In my 30 plus years in sales and sales management, I have found it common for sales people to have difficulty holding their price. In fact, I found it natural myself to want to discount and had to find a selling technique or a few of them to get around the pressure to discount further. The challenge comes in when you, as the small business owner, are also selling because you have no boss to refuse you.
I learned some of my selling techniques to avoid discounting further at the start of my career. I sold microcomputers for Radio Shack Computer Centers. As a major corporation, pricing and discounts were set by the company, not by my computer center's manager. So I had to learn to sell value or to offer alternatives that Tandy/Radio Shack made available.
Selling Techniques in Place of Discounting
The following are some of the sales approaches that I used or had used on me to hold the line on price:
- Convince your prospect of the value
- Be willing to walk away
- Find what they really care about
- Create a package
- Offer discount for larger purchase
Convince Your Prospect of the Value
This point is core to relationship selling and heart-centered business. While it's common among small business owners to truly care about their customers, really understanding what your customer perceives as valuable may take work.
Focus on your prospect's needs and wants means, of course, asking questions. Ideally these questions should be based on an understanding of their industry and common problems. Once you truly understand what they want and feel they need, you can present your products and services in the light of the value they are looking for.
Be Willing To Walk Away
Also essential to holding the line on your sales price is to be willing to walk away if your prospect is unreasonable and insists on going so low you make no profit or will find yourself at a loss. I had to do this with a manufacturer in Cd. Juárez that I had served well for four years. The corporation that owned them now only cared about price. The quote I had to match to keep the business meant that I could break even only with luck. I had no pad for emergencies.
Find What They Really Care About
You will always find that price is an issue. In our society, people are afraid to look foolish for paying too much. But if you get to know and understand them, you will find what is more important than the lowest price. It might be on-time delivery, better quality products, more reliability, less downtime, or better efficiency. In 1981, microcomputers were new and few teachers knew how to use them. I was able to win a bid from this school district against our own mail order dealers because I included local training for the teachers free.
Create a Package
What can you offer that will enhance the sale while costing you little or nothing? A small business needs to be creative here. Can you find another product or service that you can bundle with the primary thing your prospect wants to buy that will save him money and increase her enjoyment of her purchase, like free installation or 90 days free onsite service?
Offer Discount for Larger Purchase
One of the easiest ways to take the onus off you to discount your price and undervalue your products and services is to come up with a legitimate discount for a significantly larger purchase. You may be able to lower your costs from your suppliers if you purchase enough. Likewise, labor costs are often lower if you can install more units on one trip thus sharing your travel, setup and cleanup time costs.
Every sales person, whether from a small business or a major corporation, must deal with customers negotiating for a lower price. It takes effort but by focusing on what your customer perceives as valuable you can hold the line on your prices and avoid steep discounting. These five points will give you selling techniques to protect your profits.
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