Collecting cancellation fees

People don’t like paying cancellation fees even if they are aware of them when they book their appointment, to the extent that charging a fee often results in the client going elsewhere.

No easy remedies

Apart from asking for a non-refundable deposit, there are no easy remedies.

Charging a cancellation fee to their credit card leaves you open to the client disputing the charge and claiming a refund, the excuse being: they did not receive your service, they were not aware of your cancellation policy (even if you did tell them), and they did not authorize the charge.

Avoid cancellations in the first place

So, by far the best way of reducing lost revenue is to avoid the cancellations in the first place.

  • Send the client a reminder 24 hours before the appointment either by SMS, email or phone and get a confirmation of the appointment;
  • Ensure your staff are well trained to handle objections and secure the appointment;
  • Survey the clients to find out why they cancel and address the issues; and
  • If a client repeatedly cancels insist on payment up-front. If they don’t like that then don’t make the booking. Let them become the competition’s problem!

Finally, if you can afford it, you could offer a discount for up-front payment.  At least then you would have the cash even if your profit is reduced.

Posted by Peter Johnson, Business Advisor with SGBA. If you would like a free initial consultation to discuss your business, call Peter on 07714 093406 or email him at peter.johnson@sgba.co.uk.

We’d like to thank Arnold Toynbee of SolutionWise, Australia, www.solutionwise.com.au for permission to publish this material.

>The Simple Rules of Negotiation

>

How many Sales people really understand NEGOTIATION? Sadly too few.
Many enter the negotiation cycle without realising they are in a critical part of the Sales Process. Indeed negotiation is not always related to Sales situations. For example we have all had the discussions with our siblings along the line of: “Can you take me to the pictures tomorrow?”, responding with: “Only if you tidy your bedroom”. Indeed a primitive, but often effective negotiation, and indeed one (if carried out) can lead to a ‘win – win’ outcome!
It is vitally important to recognise when the sales process enters the ‘negotiation phase’. Failure to recognise this may be detrimental to your desired outcome, and do the salesman a disservice.
So, what is negotiation?
I have over the years heard many definitions, but the simple ones are always the best:
“The exchange of tradables to facilitate an agreement”.
Simple!
And what are tradables? And more importantly, how many sales men can list them?
Tradables are the areas where a Salesman or a Buyer can ‘give a little’. The obvious one is price, or more accurately, cost of goods/service. But there are many others too. They can include aspects such as product/service specification, payment terms, delivery and quantity.
Let us look at some sales examples.
The buyer says “Yes, I like the look of your resistors, and if you can get the price down by 10% then we can do business.”
The inexperienced salesman, who does not realise that the negotiation phase has just been entered is inclined to say “Yes” in great haste to close a deal. However, the more experienced salesman who has a clear understanding of his tradables may respond in one of the following ways:
“Of course, but I will need you to commit to a 12 month agreement for me to guarantee this price”
or
“We can meet this price, but we will have to provide the product without the wired connectors”
Another example would be:
Buyer – “If you can guarantee delivery by the end of the month then we can place an order now”.
Again, the inexperienced may jump at the offer, but the more measured approach would be “Of course, but we will need to engage our team in overtime to meet the deadline, therefore it will attract a 10% price premium”.
Salesmen naturally believe that the Buyer has a the upper hand, particularly as he may have a choice of suppliers. However, if you have reached the negotiation phase, it can be assumed you are winning the competitive battle. At this point the sales man should never underestimate the strength of his proposition.
It is not unknown for a negotiation to break down irretrievably, although with thorough preparation by both sides, this is an unlikely outcome.
The outcome of a negotiation and subsequent business deal fall into three categories. The first, a ‘win – win’ is the most desirable, both sides feel good about what has been achieved, and it is a great foundation for further business between the two parties.
A ‘win – lose’ is where one company is delighted with the deal, and the other is regretting the agreement, and feeling ‘stitched up’. Frequently the ‘delighted party’ is oblivious of the thoughts of the ‘aggrieved party’. In this case, unless some remedial work can be done on the relationship, it is highly unlikely that the parties will do business together.
The final outcome is a “lose – lose” outcome. Both parties feel the deal was poor, and such outcomes should be avoided at all costs. However, they do happen due to business pressures, expediency and other compelling issues. Indeed it is highly unlikely that these parties will do business again with each other.
So how do we ensure that outcomes are ‘win – win’.
Simple – preparation is key. A salesman MUST know and understand his tradables. A buyer may have different tradables depending on what he is buying. Both parties must accept that transaction value can be talked up as well as down.
Typical tradables for a salesman would be (and these can be traded up and down):
Delivery time
Order value
Quantity
Contract duration
Product finish (specification)
Packaging
Packing and delivery costs
Insurance cover
Delivery frequency
Payment terms
In summary, the best salesmen recognise their tradables, they can recite them at a moments notice, and they recognise the simple signs of negotiation. Furthermore, they have an empathy to the needs of their customer in order that all outcomes are ‘win – win’.
Happy Selling.

>The Simple Rules of Negotiation

>

How many Sales people really understand NEGOTIATION? Sadly too few.
Many enter the negotiation cycle without realising they are in a critical part of the Sales Process. Indeed negotiation is not always related to Sales situations. For example we have all had the discussions with our siblings along the line of: “Can you take me to the pictures tomorrow?”, responding with: “Only if you tidy your bedroom”. Indeed a primitive, but often effective negotiation, and indeed one (if carried out) can lead to a ‘win – win’ outcome!
It is vitally important to recognise when the sales process enters the ‘negotiation phase’. Failure to recognise this may be detrimental to your desired outcome, and do the salesman a disservice.
So, what is negotiation?
I have over the years heard many definitions, but the simple ones are always the best:
“The exchange of tradables to facilitate an agreement”.
Simple!
And what are tradables? And more importantly, how many sales men can list them?
Tradables are the areas where a Salesman or a Buyer can ‘give a little’. The obvious one is price, or more accurately, cost of goods/service. But there are many others too. They can include aspects such as product/service specification, payment terms, delivery and quantity.
Let us look at some sales examples.
The buyer says “Yes, I like the look of your resistors, and if you can get the price down by 10% then we can do business.”
The inexperienced salesman, who does not realise that the negotiation phase has just been entered is inclined to say “Yes” in great haste to close a deal. However, the more experienced salesman who has a clear understanding of his tradables may respond in one of the following ways:
“Of course, but I will need you to commit to a 12 month agreement for me to guarantee this price”
or
“We can meet this price, but we will have to provide the product without the wired connectors”
Another example would be:
Buyer – “If you can guarantee delivery by the end of the month then we can place an order now”.
Again, the inexperienced may jump at the offer, but the more measured approach would be “Of course, but we will need to engage our team in overtime to meet the deadline, therefore it will attract a 10% price premium”.
Salesmen naturally believe that the Buyer has a the upper hand, particularly as he may have a choice of suppliers. However, if you have reached the negotiation phase, it can be assumed you are winning the competitive battle. At this point the sales man should never underestimate the strength of his proposition.
It is not unknown for a negotiation to break down irretrievably, although with thorough preparation by both sides, this is an unlikely outcome.
The outcome of a negotiation and subsequent business deal fall into three categories. The first, a ‘win – win’ is the most desirable, both sides feel good about what has been achieved, and it is a great foundation for further business between the two parties.
A ‘win – lose’ is where one company is delighted with the deal, and the other is regretting the agreement, and feeling ‘stitched up’. Frequently the ‘delighted party’ is oblivious of the thoughts of the ‘aggrieved party’. In this case, unless some remedial work can be done on the relationship, it is highly unlikely that the parties will do business together.
The final outcome is a “lose – lose” outcome. Both parties feel the deal was poor, and such outcomes should be avoided at all costs. However, they do happen due to business pressures, expediency and other compelling issues. Indeed it is highly unlikely that these parties will do business again with each other.
So how do we ensure that outcomes are ‘win – win’.
Simple – preparation is key. A salesman MUST know and understand his tradables. A buyer may have different tradables depending on what he is buying. Both parties must accept that transaction value can be talked up as well as down.
Typical tradables for a salesman would be (and these can be traded up and down):
Delivery time
Order value
Quantity
Contract duration
Product finish (specification)
Packaging
Packing and delivery costs
Insurance cover
Delivery frequency
Payment terms
In summary, the best salesmen recognise their tradables, they can recite them at a moments notice, and they recognise the simple signs of negotiation. Furthermore, they have an empathy to the needs of their customer in order that all outcomes are ‘win – win’.
Happy Selling.

>Simple Selling

>

My recent article on Negotiation caused quite a reaction. I received numerous comments suggesting that it had helped them. Others made comments that suggested they did not realise they were really talking about ‘selling or buying’, and not negotiation.
I write this article purely from a ‘Business to Business’ perspective, and it concentrates on the fundamentals of selling B2B. I really have no idea about consumer decisions, they are much more random. For example, why do people buy personalised car number plates? Or why do people buy bits of string to go around their wrist? I have no idea!
This article makes no effort to go into the psychological side of selling, as it could potentially go on forever.
First, it is important to sell to those who have needs. This may sound obvious, but do not waste your time trying to sell snow ploughs to the Saudi’s, a little up front research in establishing your target may go a long way.
Making an appointment is a full subject in its own right. But usually a phone call (clearly identifying the decision maker/team) followed up by a letter works well. It can of course be an introducing letter first, followed up with a telephone call. Either way, the ‘target’ must be convinced that there is some value to meeting the sales person. So ensure you have a compelling reason that will be appreciated by your target. It may well be that you have to sell your product service first to an engineer, and to a buyer at a later stage. A canny salesman will now have the engineer as an ally!
So, you have arrived at your appointment. Find out a little about the person you are dealing with.
“So presumably you are the engineer?”……………. NO, do not open with this!
Try
“So tell me a little about your role in this department”. This enables the target to answer freely.
Do likewise about the department, and the Company too.
Once you have learned a little about your target, his department, and how it integrates into the company, you are now in a position to ask who else will be involved in any buying decisions. If appropriate you can request that others involved in the decision join the meeting to understand what needs you can satisfy. This may not always be possible.
At this point it is important to remember that most salesmen have two ears and one mouth. A good salesman will use them in the same ratio. In other words he will be listening 66% of the time, and only talking for 33%. You may have heard this before, but it cannot be stressed too often.
Treat the selling process as a game of cards. You need to uncover the prospects needs, so you need to uncover the ‘cards’ he has in his hand. How do we do this?
By asking questions!
Above, with the introductory preamble there were two distinctly different questions. The first (“So presumably you are the engineer?”) was a CLOSED question. It encouraged the prospect to respond with a ‘Yes’ or a ‘No’. It did not encourage dialogue.
The second (“So tell me a little about your role in this department”) was an OPEN question. It encouraged the prospect to respond with an open dialogue. In this case it was ‘uncovering cards’ from the prospects hand.
It is this open questioning technique that can be used to good effect. Both open & closed questions can be used to great effect in selling. The key is knowing when and where to use each.
Consider the following dialogue:
“So tell me about the issues you are facing in your filling room?”
…..An open question that is likely to uncover needs.
“Well we have real trouble fitting our current production into a working week.”
…..The opportunity given here to identify a need.
“So, if you had a way of fitting your current filling requirements into a working week, would this interest you?”
…..A closed question that is used to CONFIRM a need. Indeed it may also encourage open dialogue too.
“Yes, indeed. We may also increase by a further 20% over the next 12 months.”
…..You have now confirmed a need.
“Presumably this means you have a large overtime spend.”
…..A closed question that is used to strengthen your case.
“Yes, overtime is killing the profit on this product”
…..You have now uncovered more of your prospects cards.
“Let us consider our latest KL3500 filling machine. It runs 50% faster than our nearest competitor!…..”
…..You have now just delivered a FEATURE. A Feature will not sell the product, it must become an ADVANTAGE!
“…. As a consequence of its speed, you would easily meet the production requirement in the working week….”
…..You have now just delivered an ADVANTAGE. An Advantage will not sell the product, it must become an £ENEFIT!
“… By completing the filling process within the working week, you can save all that overtime. That means that you can pay back the cost of our machine within three months”
…..You have now just delivered an £ENEFIT. £enefits are highly compelling purchasing motivators.
But surely……… £enefit has been spelt wrongly. Well spotted! It can also be spelt $enefit. It is more difficult to spell if you are dealing in Euros!
Take on board this point : a £enefit ALWAYS relates to a monetary advantage.
Consider the SAME scenario, but a very poor use of questioning, using closed and open questions inappropriately:
“So you have some issues in your filling room?”
…..A poor closed question that is unlikely to uncover needs.
“Yes”
…..The above question deserved this unhelpful response.
“So what is the result of that?”
…..Another poor closed question that is unlikely to uncover needs.
“High Costs”
…..Another answer that does not uncover any cards.
“And what area do you have high costs?”
…..Yet another poor closed question that is unlikely to reveal his hand.
“Mainly in overtime. It is killing the profit on this line.”
“Well there is not much I can help you with regarding your overtime”
……… And so on. Of course, this latest scenario can be rescued by using questioning as per first example.
When selling, always introduce your product or service by making clear the Features (exclusives ones are best), how they relate to Advantages, and how those become £enefits.
….. Features —–> Advantages —–> £enefits …..
Always use Open questions to uncover needs.
Use Closed questions to confirm needs identified.
If your Feature is EXCLUSIVE to your Company, it is quite likely that your Advantage and £enefit will be too. So, where possible, focus on your area of strength.
Where exclusive £enefits are accepted by the prospect there is a clear opportunity to command a premium price. Here it can clearly be demonstrated why ‘Product/Service Price’ and ‘Cost’ are different.
A buying decision is normally made on three (at the most four) key issues (needs). These key issues/needs are normally called the ‘hot buttons’. It is the keen and skilful sales person that establishes these ‘hot buttons’ early on in the sales cycle….. just like the skilful card player.
Resist the temptation to bombard the prospect with lots of Features. Emphasise only those Features that relate to the needs uncovered, and can be developed into Advantages and £enefits.
Many Sales processes do not necessarily go through smoothly. Often the buyer will raise objections! HELP!!
Handled well, objections can strengthen your position! 70% of objections are down to misunderstandings on the prospects part! Try clearing up any misunderstandings by putting the facts right.
If the objection is genuine, then it is up to the skilful sales man to minimise the objection, by emphasising the £enefits accepted.
At this point, Negotiation may be likely. This MUST be recognised by the sales man. For further detail, see my article on Negotiation!
Negotiation ‘should’ only happen once £enefits have been accepted. Upon successful negotiation you are now in a position to close.
Sometimes there will be no negotiation, the buyer is keen to order.
Look out for buying signals….
Prospect…… ” Do you do it in Red?”
Sales man….. “Is that what you want then?”
When he / she says ‘Yes’, ask for the order. (Assumptive Close)
Let us consider some of the possible ways to close:
..Assumptive close (Above)
..Forcing close “You will …….. won’t you”
..Direct close “Do you want it in red?”
..Alternative close “Presumably you would like to take advantage of our credit facility?”
..Summary close “We have agreed on the £enefits from our proposal. Well Mrs Prospect, the need for our service looks very compelling, particularly in view of our competitive advantages. Can we now go ahead?”
..Concessional close “I am convinced this is the right product for your needs, and we are prepared to prioritise your requirements in our factory to deliver by Friday. Now that is what you want, isn’t it?”
Providing you get the desired response to the various closes above, ask for the order!
Having asked for an order STAY QUIET until the prospect breaks the silence!
Resist the temptation to break the silence no matter how long it goes on for. This is just as uncomfortable for the prospect as it is for the sales man!
If the prospect declines the first close, try yet another close. His/her resolve will weaken.
If the prospect declines the second close, try yet again. His/her resolve will weaken further.
If the prospect declines the third close, try once more. This is almost your last chance.
If all closes fail, ask the prospect… “What do I have to do to get us to do business?”
At this stage you have nothing to lose!
Research shows that if a prospect declines FOUR closes, then it is unlikely you will do business. Do not worry about it, but learn from the experience. Do not take failure to close personally
Discuss your successes and failures with your colleagues – share experiences
Read books on selling (free from the library).
Learn from the experience – “where did I go wrong?”
Take corrective action
Look forward to closing the next call
Happy Selling!!
Ian Thomas FInstIB
Southern Group Business Advisers http://www.sgba.co.uk
Hampshire, England
T: 0870 787 7590
e: ian.thomas@sgba.co.uk.
Southern Group Business Advisors – practical advice that works from the independent experts.
Ian Thomas provides a consultancy and Sales training business aimed at maximizing market and sales potential for the SME sector, both in the UK and overseas markets. Ian Thomas is fully accredited by, and a fellow of the Institute for Independent Business International (http://www.iib.org.ws)

>Simple Selling

>

My recent article on Negotiation caused quite a reaction. I received numerous comments suggesting that it had helped them. Others made comments that suggested they did not realise they were really talking about ‘selling or buying’, and not negotiation.
I write this article purely from a ‘Business to Business’ perspective, and it concentrates on the fundamentals of selling B2B. I really have no idea about consumer decisions, they are much more random. For example, why do people buy personalised car number plates? Or why do people buy bits of string to go around their wrist? I have no idea!
This article makes no effort to go into the psychological side of selling, as it could potentially go on forever.
First, it is important to sell to those who have needs. This may sound obvious, but do not waste your time trying to sell snow ploughs to the Saudi’s, a little up front research in establishing your target may go a long way.
Making an appointment is a full subject in its own right. But usually a phone call (clearly identifying the decision maker/team) followed up by a letter works well. It can of course be an introducing letter first, followed up with a telephone call. Either way, the ‘target’ must be convinced that there is some value to meeting the sales person. So ensure you have a compelling reason that will be appreciated by your target. It may well be that you have to sell your product service first to an engineer, and to a buyer at a later stage. A canny salesman will now have the engineer as an ally!
So, you have arrived at your appointment. Find out a little about the person you are dealing with.
“So presumably you are the engineer?”……………. NO, do not open with this!
Try
“So tell me a little about your role in this department”. This enables the target to answer freely.
Do likewise about the department, and the Company too.
Once you have learned a little about your target, his department, and how it integrates into the company, you are now in a position to ask who else will be involved in any buying decisions. If appropriate you can request that others involved in the decision join the meeting to understand what needs you can satisfy. This may not always be possible.
At this point it is important to remember that most salesmen have two ears and one mouth. A good salesman will use them in the same ratio. In other words he will be listening 66% of the time, and only talking for 33%. You may have heard this before, but it cannot be stressed too often.
Treat the selling process as a game of cards. You need to uncover the prospects needs, so you need to uncover the ‘cards’ he has in his hand. How do we do this?
By asking questions!
Above, with the introductory preamble there were two distinctly different questions. The first (“So presumably you are the engineer?”) was a CLOSED question. It encouraged the prospect to respond with a ‘Yes’ or a ‘No’. It did not encourage dialogue.
The second (“So tell me a little about your role in this department”) was an OPEN question. It encouraged the prospect to respond with an open dialogue. In this case it was ‘uncovering cards’ from the prospects hand.
It is this open questioning technique that can be used to good effect. Both open & closed questions can be used to great effect in selling. The key is knowing when and where to use each.
Consider the following dialogue:
“So tell me about the issues you are facing in your filling room?”
…..An open question that is likely to uncover needs.
“Well we have real trouble fitting our current production into a working week.”
…..The opportunity given here to identify a need.
“So, if you had a way of fitting your current filling requirements into a working week, would this interest you?”
…..A closed question that is used to CONFIRM a need. Indeed it may also encourage open dialogue too.
“Yes, indeed. We may also increase by a further 20% over the next 12 months.”
…..You have now confirmed a need.
“Presumably this means you have a large overtime spend.”
…..A closed question that is used to strengthen your case.
“Yes, overtime is killing the profit on this product”
…..You have now uncovered more of your prospects cards.
“Let us consider our latest KL3500 filling machine. It runs 50% faster than our nearest competitor!…..”
…..You have now just delivered a FEATURE. A Feature will not sell the product, it must become an ADVANTAGE!
“…. As a consequence of its speed, you would easily meet the production requirement in the working week….”
…..You have now just delivered an ADVANTAGE. An Advantage will not sell the product, it must become an £ENEFIT!
“… By completing the filling process within the working week, you can save all that overtime. That means that you can pay back the cost of our machine within three months”
…..You have now just delivered an £ENEFIT. £enefits are highly compelling purchasing motivators.
But surely……… £enefit has been spelt wrongly. Well spotted! It can also be spelt $enefit. It is more difficult to spell if you are dealing in Euros!
Take on board this point : a £enefit ALWAYS relates to a monetary advantage.
Consider the SAME scenario, but a very poor use of questioning, using closed and open questions inappropriately:
“So you have some issues in your filling room?”
…..A poor closed question that is unlikely to uncover needs.
“Yes”
…..The above question deserved this unhelpful response.
“So what is the result of that?”
…..Another poor closed question that is unlikely to uncover needs.
“High Costs”
…..Another answer that does not uncover any cards.
“And what area do you have high costs?”
…..Yet another poor closed question that is unlikely to reveal his hand.
“Mainly in overtime. It is killing the profit on this line.”
“Well there is not much I can help you with regarding your overtime”
……… And so on. Of course, this latest scenario can be rescued by using questioning as per first example.
When selling, always introduce your product or service by making clear the Features (exclusives ones are best), how they relate to Advantages, and how those become £enefits.
….. Features —–> Advantages —–> £enefits …..
Always use Open questions to uncover needs.
Use Closed questions to confirm needs identified.
If your Feature is EXCLUSIVE to your Company, it is quite likely that your Advantage and £enefit will be too. So, where possible, focus on your area of strength.
Where exclusive £enefits are accepted by the prospect there is a clear opportunity to command a premium price. Here it can clearly be demonstrated why ‘Product/Service Price’ and ‘Cost’ are different.
A buying decision is normally made on three (at the most four) key issues (needs). These key issues/needs are normally called the ‘hot buttons’. It is the keen and skilful sales person that establishes these ‘hot buttons’ early on in the sales cycle….. just like the skilful card player.
Resist the temptation to bombard the prospect with lots of Features. Emphasise only those Features that relate to the needs uncovered, and can be developed into Advantages and £enefits.
Many Sales processes do not necessarily go through smoothly. Often the buyer will raise objections! HELP!!
Handled well, objections can strengthen your position! 70% of objections are down to misunderstandings on the prospects part! Try clearing up any misunderstandings by putting the facts right.
If the objection is genuine, then it is up to the skilful sales man to minimise the objection, by emphasising the £enefits accepted.
At this point, Negotiation may be likely. This MUST be recognised by the sales man. For further detail, see my article on Negotiation!
Negotiation ‘should’ only happen once £enefits have been accepted. Upon successful negotiation you are now in a position to close.
Sometimes there will be no negotiation, the buyer is keen to order.
Look out for buying signals….
Prospect…… ” Do you do it in Red?”
Sales man….. “Is that what you want then?”
When he / she says ‘Yes’, ask for the order. (Assumptive Close)
Let us consider some of the possible ways to close:
..Assumptive close (Above)
..Forcing close “You will …….. won’t you”
..Direct close “Do you want it in red?”
..Alternative close “Presumably you would like to take advantage of our credit facility?”
..Summary close “We have agreed on the £enefits from our proposal. Well Mrs Prospect, the need for our service looks very compelling, particularly in view of our competitive advantages. Can we now go ahead?”
..Concessional close “I am convinced this is the right product for your needs, and we are prepared to prioritise your requirements in our factory to deliver by Friday. Now that is what you want, isn’t it?”
Providing you get the desired response to the various closes above, ask for the order!
Having asked for an order STAY QUIET until the prospect breaks the silence!
Resist the temptation to break the silence no matter how long it goes on for. This is just as uncomfortable for the prospect as it is for the sales man!
If the prospect declines the first close, try yet another close. His/her resolve will weaken.
If the prospect declines the second close, try yet again. His/her resolve will weaken further.
If the prospect declines the third close, try once more. This is almost your last chance.
If all closes fail, ask the prospect… “What do I have to do to get us to do business?”
At this stage you have nothing to lose!
Research shows that if a prospect declines FOUR closes, then it is unlikely you will do business. Do not worry about it, but learn from the experience. Do not take failure to close personally
Discuss your successes and failures with your colleagues – share experiences
Read books on selling (free from the library).
Learn from the experience – “where did I go wrong?”
Take corrective action
Look forward to closing the next call
Happy Selling!!
Ian Thomas FInstIB
Southern Group Business Advisers http://www.sgba.co.uk
Hampshire, England
T: 0870 787 7590
e: ian.thomas@sgba.co.uk.
Southern Group Business Advisors – practical advice that works from the independent experts.
Ian Thomas provides a consultancy and Sales training business aimed at maximizing market and sales potential for the SME sector, both in the UK and overseas markets. Ian Thomas is fully accredited by, and a fellow of the Institute for Independent Business International (http://www.iib.org.ws)