Tom Wittman: Closing The Sale Despite Objections

Let’s start with the business, in general.

The biggest challenge and I’ve lived through it myself during my journey is the business of understanding a few principles. Cash flow is a big thing for small companies. Minding cash flow and cash spread every day is super important because you can have a profit and loss statement and be making money, run out of cash, and go out of business. That’s number one, watch your cash flow. Number two is to understand where your breakeven is for revenue every month. If they can at least track those two things starting out, they’re going to be very successful because they’re going to know if they are growing their cash. They’re going to know if they’re going to surpass, break-even, and make more informed decisions each month. It’s not easy starting out in a truck with one person and building a company. Those two things are easily tracked. If they monitor that, everything else is going to come pretty easily for sure. Those two principles, even in the largest companies, are oftentimes overlooked. A cash flow and breakeven and then everything else has to do with growing the company. How do you equip the people in the field to do the things they need to do to make sure that the company is going to be profitable?

I see that every day, even in our market, you’d get these large companies which got 40 or 50-year history, but every 6 to 8 years, they’re bought by somebody else because they’re going under because of the offseason. For example, they may drop their prices low to win jobs that they don’t understand that they’re functioning in the revenue. They were paying to do the work instead of keeping quality and keeping the prices where they should be.

They don’t have to do that all the time. That’s the strategy. If they can get while we’re there if they can acquire enough maintenance agreements during demand season to stay in front of customers during the slow season. They can be less weather dependent and not have to work. It’s those types of things. There’s a strategy for everything.

Now, is a perfect time. We are probably going to post this in January, which is dead winter for most places. It means that there’s a lot of heating season going on, but also the other parts of the world, I know I’ve got a big audience base in Australia. You are right in the middle of summer. It is now a good time to plan and start thinking about what’s going to happen in four months from now. How am I going to handle that time of the year and weatherproof the business? How do you advise for that?

First of all, you need to be thinking, winter all summer and summer all winter. That’s Jim Rohn. Give accolades to Jim Rohn. The fact of the matter is managers can’t do it. It’s up to the people that are in front of customers, the customer service reps to plant those seeds and focus on it. There’s a lot of dynamics why they don’t want to do it. A big one is that a lot of companies may not manage their agreements well. What I mean by that demand season, could you imagine being a technician and it’s 100 degrees outside and your first two calls are preventative maintenance service agreement customers and then you’re out until 10:00 at night servicing repairs? That’s a distractor for technicians. If they can buy into the process and discipline themselves to push those calls into the months they need to work and free up opportunities for more incoming calls, take the older equipment, and non-customer equipment first and prioritize that way. My guy changed the lives of the entire company at that point. They can literally be less weather dependent, but it takes the technicians and the customer service reps to buy into it to see how it helps them and make it happen.

What you’re saying is basically starting to prioritize your calls when they reach out or what you’re doing is prioritizing. Set up an actual agenda of this comes first, this comes second, this comes third and then stick to that.

Take care of your existing customers and commitments first. That’s the ethical thing to do. Anything else that comes in that’s a non-client, anybody that’s not an agreement customer isn’t a customer, I believe.

They’re not in the family, as I say.

Everything from that point forward, all those goes first. Dispatching management is a little bit different too. Instead of building a tight schedule during demand season, you’re going to be sliding those calls off to the side and we’ll tell, “The next available technician will get to you.” Then you keep the list growing and it changes the dynamic business. You can do it in one season.

With companies that you’ve done this with, do you have some examples of general members that you’ve turned it around?

I had a plumbing company that went into the heat and cooling business. They were struggling at about half a million. They couldn’t keep employees. The cycle was bad. I went in and got it. I was involved with them more of a hands-on. We are a weekly and we make sure things happen. The first year, the first cycle through the season, they went from half a million to 1.5 million.

They tripled their growth.

It was awesome. They had four technicians and they were running probably 500 calls a month, turning 60% of those into agreements anywhere from 8% to 12% into replacements. Imagine doing that over 3 or 4 months. It doesn’t take long to get some things put in place. We then restructured a little bit, we put people in charge of performance in the field because as you grow, you have to restructure a little bit. In the second year, they hit 2.2 million. They’re in a pretty nice growth pattern right now, but it’s keeping up with this direction.

At that point, it’s a matter of managing the scalability and the details.

Pretty much, but there are a lot of details.

Because this is a very sales-focused podcast and that my whole business is centered around the sales focus and a lot of it is the conversations, let’s dive in a little bit and park there. You mentioned the technician’s responsibility in the field to have that conversation with the client to turn 60% into maintenance agreement customers and which the 8% to 12% into turnovers. What does that conversation look like? In context here, I’ve got a lot of people in the group that listed are small companies, maybe the owner is doing the service and the installs or a little bit larger. People wear a lot of hats or a lot of big companies too were pretty spread. What does that look like?

It’s really simple. It’s called a risk assessment. It’s the same profile that life insurance agencies have been using for years. What’s the average life of the system, the age, average life in or out of warranty, and the probability of future repairs? For example, the system is eighteen years old. The average life is 15 to 20 years. It’s out of warranty. The probability of future repairs is high and for that reason, I’d recommend getting a comfort advisor out to give you some options on upgrading to a newer system or we can go ahead and restore the operation. What would you like to do? If they choose to get a comfort advisor out, they’ve converted it. If they say, “Let’s go ahead and repair it,” I would highly recommend a maintenance agreement so you can get a discount on the repair. We’ll be out here twice a year to get in front of any issues. If you ever have a need, when it’s hot like this, you’ll go to the front-of-the-line service. That’s how they do it. It’s not complicated, but it’s fact-based. There’s no opinion. Everything can be validated with facts so when the technicians stay disciplined in the process, they get phenomenal results without a lot of pushback.

We talk about it that we’re not trying to twist somebody’s arm. We’re not making something up. It’s basically asking permission and then the client says, “Yes.”

From the old days, your customers are in control of making decisions. We’re in control of keeping them in control.

We give them control back by asking the right questions, but by asking the right questions, we all know, “The one who asks the most questions is the one that keeps control of the conversation.” It is a beautiful cycle and a beautiful circle. There is a lot about that philosophy. Let’s talk about sales teams a little bit. What are some of the common challenges you find when you’re turning around and struggling sales team? What do you do to correct that?

Probably the biggest one I find is that as a company grows, they’ll hire a salesperson or a sales consultant to be the savior. They’re left on their own accord to manage their leads, run the calls, and do everything. As the company starts to grow, there isn’t any lead coordination or tracking of performance and results. Making that shift is a challenge, especially if you have a person that’s been in there contributing for a few years, managing the whole process, and then it’s time to bring more people in. The first one right off the bat is, to start managing those leads to final disposition and be disciplined enough to schedule the salespeople very similar to would a technician for the calls. Monitor those leads. Sam, those leads cost anywhere from $400 to $700 a week. Can you imagine handing somebody $1,500 and saying, “Here’s the $1,500, go out and make more money for me?”

You’re not tracking. That’s virtually what happens when those leads aren’t tracked. I would say that’s number one. Number two is not having a sales process that can be replicated and tracked as evidence. The process that we use, we can jump in a car with a comfort advisor and do a quick evaluation, and figure out 2 or 3 gaps. Let’s lighten it up. That’s what people need, tracking and a process that can be evaluated so that we can help these salespeople get better at what they do. The third one, is mindset. It’s a big thing. For the comfort advisors, mindset. They need to learn how to learn the lesson, forget the mistake, and develop a skill. It’s those three things. If they can learn the lesson, and forget the mistake, their mindset is going to be right. When they learn a new skill, they’re going to perform at a higher level.

I love to tell everybody, we never lose in what we do. We either win or we learn and then move forward from it. That’s the mental choice to take those steps forward and to get better from each time. I know even myself being in the field still as well, I learned new verbiage or I learned that there’s a new closing technique I want to try or whatever. I know I’m going to have some learning moments along the way when people say, “I think you’re crazy.” At the same time, it’s your laboratory. That’s why it’s something we’re always moving forward from. We talked a little bit about tracking those numbers to those leads all the way to completion. What are those KPIs or Key Performance Indicators? What things should a comfort consultant or project manager, whatever we call ourselves, what numbers should they be tracking? How do they interact with each other to move that ball forward?

The number one is sales volume. Mainly, we used to be tracking that anyway because we want to make sure we get past breakeven. It’s how many presentations and then the closing percentage of X amount of presentations, what percentage close, and then the average dollar. What’s your average dollar per sale? Those are the core four. I would also include reviews. Do they look before and try to do team reviews after every sale and go back to the customer? There’s one caveat in that I’d like to add. We have a process where the comfort advisors, the salespeople, they offer their own sales plan. It’s interesting, we started to implement that years ago. What’s interesting is most of the comfort advisors, when they understand how to plan, they set a sales target that way exceeds what the expectation of the company expected of them. The unexpected consequences of that were fascinating because we shifted towards, “This is your monthly quota,” to “I want to work with your sales plan. If the comfort advisors plan exceeded the minimum, we’re good with that.” 80% of the time, the comfort advisors plan exceeded the minimum quota and they were on fire to do that. It’s almost as if we were putting a glass ceiling on them by limiting their potential based on the minimum needs of the company.

That makes so much sense to me because I’m that type of person. I know many people, both men and women, if you’re doing HVAC tracking or plumbing if you are doing HVAC sales, you are an achiever. You are more than an achiever or you wouldn’t make this a career to function with a 100% commission mentality and know that’s how you want it to be. Otherwise, you’re limited. That makes so much sense because we all know that on any given day, are we giving it our all? The answer most of the time is probably not. We know there’s juice left in the tank. To be given those reins and that buy-in of, “Let’s control my own destiny and shoot for this, shoot for the moon,” that makes so much sense why those numbers are so much higher most of the time.

That was a good unexpected consequence.

I had a cool idea with this so I’m going to set a context for this next section, but before we do that, anything else you’d like to add? We’ve covered some cool stuff so far.

I’ll take your lead on this one.

Before we do this, one thing I’d like to go through and to get your thoughts on this, the way I teach my system and the way that everybody that’s reading is starting to understand the reason that we do some of the things in the specific order is to set credibility pieces. One of the biggest foundations that we’ve started with, the very first thing is getting into the house. We’re in the house, we’ve introduced ourselves, but then getting into the introduction. Asking everything that we do is based on the three steps of asking permission, giving the data, and then checking in to make sure it was received and how it was received before you move on to any more data points. That’s the initial introduction, which is about the company super quick. Set some credibility pieces there, the introduction about yourself, and then set the agenda for what we’re going to do.