That would be CEO (chief executive officer), CFO (chief financial officer), COO (chief operations officer), etc. How important is it to get to all of the right decision makers? I can sum it up with one word: IMPERATIVE.
During one of my commercial service agreement seminars, a participant picked up on a statistic in our promotional information that stated my personal closing rate on final presentation was 87%. The participant asked, "what happened to the other 13%?" I didn't have to think long and hard to answer the question.
Almost invariably, when I didn't get the ink on the paper, I didn't have all of the right decision makers present. There are two key words in that statement.
The first is "all." We have all been in situations where one or more of the board/committee members aren’t present during the final presentation. Even though there might be enough members available to warrant a quorum, this still poses a serious problem in getting the decision made. The missing member(s) could be very influential in the decision-making process. I have had board presidents tell me prior to the meeting or at the beginning of the meeting, that they could make a decision minus the missing board member. That statement is usually made based upon a lower price, probably being compared to what their present program cost.
Typically, we would be presenting a program of greater value and more comprehensive scope than their present program, meaning that our price would be considerably higher. At the end of the presentation, when we disclosed our price, the board members present realized that increasing the service agreement cost substantially would require the presence of ALL board members. Of course this delays the decision which, in turn, seriously reduces the chances of closing the sale.
The other key word is the adjective, "right," descriptive of "decision makers". All too often, someone in a lower management position tells us that they can make the decision without going to a higher level of management. Here again, that statement is probably based on a much lower number than what will be presented and proposed.
There can't be a more sinking feeling than, at the end of the presentation, you hear, "For that amount of increase in our maintenance budget we will need to get approval from a higher management level."
Now our price is exposed and the person(s) making the decision hasn't seen the features, benefits, and cost justification incorporated in the presentation. Allowing the lower management person to take the information to a higher level is certain failure. Invariably, the only part of the presentation that will be focused upon is the price.
Another area of consideration when identifying the right decision makers is the dominant buying motive of each management level. Premature replacement of mechanical equipment plays a major part in our cost justification. A local manager or general manager may be compensated on the bottom line of his operation.
That means that any increase in maintenance costs would be treated as an operating expense, reducing his pre-tax-profits and his personal income. Local managers or general managers aren't nearly as concerned with the huge cost of replacing units when such costs are treated as a capital expense and paid by corporate.
A few years ago I was working with the general manager of a local funeral home. I realized that this home was owned by a large corporation with funeral homes all over the country. He told me it was beneficial when his packaged units were replaced, because it lowered maintenance and repair costs while corporate was picking up the bill. This makes it very difficult to increase the coverage.
Another hurdle in getting to all of the right decision makers is the lease tenant. From my experience, I find most tenants today are under a triple-net lease — meaning they're responsible for their own energy bills, repairs, and even unit replacement in many cases.
All of this normally would make them a viable prospect, except they are obviously financially responsible only until their lease expires. When a tenant reaches the later stages of the lease, they tend to patch the HVAC any way possible as to not be subject to replacing. Further compounding the problem is that most lease tenants have to deal with their property manager.
As negative as this might seem, some things never change. As commercial HVAC salespeople, we must have access to those person(s) or committees that have authority to put the ink on the paper. That access can most certainly assure a very high closing rate.
Earl King is the founder of King Productions International, a commercial HVAC contracting sales consulting firm based in Texas. He speaks to associations and HVAC trade groups, and consults with commercial contractors across the country, in addition to writing this column for Contracting Business.com. Email Earl with any questions or comments at: email@example.com or call him at 515/321-2426.