When I started out in sales and marketing, it was all about closing the sale.

In fact, good salespeople were often referred to as good closers.

Decades later, I still see sales recruiters asking for candidates who have a proven record of closing.

Here’s why we need to be extremely careful before adopting the closing mindset, or any of the countless closing tricks and techniques.

Closed for business?

The challenge with the closing mindset, is that it positions the prospective customer as little more than a barrier. A hurdle between you and the sale. An obstacle to be overcome. Little wonder so many closing techniques are based on psychological tricks.

The use of long, uncomfortable silences at key points in the sales process, for example, is used to put pressure on the prospective client. So is refusing to accept a “no” from them, by asking what they need additional clarity on, each time they clearly just want out.

In a nutshell, the focus is on outmanoeuvring your opponent. It’s them against you. A confrontation.

Here’s a very different approach, along with why I strongly recommend you use it.

Opening relationships

I built my reputation in sales by adopting the polar opposite approach. Instead of focusing on closing, I focused on opening.

Opening relationships, to be exact.

I found (and still find) the idea of closing to be self-defeating. I discovered that you can achieve a great deal more, by opening relationships with people. This means taking time to listen to them. And then learning about their challenges and what they want / need. If our marketing is targeted correctly, we’re automatically only speaking with people who are our ideal profile of client.

When handled correctly, and preceded with effective marketing, this means there’s no need to close anything (or close on anyone).

The whole process becomes a naturally-flowing conversation, where we seek to help people overcome a challenge, with the products or services we provide.

It’s a beautiful, fulfilling way to do business.

It also means refusing to sell anything to anyone, if we believe it’s not what they need.

Too passive?

This approach may sound passive, but consider your friends. Consider the people you like. The people you trust. The people you love to have around you. Are they aggressive towards you? Confrontational? No! That’s because we prefer those who respect us and are open and honest with us.

We like people who are open and honest.

We buy from people who are open and honest.

We trust people who are open and honest.

We recommend people who are open and honest.

In short, the more open we are, the more opportunities we’re open to.

Today I want to make an important plea to you. I want you to focus like a laser on making your business absolutely thrive over the next 12-months.

Yes, I know it’s 2020.

Yes, I’m very aware of the challenges.

I am also aware of the importance of looking to your future with the overriding goal of absolutely thriving.

When the marketplace is in turmoil, business owners set one of the following two broad targets. They either choose to survive (the vast majority) or they choose to thrive (a tiny minority).

We must choose our target wisely.

• Choosing to survive means you may just make it, if you achieve the target.
• Choosing to thrive means you’ll have an exceptional year, if you achieve the target.
• If you fail the target of survival, even by 1%, by default you don’t survive.
• If you fail the target of thriving, even by 25%, you can still have a better-than-average or average year.

Your target determines your focus. It sets the stage for the plans you make and the decisions you take. It shapes the conversations you have. It guides the opportunities you attract (and those you repel).

Your target also determines how you feel and how you make others feel about you and your business. It builds or erodes confidence.

• Survival mode is a source of anxiety. When we speak with an anxious business owner, we sense their worry and stress. We feel apprehensive about them and apprehension turns prospective customers away.
• Thrive mode is a source of excitement. When we speak with an excited business owner, we sense their energy and motivation. We feel positive about them. This is commercial gold dust. Especially today.

Given this, we all have a decision to make.

We can’t change the duration of the pandemic, or the even longer duration of the economic carnage it leaves us with. But we can choose the target we focus on.

And as I have seen with my 2020 client intake, it is possible to absolutely thrive.

Without knowing it, many business owners are engaged in a dangerous race to the bottom. In today’s post, I explain why this is almost always a terrible strategy for business owners. I also share some proven advice on how to avoid it happening to you.

Let’s go.

Race to the bottom: What does it mean?

In marketing, we tend to use the term to refer to making sales or winning new clients, based on being the cheapest option. This is most common among commodity businesses. However, the coronavirus pandemic is seeing a massive surge in price-cutting and fee reductions. The ‘winner’ of the race to the bottom is the business that’s the cheapest / lowest priced at that time.

Some big businesses use their financial muscle to work successfully with low prices (or fees). Their buying power means that they have deals available to them, which smaller businesses simply can’t access. This allows larger businesses to compete in your marketplace, profitably, with extremely low prices.

However, small and medium-sized business owners tend to just lower their prices, as a way to make more sales or attract more clients. They then find their competitors do the same.

And the race to the bottom begins.

The prize?

The winner gets, wait for it… the privilege of building a business on a dangerous foundation of customers, who will leave them the moment a cheaper provider comes along.

It’s a high risk, low return strategy. It requires you to constantly look for ways to lower your overhead, cut corners and speed things up. All this, in an effort to attract the least loyal profile of customers in the world: Those who switch from provider to provider, looking for the lowest prices.

Why is such a high risk, low return strategy so popular with small business owners?

Simple.

They see it as an easy way to attract more customers or make more sales. However, a look at the medium and longer term picture shows why this usually goes horribly wrong.

Here’s what I’ve seen small business owners do over and over again.

Bob’s race to the bottom

Let’s take Bob the business owner as an example.

• Bob decides to lower his prices by 10%. He soon notices a slightly better sales conversion rate.
• So, he lowers prices by another 5%. And it improves sales even more.
• Some of Bob’s competitors decide to do the same.
• The race to the bottom is now on!
• Bob then needs to lower his prices by another (whatever)%, because his competitors are charging the same low prices as him. Bob’s prices are now rock bottom or very close to rock bottom.
• Bob continues to make some sales, BUT with very, very little profit.
• At this point, it’s a case of waiting for one of the following common scenarios.
• Scenario one: A well-funded competitor decides to sell at a loss for 6 / 12 months (to gain market share), Bob then has to try and survive on fewer and fewer low-profit sales. This is HUGE right now, as financially strong small business owners seek to crush their competitors during the pandemic.
• Scenario two: Bob’s overhead increases unexpectedly and he is forced to start increasing his prices, all those price sensitive customers he raced to win will now look for the NEW, cheapest provider.

It’s easy to attract customers by reducing your prices. However, it’s unsustainable. So, if this is something you are considering, please think again my friend. Consider the medium and longer-term consequences of winning the race to the bottom.

The road ahead is closed. Soon, a line of traffic gathers…

One driver does a U-turn, and confidently heads off at speed in the opposite direction, before turning down an adjacent street. Seeing how assured this driver looks, other drivers follow him, then other drivers follow them. The initial driver has no idea where they’re going. And now they’re all lost, wasting their time and running out of gas!

Here’s why I’m telling you this and what it means for you and your business.

The most dangerous mistake in marketing

Following the marketing tactics of your competitors has the exact same effect. You’ve no idea if their marketing is working or if they’re running out of time and gas. Following them is a risky bet. And the odds are massively against you.

Allow me to explain.

Here’s just one extremely common example of how the odds are stacked against you. It comes from the world of advertising.

Advertising providers give ads away to companies, knowing that when a company’s competitors see their advertisement, they’re likely to also advertise. Your ad is simply bait, to hook others in your industry. Google and Facebook offer free advertising coupons all the time, knowing as soon as you use them, they win. They’ve done the numbers. They know a hefty subset of competitors will assume, the ads MUST work, if (whoever) is advertising there.

And yes, this follow-the-follower approach applies to every area of marketing, not just advertising.

If you’re not attracting enough new clients or making enough sales, stop following the equally lost. In short, quit dabbling. Make informed decisions, based on how to do the right things correctly.

With so much uncertainty about the future, your prospective customers are thinking longer and harder about spending their budgets than ever before. They require a lot more motivating than they used to. A lot more. If you’re not absolutely certain your marketing is up to the substantial challenges ahead, now is the time to improve it.

Because with the correct strategy and support, it’s possible to absolutely thrive… while your competitors carry on dabbling.