| Selling a price increase can be difficult
in nearly any type of situation, but trying to sell one in a soft market can be downright
brutal. Yet, as unpleasant as it can be, it is often essential. The problem of selling a
price increase in a soft market usually stems from the fact that the salesperson and the
customer are coming at the situation from different perspectives. Especially in times like
this, it is imperative for the salesperson to understand that regardless of what the
market or economy is doing, if a price increase needs to be sold, it needs to be sold.
This means that the salesperson can't go into the sales
process believing that the customer is going to reject the price increase unless the deal
can be saved by offering some type of discount. If they approach the meeting with this
attitude, they almost guarantee failure because a customer will never pay more than a
salesperson tells them to.
In these types of situations, the first thing that often
happens is a comment from the customer about how soft the economy is, how prices are
really going down, and therefore, how a price increase at this time doesn't make any
sense. When the salesperson hears this, they usually agree because they hear and see the
same thing.
However, as soon as they do this, the battle is lost and 9
times out of 10, the only thing that can save it is some type of discount. To counteract
this problem, when the salesperson hears the customer make this type of statement, they
should ignore it. Yes, ignore it. The reason?
Many times the customer merely wants to get it off their
chest and by telling it to you, they feel better. The first response the salesperson
should make is to ask the customer questions about how they intend to use what they're
buying and whether or not they've been able to achieve the results they're looking for.
If the customer continues with their line of discussion
about the economy and they can't accept the price increase, then the salesperson should
ask about the steps involved in their buying process. The objective is really to get the
customer talking. Initially, this can be a little scary because the customer may begin
ranting about how they always go for the low price. After they get done explaining their
process, the salesperson should question them about how their own customers decide to buy
from them.
It's in this part of the discussion that the customer
begins to see how and why quality and confidence are such big items in any purchase
decision. A good salesperson will then pick up on these two items and reinforce them with
follow-up questions that get the customer to further explain the importance of quality and
confidence. When the customer sees what they're buying in this light, the price increase
becomes a much smaller issue.
Sometimes even after this conversation, there will be
customers or purchasing departments who will still not accept the price increase. They
usually comment that they will find another vendor to buy from. This is often a veiled
threat to get the weak-kneed salesperson to cave in with a discount. For the salesperson,
this type of discussion is best thwarted by ensuring the end-user fully understands the
value and benefits they will receive from their product, as well as by clearly
communicating the amount of pain the customer will go through should they decide to
switch. First, the cost of converting to a new vendor is always much higher than initially
thought, so the discount the new vendor has to offer needs to be significant.
In addition, it might be easy for a customer to find a new
vendor at a lower price, but on many occasions, the lower price vanishes after the initial
order and, suddenly, the new vendor is at the same price as the original one. Furthermore,
the new vendor will not have nearly the knowledge or expertise as the original company
about how to service the customer, so the switch often winds up costing more money in the
long-run.
As a final line of protection, I strongly believe the
salesperson communicating the price increase should not have the authority to make any
price concessions. When this power is taken away from the salesperson, it's amazing how
much tougher they are in executing a price increase. By requiring the salesperson to get
approval from someone else, it also takes the salesperson off of the hot seat and, many
times, as soon as the customer is aware of this, they will stop badgering for a discount.
Selling a price increase in a soft economy is certainly
harder than selling one in a booming market. However, as professionals, salespeople need
to take the time to know and understand how to sell a price increase in all types of
markets. It doesn't require Herculean skills. It requires the diligence and patience to
keep the discussion focused on the benefits the customer is looking for from both the
product and from you, the salesperson. |
