Sales Tip: Aggressive vs. Assertive Behavior

Prospects don't usually reward aggressive behavior. When salespeople become aggressive, their only goal is to share what is important to them -- closing the sale.

There is a big difference between aggressive and assertive behavior. When salespeople are assertive, they believe in the value of their products or services. Successful salespeople are self-assured and self-confident, but never allow their sales talk to overwhelm or push away prospects.

The Home Becomes a Piggy Bank Once Again

Home-Equity Loans Make A Comeback.

If a fancy new car appears in your neighbors' driveway and you wonder how in the world they can afford it, consult the consumption playbook circa 2006. 

Nearly seven percent of new-car buyers used a home-equity loan to finance the purchase during the first half of 2012, according to CNW Research of Bandon, Oregon. That's 52 percent higher than the rate in 2011, and the first meaningful jump in the use of home-equity loans for car purchases since banks pulled back on such lending starting in 2008. It's also further evidence that the housing market is stabilizing, and that housing may eventually help boost an economic recovery.

The widespread use of home-equity loans to fund car purchases, home renovations, college and vacations was a hallmark of the housing bubble. As home values skyrocketed and equity rose, many home owners basically considered home-equity loans to be found money, especially since they figured home values would rise indefinitely. That gusher of cash pushed sales of cars, appliances and other things to record levels in 2006 and 2007.

The housing bust ended that party, of course, and home-equity lending dried up as home values fell and equity evaporated. But now, home-equity lending is making a comeback, especially in areas where the housing market appears to have stabilized.

In six states -- California, Colorado, Florida, Illinois, New Jersey and Rhode Island -- more than 10 percent of buyers financed a new car with a home-equity loans this year, according to CNW's data. Such financing is still far below peak levels of 2007, but it may be high enough to keep car sales from falling, even as the overall economy weakens.

Any pickup in home-equity lending is a tangible sign that banks believe the housing bust is over. "The housing market has probably bottomed, which gives lenders a lot more confidence when extending home-equity credit," says Keith Leggett, senior economist at the American Bankers Association. "They're less likely to do that in markets where prices are still falling."

Buyers qualifying for such loans are most likely wealthier consumers with good credit who have owned their homes long enough to have equity that wasn't zeroed out by the housing bust, which slashed home values by about 33 percent, according to the S&P/Case-Shiller home-price index. Using a home-equity loan to finance a car or other purchase -- if you're lucky enough to qualify -- can be a shrewd move, because the interest on home-equity loans is usually deductible. There's no such deduction for ordinary car or consumer loans. So home-equity borrowing can cut the cost of a major purchase by thousands of dollars.

There are signs that consumers are starting to use home-equity loans for other types of spending as well. Harvard University's Joint Center for Housing Studies predicts that spending on home improvements will pick up by the end of 2012 and grow by double-digits in 2013. That forecast doesn't measure home-equity lending per se, but it does by proxy, since many homeowners use home-equity loans to remodel.

After prior recessions, the housing sector has been a key source of growth that helped drive a recovery. But this time, it's been a net drag on the economy, one reason the so-called recovery has been so weak. A pickup in home-equity borrowing won't be a cure-all, and it may never reach the heights it did during the housing bubble. But it may finally signal that the housing market is getting back to normal.

(Source: U.S. News & World Report, 07/30/12) 

Socialogue: My Friend 'Likes' a Brand. Hmmm...

Nearly One in Four People Say they Would Buy a Brand Because a Friend "Likes" or Follows the Brand on a Social Network

Ipsos Open Thinking Exchange (Ipsos OTX)  recently released the latest global infographic and commentary on the trends and behaviors that define people's lives in today's social media age.

Twenty-two percent of people say they bought a brand because a friend follows or "likes" the brand on a social network. In the BRIC countries, that number rises to 39%, about four in ten people. It follows, then, that the better able a brand is to influence people to "like" it, the more sales it has the potential to drive. Now that's a piece of information brands that are socially active online should really like!

(Source: Ipsos, 06/26/12)

Sales Tip: Educate Your Clients

Your prospects/clients/customers will not know all they need to know about your solution. To help them understand your solution, you must ask good questions and then listen carefully. You have to first understand their needs before you can educate them on the benefits you can offer.

Although for many sales professionals it's difficult to be quiet, great sales professionals are great listeners. When you listen to clients' needs more than you're thinking about what you want to sell, they will see that you care.

You want to build trust and to be seen as a consultant -- this approach gains the respect of your client. They value what you have to say because you cared enough to ask the right questions.

For Marketers, Lead Gen Focus Is Trained on Digital

The web has provided marketers with an opportunity to develop leads early in a consumer's purchase process, and marketers are turning to hard numbers to measure the success of their efforts.

According to a January 2012 survey of marketing professionals worldwide conducted by research company MarketingSherpa, 52% of marketers said their top lead gen strategy for the next year was to meet or exceed quantifiable return on investment goals. That was followed by optimizing the marketing/sales funnel (51%), gleaning more audience insight (51%) and maximizing the lifetime value of customers (47%).

Marketers are looking for quality in their leads, but not ones that come burdened with a hefty price tag. More than half of respondents said their organizations invested $50 or less per lead, with the largest group of respondents (36%) saying they spent less than $20. This indicates that, for the time being, marketers are valuing quantity over quality in terms of lead gen, although this could change as ROI measurements improve.

Marketers also expected increases in lead generation budgets over the next year to focus largely on three areas: website optimization, social media and search engine optimization, underscoring just how important online tactics have become in recent years. In fact, the three lead gen techniques listed for the smallest budgetary bumps were all offline -- direct mail, tradeshows and print ads.

Two-thirds of marketers didn't make a huge distinction between business-to-business and business-to-consumer lead gen efforts, concluding that the techniques in both spaces were more similar than different.
(Source: eMarketer, 07/25/12) 

Subprime Car Loans Return to Favor Among Auto Lenders

Consumers without top-tier credit are finding it easier to get new car loans, as banks and other lenders are lowering the scores needed to qualify. 

While that means additional sales for automakers, and enables more motorists to get into new cars and trucks, it raises questions as to whether lenders are falling into the same risky lending practices they followed before the recession.

"There's a lot of lenders now that are into the subprime business," said Jody Lee, sales manager at Taylor Chevrolet in suburban Detroit. "What used to be a good score at a 650 or 700, now 550 is a good score."

During the first quarter of this year, total U.S. car loans totaled $52.5 billion. That's 49 percent higher than the same period in 2009 -- the recession's low point -- according to Equifax's National Consumer Credit Trends Report.

Also during the first quarter, the average amount financed on new vehicles rose by $589, to $25,995, and for used cars by $411, to $17,050.

Furthermore, buyers are stretching out payments for longer terms: The average length of new- and used-vehicle loans jumped a full month during the first three months of this year, to 64 and 59 months, respectively.

More loans and looser lending restrictions have helped boost new car and truck sales to levels not seen in four years. Estimates call for 14 million to 15 million vehicles to be sold in the U.S. this year, about 30 percent higher than in 2009.

"We've certainly seen the market loosen up for subprime," said Melinda Zabritski, director of Automotive Credit at Experian, a consumer and business credit reporting firm. "We're seeing it very close to what it was in pre-recession levels, but those days we probably will not return to. I think you'll still see the loans themselves a little more conservative."

Bank risk professionals expect a lending increase to borrowers with less desirable credit. The analytics company FICO polled 192 risk managers at banks throughout the U.S. last month and found that half predict growth in subprime auto loans will lead all other sectors for 2012.

It's easier for banks to loan money when interest rates are low and the rate at which banks loan money to one another is close to zero percent. That's one reason subprime auto lending is already on the rise.

Room for subprime to grow
Subprime consumers generally have credit scores of 640 and below, though cutoffs vary by lender. Scores range from 300 to 850; people with scores above 720 are generally given favorable interest rates, because they are seen as more likely to pay their bills.

The average credit score for people financing a new vehicle remained substantially higher than subprime during the first quarter, but it dropped six points, to 760; for used vehicles, the average credit score dropped four points, to 659, according to Experian Automotive's analysis.

Experian -- one of the major credit reporting firms -- expects the average credit score for new-car buyers could fall as low as 750. That estimate is comparable to credit scores during the first quarter of 2008 -- just before the collapse of the economy and auto industry -- when credit scores averaged 753 for new-car buyers and 653 for used-car buyers.

The subprime category typically comprises about one-quarter of the new-vehicle finance market, Zabritski said. That explains why the average credit score for new car loans is still higher than the subprime average. But there's still room for the subprime category to grow.

The number of vehicle loans made to people with less-than-desirable credit jumped 11.4 percent this year.

Lenders are not only loosening their leashes, but more subprime customers are also seeking out auto loans. Those subprime customers, however, aren't getting the rates they could, said Hank Hubbard, president of the nonprofit Communicating Arts Credit Union in Detroit, which helps those with poor credit refinance loans at better rates. Many, he said, are paying 25 percent a year.

"You could argue from a social perspective that disadvantaged people paying 20 percent interest rates is not such a good thing," said Edmunds.com CEO Jeremy Anwyl, "but from a credit perspective, it's not a bad practice."

Consumers 'have a choice'
Hubbard said for the past few years, many of the credit union's customers who have credit scores below 640 had the impression they would not be approved for an auto loan -- or would be approved, but only with a sky-high interest rate.

"People don't realize they have a choice," Hubbard said. "(The lenders) are taking people with decent credit and charging them high amounts." He points to a story of Aaron McIver of Hazel Park, MI, who was saddled with a six-year used-car loan with a 24.95 percent annual percentage rate. He had a monthly payment of $619 and was on track to pay as much in interest as he would for his 2005 GMC Yukon. CACU refinanced him twice and lowered the monthly payments to $386.

(Source: The Detroit News, 07/23/12) 

MARKETERS USE DIGITAL BUT WARILY

John Wanamaker famously said “Half of the money I spend on advertising is wasted; the trouble is, I don’t know which half.”  That is apparently even more true when you are talking about digital/social media marketing.  A new survey by the Association of National Advertisers finds that 70% of national advertisers are using digital media for marketing but 62% of them are concerned about the inability to prove return on investment.


The ANA also found that 53% of the survey respondents said there was a lack of understanding about digital media among key people in their organization. That is likely because of the breadth and complexity of the medium.


The members of the ANA are generally sticking with the big names in the social media industry.  Ninety-six percent of those who market with digital media use Facebook; 89% use Twitter; 49% LinkedIn; and 33% Pinterest.


Seventy-five percent are using branded mobile apps, 67% QR codes; 53% text ads; 41% video ads; and 25% video advertising.


The ANA report mirrors another recent study from Advertising Age, conducted in conjunction with Citigroup, which found that almost 86% of the marketers/agency execs and media execs surveyed had a presence on Facebook, but only 55% advertise on the site.


The biggest problems, says AdAge, is determining whether Facebook is actually working for the advertiser.  A majority of those using the site said clicks and “likes” were the most important metric.  But, says the magazine, “when it came to driving purchase intent just over 19% said they ‘don't know’ if Facebook is useful and more than 13% said it's ‘not useful.’ Just 55% said Facebook is ‘somewhat useful,’ indicating a high level of ambivalence on a key branding metric.”  One ad exec told AdAge that "I do not believe that Facebook is an advertising platform. We need to explore other possibilities."