The termination: a demon or a challenge?

Originally titled FTC Rule 429, the termination was not intended to be a “federal satisfaction” guarantee or a “buyer’s regret” insurance program. The rule had the limited purpose of correcting the specific problem that sales are obtained through high pressure or deceptive sales tactics. In surveys conducted on why customers rescind, the majority of customer responses included phrases such as: “The price is too high,” “We don’t see the value,” or “It wasn’t competitive with other prices we received.” In many responses there were phrases such as: “We did not believe in discounts” or “The seller had ‘a lot of pressure'”. Then there were those who were uncomfortable with the need to buy right away.

Most of these answers do not meet the requirements or purpose of the law, however, the contract is usually terminated.

Buyers’ remorse is a natural psychological condition, however, the above statements corroborate that a high percentage of rescission is due to a malfunction in the sales process. If you are selling an expensive item (that is, $ 20,000 to $ 30,000 or more) versus transactions of $ 5,000 or less, you are likely to experience a high percentage of rescission. If a customer perceives a difference in price rather than a difference in value, this often leads to termination. Issues such as the source and style of the lead, the perceived needs of the lead, the size of the contract, and cash versus finance will also affect the termination rate.

However, if your business is using outdated sales methods, using multiple “drops or discounts,” or if the value is not established before a price is quoted or an incentive is offered, your termination rate is most likely higher. Than it should be

If your average contract is $ 4,000 or less, a termination rate greater than 2 or 3% is unacceptable. In contracts of $ 5,000 to $ 10,000, the termination can vary from 4 to 10%. Contracts from $ 15,000 to $ 25,000 vary, although it is not uncommon for termination rates to exceed 20%. High-need products, such as roof replacement and HVAC systems, experience much lower rescission rates than sunrooms, greenhouses, and decks. Low-end, low-priced, and / or after-many-purchase products have a much lower recall rate. Those who use termination as a means to close are unwise in doing so and can ultimately destroy their sales methodology.