Vending Business sales Methods Larry is a veteran vending operator who has had great success in all areas of the business.
Listen in as he answers a question from someone just getting started in the vending business:
“I am starting my snack/soda combo vending business. I have machines with 19 snack and 5 can drink selections. I must have faxed 500 businesses so far in the Arizona area and I can’t get one location. I need someone to help me find businesses in my area that need vending machines that I can service for free for them.”
- Using only one method of marketing is not a good idea.
- Larry describes his method of marketing.
Vending Business sales Methods Tom Shivers: I’m Tom Shivers with the Vending Business Show here with Larry Towner who has been in the vending business for a number of years and has even sold the majority share of his vending business a few years ago. He’s a consultant now and thanks for being here, Larry.
Larry Towner: Thanks, Tom. It’s a pleasure.
Tom Shivers: Yeah. Well, I wanted to kind of review what we went over last time real briefly. We were talking about getting new accounts or Vending Machine Sales Methods . You mentioned a couple of good tips there, like a plan to land new accounts first of all. Then we talked a little about referrals and you said, “Hey, you need to know the key people in your accounts, those middle managers.” Then you went on and talked a little bit about focusing in on a specific area of geographic area for your operations and how that can influence friendly competitors and sharing leads with them. Thanks for that … for those tips. I also came across a really interesting question from a fellow who’s kind of struggling at a follow-up, how do you get new accounts question. Let me tell you what he’s asking here. He says, “I’m starting my snack soda combo vending business. I have machines with 19 snack and five can drink selections. I must’ve faxed 500 businesses so far in the Arizona area and I can’t get one location. I need someone to help me find businesses in my area that need vending machines that I can service for free for them.” He’s kind of … You see what he’s asking for there, Larry?
Larry Towner: I have an idea of what he’s asking for. Yes, I do. It sounds like this is … We had mentioned in a previous show just a little bit about not purchasing equipment until you have accounts. This is kind of an example, it sounds like to me, of a guy who’s gone out and bought a bunch of equipment, hasn’t really done any market research before buying the equipment and now has a whole bunch of machines sitting in his garage that he can’t get out onto location.
Larry Towner: One of the first things I noticed just in this question is that he talks about really only one way of generating business and that is he’s often faxing things. Now, Tom, I wanted to ask you a question. You run a business and I assume you have a fax machine, ’cause most of us do-
Tom Shivers: Sure.
Larry Towner: What do you do with those unsolicited faxes that come into you?
Tom Shivers: Well, I immediately grab them up, read them, and call the number on the fax.
Larry Towner: Is that on the way to the garbage can or after? Right. What I hear when I see this is I see somebody that it kinda sounds like this fellow’s been off to one of these ball … we call them ballroom or blue sky promotions where he’s gone in and they’ve told him, “All you have to do is fax off these things and they’ll be beating a path to your door. If you send 500 out, you’ll be guaranteed to get some results.” Well, the … While the faxing of things does work, it’s not probably really the most effective method for selling and or marketing. It is a one-sided thing.
Larry Towner: First off, actually generally costs businesses money. When you cost someone money, they really aren’t too responsive to your offer. It’s kind of like in today’s world, faxing really … blind faxing is almost unheard of. I would never blind fax myself. I might do blind emails where I’m sending it off, but emails don’t cost anybody any money. If they have interest in it, they might respond to it.
Larry Towner: Eventually if he sent enough faxes, he would get a response. I don’t know that the numbers would be, but 500 is really, really not that many to send out. I know when they used to do direct mail, if you mailed something to somebody, you were gonna look at a one to two percent response if everything was right. That means, if the offer that you had was perfect to the market and it was a perfect statement and everything was written and it was on the right paper and it was this and it was that.
Larry Towner: There’s hundreds and hundreds of items that go into doing direct marketing like that. If everything was right, you’d get a one to two percent. Which means, on 500 responses, if you got two percent you would get one. That’s really all you’re looking for at that. On faxing, it’s gonna be even less than one percent. Tom, you do a lot with internet. If you send out 50 thousand emails on internet, what kinda response rate do you get?
Tom Shivers: Well, if I’ve taken the time to really understand my audience on that list and try to answer the questions I know that they’re asking, then I might get a 20% open rate. That’s an optimistic number, actually, on email open rate. An open rate is just that, it’s just an open rate. It’s not a conversion rate-
Larry Towner: Right.
Tom Shivers: Which is much more effective. If you’re getting … Say you get 20% open rate, then you might get a five percent click rate off of those that open-
Larry Towner: At of that, if you’re soliciting, you’d be lucky to get one. Would that be right?
Tom Shivers: Yeah.
Larry Towner: You’d be really lucky to get one customer out of that. That’s the kind of things that we … that when we talk about that, a lot of it’s just statistics. When we study sales and marketing, sales is strictly a numbers game. If you’re gonna do sales, it is completely you just have to hit more doors. Now, the … As they say, one of the things in the sales game is is that what’s the easiest thing to get rid of? It’s a piece of mail or a fax or an email. That’s the easiest thing to get rid of. Those go right in the trash. The second easiest thing to get rid of is a phone call. You say, “Goodbye,” and you hang up and that gets rid of it.
Larry Towner: Getting rid of bodies, we’ve found, has been a little bit more difficult, meaning it’s been said that trying to get rid of a body is rather difficult. When you’re standing face-to-face with somebody, you tend to get a little better response than you do if you don’t. When we go about doing sales and marketing, you really have to go out and you actually have to knock doors. You have to go and you have to go talk to people.
Larry Towner: Some of my tricks on doing that are that you just ask everybody you know, “Hey, do you have vending machines?” It’s really that simple. Almost everybody has a vending machine where they work. “Well, are you happy with who you have now? Is there anything that could be made better?” You target in on those things and you ask anybody. It really doesn’t matter. I always just ask people that I meet walking into the business. “Hey, do you have vending machines?” “Yes, we do.” “Are you happy with it?” “No, the guy never puts in what we want,” or, “The damn things never work,” or whatever, any number of answers.
Larry Towner: Every once in a while you get, “No, we’re really happy with them. They do a really good job.” and blah, blah, blah. Then, what you’re doing is a bit of marketing research, really. You’re finding out who your competitors are and what they do and how they do it and do they do it well. When you go in with that kind of information, and you can pick that information up from anybody that you talk to that works at a business or is related to that business at all. It can be the janitor can give you that information. They’ll tell you the people that use the vending machines, if they’re dissatisfied with their service provider or their company that comes in and does their vending. You’ll find out about it pretty rapidly. You’ll also find out if they do a good job pretty rapidly. They’ll usually, even if they do a good job, they’ll still listen to you for a little bit unless it’s the owner’s brother in law or something like that and then pretty much you’re out the door.
Larry Towner: You’ve gotta go out face-to-face. You can do all the faxing and all the emails you want, but if you’re not out knocking the door, too, every day, you’re really not gonna win. That’s not a lot of fun and you’re gonna face a lot of rejection. We always say my conversion rates when I go out and do sales calls is about one in ten. I know that when Larry Towner goes out and he knocks 10 doors, he usually gets one account. That’s something, now, I’m a little more experienced than most people so an average person, if you go knock 20 doors, the chances are you’re gonna get an opportunity to get one account. These statistics just come from years and years and years of selling. An inexperienced person is gonna have a conversion rate of about one in twenty.
Larry Towner: Now, does that mean that you go out, you knock that … here you go. You knock on the first door. You get to 19 and you say, “Wow. I’m gonna knock this next one. It’s gonna happen.” No. It never happens that way. What happens is is you’ll go out and you’ll make 50 sales calls and your last three you’ll get the accounts. It always seems to be that way, or the last … or, it’ll work conversely the opposite way. You’ll go knock the first door, you’ll get an account, or the second door, one of your very first ones. Then you won’t get two until the very end. You have to stay at it.
Larry Towner: This is amortized. This is looked at over big periods of time. If you make 100 sales calls in a week, you’re pretty much gonna get about 10 accounts. When I say that, that’s of all sizes. It’s not being specific. If you’re going after big accounts, it can take you years to get big accounts, years and years and years it can take you. You have to be after them every three months or so, and that’s when you get into real professional selling if you’re going after a thousand person plan or something like that. You’re gonna have to be extremely professional. I’m just talking about the average business out there, with anywhere to 50 … 20 to 100 employees. You pretty much can knock the doors and they’ll at least give you an opportunity to make a vending account.
Tom Shivers: Okay. No. This fellow obviously is just getting started in the-
Larry Towner: Right.
Tom Shivers: Vending business and you definitely addressed a lot of the questions that he is freaking about right now. In a previous show, and it was how to get started in the vending business. It’s a previous show that we did. I would have him go check that out and anyone else who wants to understand more about the concept of sell before you buy, which you went into real well there. You’ve been listening to Vending Business Sales Methods at the Vending Business Show, a publication of A&M Equipment Sales.For more sales blogs Vending Sales Secrets