Selling from the Top Down

Many of you who have followed my blogs will recall that I talk about the Friedman sales system quite often. This is the selling system that I use in my business and it has delivered the business and me a lot of success.

One of the key elements of the Friedman process is the demonstration. In this section of the presentation the consultant starts to match a product to the customers need by explain and demonstrating the best product for the customer. This concept is called selling from the top down or in other words offering the most feature rich item (which also usually is the most expensive) and then asking for the sale. If the customer declines you then move to a lower feature item (unless less expensive) and so on until the customer make a decision to buy.

In my business we train the staff to sell from the top down in our core products. For the roadside assistance product we offer Premium membership first and match the features to the customer needs. If the customer agrees to go ahead we transact the business and then add on. This strategy has demonstrated for our business that over 50% of all new members now take the top level at a $165 whereas 5 years ago most members joined at the lowest level at $83, a significant uplift in revenue for the Group.

With household insurance we do a similar top down process. Every home and contents sale is coupled with accidental damage, a $150 add on. When we quote we automatically include the AD price in the total and if the customer agrees that the additional benefits are worth the investment we transact the sale. If not, we reduce the premium by $150 to win the business. Each month we now sell over 500 AD covers gifting the Group new premium through a refined sales process.

With this sales strategy in mind you would think that our people would always look at ways to sell from the top down in every product set that we have. You’d be wrong! Recently a switched on supplier visited me to show that we were losing sales opportunities in the Child Safety Seat merchandise business because we were selling from the bottom up – totally against our Friedman system.

Let me give you some background on Child Safety Seats. My business exclusively stocks the Safe and Sound brand of car seats. According to our internal advocates this is the best overall brand in the market place and it fits well with our core business. Back in 2010 the State Government introduced legislation to make child car seats compulsory for children up to the age of 7 years. Prior to this children could be out of car seats at the age of 12 months. This caused a market disturbance where all of a sudden parents were forced to buy car seats for older children and we saw a bubble in our sales.

In 2009 our sales were $400K, in 2010 $680K and in 2011 $480K. The drop in 2011 sales can be attributable to a normalisation of sales but when you delve into the stats a bit more you can start to reveal other information. In 2009 our transactions were 5,500, 2010 had 6,000 transactions and 4,800 in 2011. This revealed that we were selling less accessories, so our add ons were down.

The stats also showed that we were selling less expensive seats that in previous years, this was a reflection in a change in our advocacy stance and the staff selling from the bottom up. Both of these stats suggested to me that we had changed something in the past 2 years and that we had lost vision on our agreed roles and responsibilities.

I discovered two interesting facts. One – our advocates had moved from advocacy to recommending low cost car seats and Two – our staff were selling from the bottom up.

The role of an advocate is to provide independent technical and situational advice to a member. Their goal needs to be to advise a member on what is the best category of car seat for their child based upon the child’s size, age and the type of vehicle. What we discovered is that the advocates were also having a budget discussion and using this information to recommend a specific low cost car seat. Intriguingly the advocates were also taking this information to the Shops and briefing staff on which seats to recommend from both a safety and budget perspective.

By working with the management of the advocates I have been able to help clearly articulate the roles and responsibilities of both the sales and advocate staff. We have agreed that the advocates will recommend a category of car seats to enable the staff member to have the budget discussion. This will enable the sales staff to interact with the customer about the best specific seat to suit the need of the member. This may mean an upsell into a more expensive seat that provides better padding for the child’s back or a longer lasting material. By not having the member present saying ‘the advocate said to buy the cheapest seat’ will enable the staff to have a chance to upsell.

The second area is a training focus on the concept of Top Down selling for the sales staff on car seats. Not all customers who enter our Shops are referred from the advocates. Most are just walk ins generated from our marketing. Clearly staff are not selling from the top down and are either being influenced by the advocate training or are being order takers. Focus on top down selling by their managers in coaching sessions and formal training by the supplier and our training staff will turn this around.

There are two key lessons for us in this example.

1. You need to clearly set the roles and responsibilities and boundaries of teams that complement each other. When there is cross over a staff member needs to know their boundary and when to hand over to another expert. Now that we have set this very clearly with our advocates and sales staff we will have a better working relationship.

2. You need to sell from the top down in everything you do, otherwise you are not giving the customer the opportunities to have a real choice, you are allowing your own value system get in front of what is best for the customer and you are leaving money on the table. Also you must add on to maximise the sale.

Another learning is the Agency problem. I haven’t focussed on car seats for a long time (it’s a small part of my overall business) and relied on others. It shows that you need to have your finger on the pulse constantly, otherwise you lose control. I’ve learned that you need to stay focus and know what is happening across you business constantly.

But the proof is in the pudding. This week we are at the local Baby Expo, working right alongside the advocates. This will enable us to test these concepts and to see how we go at Top Down selling and our clearly defined roles and responsibilities. Stay tuned for an update next week!