|
December 24, 2008 ( PowerHomeBiz ) -
New York, NY -
Selling a price increase can be difficult in nearly any type of situation,
but trying to sell one in a soft market can be downright brutal. Yet, as
unpleasant as it can be, it is often essential. The problem of selling a
price increase in a soft market usually stems from the fact that the
salesperson and the customer are coming at the situation from different
perspectives. Especially in times like this, it is imperative for the
salesperson to understand that regardless of what the market or economy is
doing, if a price increase needs to be sold, it needs to be sold.
(news continued below)
This means that the salesperson can't go into the sales process believing
that the customer is going to reject the price increase unless the deal can
be saved by offering some type of discount. If they approach the meeting
with this attitude, they almost guarantee failure because a customer will
never pay more than a salesperson tells them to.
In these types of situations, the first thing that often happens is a
comment from the customer about how soft the economy is, how prices are
really going down, and therefore, how a price increase at this time doesn't
make any sense. When the salesperson hears this, they usually agree because
they hear and see the same thing. However, as soon as they do this, the
battle is lost and 9 times out of 10, the only thing that can save it is
some type of discount. To counteract this problem, when the salesperson
hears the customer make this type of statement, they should ignore it. Yes,
ignore it. The reason? Many times the customer merely wants to get it off
their chest and by telling it to you, they feel better. The first response
the salesperson should make is to ask the customer questions about how they
intend to use what they're buying and whether or not they've been able to
achieve the results they're looking for.
If the customer continues with their line of discussion about the economy
and they can't accept the price increase, then the salesperson should ask
about the steps involved in their buying process. The objective is really to
get the customer talking. Initially, this can be a little scary because the
customer may begin ranting about how they always go for the low price. After
they get done explaining their process, the salesperson should question them
about how their own customers decide to buy from them. It's in this part of
the discussion that the customer begins to see how and why quality and
confidence are such big items in any purchase decision. A good salesperson
will then pick up on these two items and reinforce them with follow-up
questions that get the customer to further explain the importance of quality
and confidence. When the customer sees what they're buying in this light,
the price increase becomes a much smaller issue.
Sometimes even after this conversation, there will be customers or
purchasing departments who will still not accept the price increase. They
usually comment that they will find another vendor to buy from. This is
often a veiled threat to get the weak-kneed salesperson to cave in with a
discount. For the salesperson, this type of discussion is best thwarted by
ensuring the end-user fully understands the value and benefits they will
receive from their product, as well as by clearly communicating the amount
of pain the customer will go through should they decide to switch. First,
the cost of converting to a new vendor is always much higher than initially
thought, so the discount the new vendor has to offer needs to be
significant. In addition, it might be easy for a customer to find a new
vendor at a lower price, but on many occasions, the lower price vanishes
after the initial order and, suddenly, the new vendor is at the same price
as the original one. Furthermore, the new vendor will not have nearly the
knowledge or expertise as the original company about how to service the
customer, so the switch often winds up costing more money in the long-run.
As a final line of protection, I strongly believe the salesperson
communicating the price increase should not have the authority to make any
price concessions. When this power is taken away from the salesperson, it's
amazing how much tougher they are in executing a price increase. By
requiring the salesperson to get approval from someone else, it also takes
the salesperson off of the hot seat and, many times, as soon as the customer
is aware of this, they will stop badgering for a discount.
Selling a price increase in a soft economy is certainly harder than
selling one in a booming market. However, as professionals, salespeople need
to take the time to know and understand how to sell a price increase in all
types of markets. It doesn't require herculean skills. It requires the
diligence and patience to keep the discussion focused on the benefits the
customer is looking for from both the product and from you, the salesperson.
=======
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 .
|