This is a summary of a one hour ($500) phone consultation with an insurance salesman that wanted to up his closing ratio. After talking to him for a few minutes, I realized that his problem wasn’t closing better, but talking to better qualified clients. We talked about Highly Likely Buyers and where to find them. There are several sources we didn’t discuss; direct mail leads, online marketing, cold calling, social selling…but I wanted to give him the very best sources for new sales. Here they are.
Current customers. In almost every instance where I have talked to a sales rep (in various industries) I found that they didn’t talk to their current clients/customers about buying new product or increasing their current coverage (in the case of insurance). I asked my sales client if he had ever found that his clients bought life insurance from another agent, between his visits/calls. Of course they had. We went over the many reasons someone would increase their insurance coverage or buy new policies; new birth, marriage, increase in income, buying a new home, and many opportunities for business sales.
And most reps in other businesses talk to their customer base far too seldom. And if the customer is contacted, it’s a Birthday card, a Christmas card, or some other automatic mailing…but no real offer to buy more. For example, I own 4 high dollar life insurance policies on myself and my wife. Yep, you guessed it, they were all bought from different agents….agents that had cold called me at a time I was thinking of adding to my coverage. Had any of the first three agents kept in contact with me..by phone or in person…they would have got the additional business with almost no effort on their part. And…my phone consulting client didn’t even ask me about my life insurance. Too bad.
When I sold vacuum cleaners in people’s homes, for 35 years, it took me a couple of decades before it dawned on me to go back to the people who already bought from me..with a new model of vacuum cleaner. When it finally occurred to me, I started calling customers who bought 3 years ago, and offered a free in home tune up and inspection of the vacuum they bought from me. After running through the names of people who bought from me 3,4,5,6,7 years ago, I found that the average person bought a new “Lifetime high quality expensive vacuum cleaner” about every five and a half years. They just weren’t buying them from me…because I wasn’t calling on them. I literally could have spent most of my last 25 years selling in peoples homes….just seeing people who already bought from me. I also found out that if I called customers that bought ten years ago or before…most of them had moved, their contact information was wrong, and they had already bought once or twice after me. Sure, I still made a few sales to them…if they remembered me…but the longer I waited to see them again, the less valuable the contact, the less likely to buy from me.
Now, why are these past customers so very valuable? They are the most valuable leads you can possibly see. They are used to seeing you. They like and trust you, which makes the sales process faster. And they are in the habit of buying from you. they are buyers. You cannot find a more Highly Likely Buyer. I know a very successful life insurance agent that has 300 clients. And that’s all he sees. He never calls anyone cold. All his sales are from existing clients, and their naturally extending family from births and marriages.
The second best source of leads is referrals from your current customers. I don’t get referrals from people who didn’t buy from me. My book on Sales Prospecting goes into detail about the approach, introductions, and language used to get high quality referrals. But the end result is you have new people that are willing to talk to you, know someone who they trust who recommended you, and they have heard (nearly always ) all about what you sell including the price paid…..there is quite a lot of bragging from your customer to their referral before you ever talk to the referral.
My own personal experience with referrals from my customers is that, of the ones that agree to see me, 80% buy on the first call (I don’t make call backs). This is about the same percentage that buys from me if they are a past buyer of 5 years ago.
And now we are going to talk about the third most profitable lead…one that almost nobody ever calls on. Other People’s Buyers. By that, I mean clients of other salespeople in your own business that have quit or were fired. They don’t have to be with the same company as you, but they should sell the same type of product. Why are these contacts so valuable? They are buyers. They have proven that they were willing to see someone who sells in the same media/approach you do. They are used to buying what you sell. They have proven that. These people have also proven that they are qualified to buy, they buy, and they are extremely likely to buy what you sell again.
It took me 22 years of selling to figure this out. I visited a friend that sold vacuum cleaners in people’s homes…and he was complaining about having to service his large number of customers. This is after I discovered that the average high end vacuum cleaner buyer, bought a new one every 5 1/2 years, on average. I offered to contact all his old customers, who bought over 4 years ago, and offer them a free in home inspection and “vacuum cleaner tune up”. He readily agreed and gave me the list. It was about 1,000 names. These were people who bought between 5 and 10 years before. I started with the 5 year old leads. About half had moved, changed their phone number, died, or already bought another vacuum cleaner….I made appointments with about 200 of these people and over 80% bought a brand new vacuum cleaner from me. At the time, it was about $1,500 each.
Then it occurred to me that the salespeople often quit, or were in need of fast money. So I started offering to buy the list of buyers/clients from other salespeople…first those who sold the same brand, and then those who sold different brands, but also sold in people’s homes. The closing percentage remained about the same. In my business, customer service was almost non-existent. But in just about any business, there are salespeople who quit or are fired. You can either contact them to buy their aged customer list. Personally, I paid $1 per name (including all relevant information). With my life insurance telephone consultation client, I advised him to get the names no matter when they bought, even a month ago….because you can always write them more insurance or replace what they have (assuming you have a better deal)
Another huge value to these names of “People who bought what I sell from someone else”, was that during the time after they bought…they talked to plenty of people about their experience with the rep and what they bought. And they talked about what they bought in basically two different ways….they either complained about what they bought…or they bragged about what they bought. And the way I found out was simple. When I called them to let them know I was going to be their new rep, I asked them their experience with the previous rep and their experience with their product.
If they complained, I tried to quickly help them with any issue, sometimes showing them a new product to solve their problem. But I generally wouldn’t ask these people for referrals. If they bragged, I asked them who they talked to, and I started getting referrals in that first phone call….and of course made an appointment to show them the new model.
So, we have our existing buyers and their referrals as the best prospects ever. And that is true. But it depends on how many clients/customers you have right now. Is it enough to provide you with a constant stream of new business? The only problem I ever ran into with seeing owner referrals, was that eventually I started getting the same names more often. I called it “Referral incest”. So, I found that I needed a fresh source of new leads that were just as likely to buy from me (I was spoiled by then) as my owners and their referrals. And buying aged lists of other rep’s customers filled that need quite well.
I hope this helps someone. All of this can easily be translated to just about any business. And if I was just starting out brand new, I would try to get the names of people who were abandoned by their old rep. The company would love to add to that business (after the old rep left) and you would get a list of Highly Likely Buyers that would very likely be interested in seeing you. After all, they are used to buying what you sell. you almost can’t get a more qualified lead.
A Bonus source of leads…people you buy from. This is a small segment of leads. I doubt if you could build a career around these people. But remember the life Insurance Agent that I consulted with? I’m an excellent prospect. And I told him that I had already bought four other large life insurance policies over the years…..he should have asked me to talk about it. Would I have bought from him? Maybe. But I certainly would have talked to him about it.
One of the businesses I own is a retail store. Every new advertising rep that wants to sell me advertising…ends up buying a high end vacuum cleaner from me. Do you know one of the most reliable sources of my book sales? Other authors of sales books. Do you sell printing? Did you buy a new car? Would that car dealer talk to you about printing? Yes. The answer is Yes. Three of the four life insurance agents that sold me a policy..bought an expensive vacuum cleaner from me before I bought the policy. And the fourth agent bought one from me later on. I never made it a condition of the sale…but these transactions lead to other transactions, traveling in both directions. Only a small percentage of my sales are from this method, but it still amounts to several thousand dollars in found money a year.