The idea of selling can be daunting. And it is! The business environment has evolved significantly in the past decades that consumers now have more choices (that means competition for the entrepreneur).
Many home-based entrepreneurs fail in their ventures because they are not able to execute and implement their vision. You may know what business to start, how to gather the resources you need; but if you don’t know how to sell, then you might as well close your business (unless you have the money to hire a sales person). As much as you dread of prospect of selling, your business needs customers, without which you are doomed.
Jeffrey Fox, in his book “How to Become a Rainmaker: The Rules for Getting and Keeping Customers and Clients” offers simple instructions on winning clients for your business, or as he calls it, how to become the “rainmaker.” Fox defines a rainmaker as “a person who brings revenue to an organization, be it for profit or not-for-profit.” They could be the owner or partner in a small business, or the CEO or sales manager of a large organization. If you are a one-person business, your goal is to become a rainmaker and bring in new business to your business..
According to Fox, “the most important success factor in any business or organization is having a customer.” A customer brings money to the business – whether to pay the bills and salaries, buy inventory or keep the business well oiled. For him, customers are more important than “the business idea, the products, the machinery, the buildings, the financing or the people.” Given the benefits customers bring to the business, your goal as an entrepreneur should be to find customers and keep them.
The book is so easy to read you can finish it in one sitting. Fox offers 50 tips (one tip per chapter) that will guide you in getting and keeping the customer. Each chapter focuses on one aspect of becoming a rainmaker and contains 2-3 pages each. Short and an easy read, the book is full of practical tips that are strongly grounded in wit and common sense. Some of his tips include:
- Obey marketing’s first commandment: treat each customer as you would treat yourself.
- Appointments with decision-makers are rare events. Hence, it is essential to do adequate “precall planning” when making your first call on a new customer and when making the last call. You need to be prepared and confident when you make that sales call.
- Don’t drink coffee on a sales call! You have to maximize time and concentrate in your objective. Do not waste precious minutes getting the coffee, stirring the cream and drinking it. Worse, it could spill and distract you and your prospect.
- You’re not at lunch to eat lunch. Wherever the business meeting is being held – in the golf course, restaurant or cocktail party – you are there solely to do one thing: do business.
- Customers buy for only two reasons: to feel good or solve a problem. You must therefore help the customer see the money by turning benefits into dollars. This is the concept of “dollarization.”
“Dollarization” is the concept continuously emphasized by Fox in the book. Dollarization is “figuring out – in dollars and cents – what each product is worth to the customer. In order to win a customer, you must be able to tell him or her the exact benefits of your products or services, relative to your competitor. Why will a customer use your business instead of your competitor, especially if you are charging a higher price?
Fox cites the example of two paints: Brand A is $10/gallon, while Brand B is $18/gallon. While Brand A has the lower price, Brand B has more pigment and will require one less coat of paint than Brand A. If your product is Brand B, how are you going to convince customers that your more expensive product is the better choice? The key is to quantify to your customers the true costs of each product!
Rainmakers do not sell the product or service; rather they sell the value of the product through dollarization. Hence, as a Rainmaker, you sell money! You may say that your product or service is “longer lasting,” “superior quality,” “excellent customer service,” or “more efficient”; but you must help the customer understand the value of your claims. Particularly if you are fighting a price war, you must be able to translate “faster service” into dollars and cents to attract new business and retain your existing customer base.
Assuming that you are selling gaskets to seal an engine component priced at $1.00 each. Your competitor sells them for $0.92 each, but your products are “more reliable.” As a result of a different design, your product fails eight times less often per thousand gaskets than the competition. When the gasket fails, it results to a warranty claim of $25.00 to fix.
How to Figure Out What Each Product is Worth to a Customer
Using the above example, Fox illustrates six basic steps to follow in a product’s dollarization:
1. Determine the competition.
Know other ways your customer can get the kind of product or service that you offer. Find out as much as you can, including price and benefits they are offering. In this example, you know that your supplier sells their gaskets for $0.92 each.
2. State your benefit.
List down all the reasons why the customer should do business with you, e.g. your product is “more reliable.”
3. Quantify the benefit.
Determine how much the benefit actually translates to when you talk in monetary terms. In the example, what does being “more reliable” mean? By using your gasket, the customer faces eight fewer guarantee claims per thousands of products sold. Think of it in terms of the savings a customer can get in using your product or services.
4. Dollarize the benefit.
Now, compute how much the benefits translate into dollar value. In the example, you save on warranty cost, which is derived by the number of warranty claims avoided multiplied by the cost per claim.
Warranty claims avoided x Cost per claims = Warranty Cost Saved
8 x $25 = $200
5. Express the total dollarized benefit in “per unit” terms.
The example showed the savings per thousands of products sold. Bring those savings down to each unit purchased. Divide the total amount of savings by the number of units to get savings per unit.
Total Savings / Number of Units = Savings per unit
$200 / 1,000 = $0.20
6. Demonstrate the true net cost of your product.
From the calculations above, show to your customer the true net cost (or true price) of your product given the monetary value of the benefits that you provide. Calculate your true price by deducting the savings per unit from your price.
Your Price – Savings per Unit = Your True Price
$1.00 – $0.20 = $0.80
However, one can argue that Fox’s sales tips are so basic that you would intuitively know them without even reading the book. Nevertheless, it is always a good idea to get a “refresher course” if only to sharpen your knowledge and maybe, pick up new ideas along the way. The value of this book to you will depend on how much training and common sense you already have. Most of all, like any how-to books, you need to apply Fox’s techniques and principles in order to get maximum value out of the book.
Recommended Books on How to Get and Keep Customers and Clients:
- 151 Quick Ideas to Get New Customers
- Ultimate Guide to Building Your Business Online: Fastest Way Ever To Get Results, Get Customers and Crush Your Competition
- How Your Small Local Business Can Get More Customers On The Internet
- Winning the Customer: Turn Consumers into Fans and Get Them to Spend More
- The Reluctant Writer’s Guide to Creating Powerful Marketing Materials: 61 Easy Ideas to Attract Prospects and Get More Customers
- 101 Ways to Get More Customers Online and Offline for Under $100
- Managing Retail Price-Point and Margin Pressures
- How to Select a Color Laser Printer for Your Home Office
- Value-Based Pricing Strategy for Your Business
- Price Perception: The Psychology of Pricing
- 15 Pricing Tips for the Small Business Entrepreneur