Eye on B-to-B: The Lowdown on Selling High-Ticket Items

May 01, 2002 9:30 PM  By

Just as the rich are different, so is selling big-ticket equipment by catalog. Mailers often need to develop special collateral materials for high-ticket items (which are frequently high-tech products as well), offer free technical support, and even employ a dedicated field sales force.

“You can’t expect people to make a decision on a $2,500 or $25,000 item with the same amount of exposure as you would give to a $50 item in a catalog,” says Mary Ann Kleinfelter, president of Marketing Solutions Today, a catalog consultancy in Milford, NH. “There’s a lot more to it.”

Supporting the sale

For one thing, the decision to purchase a costly item is often made by committee rather than by an individual. “Several people might have to be exposed to or sold on the idea, or the person you’re speaking to may need to have something in hand to show the committee,” Kleinfelter says.

You might even have to perform a demo or a consultation, particularly if the item in question is fairly complex or highly technical. The prospective buyer will need to know that technical support is available not only prior to the sale but after the purchase as well.

For Keithley Instruments, a Solon, OH-based cataloger of electrical, radio-frequency, and optical measurement solutions for electronics manufacturing, “a major selling point is communications support,” says Ronald-Stéphane Gilbert, Keithley’s manager of Internet and direct marketing. “The idea is that support is available by phone and the Website 24 hours a day, and currently that support is included in the purchase price of the product.”

Keithley’s products range in price from about $90 for PC-based hardware and software to $500,000 for parometric semiconductor test systems. The $170 million company has an average order size of $2,200.

Another way in which Keithley provides support prior to closing a sale is by offering data sheets on its Website, as well as brochures and application notes — descriptions of how the products have been used by others. The firm has approximately 40 types of “fulfillment packages” of information about particular products.

“This is a critical part of the call center response,” Gilbert says. “Before follow-up calls are made, via either e-mail or postal mail the inquirer receives an extensive package addressing the product they inquired about.”

Because merchandise with a high price point requires a high comfort level on the part of the buyer, Black Box Corp. makes sure to devote ample space in its catalog to its most expensive and most technical items. The $827 million Pittsburgh-based cataloger sells a wide range of products for computer networks, from simple pins and cables to complex routers. Products cost from less than $1 to $15,000, with an average order size of about $700.

“We don’t need to include a technical explanation of the $10 cable,” says Black Box marketing manager Marie A. Nolan, “but for the routers, which can cost up to $4,000, we might devote two full pages to a presentation, with a complete diagram, an explanation of the product, and a specification block.” Black Box also offers prospects a variety of other printed materials, including product manuals.

But for extremely costly, critical purchases, written materials may provide only so much reassurance to buyers. For that reason, Gilbert says, Keithley Instruments never sells its most expensive items over the phone. Generally speaking, inquiries for products that cost $5,000 or more “get taken by our call center and then shuttled out to our field sales force for consideration for a personal sales call,” Gilbert explains.

Keithley has about 100 individuals in its domestic field sales organization, most of whom are independent manufacturer’s reps. “In one way or another, they end up touching roughly 80% of the business,” Gilbert says, “but they may interact with the people in inside sales/telesales on a significant portion of this percentage.”

Costly items, costly sales?

Because you may need to avail yourself of multiple channels and employees to sell a big-ticket item, you should perform a P&L analysis so that you know exactly how much closing the sale will cost you. This is especially important for catalogers used to selling inexpensive products and just beginning to sell more expensive, more complex items.

“Count on the fact that you’re in for a multichannel experience, which can be expensive if you don’t have the infrastructure to assess its cost,” Kleinfelter says. In other words, be sure to figure the cost of a sales call, an outbound call, technical support, and training new product users vs. contracting with a training organization. And don’t overlook seemingly minor expenses, such as business cards for your field sales team.

That said, don’t let all the number crunching dissuade you from including high-ticket items in your merchandise mix. “I’ve seen a lot of people go from selling a $50 item to a $2,500 or $25,000 item,” Kleinfelter says. “You can apply some of the same concepts of good mail order and targeting people. It’s just not the exact same process.”

Don’t Overlook the ‘Small Change’

Selling specialized, highly technical items that cost thousands of dollars can generate an impressive average order value. But it won’t necessarily generate repeat business. Catalogers that sell high-ticket products would be well advised to also sell complementary consumables — accessories, refills, and the like so that once a customer makes a major purchase, he doesn’t disappear.

“Where most companies fail is that they don’t have a dialogue strategy with their customers,” says Richard Rosen, president/CEO of Rosen/Brown Direct, a consultancy in Portland, OR. “They sell them something as a transaction and then no longer speak with them until it’s time to sell them something else.” Rosen suggests that you “think in terms of providing value and working to keep buyers as lifelong customers.”

To that end, Wellesley, MA-based PerkinElmer, a $568 million marketer of scientific instruments, has a separate division for consumables and accessories. J. Kevin Smith, strategic marketing manager for the division, says that his group counts primarily on its catalog, the Web, and inside telemarketing, in addition to input from field service engineers, to reach potential customers. PerkinElmer’s field sales organization, on the other hand, focuses on selling the actual instruments, which can cost upward of $10,000.

Field service engineers, performing maintenance on instruments already in use, consult with the customers as part of their visits. “They try to find out if the customers need additional consumable items and accessories that might make their job easier, and they get back to us with that information,” Smith says. Items in the consumables and accessories line start at about $5 and can cost up to $500, with the average sale totaling about $150.

“It’s nice to have accessories or other products that you can approach your customers with, as follow-up offers,” says Mary Ann Kleinfelter, president of Milford, NH-based Marketing Solutions Today. “It’s something to keep that conversation going and add value.”
PBK