Operations

Increasing Sales Without Increasing Advertising Dollars

Posted on January 1, 2001 by LCT Staff - Also by this author

The telephone is the lifeblood of most limousine operators. It is what generates new business and solidifies sales. The way a company conducts business on the telephone can maintain the status quo, or propel it into a profit-generating success. Charles Tenney & Associates has been conducting telephone-sales surveys for years. The results are usually devastating to the limousine operators who assumed they were closing 30 to 50 percent of all inquiry calls. However, the fact is that the national average closing percentage of inquiry calls is only 9 percent.

We have given our telephone surveys to 50 car companies nationwide. The answer is always the same 9 percent. This means that operators lose nine out of every 10 possible sales. So why does this happen? First, most operators tend to follow the crowd in selling price, according to how great their fleet is. Secondly, most operators do not make a professional presentation. Often, they spend little or no time learning what the prospect wants. Most of the telephone conversation is focused on trying to convince the prospect that he or she should choose that particular operator. Third, there is little, if any, follow-up effort to close inquiry calls. Finally, there is no score kept on how effective the individual sales person is, or how effective the company is at closing inquiry calls.

Several operators over the years have argued with me that their prospective customers will not allow time for them to make a presentation. However, most of these operators had the wrong idea about what a professional presentation is. Matt Harrison is an operator in New Jersey who was very vocal about what customers allow him to do. “People are actually thanking us for listening and helping them with their transportation needs,” he says. Many operators in this country spend large amounts of money on advertising, but get less than cost-effective sales results. This is because they do not handle the inquiry calls correctly.

A New Jersey operator called me complaining about how poorly his yellow-page ads attracted business. He measured the yellow-page effectiveness by how many sales he closed. As we researched the company’s sales activities, it became apparent that the yellow-page ads were doing the job. The company got many calls each day directly from the yellow pages. It was the business owner who was not doing the job. He had inexperienced people answering the phones. They had not been given any training, nor were they managed, coached or monitored in any way.

We have reviewed similar results from direct mail and other forms of advertising. The answer to increasing sales is often tied to increasing your ability to close more inquiry calls. The chart below examines how selling more effectively can stretch advertising dollars. Many limousine companies can add approximately $54,600 annually by using existing advertising to sell one more trip each day. Adding one or two additional reservations per day equaling $54,000 to $108,000 annually is not as difficult as you might first think. If you have the inquiry calls already coming in, it is just a matter of doing a better job selling. If an operator instituted the six steps listed on the chart found on this page, he or she could see sales closings and revenues increase in only a few weeks. You should perform a survey to determine the number of inquiry calls you receive, and compare that to the number of calls you actually close. Very few operators are motivated to do anything unless they first recognize the need for change. We ask our clients the same questions we asked you at the beginning of this article. The answers received and the survey results are always dramatically different. Most operators have a way of over-estimating the number of inquiry calls they receive and over-estimating the number of inquiry calls they actually close. I don’t know how you answered the questions at the beginning of this article, but you will probably not improve sales unless you investigate the true sales situation within your company.

Finally, try not to have the ego that most entrepreneurs do: “We don’t want to admit that we sell only one out of 10 calls.” A survey is the only course to bring the typical operator to action. In addition, the survey works to get the sales team to buy into new sales efforts. Unless your staff members see survey results, they will resist and even deny the need for change.

If you want to get anything accomplished, you must give someone the responsibility for the task. This holds true with sales. The limousine operator must give an individual the responsibility to sell, and must indicate expected results. This holds true if you have one sales person or a dozen. A supervisor must accept responsibility for the sales team, and each sales person must meet individual expectations.

Each individual prospect who calls your company has already decided whether to spend money on chauffeured transportation. Our job, as sales people, is to convince prospects to spend money with our company. Unfortunately, most limousine companies do a poor job of getting the money. A professional sales presentation will go a long way toward getting the money. Call 10 competitors in your area, and evaluate their sales professionalism. How do you compare? A professional sales presentation should include:

For the entire story, check out the January 2001 issue of LCT!

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