Kickstart The Sales Process

So how do you motivate people to buy from you?  As I mentioned in my last post, if your product is unique, and you're the only one selling it, and it's something that is needed and wanted, you'd be laughing your way to the bank, and you don't even need to be nice or build relationships.  However, that's not very likely.  What should you be looking at to improve your odds of selling then?  We should look at the reasons why people buy.  As far as I know, there are 3 reasons why people buy:

• There's a need and/or want that has to be satisfied; and/or
• There's a dissatisfaction from a product/service that has to be alleviated; and/or
• There's a problem that has to be solved.

Knowing the reasons why we buy, what then motivates us to buy?  What hastens the decision-making process to make us part with our hard-earned money and overcome the fear of failure (failure of making the wrong choice/decision)?  According to the venerable Brian Tracy, there are 7 motivators to the buying behavior, provided any or all of the 3 reasons to buy exist:

• Money - the offer will make more money for the buyer
• Lower Cost - the offer will save money for the buyer
• Convenience - the offer is more convenient or bring more convenience
• Speed - the offer saves time or does not waste time
• Beauty - the offer satisfies the aesthetic taste of the buyer or makes the buyer feel beautiful
• Ego - the offer gives the buyer the impression of being first in line or top of the line or state of the art or the object of envy; boosts the buyer's pride and self-image
• Position (business sales) - the offer improves the buyer's position in the company and/or in the eyes of his/her immediate superior

Okay, long story short, the objective is to show people that buying your product will improve their lives dramatically in ways that are important to them.  Let's now move to the questions that you have to be ready for when you offer your product or service.  Keep in mind that even if your product or service answers a need and/or want, solves a problem they have and alleviates dissatisfaction, you have to be able to prove this to them.  The questions that you have to be able to answer are:

• "Why should I listen to you?" and "So what?" - You should be able to hurdle these two questions when you first approach a prospect.  Imagine your prospect asking you why they should listen to you, and for whatever answer you have to that, the next question is "so what?"  The purpose of keeping these two questions in mind is for you to focus on how you can help the prospect better than anybody else.  This will help you think of ways to position yourself and your product/service that will make it hard for your prospect to ignore you and the solution you have for whatever problem they have.
• "Who else has done it?" or "Who else has bought this product/service?" - This is all about social proof.  We all want to know who else owns it or who else has had the same challenge we have that the product/service has helped.  We don't want to waste time, we don't want to unnecessarily take a risk and buy something that nobody else has bought.  The best social proof is somebody who's relatively famous or well known.  If you can bring out signed testimonials of people who own and enjoy your product/service even if they're not famous, that will still be better than nothing at all.
• "Who says so other than you?" - This is a subset of the previous question.  When you claim something about your product/service, remember that your word doesn't mean much because you stand to gain from the sale of it.  Hence, the buyer will always remain skeptical of your claims.  We are all aware of how unscrupulous salespeople have played up the features and benefits of whatever they're selling, so that only brings up a defensive barrier.  A testimonial that specifically backs up your claim will come in handy here.
• "What do I get?" and "What's in it for me?" - You prepare for this question by making sure you know what gets delivered to your buyer if and when he makes the purchase.  Make sure to equate features with benefits that are important to your prospect.  Just like in real estate, when you present, you have to know what comes with the house and what doesn't.  You can't say "I'm not sure..." because that will definitely cast doubt on your competence, even if it's not your fault that you don't have the information because the seller/developer withheld it from you.  In other words, it's your job to find out everything you can about the product/service that you're selling so you can inform your prospect what's included and what benefits he will enjoy that will satisfy a need/want, and/or alleviate his dissatisfaction, and/or solve his problem.

More Sales!!!
Jon

Sale of Principal Residence

Just a short post about the capital gains tax exemption on the sale of your primary residence.  What this means is, you're selling your main/primary residence, and moving to another residence that will become your new primary residence.  In this case, you get a capital gains tax exemption.  From the BIR's website:

• The proceeds of the sale of the principal residence have been fully utilized in acquiring or constructing new principal residence within eighteen (18) calendar months from the date of sale or disposition; 
• The historical cost or adjusted basis of the real property sold or disposed will be carried over to the new principal residence built or acquired;  
• The (BIR) Commissioner has been duly notified, through a prescribed return, within thirty (30) days from the date of sale or disposition of the person’s intention to avail of the tax exemption;
• Exemption was availed only once every ten (10) years; and  
• There is no full utilization of the proceeds of sale or disposition. The portion of the gain presumed to have been realized from the sale or disposition will be subject to Capital Gains Tax. 

In case of sale/transfer of principal residence, the Buyer/Transferee shall withhold from the seller and shall deduct from the agreed selling price/consideration the 6% capital gains tax which shall be deposited in cash or manager’s check in interest-bearing account with an Authorized Agent Bank (AAB) under an Escrow Agreement between the concerned Revenue District Officer, the Seller and the Transferee, and the AAB to the effect that the amount so deposited, including its interest yield, shall only be released to such Transferor upon certification by the said RDO that the proceeds of the sale/disposition thereof has, in fact, been utilized in the acquisition or construction of the Seller/Transferor’s new principal residence within eighteen (18) calendar months from date of the said sale or disposition. The date of sale or disposition of a property refers to the date of notarization of the document evidencing the transfer of said property. 

In other words, if you're selling your primary residence, and you intend to use the proceeds to buy or construct a new primary residence, you have to let the BIR know within 30 days of the sale of your intention to do so.  Additionally, the money from the sale of your primary residence has to be utilized in full within 18 months or else anything that is left over will be subject to the capital gains tax.  You can only avail of this exemption once every 10 years, and once you sell your old primary residence, the 6% capital gains tax will have to be deposited first in an authorized partner bank of the BIR and will only be released to you once it is proven that the full proceeds of the sale (less the 6% of course) was in fact used to buy the new primary residence.

Just making sure everybody is aware of this so you can save some money that you would otherwise pay to the BIR.

That's it pancit.

Jon

New Sales Paradigm

Okay, it's not really new.  I just said so to get your attention.  So, what is this sales paradigm?  It's very simple, one that bears remembering for those who would like to pursue a career in professional selling.  This is how a person should divide his time and effort in order to make a career in selling.

• 1st Step (40%) - Foundation building, rapport, trust building, establishing credibility
• 2nd Step (30%) - Establishing needs (lacking/wants/needs), fact-finding, qualifying
• 3rd Step (20%) - Presenting features and benefits based on needs analysis
• 4th Step (10%) - Confirming understanding, answering objections, closing the sale 

 Of course, this is rather condensed.  There are a lot of things that go into selling, but this is the basic structure.  Nowadays, the effective salesperson spends time building relationships.  To build relationships you need to give 3 things:

• your TIME
• your CARING
• your RESPECT

 Maybe some of you would think "Why should I waste time building relationships in selling?"  Well, the short answer is, because people will not buy from people they don't like and trust, unless you're the only one selling what they want/need, and they want/need it badly.  Otherwise, if they can get it elsewhere, and they don't like and trust you, you don't sell.  In most cases, as long as people like and trust you, and you were able to demonstrate that your products' value is worth more than what they would pay for it, you would be immensely successful in this profession.

Of course, in majority of cases, the price issue will always be the last objection.  People have a wealth of options now, and if the cheaper alternative is acceptable, your last ace is if they like you enough to actually buy from you despite your product being more expensive.  Sometimes, even that's not enough, and people will buy the cheaper alternative despite liking you and despite you demonstrating that your product's value outweighs the price.  Remember not to blame yourself in those situations.  Some people are just like that, price over quality and service.  In most cases, people like those will get what they pay for, and they'll eventually come around to your side of the fence.  Most times, those kinds of people are really on a tight budget, so money really is an issue.  It's okay, other people value quality and service over price, so concentrate on finding more of those kinds of people and build relationships with them.

Finally, I'll share with you the 7 traits of the top salespeople according to Brian Tracy:

• Ambitious - hungry, always setting goals and sees quotas as a minimum
• Courageous - faces fears, unafraid of failure, unafraid of "NO"
• Honest - reliable, genuine, does not exaggerate, does not speak ill of the competition
• Empathetic - understands the client, listens fully, sensitive to needs
• Professional - sees themselves as consultants, expert adviser, knowledgeable, problem-solver, asks pertinent questions
• Prepared - does research, gets updated information, knows the material and details
• Responsible - accepts responsibility and makes no excuses, in charge of own life

To your success!

Jon

It's January, Time To Pay Your Real Property Tax!

It's a new year, and every new year comes with it the responsibility to pay your real estate property taxes, otherwise known as "amilyar."  It's a necessary evil of owning land and property, so don't worry about it and just grin and bear it.  After all, it's all worth it, right? (sound of silence and crickets)

Anyway, just for your information, and as sort of a guide, this here's a short post (really! I promise!) on the topic of real estate property tax.

Collection of Real Property Tax
The real property tax for any year shall be due on January 1 and from that date on, it shall constitute a lien (statutory lien) on the property, to be extinguished only upon payment of the tax and/or any late fees associated with it.  The tax may be paid in four (4) quarterly installments, which shall be paid on or before the last day of the quarter.

Installment Due Dates:

• 1st installment - on or before March 31
• 2nd installment - on or before June 30
• 3rd installment - on or before September 30
• 4th installment - on or before December 30

Tax Discount on Advanced and Prompt Payment
If the tax is paid on time or in advance, in accordance with the prescribed schedule of payment as provided in Article 341 of Republic Act 7160, you may get a discount not exceeding twenty percent (20%) of the annual tax due.  Prompt payments may be given a discount of ten percent (10%) while advanced payments may be entitled to the maximum discount of twenty percent (20%).

Penalty For Late Payments
Unpaid real property tax is subject to a penalty of two percent (2%) per month interest accruing up to a maximum of 36 months or 3 years.

In other words, the penalty only starts accruing after March 31.  So if you want to save some money, I suggest you pay your real property taxes well in advance, if you can afford to do so.  Might also be a good idea to start putting that into your annual budget so you can plan for it in advance.

Till next time, Happy New Year!!!

Jon

*Image above from discoverspringtexas.com, used without permission.

What's The Plan?

A couple of months ago, prior to when I stumbled onto the works of Mike Brooks, Brian Tracy and Tom Hopkins, I had a vague image in my mind of what I wanted: a house of my own, a new vehicle, and to get married to my fiancee Me-an.  As far as I know, those were my goals. 

The problem was, I didn't know how to make them come true.  I was trying to hit those targets in the dark.  Sure I passed the licensing exam for real estate brokers, but that didn't really get me any closer to making my goals come true.  My only thought was: if I sell enough, I'll have enough money to hit those goals.  So a couple of weeks ago, a thought hit me back: how am I going to sell enough to make enough money to hit those goals???  Yeah, I know, sometimes my mind is slow to the point of stupidity, but I'm glad I finally came around to the question.  Result: I started looking around online for instructional materials on sales, motivation, and goal-setting.  Hence, the 3 aforementioned gentlemen. 

Listening to their works was like magic!  My mind started to open up to the reality of selling, and how difficult it really is.  I always had this impression that selling was straightforward: if there was a need, just offer the product that answers the need and voila!  Boy was I surprised!  There were steps necessary like prospecting, qualifying, presenting, then finally closing the sale.  There is etiquette involved, tactics and strategies, and mind-altering mental instructions and affirmations!  There's bits and pieces about family, health, friendship, teamwork, and so much more.  More than that, the goal-setting instruction that I got specifically from Brian Tracy has got me moving.  Now, I have real goals, and action plans and steps that I must take to make them happen.

So, what's the plan?

Find out what you want to do, make plans and steps to achieve that, and pay the price willingly.  In other words, keep studying to arm your mind with new ideas and ways, and keep keeping on and never give up.

So, what's changed?

Good question.  At the very least, I've started to learn Tai Chi.  I've started an abs workout to trim my waistline.  And I've set a 200 meters target for my weekly swimming activity.  For my financial health, I have made plans to learn investing in mutual funds and stocks, as well as joint ventures, and buying and selling properties.  I have to fine-tune the action steps, but I now have a light leading to my goals, and that's the best gift I'll ever get this Christmas, maybe for the rest of my life even. 

My goals:
"I earn at least Php100,000 a month by March 2012."
"I own a 3-bedroom townhouse in San Juan by January 2013."
"I own and drive a Mitsubishi ASX by April 2012."
"I marry Me-an by December 2012."
"I enjoy traveling abroad and going to beaches with Me-an by January 2013."
"I own and use a Motorola Xoom by March 2012."
"I am strong and healthy by February 2012."
"I secure an educational plan for Kyle by April 2012."

When The Torii Residences starts selling, you better believe my life's gonna start moving very quickly towards those goals!  I can't wait!!!  Everyday, I'm gonna look at my goals and visualize my house, my car, my wedding, my tablet, my strong and lean body, and my kid's educational plan.  Those things will happen, as sure as the sun rises everyday!  I'm gonna keep keeping on until I can write new goals towards bigger and better things!  Hmmm... Maybe I should upgrade to a 4-bedroom townhouse?

Upgrade your life!!!
Jon

Bank Financing: Understand the Appraisal

I'll make this a short post, just to clarify some things about the bank financing appraisal process.  Mostly for my benefit really, so I don't forget haha!

So, let's say you want to buy a townhouse unit from a seller.  The seller agrees to 20% downpayment and bank financing, because really, it's the same banana, and the seller will get paid anyway.  The question is, what do you do to get bank financing?  Well, first of all, go to a bank and ask them for their requirements for the appraisal.  That would usually be a certified copy of the TCT (or CCT if condominiums), etc.  You will also have to pay for the appraisal fee (typically 3 - 3.5K within Metro Manila).  After a week or two, the bank will then let you know how much the property is worth according to their appraisal (fair market value) and up to what percentage they're willing to finance it.  Typically, banks will finance up to a maximum of 70% of the appraised value.

Now here's the tricky part:  the appraised value vs. the selling price.

Don't expect the appraisal value to match the selling price.  In most cases, the appraisal value will be less than the selling price.  So going back to our example, if the seller was selling the property at 5M, and he agrees to a 20% downpayment, but the bank only appraised the property at 4M and will only finance 70%, that means you have to shoulder the difference and that will be your downpayment amount.  To illustrate:

20% of 5M = 1M -> this was supposed to be your downpayment (equity)
70% of 4M = 2.8M -> this is what the bank will finance (loan)
5M - 2.8M = 2.2M -> this is what you will actually have to pay as downpayment (equity)

The reason why developers are able to offer bank financing that is equal in appraised value and selling price is because their properties were pre-appraised by their partner banks already.  That's why they will let you know what banks are affiliated with them.  So unless you can get a better (or same) bank appraisal elsewhere, you should seriously consider the affiliated banks of the developer.  But if you're buying a resale unit such as our example, your best bet would be to ask the seller for a discount or price cut, to lessen your equity contribution aka downpayment. 

Oh, and yeah, the most important factor to get bank financing:  your financial status.

How do banks determine how much you can afford?  They'll look at how much you're making in a month, and will lend you an amount that you can pay off with 30% of your net income, subject to how long the loan will be.  If the property you're loaning for is not within that margin, then you don't get the loan.  Simple eh? Hehe.

Did I say this was going to be a short post?  Ooops.

Don't put your eggs in one basket,
Jon

The Secret to Increasing Sales Productivity

You might be wondering why I'm writing about Sales per se.  Well, so am I.  That may not instill a lot of confidence in my article but actually, I've been listening to some sales materials  on CD as well as watching youtube videos about the grand art of selling, all to widen my understanding of one of the most basic and oldest of transactions: Sales.  So I find myself wanting to share the lessons I've learned so far.

It's important to note that all of us are sellers as well as buyers at one time or another.  So when selling, it's important not to lose sight of that fact.  In Sales, the real secret to increasing productivity is asking the right questions (probing) and listening for the real answer.  

And overcoming objections.

And improving your closing technique.

And having a great team. 


The truth is, all of those are true.  However, if you absolutely suck at asking questions, and you don't care enough to listen for the answers, you'll just be going around in circles trying to overcome objections, aside from wasting time and effort trying to close people who won't buy from you anyway.  That's why I believe that asking the right questions and listening for the real answers is the precursor.  When you ask the right questions and you listen to answers, you will find out what your client's reason(s) is/are.  You will find out the why's and why not's, as well as a lot of other things.

The not-so-secret secret: QUALIFYING YOUR CLIENTS.

Qualifying.  First time I heard that, I knew what it meant, but I didn't know how and what to do in the context of Sales.  In other words, qualifying your clients means finding out if they actually have the intention to buy whatever it is you're selling.  To qualify a lead you need to do a couple of things:

1. Find out their motivation.  Ask them why they're inquiring about your product or service, find out if they have a definite and specific timetable.  Anything other than a straight answer might mean that person is just curious and not really looking to buy.  They might even be asking for a friend or family member, so make sure you ask to be referred instead.  This is important to avoid the "I'm not interested" and "I'm not ready to buy yet" as well as other price objections.
   
2. Ask who are the decision-makers, who else is/are involved in the decision-making process.  Try your best to involve all of them when discussing or presenting your product or service to minimize the "I have to ask (whomever)" scenarios.  If in case you do get the "I have to ask (whomever)" scenario, try to see if you can speak with whomever it is they have to consult.  If they refuse or won't let you speak with that person, it's possible this is not the real objection and you may have to probe deeper.
   
3. Competition.  Find out who they've spoken with, what other product(s) they like or are considering.  Let's face it, we can't always win against the competition.  That's why you need to know if it's a battle you can win.  Find out what's important to your clients, and see if it's something you have or can offer, then play it up for maximum effect.  Please, don't resort to mudslinging to destroy your competition, that's just wrong.
   
4. Price, price, price.  Here's the reality of Sales: Price is King.  Check if your client has a realistic budget, find out what payment options or terms you can offer.  See how much leeway you have in terms of pegging a price on a product or service, how much of a discount or rebate you can bargain with to close the deal.  Dare I say it?  Be blunt if you have to.  Better find out if your client can afford it or not, and if he knows what he's getting himself into.  If you find out that your client can afford your product or service yet a price objection comes up later on when you ask for the deal, it's not the money that's the problem; it's a VALUE issue, you'll need to prove your and your product's value.
   

As you can see, qualifying properly will save you a lot of time, effort and money.  You won't be wasting your time trying to follow-up with unqualified non-buyers.  In the short term, you'll have less clients, but in the long term, you'll gain the few real clients who are ready and willing to buy.

I won't go into overcoming objections, closing techniques and teamwork, but suffice it to say that asking the right questions and listening for answers is the fundamental skill one needs to learn to be effective in Sales.  Don't be afraid to ask the questions that need to be asked, there's no other way unless you're psychic.




Ask and you shall receive,
Jon