Far too many sales people whether new or seasoned stumble more often than someone leaving a bar after a few too many. Mostly it’s for the lack of belief in themselves. They forget or don’t believe that they are the professionals in most sales environments. Not their customers.
Here’s my argument: “More often than not, your customer whether current or potential have convoluted beliefs about what they should receive as far as discounts and more based on a myriad of misinformation – misplaced beliefs – or unrealistic presumptions.” And, most salespeople crumble at the first indication they might need to confront these positions.
You are the professional. It’s your job to make sure the customer understands what is available in way of discounts or lack there of. You should be their resource. Not their “Yes man.”
I was called by an establishment where I was asked to come out to their establishment and supply them with quotes on a product. I was informed by the caller, “Make sure you bring your sharpest pencil because we use ‘a lot’ so we need competitive bidding if we are to entertain your offerings.” Fair enough I thought and hopped in my car and proceeded to the establishment.
When I arrived I was surprised at the size of the establishment. It had definitely been around for a while yet, I had never seen nor heard of it. I knew at that time to never judge a book by its cover from past experiences. (I had a hole in the wall client that did volume on an unbelievable scale!)
As I sat down with the owner we talked a little small talk. Then he asked me “What’s your price on X? We go through ‘a lot’ here so give me your best shot.” I replied: “Sure, but may I ask what “a lot” is? He leaned back and said “Oh sure, well we have to go through at least 10 to 15 pounds of X per week.”
At the time, this represented less than what I lost when cleaning the machines that made it. “A lot” in all fairness started at levels that ended in tons – not pounds. However, to this customer their references were with companies about 2 levels down from mine. Companies that I would supply. However, to their way of thinking they were growing and it was; “time to cut out the middlemen.”
I didn’t get angry, or make this person feel foolish. I just went on to say how I understood the choices to consider as one gets larger and more. I left them with a better understanding of how the market worked and who – what – and when to consider for X, Y, or Z. (Then I returned to the office and immediately called one of my customers and informed them their customer was out shopping.)
On the other side:
I received a call from a potential customer who wanted to discuss volume pricing. I knew of them and once again jumped in my car and flew over to take advantage of the opportunity.
Once I arrived we sat in a conference room where as always a little small talk began the process. Then I was asked abruptly by the owner: “We currently use trailer loads of X per week. We have expansion plans in the works and we believe we’ll use “a lot” more after the expansion. What types of discounts do you believe you’ll be able to offer on such an increase?” As above I asked: “Sure, but can I ask you to clarify what ‘a lot’ means?”
I was by myself seated at a conference table surrounded by both the owner and what seemed like an army of surrogates or “yes men.” It felt akin to being in some form of inquisition process. When I asked my question – you could hear a pin drop as in “He’s questioning us?”
The response came back from one of the inquisitors (as if signaled and now allowed to speak) they were looking to double current usage. Then another spoke up (again is if signaled by telepathy) and said: “Others have already suggested possible savings of 10% or more.” I replied: “Based on my knowledge. I don’t believe you’ll save anything. I actually believe your costs will increase – not decrease. And your whole pricing models might be flawed if you are going to consistently need this amount of tonnage.”
Forget hearing a pin – you could now hear heartbeats.
I went on to explain that many at their level of volume mistakenly think because they’re going to use even more that just as they’ve experienced in the past their volume increase will warrant even better prices. It doesn’t. (Also being very cautious as to not allow any of these surrogates to look foolish since obviously none of them had realized this themselves.)
I went on to expound: When you get to certain levels depending on the business, increases in product or higher demands along supply chains can hit a tipping point where the guarantee of product supply and availability gets harder hence; demanding premiums – not discounts.
It’s counter intuitive and they wouldn’t be the first company I dealt with that wasn’t surprised by this phenom in our supply chain demands. Also, for the companies that may have said or implied they can offer discounts along with approximate numbers – I would question their assumptions. This situation would take far more time to research than the time you’ve allotted at this meeting. (cue the theme from Jaws here as I sat and waited for a response)
The meeting ended there and I was politely told thank you for the information then escorted to the door. I drove back thinking. “Oh well!”
A week later I was called and asked to come back for another meeting. After arriving I was informed (only 2 people met with me this time) I was to not only price out the original scenario they had first proposed but, also asked for current pricing as to start using my services as supplier immediately.
Later I was informed that out of both their current suppliers, as well as possible suitors, I was the only one who didn’t respond in some knee jerk way as to infer if they went with me “They’d be discounts to be had!” I earned credibility.
Know your product. Know your service. Know your limitation. Find and argue your value proposition in an honest manner and you’ll get honest business.
Business not only you can bank on. But pays legal tender you can put in the bank.
© 2013 Mark St.Cyr