5 Ways Your Salespeople Are Encouraging Discount Requests And How to Stop Them
Are your salespeople saying and doing things that invite prospects and customers to question their price? Tune into the briefinar to uncover the most common discount-encouraging mistakes salespeople make, and how to stop them so your reps can make selling at premium price a habit.
In 19 hyper-focused minutes, we’ll cover:
- How timing plays a role in presenting price—and how to recognize the sweet spot for asking for the sale
- Coaching tips to address the root cause of why your sales reps aren’t confident when presenting price to prospects and customers
- The “price cushioning” mistake that every salesperson has made at some point—and how to avoid it
- Specific words and phrases to avoid when presenting price, and effective ones to replace them with
Read the Full Transcript of the Briefinar Below:
Will Brooks: Hello, and welcome to Briefinars for Sales Leaders. We promise to be brief, bright and bring it all to you in 19 minutes. Today we're going to be talking about the five ways your salespeople are encouraging discount requests and, more importantly, how to stop them.
Will Brooks: This is Will Brooks and I'm joined today by Steve Hackett, Regional Vice President of Sales. Steve has been a driving force in The Brooks Group's growth for nearly two decades. Steve, thanks for joining us today.
Steve Hackett: Glad to be here, Will.
Steve Hackett: This is really an important topic that we have today because as we all know a healthy profit margin is so important to any sales organization. But as we continue to see competition increase and buyers becoming much more savvy, our salespeople have come to expect push back on price. They can even be shocked when they don't get it.
Will Brooks: Yeah, it's become almost a given in today's marketplace.
Steve Hackett: But unfortunately that mindset can lead salespeople to say and do things that invite prospects and customers to ask for discounts, or in some cases even demand them. So let's just jump right into it. Let's take a look at mistake number one.
Steve Hackett: Mistake number one is asking for the sale too soon. Salespeople need to spend sufficient time questioning the prospect and uncovering the underlining information. What are the motivators, the pain points, the wants, the needs, the issues, the challenges? If you salespeople ask for the sale before they prove their credibility and build value, it encourages prospects and customers to focus only on the price and be very skeptical of it.
Will Brooks: You know, Steve, that's such a great point to start with. So often we see salespeople focused on themselves and their ultimate goal of making the sale and that causes them to overlook what the customer really needs. They rush through the questioning phase of the sales process, jump right to the close and they haven't uncovered the reasons why these folks even want to buy something. And so obviously without building value, what they're doing is it boils to a question of price.
Steve Hackett: So let's take a look at some of the ways that sales leaders can fix this. Sales leaders have got to coach their salespeople to be patient and ask the right questions up front; to have a solid three deep questioning strategy which will allow the reps to follow up on initial questions, dig deeper, and understand the true underlying motivations for making decisions.
Steve Hackett: Let's take a look at number two. Beating around the bush on price. I love this one, Will. Many salespeople will change the subject when asked about price. Many won't even say it out loud preferring to write it down and point at it. And then there's the tried and true, let me send it to you in an email, electronically, so I don't even have to even discuss it or I'm just going to send it to you and you take a look at it and tell me what you think.
Will Brooks: And so, Steve, when they're not willing, they be sellers, not willing to address the price right up front, what kind of perception, excuse me, does that create in the prospect's mind?
Steve Hackett: It can reveal that the prospect ... to the prospect, to the customer, that the salesperson's very nervous about the price. Lacks of confidence in price leads to price concessions and hardened negotiation with buyers. Think about it. If a salesperson is not confident in a recommendation, or their price, why should your prospect or customer feel comfortable and confident in their recommendation?
Will Brooks: Right. So, let's get to the fix here.
Steve Hackett: Until the salesperson can credibly, comfortably, and confidently tell your prospect, "This is the price," or, "This is the investment," the key word here, Will, is the word "the". I actually want to discourage negotiation. Prospects will always question them on price. As a sales leader, you need to remove the most common reason your salespeople are not confident in stating the price. Those reasons are they don't know the products or services very well, and if I don't know my product or services very well I'm not even going to recommend them.
Steve Hackett: Another key thing is to make that your opportunity is really, truly qualified because if it's not truly qualified then all I'm doing is just presenting a price to people that have no authority to make the decisions. And in today's environment, so many people are dealing with people that are in the decision making process, but don't have the authority. We truly need to understand who are the people that can pull the trigger and then be effective in presenting to them specifically.
Steve Hackett: Mistake number three. Salespeople use modifiers when presenting price. Now using adjectives and adverbs when you present price or discuss price with customers is a flag to your price and it says that everything is negotiable.
Will Brooks: Okay, Steve, why don't you give us some examples of what we're talking about here?
Steve Hackett: Will, here's some of the most common ones we hear. Our usual price. Our regular price. Wholesale price, normal, list, book. You kind of get the idea. There's so many things that we put in front of the price that it's confusing to the buyer because they don't really know what the price is and frankly, Will, all they care about is what their price is.
Will Brooks: Right, so, all of a sudden, I'm like, "Steve, that's great. I understand this is your list price or your normal pricing for other customers. But what is my special price?"
Steve Hackett: You know, words are tools to salespeople. You should educate and coach your sales team on the impact that they actually have. Confidence in presenting price comes from understanding the value that you bring to your customers and prospects, and how to apply your product or services to solve their problems or deliver their results.
Steve Hackett: If they haven't done their due diligence with research and questioning of the prospect or customers, they're never going to be sure about what it is that they need to present and they can't confuse the buyers.
Steve Hackett: Number four. They use phrases like, "Cushioning the blow". I love this one, Will. People expect to pay something for their product or services. And they expect that to be a fair and a justifiable price, that's what they're looking to actually do. But when I say, "Are you sitting down? I'd like to cushion the blow," all we're doing is adding to the confusion that buyers already have that always signal to the prospect or customer that everything is negotiable, or worse, what do I need to do to earn your business?
Will Brooks: So, Steve, what are some examples of cushioning here?
Steve Hackett: A few ones that I really ... you hear on a very common basis, "Since you're one of our largest customers, maybe we can work with you a little on this price." "Hey, let me see what I can do." Or the old tried and true one, "Tell me where we need to be."
Steve Hackett: When we use terms like this, you might as well put the neon bullseye on our chest and say, "Go ahead and beat me," because all you're doing is signaling to them that you're not confident in the price and everything's going to disintegrate into a prideful negotiation. And who's going to win?
Will Brooks: Mm-hmm (affirmative). So what's the fix for this?
Steve Hackett: The fix is this, coach salespeople to build value so price is less of an issue. I would recommend always role playing to get reps comfortable with presenting price. When we have a large presentation that we're going to provide for one of our prospects or one of our customers, we actually physically practice it. We bring people into a room, we actually go through our presentation, we asked them to punch holes in our presentation. Ask us questions that may throw us off. There's no excuse for not being comfortable when you present price, but that also comes from practice.
Will Brooks: Mm-hmm (affirmative).
Steve Hackett: Number five. Presenting price without structure or benefit. Any price in the absence of a value determinator will always be too high. What we see is when people put out the price, or just an email quote, the challenge is there's no way to define what exactly is included in that other than just a number.
Steve Hackett: So when we look at presenting price without structure or benefits, it tends to confuse buyers. And when we confuse buyers now we have a situation where, it's the old saying, "The confused buyer buys nothing." A confused salesperson sells nothing. Our job is not to confuse people.
Will Brooks: So what's the fix here?
Steve Hackett: The fix is you need to coach your salespeople in two different ways. They need to be first and foremost organized systematic in the way that is easy for the buyers to follow them. Step number one, focus on the buyer's priorities, not your own. What do we mean by this? When we're working with any prospect or customer, they have a list of things that they want to accomplish. There's an internal priority checklist that they're looking for. We need to focus in on only those things that they told us, or verbalized to us, are the most significant and important things to them about this decision. Not things that we think, but things that they've told us.
Steve Hackett: Number two, connect the recommendation with phrases like this, "And here's how we address that situation, or solve this problem, or this issue." "Here's your expected return and how we track it." We need to tie the recommendation that we make to the specific issues or challenges that they've asked us to address. Connecting those dots allow someone to internally buy what it is that you're saying.
Will Brooks: So, Steve, that was a lot of really good insight there. I know that presenting price is an area that the majority of sales professionals we deal with want to improve on, especially in this climate of fierce competition. We actually have a public seminar coming up in September that teaches reps the strategies for selling against lower priced competitors.
Steve Hackett: You know you're absolutely right, Will. Price presentation is an area that reps crave and the also crave the coaching and direction on how to effectively present that price. And it really makes for a great subject to cover during one of your sales meetings. I want to remind our sales audience to keep an eye out for an email with a recording of today's presentation and a free download, The Four Rules for Presenting Price. This could be the great basis for your next sales meeting, an effective way to start to develop those habits that your sales team needs to be effective in today's market.
Will Brooks: Excellent. Well so, Steve, I got some really good news. It looks like we have time to address a few questions that were submitted to us earlier in the week. So let's get started with the first question.
Will Brooks: It's coming from someone by the name of Roy. And Roy asks, "How do you deal with someone who asks how much your product or solution costs within the first few minutes of the meeting?" And by the way, Steve, this is like, this happens all the time, doesn't it?
Steve Hackett: Yeah, it sure does, Will. It's a great question by Roy. And, Roy, you're not the first sales person to ever ask this question. There's a basic principle in sales, never quote price to an unsold buyer. Now think about this just for a second. Any number that you give them will always be too high in the absence of a value determinator. So what happens is you want to be, there's a timing that you want to have when you present price and it's only after you truly understand exactly what it is that they're looking for, what their priorities are so that we have the best chance of tying whatever our service is or our products are to build that value, stack those benefits to address their priorities.
Steve Hackett: But in the absence of a value determinator, all price is going be too high. So avoid it. You may want to use a technique like this. "You know, we have a variety of different prices based upon our different features and benefits and volumes. What I'd really like to know is exactly what those things are, and then I'll be happy to give you the price to the penny." Use techniques just to delay the price until you really understand what it is that they're looking for.
Steve Hackett: Another thing, there's another underlying with that one too, is this, be careful of falling into the trap of people that are not the decision makers who are asking you for the price. It's just a defensive mechanism that they may have of gathering this information, but the reality are that they can't do anything with it anyways. So really understand if you're presenting price, make sure you're presenting price to the decision makers, not people that are just asking you for the price but have no skin in the game per se and able to do anything with it.
Steve Hackett: Great question.
Will Brooks: Yeah. Their goal can be just to disqualify you, right?
Steve Hackett: That's correct.
Will Brooks: All right, so let's move on. We have another question from a guy by the name of Steve. He asks, "In verticals that are very price driven almost commoditized, how do reps better position themselves?"
Steve Hackett: You know, there's three ways that reps are seen in the eyes of prospects and customers. We can be seen as the simple product pushing vendor. We can be seen as an industry or a business expert. And we can be seen as a strategic resource.
Steve Hackett: Now, when we first meet someone they're going to see us in that vendor category. We can change that perception on the very first call by the preparation and the types of questions and our three deep strategy and really understand in the industry and doing our due diligence prior to that call. To become a strategic resource it takes time. And it's a title that we can't give ourselves, it's one that has to be given to us by our customers. So getting back to your question, number one, we need to be seen as an industry or a business expert to begin with. People will do business with people that the feel have something important to say to them. So unless they can determine from the questions and from the knowledge and the information that we can provide for them that we are people worthy of their time, they're not going to give it to us.
Steve Hackett: There's another aspect in a highly commoditized markets and there are some that are really extremely price sensitive with huge competition. Bundling may be the best technique that you have for combining different products and services so that you can still maintain the price integrity of your product and services, but you're doing it in a bundling format. Try that, Steve, I think that will help you.
Will Brooks: All right, one more. "How can we increase prices without losing customers?"
Steve Hackett: That's a great question. We struggle with that one ourselves. We all need to be raising our prices from time to time. It's just the reality of what we're dealing with. Now the first thing I want you to understand is that the people that you're dealing with also see the same thing from their customers when they go to raise prices. So we're all very sensitive to this whole thing called raising prices, but that's the reality. Expect when you raise prices that there may be some fall out. You may lose some customers. Will, we've had this discussion when we look at the marketplace and say, "You know what? If we go up by X there's a good chance that we're going to lose these types of clients."
Steve Hackett: How do we handle that, Will, internally?
Will Brooks: Unfortunately we just gotta accept it. Sometimes it's a fact of reality. I mean you can't afford to do business with everybody, Steve. I mean, you take a calculated risk and you know you're going to lose X percent of your customer base, and you say, yeah, that's too bad. We do what we can to retain them, but unfortunately it happens.
Steve Hackett: What the reality is too that there are some people that really, not all business is good business-
Will Brooks: That's right.
Steve Hackett: ... and sometimes you have to lose some people in order to allow you to have the time and the resources to really benefit those people that are your best customers. So we have gone through this. We have raised prices, we've lost some, but we've also over that period of time, Will, picked up some of the best, the most loyal customers that we have today.
Will Brooks: And we've grown the business.
Steve Hackett: And grown the business.
Will Brooks: Excellent. All right, Steve. Well, it looks like that's all the time we have for today. I think if I were to sum up our conversation today it's really about being patient in the sales process, uncovering needs and wants, don't just rush to try to close. You know, use words carefully. Make sure you're quoting the price, not cushioning the blow, not using the qualifiers.
Will Brooks: So, you know, I want to really quickly talk about our How to Sell Against Lower Priced Competition workshop. This one referenced on this slide here is actually an open enrollment format, so it's open to the public. You can see some of the details there on the slide. Definitely a deeper dive into a lot of the stuff we just talked about. We also offer this program in a private setting, meaning for an in house team.
Will Brooks: So you know, Steve, in closing, I really appreciate all the insight today. I hope the listeners enjoyed what they heard. As always, folks, feel free to reach out to us with any questions and we look forward to having you on our next briefinar.
Steve Hackett: Thanks for joining us today.