5) Payment Arrangements (step five of the sales cycle)
Not knowing when to truly focus on payment arrangements is one of the biggest deal killers that exist in sales! I’ve seen rookies and seasoned veterans alike blow a deal because they allowed the prospect to take control and start talking about the money at the wrong part of the sales presentation!
Now you have to understand, I’m NOT suggesting that you hide or be misleading regarding your products’ pricing or payment terms. All I’m suggesting is that you try to spend time talking about the payment arrangements AT THE PROPER TIME which is RIGHT AFTER THE CLOSE!
The fundamental psychology of this is simple. The minute you start talking about payment arrangements, credit, writing a check, etc, your client can start losing excitement and quickly fall below the buy-line. If your client isn’t already sold or committed to the purchase, the mere idea of talking about payment or credit is usually enough to blow your sale!
Go back to the example again of going into a retail shop. If you noticed, they don’t ask you to give them your credit card first, before you shop do they? In fact, they make it INCREDIBLY convenient to pay for their goods, they just don’t make a big deal about it until you’ve MADE YOUR DECISION TO PURCHASE which in this example is the physical movement up to the cash register with the items you’ve already ‘mentally’ purchased.
So when your client starts asking you payment information (which is a GREAT sign that he’s very interested,) make sure you don’t get lured into going through the Payment portion of your sales talk. Simply say something like, “Jim, I’ll get to that in a minute- you know we have many different ways you can handle this, so don’t worry about that now.” And immediately go back to wherever you were in the sales talk. This 1) calms Jim’s nerves, 2) answers his question with assurance, and 3) keeps you in line with your sales cycle and in control.
What if Jim presses for a clearer answer? Ride with him but don’t be afraid to stay in
control. For example if Jim says, “No really, I need to know how you guys handle payment,” you can then reply, “Jim, like I said, I can usually be very flexible with that. I did it one way for Sara Johnson, and a completely different way for Mike Brown.” You can also then take a temperature question because this could mean that Jim might be ready to buy! “If I could work out the payment arrangements with you, are you pretty-much ready to roll with this?” If you get a ‘yes,’ CLOSE HIM!
Once the deal is closed, you can then feel free to work through the terms of the payment. If you have a preferable payment term, try to give a choice between 2 positives: “Do you want to take care of that with a check or credit card?” Always start with your most favorable options and work down the list from there.
We used to call orders that were paid in full or for which we received at least 50% deposit on as ‘strong,’ and any other type of order as ‘weak.’ The reason for this is that the less of a deposit you get, the higher chance you may still end up with a cancellation or back-out. Now obviously this depends on the industry, but with sales for lower dollar items such as $500 to $5000 items, you can usually secure at least a deposit. But don’t let the payment terms cause you to lose your sale.
We once had a vendor pitching us on a $35,000 phone system get so caught up in getting us pre-approved for the sale with a leasing company, that he failed to ever secure the contract! In the mean time, our accountant referred us to another company that provided a similar system but who was smart enough to close the deal and THEN worry about the payment terms. About 2 months later, I received a ‘call-back’ from the first phone company acting as if I owed them something, (I simply said- you missed out, we went with a different company!) And they actually sounded shocked! This company’s lack of follow a sales talk and cycle caused them to blow a fairly decent size sale all because they wanted to go through payment before ever closing the deal thus causing them to lose the sale entirely!