Hanging Tough Could Be the Answer

Take a look at your revenue.  “Doesn’t look too bad”, you say, given the state of the economy.  You think you’d be jumping up and down for joy.  Instead, you realize you’ve sold more product or services than you were projected to sell and yet your revenue doesn’t meet the mark.  How can that be?

You’re slated to be considered “Salesperson of the Year”.  What an honor.  The question is, “What does that mean?”  How can you be given an award when you’re bringing in less money to your company than you did same time a year ago?  Perhaps you’re being measured on the wrong metrics.  Perhaps it’s time for the Sales Manager to round everyone up and have a serious talk about what your offering is really worth and what your customers will really pay for it.

Here’s my take:  If research shows that the consumer is willing and able to pay and revenue is down, then the salesperson is either assuming the consumer would only be willing to pay a certain price and no more OR the salesperson is desperate to hear “yes” and will do whatever it takes to make the sale.  Neither assumption leads to wealth.

Let’s take a hypothetical.  You’re up against a formidable competitor.  Your prospect believes everything you’re offering is comparable to Company X except their price is 20% lower than yours.  What do you do?

If you look closely at the hypothetical you’ll notice that the prospect believes that what you and your competitor have to offer is “comparable”.  Nothing could be further from the truth.  If apples were apples there would be no need for oranges!  If you clearly understand your differentiators and how your product or service can help your prospect in ways your competition can’t, money becomes less of an issue.  If everything looks the same, you need additional product or sales training.

Some prospect pain is more burdensome than others.  Do you believe you’ve hit upon what is the single most problematic challenge for your prospect?  If you are truly aware of the pain and most importantly your prospect perceives that you can either alleviate it or remove it entirely, your cost becomes inconsequential.

When there’s an economic slowdown, salespeople often rush to lower their prices.  Prospects know they have leverage and sometimes begin pushing back on quoted rates or costs.  Understand that “pushing back” does not mean they are refusing to pay your price.  Instead, they’re looking to justify your price in their minds.  It’s up to you to show them that they are making a wise decision.

Ask yourself this question:  “Would I rather sell 100 items for a profit of $10 each or would I prefer to sell 10 items at a profit of $100 each?”  Same profit.  When you lower your price to make the sale, in essence you’re more than doubling the amount of sales you have to achieve in order to make quota.  When you give prospects the power to define your worth, you’re in the wrong business.  If you’re positioning yourself to be in front of those prospects that recognize your value and will pay for it because if they don’t they believe they, themselves, will be at a competitive disadvantage, you’re on the right track.  Furthermore, you’ve tightened your qualification process and aren’t running all over town looking for a “yes” in the eyes of every stranger you meet.

Take heart.  You’re not playing a game of “who can low-ball whom.  If all else fails and you have to lower your price because you’ll die if you don’t, state in your contract that your price only applies for the next six months or year, at which time you will sit down with your customer to re-evaluate conditions and price.  If you simply state to your prospects when closing deals that you’ll re-evaluate price in a year, selective hearing could take over, and they could forget this important bit of information.  Put it in writing and have your buyer sign off on the agreement.  Not only does your profit depend on getting written buy-in, it’s also smart business.

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