Don’t let price lose a sale


The truth — price is ALWAYS a major part of the buying decision.

Some buyers understand market price because they do their homework or have purchased your service/product in the past. This group also knows what to expect at certain price points. Other buyers have no clear idea about price and expect salespeople to educate them (frightening, but true).

Why do you or your salespeople always seem to be selling on price?

Most price issues are generated by the people selling the services. If a salesperson is no good at selling or differentiating how she is better than a competitor, the only thing left to talk about is price. This reality is hard for most salespeople to accept because what it really means is:

  1. You suck at sales
  2. Your company sucks
  3. Your industry is full of hacks

You can correct or take advantage of two of these. If your company sucks, leave!

A simple action to add so you don’t totally suck at sales is to become skilled at identifying how much a buyer expects to pay. Looking at their current expense is NO indication of the buyer’s real price expectation. Have you ever tried to get out of a bad relationship? A sales relationship is very similar to any other relationship. Picture this:

Your current bad relationship costs you $85.00 in Happiness dollars. In return, you get:

  • A dinner companion
  • Someone to hang out with
  • His annoying habit one
  • His annoying habit two
  • His annoying habit three

Now, someone else comes along and is willing to enter a relationship with you at a cost of $125.00 Happiness dollars. In return, you get:

  • A dinner companion
  • Someone to hang out with
  • A friend you like
  • Movies you want to see
  • Freedom to be yourself

Would you rather:

(a) Switch to a new relationship and pay the same in Happiness dollars, while receiving the same benefits;

OR

(b) Switch to a new relationship and pay $40 more in Happiness dollars, while receiving more benefits?

Sales is about gaining an understanding of the buyers’ needs and helping them achieve their goals with YOU! A first step in not totally sucking — ask a simple question or two early so everyone can focus on the buying process.

Identify the prospect’s initial budget or price point:

“What are you expecting to invest on this project?”

The buyer will either tell you a monetary range or she will twist in her seat before saying, “I can’t or would rather not give you that information.”

If she twists, be simple and help her out. Take your rough idea of price and give her a range to consider. If your widget costs $100.00 month, you might say:  “Most clients expect to pay between $100.00 – $150.00 a month. Does that fit within your budget?”

Notice that you should place your number on the low end. At this point, you want to see if you can even participate in the buying process. The buyer will either agree to the budget or explain that your numbers are too high or come clean and tell you she has no idea what to pay. Either way, you now have a number to work with and can place pricing aside to help the buyer identify her ideal relationship. If you are high, don’t worry — find out what type of relationship she desires. When all is said and done, if you can deliver the relationship she really wants, she’ll find a way to invest in you.

If your sales team sells price first (or only), immediate and dramatic action should be taken.

Bring your sales team around to sell first and align price later

  • Ask this question:

Is your company actually priced within market?

I define this as falling 20% on either side of the market leaders’ price.

  • Don’t allow your team to adjust price on any new business for one quarter. This may be difficult for some managers. Don’t worry about the short term — you need to think of future team health. If a manager can hold firm on price concessions, the sales team will spend more time helping buyers BUY from them and less time giving price. Once they get it, they get it!
  • Create a great SPIFF program focused on holding price.

What if your main competitor is 20 – 40 % less on every deal and they’re actually winning the deals?

  • Verify that the competitor is actually winning. Call lost accounts to make sure a change or deal occurred.
    • Survey these accounts
    1. What did they like most about the winner?
    2. Is the purchase working out as expected?
    3. If price wasn’t an issue, would they have chosen you?
    • As a sales team, compile a Differentiation Worksheet
      • Ben Franklin each company
      1. Where are you the same?
      2. Where does your team say the same thing?
      3. Where do you do the same things?
      4. What can you change to stand above this competitor?
      5. How can you demonstrate value to these clients against this competitor?

      Work as a team to develop a simple sales approach to use when competing against this competitor. With preparation, your team will instantly bring a better buying experience and more likability to the sale.

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