Top 10 Reasons Why Salespeople Let Price Drive the Sale

Posted by Dave Kurlan on Fri, May 10, 2013 @ 06:05 AM

valueSelling value.  

What comes so easily to the top 6% and some of the top 26% is so very difficult for others.

Most salespeople have little capability to effectively build value.  Talking about what your company does better or differently or  telling a prospect what your value proposition is does not build value.  Instead, value comes from 3 things:
  1. Uncovering the compelling reason(s) to buy and buy from you,
  2. Understanding the impact, ripple effect and cost of those compelling reasons, and
  3. Positioning yourself and company as the clear choice to help with numbers one and two.  Then the salesperson becomes the added value.

Here are a few random thoughts accumulated through the combined efforts of evaluating more than 650,000 salespeople and training tens of thousands of others.  In no particular order:

  • The moment a salesperson attempts to be competitive on price, any value he or she may have built is forgotten and can no longer be leveraged.  All the focus is on price.
  • Compromising or negotiating on price sets a precedent.  All future discussions about pricing will be based on this compromise.
  • If a salesperson does successfully build or create value, or position himself/herself as the added value, they must not allow price to be one of the decision-making criteria.
  • 53% of all salespeople are too uncomfortable with the subject to have a conversation about money.  How important is it that your salespeople have a conversation about money?
  • 33% of all salespeople think that just $500 is a lot of money.  How much money are your salespeople supposed to be asking for?
  • 40% of all salespeople don't determine whether their prospect is able to spend what they are about to propose.
  • 64% of all salespeople make their own major purchases in a way that will not support the sales outcomes they must achieve.
  • 86% of all salespeople believe what their prospects tell them, even when the prospect is bluffing about needing a lower/better price or that the decision will be based on price.
  • 52% of all salespeople become emotional as soon as they hear that their price may be too high.
  • 47% of all salespeople believe that if they hold their ground on price, regardless of how they do it, their prospect won't like them anymore.
All of these statistics come from Objective Management Group.  What does it all mean?  Not only don't most salespeople know how to build value, but even when they do, they quickly undermine it with their self-limting beliefs, inappropriate behaviors, outdated experiences, and desire to have a competitive price.  It's as if coming in with the right pricing will make them a hero.  Unfortunately, it makes them just like everyone else and there isn't much value in that.

Topics: Dave Kurlan, Consultative Selling, sales training, selling on price, objective management group, selling value

Are Your Salespeople Selling Price Like Sam's Club or Value Like Nordstrom's?

Posted by Dave Kurlan on Tue, Nov 11, 2008 @ 21:11 PM

Doug McMillon, CEO of Sam's Club, was interviewed in the October 27 issue of Fortune.  He said that people are spending about the same money as before but on different things, as the cost of food and energy has reallocated their discretionary spending.

We were at Nordstrom's today and I noticed two things that were unusual for such a "dismal" economy.  Despite the fact that there wasn't a sale taking place and they don't have low-end or discount pricing, they were busy.  And they were staffed - three people were taking care of my wife - all at the same time - and they had more people to help if needed! Yet, if you walk into the discount stores and need someone to help you'd be out of luck. They are down to bare bones.

So what does this say about the state of the economy and more specifically, about discounting and trying to win business based on price?

I received an email tonight from a fan of Baseline Selling asking for help with his positioning statement.  Here's what he sent me:

"I've been very successful helping owners and CFO's who have had so many insurance quotes that it makes their head spin but who don't understand how to reduce their overall cost of risk in their business. I thought you might want to invite me in to learn how our free risk assessment helped other business owners reduce and predict insurance cost in all markets."

As most salespeople do, it was way too long, and focused on the wrong issues, using price as an enticement to get in the door.  He used "quotes", "reduce" (2x), "cost" (2x), and "free".  Do you think he sounded any different from the other agents that are calling these owners?  Do you think they want to talk with him?  Let's ut it this way, if they wanted to talk with him he wouldn't have emailed asking for help.

Here's what I suggested he use instead and, as you might expect, it follows the Baseline Selling syntax for an effective positioning statement.

I help CEO's who can't stand all of the insurance agents that always call at renewal time. Can I ask you a question?

I help a lot of CEO's and the two things I hear most right now are, one, they're not sure how to assess all of their risk, and two, they're not sure how to determine how much of that risk affects their premium. Does any of that ring true for you?

If you are not a Baseline Selling apostle, you may not understand the reasoning behind the choice of words or the message but you can still take my word for it that this will work for him.

Do your salespeople have formal positioning statements?

If they do, are they identifying the issues that differentiate you from your competition?

If they are, is it working consistently?

If your final answer was a "no", here are some more questions:

Is it their message or their ability to engage and deliver it?

Is it their lack of hunting ability or their lack of willingness to hunt?

Is it their willingness to hunt or do you have the wrong people?

Do you know how to find out?

Click Comments to read how the agent responded....

(c) Copyright 2008 Dave Kurlan



Topics: sales competencies, sales assessment, Baseline Selling, Salesforce, Sales Force, sales evaluation, sales profile, sales personality test, selling on price, selling against low price, combatting price, selling value

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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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