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Selling a Price Increase in a Soft Market14

The Pipeline Guest Post – Mark Hunter

Continuing our Guest Post series this week with Mark Hunter, who specifically want to thank for getting me to think about creating this series of posts by other leading thinkers on sales.

Enjoy,
TS

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.  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.

About Mark Hunter

Mark Hunter, The Sales Hunter works with salespeople and companies helping them maximize their profit by maximizing their price.  www.TheSalesHunter.com

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ZONE Based Selling11

In the last instalment of Renbor TV (RTV), I looked at the importance of having a sales process and the difference it can make between good, great and winners.  But having a sales process is just the start, you then need to define the stages of the process, or what we at Renbor call ZONES.  The specifics of the stages will differ from company to company when it comes to details, but the general ZONES you have to move through are consistent.  Again, length, velocity, number of steps and other factors will vary.

Each ZONE of the process needs to be clearly defined including objectives, tasks and activities one needs to complete before you complete one ZONE and move to the next, this included tools, resources and other team members as required.  Before moving to the next ZONE you will not only need to have a real next step, but make an objective go/no go decision based on how well and completely you execute the ZONE.

By ensuring that each ZONE if fully completed, without shortcuts or rushing, you will build a solid foundation for each sale, and not have to backtrack and lose time and momentum.  Understanding ZONES will not magically make the sale easier, but it will allow you to execute yours with confidence, structure and a complete focus on the buyer and their requirements to succeed.

httpvh://www.youtube.com/watch?v=ntB-3BmPPEQ

What’s in Your Pipeline?
Tibor Shanto

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Plus/Minus – Sales eXchange – 8019

One of the many statistic that hockey types track (hey I am Canadian,) is a player’s Plus/Minus.  Simply speaking, when an even-strength or shorthanded goal is scored, every player on the ice for the team scoring the goal is credited with a “plus.” Every player on the ice for the team scored against gets a “minus.”   Over the course of a season or subsets of it, a player’s number is arrived at by subtracting the Minuses from the Pluses.  A player with an overall Plus, is considered to be among other things a positive contributor, and those with an overall Minus, well not that great.  Not a perfect measure, but an interesting one sales people should consider using.

As sales professionals, everything we do should positively contribute to attaining revenue, and therefore a Plus.  Things we do that do not directly or indirectly result in revenue generation, a Minus.  While the measure in sales is considerably more open to subjectivity than in hockey, it is still worth considering how our actions either contribute to, or detract from success.  Are we contributing positively, or just wasting of time without much positive impact.  It is always good to remember that time is the great equalizer, we all start out with 1440 minutes each and every single day, the question always becomes how well we utilize those precious minutes. 

Since we are at the start of the “season” (at least most with companies with calendar fiscals), it is a good time to give this measure some attention, especially since the ultimate goal is to be in the positive.  Once you conquer and manage that on a consistent basis, you have the opportunity to strive for continuous improvement, a continuingly higher Plus score.

To begin the process you need three simple things, a sheet of paper, a pencil, and some brutal honesty.  Why the brutal honesty? because you will have to determine if the action you have just taken, contributes to revenue generation, or not.  Just to help you out a bit, watching one of the SellBetter videos on You Tube, is a Plus, watching “GASSY PETS!”, a Minus. 

I am not suggesting that it should be nose to the grindstone all day long, not only would that hurt, but it is not the intent or a means of achieving a Plus score.  The beauty of +/-, is that it looks at the overall picture, not the blow-by-blow.  I remember reading somewhere that sales people are only productive 23% of their working time, which seemed low, later I found out that things like driving to the prospects office were excluded from productive time.  On the other hand, there a whole bunch of things we do that measurably cut into our prime time, and reduce our sales effectiveness.

So get your pencil and paper, and for the next week or two, track your activities and then mark each one as either a Plus, contributed to real revenue generation; or Minus, no did not contribute to revenue generation, or in fact may have impeded it.  The goal here is to achieve an overall Plus score, not to make you a dull sales robot (there are enough of those already), with every activity scoring a Plus.  Yes, it is OK to occasionally buy tickets online from the office for the “Big Show”; but you need to be cognisant of the fact that it needs to be balanced and out done by more Plus activities.

The measure is simple and certainly not foolproof, but as in hockey, it is one of a number of metrics that help you understand where you are, and steps you can take to improve.  As in hockey you also don’t have to go it alone to create the necessary change, you can include your coach or peers in helping you stay on track and be accountable for you actions and outcomes.

What’s in Your Pipeline?
Tibor Shanto
  

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A Little Bit of Combativeness19

The Pipeline Guest Post – S. Anthony Iannarino

Last week I started a new feature of weekly guest posts, with some great insights about the state of B2B sales in 2011. 

Today we have our first blogger, S. Anthony Iannarino, a fellow member of the Sales Bloggers Union, and winner of the 2010 Sales Blog in the annual Top Sales World Sales Awards.

First, I am honored that Mr. Shanto offered me the honor of being the first of his 52 guest posts in 2011. We are of the same opinion on a good many things. Because that is so, I couldn’t help but pull this idea off the editorial calendar for this post (especially since the two of us have collectively taken some heat for using terms like blood sport (mine) and predatory (his) when we talk about sales).

A Little Bit of Fight In ‘Em!

Two real gentlemen in this game, Kelley Robertson (http://www.fearless-selling.ca/blog/can-nice-guys-transform-into-hunters/) and Mike Weinberg, wrote last week on whether or not a nice guy can win in sales as a hunter (Mike’s thoughts are in the comments). I am weighing in for the sales-is-a-zero-sum-game side of this argument.

You can be a nice guy and still be a hunter. But you have to be a nice guy (or a nice lady) with a little bit of fight in you. You have to have enough combativeness in you to want to compete and to win. You cannot easily accept no for an answer when you are pursuing your dream client in a crowded marketplace where others are going to fight like Hell to win the same opportunities.

This starts with prospecting. You can be a nice person and take the first “no” your dream client gives you as their answer, picking up the phone and making another call only to repeat the cycle. You can also be a nice person with a little bit of combativeness in you, a little bit of fight, and you can compelling make your case as to why you deserve an opportunity to help them and how you will make the time you are asking meaningful for them.

If you aren’t going to argue the case for you, you cannot expect your dream client or anyone else to believe that you are passionate about what you do and how much you will fight to help them. This doesn’t mean that you aren’t nice. It doesn’t mean you aren’t professional or polite. It does mean you are a little scrappy.

All through the sales cycle you encounter obstacles that must be overcome in order to advance the opportunity. You have to have the courage to ask for what you need to win—even when your dream client may not want to give you what you need. Can you be nice and continue to ask? You sure can.

You can also be nice and not ask for what you need to win, instead accepting the loss. 

Conflicted by Conflict

Can you be effective while being completely averse to conflict? The answer, I am afraid, is no, you can’t (at least as it pertains to complex B2B sales or managment). The change initiatives that your client needs and that you sell require that you have the courage to have the difficult conversations. You have to be willing to deal with some conflict. But that doesn’t mean you aren’t nice; it means you aren’t afraid of getting a little dirty dealing with the big issues that your client expects you to deal with on their behalf.

Conflict and confrontation are very different ideas. Aggressive and assertive are very different ideas. Arguing your case and being argumentative are very different concepts with remarkably different outcomes. Combative is a bit hyperbolic, but I use that word because I don’t have a better word for someone with a little fight in them, someone willing to make a strong case on their own behalf.

When it’s all said and done, sales is still a zero sum game. Somebody wins the opportunity, and someone loses the opportunity. Usually the salesperson that is willing to fight for the opportunity until the bitter end wins. That salesperson is also almost always a nice guy . . . with a little bit of fight in ‘em.

About S. Anthony Iannarino

Anthony Iannarino, President and Chief Sales Officer for SOLUTIONS Staffing, a best-in-class staffing firm; and the Director of B2B Sales Coach & Consultancy.  You can follow him on Twitter, connect to me on LinkedIn, or friend me on Facebook.  He can also be reached at (614) 212-4729.



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Masterclass ReDo: 1:00 PM Eastern Saturday January 159

Execution – The Last Word In Sales

Back in December the gremlins of technology conspired against us and we had to postpone this Masterclass.  Well we are not about to be scared off or give up, so we are presenting it again this coming Saturday, January 15 at 1:00 pm Eastern. 

Think about it, Saturday, you can kick back, relax, nestle that iPad on your lap and tune into something entertaining that will also make you money in the process.  No boss, no cliennt calls, just you, me and the kids.

Join me Saturdayat 1:00 pm Eastern for this unique look at sales.

There are many great sales methodologies out there, SPIN, Miller Heiman, EDGE framework and others. No matter which dogma you choose to bite on, they all have one common weakness, as good as they look on the page, and they all need to be executed to matter.
 
The fact is that they usually fail for one simple reason, lack of execution. The sad truth is that sales people know what they have to do, they just don’t do it. You can train them, but can’t make them do it.  It’s the age old difference between the “doer and the thinker”, in sales, doers executes and win. 
 
This Masterclass will look at four key components of Execution.  Regardless of what approach you currently use, these four elements will help you move from Should to Do.
 
Are you looking for that silver bullet in sales? There are many great plans gathering dust on shelves, but the winning plans are the ones actually executed, everything else is just talk.  That is why Execution is – The Last Word In Sales.

What’s in Your Pipeline?
Tibor Shanto

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Price – What’s in a Number?8

Price will always be a key component of any sale, but it does not have to be the only factor in a decision, unless you as a sales person let it. Based on the studies you read, price can be as much as 40% of the final decision; and with certain individuals, it could go higher. However, when you step back and examine things, what is price?

At its most basic, it is the numerical value, nothing more. As with any number, there is no good or bad number, there is only the relative aspect it represents. It brings to mind the old joke explaining the concept of how numbers are relative by pointing out that three hairs on your head are relatively few, but those same three hairs in your soup, well. Just like +1 is not better than -1, they both represent a relative distance from zero; just as when it is zero degrees outside, it does not mean that there is no temperature, it is just a point between -1 and +1, slightly colder if you measure things in Fahrenheit.

Read On…

What’s in Your Pipeline?
Tibor Shanto

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“Did You Just Say…?” #130

 

I spend a lot of time talking to sales types, for the most part a great bunch of folks.  But every once in a while, they say something that causes you to do a double take and wonder (sometimes out loud) “Did you just say…?”  Sometimes these are stupid sayings, sometimes funny or even profound, but they are worth sharing. 

Rather than just letting these slip, or forgetting them, I will start sharing them under the above title.  No long stories, set ups, or morals, just something someone said to me while talking about sales or selling that deserve a shake of the head.  Rather than providing a visual and asking for the caption, I’ll give you the sound bite, you make of it what you like.

Don’t let me have all the fun, if you hear anything worth sharing, send it along, and I’ll post it.  (Remember just the saying, no long stories).

I was talking to a sales rep last week, when he said:

“My closing ratio is well over 100%”

See what I mean, what can you add to that?  You can’t make this up!

Tibor Shanto

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Discounting Discounts – Sales eXchange – 7921

Even as the economy improves, sales people face many challenges and pressure in executing their sales.  One that is present no matter what the economy is doing is pricing pressure, usually in the form of discounting.

Many sales people give in to the pressure just to get the sale, and it is easy to see why, give up a few points and get the deal, or the dark alternative.  The problem is that often those few discounted points could be the difference in the deal being break even, profitable or not.  Depending on the nature of your offering, length of commitment, there are scenarios where if planned, you can recover the amount discounted in subsequent years, but it has to be planned.  Most of the time, it is not planned, reps are put to the wall, rather than going in armed. 

Some reps will raise their initial price, building a buffer to be able to give a “discount”, and still meet their price.  Done right, for example using the WOW method, it can be done. The key to making it work, is knowing how you will change the deal on your side, changing the offering, or taking out components, to accommodate the demands they are making.

For example, there is a definite value to case studies in my business, assuming other aspects of the deal are in place, and someone is looking for a price concession, I may trade for one, if the discount demanded is too large, then not.

Anything shot of the above indicates one of three things:

1. The client can’t afford you – First lesson they teach you in real estate is don’t show a buyer something he can’t afford. The same is true in most sales, not every appointment is worth taking, and not every prospect is worth pursuing.  In most instances, you know it early in the process, but you give into your emotions and keep going.  Look if you need the practice fine, but remember, you’ll never get that time or money left on the table back.
2. Poorly executed sale – Assuming the buyer could afford it, and the value is there, then the only conclusion is that the value was not well communicated, impact and upside not demonstrated.  The why’s and how’s will vary, but the reality is we failed to execute the sale in a way that the buyer was able to grasp the value.
3. A lack of respect on the part of the buyer – This is the one that should upset sales people most, yet they put up with it.  If you conducted the sale properly, not only communicated the value, tying it to client requirements, including budget, then you have to conclude that the buyer has a lack of respect for you. Ask yourself, would they do that to someone they respect?  Would you?  If not then why would you put up with it?

Of course, if you read this blog regularly, you know that one way to avoid being put in the position is to have a robust and viable pipeline of prospects.  If you know you have alternatives you won’t put up with the kind of disrespect mentioned above.  The choice is simple, put a little effort into prospecting, or put up with the disrespect.

There you go, never thought the cure to discounting is prospecting, but it is one.

One final note of interest, I find from firsthand experience that people I cold call, people who are clearly in the Status Quo Zone, are the ones that have been least likely to play the discount game. Why you may ask?  Short answer they got the value, which is why they moved out of the Status Quo with you; long answer, that’s a post to come.

What’s in Your Pipeline?
Tibor Shanto

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Sales Bloggers Union Say Good-Bye To…6

Over at the Sales Bloggers Union, we are off to another great year.  Not only do we have some great topics planned, but we have a host of new bloggers taking on these topics, as well as some of your favourite members of the Union.  The general theme this year is Probing The Provocative.  If you have read the Sales Bloggers Union, you know that you will have twelve or more insightful takes on any given topic, it is a great way to learn, explore alternative views, or just wave your hand in disgust while mumbling “what the hell is he talking about!” 

This month we each of us is saying Good-bye To something is sales that really needs to go, no really it is time be rid of?  well, find out by going to the Sales Bloggers Union.  Alright, I’ll give you a clue, I say Good-bye to the “Hyphenated-Sale”.

What’s in Your Pipeline?
Tibor Shanto

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What’s Ahead in B2B Selling for 2011?28

Today I start an exciting feature here at The Pipeline, a weekly guest post by leading figure in sales, social media, marketing and other areas of revenue enhancement.  These bloggers will be bringing their unique views on all aspects of sales.  I look forward to learning from them and participating in the discussion.  I ask you to jump in, comment, visit their blogs and explore further their views.

We have a very special start to this feature, with Dave Stein, CEO and Founder, ES Research Group, Inc.  Dave looks at sales from a very unique perch, and has great insights on sales, sales trends and sales training.  His piece is a great platform for not only launching this feature, with all the views to follow, but your sales year.  As always, I invite you to contribute to the discussion.

Thanks,
TS

The Pipeline Guest Post – Dave Stein
CEO and Founder, ES Research Group, Inc.
www.ESResearch.com
davesteinsblog.esresearch.com

It’s 2011, and most of the business people I’m regularly in touch with seem to feel the same way: we’re in an economic recovery, but there is no forward progress on the jobs front.  This is across most, but not all industries in which we work. With this anecdotal, but I believe reasonably predictive, data point, I’m relatively bullish on the coming year, at least as far as B2B selling prospects are concerned.

With that in mind, here is what you’ll see:

  • Negotiation Capabilities Will Increase. You’ll see significant new interest and investment in sell-side negotiation capabilities. Industry-leading companies have been doing this for some time. Some companies will opt for the generic Chester Karrass-type of program, which will get them a few steps in the right direction, but the companies that know they are on the wrong side of the negotiation power and capability curve are opting for a more strategic approach. That means building negotiation strategies and tactics right in to their overall selling process.
  • There Will Be Wider Adoption of Technology. Smart companies are making the right investments in technology-enabled learning and selling tools. They know that out-of-the-box CRM doesn’t help salespeople win business.  In fact, sales leaders who believe it does wind up accomplishing little more than automating the chaos that exists within their organizations.  What are available today, but not widely enough deployed, are specialized, front-end applications that sit on top of Salesforce.com and other CRM systems.  These tools, such as those from White Springs and The TAS Group, provide the foundation for embedded learning, coaching, and sales process automation. If implemented the right way this stuff works.  And more companies are finding that out.
  • Social Media Will Take Some Steps Toward Mainstream.  We’re in the midst of a social media hype cycle. Some social media proponents would have you think that every B2B salesperson must be selling through the new media some or all of the time.  It just isn’t so. However, during 2011 many salespeople will, a team at a time, begin to be trained on what is relevant and effective use of social media within their markets and with their customers.  You’ll see increased usage of:  Twitter, Chatter (Salesforce.com) and other micro-blogs; YouTube, Vimeo, SlideShare, blogs, and other thought-leadership publishing tools; and proven Sales 2.0 (non-social media) products from companies like Cloud 9, InsideView, and ZoomInfo.
  • A Surge in Coaching Will Support More Effective Selling.   In the past, coaching was one of the first items stripped from sales training budgets, if it was even included in the first place.  Many sales leaders, who appreciated the value of coaching with respect to the sports teams they root for, didn’t really understand what effective coaching is, and the impact it will have on their team’s performance. Coaching is a skill. It can be learned and measured. Effective coaching supports sales people in the adoption of and compliance with the behavioral change required to follow a (new) sales process. Coming into 2011, sales trainers have a new focus on coaching. More good news is that many sales training buyers are no longer willing to automatically cut coaching from their overall approach to sales effectiveness. So you’ll see a lot more attention to coaching in the form of articles, new service offerings from providers, and, on the buy-side, the willingness to spend money on process, training, and measurement around coaching.
  • You Will Need Very Compelling Answers to “How Are You Different?” Some of our clients are in a constant battle with their customers, struggling not to be commoditized. They fight for decisions to be made on something other than price. As 2011 begins, more than half of many customer buying cycles are complete before a salesperson’s first conversation with that customer, which means there is less time than ever before for the salesperson to make their case. Customers want to know how you’re different and what that means to them in financial and other terms. Clear, concise and compelling answers are what they are seeking.  Anything less will have you reading emails asking for nothing more than your best and final price.

After the last two years, I believe 2011 will be refreshing in that there will be more business.  The proverbial pie, which had shrunk significantly, is growing again. Now we have to focus on earning a bigger piece of that pie. You’ll see sales teams adopting the growth drivers I listed above outperforming their competition.

Dave Stein is CEO and Founder of ES Research Group, Inc. ESR maximizes the value of the relationship between the sales training buyer and the sales training provider through their knowledge base, experience, and guidance in making the right decision.  ESR’s approach to evaluating sales training providers enables corporations to select training partners who will most positively impact their sales performance.

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