Sales to Date: $1,118.86
I’m a tech guy at heart. I love the idea of endlessly panning for gold in the optimization stream, using scientific method to split test product pages and using tools to recover abandoned carts. Many people in the conversion field will talk until they are blue in the face on how to build the “perfect” site.
The truth is though, is that there’s one little trick that has the potential to blow up your conversions and bottom line more than your ecommerce platform or button color.
That simple answer: learning how to pick up the phone.
On my previous post for Day 5, my sales to date were $155. While there’s been a few days that have passed, the sales to date for Day 6 is a full $1,000 more and I owe it all to closing phone sales.
Ecommerce store owners that I’ve met generally fall into one of two types: those that love sales and those who hate it. Some people hate sales because they want to run a “clean” business of simply taking orders and never having to deal with customers. The reality is that unless you have a 100% full proof product and your shipping provider never makes a mistake, you’re going to be dealing with customers anyways. While it’s easy to shoot an email through a ticketing system with a fire and forget mentality, my opinion is that it’s just as easy to call someone up over the phone.
Try to think when was the last time you were actually called up by a company and given top rate service? Short of reserving a room at a five star hotel, it’s rare to get a high level of service to help you resolve an issue. Most companies look at customer service as a cost center, but a handful of forward thinking companies think of support as a chance for brand building. When you are treated well, you will definitely remember how you were treated and how that company made you feel. Word of mouth is a very powerful thing, especially if your market is in a tight knit community.
One perfect example of a service oriented brand is REI, an outdoor equipment company that sells clothing, shoes, gear and other active equipment. What makes REI special is their amazing return policy, helpful and knowledgeable staff, sponsoring of outdoor enthusiasts and a strong following in the climbing and hiking community. In return, many REI customers are incredibly loyal and will eventually spend thousands of dollars because the company treats them well in their eyes. This works well for REI because the nature of their product is a hobby or lifestyle, which means it’s important to generate word of mouth and recurring revenue from their existing base. Do you think REI makes sure their customers can reach them by phone?
Not only can you reach REI by phone, but they are open from 4AM to 11PM PST. That means you could be shopping past midnight on the East coast, decide you want some gore tex boots and be able to talk to a sales person. Is this sales person going to be an expert? Maybe, maybe not, but they’re certainly not going to be the slouch that is just running through a script. Again, companies would love to provide superior service (and sales) when possible, but it’s hard to hire the right talent.
When you’re the one in charge of the store, you are the talent! There should be no one more knowledgeable at your product, more enthusiastic or more willing to talk about it other than yourself. This is why Mike and I always believe that passion is such a key part of figuring what niche you should get into. You might not have to be the best at it or make it into a hobby, but you should be motivated enough to become an expert in the subject and talk about it with ease.
Lesson 17: Have passion in what you’re selling.
When Mike and I were running Treadmill.com, both of us enjoyed exercising and generally led healthy lifestyles, but we weren’t running marathons or using the highest end treadmill ourselves. But we had enough of an interested that we could talk about the different motors, belt material, roller sizes and other major factors in treadmills that an enthusiast would want to know about. You want to know the reality though? Most people that called didn’t want to know the difference between a DC or AC motor and the benefits of a two-ply vs single ply belt. The reason they called usually fell into the following:
- Wanted to talk to a human. It’s a big purchase and it’s not unusual to want to make sure they were dealing with a real company.
- Wanted a real life sales experience, with advice from an expert that would walk them through their options
- Needed to get specific information that wasn’t available on the website
- Had trouble ordering online. This happens far more than you would expect, especially with the older population that didn’t grow up with computers.
- Negotiators that were looking to get a better deal by calling in person
It’s important to have a model in your head of the type of customers that contact you, because you want to help facilitate their needs. Every good sales person knows that identifying what the customer needs is at the forefront of your conversation. A bad sales pitch is about forcing on the customer what you want them to buy. These pressure tactics might work for one-off sales, but they hardly generate any goodwill or brand loyalty moving forward. Certainly not recurring sales, which is the lifeblood of just about every ecommerce company.
In a sign of the times, many ecommerce companies are willing to take a loss on their first customer just to get them in the door. The logic is that if the lifetime value of a customer is going to be many multiples of their first order, then it’s worth it to get them to “try out” the store. Groupon operates on this same model, in that they give restaurants, retail and other services the ability to market to a large audience in order to make money on the recurring revenue. Some operators are able to make money even with major discounts, but most companies can’t absorb a customer acquisition cost that is 75% of the total sale.
Taking a step back, what it all comes down to is building rapport with a customer. Most customers will only be able to experience a building of trust by committing to a sale, but by actually talking to them on the phone, you can establish that level of trust before they complete a sale. This opportunity is rare, so you should always relish the opportunity to connect with a customer.
Lesson 18: Establishing trust is one, if not the most important factor in getting customers to buy.
The only exception that I can think of to not caring about phone sales is if your business is a high volume, low margin business that would eat up a lot of your time. Your time is still extremely valuable at the end of the day because you are either running your business or building your business. If you’re early in your start-up and you’re not spending enough time building your business because you’re too busy running it, then that’s when you need to step back and get some help or prioritize.
Are you a fan of answering store calls? What’s the best sale you’ve ever made because you picked up the phone? Let us know!
This post is part of How to Run a Chop Shop, a real life blog series on attempting to turn around a struggling ecommerce store into a profitable online business in 365 days.