Pricing Situations Can Spoil a Selling Situation

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A recent The Distributor Channel article, “Fall Tune Up for Distributors,” discusses how distributors should re-evaluate their sales management process to maximize selling time and implement effective pricing tools and price negotiation practices to avoid training their clients to expect discounts.

Excerpts of the article follow.

“What takes salespeople away from selling?”

Operational issues are a major source of sales distraction.  Think back to the last time you went out with a member of your sales team.   Was a portion of the sales call devoted to discussing shipping errors, delivery issues or a poorly handled customer service issue?  Nothing sours a well-planned sales call like a little back peddling early in the meeting.  It’s hard to sell “ease of doing business” when you just cost your customer money based on something easily avoidable.

What’s worse for many distributor managers is this:  Most lack the data to determine if their growth problems are based on a sloppy warehouse and a crappy customer service department or an ineffective sales team.  Some wonder if customer issues with missed delivery dates or inaccurate shipments are just part of the “distributor sales game.”  With this in mind, one would wonder if gathering administration and logistics data shouldn’t be a standard procedure for every distributor.   We think it should be.

“Pricing situations can spoil a selling situation.” 

While we could argue that price negotiations are an integral to selling, I believe we need to explore a couple of points.

First, unless you have accurate pricing information loaded into your ERP system, just arriving at a valid price provides a selling distraction.  Each transaction requires additional research.  Every time a salesperson quotes an amount to a customer, a dozen questions flash through their mind.  Is the price right?  What price did we use last time?  Could someone in customer service have priced this differently?   Where do we sit compared to the competition?  And more.

“Not only is time spent researching for the right price, we also create doubt and uncertainty.” 

When the salesperson guesses incorrectly, it creates additional distraction.  The salesperson spends even more precious selling time fixing the issue.

“Secondly, when no selling process exists, the salesperson is stuck negotiating every single sale. 

To summon up something said by my friend and pricing expert David Bauders of Cleveland-based Strategic Pricing Associates, you never see a dog beg just once.  His point is simple: If you give your dog table scraps one time, they turn into constant beggars.  When our salespeople lower their prices once, the customer becomes conditioned to request a lower price on each opportunity.  Negotiations take away from, you guessed it, selling.

Unless the distributor employs a full-on pricing process, salespeople are left to determine price.  Customers bombard them with the message “your price is too high,” and it ruins the selling moment.  This constant bombardment of negative energy causes many sellers to lose perspective on the value their organization provides to customers.   Sales experiences, without the presence of value-creating solutions, are about as exciting as the paint page of the 1964 Sears catalog.

Click here to read the complete article.

SPA Events

Battle for Margin > SPASIGMA Negotiation Workshop & SPA Pricing Strategy Seminar

Date: October 27-28, 2016

Location: Aria Resort and Casino in Las Vegas, Nevada

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