get 500 envelopes in from your printer or from the office supply store. So somebody would call and inquire about having Larry come speak, and one of these boxes filled with Xerox copies—it holds about 500 pages—Xerox copies of Larry's with the first few on top picked to be relevant to that prospect. So if it was an association of manufacturers, he made sure the first few testimonials were from other associations of manufacturers. If it was an association of salespeople, he made sure the first few were related to salespeople. The rest of the box was the same. He would wrap it with ugly duct tape and stick a handwritten label on it and FedEx it to him. That was his shock and awe package. In all the years I knew him, he never had a demo tape, he never had a color brochure, he never had anything. But his theory, which I think was correct, not that anybody sat and read all 500 of those letters, in fact they probably only read the first few, but the fact that it was completely different than everything else everybody was sending them and that in sheer bulk and late being dropped on the desk, it had impact. And the fact that it was sent FedEx had impact. I've done these over the years. One of the ones people have seen was for Paul Johnson's Shed Shop selling backyard sheds. And so pretty much everybody, if they sent out anything, they sent out a price list and maybe a one page with some photos of the different sheds on it. And of course our package included a videotape, now a DVD, made in infomercial style of happy shed owners in their natural habitats showing off their sheds and telling how they use them, and at least one crying emotionally about the experience, a book of 102 stories by shed shop owners of how they use their garage ads, a whole packet of information, so much more than what anybody else was sending them and different in orientation than what anybody else was sending them. Therefore, he was able to sell at higher prices than anybody else, significantly, and purely by switching this method, go from about a 30% first call close to an 80% first call close. Getting all the way to improving closing percentages. In some businesses, they are much more elaborate and fancy. In other businesses, they are not. But the idea is to gain attention, to make people pay attention to them because of their elaborateness, their bulk, and their means of delivery, and then to structure their content to do all this positioning so that by the time the prospect now takes the next step that is requested of them, be that inviting the sales professional into their home or office, going to the salesperson's office or showroom, the doctor's office, the clinic, coming on to a teleseminar or a webinar, coming to a telephone appointment with the salesperson, whatever it is that what they do next, all that prepositioning has been done so that this person is as close to predetermined to buying as you can get them. He is very unlikely to question or challenge your status, your authority, your prescriptions, your recommendations, or your price. Now, in the speaking business, the opposite of Larry Dolan's shock and awe box was Nito Cubanes, who most of the people on the call will be familiar with, Nito. And he went over the years from one brochure to a large, very fancy box about the size maybe of like a Monopoly game but deeper with die-cut innards that contained his hardcover books and his DVD and his testimonial letters and The impact of this thing versus the usual brochure arriving on a desk. I mean, it actually was so big it would be work to discard it, and you felt guilty doing anything but paying attention to it. So it got past the first objective, which was gaining attention, especially in clutter. And then its contents were engineered to do all this prepositioning so that you your recommendations are accepted and not challenged. In my own case, I probably haven't in 30 years had 10 people try to negotiate fees. And that's really not because I'm such a good closer. In fact, my argument often in professional selling situations is that if you have to close, you've screwed up everything prior to the close. They should really closing you on why you should accept them. You shouldn't have to be closing them. I really have to do it and it's not because I'm such a great salesperson. It's because I've done such a good job at the prepositioning.

What's interesting is as I'm listening to you is you think of the Dolan example and also the Nido Kabe example for speakers. I get oftentimes speakers that hear about our events and they send me information. And very few people, if any, are using those approaches. Most of them are still using the pretty fancy brochure approach. As a matter of fact, you forwarded me one in the FedEx that you sent me recently with the exact same thing using the real fancy, you know—

Yeah, he made two mistakes actually. Two mistakes. Number two, he didn't make it relevant to us. He sent the same generic stuff he sends to everybody.

Yeah, and it was very boilerplate. Boilerplate. I'm sure the letter that came with it is just a boilerplate letter that comes out with it. The other thing I want to mention is, as far as the prepositioning, the other thing that he did a great job with is if you recall, he shows up speaking, handing over a DVD to play before he goes up on stage that also further prepositioned him as being a real expert in his field as opposed to what all the other speakers do, which is just go up on the stage and hope that they get a tremendous introduction from the host. Let's move on to number 4, which is the belief or disbelief that the prospect has about your assertions. I think that a couple couple things about this is number one is this also speaks to the credibility issue. So the credibility you've established can oftentimes significantly affect that belief or the disbelief about you. And also, you know, this should also be oftentimes— this should also be worked in throughout the entire content the same as number 3 is about pre-sales positioning should be worked into the content. This should also be worked into the content. And so this is really kind of about— before I ask Dan to expand on this, this is really kind of about whether or not they trust you, your trustworthiness, or whether they believe what you're saying is truthful. And so, Dan, you want to first comment about that, and then I'll give a couple of ways that— the most common ways that I see people being able to apply this in their sales presentations?

Yeah, I think again, first of all, if anybody has an unsatisfactory closing percentage or finds closing sales difficult, it tells you that you haven't been believed along the way and so the answer is not necessarily a harder a cleverer close or adding 5 bonuses to the close. The answer is to go back and take a look at where the points are all the way through from the very first time somebody raises their hand all the way through a presentation. Where the points are that you are asking them to accept something as truth, to accept something as fact and how well you framing it and setting it up so that they will believe it. In the encyclopedia business, I knew very well for a number of years the vice president at World Book for their direct sales force when people used to go into the homes and sell encyclopedias face-to-face. He went out of his way to recruit school teachers. To be salespeople because as soon as they identified themselves as a schoolteacher, they would be more likely to be believed about the assertions they made about the importance of having an encyclopedia in the home. And so they actually weren't the best natural salespeople in the world and it took more effort to turn them into decent salespeople, but they had this advantage. And even when there are obvious reasons not to believe somebody, a lot of people will remember when Victor Kiam bought Remington and he was one of the early CEO commercial spokespersons. Iacocca did it with Chrysler, which a lot of people are familiar with that, but Victor's Remington commercial was, I like "I like this shaver so much I bought the company." The truth, of course, is I own the company so I have to like the shaver. I bought the company so I have to like it. Obviously, I want you to buy it. By framing it as, "I like the shaver so much I bought the company," the disclosure, the normal disclaimer of, "Well, you really can't believe what this guy says because of course he is going to tell me it is the best shaver in the world." He owns the fact. He's turned it into a reason to believe him. I have language I use with celebrity endorsers that I got years ago from an insurance company where you have to disclose that the person is compensated. I actually used a copy from Miracle-Ear with Linkletter where it says the person is person essentially says, "I'm so impressed with this product, this company, what a great job these people do that I agreed to be their compensated endorser and I want to tell you." Now you've turned the disclaimer into a reason to believe this person. So I try and go all the way through the sales case being built and identify the points points where we are asking someone to accept now a new fact, a new truth. And those are all building blocks that lead to the willingness now to buy the product or the service. And make sure that to whatever extent is possible, we are making the person— making that assertion and the assertion itself connected in a believable way.

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