Yesterday, I was thinking about this week's sales and gross margin tip when right out of the blue I received a telephone call from an outside salesperson who had recently attended one of my sales presentations. He was looking for help in dealing with a customer who seemed to always need a better price than the one he had just quoted.
Sometimes I convince myself that I talk too much about how to deal with pricing issues, but this young salesperson convinced me otherwise. He wanted help taking the order "off the table" when dealing with pricing issues.
The IF Word
When I observe salespeople dealing with aggressive buyers, I most often see them offering to lower their price and making no attempt to get anything in return.
Unskilled salespeople might say something like: "I can give you another 5% discount. Would that be good enough to get me the order?"
Here's the mistake I believe the salesperson makes when he or she uses this approach: He or she gives away 5% and gets nothing in return. I believe most customers would respond with an attempt to get the salesperson to reduce the sales price even further.
First, establish if the customer really wants to do business with you by asking, "How much would we have to reduce our price to be competitive?"
If the customer tells you, then ask, "IF our prices were item for item, line for line identical to those of the competition, would you give us the business?"
If the customers answers yes and you have sufficient pricing authority to meet the price and you are convinced that the customer is not bluffing, then try this approach: "I am going to have to make a telephone call. It would help me a lot when I call my boss IF I can tell him that you have given me your purchase order contingent upon my ability to meet the prices our competition has quoted you. Will you do that for me?"
If the customer complies and gives you a purchase order, you have taken the order "off the table." You have eliminated the possibility that the customer will be in a position to shop the price back to one of your competitors.
Bill Lee is a business consultant, columnist, speaker, and seminar leader who works extensively throughout North America. He also is affiliated with Lee Resources, a Greenville, S.C.-based consulting, training and publishing organization.