Larry, I understand how you could have misunderstood my meaning. Allow me to elaborate. The numbers tell the story. A little about me: I've been in business a lonnnng time (22 years worth of various ventures and corporate life). I have a degree in economics from what is often the top business school in the country. I've done professional sales and have trained hundreds of guys as a corporate sales trainer. I study stats and my life is analyzing numbers. I also have hundreds of hours logged in seminars and consultation with some of the best salespeople and statisticians of our time. I didn't pull that number from my rear end. If your close ratio is over 60% you need to raise your prices. That is based on analytical data and giving you the benefit that you are performing perfect prequalification with targeted marketing. The average CR for a good salesperson is 33%. Ninety is just not realistic, I don't care how good you are. It has nothing to do with profit margins or what I need to stay afloat. You are undervaluing your product. If a car salesman could offer $5000 brand new Lexus he'd close 90%. Would it be because he is a great salesman or target maketed his clientele? I am not saying that you are not a very talented sales and marketer but I AM telling you that statistically, your numbers are skewed.
Here is my arguement that you are working harder, not smarter. Let's say we each get 10 calls from our marketing campaign. You close nine jobs. I close six. My prices are 50% higher than yours. Lets put your average job at $450 mine at $675
We both make exactly the same gross money.. ($4050 from those jobs) only over the course of a season I can do 35% more jobs than you can (given equal labor force and time per deck) Using an average month of 20 work days You might do $8991 where as I would do $13,486 in gross sales.
It would cost me about $500 in marketing expenses to achieve that gross sale number. If yours cost you $100 I am still ahead by $4095.
I have abolutely no idea where you got this notion
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Originally Posted by Deck Guy
If your theory is right, everyone everywhere should advertise anywhere and everywhere it generates the most calls without regard to a targeted demographic, and let your 60% closing rate theory increase their business. Is it possible that I just get more calls from people who are truly interested due to my ad placement and design? Or is it possible some schmuck somewhere only closes 30% of his calls, so we average each other out?
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If you have ever read any post I have made on marketing (there are many spread about in the business section and in the library) you would know I advocate targeted marketing to key demographics. I get probably ten calls a week from guys asking advice on marketing. I don't say this to blow my horn but to let you know you are preaching to the choir.
Another assumption in your arguement.. your have lower overhead. I'm not even sure how this is relevant to the discussion of sales and marketing but if you are buying your chemicals from RPC and PressureTek I know I am paying less. ( I am a chemical distributor) My sealer cost averages to $.09 per s/f. I don't believe in big fancy rigs. I use a 13 horse 4 gpm cold for deck work. I have a 5.5 gpm hot water machine used for housewashing and flatwork.
It comes down to this, Larry. Do you own a business or do you own a job? At some point don't you want to sit back and let employees perform the work you are doing? Don't you want to expand your company size and earn more profit? Those things take a higher profit margin. If you are happy staying a one man operation working your tail off and disillusion yourself into believeing success is based upon a 90% closing sales ratio then you and I have different definitions of success.