Episode #74: Pricing Conundrums

Price is always a big issue for salespeople. Sales Managers know that sales people are very happy to drop the price, because they see this as the easy route forward with the client. Whenever there is a price increase, sales people immediately whine about it, because they see this as making their task more difficult. They are permanently happy to discount, in order to win the business, even when their commissions at stake are tied to the size of the sale. The problem is they are totally focused on the wrong thing.

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

While the way to the client’s agreement is through listening, just what should salespeople be listening for? Certainly not what the client decides to talk about. The client isn’t there to do all the work and run the sales meeting. The salesperson’s responsibility however is to ask intelligent questions which will uncover the client’s needs. They need to keep the sales conversation on track – find out the needs, deal with any concerns or hesitations and then get the buyer’s agreement to do business together.

Rather than going into a discussion about what price they can get the client to agree to, they 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 to be realised. 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 salespeople when engaging with clients.

The salesperson’s kokorogamae or true intention is the key. Who are they really serving – themselves or the client? The pressure for results, to make budget, to hit the target drives salespeople to short-term thinking. Clients are not stupid, they can recognize desperation or sales push very quickly. There is a great aphorism: “everyone loves to buy but nobody likes to be sold”. Precisely! We want to be shown the value of giving up our currently available cash flow to build a better future.

So, how do we get the salespeople better able to have the proper approach to clients. We need to set down what is our attitude to our clients and how we do business around here. We need to explain we are building lifetime client value, our brand, our reputation and we are playing the long game.