Let’s cut to the chase.
The decision to transact is always the customer’s. You can be a masterful presenter and an able solutions consultant. But the dude who signs the check controls the pace no matter what your sales managers tell you. A skilled sales professional can shorten the time and obtain a higher dollar deal. But the final control is always with the buyer. With the internet, there is absolutely nothing a sales guy can hide from a diligent customer. This is a good thing because it creates smarter buyers. And smarter buyers force weak sales people out of the workforce.
Weak sales people are the ones who lead with price because they have no ability to question their way through a sales interaction. Weak sales people are the ones who take the one thing they have some semblance of control over and wield it like a weapon. Instead of taking the time to figure out what is driving the purchasing interaction, they cut 25% off hoping that will close the deal on the spot. These are the guys that offer you a ‘great deal’ before you’ve even asked them for one. These are order takers, not sales professionals.
If you’re the customer, buy from this guy. But not until he drops it to 45% off, because he totally would.
When a sales guy starts a conversation around price, price becomes the focus of the conversation. At that point, unless you’re ridiculously below the market price, everything you say about the product and its benefits will be compared to what the customer thinks the price should be. Does it matter that you offered 25% off? No, because now the starting point of the conversation begins at 25% off, not the original price.
But wait! I’m the one who said all the information is on the internet. Wouldn’t price be there as well? Surely a diligent customer knows what a good deal is.
They do. And that’s why there is a tectonic shift towards e-commerce for cash and carry items, cutting out the sales guy altogether. This, in theory, should force companies of all sizes to take a critical look at their sales force and keep only the sales professionals who can best maximize those increasingly rare interactions where the customer is giving you an opportunity to show value beyond price.
Value is the perception of getting something for less than expected. Everybody’s perception of value is different. Some people are happy with 10% off, while some people feel paying a percent over supplier costs is too much. Some people judge value by comparing to market price. Some people judge value by what their buddy told them value was. So until you know what the person’s context for ‘value’ is, your random offer of a discount is pointless. The only way to determine how your customer perceives value is to ask. Ask what the situation is now and what they want to improve and what the improvement will mean. Ask what they know about your competition. Ask what they know about your company. Ask what their criteria for good value is. Be curious and ask. You can’t offer a solution unless you know the problem you’re solving. Often time, by asking the customer to size up the problem they’re trying to solve, your sticker price might suddenly seem like a fantastic value without taking a nickel off. For a sales guy on quota, that’s one less nickel you have to make up elsewhere.
“But dude,” you cry, “sometimes all the guy wants is the lowest possible price. He doesn’t care about anything else. He won’t answer any questions. He just wants the price!”
Then don’t bullshit him and give him your lowest price. Know that your price will be shopped and know that even if you win this sale with price, you’re expected to lead with price on every subsequent sale. Know that even if you’re OK with a zero-profit sale, your company won’t be. The biggest problem with weak sales people is they will encounter this once every three months and complain that they encounter it every day on every call.
My answer to that is:
“Good. This means I can divert your leads to our self-service website and save a salary.”
Does this mean strong sales guys don’t run into price shoppers? Of course they do. But strong sales guys also have something weak sales guys don’t; a real sales pipeline. For a weak sales guy, every deal is a ‘Hail Mary’ with the lowest possible price because he only has 5 deals that are sort of alive. A strong sales guy has 50 deals and any half of them can close because the dude has a process.
Next week: Part 3 – What’s your run rate?