In the west more often than not you would see restaurants and a lot of convenience stores and delis tape 10- and 20-dollar bills near the cash register. This is usually done to commemorate their first sale.
In this article, we will discuss why that first sale is important for small businesses.
The first purchase a new customer makes with you is the most important transaction you’re going to have with them. So much is riding on its success. If your customer’s first purchasing experience meets or surpasses their expectations, they are likely to make subsequent purchases. And then further purchases, all the while developing an ongoing customer relationship. If their first experience is less than ideal, they won’t be coming back anytime soon.
It all starts with being there for that first sale.
Certain words bring to mind the idea of business. Customers, products, and the keyword of ‘sales’ are all words that make you instantly think of the business. The idea of sales is almost synonymous with business. For some companies, it is what drives their business in the first place. Their product is sales. Other companies use sales only when needed to boost their client reach and company production. Each company handles sales differently and has its own unique methods for how they look and approach sales. We asked a few entrepreneurs for their input on how they view the importance of a steady sales team.
From a customer’s perspective, their first purchase is a difficult moment. They are not sure if they can trust you. They are not sure if your product will suit their needs and they are not sure how their friends will react. In short – they are not sure. Sometimes they’ll even ditch the planned purchase entirely because there’s too much fear. Other times the purchase is deferred again and again.
And then, finally, the customer strikes up the courage in their busy schedules to either give you a call, send you an email or drop by. This is your opportunity to shine. This is your opportunity to show them that your small business can save the World.
After a brief pleasantry, do you put your foot in it by giving a negative response like:
‘Sorry, we’re about to close’; ‘We’re out of that product’; ‘Susan’s not in at the moment, she’ll be back next week’; ‘Nah, we don’t do that, sorry.’.
Ouch! Imagine that. The first experience your potential customer has with you is negative. You’ve indicated that you can’t help them.
Your potential customer retreats with their tail between their legs and looks for another solution. Not knowing that you could have actually helped if you tried a bit harder.
Companies that make sure their reception staff are absolutely right for their particular company are already one step ahead of the competition.
The first sale is especially important for high loyalty service businesses such as health professionals, hairdressers, mechanics and tradesmen. If these professionals have good skills, comparable rates and good procedures, there’s a better than evens chance that every first purchase can blossom into an enduring customer relationship.
Knowing this, it’s a matter of welcoming the first purchase – even if it means bending over backwards. Even if it means working a bit later, making a few phone calls or sourcing a new product. Think of this as an investment in securing a long-term customer relationship. The first sale isn’t one monetary transaction. It’s the chance to earn the right to a long-term relationship which could bring in thousands of dollars over the coming years. Perhaps decades.
Sales can be seen as a measure of how well your business is or isn’t doing. For business strategist John Mulry, he uses sales as a benchmark for business success. “Sales in business, at the end of the day is one of the key benchmarks for business success. It doesn’t matter if your business creates 1 job or a thousand, if it uses the shiniest new technology or if it has more apps than an android market, if your business isn’t generating sales your dead in the water. In an age where there’s a new wave of nonsensical metrics that business owners are bombarded with i.e. likes, fans, retweets, shares and engagement to name a few, none of these matter. The only things that matter are: Are you generating leads? Are you making sales? And what’s next? You need marketing for the first, SALES strategy for the second and a plan and strategy for growth.”
Another way to look at sales is to make sure not to put all your emphasis on it. Former Google employee Eric Kami, now of Sockscribe.Me, warns against building a business solely on sales. “I think building a business on sales only is a huge mistake. The metric a business should be optimizing for is the customer value of a lifetime. Depending on the type of business you operate there are numerous ways to measure this. What it comes down to are some fundamental questions: 1) Are there any behaviour traits your top spending customers have in common?). Once you figure this out then create marketing efforts to capture look alike people. 2) What can you do to change new customers to high spending ones? It’s important to test to see what works best here.”
In the truest sense sales is about making money. Katie Donovan of Equal Pay Negotiations sees sales in a true form but also a measure of success for various parts of your business. “To me sales (the exchange of money) are important for two reasons. Firstly, sales is a key means to money and money is the fuel that keeps a business going. Without money the business would cease to exist. Secondly, sales indicates if your company has purpose by addressing a need. No sale means that something is wrong. Either your product or service does not meet a need, or your marketing is not promoting the product/service correctly, or the sales process should be adjusted, or….the list can go on and on. The sales team is important because they are the feet on the ground who are ensuring money is coming in to fuel the organization on a daily basis. They can see what is and is not working long before it is reported on a monthly basis up the chain of command and they can adjust to improve situations on an ad hoc basis. It is the sales team that will understand the product/service gets more interest for a unrecognized need. It is the sales team that will understand that the target market is off by just a hair when repeatedly seeing the supposed decision makers defer to others. It is the sales team that sees that a small product feature change can open up a whole new market. They are your informal market and product development research team before you decide to follow their hunch and truly research some new ideas.”
Business owners and entrepreneurs will always have a unique view on sales. There will debates about what level of prominence sales has in a business and how much emphasis there should be on the team. Business owners will also constantly strive to make sure things are even in their company. Whether you see sales as the highest of the high or just a regular part of business, there is no denying the importance sales has on your business.
Second Sale is More Important Than the First
There’s this three-visit strategy in the restaurant business. If you can get a person to return a second time, the chances are about forty-two-percent they’ll return a third. But if you can get a third visit, the odds you get a customer for a fourth visit are something close to seventy-percent. Then, you’ve got a customer for life.
The restaurant business is cutthroat. These folks know if they want to stay open beyond the first year, they’ve got to earn repeat customers. Smart restaurants care about the second sale.
Why should care about the second sale more than the first:
The first sale is easy. Anyone can sell something to one person, once. You can trick a customer into a buying decision. You can give a ridiculous, money-losing discount to make the first sale. You can pay for a ton of advertising to make one sale.
To establish a buying relationship, however, is a different animal. Whether you own a restaurant, you write books, or you paint walls — the longevity of your business relies on the second sale… and the third.
You don’t have to abuse a customer to make the second and third sale. We like buying stuff. We bought stuff from you. This means we voted with our wallets — the strongest vote for any business.
Instead, we give a soft ask on a frequent basis.
We provide quality, valuable, entertaining content for free. We remind our customers we’re still here to serve them — better than any other choice in our market — and if they like what they see, here’s a little something they might be interested in.
There’s a tired sales slogan that goes, “we love to buy, but we hate being sold.”
Don’t hard-sell your customers. Instead, give them great reasons to return. Don’t spend all your time worrying about the first sale. Put all the brain matter to work on earning the second and forth.
Train your customers to buy from you.
Don’t wait too long to make the second sale. We’ll forget why we did business with you to begin with. We get used to the way you communicate with us. If there’s a small ask at the bottom of every email you send, we’ll accept that.
If you never ask for a sale, and a year later you make us a big offer, the rare offer may seem off-putting.
Don’t be afraid to ask. Give us a great reason to stay in your tribe and we’ll let you pitch us all day long. It can take more than 30–40 touches for us to make a buying decision. The old rule of seven touches is long-over. There’s too much noise in the marketplace.
The entrepreneurs who refuse to quit asking are the ones who will be rewarded with the fourth visit.
You need to get new customers and keep old customers, simultaneously. The old customers are the ones who really believe in you. They get special treatment.
Yes, we should give special offers to get new customers in the door, but never at the expense of keeping a loyal customer. The new customer might pay for your lunch, but the loyal customer pays your mortgage.
Look for young, innovative customers
Many larger, established companies have long-standing relationships with their suppliers – and selling to them as a start-up can sometimes present roadblocks that make closing that first sale more difficult than it needs to be. Consider going after young companies that are more open to innovation and change.
Focus on early adopters
Nurturing relationships with potential early adopters should be a high priority. Early adopters are crucial to your business success – they don’t rely on testimonials to make a commitment, and they understand the growing pains that accompany working with a startup. These ideal customers are keen on your company’s success and more than willing to jump on board early.
Know when to walk away
Focus on those prospects that have very specific pain points that align with your company’s product. If a potential customer expects your product to solve more than the key issues you’ve promised to address, consider that this relationship might not be the best fit at the current time – and be prepared to move on.
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