Holding on Price in a Down Economy
Discounting on price is not a sales strategy. It’s an impulsive move made by desperate salespeople. In a tough economy, customers think and expect everything is going to be discounted. Because of this, salespeople feel it necessary to oblige the customer to close the deal. Unfortunately, however, this leads to a downward spiral, much like an addiction to an illegal drug. Once a discount is offered to one customer, it becomes easier and easier to offer it to another one. Before they know it, the discount is being offered to everyone. Like a drug, the “fix” is in the additional sales the salesperson is able to gain. However, just like with the addictive drug, there is a “withdrawal.” Sales come at a reduced or a very reduced margin. To make matters worse, the discount ends up altering the attitude of the customer who now believes the real value of the product or service they bought is the reduced price and not the full one. Overcoming this mislabeled sales strategy of offering a discount can only be done when the salesperson is willing to change their way of thinking, despite how difficult it may be.
The first step necessary to correcting the salesperson’s mindset is to help them believe in their ability to close the sale. Competent salespeople know why the customer is looking to buy and are able to capitalize on the needs the customer has disclosed. When sales professionals begin to feel the need to discount, it’s usually because they don’t believe they’ve established a solid reason why the customer should buy from them. They have failed to ask the right questions to get the customer talking and then avoided the critical skill of following up. When a salesperson has spent all of their time touting product features and not uncovering the benefits to the customer, their presentation may not include what the customer actually needs. Only when the salesperson has taken the time to probe deeper will they truly understand why the customer wants to buy. They need to ask the right questions and then listen to the responses. Then they will be able to capitalize on the information provided them.
The second step necessary to avoid the need to discount is to keep the message on the immediate return-on-investment the customer will receive when making the purchase. Keep in mind that businesses don’t buy anything, they only invest in things. Every purchase made by a business is seen as an investment in helping them achieve their own goals. For this reason, the message must focus on the immediate gain that will result from their decision to buy. This emphasis is best brought out when the salesperson ties their questions into exploring how and what the customer expects to achieve immediately, as well as how they’ve measured results in other purchases they’ve made.
The third step is found in knowing how to respond when the customer asks for a discount or states that the price is too high. Salespeople need to be ready for these objections and not be concerned or disarmed by them. The first time the customer brings up this issue, the salesperson should not even acknowledge what was said. Often, customers feel an obligation to inquire, and once asked, they’ve done what they were “supposed” to do. The salesperson should only respond to the customer when they have brought the issue up for the second time, and the way they handle it is critical. They need to ask a question that is pointed directly at the most significant need the customer has. This will serve to shift the customer’s thinking back to why they’re looking to buy to begin with. After they respond, the salesperson should continue the dialogue with a series of follow-up questions designed to uncover even greater needs. The more the customer is focused on their need, the less they will be focused on a lower price.
Finally, salespeople must keep in mind that there will be times when they must be willing to walk away from an order. Although this can be scary and risky during these tough times, it’s essential for them to believe they don’t need every sale. Not only does walking away help them realize that there are other opportunities out there, it also serves to strengthen their resolve to hold their line and maintain the value of what they are selling.
Holding on price in a down economy is not easy, but it is doable, and, in fact, it is essential! When sales professionals believe in their product or service with complete conviction, focus on the immediate ROI, and ask the questions necessary to uncover the customer’s greatest need, resorting to the mislabeled sales strategy of offering a discount will be unnecessary. Maintaining your pricing integrity in a down economy is truly a winning strategy because, in the end, profit margins are higher, the ability to service a customer is better, and the confidence of the salesperson is greater. Especially in today’s marketplace, that’s worth pursuing.
Mark Hunter, “The Sales Hunter”, is a sales expert who speaks to thousands each year on how to increase their sales profitability. For more information, to receive a free weekly email sales tip, or to read his Sales Motivation Blog, visit http://www.TheSalesHunter.com