This article examines four common mistakes made by salespeople that lead to competing on price and what you can do about it.
You’ve hired a dedicated sales force. Your company has the best product. Great service is delivered after the sale. So why is your team losing sales to low price?”Here are four reasons we see when working with individuals and sales teams:
1. Wrong Audience
If you’re trying to sell ice to an Eskimo, you’re in front of the wrong prospect! Let’s face it, you could be Zig Ziglar and still not close the sale if you are not selling to a real prospect.
Knowledge, business acumen and excellent selling skills are useless if they are not in front of a prospect that values the expertise.
Neil Rackham, author of “Rethinking the Sales Force,”does an excellent job describing the two types of buyers that exist in the market place: the transactional buyer and the value buyer.
The transactional buyer feels the product/service is easily substitutable, doesn’t value the expertise of the salesperson, and sees price as the main decision criteria. Trust in the product is more important than trust in the salesperson.
The value buyer recognizes differentiation, appreciates the expertise of the salesperson, and places trust in the person over the product. The key decision criterion is a salesperson that understands their business and knows how to fix their problems -and they are willing to pay for that expertise and service.
If a salesperson is trying to sell value to the transactional buyer, they’re going to fail because their company’s business model of offering value doesn’t match their prospect’s business model of buying on price. They don’t want to buy ice.
2. Poor Consultative Sales Skills
OK, so you’re in front of the right prospect and are still getting beat up on price. More than likely it’s because you didn’t set up a consultative sales call, but instead a question/answer session. The problem starts when the appointment is set.
Some salespeople seem almost apologetic when setting up appointments. “I know how busy you are”can be interpreted as “I have nothing going on,”or “I’d like to come by -I’ll only be 20 minutes”can come across as: “My product/service doesn’t deserve much time.”If your prospect has a problem that is costing them $100,000, can it be thoroughly discussed and diagnosed in 20 minutes? A sales meeting set with poor expectations leads to poor investment by the prospect.
Lousy selling skills clobber salespeople who work in industries where goods sold are perceived as commodities. The untrained salesperson doesn’t know how to move the sales call from a “give me a quote”call to a consultative sales call. Many sales professionals “obey”the prospect and give a quote without qualifying the prospect.
The professional salesperson knows how to respond when the prospect starts pressuring for price by saying, “We are competitive in our pricing, however, it’s not the reason our customers do business with us.”
This response tells the prospect that you are not there to talk price, you are there to learn about his business’s issues and challenges. After all, if price is the only issue, the prospective customer doesn’t need a highly paid sales professional. They only need a well-designed Web site with an e-commerce function.
3. No Competitive Analysis on the Competition
Run a pop quiz on your salespeople this week and see if they know your company’s strengths and weaknesses as compared with your biggest competitor. A salesperson must know the gaps in the competitor’s offering such as no training on products, lack of 24/7 support, or difficult implementation.
Once the gap is identified, the professional salesperson crafts questions to expose the gap and impact to the prospect. Put it this way, if you can’t find any differences, how the heck can you prospect? And if there is no difference, the prospect has earned the right to buy on price.
This theoretical word is at the core of selling value. Conviction starts with the salesperson. Merit Gest, a fellow sales trainer, teaches her clients, “You have to be sold on yourself before you can sell anything else!”
An old joke floating around the sales training world states, “If you are looking for a brain surgeon, do you look for the cheapest or the best?”
Salespeople must have the same attitude. Do you regard yourself as the “sales surgeon”in your industry? Make sure you are in front of the right prospects and ask yourself: Is price the issue or are you making it the issue?
Colleen Stanley is president of SalesLeadership Inc., a business development consulting firm specializing in sales and sales management training. The company provides programs in prospecting, referral strategies, consultative sales training, sales management training, and hiring/selection. She is the author of “Growing Great Sales Teams: Lessons from the Cornfield.”Reach Colleen at 303-708-1128 or visit www.salesleadershipdevelopment.com.