Does that mean that you should charge your prospect for a presentation? Yes…and no. While it may not be appropriate to ask your prospect to pay you money for the privilege of viewing your presentation or demonstration, it is appropriate to ask your prospect to pay you with a decision. Depending on the complexity of your selling cycle, the decision may be a buying decision, or it may be a decision to go to the next step in the buying process. Whatever the situation, you need to get “paid.”
However, unless you’ve established an agreement in advance with the prospect, you are not likely to obtain a decision. The prospect will most probably tell you he needs to “think it over,” “give your proposal some serious thought,” “digest the information,” or he will come up with some other reason not to make a commitment—leaving you in the dark about what is going to happen next.
Therefore, when scheduling a presentation, ask your prospect to commit to giving you a decision. It could be “yes” or it could be “no”; it just can’t be a put-off. Give the prospect permission to say “no” if he doesn’t feel that what you present is a best-fit. Most often, when you give the prospect permission to say “no,” the “think-it-overs” and other put-offs disappear.
What Does Abraham Lincoln Know about Closing More Sales?
It’s been reported that Abe once said, “If I had six hours to chop down a tree, I’d spend the first four sharpening the axe.” While closing sales isn’t exactly like chopping down a tree, there are similarities.
To slice through the layers of bark and into the core wood, lumberjacks use an axe—Abe suggests a very sharp axe. To “slice” through suspects and get to real prospects, i.e., separate real selling opportunities from those that only look good on the surface, salespeople also have an axe—qualifying questions.
So, how sharp are your questions? Do they cut through the smokescreens prospects often put up to fend off overzealous salespeople? Do they get to prospects’ core concerns and discover the reasons they would buy from you? Do your questions tiptoe around money issues or do they cut to the heart of the matter and uncover exactly how much prospects are willing and able to invest to obtain your product or service?
Do your questions cut into the process by which prospects will make their buying decision, and more specifically, identify what they will need to see and hear from you to be confident enough to award the business to you?
If your questions aren’t sharp, you’ll spend a lot of time chipping away at opportunities, but have few sales to show for your efforts. Take Abe’s advice and spend some time sharpening your axe. After all, it’s the primary tool of your trade.
Salespeople often become so wrapped up in the activities surrounding the pursuit of a sale that they lose focus of where they’re going. Sometimes they’re not sure why they even started the journey.
Developing selling opportunities is not a haphazard activity. Likewise, the process of deciding which opportunities to develop—and which to avoid—should not be indiscriminate.
Learn to be selective about the opportunities you go after. When judging an opportunity, consider the following:
- Is the opportunity in alignment with the core competencies of your company and/or your area of expertise?
- Will the sale help further company goals—product promotion, territory expansion, profit improvement, market penetration, maximum utilization of resources, etc.?
- Do you have a clear competitive advantage (and can you demonstrate it)?
- Will the pursuit of the opportunity be at the expense of higher priority (or potentially higher payoff) opportunities?
Give the highest priority to opportunities that are in alignment with company goals and where the odds of obtaining the sale are clearly in your favor. Being selective doesn’t limit your opportunities. Instead, it allows you to focus your efforts on those opportunities that will generate the greatest return.
You Make the Call
Situation: You sell various chemical components used in the production of PVC pipe. The buyer for one of your oldest customers, with whom you’ve had an excellent relationship for several years, tells you that he has been approached by one of your competitors who is offering better pricing on a few of the products you supply to them. It’s not much of a price difference, but he wants to know if you’d match the price.
Your company has done, and continues to do a lot for this customer to maintain the relationship and help the customer build their business. Some of the things your company does include: routinely bail the customer out with rush shipments without assessing a “rush” charge; extend quantity pricing on orders that don’t meet quantity discount requirements; and participate in monthly Quality Assurance Reviews with the customer to help identify ways to improve quality and reduce costs. None of your competitors extend the level of service and participation your company provides.
What should you do?
- Give in and match the prices. After all, you don’t want to take the chance of losing a good customer.
- Stand your ground. If you give in on one or two items you’ll only be opening the door to negotiate lower prices on all the items you sell to the customer.
- Remind the buyer about all you do for his company and ask him to reconsider his request.
Action: Before selecting a course of action, it’s important to find why the buyer is now asking for better prices. Undoubtedly, during your long relationship with the customer there have been competitors knocking on their door and offering lower prices in an attempt to “buy” the business. What prompted the buyer to respond now, when price hasn’t been an issue in the past? The answer to that question will likely dictate which strategy is appropriate.
However, if the buyer’s underlying motive is simply “I’ve got nothing to lose by asking,” then the best strategy might be a combination of the actions suggested above. Start by reviewing the things your company does for the customer that are over and above supplying quality products at fair prices and ask the buyer which one he is willing to trade for the price concession he’s requesting. Remind him that you’re already extending some price concessions—quantity pricing on small orders as well as waiving the charge for rush shipments. If he’s not willing to give something up, stand your ground.
If the buyer is willing to trade something, the “rush” charges, for instance, then meet the price request—if, and only if it makes good economic sense for your company. (That decision should be made by management prior to your “negotiation” with the buyer.) Let the buyer know that you fully intend to hold him to his bargain. Document the agreement; have the buyer sign it; keep a copy in the customer’s file.