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Discounting Your Way Into Sales Oblivion
I don't even like saying the word d---------g. I have literally obliterated it from my dictionary with a black marking pen. I'll bite my tongue until it bleeds, before I say the word. Earlier this week Bernadette, my wife, and I went shopping . . . something I love to do. Just kidding! We were looking for a 3-piece plant stand for our deck. We found one in a catalog and went to the store to check it out. Bernadette always asks the sales person if he can do better on his price. You'd be surprised how much you can save just by asking. Sidebar! The word ASK is the most powerful word in a sales person's vocabulary. Back to what happened. We debated over two different pieces and made a decision. The piece we did not select had a 30% discount tag on it. According to the sales person the 3-piece set we decided on was not on sale. Our sad faces did not seem to move him. He said he could get into trouble for giving us a discount. Another sidebar. The GNP of the United States would increase by a staggering amount (Probably hundreds of billions) if all salespeople got into trouble with their organizations for giving discounts. Back to the store. The salesman said the display unit was the only one available. Bernadette asked for a discount if we took the floor display. He caved in and finally said I'll give you a 10% discount. Here's the math: The list price was $178. 10% equals $17.80. He could have said, after doing the math, I'll take $15 off because it's a display unit. The $15 is 8.4%. We would have been thrilled. And you can bet the ranch, we would not have reached for a calculator to see what the percentage discount was. In my opinion dollars off always sounds more impressive than a percent discount. Because it was a display item the salesperson had to remove some things before he could bring the 3-pieces to the cash register. Bernadette inspected each piece. They were painted black and one had a sizable and noticeable scratch on it. Bernadette once again asked if he do any better on the price because of the damage on the 3-piece plant stand. It's time for more math. Remember he first offered us a 10% discount. If he increased the 10% discount to 12% the increase is 20%. If he increased the 10% discount to 14% the increase is 40%. If he increased the 10% discount to 16% the increase is 60%. If he increased the 10% discount to 18% the increase is 80%. If he increased the 10% discount to 20% the increase is 100%. Without any hesitation he said I'll give you 20% off. He doubled his original discount. It doesn't sound like much but in reality it is. The plant stand list price was $178. For other products, perhaps even yours, it could have been $1,788, $17,888, $178,888, or even $1,788,888. Don't be too quick to give discounts, especially big ones. Use your head and do the math before you offer additional price concessions. Forget about defending your price and do your best to explain your value. Here are a few more things to keep in mind: If you offer genuine value - don't give it away, charge for it. If you absolutely must offer a price incentive, never start with round numbers. Make sure there's a decimal point included. For example, any professional sales representative offering 5%, 10%, 15%, 20% off etc. should have to listen to seven straight hours of Lawrence Welk Music. If you must offer a concession try 3.9%, 8.9%, 13.6%, 19.3% etc. Once you calculated the discount % convert it to dollars because it always sounds like more. Never offer a price concession without getting something in return - NEVER. Finally, a small disclaimer. Please don't think I'm violating my pricing strategy when you see me offer special incentives for my products. My speaking and consulting fees are at list price and I seldom offer any discounts. I have negotiated very good pricing for all my products. And I'm happy to offer you a price break from time to time if it helps you to invest in your self-development. See the end of this letter. In a nutshell - anybody can offer a discount. If profitability is the applause of a happy customer you should be raising your prices, especially if your customers are happy. Jim Meisenheimer is the creator of No-Brainer Sales Training. His sales techniques and selling skills focus on practical ideas that get immediate results. You can discover all his secrets by visiting his website: http://www.meisenheimer.com
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Careers and Employment 4 Tips for the Summer Slowdown - How To Pick Up Sales You may have heard about the "summer slowdown". You may be experiencing it right now, or you may not be affected. Regardless it's important to pay attention, and do something this time of year. Hiring--A Vital Key In Sales Management Success Recently, I was asked to spend some time on the telephone, coaching a client's administrative assistant on how to check out an employment candidate's references. After each in-person or telephone conference, I complete a brief written report going over the information discussed. The information that I gave this worker was so vital to the company's overall sales management success that I felt impelled to share the report in my periodic client e-mailings, feeling that it might be of value to others that I serve. The information is so vital to the management process, I decided to reproduce it here as well. The Product or the Sale This is a quandary not unlike the chicken or the egg question, "Which comes first?". Do you focus on creating a superior product and continue to develop superior products or do you shift focus from the product to the sale prior to fully developing the line, or schedule of services? Five Steps to Maximize Success in Targeting For Growth Targeting is the process of selecting high potential customer accounts to receive intense sales focus. Goal setting translates that high potential into achievable numeric objectives, i.e. revenue and margin growth. Getting Off The Advertising And Sales Rollercoaster Seeing the results of advertising your business can be like watching a roller coaster. The day you run your ad you see a flurry of activity; your ph0ne starts ringing, your web site traffic increases and/ or potential clients visit your store. Your hopes soar. sales go up. Two or three days pass and the response goes down. You look at the bill for the advertising and your jaw drops. Your hopes descend. Increasing Business Through Distributors You're a small company with a good product. You are confident that the product can sell, but you don't have the financial resources to hire a team of fifty salespeople to market and sell the product for you. You also don't have the staff resources to support those that purchase the product. How do you make your good idea and good product create success for you? The Surest Way to Boost Sales If you have a small business and you are looking to boost your sales and make the public aware of your business, how do you going about doing this? There is one sure way that I know to boost sales and create awareness. It may not be sexy, but it WORKS! How To Build A Worldwide Distributor Network When your product is market ready and has a good bargain, it will be no value to you if you don't know who's going to buy it, or how you are going to tell the world about it. Your product will only sell if it has a good wide distribution network. Sales Plan? Whats a Sales Plan? In the past, if you said the word "plan" to me, I would bolt and run. I'm the "creative type," a former ballet dancer and choreographer-I'm terrible with details. When I was dancing professionally, all the details were taken care of; all I had to do was show up and dance. Even when I was choreographing, as long as I met my deadline for when the dance needed to be complete, I could go with the moment, go with the impulse and see where the dance led. The Sales Carpenter I remember moving my family to Argentina as Vice President of Sales for Latin America. I was in charge of managing five regional offices, Argentina of course being one of them. How Many Salespeople Should I Hire? One of the most asked questions I get is how many sales people does it take to get the revenue numbers needed. Personally, I believe in large sales forces because in highly competitive situations the largest army wins. That doesn't mean, however, that you can go out and hire 100 sales people if all you can possibly sell this year is a million dollars if everything goes right. So how do you decide how large a staff you need? How to Beat the 80/20 Rule in Sales Performance -- Part 1 Business executives and sales managers frequently bemoan "80/20" performance on their sales teams, where approximately 80 percent of sales are produced by approximately 20 percent of salespeople. Why do salespeople perform so differently? What is it about top sales performers that enables them to achieve such vastly superior results? Sales Forecasting For New Businesses Sales forecasting is the process of organizing and analysing information in a way that makes it possible to estimate what your sales will be. This Micro Module outlines some simple methods of forecasting sales using easy to find data. Books containing simple and sophisticated techniques of forecasting sales can be found in libraries and business oriented book stores. Disclosure Laws Favor International Terrorists The Federal Trade Commission has rule that are supposedly in place to protect franchise buyers from fraud from franchisors who might attempt to mislead them into purchasing a franchise. Part of the franchise rules are addressing required disclosure paperwork. In this disclosure document, which is required to be given to franchisees 10 days before any purchase is made are the names, addresses, phone numbers of all franchisees in the system. For smaller home based franchises this means home numbers, addresses and personal information. 100% Commission Equals Zero Percent Control The temptation to use straight (100%) commission plans never goes away: "Let's put our salespeople on 100 percent commission. Then, if they don't perform, we're not out any money." For small, start-up organizations, the lure is irresistible, especially when money is tight and the company or the products they sell have no track record in the market. 3 Secrets That Set The Context For Sales Success In today's competitive environment, every organization is trying to improve sales results. In every company, the most important and vulnerable link in the success chain is the performance of their people. As a sales management trainer and coach, I see that managers across every industry fail to take a hard look at the capacity of their people to provide the service -- whether it's to internal or external customers that puts them in a league apart from the competition. Beyond the Golden Rule There are several types and sub types of people in the world. Getting to understand the differences will help you connect with other people. This is taught in sales 101, because the need to connect with the people to make the sale. How to Sell Strategically If you want to maximize your sales performance, take a strategic approach to selling. After all, wouldn't you agree that "the 80/20 rule" applies to customers, where approximately 20 percent of customers produce approximately 80 percent of sales? A Fracas in the Franchise - Keep Your Customers by Keeping Your Workers As a previous owner of a Franchise I know the importance of maintaining employee commitment, loyalty and enthusiasm in maximising customer satisfaction, generating positive customer perception and protecting your investment. Commodity Sales Prospecting - How to Stand Out From Your Competitors I have received a number of requests for advice from salespeople and sales managers that sell "commodity" products and services. When I refer to commodities, I don't just mean pork bellies or frozen concentrated orange juice. A commodity is any product or service where the target prospect is likely to be thinking:
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