You probably won’t hear this at the IBBA conference.
Having performed marketing for business brokers and middle market merger and acquisition specialists now for over a decade, I want to comment on a few occurrences I have seen first-hand that you probably won’t hear at an IBBA conference.
Sitting behind the computer screen directing hundreds of brokers across the U.S. and Canada, with the aim of developing prospect lists into successful appointments, I get to see feedback equally from both our client the broker and also the prospects we generated for them. Being a licensed broker myself I have been able to apply my observations first-hand to prove what was an inference is in actuality a fact.
My first two clients could not have taught me more and we’ll change the names to protect the innocent. Dave came to us as our first business broker who wanted us to generate listing appointments for him. Dave was highly intelligent with a strong background of business success and clearly had business brokerage under his belt. He was quite fluent in SBA rules and finance in general and his understanding of both the market and the people who make up the market were advanced. Our second client, Randy, was more of a good old boy who could put you at ease quickly and did more listening than talking. If Randy had the same level of knowledge, it only came out when needed. While our first broker was under the direction of a CBI Broker for an office, Randy was the owner of his own office and had other brokers working for him, and also had a track record of success.
Never list a friend’s business.
Just like you should never loan a relative money (give it to them fine but loan …never), listing a friend’s business must be done with kid gloves. At the time I was not yet licensed and therefore when it came to referring a broker to my friend, I had to choose between the only two brokers I knew in town, Dave and Randy.
My impression of both was that they were upstanding superior men, however Dave’s professional edge won out and I recommended him to my friend. Subsequently, Dave landed the listing. This is when I gained my first insight into the different approaches of the two men.
Dave felt he was mentally preparing his client (my friend) for the upcoming process. It sounded more to me like he was pointing out every negative thing he saw and conditioning my friend for impending doom.
Dave felt he was covering all his bases with request after request so he was sure every “t” was crossed, which was certainly his obligation and responsibility as a professional broker. The pace with which he proceeded at this task left my friend feeling overwhelmed with confusion as the effort to sell his business appeared to become more work than just keeping it.
Well Dave listed the business and ran the usual web ads, and according to my friend, never made contact with him again during the entire listing period, which eventually went to expiration. It was at this time I was curious what Randy did different as Randy appeared to list more of the leads we generated for him and additionally sold more of the listings he had.
The starting line is not really the start…its closer to the finish.
I made it a quest to ascertain what Randy did different than Dave. It truly came down to Dave feeling it was his role to be a consultant, an advisor, a mediator, first, and only then a broker completing a task for the benefit of all – if only his role as the expert went as he planned.
Dave walked in and began to question, advise, guide, while really under the surface he was looking for what was going to be an obstacle to his commission and how much work he truly was going to have to do to get the business sold. This game back and forth between the prospective business owner and Dave was designed to impress and convince that Dave was the man to list with. My opinion is that with all his analyzation and fodder, Dave was his own worst enemy and was not even up to the starting line yet.
Randy walked in with not only the mindset but additionally the verbiage of “You have a wonderful business here…how much do you want for it?” After small talk Randy would say “Let’s get this business on the market and try to get your asking price so you can enjoy the rewards of everything you’ve built here.” He would shut up and pleasantly look at the owner…and BAM the listing was his.
Naturally, I carried this with me for years in anticipation of the day that I would be a broker out in the field. My first month I had listing appointment after listing appointment (generated of course by SalesDouble.com since I don’t enjoy making calls myself). To partially cover my lack of knowledge of the industry, I quickly became the questioning consultant, the studious advisor, and the willing mediator. I could never understanding why owners who seemed to be open, willing, and even interested in selling, did not make the move to list with me.
The older we get the longer it can take.
After one month of no success, I cleared my mind and probably out of sheer frustration realized I was being more Dave than I cared to be and decided I was going to become Randy. I was going to start at the starting line, knowledge under my belt that would come out when needed. Straight from the gate was to pleasantly BEGIN the first meeting with, ““You have a wonderful business here…how much do you want for it?” Followed by, “Let’s get this business on the market and try to get your asking price so you can enjoy the rewards of everything you’ve built here,” and then shut up and wait for the owners response…and BAM, six nice listings in three short months.
3 good lessons to remember.
Lesson one as we just studied is start an in person meeting or a phone appointment with someone who claims to have strong interest, with the above trial close and let the owners reply gauge the next level of conversation.
Lesson two is if you are unsure of the interest level, then tread as lightly as Kwai Chang Caine (KungFu) on rice paper and ease into the conversation. I cannot tell you how many clients over the years have opened a conversation with “I hear you want to sell your business?” Or begin the call with the expectation that the owner has been waiting on pins and needles for the call. “Yes its Bob and we have a phone appointment for right now…” Today’s business owner has as many as 5 or more contacts a week from brokers looking for the listing. Ease into the conversation if they “just want information.”
When unsure of the interest level, don’t go for the marriage proposal, start with coffee.
Lesson three is be accountable, be pleasant, be professional, because it does matter, especially the one time you think you can get away without it.
This lesson comes from our “Wall of Shame.” I’m a bit ashamed to say we have a wall of shame, however we do it as a reminder and compass of improvement needed by the parties involved and insight to client behavior. When a prospect has replied to an email marketing item that we sent out on your behalf, it passes through our server and we see it and make sure things are handled properly much like an email bounce-back. That’s what you pay us to do.
The amount of email replies that we have seen from the prospect to our client that say “Where were you…you were supposed to call…..you were supposed to send me a quote…etc,” are astounding.
We gave up long ago putting those comments on the wall of shame as those came in daily. We now reserve space for emails like a recent one that said, “The last guy from your company showed up late in a seers sucker suit, driving a beat up car to list my million dollar business. Cancel our meeting,”
The current market.
My personal current assessment of the market is optimistic, based on results from the 50,000 dials per week we make into nearly the entire SIC code sector and our other comprehensive marketing done at SalesDouble.com.
The wisest of financial sages cannot predict the next days happenings so we each go with what we choose to believe. I’ve decided not to participate in the continuing economic downturn for the simple reason that there is always someone out there with money who needs something I have. Car sales are down? Yes but over 1,000,000 new units were sold last month. Someone has money. Home sales are down? Over 400,000 new homes will sell this year. Someone has money. I do not care how hard it is to find the business owner who has the magical combination of a desire to sell and a business worth selling – the payoff is worth the fight.
Calls into the manufacturing sector the first quarter of 2010 have yielded more optimism and increased sales and activity than I have ever seen since the downturn (and I’m not talking about 2007, I’m talking about the manufacturing downturn that started a decade ago). We call for other clients into sectors to see if they need help increasing sales and we are experiencing a record number of companies telling us they are currently at or exceeding capacity. The wholesale distribution sector is mirroring this pattern and sectors such as medical, environmental, consulting, transportation and a host of others all have gems waiting to be found.
Following are the top six items for a brokerage firm or individual broker to focus on and evaluate where current marketing efforts stand.
“How to Fail in Business Brokerage “or” better yet, 6 mistakes to avoid”
If you know how other business brokers fail, reversing the downfall is a simple step by step plan performed bite by bite each day. Check out the following reasons for failure and see how many of them your office may be prey to.
1. The King of the ONE CALL CLOSE. Want to fail quickly?… Ignore the 7 magic moments.
Our internal research, conducted three distinct times over the last 5 years, continues to show that there is a magic number 7 when it comes to getting a listing. I’m not trying to explain it or justify it, I’m merely reporting it as it is a rule we live by. Each contact made with a business owner is valuable, regardless of the time period over which they occur or medium used for the contact.
You as our client may be a perfect example: Contact 1 - we phoned you to see your interest level; Contact 2 - we sent an email outlining our services to help your business grow; Contact 3 - we sent a follow up email to verify you received the previously more elaborate electronic brochure; Contact 4 - a salesperson phones you back to sell harder and gauge true interest; Contact 5 - we resend the electronic brochure you say you did not receive; Contact 6 - sales calls you back again and further data is provided, questions answered, testimonials provided; Contact 7 - another sales call and finally the ability to close and complete the sale.
Our true surprise and amazement comes at the common occurrence of 7 being the magic number. Whether the initiations were 3 phone calls, 1 mailer, and 3 emails totaling 7 or 2 phone calls and 5 emails, etc., 7 was the most frequently required number of contacts. As our client, we handle most of the initial 5 or 6 contacts for you, so please don’t discount the prospect just because he isn’t ready to list NOW. If you don’t know how to properly throw a prospect back into the SalesDouble.com system so that continual future contacts are handled by us, CALL ME NOW.
2. Don’t tell me how to do my job. Rule #1, Do as I say, not as I do!
The best explanation of the problem here is to ask yourself, “Is it easier to fix my relatives and friends lives and problems or to fix my own?” It’s easy for management to tell brokers to “Set goals,” “Call expired’s and FSBO’s,” “Test your scripts and improve your sales skills,” and the list goes on. Whether you are the CBI who wears three hats or the broker who is the rainmaker for the company, if you don’t implement the basics of having a plan of action to follow, your success is greatly hindered. How am I generating new listings? How am I handling buyer interactions? Converse with partners, family, strangers, clients and prospects, or better yet US to ask opinions, get help and ponder observations. You internalizing the problems you see within your company or sales patterns are simply repetition of current or past failures. Seek new and different strategies. We work with hundreds of brokers and other businesses across the nation to improve and perfect their sales. USE US!
3. I don’t think you “get me.” Help Me Help You.
You don’t have to look long or far to see all the hustle and bustle about USP’s, or the “Unique Selling Proposition.” Good ol’ Wikipedia has some great examples of GOOD USP’s - check them out! We exist in such a world of clutter and confusion that what works best today is what worked 30 years ago, “Hot Button Salesmanship.” If you expect people to list and buy with you, then remove or reduce every obstacle to the sale. Speak clearly so they get why they need you from the very beginning of the conversation.
Do you explain to buyers why you need so much data from them before moving further into the details of a listing? Does your new listing understand the process of what to expect and the possible value of at least being open to owner financing? Repeat benefits (not features) clearly and more than once. A feature we see displayed at so many business brokerage offices is “No one sells more businesses than us…” but the benefit to the owner thinking of listing is that “listing with us you’ll get the security and protection you need and the price you want.” Tell owners that “you are the best representation for their company” and tell them why. Open new conversations with new prospects much like a first meeting with a potential date. Don’t start with talk about marriage and kids, start with a cup of coffee or a movie. As brokers our job is to educate and nurture and some need more nurturing than others.
4. Open dialogue or scripts.
Nothing beats a perfect script that hits home. Years ago, for a large paint contractor, we went out and asked builders and contractors some of their biggest grievances. The paint contractor client was expecting timeliness, price, and of course quality to be the big three top concerns. The number one thing we heard was completing the jobs loose ends. Painters would leave the weather-strip out of the doors and lose the screws to hinges. The number two complaint was cleanliness of the jobsite, which reflected directly on the contractor. We catered the marketing to hit home with these points while still addressing the additional points and had remarkable results, including many comments from prospects that said they felt like we knew exactly what they were thinking. Do you know what your buyers and sellers are thinking?
Scripts are great and needed, however, being able to hit home with your dialogue when conversing with a prospect shows them you are of value. If you don’t know their problems then how can you help them? If you aren’t going to help them then why should they be talking with you? If you want to take “The sizzle out of Yo Fizzle,” then just ask the prospect questions; ad nausea when what they want is someone with answers. Even the lowliest business owner thinks his time is more valuable than everybody else’s and speaking about solutions with them is useful, speaking about all your features when only one is their sweet spot is going to get a hang-up and you will never make it to the magic number 7.
5. Only one medium need apply. “I prefer email”
Maybe you do prefer email, however maybe your delivery rate is less than 10%. Maybe your prospects buying style is verbal and emails bounce off their brain like fleas off a glass ceiling. I’m not here to say whether mailers, blogs, or RSS feeds work for you or not. I am, however, here to say that our system utilizes person to person contact with phone calls, emails that are personalized and also email marketing in a brochure or display format with click-thru features, audio visuals to elaborate the strongest points to those most willing and most interested, and even good old fashioned faxes when appropriate. The SalesDouble.com system you are using incorporates multiple medias; make sure you are taking advantage of everything available as you build toward that magic number 7 contact.
6. 50% of data generates 100%, half of the time. Numbers, numbers, numbers.
As a client of ours, we focus first on the numbers surrounding your list and target market. Too small of a target and you’re out of business. Too large a target and bottom line profit is affected. Many of our clients provide their own list which is fine, however, after we have called through your list, we need to review the stats of disconnects and leads and find out what SIC code is producing the best results.
If you want to crash and burn, ignore the numbers. If you want to see big numbers at the end of the year, then start realizing that the numbers are all that matter. What percent of your list is accurate? What percent of your list contains prime targets? What exact SIC code is producing the highest response rate? What SIC code is producing the highest margin or the fastest sale. How many contacts are needed to create a lead? How many leads are needed to get a listing and then make a sale?
So here’s the simple sentence we follow internally: Maximize target lists to highest producing return, while directing most effective callers with a cleansed list to entrench the USP to the proper contact, while educating sufficiently using multiple media to determine if interest level is sufficient enough for the close. Then we hand it over to you, our client.
And Sadly the List Goes On…
This is just a half dozen of the most common as sadly the list goes on. Our job here at the SalesDouble.com is to help you eliminate obstacles to your success such as those above. The more you communicate with your customer service rep here, the quicker and easier it will be to achieve your goals. Call us today at 866-231-6776 and don’t be a stranger.
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