The ability to talk about money, (pricing, cost, and investment) is not only important to show confidence to the prospect but also to additionally qualify the prospect to make sure they actually are a true prospect. Price cutting had less to do with actually closing the sale and more to do with the comfort level of the salesperson, as well as the salesperson following a sales process and talking about cost earlier in the process. One of the reasons salespeople have to negotiate price, creating discounting and have a lengthened selling cycle is often directly related to not having a money conversation earlier in the process.
Prospects themselves don’t often encourage the budget conversation; either they are used to or are typically more comfortable with waiting until the proposal is sent to see what the price range will be. If there is no early conversation about money and it is only brought up at the very end, the prospect has much more negotiation power than the salesperson.
Discounting is a direct result of the salesperson’s belief. If a salesperson believes that a prospect will not buy anything without feeling like they ‘won’ got some sort of a ‘deal’ then they will often sell by price cutting, even if it isn’t necessary. Therefore, in your case, you discount a small amount but must be approved by management so it will be important to have someone who has had experience selling and believe that your discount belief in your organization is the correct one.
When we are selling something within a price range this becomes comfortable for us, it is often difficult to believe that something for example, much more expensive than they have been selling, isn’t worth spending at that level. Whether this is true or not, belief is a leading factor in being confident in selling your product or service.
Often the salesperson will need to ask for discounting from you to get comfortable with selling at the price of your product or service. The other outcome may be to fail in selling to the goal that they have been given and blame the fact that the cost is too high.
As an example, the cost of your average sale is $1000.00 – $5000.00. If a salesperson had been selling a much lower-priced product or service, for example, a competitor that costs less, it may be difficult to justify in the mind of the salesperson charging a price more than they are comfortable, is too much. The result of this is often an inability to sell without a deep discount, lots of excuses for not making their goal, or difficulty selling at all.
When it comes to competitors, your price is often the least expensive so being able to sell in this environment without a lot of negotiation will be very important for you. Being positioned in this way is unique to you and how to sell in your position of negotiation will make or break a successful sale.
Often salespeople can hide behind a low price offering or the ability to discount heavily as sales success. If you are the low-cost leader, then this will work for you. If you aren’t always the least expensive in your market, it will be difficult for a salesperson who sells that way for example to create enough interest outside of price.
A True Sales Process
Ask yourself, are you (or your sales staff) discounting to get the business? Do they feel that is necessary to close business? If so, using a true process will help get past this issue. If you could sell completely on price, you can do this virtually, and there would be no need for a salesperson, right?