Jonathan Winstel, a Matco Tools franchisee, works very hard to make sure his customers do not skip payments.
"There is no 'next week' for the tool guy," he says. He tells customers that if they skip this week, they aren't going to pay him double next week.
The Matco Tools financing software works out a payment schedule. But if the payments are not made on time, the sale will not yield the necessary profit. Winstel has learned he needs to make 33.3 percent gross margin to make money on a sale.
Getting customers to stay current on their payments requires strong personal customer relations skills. It is an area that Winstel considers himself good at. While he knows how to make "small talk" with people, he makes sure he directs the conversation to business after five or 10 minutes. "You always try and bring it back to the tools," he says. "You have to step up and realize, 'I'm not here to talk about hunting or about sports.'"
"If you spend a little extra time, you can get something from them," he says. In many cases, the customer has the money to pay but is hoping for some additional time. "They're just trying to push that envelope," Winstel says. "If you push back a little bit, they usually do give you something."
Winstel has learned there is an art to asking for money. "I have to not be rude," he says. "I do it [ask for money] in a joking manner. A lot of the time, they [the customers] get it. If they don't, you say, 'hey, it's not working out.
"They think, 'he's my friend and he'll let me slide.' They're the ones that'll disappear the quickest."
He also makes it a point to learn when the techs get paid. If he shows up on pay day, he knows he is more likely to get a payment. "It's all about observing," he says.
"Have a friendly relationship and business sense," he says.
Have a sales strategy or helpful hint you'd like to share? Send your "30-second sales seminar" to email@example.com, and see your suggestion featured here!
It's fine to be in a Christmas spirit, even year-round, but create holiday specials without undercutting your margins.