One day as a salesperson sat in front of a buyer at his desk he noticed a price quote from his fiercest competitor out of the corner of his eye. Although it was in plain sight on top of a pile of papers, there was a soda can covering up the dollar amount of the quote.
While they were talking, the buyer received a phone call from his boss who wanted to see him immediately in his office down the hall. He jumped up and quickly left the room, telling the rep he would be back in a couple of minutes.
The salesman sat there staring at the stack of papers for what seemed like an eternity, and finally couldn’t help but lift the can to see the competitor’s quote. When he did, hundreds of BB’s bounced all around the room from the can that magically had no bottom.
There are two morals to this comical anecdote. The first one is, don’t ever pick up anything from a buyer’s desk. The second is, you are the one with the ability to cut your price, and your buyer has every right to try to get you to do it.
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It’s hard to get salespeople to believe this, but I read a study completed a few years back stating unequivocally that price is more important in the mind of the salesperson than in the mind of the buyer. If price alone were the real driver in making sales, there would only be one company in your industry, and they would be the low price provider. Here’s a news bulletin for you; if that were true your company wouldn’t need you to sell for them!
You know it really doesn’t take lots of brains to cut your price in order to increase your sales. If you insist on doing that, you will eventually go broke. It’s even harder realizing that nobody, including you, wants to pay any more than they have to for anything.
It’s strange, but salespeople are pretty confident and convincing when sitting in front of buyers, until it’s time to talk about price. When that time comes, as if you had flipped a switch, the sales reps voices go up an octave, beads of sweat form on their upper lips, and they begin to stammer and apologize. “Uh, that’s the bad news…Our price for a job this size is $19,000…but I really want your business so tell me how much higher I am than the other companies you’ve seen so far, so I can try to match them?”
It just seems like reps are light-years behind when it comes to discussing pricing effectively, so in this post I’ll bring to light some gut-level feelings salespeople have when grappling with pricing. Hopefully this coaching will help you better deal with this show-stopping issue:
Weirded out – Pricing discussions are as difficult for salespeople as sex education talks are with their kids. It seems there’s just not enough belief in the value of what you are selling in relation to the price.
The best way I’ve found to attack this phenomenon is to spend time in the field with service personnel or installers in order to see and really understand the quality of materials, technology, and the sweat equity that goes into what you sell. You might even couple that with learning about the research and development costs that were involved in birthing your offering from the beginning. That way when it finally dawns on you that your company is committed to excellence and doesn’t cut corners, you might begin to sweat fewer bullets and become less self-conscious about your price.
Worried – Sales reps think price haggling is their weapon of choice. This occurs primarily because too many salespeople believe it’s more important for prospects to like them than to be honest brokers for their clients. There’s also an expectation on both sides of the desk that wrangling over price is just something you do. This urban legend makes reps uncomfortable when standing their ground, and more afraid of losing sales.
The real problem with price cutting is that as soon as you begin to give way on pricing, you begin to undermine all the advantages your company has worked so hard to achieve. More often than not, competitors don’t go to the trouble that your company did to ensure you have the upper hand. Therefore, by cutting the price you erase these advantages and devalue you’re offering in the buyer’s eyes.
Wimpy – Salespeople rarely stop to think how weak they sound to buyers when they are clumsy in discussing price. Your stock goes down with buyers every time you project less than full confidence during these price conversations.
For instance, the buyer may begin to wonder if the product or service is really worth what you quoted, possibly thinking your price was overstated from the beginning. When they begin to doubt your integrity, you immediately become a dead man walking.
To put a wrapper on this post, remember the way you handle price either reinforces everything else your company does in terms of marketing and positioning, or undermines it. This happens because price, and how you present it, speaks volumes about what you’re selling and the company you represent.
If you, as the sales rep, can’t even bear to say the price aloud, you’re virtually telling the prospect that you’re embarrassed that it costs that much. That also means you think anyone who’s willing to pay that price must be crazy. That attitude must be avoided at any cost.
Remember, price cutting is a self-inflicted wound that will lead to your business life bleeding out.
©2015 Robinson Training Solutions, LLC