iSnare.com - Free Content Articles Directory
Authors Contents [Advanced Search][Add OpenSearch][Job Search]
Distribute your articles to thousands of article sites for only $2 and below! Read more...

Index  Business
 

Price Cutting Is For Sissies

 
[ Contact the Author] [ Send to a Friend] [ Article Publisher] [Make PDF] [ Print] [ Bookmark & Share]
 
Read our Terms of Service before reprinting this article. The submitter specified above has claimed the rights to this article.
Mark Hunter

Sales is all about closing the deal, and in order to achieve that goal, a purchase price must be agreed upon. All salespeople, at one time or another, have had their price challenged. What do you do when that situation arises? As much as everyone in sales would like to consider themselves "great closers", in reality, many are sissies when it comes to this important skill. They often boast about never discounting their product, but when they're suddenly confronted on price, they fold faster than a cheap umbrella on a windy day.

Consider the following scenario you may have found yourself in.. ..You're on the verge of closing the biggest deal of your career. Doing so will put a nice, fat commission check in your hands and you'll soon be receiving kudos from everyone in the company. Now comes the curve ball. You discover that the customer is looking to you for a price discount and, to top it off, you find out about an equally qualified competitor that is willing to undercut your price. While you are under the pressure of being in the middle of the hunt, you are left with only two options. You can hold the line and not cut the price to keep your profit potential in tact. Or, you can cut the price and be willing to take a lower margin for the sake of landing the big order. Which do you choose? Although the tendency for many is to give in to the price discount, by being prepared ahead of time as to why your product/service can fill their need, you can avoid caving in under the pressure of the moment.

In a situation like this, your self-assurance is critical. Be confident in what you say and, more importantly, ensure that the customer is certain of the benefits they will receive by working with you. The cheapest price might be what everybody is looking for, but what good is a low price if it doesn't deliver on what it is supposed to? When the customer requests a price discount, respond by asking them about how they intend to use your product/service, and what they expect to gain from using it. Your goal should be to get them to express both the pain they will experience if what they're about to buy doesn't help them accomplish what they want it to and the need they have for your type of product/service. Then you can explain how your product/service can alleviate that pain and best fill that need.

How can you establish a high level of confidence in your price? One of the best ways is by having a full sales pipeline. This means that you have prospects and customers at each phase of your sales process so you don't have to worry about closing every sale. Your assurance comes in knowing that you're making the right decision by not discounting because you "have" to.

The worst thing any salesperson can do when a customer is looking for a price break is to give in. Unfortunately, because many cannot confidently communicate their price, they often cave in. To overcome this problem, salespeople need to understand, in real terms, the buyer's perspective of how they can benefit from the product/service. For example, if I'm going to take a trip and my destination is 1,000 miles away, I have several options as to how I can get there. I could hitchhike, which would cost me virtually nothing, but wouldn't guarantee when I'd arrive. I could drive my car, keeping my immediate costs to only the gasoline (assuming the car does not break down), but my travel time could take several days. Or, I could fly, which would probably have the highest immediate cost, but would, undoubtedly, be the fastest. Because your goal in selling should be to help ensure the success of your customers, you can see from this example that the cheapest approach is not reliable, nor would it save time. In addition, most people wouldn't want to take several days to drive to and from the destination. Therefore, because of the time it will save, the best option is to fly, even though it's probably the most expensive. Since time is of the essence in many industries, its value is worth the extra money. Keeping that in mind, cutting the price is clearly not the most beneficial or efficient.

Besides being unable to confidently communicate their price, another common reason salespeople give in when challenged is because they believe the misconception that by offering a discount on the initial order, they can make it up on the next one. However, the truth is that there is no way to ever regain the lost revenue. Once the customer has accepted a lower price, that amount becomes their new level of expectation. Any other price is seen as an increase. Think of it from the following perspective: Would you believe a promise from your boss that if he/she were to hold back your next raise for a year, it would be made up to you later? We often kid ourselves into believing that we can get the higher price out of the customer on the next order.

Finally, when a customer requests a discounted price, it is important to remember that giving one is an immediate reduction to your total profit. Depending on how drastic you are willing to go, you are ultimately the one taking the pay cut. Is that what you really want to do? Consider that decreasing your price may help you land the initial sale but, over time, it still does not make up for the revenue you lost on the initial sale.

Maintaining pricing integrity is a challenge. It starts by being self-assured and it extends not only to the service you deliver, but also to the expectations of the customer. Don't entertain their requests for a discount. Be confident in both your price and the product/service you offer. Ensure that your sales pipeline is full by spending adequate time developing it at all phases of your sales process. Consider how your product/service can help ensure the future success of your customers. Don't believe the lie that you can make up your initial price cut on the next order. Without confidence in your price, you can say good-bye to your profits. Price cutting is for sissies!

Important NoticeDISCLAIMER: All information, content, and data in this article are sole opinions and/or findings of the individual user or organization that registered and submitted this article at Isnare.com without any fee. The article is strictly for educational or entertainment purposes only and should not be used in any way, implemented or applied without consultation from a professional. We at Isnare.com do not, in anyway, contribute or include our own findings, facts and opinions in any articles presented in this site. Publishing this article does not constitute Isnare.com's support or sponsorship for this article. Isnare.com is an article publishing service. Please read our Terms of Service for more information.

Mark Hunter, "The Sales Hunter", is a sales expert who speaks to thousands each year on how to increase their sales profitability. For more information or to receive a free weekly sales tip via email, contact "The Sales Hunter" at http://www.TheSalesHunter.com.
Article Tags: customer [See Dictionary], price [See Dictionary], productservice [See Dictionary]
Got a question about this article? Ask the community!
Article published on April 30, 2008 at Isnare.com
 
Rate this article:

Sales Goals in a Tough Economy
Submitted by: Mark Hunter

Making your sales goals in a good year is one thing, but attaining them in a difficult year is an entirely different challenge...

Holding on Price in a Down Economy
Submitted by: Mark Hunter

Discounting on price is not a sales strategy It's an impulsive move made by desperate salespeople...

Shut-up And Sell!
Submitted by: Mark Hunter

Contrary to popular belief, to be a successful salesperson, it doesn't matter how much you know about your product or service...

Top Ten Tips for Cheap Business Gas
Submitted by: Nick Heath

There are 11,000 different energy tariffs for small businesses, depending on your supplier, postcode, credit score, consumption, length of contract etc...

Features of RingCentral Phone Service
Submitted by: Jason Kay

There are so many business owners these days that think just because their company is not a Fortune 500 one that they cannot afford an 800 number, but with the birth of company’s like RingCentral, nothing could be further from the truth...

How To Reduce The Costs Of Running Your At Home Business
Submitted by: Scott Lindsay

Cost cutting measures can be useful at any time, but with costs rising along with stressful economic concerns these measures have never been more prudent...

Presenting a Professional Appearance in Business
Submitted by: Scott Lindsay

The first impression someone gets of your at home business may shape their ongoing relationship with you as a business entity, and no matter how good your product(s) or services are, they may choose not to buy following a bad first impression...

Owning a Business is Hard Work
Submitted by: Brenda Williams

Owning a business is hard work Not only do you have to worry about expenses such as the cost to rent an office, but you also have to worry about how many employees you need, how many you have to absolutely have and then after all of that, how many you can actually afford...

Work From Home and De-stress
Submitted by: Michiel Van Kets

If you are stuck in a rut and wondering what is the point of it all, then it’s time you made some changes to improve your quality of life...

Business Electricity Comparisons in Plain English
Submitted by: Nick Heath

Comparing business electricity and business gas prices doesn’t have to be complicated, particularly if you use an independent expert to guide you through the process...

Will Your MLM Comp Plan Ever Pay You What You Are Worth?
Submitted by: Guy & Michele Luminato

Why are you in your MLM The reason you joined a MLM is because of the dream that you could make a significant income and have the time freedom to do the things you always wanted to do...

Online Marketing Blueprint to Success- You Owe it to Yourself Part 4
Submitted by: Dan Atkins

Having spent a couple of years running in circles, trying to build myself a online business, it was not a total waste of time and money, even if I spent money that I did not have to spend...

The Aggressively Affordable Shopkeeper
Submitted by: Alexandria Marx

It isn't as difficult as you may think to get a viable eCommerce web presence If you want to get started in the "web-preneur" market, then the first step after brainstorming your idea and narrowing it down would be to get all your tools in place to make it happen...

Easiest And Quickest Way To Be An Online Shopkeeper
Submitted by: Dan Marx

Easiest and Quickest Way to Be an Online Shopkeeper Have you caught the bug to be your own boss, or simply want to supplement your income...

Fire Your Boss, Build Your Own Ecommerce Website and Store
Submitted by: Dan Marx

Fire Your Boss, Build Your Own Ecommerce Website and Store There's not much difference between the real and virtual worlds when it comes to commerce...

Easy Shopping Cart Software Makes Buying a Breeze
Submitted by: Dan Marx

Like any product, buying easy shopping cart software is competitive business How do you differentiate the cream from the...

Guide to IR35 - The Rules and Regulations
Submitted by: Michiel Van Kets

Working as a freelance contractor, predominantly those in IT, you should already know about the IR35 rules and regulations...

International Caravan And Blazing Needles Team Up To Bring Home Decor To New Levels
Submitted by: Sebastian Porter

Thank you for stopping by International Caravan, aka, Caravan Outdoors ICI's elite experienced staff of customer representatives are here to help you find what you are looking for...

Isnare.com Footer Divider

© 2004-2009. Isnare Free Articles - An Isnare Online Technologies Free Articles Project. All Rights Reserved.   Privacy Policy