A new sales coaching student of mine asked an interesting question during our first session. “Steve, would you have difficulty selling a $5 bill for $4?” Without hesitation I replied, “No, however I'm sure to encounter several obstacles. With the proper preparation, when given the opportunity, I'm certain to succeed.” The student looked at me quizzically, almost as if she were preparing to snatch the pebble from my palm. She was never expecting that answer.
I need to share a conversation I have with sales people, regardless of their product or service. Most sales people I've trained, coached or hired, at some point, became concerned with pricing. Pricing usually wasn't of concern during our initial discussion; it was more about compensation, territory and titles (most sales people want to have a prestigious title to make them feel more valued, like “account executive” as opposed to “schlepper”).
It was only after actual field experience selling the product or service that pricing was discussed. As a rule, sales people always want to have the lowest pricing in their marketplace. That's when I would share another of my 8,412 philosophical thoughts; anyone can sell $5 bills for $4, and when they did, we would pay them little, if any, commission. Sell $5 bills for $8 and you're on the fast track to financial success.
In all my seminars and teachings I emphasize that success is more likely to occur when preparation meets opportunity. So, if given the opportunity to sell $5 bills I must first consider what, if any, objections I might encounter. If prepared to address these objections with clear, logical and coherent remarks I can easily overcome them and close my offer.
The most obvious objection would be, “What's wrong with this scenario?” Realistically, why would anyone sell anything for less than its real or perceived value? Usually, if it's too good to be true, it is! There could be numerous reasons to offer this, or any, price advantage. To do so without an explanation will always make your prospect skeptical.
Verbalizing your sales objective ensures credibility, but regardless of price, your prospect must benefit from the transaction. Selling price is only effective if it's accompanied with a logical and realistic explanation for any reduction or discount. If your main selling point is price you're not ensuring longevity in sales. Pricing plays a significant role in the sales process albeit not the primary role. It's difficult to always have the best pricing but successful client relationships will endure most pricing changes.
The take away from this situation contains several points. Pricing will usually require an in-depth discussion, so be prepared when given the opportunity to discuss it. Second, sales people should contribute to the profitability of the product or service they represent. Lastly, those individuals, or teams, responsible for the selling function need to find methods and techniques, other than pricing, to close sales. Pricing, at times, could be the determining factor in some closing opportunities; however, longevity in sales is based on relationships and not dollars.
Most people can sell $5 bills for $4 but when they do, we don't need to compensate them for the privilege. Sell $5 bills for $8 and you'll be a valuable asset to any organization or successful enterprise.
