Three types of closes and, no, LPO isn’t one of them. Very likely the creditors and suppliers demanding payment from embattled Nakumatt are holding dearly to LPOs.
“Closed”. This word is music to a salesperson’s ears. To close is to get commitment from the buyer that he will buy what you are selling. Closing is the point in the sales presentation when the seller instigates this commitment. As straightforward as that may appear to be, it is amazing how the average seller struggles with it. For instance, there are bank sales people who argue that, “I closed because I opened the account even if it’s not funded (meaning no money in it)”, and others, “… because I got the cheque” and others still, “…because they signed the contract.” And there are the unfortunate souls who say they closed because “He was in agreement with what I was saying plus he said he will buy.”
Three types and examples of closes
Now a close could be minor, major or conclusive. Minor closes include the buyer agreeing to the demonstration or, choosing which one of the two colours or modes of payment he prefers. Making a choice, likely means that he is interested and, depending on the stage of the sale, could be a step away from the conclusive close. A demo can be especially elusive because some sales people lead with it thinking, “Once he sees how it works he’ll immediately sign the dotted line.” He likes how it works but doesn’t buy and your best hand is wasted. Used correctly, as a researched prescription and not assumed diagnosis, a demonstration can lead to the conclusive close which is a great sales closing technique.
A cheque is not an egg. Don’t sit on it
Major closes include signing the contract, getting the cheque, or securing an LPO (Local Purchase Order). The importance of these cannot be gainsaid. However, sellers who keep due cheques in their drawers should stop! It’s only a piece of paper-it can get lost. Further, it can bounce. In addition, as dramatic as this may sound, the issuer’s business can burn down and with it the prospects of honouring the cheque. Also, its value is extracted when it’s banked, so bank it when it’s due.
LPOs tend to be misleading for salespeople who assume that the LPO will automatically transform to cash after the stipulated period and so don’t follow through; some even say, “That’s for Finance department to do.” LPOs converting to cash is not always a natural progression. For instance, very likely the creditors demanding payment from embattled Nakumatt are holding dearly to LPOs. Contracts are music to the legal departments mind but shouldn’t be the end game for the seller. Yes, they are good because if the client refuses to pay or says, “This is not what we wanted,” you can quickly flash it out and exclaim, “Aha! You signed this remember? Let me reread you Section 112, paragraph 61 subsection q, which you also initialed as you can see here. Now, subsection q says…” But is that a close?
The conclusive close
The conclusive one is money in the bank. And this ultimate one, of the three types of closes, and is what the other two should culminate to. The conclusive close is what keeps the business running-it pays salaries, commissions, and for developing new products. So next time you say “closed”, make sure you mean, money is in the bank. And instigating the close is the way how to.
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