BUSINESS BUILDER SERIES
You may be tempted to lower your price to get that first job in an area or with a building owner, but know this: cutting deals is very risky business indeed.
If your business is largely built on referrals, or if you would like it to be, cutting deals can be devastating to your bottom line. The price you establish for one customer is very likely the price you will have to set with that customer going forward – and everyone subsequently referred by that customer and their network.
When you cut your price, or give something away, just to close the deal, you’ve very likely just established your new norm. Your new reduced profit margin.
Here are SIX critical things you must do to hold to your price and still win jobs:
1. Sell Value not Price
According to Tom Reilly, literally the guy the wrote the book on Value-Added selling back in 2010, value added salespeople are proactive – in other words, value added salespeople build more value on the front end so that price becomes less of an issue on the back end.
So, how is this done?
First by establishing TRUST. When two people like and trust each other, they want to do business together and will figure out a way to work out the details.
Second, the transaction must be a win-win proposition. In other words, each party must walk away with benefit.
Third, the sale is about the customer so you must define value in CUSTOMER terms, not seller terms. Reilly tells us “If you define value in customer terms, they pay for it with a higher selling price. Conversely, if you define value in your terms, you pay for it with a bigger discount.”
Fourth, your proposition should be three-dimensional and include all of the following: your product or service, your company and YOU. According to Reilly (remember, he wrote the book on value added selling), the salesperson’s competence and attitude are primary drivers of customer satisfaction, loyalty, and retention. The remaining five actions listed below will allow the customer to buy into YOU.
2. Know your products
This goes without saying. But how well DO you know the products you are selling? Have you studied the sales literature, examined the samples and learned the key benefits of your products over the competition? Have you browsed online information, looked into the technical aspects as well as the aesthetic elements? Read testimonials, reviews? Have you taken advantage of special training? You can be lucky once in awhile if you wing it, but to truly drive sales you must understand why the product you are offering is the best solution for the prospect. Even after you present your solution, you will likely need to field questions. Confidently delivered answers to those questions will help leverage a successful close.
Contact Division 7 Sales anytime to obtain sales tools and schedule one-on-one sales training for any of the products we represent.
3. Use visual and tactile sales tools.
Yes, seeing is believing. Plan ahead to have ample photos, samples, things a prospect can hold, touch, and feel. Show them the value. Do not underestimate the power of sales tools.
Need samples or product literature? Contact Division 7 Sales.
4. Speak with conviction about price
If you truly believe in the value of your price, and have established trust with your prospect, then they will believe in it too. Be proud of your price. Be confident. Never apologize or make excuses.
This is easier if you help the prospect understand the complexity of their needs. This is done by first listening and examining the situation. If you have established trust early on, you can help the customer fully define their needs and then show them that your offering is a valuable solution to those needs. If necessary, help them understand why your solution costs what it does, and that a lesser offering will not be a complete solution for them.
If the prospect cannot physically pay the price, work together on creative ways to decrease the offered package in order to cut costs. Think twice — and then think again — before decreasing the price simply because the prospect cannot pay it.
Check out 5 Things to do Instead of Cutting Price.
5. Mind your body language, eye contact
Some experts believe that as much as 90 percent of communication is non-verbal. This means that body language speaks louder than words in the selling process.
Check out What you MUST do to Sell with Body Language.
6. Appear successful
Gain a definite non-verbal advantage with a successful appearance. This includes meticulous grooming, clothes, and shoes as well as a clean vehicle and an organized presentation. Make it obvious that you prepared ahead of time for the presentation. This helps give the prospect confidence that you will take the same care with them after they award you the sale.