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Acquiring a business requires time, effort, and money. An acquisition can transform and grow a business overnight. But purchasing the wrong target company wastes time and resources, and causes distractions. Every acquirer must analyze, investigate, and perform due diligence to ensure that doesn't happen.
The entire process of buying a business can be daunting. However, with the proper research and attention to detail, an acquisition can lead a business to successful growth. To help acquirers, we have included 55 questions to ask when buying a business. We have separated it into categories and phases.
Business Readiness Questions
Before asking questions to the seller or target company, ask the following questions:
1. Why buy the business?
What is the goal of the acquisition? Is the acquisition’s purpose to acquire specific technology or enter into a new market? A good deal rationale will set the tone for everything else.
2. Why not build internally?
Why buy the product or service instead of building it from scratch? Is it more expensive to build from scratch? Is it because of time-to-market? A buy-or-build analysis is crucial when deciding to acquire a company, which requires collaboration with the CEO and functional heads.
3. Is the acquisition affordable?
Funding an acquisition can be tricky, depending on the acquirer's financial capability. There are three ways to fund a transaction: equity financing, debt financing, and cash reserves.
- The simplest is cash reserves, paying the entire deal with excess money in the balance sheet.
- Equity financing is the act of raising money by exchanging equity. This method is risky, as losing too much equity might affect ownership.
- Debt financing is raising money from lenders, and repaying them later, typically with interest. Debt financing is harder to obtain and will depend on the consolidated debt capacity of the company.
4. Can the team’s resources handle M&A?
M&A is massive and will require many people to execute the entire process. Not to mention that it could take months and, in some instances, a year to finish. Also, the people involved in the transaction will most likely juggle their day job while participating in the deal. Dedicated and capable people is a requirement for any company to execute M&A.
5. Where to find third-party consultants?
Aside from the internal team, getting outside help has its benefits, and is sometimes necessary. It is important to understand where to find third-party consultants and the costs associated with hiring them.
6. Is there a culture fit?
It's never too early to do a cultural assessment of the target company. Even at a high-level view, massive differences will be noticeable. For instance, a traditional company trying to acquire a millennial-dominated startup might have problems due to a substantial generational gap. Further diligence is required.
7. Is this the best target company available right now?
Are there any other alternative targets? Look around, it doesn't hurt to ask.
Questions about the Business’s History
Now it's time to approach the target company and ask a few questions. Before fully committing all efforts and resources, obtain a high-level view of the company and get to know the seller.
8. Why sell the business?
There are several reasons why business owners sell their companies, and some of them can be deal-killers. Knowing why a business is being sold upfront can give buyers confidence or the ability to walk away as soon as possible.
9. When did the business start?
Longevity is a good indicator of business success. The longer the business has existed, the safer it is to purchase. Chances are, they have good customer loyalty, a solid reputation, and overall stability. However, startups are often less expensive and have more potential. Business duration is a good starting indicator of the business’s quality.
10. Are there any other investors or owners?
Is the seller the 100% owner of the business? Or do they have capital investors? Are they selling their shares too? How much of the company is for sale?
11. Was there ever a lawsuit against the business or the owner?
In the business world, past or present litigation matters. It’s a good indicator of culture, values, and, most importantly, reputation. Also, litigation can open the acquirer up for liabilities. If the target company has legal problems, the buyer will inherit those problems as the new owner.
Future Business Crowth capabilities
What about the future of the business? Has the business maxed out its potential? Or can the company grow with extra help? Those are important questions during an acquisition.
12. Does the business have the potential for hypergrowth?
Often, acquirers make the mistake of ignoring opinions and the owner's vision regarding their business. But the fact is, no one knows the company more than the owner does. If they are one step away from achieving hypergrowth, they might know what to do, but just lack the capabilities or funding to achieve it.
13. Is the business too dependent on the current owner?
A business heavily dependent on the owner could cause problems, especially if they are retiring. That massively cuts the value of the company, even though the owner may not see it that way. Also, putting all hopes on one person that could walk away anytime is not a good idea. If it seems impossible to replicate the owner's role or automate the processes, think twice about buying the business.
14. Is there someone who could run the business?
It's time to find a deal sponsor; Someone who can inherit the business forward. If the business is not dependent on the current owner, find a suitable replacement that can handle the business and its day-to-day operations. The location of the business is also crucial. If the business is overseas, and there is no willing employees to move there, that could be a problem.
Financial Questions & Valuation
Never buy a business without looking at concrete financial data. A business valuation goes beyond understanding the growth path of the target and verifying transactional elements is essential. Typically, there is an NDA in place before the seller would agree giving out sensitive financial information.
15. What is the business revenue?
How much money is generated from regular business operations? If most of the money comes from non-operating income, that means their products are not sellable, and acquiring this company might be a lost cause. This question entails getting all of the financial statements for the past five years.
16. How much profit does the business make a year?
Profit is not the same as revenue, and a business can have high revenue with no profit due to high fixed costs. It's essential to understand how profitable the business is.
17. Does the seller have any outstanding debt?
Look at the debt schedule. As the one inheriting the debt, it is important to understand each and every detail of the debts incurred by the company.
18. What are the company's assets?
Ask for a list of all the long-term assets owned or leased by the business. For the assets owned, they should provide dates of purchase to give an idea of the length and estimated usage of each machinery. It will also help understand the depreciation, condition, and remaining value of the assets. For leased property, ask for the contracts whether it's machinery or real estate.
19. How much is in the business’s bank account?
A bank account balance will give a good estimation of the business’ operating cost. There is also the matter of business continuity. Since all the salaries, receivables and payables go through that bank account, inheriting it is easier. Just put the account balance on top of the overall purchase price so that the transaction doesn’t disrupt the business operation. The treasury team should secure all the necessary signatures and forms to transfer the bank account successfully.
20. Is the business tax compliant?
If the target company is not tax compliant, the acquirer will inherit potential problems with the government. Secure the following:
- All income tax returns for the past three years
- Sales tax returns for the past three years
- Tax settlements or outstanding tax investigations
- Details of outstanding tax liabilities and tax liens
- Employment and excise tax filings
21. What does the business's quality of earnings look like?
A quality of earnings report is a good indicator of a company's profitability under new ownership. This process removes one-time events from their income statement and focuses on EBITDA. (Earnings before interest taxes depreciation and amortization)
22. What is the projected sales for the next year?
Look at the trajectory of the business. Does the business have something in the works that is geared towards boosting sales? Do they have new opportunities? Do they have incoming new clients? Getting their rough estimate is an important part of evaluating their business.
23. What is the seller's asking price?
How much is the asking price? If it is unreasonable, consider walking away before wasting any more time. It’s very common for entrepreneurs to be emotionally attached to their business, which skyrockets their expectations. If it’s too low, consider sealing the deal quickly before any buyer swoops in and triggers an auction.
24. How much have similar businesses recently sold for?
Regardless of the number and what the business looks like, it’s important to know the fair market value for the specific type of business. Research or ask around how much similar businesses have recently sold to get an idea of how much to pay.
Questions About Day-to-Day Operations
Even if the numbers look good, what about the daily operations? It’s time to think about integration and company culture.
25. How many employees does the business have?
Obtain the business’s org chart and headcount by function. This will provide insight into the critical players crucial involved in day-to-day operations and the overall size of the business. This question also entails getting employment contracts. Gain access to sensitive information such as compensation, bonuses, and other details regarding every employee.
26. Have there been any layoffs or material changes to the workforce in the last 24 months?
Like it or not, culture matters. If the target company is throwing out employees left and right, that says a lot about their culture and how they treat or retain employees. Try to uncover if there are employees who left out of anger or were mistreated during their tenure, which could lead to possible lawsuits in the near future.
27. What are the products or services of the business?
Get a list of the products sold, or services provided, with a description. Knowing everything about these products will help during integration, especially in creating a go-to-market strategy.
28. Does the business have intellectual property, trademarks, or patents on their products?
Are their products special? If so, are they protected or registered? If they have no protection on a special product, then it is virtually useless because another company can copy it easily. Is it too late to register now? If their product is the deal rationale for acquiring the company, then this could be a deal breaker.
29. How does the business produce products?
This question provides a detailed view of what the day-to-day operations look like. How do they acquire their product? Do they make it from scratch? Do they buy parts and assemble it themselves? Or do they just buy and sell the products? Knowing the workflow will help accurately identify key people to retain, the pieces of equipment and tools needed for daily operations, and cost synergies.
30. Are the facilities, equipment, fixtures, and vehicles in good working condition?
If the sales are great and the products are great, but you cannot produce anything because the equipment is broken, then it's all for nothing. If all the vehicles needed to sell or deliver the product don't work, how will the business operate? Replacing or repairing everything will cost a lot of money and should be deducted from the overall valuation.
31. Who are the suppliers?
While trying to understand the operation, also get the supplier list. Who are the partners in producing the product? Do they have an existing contract? What are the limitations of the contract? If a supplier wishes to stop selling, can the business still operate?
32. How does the business sell?
Arguably, one of the most critical questions to ask before acquiring a company is how does the business sell their product or services? Where do they sell? How do they deliver? How do they collect payment? Achieving revenue synergies is almost impossible without understanding the quote-to-cash process.
33. Who are the customers?
The customer list with a breakdown of revenue by a customer is another important piece of information to obtain. Who are the top clients? Do they have contracts or can they leave anytime? How many customers do they have? And most importantly, who are the typical buyers of the product?
34. How does the business acquire new customers?
What is the go-to-market strategy? How do they acquire new customers? Do they have proactive sales reps? Physical stores? Social media? And what does the customer acquisition cost? Understanding the prospect-to-customer process is also key to integration.
35. Has there been customer churn in the last two years?
How many customers has the business lost? Do they know why? Is it something serious? Or is it because of better competition?
36. Who are the competitors of the business?
Knowing the competitors will help paint the entire landscape of the industry. Understand who they are, what they are doing, and what you can do to outgrow them.
37. Does the business have any existing partnerships with other entities?
Any joint venture or partnership agreement the business has entered into must be identified, especially if they are taking a percentage of the profits.
38. Any other contracts or agreements the business has entered into?
Are there any non-operating contracts the business has entered into? Acquirers inherit contracts and obligations. It could be as simple as a promise to donate money to a certain charity every year.
39. Does the business have the proper licenses and permits to operate?
Secure necessary permits to operate the business, licenses to use special machinery, and any other government-mandated licenses. Does the business have all of the necessary permits and licenses? If they do, are they all transferable to the new owner? If not, is it possible to secure ones? Otherwise, it might not be possible to own the business after all.
40. What kind of technology does the business use?
Today, technology is crucial for any business. It's very safe to say that the target business uses technology tools. What are the tools used? Can the tools be migrated to another system? Is it necessary to upgrade their computer hardware to be at par? This information directly impacts the integration budget.
41. Will the business be the same under different ownership?
Probably the most important question in this list, what will the company look like after the sale? If the plan is to relocate the entire business, can it still continue to run properly? If a huge part of the business relies on the owner's name or personality, then it's going to be impossible to replicate.
42. Is the target company better left alone? Or integrated?
Integration is the most delicate part of the transaction. Properly assess how much integration is possible to achieve synergies without breaking the company's value.
43. Does the seller have better processes?
It is also possible that a target company has a better process. Be open to reverse integration and adapt to their processes instead of the other way around.
44. Is the seller happy about the integration plans?
A big mistake that acquirers make is not listening to what the seller has to say about the integration plan. Remember that the seller is good at what they do. Be open to suggestions and align with their business leaders of what the company should look like after the transaction.
Purchase Contract Questions
It's time to put everything in writing.
45. How many risks are involved?
After gathering all the information, how many risks are involved? Even with the risks, is the deal still viable? Can you mitigate those risks in a contract?
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46. What are the things included in the transaction?
Focus on the disclosure schedule in contracts. It contains what is and is not included in the overall transaction.
47. Is the seller willing to help during the transition?
In some instances, like a carve-out, acquirers require help from the seller to transition the business. A transition service agreement must be secured before the deal closes. However, even if it's a stock acquisition, sometimes, the owner needs to stick around for 90 to 100 days. Is the owner willing to stay for a little longer? Put it in writing.
48. Is the seller willing to sign covenants to protect the business?
As the previous owner, the seller knows all the business's trade secrets. Can they promise not to compete against it after the transaction? Will they share the secrets of the business to other companies or competitors? Also, other employees might have a deep loyalty to the owner and follow them wherever they may go. Protect the business and put covenants such as NDAs, non-solicitation, and non-compete clauses in the contract.
49. What are the things that the seller is willing to represent and warranty?
Reps and warranties are crucial for any transaction. These are statements of fact that the seller made to attract buyers. If any of them turn out to be false, reps and warranties allows the acquirer to claim damages. The most common example of this is the legality of the business. If the business turned out to be illegally operating, then reps and warranties can cover the damages. List down all the things the seller is willing to represent and warranty.
50. What are the other items needed to close the transaction?
Signing and closing right away rarely happens, and acquirers must identify other closing requirements to close the deal. The most common ones are regulatory approvals from the government, shareholder approval, and third-party approvals such as landlords' permission to transfer the lease, or the money if doing debt financing.
Miscellaneous
At this point, all that's left is to sign the contract. But before you do, here are some final questions to ask before signing a deal.
51. Was the seller nice during negotiations?
During negotiations, was the seller pleasant to work with? If they are unbearable, it might be an indicator of future culture clashes that will disrupt integration.
52. Is the target company socially responsible?
Not everyone cares about ESG, but it is slowly becoming a new trend globally. If this matters, then look at their ESG initiatives and identify if there is alignment on values and goals.
53. How will the deal be announced?
Announcing the deal can make or break the transaction. A poor announcement can scare all the employees and cause them to leave. The same can be said for newly acquired customers. Plan with the communication team carefully and get support from the target leadership.
54. Is everyone on the deal team happy about the transaction?
M&A is a massive undertaking that requires a huge team to finish. Having worked on the transaction, the deal team’s opinion matters. They are the ones that were in the trenches working with the target leadership and discovering the risks first-hand. If they think this is not a good purchase, talk to them about it before proceeding to sign the contract.
55. Are you happy with the company?
Last but not least, are you happy with the transaction? At the end of the day, the buyer has to be confident and satisfied with the purchase.
Mistakes to Avoid When Buying a Business
We have provided 55 questions to ask when buying a business to prevent owners or corporate development from acquiring the wrong business. However, even with the right target, pulling off M&A is an arduous task. Statistics show that over 50% of deals fail due to inefficiencies in the process and framework. Here are mistakes to avoid when buying a business:
Lack of integration planning
Asking the questions above will help identify if the company is a good purchase. However, what happens after is a different story. Most transactions often include integration planning, but not early enough. To make matters worse, some teams start integration planning after signing the purchase agreement. And in some instances, the people that created the integration plan were never involved in the diligence process. These are all recipes for disaster. Integration planning needs to start as early as possible. The earlier, the better.
Working in Silos
M&A requires a considerable amount of people to complete. If those involved in the transaction work independently from one another, it will cause problems that will destroy the value of the business. Try using Agile M&A, a framework focused on collaboration and communication between teams, centered around integration planning with the deal rationale in mind. Learn more about it here:
Lack of commitment from the leadership team
Before conducting M&A, there needs to be a fully committed deal sponsor, someone who will inherit the business after the deal is closed and will take responsibility of running its daily operation. If no one will take ownership, the newly acquired business will be in jeopardy.
Understaffing the Deal Team
Never understaff the deal team just to save a few bucks. An extra one to two people can make all the difference between a burnt-out team and a well-oiled machine.
Recap
Buying a business is life-changing if done correctly. The list of questions to ask when buying a business is a good starting point to identify readiness and the target company’s quality. However, don’t feel limited by the above set of questions. Feel free to ask more specific questions, depending on the type of business and industry of the target company.
The most important thing to remember is to have a strategy behind the acquisition.
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Open-ended questions are essential to success in sales. Why? Because they allow reps to get inside the head of their prospects and build rapport with them, while uncovering their pain points, establishing their needs, and clearly articulating the value of an offering.
In this article, we’ll outline the difference between open and closed sales questions, talk about how to use them in your business, share examples, and highlight critical mistakes to avoid.
What Are Open-Ended Sales Questions?
An open-ended sales question is a probing query that helps sales reps better understand their prospects. They can be used at any time during the consultative sales process, from initial conversations with a potential customer up until the close of a deal.
A few characteristics of open-ended sales questions include:
- They are conversational.
- They usually involve the Five W’s: Who, What, When, Where and Why, as well as How. (Some people call these the Six Ws—even though “How” doesn’t start with W).
- They don’t have a set pattern, meaning there is no formula or structure to them.
- They usually require thought before someone answers.
- They are naturally subjective, not objective. That is to say, they’re often more about personal feelings, than set-in-stone facts and figures.
When used in sales calls, open-ended questions enable sales reps to create dialogue with prospects and learn important information about them that can help close a deal.
Open-Ended vs. Close-Ended Sales Questions
Close-ended sales questions aim to uncover important information about prospects—just like their open-ended counterparts. The main difference is that close ended sales questions lead to specific answers, like a yes or no, or a multiple-choice option.
Because of this, open-ended questions allow the control of a conversation flow between sales rep and prospect, while close-ended questions keep reps in the driver seats at all times.
Here’s a quick example:
You could ask a prospect, “Do you have any other questions that I can answer for you today?” which is a close-ended question because the answer is either yes or no. Or, you can ask, “What other questions can I answer for you today?” which opens the door to dialogue.
Why Sales Teams Should Ask Open-Ended Sales Questions
Now that we know what open-ended sales questions are, let’s talk about why you should ask them. Here are three important reasons to ask your prospects open-ended questions:
Engage Prospects
Open-ended sales questions encourage prospects to talk about things they care about. It’s easier to engage in conversations that we find interesting and meaningful.
Once a prospect is engaged, you’ll find that building rapport with them, learning their pain points, and closing a deal is a much simpler process. This is because your conversation will feel like a true dialogue, not a sleazy sales pitch.
Discover Pain Points
Engaged prospects talk more, which will give you plenty of opportunities to discover their true pain points. You can then use this understanding to frame your company’s products and/or services in the appropriate ways and increase your chances of closing.
For example, if, after asking an open-ended sales question, a prospect says, “Our current software is just so hard to use,” you can talk about how intuitive your solution is.
Build Trust
Finally, open-ended sales questions build trust because they demonstrate to prospects that you actually care about their thoughts and opinions. You’re basically inviting them to tell you everything about a specific topic—the good, the bad, and the ugly.
When a prospect feels like they can tell you exactly what they’re looking for in a product, any concerns they have, etc., they’ll naturally start to trust and open up to you.
55 Examples Of Open-Ended Sales Questions (By Category)
In this section, you’ll find 55 examples of open-ended questions in sales, separated into 10 different categories based on when they’re best used.
Remember, as Sam Parker, sales trainer and author of Just Sell.com says, you are asking the prospect to answer the question. You want to hear what they have to say, meaning no leading, no prompting, and no interrupting.
Rapport Building Questions
When working to build a relationship with the potential customer and establish a personal connection, use Rapport Building Questions.
As Xactly.com explains, rapport-building requires you to really get to know your prospects. Without this level of intimacy, you can’t consult the account. You have to know what they want and need so you can position your product or service as the perfect solution.
Examples:
- What needs to happen today to make this appointment worth your time?
- What motivated you to take this call with me?
- How do you evaluate vendors in this [Area/Field/Industry]?
- What concerns do you have about making changes in this area?
- What part of your [Process/Product/Service] do you enjoy the most?
- What have I not covered that you would like to know more about?
- How’s business? Have there been any changes since we last spoke?
Qualifying Questions
It’s important to evaluate new leads and determine where they are in the buying process. Qualifying questions help determine a prospect’s interest level, what they think of your sales approach so far, and what your next move should be to close the deal.
Examples:
- When do you think you might assess your solutions in [Your Industry/Category]?
- What do you think about our offer so far?
- How should we move forward after today?
- Do you have any questions about our product that I haven’t answered yet?
- What’s your budget look like for this [Project/Product/Service]?
- What’s changed since the last time we spoke about this?
Needs-Based or Pain-Based Questions
When you want to learn more about the challenges your prospects face, try Needs-Based Questions, aka Pain-Based Questions. Just be cognizant of the pains your offering solves. In other words, don’t ask about areas that your product or service doesn’t address.
Each of the following open-ended sales questions aims to uncover important details about a prospect’s current system and why it isn’t working for them.
Examples:
- Why isn’t your particular solution and/or process working for you?
- What’s preventing you from hitting your goals?
- What are some challenges you’re looking to solve?
- What do you think about our offer so far?
- What improvements are you looking to make in your department?
- Have you tried to resolve this problem before? What happened?
Impact or Benefit-Driven Questions
Wanting to learn the best way to close a potential customer? Ask them Impact or Benefit-driven questions to discover the product features your prospects find most intriguing. Then, use their answers to these sales questions to inform your approach.
To prepare, review the features and benefits of your product or service so you can ask good open-ended questions to potential customers.
Examples:
- How important would you say [Feature] is to your [Industry/Process/Business]?
- How much time do you spend [Performing a Specific Task]?
- How would you spend the extra 30-60 minutes a day if you didn’t have to [Task]?
- If this problem remains unsolved, how will it affect your business in the future?
- How do you think you could avoid issues like A, B, and C?
New Future or New Reality Questions
These kinds of questions help prospects visualize what it will feel like to achieve their goals using your company’s products and/or services. As such, they’re quite powerful.
Examples:
- How do you think changing this area would improve your day-to-day process?
- What would you like to achieve in the next year by making this change?
- If time and money were no object and you had full authority to do whatever you wanted, what would you change about your current system?
- If you were to describe your situation in three years, what would you want to be different from what you have today?
- If you could go back in time, what would you change about your business?
Objection-Based Questions
Objection-based questions are designed to uncover objections before they derail your sales process. Or, at the very least, give you the details you need to disqualify leads and move on.
Examples:
- The common objection is, “I need to discuss this with my supervisor,” so the question would be: “Who else is involved in making these types of decisions?”
- The common objection is, “I can’t afford this right now,” so the question would be: “What budget do you have allocated for something like this?”
- The common objection is, “I’m not interested in your product or service right now,” so the question would be: “When are you interested in learning how I can save you X% with this product/service?”
- What concerns, if any, do you have so far?
- What else would you like to talk about?
- What would stop you from making a change today?
Buyer History Questions
Buyer-History Questions help to uncover prospects’ past experiences and purchasing habits. They’ll also help you understand the state of a prospect’s relationship with their current provider, which can have significant implications for your sales process.
Examples:
- What has your past purchase experience with [Product/Service] been like?
- When was the last time you evaluated something like this?
- Why weren’t you satisfied with your previous vendor?
- How would you describe the level of service you receive from your current provider?
- What measures have you taken to fix your problems with your current solution?
Clarifying Questions
What if a prospect doesn’t give you enough information on a specific topic? Try asking open-ended questions that help clarify their thoughts and opinions. These are great for directing sales conversations, while allowing prospects to maintain control.
Examples:
- Can you tell me more about that?
- What do you mean when you say [X]?
- Would you be able to give me an example of that?
- Can you give me more information on [X]
- How did that affect your team?
Closing Questions
The best open-ended sales questions will help you take prospects from new leads to paying customers—but only if you ask the right ones at the right times. Here are a few questions that will help you “seal the deal” and earn the commission bonus you’ve been eyeing:
Examples:
- What’s your timeline for making a purchase?
- Who else are you comparing us against?
- What would it look like if our products helped you overcome your challenges?
- If we make a deal, what would it mean for you personally?
- What else can I do to help you finalize your decision?
- When can we get started?
Open-Ended Questions to Ask After Closing
You know the saying, every ending is a new beginning.
A closed deal is really just the beginning of your company’s relationship with a new customer. That’s why it’s important to ask engaging sales questions after closing to ensure customers are enjoying their experience and want to continue doing business with you.
Examples:
- What caused you to reach out to us?
- How can we help you get started with [Product/service]?
- Now that you’re a customer, what can we do to make sure your experience is perfect?
- What questions do you have about the onboarding process?
Tips to Ask Better Open-Ended Sales Questions
Once you’ve prepared your sales discovery questions for each stage of your prospect meeting, you should think about how to ask open-ended questions in sales.
Everything from the order in which you ask your questions to the various ways you transition from one to the next should be considered so that your flow seems natural and your prospects never feel like your conversations are overly structured.
Sales professionals who have trained use a series of needs-based questions to uncover the prospect’s pain.
Similar to a traditional funnel, the pain questions start broad; i.e., “What are some things you would like to change about your current system/provider/product line?” They then move to more specific questions like, “Can you give me an example?”
Invert the funnel. Funnels are broad at the base and build up to a point. When asking open-ended questions for sales, invert the funnel by asking board queries first, then working your way down to more specific ones.
For example, ask a simple, non-threatening question to start such as, “What should I know about your business? Then look for areas to explore in greater detail based on the response you receive, using pointed questions to reveal important details.
Exude curiosity. It’s important to show sincere interest during the open-ended questioning process. Think about how you can help your prospects rather than the sales commission they represent. Nobody wants to interact with sleazy sales reps.
If you can make your sales calls about your prospects instead of about you, your company, or even the products and services you sell, you’ll have more success.
Shut your mouth. One of the best things you can do on a sales call is listen.
Let your prospects speak about the things on their minds. Ask questions that give you a deeper understanding of their circumstances. Then adjust your approach to address their wants, needs, and concerns. Doing so will form a bond between you and potential customers.
As leadership guru Michael Hyatt says, “you will often find that people volunteer amazing amounts of information that you would have never obtained any other way.”
Keep it personal. Preparation is vital to a successful sales call. However, over-preparedness can be extremely dangerous because it can make your exchanges feel impersonal and robotic, like you’re reading from a script.
Work hard to make your conversations feel personal. That way you can build rapport with potential customers and gain their trust.
This isn’t an invitation to not prepare for your sales calls. Instead, it’s a warning to not let your preparation distract you from your goal: to get to know your prospects so that you can sell them products and/or services that will make their lives better.
5 Mistakes Reps Make When Asking Open-Ended Sales Questions:
1. Answering your own questions. While it may feel natural to suggest certain answers to the questions you ask prospects, doing so isn’t advised. This is because your suggestions can alter what a prospect was planning to share with you.
Instead, ask your questions and then zip your lip. That way you learn exactly what’s on your prospects mind, without it being colored by your own input.
2. Forgetting to listen to the client. Similar to answering your own questions, forgetting to listen to the potential customer defeats the purpose of asking open-ended questions.
3. Interrogating clients. Rapid fire questions that dig a little deeper than a person wants feel more like an interrogation than a conversation, which is not going to help you build rapport.
Be sure to ask enough follow up questions to gain a better understanding of your leads, but not so many that people wonder if they should have a lawyer present.
4. Asking too many “why” questions. “Why” is one of the Five Ws, however it can be tricky to ask a “why” question without sounding accusatory. As Arden Coaching points out, “Why did you do that?” is more pointed than “What did you use as the basis for your actions?”
You can ask why, of course. But be careful about how many times you ask it and the tone you use when asking, so as not to offend your prospects.
5. Jumping straight to a solution. Remember, this part of the sales process is all about building relationships, not pitching your product or services.
If you notice that your prospect has a problem that your product or service can help with, resist the temptation to share information about it immediately. Instead, save it for the appropriate time. Remember, good sales come to those who wait.
Ready. Set. Question.
Asking consultative selling questions will give you the chance to listen to your prospects and build relationships with them. Once done, you’ll be in a much better position to close deals because you’ll understand their pain points and can adjust your sales approach to suit.
Just remember, the way you ask your open-ended sales questions matters. Ask them correctly and you’ll harvest new qualified opportunities for your business, while optimizing your sales funnel and improving team efficiency. Win!
Perhaps most importantly, however, open-ended sales questions allow you to prioritize your prospects to optimize your sales funnel for efficiency and success.
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Sources:
Saltis, Sam. “87 Open-Ended Sales Questions Every Digital Agency Should Ask in Every Buying Cycle.” www.coredna.com. 6 November 2018. Web. 15 November 2018. < https://www.coredna.com/blogs/open-ended-sales-questions#>.
“Open-ended Questions Require and Answer Beyond “yes” or “no”!” richardson.com. Web. 16 November 2018. < https://www.richardson.com/sales-resources/open-ended-sales-questions/>.
Rose, Lisa. “Open-Ended Questions for Sales: How to Get Your Prospect Talking.” Brooksgroup.com. Web. 15 November 2018. < https://brooksgroup.com/sales-training-blog/open-ended-sales-questions-how-get-your-prospect-talking>
Parker, Sam. “Top 30 Open-Ended Questions.” www.justsell.com. Web. 16 November 2018. Web. < https://www.justsell.com/top-30-open-ended-questions/>
Schultz, Mike. “21 Powerful, Open-Ended Sales Questions.” www.rainsalestraining.com. Web. 16 November 2018. < https://www.rainsalestraining.com/blog/21-powerful-open-ended-sales-questions>.
Scott, Jordan. “24 Open-Ended Sales Questions Your Reps Should Be Asking.” Xactlycorp.com. Web. 26 February 2018. Web. 16 November 2018. < https://www.xactlycorp.com/blog/importance-open-ended-sales-questions/>.
Alessandra, Tony. “15 Tips For Asking More Effective Sales Questions.” Blog. Hubspot.com. Web. 16 November 2018. < https://blog.hubspot.com/sales/10-tips-ask-sales-questions-si>.
Hyatt, Michael. “7 Suggestions for Asking More Powerful Questions.” Michaelhyatt.com. Web. 16 November 2018. < https://michaelhyatt.com/asking-more-powerful-questions/>.
Perry, MA, PCC, Maren. “How (and Why) to ask open-ended questions.” Ardencoaching.com. Web. 16 November 2018. < https://ardencoaching.com/how-and-why-to-ask-open-ended-questions/>.
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