Yoho Tells Companies What Mistakes to AvoidApril 30th, 2012 | Category: Featured Content
If you are a window retailer and you don’t make companies give you a deposit you are making a mistake, Dave Yoho, Dave Yoho Associates, told home improvement companies, including many window retailers, last week during a home improvement profitability workshop.
This was just one of the many pieces of advice he gave companies. Other tips included everything from pricing to determining costs. He doesn’t buy the argument that companies must drop prices to compete.
“The major failure in businesses is they don’t have the proper policy when it comes to pricing,” said Yoho.
As for why companies must take deposits, “You need to accrue cash,” he said.
“Never do a job without a deposit. In the window business we believe the deposit should be 40 percent of the job.”
He also offered an idea of a rebate as a way to get companies to make a deposit. For example, if a homeowner gives a 20-percent deposit they get a 2-percent rebate, and so on.
Other advice included how to ensure you get paid.
“When your receivables are more than 90 days past due your chances of getting paid are almost nil—but you still have to pay taxes on it,” he said.
But “it’s all in the way you ask for it,” said Yoho. In your contract specify that the homeowner has to pay when the job is “substantially completed.”
“If you did a $16,000 job and a $300 window is missing they still have to pay you,” he said.
“Don’t let the money hang out,” said Yoho. “Make sure you ask for the money on the jobsite.”
Yoho spent a substantial amount of time telling people how to determine their profit.
“If you bargain you just lost your profit,” he said. “You should not be doing jobs if you can’t make a profit.”
But you can’t make a profit until you make the sale, right? That’s where proper training of the sales rep is crucial.
“If you don’t try to make the sale on the first call you won’t,” said Yoho. “You need to train your salespeople how to do this.”
Why do they not make the sale on the first call?
“They do not ask for it or they don’t ask for it properly,” he said.
But some in the room are already doing a great job in this area. A representative of one company in attendance said, “A high 90 percent of sales are made on the first call.”
So how do they make that sale the first time? Proper training. However, when Yoho asked attendees how many had formal sales training only a few hands went up.
Sometimes this leads to the offering of options, that while valid, don’t always need to be offered. For example, Yoho talked about financing options, such as same-as-cash, and said, “Salespeople spit it out automatically and they don’t have to.”
Much of the seminar also centered around lead generation and the cost of a lead.
“Be careful when it comes to farming out too many leads to your reps,” said Yoho. “Too many leads doesn’t get you to sell more it gets your reps to waste more.”
Yoho puts the cost to issue one lead at approximately $300.
“When your sales reps complain about the quality of leads you give them, don’t give them one for a few days.”
He also reminded attendees that when it comes to close rates, “Most people measure closes by presentations given. It’s really by leads issued.”
His no-holds-barred approach to sales seemed to be welcome advice to those in attendance. He left them with words of wisdom including:
“You don’t have to cut your prices. You don’t have to offer a secondary product.”
“You lose the sale because your salespeople don’t perform well. Most think they lose due to price.”
The event included a variety of sponsors from various companies including Sunrise Windows. Each sponsor was given a few minutes to talk to attendees and Mike Roncato, vice president of sales, pointed out that the company has a “dealer-direct focus” and that the company also places a high priority on dealer training.
Stay tuned to dwmmag.com for “how to canvass,” a session presented at the event by David Alan Yoho, and a blog for further details from the sessions by DWM editor Tara Taffera.