John Hirth's commentary on sales...

"I'll give you the business if you can beat my current price..."

“I’ll give you the business if you can beat my current price…” Ever get this one…sure you have. You’ve gotten it from one of your good customers who seem to always be willing to “give you a shot”. Sometimes you’ll get the business and sometimes not…the problem is “not”.

These requests can waste a lot of time, particularly when you don’t win! Let’s talk about the request and see if you can win more of these opportunities as well as get a little more margin too!

Let’s consider why good customers are willing to give you a shot on additional products? Sometimes it’s just from the good will you have built up…they want to “throw you a bone”. Other times, there are problems with their current supplier and if you were aware of the problem, you could provide products that would work better (add value), as well as build some leverage that would allow you to charge more and get better margin.

So, to improve our percentages and get better results let’s look at some strategies that will help us get more of what we want. First, we’ll need to change the way we think about these opportunities in order to sell more of them and get higher prices. Most of us come to these situations with the belief that unless we can beat the price we won’t get the business. This is called a “non supportive belief” and we need to change it in order to be successful.

If you think about it, why would they come to you to replace a product they use and are happy with? Usually they won’t, and often when they ask you for the “can you beat my price offer”, there’s usually a problem with what they’re currently using that they don’t want to tell you about. In reality, if you knew about the problem you might actually be able to get more money.

So, instead of jumping at the request and immediately getting them the information they’ve asked for, consider responding by asking:

    Thanks for the opportunity… Is there a reason you asked about that product?

    Or Is there anything about what you have now that you don’t like?

Now, if there’s a problem, you might be able get them a product that works better. Or because you know they’re currently unhappy with what they have now you might be willing to go in at a little higher-margin (price). On the other hand if they are just giving you an opportunity, tell them you might not be able to beat the price but you could be within 1% of where they are now. If they’re not willing to accept a 1% increase, suggest that you can’t beat the price but that you could match it. Going in with an “exceed or meet price mentality” is much better than starting at a “beat price mentality” (in negotiations always start high).

Still, if they insist that you have to beat the price…you are at an advantage by having started with an exceed price or match price strategy/mentality. Now, you can more easily suggest that you would be willing to beat the price if they can give you one or two more items to quote. Remember, when you are negotiating, never give up anything without getting something in return! Getting a little more for what you sell over the long run could put a lot of money in your pocket as well as you companies. By changing your selling “beliefs” or thought process you’ll set new behaviors that will help you be more successful in sales!

"Winning the "price only" sale..."

I know... perish the thought that we actually "sell" on price. Many so called "experts" will say "I never sell on price". But what if it really gets down to the fact that "price" seems to be the only difference and you feel you have no other options. Or, let's consider the fact that sometimes we have a "price" advantage, so it might (on occasion) be worth using low price as a strategy.

Before we "go there", first decide if you have exhausted all of your options? Do you know why you are worth more and have you created a "value translation strategy" that gives you an advantage? Have you done a good job of managing and controlling the call in a way that helps you "create difference" and helps you avoid the "feature benefit trap"? If not, your selling strategy may actually be leading you to the price objection (see other "sales strategy" posts)!

Have you explored all of the other advantages your customer gets when they buy from you that are not product related? Can you split shipments, offer dating or extended terms, help lower inventory carrying costs or eliminate paper invoicing with electronic ordering? Make sure you think "beyond the product" to extract ever bit of value you and your company can deliver.

So for now, let's assume you've done a good job managing the call and you reach that "control point" where you have to decided to accept the "price only" option. It gets down to "the best price wins". You go in with your best price in hand (notice I said "go in" not send in!) and you make the offer knowing you have an extra 10% to work with... they're notorious for "grinding you at the end", so you're prepared with one more bullet. They look across the table with that steely gaze and say "you've got to do better"?

Offering to do better at this point is a huge mistake. If you give them your extra 10% now, every time you come in they have to say to themselves "based on the last situation I guess everytime I buy from this sales person I have to assume that they have not given me their best price". Your actions create distrust.

You're better off saying "I wish I could but I can't". How you say this is probably more important than what you actually say. It must be said quickly, courteously and without reservation. Your ability to respond immediately communicates to your prospect that because you answered so quickly and without the need to think about it, it must be true (we'll learn more about this "Subconscious Selling" in future posts).

Now, you will hear one of two things:

          1. "O.K., I can accept your price (it was just a test (remember, they always lie!) or

          2. If you can't get lower... you lose.

With the second response you know they mean business. Now, instead of dropping the 10%, first ask what they mean by lower... they might say 5%. But don't give in yet... tell them that you have already given the best price you are able to authorize, but that you would be willing to fight for them and try to get more. However, first they'll need to give you a purchase order at the price they want that you will take back and get approved. With a commitment from them like this, you're sure the company will be able to compromise...but  they would be unwilling to compromise unless you have "paper"! Empty promises will never get fulfilled! If they're serious they should have no problem with this request.

What does this get you? First, credibility, they believe they got the best price up front so they are less likely to question your offer the next time. You've also shown them that you will go the extra mile for them. Plus, you didn't just "drop your price" giving them the opportunity to go back and use it against you with their current supplier!

When all else fails and they tell you it's price, make sure you know how to "manage to win"! This strategy gives you options and will let you make "the price only sale" with dignity!

Action Step: Learn the strategy and role play it with a co-worker. Remember, practice, practice, practice!

"Be the "hunter"... not the "hunted".

Too often in sales we find ourselves being shot at... "hunted" if you will. We play a defensive game rather than an offensive game. We are reactive rather than proactive and often find ourselves justifying our existence and value. As long as you allow yourself to be "controlled" this way the outcome of your calls will not be what you have hoped for. You need to be in control, manage the "game" and be "the hunter" not the hunted!

The reason this happens is most of us don't do a good job of taking control of the call in the first place (or even recognize that we've lost control!). In our "Sales Mastery" program we go to great lengths and spend a lot of time helping our clients craft what we refer to as "the initial agreement", which is a tool designed to get control of the the call right from the start. It is a well choreographed and "scripted" response to the tough "offensive" challenges your prospects will use.

Sometimes, right off the bat, their responses are challenging and put a lot pf pressure on the sales person. They ask questions like:

               Why should I buy from you or your company?

               What makes you better than ACME brake pads (see the movie "Tommy boy!)?

               You're going to need a low price to be able to get our business!

Right away, if you answer these questions, you are reacting, on the defensive and "taking lead". What's really important here is to understand that "any answer you provide will be a problem", because it forces you into the "hunted" or defensive mode. You need to not answer but "reflect" the question to  take control and become the "hunter". You need to gain the upper hand and assume an offensive position. What you need to "hunt" for is information from the prospect that will allow you to determine "are they really a good prospect that could benefit from what you have and be worth your time"?

This concept can easily consume three hours in a training session, so let me give one example of how you create an advantage for yourself. since so many of our clients are pressured on price let's take the low price issue first:

             "You're going to need a low price to be able to get our business!"

First, this is a "statement" and does not require an answer (sales people have a bad habit of answering unasked questions!). Second, justifying why buying on price is a bad idea just "offends" the prospect. Or saying "we never lose on price" clearly demonstrates that you are willing to negotiate price. These responses keep you in the "hunted" role.

A better response that would put you in the "hunter" role and might provide valuable information that could help you know how or what to sell might be something like:

"It sounds like low price is important to you, can you tell me why?"

Immediately, without arguing or forcing them to assume a defensive position we have acknowledged the value of the statement but have then asked a question that starts our "hunt" for information.

Another way of "switching" to offense on a question about low price might be:

"Most of the time, when people are concerned about price they are trying to find ways to reduce their expenses or control costs. There might be some other ways that we could help you control your costs or make you more efficient, could we discuss those issues as well".

Same outcome, we switch from "hunted" to "hunter". We change the focus of the conversation from "us" to "them" and immediately put ourselves in an offensive role rather than a defensive role. Learning this skill will require thought and work but will pay dividends and help you not only be more successful but also a lot less frustrated in your selling career. It's a lot more fun to "hunt" than it is to be "hunted"!

Action Item: Make a list of all of the questions or statements that you get on sales calls that tend to make you lose control. Create strategies around those questions that help you "reflect" or "re-frame" the conversation to your advantage. Practice, practice, practice.