We had a lousy first quarter. I’ve still got high hopes for 2018 but Q1 really stunk. Why? Our builder segment exceeded numbers (grew 30%) and we met our high-end business goals. After a little more searching, we found the culprit. Our middle market, high transaction count, low dollar average salesman was off by 50%. 50%???
I saw why he came up short the next day.
We missed a sales appointment with a prospective client. I had a little time and decided to swoop in and handle the meeting myself. The sales rep who missed the appointment rarely makes mistakes and was having a stressful week. If I can do anything to relieve stress with our employees, I try and help out.
This appointment should’ve been a perfect fit for us. House priced north of $500,000, 4000+ square feet and a couple with decent disposable income.
I got out of my car and began walking towards the house. Just like you, I start looking for opportunities as soon as I pull up. As I approached the front door, the royal blue ADT sign stabbed at me as I realized security was now off the table. “No matter,” I thought, there’s still plenty of other opportunity in the home. I walk up the steps to the door and notice a Ring doorbell. Another opportunity gone. Right next to the doorbell sat an ADT smart deadbolt. Curses! Before I even knocked on the door, three revenue opportunities were off the table. I took a deep breath and rang the bell.
The prospective client showed me in and pointed to the brick fireplace and explained he wanted his previously purchased TV mounted on the brick and an IR repeater installed. He also wanted full surround sound and a universal remote to control it all. His budget? $2,500.
We began a discussion using our budget calculator tool and the prospect started bucking my price ballparks. I knew this guy wasn’t our customer but I wanted to learn as much as I could before retreating.
I know what you’re thinking. “Clifford, you moron!” It’s true. I didn’t take my own advice and qualify him over the phone. To be fair, we were back on our heels after standing him up, but I wasted my time. I’m glad I had the opportunity because it woke me up to a few hard facts about 2018 and beyond:
- Kiss your lower middle and middle market homeowner sales goodbye unless you’re planning to make less than 40 points gross profit.
- ADT and Xfinity are coming for your customers and will be installing perfectly good security solutions for clients featuring brands like Nest and Ring.
Why am I making a federal case out of one client interaction? It’s because I’ve met this same prospect every year for the last 16 years. five or ten years ago, this conversation would’ve gone much differently with the prospect probably not having much of a choice but to lean on a custom installation company to perform most of this work. With the advent of IoT and service providers like ADT and Xfinity looking to cash in, the times they’ve a-changed.
What are we going to do about my big lesson learned?
- Livewire will be focusing on high-end, builder and commercial business moving forward. Each of those markets value service and won’t be going DIY anytime soon. Volume players can’t compete in those categories.
- Our next sales hires will be focused on the ability to interact with those specific audiences extremely well with special attention paid to relationship building.
Are you seeing the same phenomenon in your market? What are you doing about it?
Stay frosty and see you in the field.