“If it ain’t broke, don’t fix it” Attitude

Question & Answer for Sales People

Q.  I have many customers who refuse to even consider some of my products because the one they have now is working fine and they don’t want to change something that is working well for them.  They feel they are opening themselves to potential dangers, problems and nightmares by fixing something that isn’t broken.  Any suggestion for how to deal with the “If it ain’t broke, don’t fix it” attitude?

A.  This is one that frustrates every sales person.  Let’s start by putting yourself in the customer’s shoes.  You’ve shown him your product, and it’s noticeably better/cheaper than what they are currently using.  Or, they won’t even take the time to look at your latest and greatest solution.  Regardless of where you are at in the sales process, the problem is that you have something better, and they won’t budge from using an inferior solution. 

Why not?  Let’s analyze the situation.  As is almost always the case, the solution becomes really obvious when we have done a good job of analyzing the problem.  So, let’s consider the reasons why the customer won’t budge.  Here are the big three.

1.  The perceived benefit from switching the product is not worth the time and effort the customer must invest in the change process. 

OK, so your LAGS (latest and greatest solution) will save him 5%.  But, he must work off his old inventory, notify the current supplier, switch all the numbers in his purchasing and inventory systems, perhaps rewrite protocols, maybe train staff in the new thing, communicate the change so that everyone internally knows about it, etc.  See the problem?  It takes time, effort and money to change a product.  And most of your customers, if they are like most of the business world these days, have too much to do and not enough time in which to do it.  They don’t need another project. So, while your LAGS is an improvement, the improvement just isn’t worth the time and effort. 

2.  The potential change infringes on a well-established relationship.

It maybe that the current product is being purchased as part of a committed relationship with the competition.  And it may be that the competitor performs other services for this customer that would be jeopardized if the customer didn’t buy this product from them.  For example, the competitor may invite this customer to an annual outing to his condo on the beach in Florida.  If the customer switches this item, he may believe that it jeopardize that.  Or, the competitor inventories the product for them, provides special dating, packages it specially, etc.

The issue here is that switching the product harms an existing relationship, and the relationship is more important to the customer than the savings or benefit of your product.

This relationship issue can also extend to the individual.  In other words, the customer has a long-standing excellent relationship with the competitive sales person.  And the customer doesn’t want to do anything that might be seen as jeopardizing that relationship.    In either case, the relationship trumps the benefits of your product.

3.  The risk isn’t worth it. 

Every decision to buy carries with it a perception of risk.  Risk is defined by the perceived cost to the individual customer if he/she makes a mistake.  Think of it this way:  What happens to the individual decision maker if he decides to switch to your product, and it doesn’t work out the way you portray it?  Maybe the product doesn’t quite work as smoothly as it seems, or your ability to deliver isn’t what you promised.  What grief does that cause the customer?  What emotional turmoil, job stress, and personal pain does it cause? 

Now, I know that you’re saying none of that will happen because you really do have a great product and you really are a wonderful company, and you won’t let anything bad happen.  You may believe that, but your customer doesn’t. 

If the customer perceives there to be great risk in the decision, the status quo is always the safer, preferred choice.  It’s always safer to maintain the non-painful status quo than it is to take a major risk.

OK, you have analyzed the reasons why this particular customer isn’t rushing to order your LAGS.  Now what?

Your solution is based on your analysis of the reason why they don’t buy.  If the reason is the customer views the benefit of changing as not worth the effort, then you must either reduce the effort, or increase the perceived benefit.  Offer to do as much of the work of changing as you can.  Provide all the information in an easy to use format so that it is easy to put into the computer.  Offer to write the memo announcing the change, to train all the employees in the details of the new thing, etc.  Make it less costly in terms of time and effort.

Or, make the benefit appear bigger and more attractive.  Do some financial justification.  Show the impact on processes and the customer’s customer.  Make your product even more compelling.

If the reason they don’t buy is number two, your best hope is to convince the customer that the change won’t jeopardize the existing relationship.  Minimize the impact on the competitor.  And, again, maximize the benefit of your product. 

This is the most difficult situation to deal with, because the reason they aren’t buying is something about which you can’t do much – a relationship with a competitor.  You may be reduced to the fall back position of last resort – proactively wait for something to change in your customer’s relationship with the competition.

If the reason they don’t buy is risk, your strategy is to reduce the perception of risk.  Remember, risk is perception, not necessarily reality.  The problem is that the customer perceives there to be risk to him in the decision to buy.  So, reduce the customer’s perception of risk by using a combination of risk-reducing tactics.  Make the product seem more real by having him see it in operation in a different customer’s environment.  Back it up with written guarantees and warranties.  Make it seem like a lot of people have successfully used the product by having pictures of other customers using it.  Acquire letters of recommendation and testimonials from other customers.  Anything you can do to have someone else, beside yourself, say good things about the product is a worthwhile effort.  Bring the customer into your facility, and let him meet the people who make things happen for you.  All of these things reduce the risk to the customer.

One final thought.  Understand that our customers are far more motivated to take action by the avoidance of pain than they are the acquisition of some benefit.  We are so used to talking about the benefit of our product to the customer, and that often falls on deaf ears.  Far more powerful is the perception that our solution makes some intense pain go away.  If you can identify some significant pain that the customer is experiencing, and show how your LAGS makes the pain go away, you will have provided the customer significant motivation to shove all three of the above reasons down the list.

Price, Price, Price!!!

Six steps you can take to keep cut-rate competitors from stealing your customers

In this article we are going to take a closer look at an all-too common problem: what you can do to close an existing customer when your competition keeps lowering their price.

All sales reps face competition. And nothing is more frustrating than having your competition offer to sell to your existing client base at dramatically reduced prices.

Consider the following scenario: Your biggest client calls to tell you that they’ve been offered a cut-rate price on the very same products you’ve been selling to them for years. They like doing business with you, but with the pressure on to save money and increase profits, this new lower price is just too attractive to pass up. No matter how much you preach value to the customer, they continue to come back with the lower price and tell you they are working from a strict budget.

To make matters worse, your competition is also trying to offset the lower price with a longer contract, which will hurt your chances of ever getting the client back if you lose their business now. You know this is a risky move for your competition, and that they will probably lose money on the deal.

What can you do to close this business without taking a huge bath on your profits?

Step One: Focus on testimonials.

Testimonials are the most powerful weapon sales people have to prove their value to their customers.

Clients tend to believe other clients more than they believe you. So find customers who already switched for a lower price and then came back to you because their experience with the competitor was less than satisfying. Or find clients who were considering moving their business, only to change their mind when they realized that the long-term implications were less than positive.

These client stories will add firepower to your case and help you convince your customer that doing business with you truly is a better and more profitable solution in the long run.

As a side note: you should be collecting testimonials from every client you do business with regardless of how well your business is currently doing. Testimonials are your most profitable selling tool, and you can never have too many.

Step Two: Learn from history.

As your team’s manager, show your sales people that prospects who only buy on price are not the best customers for your business because, in the long term, they are not profitable customers.

If your sales team is confident in selling based on the quality of your service, they will seek out prospects who value quality over those who only care about price. Your team may have to be willing to endure the short-term pain of letting a customer go, in order to make long-term gains with other, more profitable clients.

Step Three: Reward loyalty.

Show your long-term customers how much you value their loyalty by creating an account management process that rewards them for keeping their business with you.

Most companies make the mistake of only offering discounts and bonuses to new customers. Instead of devising a scheme to reward new business, create a program that rewards loyalty. For example, perhaps your customers can receive a lower price after 2 years of continuous ordering. Or maybe longer-term customers can be the first to receive special new products or access training at reduced prices (or maybe even free).

Take a look at your current client acquisition plan, and make sure it’s not “sweeter” to become a new customer than it is to stay an existing customer. After all, long-term customers are far more profitable than new customers. Some studies show that acquiring a new customer costs as much as 15 times more than it does to sell more to existing customers.

Ask yourself: can you increase your profits by spending some of the money you currently allocate for landing new customers, towards keeping your existing clients instead?

Step Four: Give yourself some breathing room.

Make sure you’re never in the position of having to save an account at any cost, simply because it’s the ONLY account you can close this month. If you don’t have other options, you will feel enormous pressure to close business at any price.

What can you do to avoid this scenario? Always be prospecting. The best sales people manage a full funnel of leads (at least 3-4 times your quota of active qualified leads) at all times. This gives them the freedom to be able to walk away from an unprofitable deal, and focus their attention on a profitable one instead.

Step Five: Do your research.

A company’s website is a great place to do a little pre-sales call research. However, most companies only put what they want you to see on their sites.

If you’re trying to save a deal, you might want to dig a little deeper to find out more about your client’s past, present and future, what their customers think of them – and their reputation in the industry.

Start by using Google or any of the other countless search engines out there. You may be surprised how many blogs, message boards or other websites you’ll find that may provide you with some deeper insights you can use to ask your clients about the price issue. Just be sure to consider the source. After all, most message boards are unfiltered, and you can’t trust everything you read online!

Step Six: Don’t add value if your customer won’t value it.

Last but not least, don’t randomly add value unless you know for a fact that your customer will appreciate it.

Sales people often make the mistake of piling on extras that the client may not want or need. The result is that it will cost you more to give the customer something they couldn’t care less about in the first place – a perfect lose-lose proposition.

When I ask many of the sales people I coach why they do this, they usually tell me it’s because they “think the customer will like this.” Thinking the customer will like something is the same as assuming they will like it. You only need to think back to grade school to remember what happens when we assume.

Value, like beauty, is in the eye of the buyer. Ask questions to find out what, besides price, would keep the customer from giving their business to someone else. Then set to work to provide them with as many of those concessions as you can.

If the client doesn’t want any extras, then you can’t use the value vs. price argument to win this business. Quit trying and go on to something else.

In today’s highly competitive marketplace, pricing pressure is a constant menace. If you want to be successful, you need to make sure the deals you are closing are profitable ones. Although your first goal should be to keep your existing customers, be careful of offering so much that the client actually ends up costing you money. If your client base is too price sensitive, go out and find new clients that want the value you have to offer – not just the lowest price.

It’s not easy, but it is simple to do if you have conviction. The first step to finding better clients – ones that focus on value and not price – is making sure you are 100% confident that you are delivering such a high value to the marketplace, that all buyers will want to own it at full cost.