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Our latest home improvement webinar on leads brought together over 900 companies to help turn leads into sales in the year 2012.

As is the case with most of our programs, we have an abundance of questions that were not able to be addressed on the webinar. We will also answer many of these in our monthly e-newsletter (you can sign up today on our website).

Questions on Shows, Events, and Showrooms:

1.  How do I keep my full-time people busy? There aren’t enough events.

Full time people can also work mall displays — radiate around recent installations – work on Quality Control programs that provide referrals (business now and later). There’s lots of prep, legwork and maintenance work for them too, especially as your department grows.

2.  In your seminars I’ve heard you say “no chairs” in the work area. Our people get tired and they sneak them in – - what should I do?

You have to check on them yourself frequently, or through a small group of mystery shoppers.  Hire part time men or women who can complete an 8-10 point survey after visiting your booth/display – also let your promoters know that they are being shopped – (it’s like putting a radar sign on the highway – most cars will slow down even if no actual radar is present).  I know this rule may be difficult to enforce, but it is a key ingredient to make your presence at a show more profitable.

3.  How do you avoid giving a price when they walk over to our window sample and ask “How much is this one”?

Usually the prospect does that when they’ve already asked for a “ballpark figure” and were given an explanation about why the price would be delivered in person after evaluating their project.

You could paraphrase the original “depends” response as follows:

“The price of (your product) would depend on the options you chose along with the quantity, sizes and colors – of course – once our representative sees the condition of your (current product), he’ll know what we need to do to order the proper (your product) and install it properly, meeting the conditions existing in your home.  In addition, he’ll be able to deliver a price in writing and as I have mentioned- that price will be good for one full year – may I make a suggestion? (Take control – get to the next step—search for the best time and circumstances to visit – set appointment.)

Questions on Canvassing:

1.  How do I find good canvassers?

A: Recruit and hire regularly using 5-10 sources with a well planned sequence enabling you to identify fearless optimists or manageable mavericks whose current lifestyle is congruent with earning fairly good money in only a few hours daily.  It is the kind of job that will appeal to many different circumstances.

Many of our clients hire college students as canvassers and those individuals who need a second income.  They also hire retired or semi-retired people – in short “people with available time”.  But don’t forget, we suggest the use of a behavioral profile to determine whether the canvasser being hired has a behavior adapt able to this sales support role.  Many of our clients hire canvassers who then become highly successful in that role and they find it good basic training for an actual sales position.

2.  Can I pay canvassers on straight commission?

Yes, but statistically – employee retention is better when paying a base salary PLUS incentives. There are very few stable individuals who can use their own car, work alone despite the weather then deal with the face-to-face “turn down” rate, which is common in this role, even when they are paid a high commission rate. Reminder: strong management (supervision) is the key.

3.  Vans are expensive. It’s a lot less money to send them out in their own cars. Why can’t I do that?

A: They don’t show up or they arrive late or get lost, leave early and give up easier. Sometimes they have friends accompany them. That could jeopardize your plan, create insurance risks for your company and other problematic exposures.

Check out reliable used vans.  They are less expensive than you think.

We will address more of your questions in the next blog posting, and we invite you to give the home improvement webinar another listen. The material that was covered takes constant reinforcement.

We will now continue answering questions from our latest home improvement webinar. If you haven’t done so already, make sure to read our last blog posting where we address more of the questions that were asked during the program.

Q: You mentioned “lead control”.  How does that relate to giving salespeople the freedom to handle the lead in the best way because they are experienced to do so?

A: A reminder – if a lead is any inquiry coming into your business, it then has to be structured into an “appointment” (which usually requires scripting).  A properly scripted “lead to appointment” has created information beneficial to the salesperson and anticipation on the part of the prospect.

Now let’s assume the lead is issued to the salesperson.  Most efficient sales organizations have policies where salespeople are required to turn in their leads immediately after the presentation. Unsold leads were rehashed along with “no-sits”, often producing an increase of 12-14% of the volume extracted from the same leads.

Incidentally, in well managed sales organizations, once the lead is given to the salesperson as an appointment, the salesperson is not permitted to call and requalify the lead. If that process is elected, you will immediately determine a lower sit (presentation) rate.  Some leads are easier to work than others, yet a good prospect, inefficiently handled is often categorized by the salesperson as a weak or poor lead. That constitutes a break down in the marketing to sales program and will usually lead to higher marketing costs.  Leads retain dominant value for about 48 hours. While they are not dead after that, they lose the strength of the impulse which created the contact.  When you receive a lead, act on it ASAP.  Confirm that you are interested in it and don’t set conditions about whether it is worthy of a sales call.  The chances are that you and your salespeople may need training on how to handle leads of this nature.  Most of our clients confirm leads (irrespective of the source) within minutes.  They have computers set to verify their interest in the prospect immediately.  Any delay diminishes the prospect’s value in your eyes and it diminishes your value in theirs.

Q: How do the most successful companies handle lead intake and lead distribution to their salespeople?

A: Many confirm their leads within 5 minutes of their receipt (via email).  Lead intake, confirmation and rehash personnel are rescripted and highly supervised.  Salespeople are required to return a confirming sheet from all prospect contacts, enabling telephone follow-up in conformity with the “Do Not Call” laws.  Sales managers frequent “ride-alongs” to observe and enforce methodology.  In a recent survey, we were able to measure the success of the companies who had diversified lead development and strong controls in place.  In most cases these controls produced an increase in sales.  Many saw their 2009 sales exceeding those of 2008.  Many also require a quota of self-generated leads by their salespeople to achieve monthly bonuses.

Q: We were inundated with questions regarding less qualified leads.  Some requesting “information only”, others coming from 3^rd party sources which had incurred delay on reception.  While these leads require laborious techniques, they often bear fruit.

A: We call these “nebulous leads”.  Nebulous meaning not clearly defined.  These leads are frequently developed through “3^rd party” sources who run elaborate promotions or lead development campaigns.  When companies receive these leads and try to bring them to a point where a product and a price proposal can be presented, they experience a great level of frustration largely because their organization at all levels (1) call intake, (2) lead setting, (3) lead issuance is not on the same page and what follows is chaotic lead “mismanagement”.

Here is some thought on how to identify this kind of lead which was acquired by the means explained above.  Individuals that we classify as “nebulous” are usually prospects who haven’t committed themselves – yet would be open to listen and look.  The lead, once received, requires finessing beyond that of the prospect who says “give us a price” or “an estimate”.  Nonetheless, this prospect is identifying themselves as a potential customer.

Add them to your database and continue to follow up with them on a semi-regular basis. However, here is the caution, follow up too often and you may risk them opting out of your marketing, but if you don’t follow up enough they may forget about you entirely. As such, you need to continually strive to achieve the perfect mix.

Q: We hear the word “prospect” “lead” and “inquiry” used interchangeably at many seminars.  Are these all the same?

A: No, and here’s why.  A prospect is someone who can use your product or service. If you have found a way to get someone to respond to your marketing devices thereby acknowledging their need, you have a prospect which you can identify for lead purposes. If they do not respond to your marketing devices or that of others they are nonetheless a prospect and will remain so until someone gets them to acknowledge their need and sells them.

Q: Doesn’t this kind of lead represent a real challenge for salespeople who have never had to use them before?

A: A prospect requesting an estimate, responding to direct mail or registering at your booth at a show may openly declare “need.”  However, often the need may be deeply hidden in a prospect’s response for information, such as “send me some information”.  To add complexity, the prospect may say “we’re not going to buy now.”  This is complicated by the perception that the prospect hasn’t stated their need and the lead gets labeled as weak or poor.

The more sophisticated companies don’t try to force the “information only” lead upon the salesperson who had no respect for this kind of lead or doesn’t understand it.  It still requires marketing skills to turn that into an issued appointment.  One of our clients in a Midwestern city makes the following comment regarding this kind of lead after he developed a marketing technique with a series of “follow ups” which ultimately produced an issued lead (appointment).

“Most companies – don’t – or – won’t follow-up on an “information only” lead – we do.  Over a period of 6 years we sold $1,900,000 business with leads such as these.”

Q: What techniques work the best with unsold or unissued leads?

A: In our experience, a system that uses scripting, which in turn encourages a prospect who, in the past, hasn’t seen the demonstration, to view it now. This process is called rehash.

Take an example of a prospect who received a presentation that wasn’t sold, but later agrees to have someone come to their home and review the original presentation and price proposal (in well-run companies this also includes sales which were cancelled or were credit rejected).  Rehash requires a “refined” technique that starts with a scripted phone call that contains no risk or threat to the prospect – in fact, implies a “benefit”. This task is never allocated to the original salesperson.  It is, for the most part, a call center issue made by a marketer, not a salesperson.  The rehash lead is seldom, if ever, issued to the original salesperson (for obvious reasons). He/she didn’t’ sell it the first time and the no-sale or cancellation may have been created by a malfunction in the presentation.

All leads which do not turn into issued appointments or remain unsold, or those cancelled or credit rejected should be accumulated into a database.  We call the use of this database to manufacture sales asset recovery. The company has an investment in these leads and any sale made from the database has very few costs related to “reissuance”.  Most successful companies acquire 20% or more of their revenue annually from their database and their customer solicited referrals.

If we did not get to your question, please email us directly at admin@daveyoho.com and someone will get back to you shortly – - and don’t forget, part two of this home improvement webinar series will be held on Decmeber 13th.

Last week’s home improvement webinar on lead generation was a rousing success. There were over 950 companies on the program and we received numerous questions. As is frequently the case, we did not have enough time to answer them all on the webinar so we took the opportunity to respond on our blog (the first series of questions and answers are covered in our latest e-newsletter – to receive a copy e-mail admin@daveyoho.com).

Here is a sampling of the questions we received:

Q: You give the impression that many home improvement companies have tried canvassing, yet few have been successful at making it work “long term” within a practical budget.

A: As we pointed out in the webinar, it is not uncommon for companies with a canvassing program to issue as little as 30% of their canvass leads as appointments. In addition to that, they may only gain entry into 40-50% of these homes for a presentation.  They experience a closing ratio lower than they do for other leads (some of this is attributed to the salesperson’s dislike of that lead). Then top this off with marketing costs that sometimes exceed 20% (some even much higher).  Not a practical way to do business.

Q: Has your company made a study of effective canvassing programs?

A: You bet, and here are some of the basics:

Unless companies subscribe to a plan that includes territory and time selections (by management) for canvassing in middle income neighborhoods, they’re off to a poor start.

It is human nature to try to find the path of least resistance. Better neighborhoods with higher income families frequently represent better education and more well-informed prospects and in turn represent more complications in developing a lead.

But there’s more to it than that.  Actually, there are about 51 components for an effective program. The script language is extremely important.  Intelligent people with money to buy the products you offer have to receive information which they see as beneficial.  Many canvassing groups use a mini-presentation book at the door.  One company we studied has canvassers earning $40-60,000 annually with a fully loaded marketing budget of approximately 9.6%.

Q: What kind of results can be effective with a well-managed canvassing program?

A: The better managed companies have a 50-60% issue rate, a 60-80% sit rate and marketing costs below 15% (fully loaded).

Here is an actual case study of a very efficient program:  Canvassers working (average) 4 to 5 hours daily produce ½ lead per hour set with the homeowners by the canvasser (via cell phone) with their office. This translates into a 60% (minimum) presentation (sit) rate and a minimum of 1 presentation (sit) produced in less than 8 hours of the canvasser’s effort.

One of the keys in this last case study is the “canvass manager” who makes everyone (including himself) adhere to the “model” of the program.

Is it easy? No. Is it successful? Yes. Is it cost prohibitive? This particular company operates with overall marketing costs at 13% and their canvass program (fully loaded) is slightly over 12%.

Q: We are considering hiring a company to do our canvassing.  What are some of the cautions?

A: We received the same question from 12 companies who participated in the home improvement webinar.  If you tried canvassing on your own and couldn’t make it work, or it was too costly, you may succumb to someone who encourages you to let them do the canvassing and provide you with the leads.  There are several smaller companies who provide this service – however – be cautious of “canvassing companies” who want to sell you leads. Several larger companies who provide this service do not appear to have “long term” success stories.

Q: Our salespeople don’t like the canvass leads, so we haven’t been successful with closing many.  Apparently our canvass program “stinks”.

A: Your question probably contains the answer.  You hired salespeople, promised them bona fide leads and they expect to get them. However, if you are allowing your salespeople to determine the source of leads you will never get a canvassing program to work, and since this is but one form of face-to-face lead solicitation (which also includes “shows” and “events” and “SFI programs”) the failure is not in the lead, but in the method of adapting a salesperson on how a face-to-face lead has to be handled to obtain results. Unfortunately this is a management failure.

Management frequently “succumbs” to the complaint of the salespeople that these are “weak leads”.  When the sales department convinces management this is the case, the marketing department is told to get a stronger lead. Ergo: the number of leads decrease and management is unhappy because they don’t have enough leads for the salespeople.  Weak canvassing methods include “looking for”.  Successful canvassing programs treat the canvassing department as part of the sales methodology. At the risk of being repetitious, modern techniques require that the canvasser be hired with a behavioral profile indicating sales “traits” and the ability to follow special scripting devices which often includes a mini presentation book. The appointments were set via cell phone from the canvasser and the prospect to the call center.

Again, at the risk of being repetitious, The successful companies measure not only the number of leads which are produced by hourly effort, they measure the hours it takes to produce a sales presentation from the leads acquired with a marketing budget of 12% to 15%.  In short, the entire process is treated as a science – not – an art form.

Q: We received numerous questions on “diversified lead sources”.

A: Today’s marketing techniques, whether for a small company trying to stay alive or a large company attempting to expand, have to include diversification. Smaller companies may have 10 or 12 sources for lead development; larger companies 30 to 50 sources.  Companies who choose not to diversify their home improvement marketing typically tell us:

• The majority of their leads are referred to them through a satisfied customer.
• We are a recognized name in our territory, so we don’t do much advertising.
• We invested heavily in print ads – yellow pages – web design – or similar and couldn’t make it profitable.

Here is what you have to remember.  In every market and for every product or service sold in that market, there are a certain number of prospects who develop a “need” for most of the products sold.  The trick is how to identify and find these prospects then sell them without resorting to being the “lowest price” in town.

The next “trick” is to find ways to identify and attract prospects who haven’t yet met the explicit need level, but could be convinced to “take a look”.  That requires a good marketing technique which then has to be balanced with a strong sales technique.

This is not being critical of those who get “referred” as a good contract or source, because referral leads are great; most salespeople love them. The reason they don’t get more of them is usually determined by their lack of “asking for them”. If you can develop enough business without advertising or spending promotional dollars, I applaud you. However, keep in mind that past customers should be solicited for referrals with a plan that meets the requirements of your local state laws.

We will answer more questions on our next blog posting so make sure to subscribe so you can receive updates as they happen!

This is a critical time for the home improvement industry as recent laws are making it more and more complex to do business as many retailers have done in the past.

With that in mind here are eight critical issues that the industry is facing:

The inherent risk in using “share of profit” compensation for salespeople.

Despite it having been “industry practice” for many years, government agencies continue to crack down on retailers and levy exorbitant fines in an attempt to curb these practices.

The co-mingling of 1099 and W-2 employees in your installation department.

Frequently, this will lead to an IRS audit or citation for misclassification.

The use of a “price drop” for a one night close if followed by a rehash using the same product at the same or lower price.

Consumer protection legislation that has been enacted over the past few years leaves this issue open to interpretation and has proven to have disastrous results for many home improvement retailers.

Improper (or lack of) compliance with EPA regulations/requirements concerning lead paint.

If you perform work on houses built in 1978 or prior are you providing correct documentation (whether the job is sold or not)?

Providing the proper notice of rescission as required by federal and frequently state law.

There is a required format and number of copies of the notice of rescission required for each sale made at other than the seller’s place of business.  Many retailers leave an incorrect number and are in violation.

Operating with a retail contract that doesn’t provide sufficient protection.

Collection practices may be difficult. Clear definition regarding limits of liability should include arbitration in the event of disagreements.

Failing to protect your intellectual property and proprietary information.

Your logo, brand, motto, customer/employee list and presentation material can be at risk without proper protection.

The use of a “non-compete” provision for salespeople.

May be a mistake if you don’t have one  – - and in some states a worse mistake if you do.

To hear us expound upon these issues, make sure to join us in Chicago at the 2-Day Home Improvement Profitability Summit where you will hear expert analysis from our legal counsel D.S. Berenson while also being exposed to the top trainers in the home improvement industry.

Last week’s home improvement webinar entitled “Open Your Mind to Close More Sales” generated an excellent response from our customers as well as industry leaders.

Once again we would like to thank all of the attendees as well as all of our sponsors of the program.

The 90 minute webinar was filled with tons of Q&A; yet despite that we were not able to answer all of the questions that were posed.

As has been our habit in the past, we are now posting a sampling of questions that were asked prior to and during the webinar.

Q: In today’s market, people seem to be more price conscious and our area is loaded with “price cutters”.  How do we justify our price for a quality product?

A: You can’t justify your price — stop trying.  With the right presentation, you establish “value”.  You have to demonstrate and have your customer agree that the product you sell is high quality, long-lasting, installed by experts and meets their needs better than other products in your market.  In our series “The Science of Successful In-Home Selling” we explain a method entitled The Total Offer Concept™ which goes into great detail on this topic.

Q: We are often met at the door (sometimes over the phone) with the statement — “We just want a price, not a long visit.”

A: Respond quickly by saying — “No problem.  Let’s take a look at your project and determine your needs.” During the review of the project, ask questions, write down the responses and sell yourself.  Present yourself as a professional.  It is your job to uncover needs.  Then present your product to meet those needs.  Explain the options, the various protections they need, such as a written proposal, a reliable guarantee, a product installed by specialists.  Most prospects will listen if you are talking about them — their needs — their problems — and how you can help solve them and why this home improvement project isn’t an expense — it is an investment.  You will extend your time with those prospects.

Q: Can I use a one-call close without high pressure?

A: It all depends on what you consider high pressure.  Explaining in detail what your product and service represents — isn’t — establishing the value of the product/service you are providing — isn’t —and — asking for the order, if done properly — isn’t.  Our closing system is utilized by the most successful companies in your business. I recommend that you listen to the free recording “The 7 Myths of In-Home Selling” — where this question is answered in detail.

Q: What is a decent closing rate?

A: Some companies still measure their close rate against presentations, which fails to account for the number of leads issued and this is a mistake.  So we measure closing efficiency against leads issued.  Yes, there will be some no-shows or some 1-leggers that you do not wish to present to, but if these are not exorbitant in number, it’s all part of the process.  So if you’re still measuring by the old fashioned rate – closes vs. presentations – 1 out of 3 or 4 is decent provided there is a 70% sit rate on leads issued.  Small ticket items ($4,000 or less) should close at 50-70% with a 70% sit rate.  Caution – don’t be too quick to blame the low sit rate on your marketing department.  Frequently it is the inept processing when the salesperson is at the door of the prospect.

Q: So what’s the difference if you’re measuring against leads issued?

A: First of all, our latest industry survey shows that the average cost of a lead issued is $285.  If a salesperson receives 7 leads per week, that equals $1995 – close to $8,000 a month and that’s $96,000 a year.   You will want to measure the efficiency rate of anything in which you have invested $100,000, I’m sure. Depending on the lead source, conventional leads (radio, television, print, direct mail) should look for a 70% “sit rate”.  That’s a presentation being made to all interested parties where you have sufficient time to do a needs assessment (walk around), company and product presentation, present the price and attempt to close.  If you sell 1 out of 3 of these presentations, that’s a 23% close rate against “sits” and roughly 33% against leads issued.  These would be effective goals.

Q: How do statistics differ with canvass leads?

A: A whole different ball game.  Our surveys indicate that canvass leads as well as those produced from other face-to-face sources, such as shows, malls and even S.F.I., don’t do nearly as well (greatly due to the attitude pervasive in salespeople who don’t like canvass leads ) – partially due to mismanagement by marketing (poor scripts and poor lead issuance management).

Our surveys indicate that 90% of all canvass programs are failures (too costly – poor sales vs. leads issued).  The person-to-person leads, when processed, have reached a 40% issue rate or less.  Remember, if you took in 100 leads that means you issued 40.  Then the sit rate as defined in the previous question is usually 50% against leads issued.  That means you’re now down to 20 leads from the 100 acquired.  The gross close rate averages 3 to 4 sales.  When you eliminate credit rejects and rescissions, you’re down to about 2 sales.  So fully loaded costs are usually more than 20% of the total revenue produced.

However, don’t sell the concept short.  Canvassing works if it’s structured properly, then managed properly including personnel selection and rigid script enforcement from the lead intake by the canvasser through the appointment setter or confirmer – - and, of course, add the “attitude factor” of the salesperson.

Q: What are your suggestions in terms of scripting for canvassers?

A: 2 factors need to be considered – -

1. You’ve got to have the right script
2. You have to rigidly enforce its use.

A well-scripted canvasser is not a canvasser. Modern canvassing requires the selection of the proper personnel.  Those selected should be profiled and have a behavior which is adaptable to a selling function.  The good canvasser is an extension of your sales department and will frequently grow into becoming a closer.

In addition, all scripting is subject to the discipline of the canvasser and management.  Scripts are what they imply, i.e. what to say and how to respond to questions.  With some success the canvasser starts to embellish these with war stories, personal philosophies and small talk that reduce effectiveness.  Successful canvassing programs have somewhere in excess of 50 components if done correctly.

Q: What are the statistics on rescission?

A: Here’s a rule of thumb – - if you’re getting no rescission at all, you’re probably selling “call back” business or you’re not attempting to close at all. On the other hand, if you’re getting too much rescission be aware that “rescission is a malfunction of the selling process” – so you’re doing something wrong.

Here are some statistics, if the size of your contract is $4-5,000 or less, your rescission should not exceed 5%.  If your average contract is $8-12,000, rescission should not exceed 10%.  If your contract exceeds $25-30,000, your rescission rate might be between 20-30%.  Remember, I said that rescission is a malfunction in the selling process.  In a well structured organization, 25-30% of the rescissions can be recovered and are then reinstated as valid contracts.

Should you have any follow up questions regarding this blog posting, or if your question was not addressed please comment or e-mail us at admin@daveyoho.com.

I enjoyed participating in the most recent home improvement webinar on lead generation and appreciate the opportunity to answer many of the questions on canvassing that we received in this format.

Q: What is the best way to pay the marketers in the field – by the lead or by the sale or both?

A: A base salary (per hour) incentivized by issued appointments or presentations (provided minimum goals are met), further incentivized by the number of hours taken to produce those results. The team leader’s compensation should be similar based on the average of the team.  There are typically additional bonuses paid on gross numbers but are conditional to certain “hours to demo or issue” being met first. Additionally you can create a “pool” of funds which are based on the percentage below budget. (i.e.  canvass marketing budget – 14%, actual expenditures – 12%, equals 2% of net volume generated. And you can distribute a portion of this (i.e. 20%) to individuals within the group on a “per” performance basis if warranted.

Q: Lead generation for mid to high end remodeling – what works?

A: I’d start with your database.  Leads you’ve had in the past which you have not had an opportunity to present, those to whom you proposed and did not sell and those prospects you sold who could not get financing – then examine your previous customers, solicit them for additional work, ask them for referrals and don’t hesitate to use the methods we recommend for sunrooms, basement refinishing, cabinet re-facing and bath rehab.

Q: How do I convert more of the leads I currently get into appointments?

A: I recommend to give the webinar another listen.  A great deal of the information that you need is contained in that 90 minute program.  On our website there are also numerous home improvement articles on this topic that I advise you to download at no cost.

Q: When are the best hours of the day to canvass?

A: In most markets (some differ) the best hours during the week are 4-8pm. Generally, there are more people home on weekends. Saturday and Sunday are good all year due to sunlight and temperature. 3 out of 4 of our clients experience their best days on Sundays (noon – 5pm). Saturdays usually start at 10am.

Q: How many man hours to produce a lead?  How many man hours to produce a presentation?

A: There are lots of variables, starting with your definition of a lead. No matter the client, we always begin with “budgeting by the demo” since this is a demo business (although the “issued appointment” is our preferred unit of measurement and compensation since it’s easier to define and avoids time-wasting discussions and arguments.)  Once we’ve identified the amount of money we can budget for and compensate for a demo, we work backwards to the issued appointment. The key issues are what it’s costing you, the average sale and the close rate at which your sales force is capable. Here are some safe averages. If your average sale falls in the $8,000 to $12,000 arena, you can probably make a profit up to 15 hours to a demo although you will likely be over budget. Most of our clients need to fall under 12 hours to a demo although we personally never want them over 10 hours to a demonstration. The sweet spot is when you can manage your entire canvassing operation under eight hours to a demo.

Q: What should the sit (presentation) rate be for canvass leads if you have a 65% sit rate for conventional leads?

A: Sorry, your sit rate should be higher than 65% for any lead including canvass. And I’m unsure if your defined sit rate includes a full demo. We typically define a sit rate as all parties being present with an understanding (and agreement) to a certain amount of time set aside and with consent again to those terms at the door allowing us to proceed to the walk-around. Typically, our goal is to attain a 90% or better sit rate. Demo rates should be in the 80’s. Anything under 75% probably indicates that you’re inefficient in multiple areas, starting with how the initial appointment is set.

If you have any further questions on canvassing please e-mail me at david@davidyoho.com and don’t forget to check out the earlier blog posts reviewing questions from our last webinar.

Finally, our next home improvement webinar will take place on September 13th so make sure to register today!

On last month’s home improvement webinar we had the pleasure of welcoming Mark Berch on the program.

Mark is Chairman & President of Service Finance Company, a nationally licensed FHA Title I Lender.  They are a third party servicer with the ability to conduct business in all 50 states and the District of Columbia. He has spent the majority of his adult life in and around the home improvement industry.  He was co-founder and president of an HVAC company with 42 locations in 17 states. He was also founder of a home security company which operated in California, Georgia and Illinois.  His background and experience enables him to effectively marry his in-depth knowledge of the home improvement industry with his expertise in financing, thus creating the best financing options for both the home improvement retailer and the consumer.

There were a number of questions directed towards Mr. Berch on the webinar which he did not have time to address; consequently they will be answered here.

Q: Dave mentioned a company (without identifying them) that sent in 44 applications and received 35 approvals — that’s approximately 80% — with sales of over $496,000.  Were those applications submitted to your company – and – over what period of time?

A: They were submitted to our company over a 4 week period

Q: During your presentation on the webinar, you gave us an example showing an ad giving payments at $99 a month (I think).  You also mentioned the payments related to a contract of an average size, etc.  Could you repeat that and tell me if this is the disclosure that Dave spoke about?

A:  The $99 monthly payment was based on a $7500 amount financed at 9.99% with a 10 year term. You must disclose the term, APR and amount financed in your advertising. You must seek legal advice prior to publishing an ad as each state may have different disclosure requirements.

Q:  We get over 50% of our business through canvassing, shows and events.  Do your clients use a handout, a reprint of an ad or a blown up ad? Can you provide some examples?

A:  Current clients print up an 8 1/2 X 11 color ad and use that as a handout. There are several examples available on our website.

Q:  Is the enrollment process for this program very complicated (how long does it take)?

A: It will take you about an hour to fill out the enrollment forms. We will approve within 48 hours if all materials have been submitted.

Q:  Can I submit an application which was recently turned down by our current provider of finance service?  We believe our customer had fair to good credit, but the amount of the contract was simply too large.  What are the credit limits to this plan?

A: Yes, we will look at your declines to help you get started. Our maximum loan is $25,000.

Q:  How long does it take to get the average approval?

A: 5 Minutes

Q:  One of the gentlemen on the webinar who represented a manufacturer stated that one of his dealer’s customers applied online with a credit application that your company provided.  He said that many prospects don’t call  because they fear that “declined credit” will show up on their credit report later.  How does this work?

A:  It will show up as an inquiry — not a decline. The inquiry could result in an approval or a decline, but that information does not show up on a credit report.  If a consumer applies online using our private label web application which resides on the “dealer’s” website, the consumer’s credit report will show an inquiry. There will be no indication of a final credit decision, i.e. approved or declined.

In the next blog posting we will address the remaining questions from last month’s home improvement webinar.

Our last home improvement webinar elicited more questions than we have ever received, and we will continue to answer them now.

If you have not read it, make sure to review our last blog posting for more questions that were answered from the webinar.

Q: We get internet leads and we call every day and email letters and newsletters with coupons and still we get no response.  What can we do to get to talk to homeowners?

A: A prospect’s response to advertising (a lead) is an indication of interest.  The level of interest may vary from curious to various levels of need.  The Internet lead is someone responding to your homepage – or – something within your posting which intrigues them.

First, acknowledge all inquiries with a simple thank you, then provide them with the information they requested and let them know (professionally) that someone will call them within the next day or so to answer specific questions and give them additional information which may include job sites or things of that nature.  The latter is not necessarily what they want, but it responds to their urge for contact.  The person calling them should be scripted and ask questions rather than starting to sell.  Questions such as:

• “How long have you lived in your home?”
• “What is the age of the particular product you have now (roof, siding, kitchen, bathroom)?”
• “What is your goal?”

Most companies respond with personnel callers who talk about themselves or use inane introductions such as “My name is Mary Smith.  I’m with XYZ company – how are you today?” These are ‘worthless words’ and that’s why you need a script.

Usually the Internet lead (prospect) has also examined the websites of others and they may have information and misinformation about the product or service you are offering.  Structured dialogue (scripting) will usually get you to the core of what their needs might be.

Also, you indicated in your question that you call every day – and – you may be long past the perception of an information provider to that of a pest.
Your last sentence indicates you probably need a lot of work on scripting.

Q: We use your “Leads, Leads, Leads” program.  The amount of information seemed overwhelming at first, but since using the scripts properly, we doubled our issue rate.  The problem is, the salespeople claim they want a more qualified lead to create a better sit rate.

A: We are glad you are using “Leads, Leads, Leads” and continue to review this material; it will help with the next part.

What you stated remains an on-going problem – the salesperson wants a more qualified lead which brings down the issue rate.  The owner wants more “bang for the buck”, so he wants the sit rate increased.

My recommendation is that you first focus on improving the issue rate while utilizing scripts, which ensure (1) all interested parties, (2) a specific time, (3) interest created in the product or service .  Next, sales management has to realize that the issued lead today is very costly and salespeople have to be better prepared to “sell their way in”.  I’m not talking about “foot in the door”.  Rather being prepared for some of the minor resistance that frequently occurs.  I also suggest that someone in your marketing department listen to The Science of Successful In-Home Selling and that likewise your sales managers listen to the CDs in the Leads, Leads, Leads package you have.

Q: We are in the gutter business, which isn’t good right now.  We also sell handyman services, and our average contract is between $2 – 3,000.  Is there financing available?

A: Contracts of the size you mentioned do not require conventional financing.  Use credit cards (which also may be offered on a 3 or 4 payment basis with an individual contract stipulation authorizing you to charge their credit card once a month for 3 months). However, this is not the reason you may not be getting as much business as you want. Adding this as a “benefeature” enables you to provide a solution for the customer who really doesn’t’ have the cash to buy now.

Incidentally, who told you the gutter business was bad now?  Remember, it is either good or bad, depending on the way you run your business and the success you achieve.

Q: How many people still use the “free no obligation estimate” phrase??

A: The phrase “free estimate” is outdated language.  We suggest a phrase that goes something like this:

“We will examine what you want to have done and need to have done and if we can offer a service which fits your needs we will give you an accurate written proposal on what your investment would be.”

Q: Are the ads which feature average payments directed at low income customers?

A: To our knowledge, these ads attract responses from a broad range of prospects – - some of whom have saved a portion of the costs and need to finance the balance and haven’t found banking sources which will accommodate them.  This includes prospects who were rejected when they sought credit in an earlier application for reasons that may no longer exist.  It attracts people who have a “big ticket” project of necessity – roofing, HVAC, and similar and haven’t been successful with their local bank.  Of course, it also attracts low income prospects.

We will continue to answer questions from our last webinar in the next blog posting so be on the lookout.

Thank you to everyone who was on last week’s home improvement webinar on leads and obtaining financing. We received an abundance of questions, many of which we were not able to answer during the program. As such, we are going to address many of them in this forum.

Q: Can you provide us with “slicks” of the ads you showed?

A: While we do not provide “slicks”, you will have pictures of the ads on the MP3 and can arrange your own from these examples.

A caution – be sure you check with some authority in your state (or your attorney) regarding the disclosure needed in these ads – regarding the size of the contract, the APR, etc.

Q: How does the advertising you’ve shown work with canvassing, shows or events?

A: Think about it – one of the most common reasons your canvassers or presenters can’t build a lead is because the prospect says “we can’t afford it now”. Have a pamphlet or brochure available to explain how you make this type of financing available.

Q: Is print media dead? If not, what are the most cost effective ways of using print media?

A: Print media is not dead, but it is in trouble. Circulation is dying.  Many people in the age range from 30-50 get their news via the Internet and don’t read the paper.  Many dealers are buying print media on a P.I. (per inquiry) or similar.  This takes knowledge of how advertising is sold, but it’s worth a try in any market.

The form of advertising mentioned in our recent webinar (utilizing financing/payments) is working a lot better than most.  Check the ad samples from the recent webinar.

A reminder – we have an abundance of free articles on this topic and others on our website.

Q: Do you hold new salespeople responsible for generating leads?  If so, how do you recommend they procure them?

A: Create a job description defining their responsibilities – and policies – then train the new hires on “how to self-generate leads”.  It is a great idea to make lead generation part of a new salesperson’s responsibility.  If nothing else, have them work around your completed jobs that were sold by veteran salespeople who won’t work around the job.  These are an excellent base in which to develop new leads.

Incidentally – you asked the question regarding “new salespeople”.  It probably fits all salespeople if lead intake lessens self-generated leads.  If you don’t have a database recovery system – have them start with old (recycled) leads from “no sit” – “no demo” or “no sale”.

12.  Q: Is direct mail around the house we are working on a good source of leads?

A: Direct mail is one of the options for using the job under construction or just completed.  Have someone visit 5 houses on each side of the new job and 10 houses across the street on every installation you do.  Make sure they are using door hangers. You can usually get the names of the people from the owner of the house where your current job is being done.  All actions such as this have a learning curve.  The more you do it, the better you will get.

Q: We just regrouped our canvassing program.  The trouble we always have is getting canvassers in the door.  The ones we get in the door show up for the interview but never return.

A: I would probably need to know a lot more about your company and operation before I could answer you completely.  It may have to do with the ad you’re placing or the kind and style of job you are offering (good canvassers in many markets make upwards of $60,000 a year).  Today’s great canvasser isn’t just “looking for prospects”, he or she is hired based on having some sales acumen. They are tested and profiled, and only the best are selected. They are trained and supervised by someone in the field with them.  They work on tight scripting.  The leads they make are relayed into a call center.  Someone else sets the appointment.

A behavioral profile can aid you in determining (1) adaptability to the sales role, (2) how the individual will respond to the stress, (3) manageability.

You probably have to rethink your program and see what you are missing.  In all probability, you may have to change the “model” you set up for this (the canvassers’) job.

You also may need help in your process regarding interviewing salespeople.

Q: We are in the roofing business. When it rains our prospects need a solution (usually they have a leak).  When it isn’t raining, we have trouble getting leads and closing.

A: You are in the same ballpark as those in basement waterproofing.  You are waiting for “nature” to help deliver a prospect that has a “high need”.  The truth is that the roof has a weak condition when it isn’t raining as does the basement.  Your job is to develop leads on an inspection basis, detect the weaknesses and convince the people to consider before it rains.

In your business (roofing), if the roof reaches a certain age, it’s time to think about replacing it before it leaks.  An analogy: when your tires start to lose their tread, you don’t wait for them to blow before you replace them.

There are many studies on why roofs are leaking (or will eventually leak) and the same is true of waterproofing.  If you can get a prospect before the roof leaks, you are ahead of the game and the competition.

Q: What are the best headline grabbing words and phrases to have in a magazine ad and where should they be located in the ad?

A: A couple of reminders first.  People don’t read ads.  They read what interests them and sometimes it’s an ad.  Your prospects aren’t looking for your product for the most part.  They’re looking for what your product does: protects their home – saves them money – avoids/eliminates maintenance – increases the value of their home.

The eye reads from left to right and top to bottom.  The headline captures the attention, the bottom line tells them what to do: “Call today” – “Visit our showroom” – etc.

Think of the words that relate to those issues and think of how best to get their attention.  An ad in any printed format is in competition with other reading matter on the same page (frequently another ad).  So you have to work at your headlines: “Save ___% today” – “Sale” – “Free” – “Low or no cost” – and, of course — how you will make it affordable for them.

We will answer more of your questions in the next blog posting.

For those of you waiting for the remaining Q & A from our latest home improvement webinar, we appreciate your patience. Now that all of our Spring programs have wrapped up, here is a summary of questions that were asked which we did not have time to address:

Q: Where do you find potentially high performing salespeople? (Robert,  Mr. Sunroom Professional Remodeling)

A: I’m glad you added the word “potentially”, Robert.  Some companies spend too much time trying to hire their competitors’ salespeople (usually a big mistake).  A behavioral profile (or similar) taken accurately will usually determine whether an individual has strong sales traits (behavioral).  Once defined, a strong interview process is suggested and then a training regimen, which assures the newly hired salesperson is selling via a successful (proven) sales methodology.  Think about this, Robert – a great sales manager takes an ordinary person with sales/behavioral traits and trains him or her to be an extraordinary salesperson.

Q: What interviewing questions do you suggest to weed out the less qualified salespeople? (Kevin, Evergreen Window & Door)

A:  Similar to the last question, Kevin.  If you’d like to see part of the process in action, we have a video that demonstrates many sales interview tips.

Q: How do I pay salespeople on commission if they bring in a GPM of 40%. The problem I have always had is they want 10%. (Jim, Murphy Window & Sunrooms) and What percentage of the sale should I pay in commission? (James, Heartland Exteriors)

A: Directing my answer, Jim and James, to both of you – If you have a 40% (gross profit margin) there’s no reason not to pay 10% since your G & A and marketing costs should be allowing for a fair net pretax profit – however – the formula has to be regulated so the job is sold correctly.  It is wise to combine it with a control so that if the salesperson doesn’t sell it, when the lead is turned back, it goes through a rehash by a third party.

Another however – to James – 10% commission should not be the standard for big ticket items (i.e. $25K to $50K and up).  The commission should be worked out versus a sales goal which permits better than average earnings for the salesperson, but not sufficient to destroy their initiative. For example, a salesperson selling windows, cabinet facing or similar where the average sale is $8-$10,000, being paid 8-10%, has to be disciplined to sell 1 to 2 transactions a week minimally.  The salesperson who is given leads to sell sunrooms, metal roofing or basement refinishing sells a $40-$60,000 transaction, so they should have a commission in the range of 6-8%.

Q: Should salespeople be compensated by salary or by  commission? (James, J&A Associates)

A: When salespeople become truly accomplished, they tend to want an incentive system which compensates them for extra effort.  In many organizations when a salesperson is hired, they are given a training compensation for 1 or 2 weeks (which is termed a draw) the intent of which is to make them feel secure during the training period.  However, James, it all comes down to performance.  If you have a specific percentage built into your pricing formula for commission, salespeople should understand they have to operate within the parameters to produce enough profitable revenue to cover the cost of what they are paid, no matter what you call it – salary – commission – or draw.

Q: What are your thoughts on paying overages to salespeople? (Gary, AA Home Improvements)

A: Usually a bad idea, Gary. Reason 1: an overly aggressive salesperson may overprice a contract purely to earn additional commission.  Ultimately this is not good for customer satisfaction, which brings me to reason #2.  An attorney general (any enforcement agency) will often single out a company and publicize the fact that salespeople in the company are incentivized to charge more to one company than to another.  We have numerous case histories to support this, which show companies that have been driven out of business.  Reason 3: if a salesperson makes more on one transaction it could incentivize them to sell fewer transactions earning higher commissions for fewer sales.  The solution (except in extreme cases, where there are what we deem “God only knows” factors in price development) is that salespeople should be trained to use standard estimating practices, and if they run into special situations, they should call the office for a supporting price change.

Q: How do we successfully vet applicants? (Cheryl, Alcher Interiors, Inc.)

A: Each applicant should be subject to 2 kinds (forms) of job application.  The first is a pre-employment application where you get specific information enabling you to ask interview questions which are pertinent to the information received.  The other is an employment application.  Here is where the applicant is under serious consideration.  References should be checked and a background check drawn on the individual.  To do so requires a release by the applicant giving you permission to seek out this information and draw such a report.

Q: Do I really want a salesman to do a HARD close? (Gary, Ferguson Industries)

A: I’m not sure what you mean by hard close.  No one bearing the title of a salesperson should ever proceed into an attempt to get a sale without asking for it properly.  This can be done without using tactics you might consider “high pressure”.  The most common reason salespeople do not get an order is because they don’t ask for it – or – they don’t ask for it properly.  Salespeople are not estimators (estimates are part of their job role).  Salespeople have to do more than hand out written pamphlets and allow people to see samples, they have to be taught a sound sales methodology.

Q:  How can a small company (1-2 employees) hire great salespeople?  Most of them want to work for a larger company (at least 8-10 and up)? (Jim, Manley Enterprises)

A: This is more of a statement than a question, Jim and the statement may be colored by your history/experience.  Great salespeople want to work for companies that have a good product, a sufficient supply of leads and a fairness in dealing with them.  We have dozens of clients who have as little as 3 salespeople – all of whom sell over $1 million a year for these small companies with a strong local reputation and a smart selling system.  Their incomes range form $80-100,000 a year and to say they have satisfactory employment is an understatement.  You may be equating larger companies with more leads and that might make the company seem more attractive.  Yet smaller companies can develop a satisfactory lead getting and sales program in which their employed salespeople do extremely well financially.

Q: What do you do when you have a great (your best) salesperson but their arrogance and personality continue to rub others the wrong way? (Nathan)

A: Nathan, we intentionally excluded your company name in case someone should see your response.  However we received at least 3 or 4 similar questions.

If this is your best salesperson it says something about how the customer perceives that person.  Great salespeople are frequently enjoyed and appreciated by their customers and disliked by their managers, those in production or even the office staff.  The reason stems from what is known as “behavioral use”.  Salespeople like this are often charismatic and articulate.  They “light up” the conversation in the prospect’s home.  They are loaded with anecdotes, stories about life and simple “chatter” that intrigues their prospects/customers.

Frequently they are the top producers.  Management doesn’t have to love, admire or become social “bosom buddies” with them – they have to understand them.

I suggest you have this person behaviorally profiled to get an insight as to why there is such an appeal to the customer base while frequently a lack of appeal to management.  They are not necessarily role models to other salespeople, but some aspects of their behavior, if replicable, are beneficial.

As long as this salesperson sells profitable contracts and doesn’t offend customers, you have to find a way to understand and deal with the behavior.  I used to tell a funny story that went like this:

A client called me and said, “We have a salesperson who is constantly late for meetings, interrupts the sales manager when he’s talking, doesn’t get his paperwork in on time, makes outlandish statements about his ability and treats the production crews as if they were his personal ‘hired hands’.”  He ended by saying, “What can I do about this?” My answer was, “Get rid of him!” He responded quickly by saying, “I can’t! He’s our best salesman!”

If there was a question which we did not address please e-mail our office at admin@daveyoho.com, and we invite those of you who haven’t already to sign up for our home improvement webinar series.