The PESKY DISCOUNT

Have you yet wearied of sales people asking you, the sales manager, to discount a price with no specific reasoning behind the request? Are margins slipping?

Why?

“I had to cut the price to get the order”. I hear this from client’s sales teams all the time. Rather than actually selling, they’re clerking by offering discounts. If you’re discounting, there should be a reason. Yet many of them start with quoting a price, and then suggesting “Let me see what kind of discount I can get for you.”

Discount?

Seriously?

Why?

Read this paraphrased poem from 19th century (think about that, 19th century) writer, John Ruskin herein titled, “What Is Price?”

“It is unwise to pay too much but,
It is unwise to pay too little.
When you pay too much you lose a little money – that is all.
When you pay too little you lose everything – because the thing you bought was incapable of doing the thing you bought it to do.
…If you deal with the lowest bidder it is well to add something for the risk you run.
And if you do that…
You will have enough to pay for something better.”

Is this 19th century quote still valid? Not sure?

Of course it is!

Ask yourself, what is your value proposition and are your customers willing to pay for it? If not, why?

Remember: In the absence of perceived value, the determining factor is…price.

Your value to your customers is your knowledge and ability to serve them like no one else.  You (hopefully) have a brilliant sales team, people who have forgotten more about your products and craft than most of your customers will ever learn. People that WANT to succeed while looking out for the customer/client’s best interests.

You’re able to provide complete, total solutions when customers or clients come in asking for a specific piece of the solution, perhaps thinking “that’s all I need to fix ______” More often than not, even the most informed customer/client doesn’t know what they don’t know. It’s the salesperson’s job to remedy this lack of information, even if it means the customer doesn’t purchase from your company.

If you’re honest and compelled to provide ‘all the right stuff’ to your customers so that they don’t find themselves out on projects missing parts, extra batteries, all the accessories to make the project, activity, endeavor purr, swing, hum, or fly right, that will not only make them happy, but let them know you care for them, their project, and want to be their total solutions provider.

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INCREASING CUSTOMER TRUST/REDUCING CUSTOMER RISK

Every time a customer comes to you, they’re taking a risk.

Making a purchase is taking a risk. How big the risk is determined by price, but more importantly the value of the purchase should outshine the cost, and our salesteam is the vehicle through which that happens. Take in point, a recent customer I’d talked down after a terrible experience with a retailer. She walked into a retailer asking for a “complete system, ready to use, out of the box. She bought a camera system, expecting to shoot near professional-grade images of her family over the weekend. The “complete system was quite expensive, and she was thrilled to have a system ready to roll when she unboxed it all. The customer paid a high price, but didn’t care much about the price; the focus was on what the purchase was going to allow her to do.

Unfortunately, the retailer failed to provide her with the key to the product she purchased; she needed a memory card for her several thousands of dollar camera purchase! Imagine buying a car, and not receiving the keys, and the dealership is closed. Not a good situation.

The retailer failed to meet her particular need, reducing the value of the purchase. Because of a missing 35.00 memory card, her perceived value wasn’t there, and she wanted to return the product. Had the retailer provided the card as part of her “total solution,” price never would have mattered. She bought from from the retailer because she valued their expertise, trustworthiness, and history. For the want of a $35.00 memory card (less than 2% of her overall purchase, the customer was lost.

Rarely do customers think about the overall price more than they think of the value of whatever they’re purchasing. This is easily set aside by suggesting “We’ve got quite a pile of gear here. Thankfully the cost you spent will be forgotten when you’re out making great images with it. Great photography is all about the image, and (list a few items here) the tripod, monitor, wireless system, lights…all of these things together…you’ll be glad you have them with you instead of wishing you did when that great shot is right in front of you.”

“The bitterness of poor quality remains long after the sweetness of low price is forgotten”

Truly, consumers around the world put perceived value over price, as price is quickly forgotten while the value lives on. Ask yourself how often you think about the price you paid for a favorite thing in your life such as a motorcycle, piece of jewelry, a warm coat, or other favored product/item?

I’ll bet it’s not very often, if at all.

If price over value mattered, how many of us are driving used Yugo’s, watching television on an old 8″ black and white television, using flip phones, or searching Craigslist for an old DV camera?

Likely, none of us.

Few of us make our purchasing decisions based on price so why expect that our customers do?

So how do we go about reducing the perceived “risk?”

1. Build solid, deep relationships with the customer. Relationships mitigate risk. The greater the relationship, the lower the perceived risk. That’s why the salesman with the longer relationship almost always has the benefit of the doubt in a competitive situation. Its not the price – its the risk. Ask any B2B salesperson why they are successful; they’ll likely tell you it’s because the client knows them, trusts them, and knows they’ll take care of them. It’s entirely about building that relationship.

2. Use of third party recommendations, other customer purchases, case studies and testimonials.
All of these say to the customer that someone else, or lots of “someone elses,” have used the product. That means its less risk for your customer to purchase.

3. Try to get our customer as physically involved with the product as possible. For example, if you’re selling a piece of equipment, try to get the customer to trial the equipment, or at least visit somewhere its being used. The more your customer can see and feel the actual thing, the less risk  to them. Remember our “try before you buy” policy.

If you’re not selling extended service plans, for example, it may well be that you’re making decisions about the customer’s perception of risk.  Remove that preconception from your mind, recognize the customer’s risk is truly elevated WITHOUT the service plan.  Imagine that customer coming back in two weeks, angry because their tripod fell over and they now have a useless piece of gear, simply because we failed to reduce their risk by providing them a Service Plan/secondary warranty? Certainly, you don’t want to be “that person” that didn’t consider the best complete solution for the customer, and provide (or attempt to provide) every component to assure their success!

Reduce the risk of purchase by putting yourself in the customer’s shoes. “What would I want if I were out on this adventure, starting from scratch?” Providing the customer with everything they need, giving them security in their purchase, feeling great about their relationship with you; you’ll have life-time, loyal, and happy customers/clients.

STACKING THE PIPELINE!

Too often, we find ourselves managing our sales, vs making sales.

A significant part of a salesperson’s role is to seek out new customers, bring them in to our world, and help identify, suggest, and service a customer or client’s need. A good sales person is able to provide a complete solution.

Part of this is doing our due diligence for customers/clients, and finding the specific tools they’ll need in order to be successful with the products we provide for them.

As we seek these solutions, we’re constantly quoting, building opportunities for future sales. It’s a great opportunity to practice trial closes. Rather than actually asking the customer to buy, ask “May I get you a quote on that?” 

These quotes become liquid in the pipeline. Whether they come to fruition or not is dependent on how you manage your quotes and orders, communicating and asking questions at regular intervals with your customers.

At the end of the day, the standard rule of thumb is that for every four quotes written, one sale completes. So if the goal is to generate $100K in sales, we need to quote $400K to assure we reach our goal.

What if customers aren’t coming to you?

Then you go to the customer. Find them in your CRM system, lead systems, Facebook, LinkedIn. Find them at Meetups,  hobby gatherings…seek out new life, and new customer-nations…

There never has been an easier time to find and fill the pipeline, but it does still require work.

Fill your pipeline by quoting often (you’ll need to close to do this). Build your business for your next week, next month, next year by
You’ll be pleasantly surprised at the results of a filled pipeline.

*header image from adara-associates.co.uk

EFFECTIVE, WIN-ORIENTED CUSTOMER CONTACTS

If you’re at all a professional sales person, retail or otherwise, you know and capitalize on the value of creating customer relationships.

Each day we need to reach out to some segment of our customers, and we can be more effective if we undertake a few steps to best reach our customer with language and approach that will compel them to communicate or engage with us.

We:

  • Prep our e-mail
  • Determine a subject line
  • Our Opening line (very important)
  • Body copy (The main message, somewhat important)
  • Signature

Before you start writing, take a few minutes to PREP your email(s) with relevant information.  A Google search might help you know more what your customer is interested in. Maybe you’ll find them on Facebook, LinkedIn,or other social engagement site. Perhaps you’ll learn where they work, or exactly what they are interested in from photos or videos posted on the web.  However, you’re not done just yet!

WHAT’S OUR REASON TO REACH OUT TO THEM?

A “trigger event” such as a “thank you for purchasing” is a good reason.
Software update for their product is a good reason (for example, GoPro just released a firmware update for their camera). Perhaps there is a new widget for their new motorcycle, or a rebate on a recent purchase.
Asking them how they’re enjoying their XXX product is a good reason.
Telling them about a special event or opportunity at your location is a good reason.
There are many great reasons to be reaching out to customers

If you have any questions about photography or video please call me” isn’t a good reason. The above sentence doesn’t engage, and it puts responsibility for contact on the customer’s shoulders.

Now assemble/create your subject line.
“ideas for [what’s important to them]”
“update available for [what’s important to them]”
“New XYZ available to fit your [product they bought]”
“Saying ‘Thank you’
Question about [what they bought]
Thoughts about [what they’re doing in their craft]

…are all good examples of subject lines. Emails with attractive, interesting subject lines are 70% more likely to be opened (according to SalesForce data).

AVOID THESE WORDS IN YOUR SUBJECT LINE:
Final             Reminder               Sale
Tempting      Specials                 Complimentary
Help              Donation                Don’t
Exciting         Unique                   Discount
Solution         Partner                  State of the Art

Start off by saying something about THEM, not yourself, and not your company. Make it personal.

Michael, I noticed you[………]
Kristin, [mutual connection….] mentioned
Brian, Congratulations on your new […….]
Dr. Smith, Congrats on the recent […..]

THE BODY COPY

Should relay your value by connecting you to your customer.

“How would you like to improve….”
“Do you have any unanswered questions about….”
“Would a _____ make your ______ more efficient?”

(Remember, we know what the customer has asked us to quote or what they’ve purchased. Use this knowledge to fill in the blanks above)

We are LOOKING for a place to ask the customer a question in the email.
QUESTIONS are engaging. We want to ENGAGE the customer in conversation.

SIGNATURE

Keep it short.
Use a company graphic in your signature. Not only does this remind them of where you can be found, it also speaks to branding.
Make sure your phone number and email are included. True, they have your email that they can respond to, but by seeing it in the body of your signature provides an instant reference to who you are.

BAM! YOU’RE DONE!
To sum up;

  • Personalized Subject line
  • First name or professional title
  • Opening line about THEM
  • Questions that aligns with their desires or recent purchase
  • Simple signature

MANAGING THE “ITCH” CYCLE

MANAGING THE “ITCH

There is a study of habit known as the “Itch Cycle.” The Itch Cycle varies from topic to topic, and person to person. For example, once upon a time, comedians referred frequently to the “Seven-Year Itch.” Men were known for getting bored with what they have, and looking around. MGM had a famous movie starring Marilyn Monroe of the same title.

The Sales Cycle has an “itch” too. In the past, the cycle for small consumer goods was 18 months. Today, that itch cycle is much shorter due in great part, to the immediacy of the internet and mobile devices.

Customers are better informed than ever, and decisions to purchase (once the itch cycle begins) was once 10 days (small consumer goods). Today, that cycle is five days, or half of what it was 15 years ago.

This means we need to be in contact with our customers sooner, and more frequently if we want to be the  solution to their “itch.” During your one-on-ones, ask your manager to share with you the frequency of converted quotes, and the vast majority of them happen inside the seven-day window.

We are moving from the age of the seller to the age of the customer. Our customers are better informed, more aware, and able to engage with solutions providers at any number of portals that didn’t exist 10 years ago.  Customers have more alternatives for which to scratch their itch.  If you ignore this fact, you may rapidly become noise vs signal in their world

BUILDING THE ITCH

Through our Customer Contacts and followups, we generate an itch. By reminding customers we’re here and that we’re looking out for their best interests, they’ll think of us first. You can bet that the competition isn’t sending them followup emails every couple of months. If by some strange coincidence they are, it’s unlikely that the competition knows as much about the customer as we do, because we’re not only qualifying our customers, we’re always doing an informal Needs Analysis by knowing what they do with their gear, knowing what would best compliment their equipment and workflow, and keeping an eye out for their best interests, right? If you’re not doing these things, you should be. That’s what a professional facilitator/sales person does.  It’s a big component of building trust.

MANAGING THE ITCH

Once we generate a quote, we need to keep ourselves in the customer’s mind. We do this through phone calls and emails. We need to ‘scratch their itch’ every 72-96 hours. Therefore, if we generate a quote on a Monday, we need to be in touch with that customer by Thursday afternoon at latest.

Therefore, if we generate a quote on a Monday, we need to be in touch with that customer by Thursday afternoon at latest.

In your CRM software, set a reminder/followup to contact your customer within that four day window, and watch your sales grow.

Scratching itches brings relief, and relief puts money in YOUR pocket as a solutions facilitator for your customer’s needs.

 

The Trivia of “Sell”

SELL:

“to provide or transfer a product or service to someone in return for money”

– to some people the concept of selling suggests undue influence or persuasion of another person to buy with an imbalanced focus on the seller profiting from the sale. Vistek Sales Staff

Early origins of the word tell us that selling should aim to benefit the buyer more than the seller. This strong focus on achieving a positive outcome for the buyer features firmly in good modern selling methodologies, where empathy, integrity, trust, and sustainability are central to the sales process.

TO “GIVE”

The word “sell” is a very old word with even older origins. Before 1200 the word was “sellen,” evolved from “sellan,” which appears in the old English epic poem “Beowulf,” first seen 725 AD. At this time the word “sellan” carried the wider meaning of “giving,” and exchanging for money (i.e., selling). We see this broader meaning in cognates (words with the same root) of the word “sell” as they developed in other languages. In ancient Dutch the word “sella” meant “to give.”

In Old Saxon the word “sellian” meant “to give.” The Old Norse word “salja” meant to “give up” (something to another person). The old Gothic word “saljan” meant to offer a sacrifice. Related to these meanings, the Old Slavic word “sulu” was a word for a messenger, and the Latin suffix “selere” indicates the concept of taking counsel or advice.

This is often what customers and clients buy; our counsel or advice.

The original derivation seems to trace back to ancient Indo-European language, in which “sel” and “sol” meant “to take.” It is only in relatively recent times that selling has focused on the seller’s advantage and profit and not on fulfilling customer wants, needs, and desires.

When sellers fail to focus on the customer’s benefits, the concept is not operating at its best and short-changes our profession.

Selling is truly sustainable – as a profession, a career, and a business activity – when it focuses primarily on the customer benefiting from the relationship. A true salesperson is one that enables, facilitates, or directs their client or counterpart on a mutually beneficial path.  This is truly a professional aspiration that merits pride.

WHAT CLIENTS BUY (hint; it ain’t what you think)

There is a very old saying; “Sell the sizzle, not the steak.”

Clients and customers truly don’t want your product.

Seriously.

Our customers buy what our products DO for them, or what our products allow them to do.

They want more profit, experiences, ego-boosts, greater productivity, or memories.

It’s likely you have had some sales-training by now, and understand that people don’t buy what we manufacture, develop, or concept. They buy what our products allow them to do/experience.

As a reminding example; people generally don’t buy cars; they buy the self-reliant ability to get from Point A to Point B.  People don’t buy skiis; they buy the thrill of rushing down a mountain grade, or perhaps they buy a social experience with other friends that own skiis. What they DON’T buy is the physical object/device itself.

Selling “facts” or “features” is meaningless. Overall, selling on “facts” is counter-productive and may be construed as arrogance.

Selling “fuel-injected, or Quad-core processor, or 4K display” means very little unless these facts are tied to the benefits of what the fact/feature provides.

  • Fuel-injected allows for better performance both in terms of fuel consumption and greater power from the vehicle engine. “Would more power and greater fuel-efficiency be something that interests you?
  • The benefit of a Quad-core processor means not only faster computing, but also greater ability to have multiple applications open without bogging down the system. In turn, this results in greater productivity. “How do you suppose a faster processor might benefit your workflow?
  • A 4K display means the user experiences a better image, sharper in low light, smoother color transitions/contrasts, and less eyestrain/fatigue. “Do you think you’d enjoy not having a headache at the end of a long day in front of a computer screen?

Business clients don’t purchase software because it’s written in SQL, Java, whatever. They don’t buy that it’s got 512 bit encryption. They don’t buy module-ized systems. Business customers don’t even buy 24/7 tech support. But they do buy products that allow them to use software on whatever OS platform they have, they do buy secure information, and they do buy a product that can grow as their business grows. They buy peace of mind, knowing that their data systems will always be up and running 24/7, thanks to your company and the assurances your support team offers.

Either way,clients generally don’t care much about specifications; they care about what specifications/facts/features DO for them. If you know WHY they’re buying, it’s easier to direct the conversation of benefits to fit their particular dominant buying motive.

Each time you present a fact, tie it to a benefit.

Try to target the benefit to their dominant buying motive.

“This camera has a full-frame sensor which allows you to shoot better pictures in low light.  Would better images in low light be something you’d appreciate from your camera?

The SalesBurger is a device that helps me remember to sell the sizzle, not the steak. The “meat” of a salesburger is the primary part of a hamburger that people purchase; the meat is the “benefit.” The meat is the tastiest part of the burger, right? When presenting, try to invoke the Lettuce of Enthusiasm, and go easy on the Mustard of Intimidation.

  • FACT-Describe the fact/feature/spec of the product.
  • BENEFIT-Describe what it DOES for the customer.
  • EVIDENCE-Demonstrate the benefit (when possible).
  • NAIL DOWN-Restate the benefit in the form of a question. “Would this be important/valuable/useful to you?” (A nail-down is merely another form of a trial close)

Try using the “salesburger method” when presenting a product. Tie benefits to facts/features. You’ll increase sales as a result!

SalesBurger-LG

salesburger ©1981 dse