Tired of the Price Fight? Data Reveals Insight to End It.
Have you ever wondered why some of your salespeople would rather negotiate on behalf of a customer or prospect to get them a lower price than sell the true value that your company’s products and services deliver? If you haven’t, you probably will, because data we have on over 630,000 salespeople reveals that 60% of salespeople are not comfortable discussing money.
“How can that be?” you might say. They are in sales for goodness sake. They must discuss money. You may even think most are in sales because they want to make more money and by holding firm on prices rather than discounting they stand to do just that.
And while all this may be true, in 66% of these same salespeople, the reward of more money will not drive them to overcome their discomfort in discussing it with their prospects. They are just not that motivated by money. Sure, they likely want to make more money, but that desire won’t drive them to overcome their fears and their lack of confidence in selling value.
Here’s More Bad News
Only 13% of salespeople are proficient negotiators. Now, you might say, “They are perfectly comfortable trying to negotiate with me.” But know this. They have a relationship with you. They are not as concerned about what you might think, but they are concerned about what the prospect will think, say, and do. And especially in environments where there are fewer opportunities due to buyers pulling back, the salesperson is afflicted with fear that the opportunity will slip away and there aren’t enough other opportunities lining up in the pipeline.
There is a process to help your sellers who have difficulty demonstrating the value of your products and services, or who would rather run to you for a discount, as opposed to helping the prospect understand that value and be willing to pay for it. And it’s definitely worth following.
As my business partner Casey Brown says, “Remember that if your goods and services are excellent, you should be paid excellently.”
And as I have written about recently, the crappy tactic of offering a higher price just to “give” the prospect a price concession greatly diminishes your ability to really sell your company’s excellence.
The 3-Step Process to Stop Internal Price Fights
- Ensure your team can discuss the value your company’s products and services delivered from the viewpoint of what’s important to the prospect. Salespeople must understand your differentiators, why the client cares about those differentiators, and be able to prepare and ask questions to help the prospect or client discuss that value in their own words. Utilizing the concept of “The Cost of Failure” is highly effective. Do this by helping the client understand what happens if they select an inferior product or service, or even if they do nothing. Go deep on the financial and emotional impact of failure by selecting unwisely. This Value Proposition Creation Toolkit will help.
- Make the ROI and value discussion a required part of the sales conversation. Do this after building the relationship and fully understanding the compelling reason to do something, the earlier the better. But do not discuss the economic elements in terms of “budget” unless your team sells specifically based on budgeted items. Assume there is no budget for your goods or services, which often is the case anyway.
- Help your team overcome their fears and self-limiting beliefs regarding money and their hang-ups discussing it. This is easier said than done since much of sellers’ issues with money are tied to deep-seated beliefs. Frequently, it goes back to their upbringing and their family’s attitude about money in general. You can’t expect someone to easily talk about money if it was a difficult or sore subject for them as a child.
- If they were chastised for talking about money at the dinner table, for instance, it can be hard to break that habit. Just telling a salesperson to do it and laying out a plan of attack may not help them. They must be coached, and it may require digging deeper into “why” they are not comfortable talking about money. Steps 1 and 2 above can help, but you may have to get “real” with people who have had difficulties with money issues for a long time.
Do It with Discipline
Implement this process and remember that when a salesperson resorts to their old discount-asking ways, habits are hard to recast. So, you will need to be the one who reminds them of the process. and asks enough questions to help them realize where they may have stumbled selling excellence with the prospect.
Repetition and reinforcement are the name of the game, especially with a topic such as money, where the habits may go back decades…back to their childhood. They can be reformulated, but it will take time, effort, and a comprehensive approach.
And remember that 60% of salespeople suffer from a discomfort discussing money, so it is highly likely that some of your people may be afflicted. It is a concern for most every sales organization.
Source for all data: Objective Management Group