Get more from cancellations
It can be annoying and frustrating when a prospective customer decides not to buy from you. It is also a great opportunity to get some feedback which you can use to grow your business though, so don’t let it go to waste!
A phone call is often the most effective way to get feedback, although e-mail works as well. Try these simple steps:
1. Explain that you are sorry they decided not to do business with you, and that you would like to find out why so you can further improve what you do.
2. Ask “what was the main reason you decided not to use us?”. Often this will open up a conversation. Sometimes they will say that you were too expensive. If so, what they are really saying is that they couldn’t see what value they would get from using you (or that they simply didn’t have the budget in which case it wasn’t really a serious enquiry). Ask if they have found someone else to do business with, get their details if possible and ask what made them choose them.
3. Ask “what did we do well”. This is so you understand which parts of your process work well, so you know you don’t need to focus on them (for the moment!).
4. Ask “what we could have done better” – if this hasn’t already come up in the conversation.
Thank them for their feedback, explain that you will use it to improve your business and ask if they will bear you in mind for the future.
Most of the feedback should be easy to understand and implement changes, but the cost objection needs further investigation.
If they haven’t found someone else to do the work, it is likely that it was just a general enquiry. It may mean though, that the way you promote your product or service needs to be reviewed. Usually, a cost objection is caused by 1 of 3 things:
1. You are more expensive than your competitors. If you haven’t done so already, list your main competitors and check their pricing against yours. Are you more expensive than the majority? If yes, then can you justify that through extra features, quality or results? If you can’t, then consider reducing your pricing. If you can, then move to the next point.
2. Prospective customers can’t easily work out what value they will get from your product or service. How clearly do you show the value? Do you use case studies and testimonials? Can they see how your customers feel about using you? Look at your website and promotional material – how can you change them to emphasise the value that you give?
3. The final possible reason is that customers don’t see the full cost until they have started the buying process. Make sure that a prospective customer can very quickly understand what they will have to pay and what they can get for it. Include delivery costs upfront wherever possible.
If you send quotations or proposals to prospective customers, try this simple template we use. Our conversion rate is over 90%.
Section 1 – Background
Thank you for your enquiry about XXXXX. From our conversation I understand that you are looking to XXXXXX and that your main concerns are XXXXXXXXX.
Section 2 – Summary of my proposal
This will make sure that xxxxxxxxxxxxxxxxx.
The total cost is £x plus VAT, total £x.
I will call you in the next few days to answer any queries you have, but please don’t hesitate to call in the meantime.
Section 3 – Details
List each element, what you will do, why it is important and what they need to do if anything
Section 4 – your expert
A brief biog if required of the person/people who will carry out the work.