High-Profit Selling: Win the Sale Without Compromising on Price272
High-Profit Selling: Win the Sale Without Compromising on Price272
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HIGH-PROFIT SELLINGWin the Sale Without Compromising on Price
By Mark Hunter
AMACOMCopyright © 2012 Mark Hunter
All right reserved.
Chapter OneYou Are Hurting Your Profit
SOME PEOPLE PLACE THE BLAME for anything that goes wrong on someone or something else. This has become the norm today with far too many salespeople. They blame their inability to make the sale on everything except the fact that they are unable to present a compelling reason for customers to buy from them.
If you were to ask salespeople why they can't close more sales, many of them would claim it is because their price is too high and simply more than what their customers want to spend. I've heard this excuse thousands of times. I can't begin to tell you how often I've seen marketing departments and sales executives get sucked into believing it. But in reality, price is only one of many factors that influence people or companies to buy. Even if you are in a business where you sell commodities, there are other issues, such as quantity, delivery time, shipping method, and payment terms, that influence the customer's buying decision. Unfortunately, many salespeople have the tendency to turn this one element—price—into the only issue.
The business environment is tough. There are always outside factors beyond the control of the salesperson that can and will affect how customers behave. Whether the economy is up or down, it seems that customers are asking for a discount or saying they won't pay the listed price. It's time we slay the myth that selling revolves around price. I can dispel this false concept for you, both in your personal sales process and in your entire company, so that you can stop hurting your profit and actually start increasing it.
In this book, I'll show you how to get the customer to accept your price. Beyond that, I'm also going to show you how to increase your price and have your customer thank you for charging more. Yes, you read that right! I'm going to help you to convince your customer that there's a higher level of value reflected in the higher prices you are charging, which is representative of both you and what you are selling. You may be wondering if I've lost my mind. It's okay to doubt me, because it means that once I show you and, more important, convince you that you can turn a higher price in your favor, you'll embrace my recommendations even more.
Would I be a better salesperson if I could generate 20 percent more profit off the same amount of sales?
Now ask yourself:
If I could increase the value of what I'm selling in the eyes of my customer, how much more profit would that be worth to me?
Finally, ask yourself:
If all it took was 30 minutes a day to increase my overall sales performance by 30 percent, would it be worth it?
I bet I know how you'd answer each of these questions. The questions themselves are not tough to answer. The challenge is in figuring out how to proceed after you have answered them. You obviously care enough about improving your profitability to have bought this book, so I have no doubt that you want to do what it takes. I'm committed to helping you.
What Is This Book Worth to You?
Reread the previous paragraph and you'll notice that I didn't mention the price of this book. I pointed out the value of what you are going to get from it. I set up a scenario and got you to do some self-reflecting. By merely going through this exercise, you've begun to determine what the price/value relationship is for High-Profit Selling. Some of you may see the book as a tool for potentially unlocking $1 million in increased profitability for your company each year. Others may see a $50,000 annual opportunity, while still others may see only $1,000 per year. What would the value of this book be if the increase in profitability you gain from it occurs each year for the next ten years?
Regardless of the specific increase in profitability you may potentially realize, you have an expected benefit for the book—and this expected benefit plays immediately into the price you are willing to pay for it.
What if the price of the book could vary by an amount reflecting the full value of what somebody would gain from it? If that were possible, then some people would pay $20 while others would pay $20,000. Naturally, this is not possible. I use this example because I recognize that in some situations it's not possible to vary the price or some other part of the price equation. These circumstances can make your role as a salesperson more difficult. However, the premise of this book is that you must find a way to increase profit whatever the situation.
To increase your profit you may have to find other ways to enable the customer to receive value, which means you need to have different strategies and tactics to help you through all situations. Throughout this book I'll show you how to do just that.
To Maximize Profit, Change How You View Your Customers
You must be able to provide your customers with the services and/or products they want in a manner that allows you to maximize your profit. To that end, you have to change the way you view your customers. The solution lies in seeing each customer as having unique needs that require a unique solution from you. When you view your customers in this way, you will discover new opportunities to assist them and they in turn will be willing to pay more for these solutions.
Maximizing your profit also requires that you assess your service or product offerings to tailor them more effectively to what the customer wants. Don't worry, I'm not proposing changes to your manufacturing or supply-chain systems. In the vast majority of selling situations, maximizing profit does not require any changes to your internal process. The changes you'll need to make are to your selling process and how you deal with your customer. This is why I say high-profit selling is all about you. When you, the salesperson, take ownership of the complete selling process and the customer, it's amazing what can and will happen.
It's Time to Look in the Mirror
Throughout this book you'll find countless proven methods for selling more effectively and successfully. But before you can begin to put even the first principle to work, you have to look in the mirror and assess yourself. Don't look for others to be your key to success. More than anything else, it's sales motivation that counts. The less sales motivation you have, the more profit is lost. Sales motivation is composed of your attitude and your confidence. You can have the greatest product in your industry or niche, you can have unbelievable advertising or fabulous marketing materials, but you can still lose sales if your attitude is poor and you lack confidence.
In my years as a sales consultant to corporations large and small around the globe, I've sat across the desk from many marketing and/or sales VPs and told them not to spend one more penny on advertising or marketing until they fix the problems with their sales force. I look them in the eye and say they must look closely at their team's level of confidence in what they are doing and what they are selling. Yes, this critique has made for some tense situations, but I'm a firm believer in making sure that sales can handle what marketing will deliver.
The example I like to use is that there's no sense in owning a Lamborghini if you don't know how to drive it. You'll never be able to fully appreciate its qualities unless you are skilled at driving a high-performance car. The same applies in sales. We all have the ability to communicate with customers, but do we all have the ability to truly sell? If you don't possess the best selling skills, there's no way you'll ever be able to fully use the opportunities that marketing may give to you.
If you think I'm putting marketing on a pedestal, I assure you that's not the case. I've been in sales for more than twenty-five years, and during that time I've grown skeptical of what the typical marketing department claims it can do. I believe that sales and marketing must work together cohesively if either is going to achieve its goals. Think of it this way: Sales and marketing are connected in a food chain. Marketing creates the food that sales eats. There's no reason for marketing to create anything that sales can't eat. At the same time, there's no reason for sales to ask marketing to make anything that sales won't eat.
Your Confidence Drives Your Attitude
Your level of confidence drives how much you believe in what you sell and how you deal with your customers. Unfortunately, too many salespeople lack complete confidence in what they sell and, therefore, in the price they are expected to charge. Why? The simple fact is that the vast majority of salespeople are not willing to take personal responsibility for failing to close more sales.
If we were to believe that the reason salespeople are not more successful is simply because of pricing, then all we'd have to do to solve the problem is lower the price we ask for our goods or services. The problem with this line of thinking is that no matter how much you lower your price, you are almost always cutting your profits by a percentage far greater than the percentage of the price reduction. Salespeople often fail to realize the damage they are doing to themselves, and to their business, by thinking they can close more sales by taking this price-cutting approach.
The other problem with lowering the price to close more sales is that there's no guarantee the competition won't do the same thing. And what's to say the customer isn't going to continue to demand further price reductions? Either way, you lose. What's the point of selling anything if you are unable to make any money from the sale? This is why you must establish, in the mind of your customers, the value they will receive at the price you offer.
The level of confidence you must have is not just in the product or service you are selling, but also in the price you are asking. Let's dig into this idea by using a comparison of two companies and the different ways in which they determine the price they ask for the same item.
Can a Company Asking a Higher Price Really Win?
Here's an example I frequently use when addressing sales organizations: One company, which we'll call Ace, is struggling to grow, but the products it makes are very good. Ace is a smaller player in the marketplace and establishes its pricing based on what it costs to make the product. The company's managers have done repeated analysis of their cost structure and know exactly what it costs to make their goods; therefore, they know exactly how to price them based on these costs.
A second company, which we'll call Big, is a large, well-financed, multinational organization that produces the same item as Ace. But Big does not price its product based on what it costs to produce. Instead, Big bases the product's price on the value its customers see in the product. The entire sales process is all about helping customers realize the value of what they are buying. More important, Big has excelled at showing customers how the product helps them deal with their critical needs.
By now you probably know where I'm going with this story. The company that is able to get a much higher price is Big. The real issue, though, is that the salespeople who work for Ace are nothing more than order takers who fail to maximize their relationships with their customers. In fact, I would go as far as to say that Big's customers probably appreciate the relationship they have with Big more than Ace's customers appreciate Ace. Big clearly is focused on helping its customers see how they are getting a superior value.
Are you beginning to grasp this vital concept? Value is what the customer believes it is, not what the salesperson thinks it is. In too many selling situations, you may be doing way too much thinking! That is, when you focus too much about how you define value, and you try to sell that idea of value to someone else, it can start knocking down your confidence. As your confidence gets knocked down, your attitude starts to suffer, and suddenly you are in a vicious downward spiral. A better approach is to allow your customers to define value for you.
Confidence—in yourself and in what you sell—is without a doubt the greatest single asset you can bring to both your customers and your profitability. Your challenge is my challenge, because I'm committed to helping you find ways to increase your level of confidence in the prices you offer. Note the last word in the previous sentence is "offer" not "charge." Confident salespeople don't charge anybody anything, so strike that word from your vocabulary from this point on. Rather, confident salespeople allow their customers to invest in, to participate in, and to benefit from their offerings. It doesn't matter whether you sell in a business-to-business environment or a business-to-consumer environment. The principle is the same.
People Don't Buy—They Only Invest
Customers don't want to buy. They only want to invest in order to achieve something: to get some sort of gain or to relieve a pain. For example, a company may be looking to buy insurance to minimize the risk of theft or vandalism; this would be an investment to relieve a pain. The company is only going to invest enough money in buying insurance to offset what it sees as the risk. If the company believes the potential loss from theft (i.e., the pain the company would suffer) would not be very much, it might make the decision not to buy insurance. An example of a gain that a company might invest in would be buying a new piece of equipment to help operations run more efficiently. In both these cases, the company will invest if it can get a clear return on investment. Although the cost (price) is factored into the decision, it is really the return on that cost that is most important—so price is a secondary consideration.
While these examples involve businesses, the concept applies equally to individual customers. They are also looking to gain something or to relieve pain when they are contemplating making a purchase—or, should I say, looking to invest.
Confident salespeople help their customers succeed, and that's exactly what you are doing when you sell something. For instance, I have a high degree of confidence in what I do as a consultative sales expert because I firmly believe I'm helping you and thousands of others achieve a higher level of profit from each sale.
An exercise I like to take salespeople through to help them develop their confidence is to ask them to write the top-five reasons customers buy from them. I then ask them to detail specifically what benefits their customers gain from the purchase. Do this exercise for yourself and keep your written answers someplace where you can refer to them regularly. Also, ask some of your loyal customers what benefits they are getting from buying from you. They might mention some things you haven't thought of. The idea is to always have in the front of your mind the reasons customers prefer to do business with you rather than your competitors. If salespeople have no idea why their customers do business with them, it's no wonder so many of them struggle with the issue of maximizing price!
Forget About Your Competition
Too much effort is lost worrying about what a competitor is charging. Forget about your competition. They are not you. It's time for you to be proud of who you are. People who second-guess themselves are never going to excel. Would you choose to follow someone who wasn't sure of himself ? How, then, can we expect customers to pay a premium price for anything if the salespeople they are dealing with are always second-guessing themselves?
Even if you sell commodity items, and no matter how price-sensitive the market is in which you compete, there are still reasons, besides price, that sway customers. So, as you develop your list of reasons why your customers buy from you, don't include price as one of them. Take your time to expand your list, and be sure to get input from your customers. When you ask them why they buy from you, you'll be pleasantly surprised at what you hear. More often than not, they will tell you positive news.
This book is designed to give you the tools you need to succeed. Confident people accept ownership of their situation, and they readily accept responsibility for who they are, as well as for their actions. More important, they are comfortable knowing they will be judged not only on what happens to them, but on how they choose to respond to what happens to them.
Excerpted from HIGH-PROFIT SELLING by Mark Hunter Copyright © 2012 by Mark Hunter. Excerpted by permission of AMACOM. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
Table of Contents
Chapter 1 You Are Hurting Your Profit 5
What Is This Book Worth to You? 7
To Maximize Profit, Change How You View Your Customers 8
It's Time to Look in the Mirror 9
Your Confidence Drives Your Attitude 11
Can a Company Asking a Higher Price Really Win? 12
People Don't Buy-They Only Invest 13
Forget About Your Competition 15
Chapter 2 "Profit" Is Not a Dirty Word 17
Are You Chasing the Shiny Object? 18
Do You Think "Profit" Is a Dirty Word? 20
How Do We Define Profit? 21
What Does "Immediate Profit" Mean? 21
What Is Your Customer Worth Down the Road? 24
Calculate Your Customer's Profitability Sustainability Factor 26
A Big Order at the Wrong Price Isn't Worth It 28
Intellectual Profitability Adds Up 30
Minimize the Profit Takers 32
"Profit" Is a Beautiful Word 34
Chapter 3 Use Needs and Benefits to Command a Higher Price 36
Chasing the Shiny Object 38
Determining the Customer's Needs and Benefits 39
Separating Good Information from Bad 44
What We Can Learn About Needs and Benefits from Apple 45
Using Follow-Up Questions to Categorize a Customer's Needs 47
Needs? Benefits? What's the Difference, Anyway? 47
Chapter 4 Creating Real Value Using Your Price Point 54
Forming Real Value Around Price 55
Creating the Price Point 56
The Power of the Ultra-Price Package 57
Ultra-Prices and a Salesperson's Beliefs 60
The "No Negotiation" Philosophy 61
Sales Managers: Don't Empower Salespeople to Give Away Profit 63
Where Does the "No Negotiation" Policy Work Best? 64
Rules for an Effective "No Negotiation" Policy 65
Making the "No Negotiation" Policy Work, Despite So Many Rules 70
Using Time to Drive Value 71
Chapter 5 Prospecting That Works 74
Past Growth Doesn't Guarantee Future Growth 75
Finding New Customers Is Not an Optional Job Activity 76
Prospect or Suspect? Do You Know the Difference? 77
Is Prospecting Ingrained in Your Daily Routine? 77
Can't Prospect? Then You Can't Sell 78
What Is a Prospect? 79
Not All Prospects Are Created Equal 80
Assumptive vs. Inquisitive 81
Tactical Comments and Questions: The Price Squeeze 86
Strategic Questions Lead to Long-Term Relationships 87
Aim High When Prospecting 88
Make Prospecting Part of Your Daily Routine 88
Holiday Prospecting 89
Just Do It 92
Chapter 6 Sell More by Talking Less 93
How Professional Buyers Use Silence 94
Give Control to the Customer 95
How to Use Your Personality to Ask Questions 96
Questions That Work for You 97
How Much Time Do You Talk on a Sales Call? 98
Tactics Buyers Use to Speed Up the Sales Call 99
Why Salespeople Fail 100
An Example of Not Listening 100
Learn Your Customer's Language 102
The Best Follow-Up Questions 103
Put the Pride Aside: It's Costing You Money 103
Expand Your Question List 104
Do You Respect Your Customer? 105
The Two-Second Pause 106
Close Too Fast and You Lose Profit 108
The More the Customer Talks, the More You're Prepared for the Next Sale, Too 109
Keep Your Eye on the Prize 110
Chapter 7 Skip the Sales Presentation 112
Why Preparation Is Essential 115
Preparing a Sales Presentation Does Not Mean You Will Use It 116
Do You Know Your Presentation or Do You Know Your Content? 117
What About Skipping the Presentation on the Phone? 119
Always Respect Time 120
Developing Your Presentation 121
How Many Calls to Close a Sale? 122
Chapter 8 Leverage Knowledge to the Fullest 124
The Customer Is Seeking Knowledge, Too 126
Leveraging Knowledge 126
False Facts 127
How Do You Track Customer Information? 129
Visiting the Senior Officer 131
Using Information to Gather Opinions 132
Validating Information 133
The Power of Sharing Your Information 134
Knowledge Can Help Open the Next Sale 136
Knowledge vs. Information 136
Your Competitor May Have the Same Information 137
Your Knowledge Helps Create Trust 138
Your Knowledge Can Create a Long-Term Relationship 140
Chapter 9 Sell More Without Even Being There 141
China and the Sales Catalog 142
How the B2B Selling Process Has Changed 144
Putting Your Information Online 145
Getting the Right Information on the Internet 147
"Vendor Validation" 148
Becoming a Thought Leader 150
Time Well Spent 152
Chapter 10 Selling to the C-Suite 154
What Language Do They Speak? 155
Attributes Needed to Connect with the C-Suite 158
Connecting with the CEO Directly 163
The 12 × 12 Approach 165
Connecting with the CEO by Way of a Referral 169
Dealing with the Blockers 170
Meeting with the CEO 172
C-Suite Relationships Are Insurance Policies 174
C-Suites Are Research Departments 174
Chapter 11 How to Handle Price Objections 176
You Need to Be Blunt with the Customer 177
How Should You Respond to Objections? 179
Responding to the Request for a Reduction in Price 181
What Do You Do About the Persistent Customer? 184
Getting Customers to Focus on Their Needs, Not Your Price 186
The Customer Is in No Rush to Buy 189
Don't Try to Push the Customer with a Limited-Time Discount 191
Sell First, Negotiate Second 193
Chapter 12 Executing a Price Increase 194
The Ten-Step Process to Execute a Price Increase 195
Step 1: Know Your Strategy and What the Price Increase Is Going to Accomplish 197
Step 2: Sell the Objective of the Price Increase to People Inside the Company, Particularly the Sales Force 201
Step 3: Determine and Isolate the Customer's Key Benefits (They Help Sell the Price Increase) 202
Step 4: Understand the Customer's Decision-Making Timeline and How It May Impact Plans to Communicate the Price Increase 204
Step 5: Isolate Key Contacts Within the Customer's Company 205
Step 6: Develop Data and a Fact-Driven Point of View (FDPOV) 206
Step 7: Signal to the Customer the Expectation That a Price Increase Might Be Coming 207
Step 8: Formalize Expectations and Goals with the Sales Force for Each Customer 210
Step 9: Present the Price Increase to Customers and Gain Their Commitment 210
Step 10: Reinforce the Price Increase by Sharing the FDPOV 212
Ten Steps to More Profit 212
Chapter 13 Purchasing Departments and the Professional Buyer 214
Who Is the Professional Buyer? 216
The New Vendor 217
Understanding How the Buyer Operates 219
Warehouse Tours and the Buyer 220
Learning the Customer's Computer System 221
My Three Hours with a Buyer 222
Do Outside Meetings Include Any Risk for You? 224
Understanding a Buyer's Objectives 225
Vendor Letters and Requests 226
Increasing Your Margin on Friday Afternoon 227
Chapter 14 RFPs and RFQs: The Bidding Process 231
Are RFPs a Good Use of Your Time? 232
Benefits of the Small RFP 234
Writing the RFP Gives You the Upper Hand 235
Step 1: Determine Your Strategy 236
Step 2: Develop Your Minimum/Maximum Standards 243
Step 3: Develop Your Options 245
Step 4: Gain Information from the Customer and Others 246
Step 5: Respond and Get the Meeting 247
The Value of a Follow-Up Meeting 249
Bid Selection Renegotiation 249
Chapter 15 Position Yourself to Continue Earning High Profits 251
One Percent Continuous Improvement Process 253
Small Changes Equal Big Improvement 254
Your Windshield Is Talking to You 255
Recovering from the Bad Sales Call 257
Always Be Learning 258
Strategically Planning Your Week 259
Setting Weekly Goals to Build Off Your Successes 261
Recording Your Goals and Accomplishments 263
Furthering Your Knowledge and Expertise 265
Recommended Websites 265