If you are a sales manager or owner you probably hear the same things I do related to pricing. Sales people will say they need to discount for this or that. It is either a competitive situation or a loyal customer deserves a good deal. My stance is to not discount as a practice but be open to negotiations if needed for the right reasons. When one salesperson is consistently having pricing issues or objections you probably don’t have a pricing problem you have a selling problem. This is how I address the problem.
You first need to realize the problem lies in the perceived value of your product or service by the customer related to the price. Most likely the salesperson is taking short cuts while selling or product dumping to convince someone to buy. They have strayed from the fundamentals of discovery to uncover buying motives, problems, goals or needs. Michael Bosworth’s book Customer Centric Selling is a great resource to help a sales person understand discovering needs. You can also take a look at my article on Discovery Appointments as a quick reference and sales tool.
Have the Salesperson prepare questions (written down) before their appointment and have them show them to you. Make sure they are questions that will help the salesperson understand the customer, their business, their problem and their goals. Don’t let them just leave with questions related to how many widget they think they need. When they return debrief the salesperson. Don’t ask them what they sold; ask them about the answers to the questions they listed. Find out if they asked the questions and what they learned. If they did not, do it again for the next appointment. Let them know you don’t care if they sell anything on the appointment but they need to come back understanding the customers needs.
Keep it up until they see the value in doing this. Once they understand the customer problem, presenting your solution will carry more value and pricing will begin to become less of an issue.
Today a sales person called with bad news. Unresolved service issues caused a good customer to cancel service. The salesperson explained they had repeatedly worked with a vendor to resolve the issue but problems persisted. What the salesperson was saying was, I did all I was supposed to do, I sold the deal, helped resolve issues, took the complaints and now I am eating crow with a charge back looking me in the face.
Of course the communication is never delivered that concise and usually as in this case repeated a few times before they settle down. The sales person needs someone to listen to them; this usually takes patience and empathy from the sales manager. They need to vent and believe someone understands them. As a manager it is easy to want to cut to the chase and solve the problem from happening again, I suggest you be patient and allow your sales person to vent before solving problems.
The sales person just listened to the customer do the same thing. There is nothing worse for a sales person than working hard to close a deal and watch it go away due to unresolved issues out of their control. Sales people not only need someone to supply them with a good product or service, reliable systems and support but someone who understands their pain and will be their advocate with ownership or the vendor.
Once the emotion is down it is easier to work on the problem. Ask them to get involved with documenting issues so the breakdown can be addressed and eliminated or minimized with future customers. Then be their advocate and take the issues to the people that can fix them. Make sure you report back to them on what you are doing and changes that will be implemented. You will build trust and teach them how to resolve business issues in the future. In the long run if the issues are solved, the sales person will vent less and get to the problems sooner knowing that you are their advocate, someone they can count on.
We just hired a new sales rep at one of our client businesses. We took our time and and followed our hiring process to find the best qualified person that was a good fit for the sales team. In a world of greed and “looking after mine”, there are still people (a lot of them) who want to be part of a team-oriented department.
Today our new rep (who is a well seasoned and proven veteran in the industry) was being oriented into the company by our team leader (much younger, far less experience). Because both the team leader and the new rep believe in working as a team with a high level of trust, the team leader shared a current situation he was stuck on with the new rep. The problem was a customer had recently spent 75k on a new system and did not have the budget to add additional services that they wanted. When the new rep looked at the name of the company, he said, “I sold them the 75K at my old company”, he thought he could probably help re-negotiate the lease to add the new services for a small amount per month to the customer.
What would have happened if the team leader felt intimidated by the new veteran rep? He probably would not have shared his dilemma. What would happen if the new rep was more interested in getting his share from “his” customer? Most likely things would end up in conflict or no sale. Instead the chances of helping the customer increased due to the openness and willingness to work together by these two.
The New England Patriots are a great example of hiring players wanting to be part of a team instead of a group of stars. In a league where talent is extremely equal from team to team, New England found a way to make individuals better through the team. The same exists for sales teams. Don’t just hire the hot sales guy looking out for his own, but find a quality team player and you will make everyone better.
H. Dale Burke in his book, “Less is More Leadership” has a great quote. “When your memories are more exciting than your dreams, you’ve begun to die.” If you find yourself talking more about what was, than what can or will be you might need some resuscitation. Growing your business through a sales team requires a clear vision that will motivate them to stretch. They need a compelling reason to move out of the comfortable and stable environment they have.
As the manager of your sales team you need to provide a vision and ask hard questions that knock people out of their comfort zones. Don’t count on money to be your main source of motivation. Studies have proven that money is down on the list of what motivates people. People will work toward excellence, they want to work toward team goals, and most sales people like a good challenge.
As the leader it is your job to set that vision, and communicate it to employees. Where will your company or sales departement be in 1,2 or 3 years? What will it take from the sales group to get there? What will each person need to do to contribute? A great question to ask each sales person is, “What will you need to change or do differently to reach your new goals?” This is a stretch question.
In my consulting work with business owners and managers I find that many have a vision they have not clarified or shared. This leaves their employees willing to follow them to comfort and stability. When the vision is shared, these same employees now have a new journey to be part of.
It is a simple, well known excersise that is neglected by many. If you don’t have your vision documented or shared, do it now. It could be the simplest way to motivate your employees toward helping you get there.
When I started consulting I met with Harvey Meier (www.harveymeier.com), a 30 year veteran to management consulting and asked him, “If you were to give me one tip to help me in consulting, what would it be?” He responded, “Ask one more question.” He explained, when you are ready to begin sharing a solution to your prospect, stop and ask another question. It has been one of the best business and selling tips I have received.
Once you find out what someones problems or goals are, dig a little deeper. You can ask questions like, “How will fixing your problem impact the company?” or “What will achieving your goals allow the company to do in the future it is not doing today?” Don’t be in a rush to “sell”, take your time learning about your customer and their needs. Buying is an emotional process, help your buyer get in touch with their emotional need and then present your solutions to it.
Practicing this skill is easy, you can do it during any conversation. When you are ready to say something, don’t. Ask another question. Practice learning more about others rather than sharing more about yourself. The more you understand about a customers problems the more valuable your solutions become. The extra question you ask will become the most important sales question for that situation.