Direct selling is a timely and costly proposition. When it comes to product sales, the probability of success through direct selling is approximately 10%. These means a salesperson would need to have a meaningful conversation with at least 10 prospects before one became a customer. The probability of success is much lower, closer to 2%, when it comes to services. One of the reasons is because products have a well-defined form fit and function while services do not. As a result, it is a lot easier for the prospective customer to understand how a product will enhance their life or business. In other words, they can appreciate how having the product will help change their situation.
A bigger challenge when it comes to selling services is that most people think they already have enough. Let’s take an example a service we are all familiar with, insurance. Has an insurance salesman ever called you asking you if you want to buy any insurance? I would image they called you around the dinner hour and you were not that interested in speaking to them. They probably tried to sell you more coverage, maybe with the promise of reducing your premium payments. Unless you really needed more insurance, I bet your response was something like “I’m happy with my current insurance carrier” and/or “I don’t have time for this right now”, or “saving a few extra dollars a month isn’t worth the time and effort of taking a physical and completing the paperwork”.
Sound familiar? You probably have little incentive to buy more insurance, especially if you believe you already have enough. Would you be surprised if the same dynamic exists when it comes to purchasing other types of services like professional services, hardware support, or logistics, etc.? Probably not! I’m sure you’ve heard similar types of objections, like “we are happy with our current provider”, “we don’t see any reason to change right” now, or “its takes too much effort to change”.
Fortunately, there is a way to change this pattern and improve your chances of winning new business. It’s called “Education Based Marketing”. It uses a number of different indirect selling tactics to create interest, build demand, and lead prospects toward taking action. Examples of indirect selling include websites, brochures, newsletters, press releases, and article placements.
To understand how education based marketing works let’s look at the insurance example again. Let’s say that you have reached a point in your life where you are starting to think about retirement and you are in search of an investment that protects your principle and produces a reasonable, guaranteed rate of return. Now suppose one Sunday morning you are reading the “Lifestyle” section of your local newspaper and you see an article about retirement planning. The article describes challenges, concerns, and frustrations that people experience when it comes to investing. It also identifies various options to overcome these challenges. One of these options is insurance annuities and there is a quote from an insurance salesman, who just happens to be based in your hometown, about the types of returns that are possible with annuities and what to look for in a provider. Now if you are planning for retirement, chances are that one of the first things you are going to do on Monday morning, after you find that salesperson’s telephone number, is call him and schedule an appointment to discuss your needs.
Compare these different approaches. In one scenario you can’t wait to speak to the salesperson and in the other you won’t even give him the time of day. Simply put, by using an education based marketing strategy and indirect sales tactics you pull prospects toward you rather than then pushing yourself on them. In a nutshell, education based marketing is about educating your prospects about the challenges they face and the ways they can solve them. You still need to be able to sell once you get in front of prospective customers. However, education based marketing helps improve your success rate because it provides a process by which prospects self-qualify themselves and take initiative to call you. Our research shows that prospects who engage with a company’s Education Based Marketing program are 29 times more likely to purchase and 94% more satisfied with their purchases because they are better educated about what they purchased and why they need it. In other words, they can defend their purchase logically.
If you are responsible for marketing and selling services,then it’s absolutely critical that you give some consideration to Education Based Marketing. No doubt it will improve the effectiveness of your sales process and closing ratio. Education Based Marketing is one of the five (5) fundamental concepts of successful service marketing that I cover in my new online training course. Last but not least, you can schedule a free telephone consultation with me if you would like to discuss how Education Based Marketing can work for your company.