If your customers are constantly “beating you up on price,” maybe it’s not their fault. Maybe it’s yours. Bad selling reduces achieved price, and most of the time, salespeople don’t even know that they’re doing it badly. Today, I’m going to show you six ways to increase your price through better selling.
One of the most common questions that I get sounds something like this: “Troy, all this stuff you talk about is great, but in my industry, everybody just buys on price. What do you do about that?” I like to ask them to recite their teleprospecting approach; i.e. what are they saying to get appointments? Invariably, they say something along the lines of, “We provide (such and such a product) at a (good/competitive/low/cheap) price.” It’s not surprising that they end up with price, since that’s where they start. In any endeavor, how you start will be a big determinant in how you end.
Here’s the truth. As my Smooth Sailing Coaching clients learn, most price negotiation is initiated, and in many cases prolonged, not by the customer but by the salesperson. Salespeople begin the price negotiation process by saying lots of anti-profit phrases, even when they don’t recognize it. The “at a competitive price” word vomit is only the tip of an iceberg that has nonsense phrases such as “I want the last shot at the price” near the bottom. Keep in mind – when you cut price, you ONLY cut profit; you seldom reduce cost of the item delivered. Why do we do this? Well, there are a number of reasons and none are particularly good ones:
FEAR. Fear is the all-time biggest motivator for bad selling tactics. Salespeople are scared of losing deals, of losing customers, of being rejected, of any sort of failure indicator. This fear causes salespeople to go to the lowest common denominator to sell – and make no mistake, price is the lowest common denominator.
LAZINESS. Hallmark Cards used to have the slogan, “When you care enough to send the very best.” In selling, when you DON’T care enough to do your best job of selling, you dive to the bottom with price-selling tactics. When you sell on price, you don’t have to do the hard (and beneficial) work of really discovering customer needs, of matching the right product with the needs, and then selling on the value generated. You simply do a comparison of product and then a comparison of price. It’s easy and cheap in more ways than one.
IGNORANCE. A lot of salespeople price-sell not because they’re bad salespeople, but because they don’t know any better. If you don’t know or understand how value is generated, how needs are discovered, and how product solves needs, you will price-sell because that’s all you have. That’s where the six ways to increase your price through better selling come in.
The bottom line here is the bottom line. Your company must make a profit; you can’t lose money on each sale and make it up on volume. Want six ways to increase your price through better selling? Here they are:
1. Ask your best/happiest customers why they buy from you and how they “win” with their purchase.
2. Convert those answers into written testimonials.
3. Convert the testimonials into case studies.
4. From the studies, define at least three nonprice ways that your company helps its customers.
5. Use those to develop teleprospecting talking points that really work.
6. Look for needs in common with your best customers, and sell to those needs.
It’s really not tough, but it does require a mindset change. Even if you sell a “commodity,” remember another one of my rules: Everything is a commodity – until somebody screws up. Even with pure commodities, there are people who do the job a little better, and a little worse. “Better” can, and should, be monetized. Anything can be commoditized through pure price-selling tactics, and anything can be rescued from commodity status through value-selling tactics. It’s entirely up to you.
THE BEST STRATEGY TO HOLD PRICE: Present a reasonable, profitable price in a strong, confident fashion (too many salespeople present price as a question, not a statement). Don’t encourage negotiation.
THE WORST STRATEGY TO HOLD PRICE: Present a too-high, unrealistic price using the old “you can always negotiate down” strategy. When you do this, you DEMAND that your customer cut your price. At some point, you have to rebuild your price discipline and your credibility to hold price – why start with a price that kills your credibility?
Salespeople cost themselves millions, if not billions, of commission dollars every year through bad selling tactics. Don’t be one of them. It’s not that much more work to hold profit, but do it wisely. Where you start can determine where you end.
