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| Dartmouth Clients: |
Procter & Gamble
AT&T
Lilly
Roche
Chase Bank
Trilogy
Mays Chemical
Xerox
CT Corporation (NY)
The Engledow Group
The Estridge Group
Siemens
SOI
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What our Clients say…..
“The Dartmouth Group, Ltd. has worked closely with us to create selling and negotiation models for our North American operation. Dartmouth’s contribution in helping us to rethink, develop and implement these new models has proved invaluable”
Bruce Peters,
Director of Global Sales Training
The Procter and Gamble Company, Cincinnati, Ohio
________
“The talent that The Dartmouth Group brings to the table is incredible---their support for sales strategies, field sales organizations, compensation modeling, change-and managing change-within companies is incredibly important in today's hyper-competitive environment. The "sales traps" are a must for every sales person and manager to recognize. If you want to get and keep a competitive edge, this is the organization to partner with”
Jack Thompson,
Vice President
Xerox Corporation |
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| Information
You Need to Know |
Can you
sell yourself out of trouble?
In today’s tight economy, business leaders from boardrooms to field salespeople are trying to figure out how to get more out of less. Does your company know how to sell itself out of trouble?
At Indiana University’s Institute for Global Sales Leadership at the Kelley School of Business, we have been examining sales strategies that may work in good times, but not as well in tough times. In fact, they may be counterproductive and cost salespeople and their companies not only orders and revenue, but profit margins.
We refer to these types of sales strategies as “traps”—in other words, mistaken beliefs, pitfalls or partial truths. These traps tend to run counter to conventional wisdom—but they may adversely affect you or your company’s performance.
So what are some of these traps? After examining the secondary research on this topic, I’ve chosen three for discussion:
 Do you believe you should reduce your prices to retain customers or to develop new business? Many people do, particularly in hard times. But this may be only a partial truth. Buying decisions are not always about price; sometimes they are about value. And, if the decision is about value, you may be solving the wrong problem by dropping your price.
For example, a study by eminent sales researcher Neil Rackham, cited in his book, “Major Account Sales Strategies,” found that nearly two-thirds of the time a customer claimed price was the reason he or she didn’t buy, price turned out not to be the only reason. There were other reasons, such as concerns regarding the “value or importance” of the so-called “benefits” the salesperson was offering, or deep-seated concerns about the company’s reputation or past product performance.
It appears it is important for a sales organization to know how to create value, so customers recognize how the price was determined. Furthermore, customers normally evaluate the benefits they receive against the total cost they pay. In this equation, price is a subset of total cost, because cost also includes factors such as hassle, effort and risk. Therefore, the customer is weighing benefits minus cost to determine value.
The trap here is that salespeople often reduce their price before they have built customer value by effectively probing for key benefits they can offer the customer to offset the cost the customer is evaluating. The right questioning techniques, coupled with coaching reinforcement, will help improve profit margins of both parties—consultant and client.
Will you and your managers put on a stronger push to “close business” at the end of your revenue periods to improve performance? Be careful! You may be solving the wrong problem.
If salespeople are experiencing difficulty closing the sale, it may be because they have done an ineffective job of uncovering the client’s needs earlier in the sales cycle. The solution? Travel with them early in the sales cycle rather than at closing; be there to help them identify customer needs.
You can also help them then with their questioning techniques to uncover and develop needs in areas your product or service can address better than competitors’. In this way, you will also be less likely to need to reduce your price in this value equation: Value equals benefits minus cost.
Are you placing your primary emphasis upon sales results and cutting back on sales training to save money? This may be a trap because, if your salespeople are not effectively probing for needs, they may be lowering their price to offset their lack of investigative skills.
If you are experiencing declining profit margins and revenue, you may want to ask yourself if you are focusing upon the right solution during skeptical times. Should you reduce your sales training dollars and risk lower margins or should you focus upon creating customer value so you won’t need to reduce your price as often?
It is not always easy to separate symptoms from problems, but the price of solving a symptom rather than a problem can be costly to a company and its sales force—it can be a
trap!
Canada can be reached by e-mail at rcanada@dartmouthgroup.com.
Quote: … if your salespeople are not effectively probing for needs, they may be lowering their price to offset their lack of investigative skills.
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