High-Ticket Facts

If you’re wondering what High-Ticket selling is really all about, you stopped on the right page.  Now, more than any time in homebuilding history, it’s important that you know.  Matter of fact, based on today’s customers and today’s market realities, you could find yourself in trouble if you don’t.

I’ll be posting articles, facts and information that will help you better understand what the “fuss” is all about.

 

Selling High-Ticket Products

By Rick Heaston

Today’s customers are different.  And the reason they’re “different” is easily explained with a single word … “Overwhelmed”.

If your customer isn’t the focus of multiple advertising messages, she’s juggling family or work issues … and if it isn’t that, she’s trying to decide who gets her time and attention and who doesn’t.  All of this boils down to a simple definition.

If “How you sell” ends up matching “How your customer decides”, you’ll get the time and attention you deserve.  If it doesn’t, you won’t.

Like it or not, you’ve just read a sentence that might well be the most important “If” in our industry today.  That’s because if your selling process doesn’t match your customer decision process, your success will be limited.  Selling has reinvented itself … all because of a research study that began over thirty years ago.

High-Ticket Selling

What makes Neil Rackham’s 30-year/$40 million research study and his first book, SPIN Selling, different from the more than 1000 sales books already published?  In Rackham’s own words, “Two things”:

1.  It’s About The High-Ticket Sale:  Almost all existing books (especially inside the homebuilding industry) have used models and methods that were developed in low-ticket, one-visit sales.

In the 1920’s E.K. Strong carried out pioneering research studies focused small, or low-ticket selling.  As a result of his studies, he introduced ideas that were new at that time.  Strong introduced features and benefits, closing techniques, objection handling and open and closed questions.

Now, for more than 90 years, these same concepts have been copied, adapted and refined with the assumption that they applied to all sales.   Even the trainers that insist their training includes “high-ticket” strategies, base their ideas on Strong’s original methods.  The fact is, these are all wonderful techniques if you’re selling low-ticket products (under $1000).

Rackham’s SPIN research is the first study that defines the difference between High-Ticket and Low-Ticket selling skills.  And the first to identify the skills most closely associated with success in high-ticket selling.

2.  It’s Based On Research:  The SPIN research is the first publication of results from the largest research project ever undertaken in the selling-skills area.  Rackham’s Huthwaite Inc. team analyzed over 35000 sales visits over a period of 12 years to provide the high-ticket selling strategies that literally every other industry now embraces.

Rackham points out that there are plenty of opinions on how to sell, but a real shortage of well-researched facts.  Stating that a project “sold out” in a few months, or a testimonial from an associate that sold a few extra homes doesn’t constitute a study.

Rackham’s SPIN research was based on a behavior-analysis method that was able to produce the first-ever scientific, qualitative look at selling.

Some of the Results

It’s certainly nice to have a body of evidence to look toward for improvement, but you have to wonder, “How can it help me?”  Let me introduce you to some of the differences between selling a high-ticket product compared to selling a low-ticket product, then you can decide for yourself.

Look closely and I think you’ll be both amazed and fascinated.  Here are just a few of the strategic differences Rackham’s project discovered:

  • Discovering your customer’s “needs” represents only about 25% of the information you need to uncover to be able to easily and efficiently close a high-ticket sale.  In a low-ticket sale, discovering needs is all that required.
  • A traditional feature and benefit presentation, while super effective in a low-ticket sale, is the least effective method to build value in a high-ticket sale. Value building in a High-Ticket sale requires a very unique set of questioning skills.
  • The more you present … the less value your customer perceives … and the less value they perceive … the more objections they’ll have.   Not true for a low-ticket sale …  presentations are helpful.  On the other hand, High-Ticket selling is all about objection prevention and the results prove it works.

Interesting results, huh?  I’m sure a few of you were stunned and a few of you weren’t.  But I guess it all depends on what you want to believe. If you believe “What works” to sell a Low-Ticket product will work to sell a High-Ticket product, you’ll also believe that doing what you’ve always done will reward you with different results.

What About Associates?

I’ve found that almost every associate responds differently as they’re exposed to High-Ticket selling techniques.  The experienced and most successful seem to respond by saying, “Come to think of it, I knew that … that’s the way I sell.  I just didn’t know how to express what I did.”  Other high performers say it differently by stating, “Finally, it’s about time the industry started thinking this way.”

On the other side of the sales universe there’s the “newbies”.  And they’re very matter-of-fact when they say, “Why wouldn’t we sell that way.  It makes all the sense in the world.”

In the end, it’s your decision to keep doing what you’re currently doing, or to investigate a method that’s guaranteed to improve your results.  The longest and largest research study (7 years and ongoing) inside the homebuilding industry shows that you can double your sales per hundred visitors at a minimum … and reduce your customer’s first visit to time of contract by 48%.

In the end, no matter which direction you choose, it’s important to never forget:

“Success in today’s market needs to be based on the selling strategies most closely associated with success with high-ticket products.”

Twenty years ago Rick became the first trainer in the homebuilding industry introduce a program that addressed the differences between high and low-ticket sales strategies.  Today, his program is still the only industry program that focuses on the behaviors most closely identified with success in a  high-ticket sale.  His Reimagine Selling program is supported by the longest and largest research study both inside and outside the homebuilding industry and produces results better than all other programs. 

Everybody’s Talkin’ At Me

By Rick Heaston

midnightcowboyEver wonder what shopping’s really like for your customers?  I happened to be channel surfing one night and came across an old movie that “said it all”.   Picture this …

A tall gangly cowboy fills the screen.  His fringed leather jacket, Stetson hat and shiny cowboy boots cause him to seem a little more “Hollywood” than Texas “Cowboy”.

The picture zooms in as he leaves his room in the run-down Big Spring Motel.  He’s carrying an ugly cowhide covered suitcase  And in the background you hear an old familiar song …

Everybody’s talkin’ at me

I don’t hear a word they’re sayin’

Only the echoes of my mind …

It’s the theme song for The Midnight Cowboy and quite possibly the theme song for today’s customer.  Everybody’s talkin’ at me … I don’t hear a word they’re sayin’ … only the echoes of my mind.

And if what I say is true, it isn’t good for your customer or you either.

High-Ticket Versus Low-Ticket Decisions

You’ve heard me say it a hundred times and I’m going to say it again.  Purchasing a high-ticket product is completely different than buying a low-ticket product.  And the reason it’s different is simple … decision consequences.

If a product doesn’t cost much money, your customer’s decision consequences are inconsequential.  So what if they goof and buy something they never use?  It isn’t the end of the world.

On the other hand, when a large amount of money is involved, the consequences of a bad decision could be staggering.  Let me show you what I mean by asking a question.

How do customers react when they’re “closed” early and often?

For instance, what do they say if it’s a product they kinda’ like and it doesn’t cost much money?  Don’t they say, “Ok, you win … I’ll take it”?

On the flip side, what does your customer they say if it’s a product they kinda’ like, but costs a ton?  Don’t they say, “We need to think about it”?  See what I mean? They have one response for a product that doesn’t cost much money and another if it does.

With that in mind, let’s look at some of the things that affect a customer purchasing a product that costs a lot of money:

  • Higher Consequences:  In a small sale, your customer’s decision is not affected by the risk of making a mistake … but with a high-ticket product, it’s your customers biggest concern.
  • More Decision Parts: Where a low-ticket decision doesn’t require much consideration … a high-ticket decision has lots of parts and pieces that your customer must consider and reconsider.
  • More Incentives:  Low-ticket decisions generally happen in one visit … but might take a few days, a few weeks, or even a few months when a customer is spending a lot of money and trying to determine if they are getting the best deal.
  • More Advice:  Small sale decisions are normally made independently … where customers purchasing a product that costs a lot of money will rely on everyone from parents, to friends, to lawyers to “help” with their decision.
  • More Choices:  Lots of choices aren’t decision “stoppers” when a product doesn’t cost much money …but paralyze a customer’s decision process when communities, homes, sales associates and incentives all look the same to them.
  • Less Trust:  Trust isn’t a factor in low-ticket purchase decisions … but has serious consequences for a customer about to spend a lot of money.

All of this means that the problems you face as a seller are different than ever before.  And worse than that, the selling techniques that work for products that don’t cost much money, have the reverse effect for products that do.

High-Ticket Versus Low-Ticket Selling

In today’s market you’re trying to sell a customer that has lot’s of choices, is confused, has less time and doesn’t trust you.  All of this boils down to one thing.

Selling today is different because our customers are different.  And that’s because the problems our customers experience are different than ever before.  Let’s take a look at the problems you face as a seller.

Problem:  Because there’s so much money involved, customers are scared that they’ll make a bad decision.  And customers that are scared they’re going to make a mistake, keep on shopping or don’t decide at all.

Success Strategy:  Customers that are prepared to spend a lot of money don’t want to make a “good” decision or a “great” decision … they want to make the most “perfect” decision possible.  This requires that you have a sales strategy that helps your customer define what “perfect” means to them.

Presentation and closing techniques don’t do anything to help a customer with their decision if they are overwhelmed and confused by all of the information directed their way.

Problem:  Customers are super sensitive to the risk involved with purchasing a product that costs a lot of money.  Matter of fact, the risk of a big decision and the fear of a bad decision go hand and hand.  This combination causes customers to shop and shop and shop some more.  And as before, it even causes customers to delay their decision, if they make one at all.

Success Strategy:  Risk is directly related to decisions that don’t make sense.  The more confused a customer is, the higher the perceived decision risk.  “Selling” to your customer’s needs, which is popular in our industry, isn’t the answer to lowering your customer’s perception of risk.

Your sales strategy needs to help your customer think about the things they haven’t thought about.  Think about current problems, impacts and benefits of a new place. These are the things that reduce risk and bring your sales process to a conclusion.

Problem:  Customers claim that everything looks the same.  They say that it’s hard to differentiate between homes, communities, and sales associates.

Success Strategy:  As simple as it seems, early in the shopping process, customers narrow their choices to the “products” that most stand out.  In other words, customers narrow their many choices to the two or three alternatives that stand out most.

What’s interesting is that it isn’t always the product that gets your customer’s attention.  Many times, it’s their experience with you that creates the difference.

This means that your sales strategy needs to focus on your selling process.  And that means that your selling process had better focus on your customer’s shopping agenda.

Problem:  Customers don’t like sales associates.  Matter of fact, they’ll do about anything they can do to avoid contact.  Ten to fifteen years ago that was not the case.  Back then they needed you for information.  Today the opposite is true.

Today’s customer hates to be sold. Matter of fact, if they feel like they are being “sold” or “closed”, they’ll back away and choose another alternative.  Closing early and closing often, which worked when you didn’t have to sell, now has the reverse effect.

Success Strategy:  Today’s customer has to know that their agenda is more important than your agenda.  “Selling” isn’t the way to make that happen.

Today’s strategy requires a technique that allows a customer to decide for themselves … or said differently … be involved and participate in their decision and your closing process.

Does Your Strategy Match Theirs?

The homebuilding industry is making progress, that’s the good news.  The bad news is that we still haven’t reached the point where we’ve matched our selling process to our customer’s decision process.  And that’s hurting your results.  But more than that, it’s increasing the incentives you’ll need to provide to make a sale.

So if you keep doing what you’ve always done .., you”ll continue to get the same results.    And that means you’re not much more than the song suggests, a Midnight Cowboy.

Twenty years ago Rick became the first trainer in the homebuilding industry introduce a program that addressed the differences between high and low-ticket sales strategies.  Today, his program is still the only industry program that focuses on the behaviors most closely identified with success in a  high-ticket sale.  His Reimagine Selling program is supported by the longest and largest research study both inside and outside the homebuilding industry and produces results better than all other programs. 

 

 

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