One of the most important things I learned early on in my consulting career is in order to generate revenue, commissions, fees you have to be able to follow the “FEES” Principal on the road to closing deals.
Let me explain the “FEES” Principal for you. The first letter in the word FEES is “F” which stands for Finding the prospect. One has to learn how to find the most amount of qualified prospects in the least amount of time for the least amount of money.
The second letter in the word FEES is “E” which stands for Expose. One has to learn how to expose or inform the prospect about the Factoring services that you provide. The best way to do this is through an information rich website or a targeted direct mail piece, after all a website can act as your office or store front.
Many years ago, I owned and operated a sign company that produced traffic signs and sign blanks. We later branched out into illuminated sign like the signs that you see in strip malls and custom signs etc. Our slogan back then was “A Business with No Sign is a Sign of No Business”. In this day and age same goes for having a website. It brings credibility and exposure to your company.
The third letter is “E” which stands for Educate. You must have the ability to educate the prospect about WIFT (What Is in It for Them). This again can be done through your website or strong communication skills. This I will address in a few minutes.
The last letter in the word FEES is “S” which stands for Service. You see we are really in the service business and it so happens that money is our inventory. Continue to provide timely service, communication and follow up, this will lead to referrals. The best referral is happy client. So you see if any one of these components that make up FEES breaks down, the end result in many cases is no fees and no commissions generated.
If you don’t know how to find qualified prospects, you will never have the chance to educate. If you know how to find the qualified prospect but, you cannot expose them to your company – you will never have a chance to educate. If you can find them and you know how to expose them to your company but, cannot educate them about WIFT chances are you will not close the deal. In my future articles I will explore the above with you in more detail. For now let me briefly address communication skills that one should develop to help them convert prospects into clients.
Many consultants are caught up in the “me” syndrome and try and sell their services vs. becoming a consultant. It is not about you – it is about what you can do for your prospect in order for them to become your client or WIFT (What is in it for them). After all we are not called “Sales People” we are recognized as “Consultants”.
Most people do not like to be sold and they are resistant to Marketing. Do you like to be sold? Do you know when you are being sold? So, does your prospect! The challenge as a consultant is to promote your services without selling. How do you develop a consultative mindset vs. a sales mindset? Have you ever heard of the 80/20 rule? To become an effective communicator with a consultative mindset you must learn to talk twenty percent of the time and listen eighty percent of the time.
A sales person is conditioned to listen twenty percent of the time and talk eighty percent of the time. In order to develop a consultative approach you should incorporate questions. Asking questions that will help you gather information and taking good notes will help you develop good rapport with your prospect. Knowledge and information breed confidence so make sure you know your stuff make sure know the definition of Factoring, be able to explain how it works and list the benefits that appeal to your prospect.
Here are a few questions that you can use to get you started:
1) Can you tell me what your company does?
2) Can you give me an example of your typical customer?
3) Can you tell me how long it takes your customers to pay?
4) If I could help you increase your cash flow how would you use it?
5) If I could help you increase your cash flow when would you need it?
Then it is your turn to explain what you do and WIFT.
Michael Ponomarew brings with him more than 24 years of experience in entrepreneurship, marketing, and business management. Mike can be reached at mikep@millenniumfunding.com or by calling 888.652.8298 ext. 45.
Thanks for sharing Mike. Good stuff.
Hello Billie
Your welcome – let me know if I can be of any further assistance.
Regards
Mike
How much and What are the typical fees Factors charge the client? How do we respond to objections due to perception of excessive fees?
BTW, great article. Thank you.
Hello Cristin
Thank you for your question. It is difficult to quote fees without conducting our due diligence on the Client’s customer base and reviewing the A/R Aging report. As a Factor we make our credit decisions based on the Creditworthiness of the customer (debtor paying the invoice) and the length of time it takes the customer to pay. I would continue to quote the above when the client is pushing for a range or average fee.
Regarding the perception of excessive fees – I have not encountered this perception – could you please elaborate a little further “excessive fees”. Saying that the it is important to explain the benefits of Factoring and how the client can use the increased cash flow to neutralize the factoring fees i.e. supplier discounts, volume discounts etc…Let me know if this helps – or you can contact me to discuss @ 888.652.8298 ext. 45
Mike,
Thank you for the above article – informative.
Have you considered getting a webcam and setting live trainings via teleseminar
and webcam combined? It would be a tremendous benefit not only to consultants
who are feeling left out in the cold, but bring many benefits to you and Millenium
Funding both tangible and intangible.
Please take it into consideration.
Thanks for listening.