I first wrote & published the below blog post back on Nov 7, 2010 but it’s been stuck on an old unused site of mine, so I have decided to “liberate” it from anonymity and re-publish it here today. I hope you find it helpful.
I was speaking to a client on the phone the other day, and he expressed his disappointment that the small test Google AdWords campaign I had run for his website had not resulted in any sales.
He sells an industrial cleaning machine that retails for approx $7000, and the 10-20 leads we had generated using AdWords had not turned into any genuine sales – mostly just people wanting the price and that was the last he heard of them.
He was left wondering what had gone wrong – why hadn’t he managed to sell a machine to anyone, and had his money been wasted?
The answers to his questions are both simple and complicated, but oh so important to any business wanting to make sales to clients… so I decided I would take a run at the topic, and at least provide a high-level overview of what I saw as the key areas where he went wrong.
Hopefully you can learn something from his experience and if it makes a difference to you, then I’ll feel this article was worth writing.
So, firstly, let’s look at the ultra-simple answer to his question.
People (that includes you & I) buy from people (and companies) we know, like and trust.
We also buy when we feel the product or service is worth more to us than the money we’ll have to part with to make the purchase.
Lastly, we buy when we can afford to make that purchase, either because we have the money or can arrange to get it (credit card, personal/business loan, good old Mum, etc.)
It doesn’t matter how much you love that Porsche 911 Carrera GTS, if you don’t have your hands on a cool $309,656 in moolah (driveaway price according to Porsche Australia as of today 23 June 2018), then you aint gonna be the proud owner of that fabulous car!
So, there are at least 3 different components in operation here:
- trust – do you trust the seller
- money – can you afford it
- value – do you think it’s actually worth spending the money on
I guess we could also add a 4th item in: desire – do you actually want it, but I think in the overall scheme of things, it’s the most obvious and least important (to some extent). After all, you typically don’t buy things you don’t like nor want.
So, in looking at my client and his attempts to sell his industrial cleaning machine to people, he would need to ask himself 3 questions, and come up with some really honest answers.
I think his first problem was the trust issue. People didn’t know him or his business. He was a new player in the market, selling a product that isn’t well known in Australia, and so one of the first issues he needed to overcome was to provide proof of him & his business being legitimate, and his product having a good reputation in the market.
His product line is available overseas (Asia & the USA), but it was new to Australia and practically no one knew of it or him.
Secondly, could his prospective buyers actually afford it? Was $7K seen as way too expensive for it, compared to any existing alternatives? If 99 – 100% of his prospective customers wanted something like his product, but were only prepared to spend $2k – $3K – even $5K, then he has/had a problem.
This leads us into item #3, did the prospective buyers feel it was good value for money – did they see their $7K as a good investment?
This one ties very closely into item 2 (the money), because people usually only buy if they see it being good value.
Since his product was an industrial cleaning product, and a typical buyer may purchase his machines for a cleaning business, did they feel that spending $7K per machine would produce a positive ROI in a reasonable time frame? Would the purchase of this equipment pay for itself quickly enough &/or would it leverage their product offerings to allow them to earn even more money than they paid for it?
Once you understand this, you should quickly realise that the actual purchase price is (within reason) immaterial. After all, whether one of these things cost $500 or $50,000 wouldn’t make a difference if owning & using one gave the buyer a 500% or 1000% ROI.
In other words, for every $7000 they spend on one of these machines, if it brings in $35K or even $70K in positive revenue, then it’s likely to be a great investment.
And that’s perhaps one of the biggest weaknesses he had in trying to sell these machines. He hadn’t done any research in his own business to see what ROI having these machines could provide. If he had test driven 1 or 2 of them in his own business and monitored the earnings they brought in, he would have known fairly quickly whether they were going to be a cashflow positive earner for him (and buyers operating businesses like his).
Imagine how the sales enquiry would go if he knew his numbers…
“I should tell you up-front Mr Prospect, that before I took on the dealership for this product in Australia, I actually purchased 2 units to test drive in my own XYZ cleaning business, and measured their earning capacity.
In the last 6 months, I have been able to measure sales of $155/day directly related to the rental & use of each machine, and they were only costing me $5.20/day in finance charges.
Within 6 months, I had paid $873 in leasing/finance charges and had earned $26,040 in gross revenue per machine.
Of course, you’re welcome to purchase a machine at $7k outright if you like, but my recommendation is that you lease or finance it through your bank, and minimise the outlay upfront for the equipment, and start earning revenues from day 1.”
And, how about if he told the prospective client that he was happy to share his financial records (earnings and outgoings for this product in his business), just as additional proof that he was telling the truth? Do you think that would make it even easier to make a sale?
Do you think that any prospective buyer confronted with this “sales pitch” would have any problems with items 1, 2 & 3 (trust, money & value), when it was put to them in this way?
Obviously, not every situation will fit perfectly into this scenario, and sometimes it’s almost impossible to measure ROI, but for those small businesses selling products/services that do fit this model, there’s a killer sales pitch for you to use, starting today.
Another problem he (and many other businesses) faced was getting to pitch his product to the RIGHT kind of prospective buyer.
After all, what’s the use of trying to sell your product to someone who is not in the market for your product?
Just as a quick aside on this topic, here’s a link to a great article by Master Marketer Dan Kennedy, titled Right Product, Wrong Market. Go have a read – it might be an important eye opener for you.
His product was best sold to businesses providing cleaning services, so making a pitch to an accountant who has no involvement in that market is obviously silly. Yet, day in & day out, I see businesses trying to sell their product to the wrong kind of buyer (usually via broadcast advertising like TV), and I can only assume they’re not getting very good results.
If I was this client, I would have purchased a mailing list of his IDEAL customer and sent them a direct mail pitch, rather than just hoping Google AdWords was going to be the best way to promote his product.
AdWords *IS* a fabulous way of testing the market for a product and getting feedback on whether there is any interest in whatever you are selling, but it’s sometimes extremely difficult to target your ideal buyer because they are just not searching for your product/service.
In this client’s case, he would have been far better off targeting his sales pitch to the buyer who is most likely to benefit from owning 1 or more of his machines. That way, even if only 1 in 100 direct mail pieces sent out turned into a sale, he would have paid for the postage & production costs, and ended up with a profit into the deal.
In his case, AdWords was a tougher way to market his product.
And that’s an important lesson in and of itself: promoting your product/service work well with some forms of marketing and not well with others. You’ve got to figure out which options best suit your business, market & product offerings.
That’s why this site is about small business MARKETING, not just small business INTERNET marketing (even though that’s my favourite form of marketing). Different strokes for different folks and so forth…
Another reason he didn’t get any sales was he didn’t make his pitch to enough qualified prospective buyers. In many businesses, you need to speak to 10, 40, even 100 prospects before you’re likely to make a sale.
So, if you have to pitch to (on average) 83 people to get a sale, then guess what happens if you only presented to 25 people…
That’s right, strike 3, you’re out!
You need to make the numbers work in your favour, and my client definitely didn’t do that. He only got to speak to 15 people before he pulled the plug on the AdWords campaign. That’s a [another] BIG reason why he didn’t get a sale, aside from the other things mentioned already.
Once again, in his case, direct mail would have been so much quicker, cheaper & easier than AdWords. He could have presented to 1000 high probability prospects in 1 week for a cost of perhaps $1-$2 per person, rather than hit 1200 unknown probability prospects in 1.5 months via AdWords for $1.65 per person.
Sounds somewhat similar (aside from the time frame), but keep in mind that a direct mail piece could have included a full sales letter, brochure, and other promotional literature, whereas adwords (in this situation) had a small text ad with 4 lines.
Which do you think is more likely to be effective???
So, making sure you target your market as tightly as possible is a key element of success in marketing. Taking wide spread pop shots at anyone who is breathing and has cash in their wallet is typically a very wasteful method of generating leads & sales.
Think sniper vs shotgun. Laser-targeting your IDEAL prospect with the right message and offer will always be more effective than spraying the widest area possible with mass broadcast marketing, HOPING to hit the right prospect.
So, in conclusion, the lessons you can draw from this example are:
- Make sure you can provide STRONG COMPELLING arguments for money, trust & value,
- Target your IDEAL prospective customer with a pitch that gives them great reasons to buy (ROI, saving time, saving money, increased earning capacity, etc), and
- Present to enough prospects to make the numbers work in your favour.
If you actually spend the time & effort to fulfil all these points, you’ll be blown away with your results, and you won’t be left asking the question “Why Didn’t My Product Sell?”