Episode #23: Sales Understanding

Price is always a big issue. We salespeople are very happy to drop the price, because we see this as the easy route forward with the client. Whenever there is a price increase, we immediately whine about it, because we see this as making our revenue task more difficult. We are permanently happy to discount, to win the business, even when our commissions are tied to the size of the sale. The problem is we are totally focused on the wrong thing.

What should we be focused on is not the pricing. We need to do a better job of listening to our clients, to really, deeply understand what that business needs to succeed. Rather than carrying around a bunch of screaming monkeys in our heads, all fighting about price, commission size, boss anger, mortgage payments, personal status, which new car, etc., we should be 100% concentrated on the client’s problems, not our own.

Rather than going into a discussion about what price we can get the client to agree to, we would do much better to join the conversation going on in the mind of the buyer. The customer has goals and aspirations and our job is to help them achieve them. In their success is our own success. In fact, the cost of our product or service is free to the client. It is free because it is paid out of the additional growth we bring to the client’s business, rather than a subtraction from what they have today.

When you think in terms of paying for your contribution from the increase in the revenues or costs savings for the client, then your whole mental framework shifts and so does the conversation. A focus on repeat orders rather than this one transaction is also a powerful mindset shift for us when engaging with clients. There may be occasions where this transaction is a one shot wonder, but really we want to build relationships with clients which last. Lasting relationships are totally based around the amount of trust which has been created and thinking only about ourselves, isn’t going to make that trust engagement happen anytime soon.

Pricing is totally related to perceptions of value on the part of the buyer. If there is sufficient value from the exchange of the good or service, then the buyer is comfortable with the relationship between the two. Their perception is the key and this is the job of the salesperson to work on that buyer perception. In many cases, it is very hard to prove that the price is backed up with sufficient value to justify what the salesperson is asking. This is understandable in some cases where the thing being sold is intangible or where the outcomes take time. Talking about the historical results for other firms is fine, but the buyer always suspects that type of talk is baloney or irrelevant. They have their own situation in their company and they want to see the value proposition through that prism.

A test or sample is a good way to break through the skepticism. The results may or may not be immediately available, but at least the process is able to be confirmed. The buyers experience helps them to decide whether the outcomes suggested are reasonable or not, based on what they have seen.

So, how do we salespeople become better able to have the proper approach to clients? In lieu of no existing sales philosophy at all within the firm, salespeople will generally posit their own version and often this is a highly selfish one. The sales culture can quickly become self-defeating. So we need to take responsibility and set down what is our attitude to our clients and how we do business around here. We need to understand we are building lifetime client value, our brand, our reputation and we are playing the long game. Salespeople need to repeat this to themselves endlessly. As salespeople we may think a couple of self administered doses of this philosophy will do the trick - well it won’t. We have to hammer on about this all the time to ourselves, to drive the idea into our mind and our soul.

Engaged employees are self-motivated. The self-motivated are inspired. Inspired staff grow your business but are you inspiring them? We teach leaders and organisations how to inspire their people. Want to know how we do that? Contact me at greg.story@dalecarnegie.com

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About The Author

Dr. Greg Story: President, Dale Carnegie Training Japan

In the course of his career Dr. Greg Story has moved from the academic world, to consulting, investments, trade representation, international diplomacy, retail banking and people development. Growing up in Brisbane, Australia he never imagined he would have a Ph.D. in Japanese decision-making and become a 30 year veteran of Japan.

A committed lifelong learner, through his published articles in the American, British and European Chamber journals, his videos and podcast “THE Leadership Japan Series”, he is a thought leader in the four critical areas for business people: leadership, communication, sales and presentations. Dr. Story is a popular keynote speaker, executive coach and trainer.

Since 1971, he has been a disciple of traditional Shitoryu Karate and is currently a 6th Dan. Bunbu Ryodo (文武両道-both pen & sword) is his mantra and he applies martial art philosophies and strategies to business.