Read our article about the keys to managing sales team behavior with respect to situations where a sales person takes a course of action that favors their customer at the expense of their employer. Excerpts of the article authored by Frank E. Hurtte Jr. who has 28 years of distribution industry experience and a lifetime in sales follow.
“The customer-facing people in our industry don’t fit the mold – they shy from the very thought of being a sales person. Instead they dedicate themselves to helping customers solve problems.”
Because some our best sales people morph into agents for their customers, their loyalties shift from parent company to loyalty to the customers. And even though, some who profess to be sales experts will encourage this type of behavior, a danger looms in the background.
After in-depth interviews with hundreds of distributor salespeople, we have observed a growing trend. Situations abound where the sales person takes a course of action that favors their customer at the expense of their employer.
“Somehow we need to explain this “bigger mission” to our people. And here is why…”
Failure to provide this message to your customer-facing sales team members puts them into the position of Robin Hood. Let’s shy away from dollars and cents and instead talk about the value-based services you provide. Diverting a little extra value to the customer, in the form of training, troubleshooting aid, demo unit time or extended terms, doesn’t hurt anyone – right? Well, it does. All of these have a value; they cost your company money. But most of these good folks can justify their actions because it’s not really stealing – money. And, these people really are customers of some kind, even if they don’t really contribute profits to the bottom line.
Beyond the valuable resources already mentioned, we must understand the natural psychological phenomenon surrounding efforts to improve margins. The concept of price sensitivity doesn’t play well when you face the dilemma of deciding who gets a discount and who pays full price. Without some kind of pricing process and ongoing value-metric training, charging one person more than another seems immoral.
“The Process of Getting Paid for What You Do”
Building a real pricing process – with expert analytics, training, and metrics – is a critical part of your business success. First, a pricing process simplifies the decision-making process. Instead of asking your sales team to guess the optimal prices of thousands of products being sold to thousands of customers (millions of possible combinations!), you pursue a different path. The path to pricing excellence. Customer types are defined, market pricing levels are expertly determined and loaded into the business system, and exceptions to the system are carefully documented. Adherence to the process is measured and coached on an ongoing basis. To illustrate, let’s look at a couple of examples that occur on an ongoing basis.
Applying a pricing process makes everyone’s job easier. It takes away a whole lot of the psychological self-doubt and pulls your salespeople out of the Robin Hood syndrome. David Bauders, the founder of Strategic Pricing Associates, together with his colleagues, has built a pricing process that combines world-class analytics that determine optimal prices that balance competitiveness with profitability.
Click here to read the complete article.
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