Maximizing Your Price in a Soft EconomyMark Hunter
July 11, 2008
Establishing maximum value for your price is never easy. In today's
volatile economy, it's even more of a challenge. For most companies,
costs are increasing, yet the ability to pass them along to the
customer is fraught with numerous roadblocks. The customer's response
to a price increase is rarely positive, with the usual line of
objections that go along with it. In addition, there are the concerns
that a competitor's price may undercut yours or that the customer may
choose to go down a different path instead of buying from you at all.
As big as these issues are, they pale in comparison to the number one
roadblock to maximizing your price point: the confidence of the
salesperson.
The main reason why companies do not capitalize on
their potential revenue is because their salespeople do not have the
confidence to ask for and receive the highest price point. If a
salesperson is secure in what they are selling and in knowing how the
customer will benefit from their products/services, then they will be
confident in asking for and getting the desired price point. The
problem is that many times the salesperson lacks confidence in at least
one of these areas, resulting in their inability to make their sales
quota.
To rectify this problem, it's important to examine how
the salesperson first developed a lack of confidence in their ability
to maximize their price points. Generally, it stems from a sale they
perceived to be lost because their price had been too high. On the
surface, their assumption probably appeared to be correct. However, in
reality, it just seemed that way because the right price-value
relationship had not been established. If the salesperson had executed
a proper sales strategy that allowed both himself and the customer to
see the product's/service's true value, this could have been avoided.
It needs to be communicated that in a B to B environment, the benefits
are to both the buyer and the business they're buying it for. In a B to
C environment, the benefits are to both the buyer and to the person(s)
who will actually use the product or service. When the salesperson and
the customer understand this, it can help erase the uncertainty that
the price may pose.
Let me give you two quick examples. If a
person works for a mega-global company and is buying widgets, he'd have
no problem spending a little on them if he knew he was buying them from
a reputable company that has experience selling to other mega-global
companies. In essence, the customer is looking for confidence and is
willing to pay for it. In a B to C situation, because the customer
doesn't want to look like a fool for their purchase, they want the
salesperson to provide them with enough emotional benefit to allow them
to convey to others that they made a great decision. In both
situations, an inexperienced salesperson is going to lose the sale if
they don't take the time to use questions that encourage the customer
to fully express their needs. In general, new salespeople often lose
the sale shortly after they've stated their price. Thus, it's only
natural for them to believe that the price was the determining factor.
However, when digging below the surface, the price was not what
prevented them from closing the deal. Rather, they lost the sale
because they didn't ask enough questions to fully establish the needs
of the customer.
Top-performing salespeople ask questions that
allow the customer to elaborate on their needs and then demonstrate
their listening skills by asking appropriate open questions and probing
deeper with great follow-up questions. They use the information that
they learn to better explain how their product or service can be
beneficial to the customer. In my 25 plus years of selling, I've
learned that the customer's real needs, hurts, and wants don't often
surface until you're demonstrated genuine interest in what their
thoughts and goals are. Ironically, this means that you can throw out
their initial comments, as it is rarely the need they are looking to
fill. If you expect to base your price-value relationship on what you
first hear, you'll never come close to achieving your maximum price
point.
In summary, today's economy is full of opportunities
for top performing salespeople to ask really good questions that get
customers talking. This allows both the customer and the salesperson to
see, feel, and understand what their true needs are. When the
salesperson can experience this across multiple customers, they will
begin to develop the assurance they need to be able to confidently
convey the maximum price point their company expects them to receive.
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