by Art Waskey | Aug 10, 2020 | Art of Sales Weekly
I was recently asked to join a rep in a meeting to advise on price with a customer to close a very large sale, potentially our largest of the year. The vendor we were representing also participated in the meeting.
The company president reviewed our proposal with her accountant then left the room to write a check for the 20% order deposit we had discussed. When she returned, we noticed that the total was 2% less than our agreed upon price. How do you handle a situation like this?
First, you need to be aware of the account’s background. This case involved a dominant, aggressive owner who was ready to buy several months earlier but let us know she needed our “best price.” She even shared a competitor’s quote with us. We spent a great deal of time in final negotiations and were able to get our vendor to drop his price to a cost-plus, and we, as his distributor, reduced our margin to the bare minimum.
After so much careful analysis, how do you react to an order that does not meet your stated price? If we, as the distributor, were to accept the lower-priced order, our vendor will expect us to absorb the difference. If we were to hold a strong position and decline the order on the table, we could potentially alienate the customer and lose the deal completely.
With too many people in the room for an open discussion of the order’s history, I decided to decline the check for the time being and say that we would get back to her on this proposal.
Here are some suggestions for dealing with your “Give Me Your Best Price” customer:
- Be sure you know your customer personally and have an established sense of trust.
- Be sure you can prove the value of your product to solve their problem.
- Try to establish an agreement beforehand that obligates the customer to buy if you show them the solution to their problem.
When the subject of price rears its ugly head, go back and review these parts of the sales cycle before answering the price issue. If you hit a snag like the one above, you likely will need to work further on the proposal and the relationship. Remember, people spend more money with people they know and trust.
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by Art Waskey | Aug 3, 2020 | Art of Sales Weekly
I was concerned that my salesperson wasn’t fully committed to building relationships of trust with his customers before trying to sell them our products. To illustrate the importance of getting to know someone before taking any major sales actions, I shared this story with him.
What is really happening?
A man boarded a plane juggling his three young children. The kids were seated together and he watched over them from the window seat in the following row. A woman about his age was in the middle seat next to him. As the flight progressed, the children became restless and began to bicker, but the father seemed oblivious to the situation. Frustrated by the disruption, the woman complained to the father, “Can’t you control your children? Their behavior is really bothering me and other passengers.” The man snapped to attention. When he spoke to his children, they immediately quieted down. The lady, sensing that perhaps she had overreacted, apologized and asked if the father was okay. He responded that they were flying to his in-law’s home for a visit. He had just buried his wife after her extended fight with breast cancer. The lady, who had recently lost her mate, was moved. When they arrived at their destination, she helped the gentleman get the children organized and off the plane. That kind step and chance encounter eventually led to a happy marriage between the two strangers.
Relationship First
When the sales rep heard this story, he understood. You never really know what the customer might be going through when you call on him. Take the time to ask questions and learn about your customer before giving your sales pitch. An unexpected answer just might lead to a successful long-term business relationship.
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by Art Waskey | Jul 27, 2020 | Art of Sales Weekly
Presenting your solution to a customer’s problem before securing their commitment can have negative consequences. Be sure you don’t become the “unpaid consultant” by spilling the beans too soon.
What do you need to look for in a commitment? You want to establish a secured, up-front agreement with your prospect, one that represents a lasting contract with a set of rules that governs your interaction with him. This agreement should be clear, concise, understandable, and contain the following:
4 Essentials to an Agreement
- Mutual consent between two parties in the form of a verbal or written proposal that is acceptable to both parties.
- A valid consideration or a savings in the form of time, money, safety, etc.
- At least, two competent, agreeing parties.
- And, of course, a viable product or service to sell.
Clients do not generally express their concerns until you have gained their trust. Make certain that all of your prospect’s issues have been voiced and alleviated. If you try to engage without getting to know your prospect and his background, the probability of a mutual agreement is greatly diminished.
For the commitment to be effective you must develop a durable understanding. Don’t rush. State your request, review it, repeat it, and gently remind your customer at the conclusion of your presentation what they have agreed to do.
In order to be confident that your product or service will be agreed upon, before you begin your pitch, ask,
“If I can prove that my idea will save you [time, and/or money], will you buy it from me?”
Be Able to Pause or Regroup for the Commitment
Don’t move forward until the party agrees. If you don’t have agreement, be willing to either start the process over, or end the meeting.
You do not want to end up presenting a solution that becomes a selling tool for your competitor. When you have a valuable idea to sell, guard it by securing a prior agreement. Learn the skill of making a lasting, binding, and successful commitment.
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by Art Waskey | Jul 20, 2020 | Art of Sales Weekly
Are you often excited to make a sales call because you know you have a product or service that your prospective customer desperately needs? You’ve researched how the company is currently performing with their process or service, and you are confident that your idea is going to save them money — big time. You can’t wait to get that new account. Your competitor is dead meat and you know it!
One Caution- Slow Down
Experience has taught me to provide this caution — slow down. I repeat, slow the sales cycle down. Have you ever rushed in and showed a prospect how to improve the process or service only to return to find that the company has embraced your idea but your competitor has delivered the goods? It is all too easy to lose an order if you don’t have a clear, concise, and understandable agreement in place.
I was asked recently to make a call with a rep. Our sales analysis was complete and our offer represented a savings to the customer of 30 percent. We were confident of our position. My skilled rep had established a good relationship with the general manager of the company. He knew the GM’s background, the company’s product line, and the customer’s pain points, and he had developed a first-class resolution to a major problem.
To our surprise, our meeting included more than the general manager. The plant superintendent and the controller joined our group and the buying decision was to be a joint one. As we walked into the conference room, I was desperately asking myself, “Now how in the world are we going to get a commitment from three people, without giving away our competitive advantage?”
So I asked, “If we can prove that our system will save you 30 percent, will you buy it from us?” As expected, I got three different responses: yes, maybe, and not necessarily. So, I backed away from my opened laptop, slowed my pace way down, and after a long pause, reversed the situation with, “Then I guess you don’t know and trust us well enough to hear my presentation.”
1 step back, find agreement, then 2 forward
I spent the next half-hour directing my attention to the two non-affirmative respondents and asking them probing questions. To my delight, they shared their reservations with me. Not surprisingly, their concerns had nothing to do with agreeing to move forward, but everything to do with the problems with their existing system and our competitor’s failure to resolve them.
Be ready to change your pace and slow the sales cycle down if necessary to meet shifting circumstances. Remember, without a firm, up-front agreement, you may be giving away your solution!
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by Art Waskey | Jul 13, 2020 | Art of Sales Weekly, Featured
We all know the value of a good contract, one that holds a customer to a solid, long-term business commitment. Getting a contract signed is therefore an important part of sales rep’s job.
Five Tips that Work!
- For a new customer, agree to hold prices firm for a year if he or she will sign a five-year contract.
- For an existing customer whose contract is about to be renewed, offer this option: an increase in price each year with no contract, or, a firm price each year with a five-year contract.
- For a long-time and valued customer, offer a price rollback for signing a multi-year contract.
- Highly sophisticated accounts often prefer to operate with contracts. You might suggest to the decision-maker you are working with that top management would be impressed by his forethought in getting contracts implemented.iH
- In accounts where you have excellent relationships in place, you might suggest that a contract would protect both companies if either experienced an internal change.
Best Practices to Remember (when negotiating)
- On a sales call, when confronted with a client who is locked into a deal with another company, always ask when their contract is due for renewal. Return two months before that date to remind the customer that the contract is due and ask if you can submit pricing. This demonstrates your determination to service that customer and tends to impress most decision-makers.
- Always ask to see competitive contracts. Customers often will let you review their contracts and give them your advice. Be aware, most contracts have an “evergreen clause,” meaning cancellation notification must be given by a set time prior to the anniversary or the contract automatically renews for another term.
- I also find it is good practice to give your customer an opportunity to renegotiate if they feel an existing contract with your company is one-sided. Remember, “You can get to the top by getting to the bottom of things.” Find out what the issues are and address them. A contract review generally yields greater customer satisfaction and sets you up for more opportunities going forward.
- Finally, always start the day by thinking about getting a contract signed. That way you will not return at day’s end empty handed!
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by Art Waskey | Jul 7, 2020 | Art of Sales Weekly
I remember when your word was your bond and was all that was needed to form an agreement. In the last 20 years, however, verbal contracts have all but disappeared within our litigious society and written contracts are the order of the day. Like all contracts, written or verbal, how well they work is up to you.
Everyone seems to have a story about a contract gone awry. My company faced a contract dispute when a customer made a management change and the new person in charge started buying from our competitor. To address the situation we took a copy of our contract to the new manager and asked him to reconsider his position. He would not and a letter from our attorney was sent to him. When the two lawyers (ours and theirs) got things straightened out, we had the business back. Three years later, we still serve that customer, the man who violated the original contract is gone, and a new agreement has been signed by his successor.
Here are 5 good reasons for writing contracts.
- As illustrated in the example above, a contract protects your business when companies make internal personnel changes. It also gives you time to build a relationship with new decision-makers.
- Contracts tend to keep competitors’ sales reps away. The words, “I have a contract,” have legal bearing and discourage the competition from repeat sales calls.
- Contracts protect you from the national account deals struck by “top management in faraway places,” people who may not understand the meaning or value of the service you provide locally.
- Contracts give you an anniversary date for a price increase reminder.
- Contracts give you a time advantage as you know when the contract is due for renewal and, in most cases, your competitor does not.
The use of effective contracting will let you sleep better at night knowing that when changes occur within your best accounts, you will not be left out in the cold. Today’s contracts guarantee a secure tomorrow, so be sure to take the time to strategize on how best to get and keep those documents in place.
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