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Sales Strategy & Management

Pitching the Right Price

Stop limbo-dancing with your prices.

Axel Rittershaus

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I’m sure you’ve seen limbo dancing at some point in your life – you know who I mean, those folks moving to Caribbean rhythms, leaning backwards and dancing under a horizontal pole, hoping not to touch it while moving forward. When they are in a competition, the stick will be lowered gradually until only one dancer is capable of dancing under it.

Imagine you are one of these dancers and you’d like to win. Would you put the stick to the lowest point you ever managed to get through right at the start? Or would you start with a decent height, watch the competitors and make your dancing look harder than it is – just to confuse your competition a bit? Chances are you’d choose the latter.

Now let’s talk about your prices.

Be confident

When clients talk to sales reps, even the very eloquent sales people often start stammering as soon as the question “how much is it” is raised. They fear to be rejected because of a price which is “too high” and therefore struggle to communicate price in a strong and self-confident way. Just imagine you’re the customer and you’re confronted with an under-confident sales person when talking about prices. There is no doubt you would start negotiating for a better price, even if the mentioned price would be fine with you.

Due to a number of reasons like lack of confidence, little knowledge about the competitive advantage over other vendors, and the absence of insights into clients’ needs, too often the first price mentioned by the sales person is already on the lower end of their price range.

The thinking goes something like this: “If I start too high, the client might immediately send me away. If I start very low and tell them that this is already a very good price, they will be more likely buy from me.”

This approach is like starting the limbo at your lowest height. You don’t have any flexibility to go lower, except for the big risk of losing it all. Just imagine you’d be competing with weak opponents and you could have won the dancing competition at a very convenient height. Starting too low increases the risk without any need.

Sell high first

Just imagine, the client would have bought 25% above your lowest price, but you never tried to sell at that price.

So, the next time you start talking about price with your customers, always remember how a limbo dancer would act.

Of course, your first price has to be reasonable. No dancer would start with a pole he can just walk under without leaning backwards. Your first price might be high, but it mustn’t be insanely high. Even if there is no competition! Because one day your client will find someone else and will never forget that you took advantage of him.

Proper pricing discussions

For a proper price discussion, pay attention to these topics:

  • Be aware of the weaknesses of your competition and the real need of your client. You will be more competitive if you show your client how he can achieve his results with your solution and highlight where you are strong and others are not.
  • Get a sense of your clients’ budget and the urgency of their project/request. When I sold enterprise software, I always asked my clients questions like, “Are you looking for a solution for Euro 5 000 or 500 000?” I used extreme numbers and I did it on purpose, because this elicits an immediate reaction. If you ask “R5 000 or R6 000?” What would you expect the answer to be? R5 000 of course! Extreme numbers give room for negotiation. The more urgent the request, the more they will focus on a solution solving their problem instead of just looking for a bargain.
  • Never, ever start with the lowest price. Never. You need to have some space to maneuver.
  • If you need to reduce the price, request something in return from your client. It can be a shorter payment period, a guaranteed number of orders, a reference letter, etc.
    I have never had a price negotiation where I lowered the price and did not get anything in return.

Accepting low prices

Finally, if you are going to accept a low price, be aware of the position you are putting yourself in when doing so: It’s extremely hard to increase the prices up to the fees you really need to make if you have already sold for the lowest possible price! To take this client from a low price to an appropriate fee might be a task impossible to achieve. And maybe this client with that little margin keeps you away from another client with much better margins and business.

I learnt this lesson the hard way with one major client. In the beginning, I gave him a very good price because it was a huge opportunity. We made some good deals, but it was almost impossible to raise the prices. After three years I made almost 30% less money with him per day compared to other clients. So I ended up preferring to work with other clients instead of him.

So, be careful with your pricing, just the way you would act with the stick if you’d be a world class limbo dancer: Never start too low.

Axel Rittershaus is an internationally renowned C-Level / Executive Coach & Author who started as an entrepreneur in the IT industry in 1993. He knows that success is the result of hard work and determination even more than innate talent. A master of maintaining focus and follow-through, Axel supports C-Level leaders globally in achieving goals. Axel is dedicated and passionate to see clients succeed beyond their expectations. Axel is also the president of the International Coach Federation South Africa and a multiple Two Oceans and Comrades finisher. You can follow him on twitter.

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Sales Strategy & Management

(Podcast) Are All Prices Negotiable?

Person, socialisation, product, place – what are the key differentiating factors between those who negotiate price and those who don’t? And who determines the value of a product?

Nicholas Haralambous

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What is up for negotiation? When should you be negotiating prices, and when should you be open to negotiating prices with your customers?

Person, socialisation, product, place – what are the key differentiating factors between those who negotiate price and those who don’t? And who determines the value of a product?

Listening time: 8 minutes

Related: (Podcast) Phone Calls Often Solve Email Problems

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Sales Strategy & Management

Sales Leadership: The New Frontier

The Leadership skill of Influencing people increasingly trumps “hard selling techniques” as people enjoy the feeling that they are forced into buying a certain product less and less.

Dirk Coetsee

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“Once upon a time only certain people were in sales. Every day, these folks sold stuff, the rest of us did stuff, and everyone was happy. One day, the world began to change. More of us started working for ourselves- and because we were entrepreneurs, suddenly we became salespeople, too. At the same time, large operations discovered that segmenting job functions did not work very well during volatile business conditions-and because of that, they began demanding elastic skills that stretched across boundaries and included a sales component.” – Daniel Pink

The transformation of sales persons to Sales Leaders is not only the essence of this article but increasingly becoming a necessity, considering the skills demand required to convince people to buy your product or service within an modern environment wherein the consumer is spoilt for choice.

Related: 3 Strategies For Closing Sales Without Picking Up The Phone

In general staples in the make up of old school sales training was and in some cases still is: Product knowledge, fielding sales calls in a friendly way yet creating urgency, learning the ability to overcome client objections and of course do not forget the all-important methods of upselling.

All those elements of selling are still important in general yet “soft skills” such as active listening, handling conflict, and above all removing the emphasis from selling a product or service to selling an enhanced lifestyle or life experience has become the new frontier for the sales game.

The Leadership skill of Influencing people increasingly trumps “hard selling techniques” as people enjoy the feeling that they are forced into buying a certain product less and less. The “parrot method” of drilling sales scripts into the salesforce of the company is slowly but surely becoming obsolete as people want to feel that they are being cared about and considered within the sales process as individuals. “Caring for the other person is the only leverage in any conversation”, Gary Vaynerchuk says.

The above theory calls for a balance between Sales Leaders whom inspires their sales teams to create a personal, professional, and vibrant environment for their customers wherein which they are highly motivated to buy, and Sales managers whom monitor the key sales metrics and checks that sales procedures are being followed. In the modern world both Sales Leadership and management are needed at each end of the balancing scale.

Still, to this day an unfortunate large proportion of sales people are like lambs put to the slaughter, within some situations, as the only weapon taught to them is product knowledge and wearing a smile and then suddenly a very unhappy customer unleashes their anger upon them, and now the poor sales person has no knowledge in terms of how to deal with conflict, generally speaking. How to cope with and overcome conflict and other negotiation skills has become paramount in sustaining very good client relations.

Ethical Leadership is also strongly put forward as a necessary component of any sales training or course through this article. Sales techniques filtered through the companies Vision, mission statement and value system to test its validity and alignment to the companies’ culture can be increasingly effective as opposed to simply applying generic methods of selling which is not always aligned to the company ethos. A high level of ethics amongst Sales Leaders can ensure that after sales promises are kept and that the product sold is in effect as good as propagated by the sales person.

Related: The 5 Best Actions You Can Take To Improve Sales Calls

When a servant leadership culture is prevalent within your company it goes a long way to ensure that your sales people create a caring and positive experience complimented by an enhanced after sales service. Servant Leadership within a sales context is to put the customers’ and teams’ purpose above the individual team members purpose and that by itself is a potential multiplier of sales performance.

A highly important factor within the context of sales performance is the sales Leaders’ ability to formulate the right questions to be asked of the client in order to create a very pleasant experience. Statements in general can be quite dangerous as it is normally viewed as final and very hard to take back once communicated. Questions on the other hand requires an answer and when posed in a caring way can quickly establish rapport with a client.

Subtle nuances picked up by the Sales Leader through asking the right questions can greatly assist in creating positive client engagement. A practical example would be to refrain from the very obvious question of:  how are you? People are so used to being asked this question that they are not likely to give you a very open and honest answer and will be likely to provide you with very generic answers such as, “Fine thank you, “Well thanks and you”, and so forth.

By very simply changing the question to: “How are you feeling today? “, the very perceptive Sales Leader can relatively easily pick up on the client’s emotional state and adjust the conversation from there in order to create rapport.

In Summary, this writing actually asks one question to all CEOs’ and/or boards that must take their companies forward towards a desired future state: Do you want sales people and managers whom are likely to maintain the status quo, or do you seek Sales Leaders whom will challenge the status quo and will always be willing to ask more of themselves in terms of increased skill levels and performance?

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Sales Strategy & Management

You Have Less Than 7 Weeks Left To Turn Your 2017 Around

Implement these 5 steps and achieve 2017 revenue targets and set up a great start to 2018.

Charles Hsuan

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It’s no secret that 2017 has been tough for the majority, with less than 7 weeks to go before business winds up for the year. I’ve summarised an effective sales plan that will help you accelerate your way to success before the year ends.

Referred to as the “championship rounds” in boxing, the last few meters of a 100M sprint, be smart with the last bit of mental energy you have left and sell, sell, sell.

Implement these 5 steps and achieve 2017 revenue targets and set up a great start to 2018.

1Be Laser Focused on Your Customers

You’ll never be one size fits all to everyone, review your client base and define 3 to 5 groups of customers that your business serves, and solves problems for.

Grouping Map

  • Customers that behave similarly, have similar problems and face similar circumstances.
  • Define the groups by age, volume, category, geographic location, and similar demographics. The more components you assign to each group, the better you understand them, and effectively communicate your services to them, ultimately solving their pain points.
  • Personalise with a name it e.g. Sarah is a 30-year-old white collar worker that lives in the urban area, earns R30 000 a month in household income, she sends money back home each month “Black Tax” to support family members that lives in a rural area.

Related: Have We Lost Our Face-To-Face Sales Ability?

2What Goes Through Their Minds Before Making a Purchase?

  • Whether it’s subconscious or psychological, people buy solutions to problems, especially in a tight economy.
  • In order to stay relevant to your customers yesterday today and tomorrow. Continue to evolve and develop your products and services to ensure you are solutions driven.

3Build The Right Pitch

As each of your customer group face their unique challenges. Build a pitch that positions your communication for each customer group to maximise effectiveness.

Follow these 5 important pitch building steps

  • Who is the consumer?
  • What is the pain point that you’re looking to solve?
  • What is the setback for your consumer to not have that pain point solved?
  • What do you do to solve that pain point?
  • What is the result for your consumer, of having that pain point solved?

Once you’ve built the pitch, utilising them adequately, and start selling!

4Implement Your Strategy

This revenue-generating strategy has 2 aspects: hunting (Active) and farming (Reactive)

  • Hunting takes on the form of outbound action. Searching, meeting and engaging with your potential clients. In short, stepping out and finding your customers.
  • Farming is more reactive, it is known as inbound selling. You farm by leaving breadcrumbs that lead your customers towards your services. This is done by generating practical content and using digital platforms to attract attention towards your services or products.
  • Build a calendar for your hunting and farming activities, for the next 12 weeks, and specify tasks for each day.

Related: Savvy Sales Skills To Grow Your Franchise Footprint

5Execute, Measure, Adjust

  • Hunting: Make 10 calls before 10 am each day, make use of a sales script, this forms part of your daily activities.
  • Farming: Schedule a week’s worth of social media content to post.
  • After week one find out which group gives you the best response, tweak it & carrying on.

This plan will help you to notice which approaches yield the best results. You’re able to remove what doesn’t work and focus your time on what leads to the most sales. May this help you turn the last 7 weeks of the business year into a profitable one.

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