Just think: If price were the only factor in a builder's purchasing decision, a dealer could fire all its salespeople.
Along with fast food, we could have fast lumber. Prices would be posted in a drive-thru lane, where builders would shout their orders into a garbled speaker to a pimply-faced order-taker who would ask, "Want a side of nails with that lumber load?" Builders could call in lumber orders for delivery just like they dial up for pizza. Walk-in clients could have it their way by ordering up takeoff service.
That process must begin with the salesperson first realizing that he or she is the frequent cause of price objections. Why? Because too often, a salesperson's work ends up creating a reverse auction. That's when sellers bid to earn business, literally begging the builder to buy by providing ever-lower prices for the dealer's goods.
Remember: A bid is a commodity-driven request that's presented from the seller's perspective and provides nothing more than a list of materials and corresponding prices. The bid's recipient can compare prices to the seller's competition, but never really knows the true total cost of doing business. The salesperson assumes the buyer will know the real value of the bid, either intuitively or through some (unlikely) calculation by the buyer to assess the return on investment in the seller's service.
Offering a bid does nothing more than get you into a price war, just as the fast-food joints hawk ever-cheaper burgers and burritos. Instead of bidding, you should be serving up proposals.
A proposal is an offer that speaks to the client's objectives by illustrating the benefits to the client. It clarifies the value of the seller's service and even quantifies the total cost of doing business. It describes the complete service by detailing the tangible value of products, scheduling, delivery, service, and other resources, such as marketing tools, sales assistance, and installation training.
Your ability to reduce price objections during the heat of battle begins when you prepare high-quality proposals before the battle. Structure a proposal to include the following:
Reiterate what you heard. A proposal should summarize your understanding of the client's business challenges. It could include various bullet points that list, for example, the client's marketing objectives, scheduling issues, and production goals. It should demonstrate your interest in being a valued part of the client's organization.
State how your products and services address the challenges. Of course, your proposal must include a list of materials and pricing. But it can also include details on scheduling deadlines, training assistance, contact numbers, installation details, product catalogs, and more. As you might expect, this approach probably will demand you schedule an appointment that provides enough time for you to illustrate the details of your work and the benefits to the client.
Describe the total program investment. The word "price" is frequently interpreted as a necessary evil and a line item that every business must control. An "investment," on the other hand, is viewed as a deposit for future returns on assets. If you do not define the benefits of an investment in you, your client certainly will not.
There is a big difference in saying you're a consultant to your clients and actually being a consultant. The key to helping your clients begins when you stop negotiating a lower price with your employer and start providing tangible return on an investment to your clients. Stop bidding and start proposing.