Maximizing Your Price in a Soft Economy
By Mark Hunter
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.
Mark Hunter, “The Sales Hunter”, is a sales expert who speaks to thousands each year on how to increase their sales profitability. For more information, to receive a free weekly email sales tip or to read his Sales Motivation Blog, visit www.TheSalesHunter.com.
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