When, How and Why Salespeople Discount Products and Services

Posted by Dave Kurlan on Wed, Jan 06, 2010 @ 15:01 PM

We often bring our two golden retrievers to a great local kennel with very attentive local ownership. At $23 per day per dog, plus "play time" and food, a weekend stay comes to about $140 for two nights.  However, when we travel on vacation and leave the boys for 7-10 days, and add grooming to their week of pampering, the tab could run as much as $800.

When I pick up the dogs, Heather gives me the bill.  When it's $140, I pay, she gets the dogs for me, and we leave.  However, when the bill is $800, Heather gets really uncomfortable, and begins editing the invoice and always seems to get it under $650. Nice, right?  Only if you're a customer.  If you're Bob, the owner, who has no clue she is doing this, what must it be like for him?

He has a 150 dog capacity and on vacation weeks, is fully booked.  Let's assume that there are just 5 of those completely booked full vacation weeks per year; The week between Christmas and New Years, 2 Winter Vacation weeks (public school and private school on separate weeks) and the two weeks around Independence Day and Labor Day. Let's also assume that the not everyone has two dogs.  Let's assume that this only impacts one third of the customers during those four weeks.  So that's 50 invoices being discounted $150 for 5 weeks or $37,500.  And let's assume that during the 8 other busy summer weeks not already accounted for, we have half as much occupancy - another $30,000.  I wonder what he would do if he knew that Heather was giving away $67,500 of his revenue without being asked?

So why is this happening and how does it relate to sales and sales management?

Heather has Low Money Tolerance.  In her case, anything over $650 is A LOT of money. So she discounts the total, not to make the customers more comfortable, but so that she can be more comfortable!  What would happen if her customers said, "Oh my, this is a lot more than I thought it would be...isn't there anything you can do?"

What about your world - you and your salespeople - how many of your salespeople have low money tolerance?  How would you know?  What is it costing you?

(c) Copyright 2010 Dave Kurlan

Topics: Dave Kurlan, sales management, Sales Force, sales tips, Low Money Tolerence, discounting, price objections

Key Account Sales - More Than Just Important Accounts

Posted by Dave Kurlan on Mon, Nov 02, 2009 @ 09:11 AM

Over the last several months I have engaged in several on line disagreements about the importance of asking questions early in the sales process.  More than one sales expert has claimed that asking questions violates trust.  More than one marketing expert has claimed that asking questions is offensive.  My position is that unless your salespeople are asking lots of good, tough, timely questions, they won't uncover their prospects' compelling reasons to buy and buy from you instead of your competition. In addition, you won't create the urgency you need to move the opportunity forward and prevent delays, put-offs and ambivalence.

My guest on last week's edition of Meet the Sales Experts was Sales Development Expert Hal Thorsvig.  We were talking about psychology, the art of asking questions and listening and he said that "when people are sharing their emotional reasons for buying they are into the highest level of rapport there is!"  He added that you should "ask questions with a true sense of wonderment and curiosity".

Hal also had some interesting thoughts on Key Account Sales where, according to Hal, there is much more to it than just identifying important accounts and assigning account managers to them.  He said you must have:

  • strategy to ward off competition
  • ability to deal with multiple buying influences
  • great control/understanding of the needs of each of those influences 
  • ability to maintain the account (maintain should be interpreted as retain)
  • ability to grow the account

Are you or your salespeople struggling with ways to justify pricing that is being attacked with unrealistically low prices from your competition?  Listen to the show for the great Uncle Charlie story that Hal told. Hal's story is bound to put an end to that problem!

Click here to listen to the show.  Click here to contact Hal.

(c) Copyright 2009 Dave Kurlan

Topics: Dave Kurlan, sales management, Salesforce, Sales Force, pricing, key account sales, hal thorsvig, price objections

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Best-Selling Author, Keynote Speaker and Sales Thought Leader,  Dave Kurlan's Understanding the Sales Force Blog earned awards for the Top Sales & Marketing Blog for eleven consecutive years and of the more than 2,000 articles Dave has published, many of the articles have also earned awards.

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