A Horrible Sales Tactic

My last post detailed some of the silly tactics and tricks salespeople try to use to make a sale. It also provided a three-step process to help salespeople connect better with their prospects so they don’t have to pull tricks and tactics on them. In this post, I’m going a step further, adding a huge pet peeve of mine to the list of tricks and tactics to avoid. It has to do with pricing and negotiation.

Please Don’t Do This!

If you are in the habit of pricing your products and services higher than you expect to get paid, and then demonstrating a willingness to reduce the price to “meet in the middle” with the clever negotiating prospect – Stop it! And don’t let your sales team do it. You are not only teaching your team very bad habits and reinforcing a bad thought process, but you are killing the integrity you have with customers.

I know that there is a psychology surrounding giving something to help the prospect feel like they “won”. Unfortunately, in the process of reducing your price, you have suggested to the prospect that your company is not honest. And guess what, you have also set your team up to constantly get requests for discounts.

Two Major Problems:

  1. Starting this very bad cycle in the first place:

Salesperson thinks: “I am going to quote you high.”

Buyer thinks: “I know they can shave some off. They always do.”

Salesperson thinks: “If we cut 15% off the buyer will feel special and we still meet our minimum Gross Margin requirements.”

Buyer thinks: “I am such a superior negotiator. He/she is just another hack salesperson.”

  1. Reinforcing with your team that your products and services aren’t worth the excellence that they deliver. The mere fact that price is the first thing a team thinks about creates the belief that the only way to win business is by discounting. I would argue that this problem is causing more harm than the first.

So, What’s to Be Done?

Since we know that 60% of salespeople are uncomfortable discussing money*, this may be a chore. But the easiest way to help them overcome using this nasty trick is to focus on the value that is brought to clients.

Do this by way of anecdotes. Let the prospect know about the solutions your products have provided for clients. By helping your sellers paint a picture with the client of what might happen if they don’t purchase your product or services now, they can help reinforce its value within the mind of the seller.

Just make absolutely certain that the ROI calculation – either quantified or qualified – is a required step of your selling process. Here is what I mean: Your salespeople must find out the depth of the problem, concern, issue, or situation that the prospect is facing. Then the salesperson must determine the impact to the prospect of not changing or otherwise fixing their situation. Once they work with the prospect to determine the options to collaboratively fix the issue, demonstrating value should be far easier.

Make the Emotional Connection

Remember that emotions play a large part in purchases, even if the prospect acts like it is only about the money. So, if your sellers are not comfortable talking about money, they will not be able to easily discuss the cost of failure to the client, value, and ROI. And if they can’t do those things, they will not be able to effectively connect at an emotional level with the prospect.

Your salespeople can set themselves apart simply by not acting like every other salesperson who prices their services high then discounts when asked. By demonstrating value instead of discounting, they will instead establish themselves as more useful, different, and more like a peer than a peddler. This will position them and your company in the right way now and into the future with the client or prospect.

And, since discounting is one of the biggest profit killers, you might be interested in seeing the impact that pricing has on your profits.  Feel free to access our Profitability Levers worksheet.  It will provide a clearer insight into the pitfalls of discounting as a negotiation tactic.

*Source: Objective Management Group