YOUR PRICE
Is tOO
hIgh!
hOw tO dEal wIth thOsE
PaInfUl PRICE ObjECtIOns
feb 4TH 2009 / Issue 17
EnCOURagIng YOUR REPs tO add ValUE
sEttIng salEs taRgEts3 COmmOn mIstakEs tO aVOId
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27 & 28 April 2009, Rendezvous, Auckland
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A key event for all Sales Managers, Key Account Managers, Marketing Managers, Business Development Managers and all those that want to reach the top in sales
management in today’s challenging economy
REGISTER NOW SAVE $300with our Early-Bird Special. Register and pay before 5.00pm 16 March 2009
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Untitled-4 1 2/2/09 9:09:43 AM
NZsM / feb 4TH 2009 / 3
febRuARY 4TH / Issue 17
thIs wEEks mUst REad
YOUR PRICE Is tOO hIgh
How to deal with those painful
price objections.
sEttIng salEs taRgEts
Three key mistakes to avoid.
nZsm CalEndaR
twO mInUtE tOP-UP
OnE IdEa PER CUstOmER
encouraging your reps to add
value.
bOOk REVIEw
hOw I RaIsEd mYsElf
fROm faIlURE tO sUCCEss
In sEllIng
A business classic, this book
is for anyone whose job it
is to sell. Whether you are
selling houses or mutual
funds, advertisements or ideas
-- or anything else -- this book
is for you.
salEs tRaInIng dIRECtORY
thE ClOsE
8
1112
5
8
10
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12
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14
YOUR PRICE
Is tOO
hIgh!
hOw tO dEal wIth thOsE
PaInfUl PRICE ObjECtIOns
$5
NZsM / feb 4TH 2009 / 4
2009. In Chinese Astrology this
is the Year of the Ox, which
symbolises prosperity through
fortitude and hard work. After the
giddy ride of the last few years to the
top of the economic boom, and the
traumatic burst of the bubble over the
last 9 months, this year is a time for strength, stability
and modesty.
As anyone who did economics in fifth form will know,
our economy (as with everything in life) is in a constant
state of flux. It goes through cycles of growth and
decline, boom and bust, just as nature dictates that night
will always follow day, and autumn and winter will
always follow summer.
Regardless of the events precipitating the economic
winter we find ourselves in now, the important thing
for us all to note here is that this is no more than a
continuation of the natural business cycle, although it
still caught most of us by surprise.
Yes, we should acknowledge that we are in what the
economists refer to as a “recession”. Yes, we should
acknowledge that many of our customers may have
less cash available to spend on our products and
services. There’s no denying it and we can’t do much
to change it. Insisting on wearing your speedo’s in the
middle of August will not change the fact it is winter
– you’ll just die needlessly of hypothermia.
but what we can all do is decide how we are going
to react to these circumstances. As individuals, as
families, as businesses and as communities, the one
thing we can control is our attitude towards adversity.
some say that adversity brings the best out of Kiwi’s
so let’s take note from our companion the Ox and
commit ourselves to a year of hard work, practicality,
and the determination to get ourselves ready for the
economic spring that is sure to follow.
for us at NZ sales Manager we’ll be introducing several
exciting new features this year, and look forward to
helping you make the most of the sales opportunities
that come your way.
It’s great to be back!
Richard
AbOuT /
short and sharp, New Zealand sales
Manager is a free fortnightly e-magazine
delivering thought provoking and
enlightening articles, and industry news
and information to forward-thinking sales
managers, business owners and sales
professionals.
eDITOR / Richard Liew
ART DIReCTOR / Jodi Olsson
ADVeRTIsING / Dave Mahony
ADVeRTIsING eNQuIRIes /
Phone Dave on 021 843 040 or
email [email protected]
CONTeNT eNQuIRIes /
Phone Richard on 09 523 4112 or email
POsTAL ADDRess /
NZ sales Manager
C/- espire Media, PO box 137162,
Parnell Auckland 1151,
New Zealand
WebsITe /
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nZ sales manager is an
Espire media publication
NZsM / feb 4TH 2009 / 5
Cost down and commoditisation is a
relentless reality of the globalised, infor-
mation driven world in which we live.
We need to change the way we sell if we are to
overcome the daily challenge of buyers saying,
‘Your price is too high…’
I recently attended a CIPs (Chartered Institute
of Purchasing and supply) forum where a
panel of ‘experts’ debated the current state of
procurement in NZ. While this was a fairly
chaotic debate to say the least, one member of
the panel commented that procurement in NZ
is relatively unsophisticated. There are simply
not enough large companies here who are of
the size where strategic procurement is viable.
I tend to agree and also came away thinking
that their message was that ‘cost down’ is pretty
much where it is at. ‘No surprises there’ you
might be saying.
A few months have since passed and the credit
squeeze is affecting business. Projects are being
put on hold and buying decisions moved up to
senior levels as companies ride out this period
of economic uncertainty.
The consequence for many sales people in
these times is that selling becomes all about the
price. If the talk around your coffee machine is
‘we are too expensive’, and ‘we can’t compete
on price’, then read on, as it is likely to be a
symptom of how you are selling rather than
what you are selling.
do your buyers turn straight to the “sports
pages” at the back of your proposal to see
what the price is?
by Paul Newsom
YOUR PRICE Is tOO hIgh!
$$$
T H I s W e e K ’ s M u s T R e A D
\\ how to deal with those painful
price objections.
NZsM / feb 4TH 2009 / 6
I often find that when sellers complain that ‘it is all
about the price’, all too often it is all about price
because they are only competing on price! Price is the
easiest criteria for people to use in the buying decision.
Price comparison is quick and something we all
understand.
When the features of competing products look the same
to the buyer, price quickly becomes the primary factor for
the buyer to consider. I see many proposals and quotes
where the only criteria given for the customer to decide
on is price, yet sales people complain that it is all about
the price! Discounting then starts (what else is there to talk
about?) and continues until the customer says yes.
If this is you, in the long term you can’t win. someone
will always drop their pants on price lower than you are
prepared to.
whY Is thE ‘PRICE tOO hIgh’?
When the buyer says ‘the price is too high’ it will
generally be for one of five reasons:
1. You have quoted the wrong thing to meet the need
2. You have not understood how and why the customer buys
3. The value of the benefit of your solution/product has
not been understood
4. They do want to buy from you, but want to feel they
have got a discount
5. Your price really is too high.
let’s take a quick look at these:
1. You have quoted the wrong thing to meet the need.
It’s an old cliché but offering a Rolls Royce when the
customer needs a Mini is just plain bad selling. You
won’t win this time and probably won’t be invited back.
Your customer will not trust you.
If you don’t have the right solution for the customer,
then say so. If you can, recommend where they will find
the right solution.
2. You have not understood how and why the customer buys.
understanding the buyer motive is a widely taught
selling skill, yet when in front of the customer, it is often
done in insufficient detail. In your eagerness to make a
sale, the trap is to present the solution far too early – so
the customer judges you on price only.
Put the customer’s needs ahead of yours, start listening
to your customer and stop talking.
3. Your value is not understood.
You have a solution that is differentiated from your
competition, yet the customer doesn’t ‘get it’, and
won’t pay for it.
Whole books are written on this. Here’s step 1 in two
sentences. first understand what issues and problems your
customers would have in the absence of your solution.
Only when you can quantify this, will you be able to begin
to define value in a way that will be understood by the
customer to the extent they are prepared to pay for it.
4. buyers want to get a discountMany buyers like to feel they have to get a discount
each time they buy (like me!). The problem for the
seller who discounts is that if you offer a discount the
first time, the customer will be expecting a discount
the next time they buy. Your first price is then never
the real price.
You must either understand the opportunity well
enough to know that your first price is your best price
and will win, and make sure the customer knows
that it is your only price. Alternatively be prepared to
manage the expectation of discounting for the life of the
relationship.
before rushing to discount until the customer says ‘yes’,
pause for a moment and find out what ‘too high’ means.
Too high compared to what?
5. Your price really is too highIf there are lower priced alternatives in the market
that offer the same or more value, and the customer
does not value the relationship, then the product is
commoditized in the mind of the customer. Your price
really is too high.
The best advice is to fix it or go and sell somewhere
else. for top sales people, price is rarely an issue
because of how they sell. You will notice that reasons 1-
4 above are fixed by how you sell.
NZsM / feb 4TH 2009 / 7
Many sales training manuals will advise to keep off the
price until everything else has been discussed and agreed,
yet many buyers want to get quickly onto price.
Put yourself in the buyer’s shoes for a moment. When you
are buying you want to know what the price is don’t you?
How do you feel if you can’t get to the price, or the sales
person won’t tell you the price? You become suspicious.
You lose trust, are likely to be put off and go and talk to the
next supplier. so don’t do it to your customer – if you do,
price will become an issue before you want it to.
When asked about price, you have to manage expectations
around price, rather than sidestep the customer’s question.
Bear in mind that as part of your qualification, it will be
in your interests to set a price expectation early on so
that you are not wasting your time. If the customer is only
prepared to shop at The $2 Shop, then it is best to find this
out early in the piece and let them go to The $2 shop. (I
have nothing against The $2 shop, and buy there regularly
myself for those squishy balls etc you find on the table at
training sessions!).
If you have a solution of value and you want the customer
to pay for this value, then manage these expectations by
quoting a reasonable price range that is based on what you
know at the time. Then qualify this with a comment such
as ‘I expect it will be significantly less than the cost of the
problem’, or ‘it will be a small investment to solve what
seems to be a major problem for you’.
Get agreement before you proceed. If you’ve had the
conversation about price early on, price is less likely to be
a big issue at decision time.
It is true that as the sale becomes more complex, getting on
to specific price too soon will result in you being judged
on price alone and value will be left on the table. being
able to answer the question with credibility requires good
consultative selling skills.
In summary, price will remain an issue for the self
serving sales person who is focussed only on their own
interests and when the sales conversation does not go
beyond the product or service they are selling. When top
sales people stand in their customer’s shoes, understand
their business, help them to make good buying
decisions, and differentiate their product or service,
company, and themselves from their competitors, then
price is rarely an issue.
Paul newsom is learning & development manager for the Rev sales network, a nationwide personal and
professional development network for sales professionals. Visit www.rsn.co.nz for more info.
keep off the price at your peril!
NZsM / feb 4TH 2009 / 8
sEttIng salEs taRgEts
At this time of year a lot of businesses are revisiting
their sales goals and target. We thought it would
be timely to share the biggest mistakes we see
businesses making when it comes to sales planning.
MISTAke 1: AccelerATed GrowTh rATeS
In this context, your growth rate is the percentage change
in your turnover each year. If you have a turnover of $100
000 in 2007 and then $120 000 in 2008, your growth
rate is 20% / annum. One of the biggest mistakes business
owners make is setting unrealistic growth rates for their
business. for instance, consider the following data.
historically the business has achieved:
* 2003 = $50,000
* 2004 = $70,000
* 2005 = $100,000
Then they start planning sales goals for the future:
* 2006 = $200,000
* 2007 = $550,000
* 2008 = $1,200,000
on the surface these figures may look reasonable, just a
few $100,000 here and there. However, the growth rates
tell a different story.
* 2004 = 40%
* 2005 = 42%
* 2006 = 100%
* 2007 = 175%
* 2008 = 118%
It’s not so much that these growth rates are impossible but
you must seriously question how a business is going to go
from a growth rate of 42% to 100%+ in just 12 months.
Most business owners setting ambitious sales goals don’t
think through this in enough detail and fail as a result.
but shouldn’t sales gobals be ambitious?
A lot of management books push business owners to
“shoot for the stars” when setting goals for their business.
three key mistakes to avoid by Kirrily Dear\\
NZsM / feb 4TH 2009 / 8 NZsM / feb 4TH 2009 / 9
It needs to be clear who is accountable for sales performance in the business and what that specifically entails.
kirrily dear is the founder and development director of australian marketing, management and strategy consultants Eyes wide Open. Visit their website at www.eyeswideopen.com.au.
We disagree with this mindset when it leads the business
owner to set goals that lack a pragmatic foundation.
substantial growth is possible but you have to carefully
plan how it will happen. What’s going to give you the leg
up? More sales staff? A merger with another business? A
new contract? better facilities or more warehouse space?
be very careful about setting your business on a course
for substantial growth. It will most likely put your people,
cashflow and other resources under enormous pressure.
failure to achieve the goals can be devastating to the
business, your credibility and the confidence of the people
within the business.
from our experience, you are likely to be more effective
setting more conservative, well considered goals. We call
this “setting yourself up for a win”. After all if you achieve
them quicker than expected you can always set new ones!
(Of course, you only set new ones after you’ve celebrated
your win!). Taking this approach leads to business growth
being a more enjoyable and rewarding journey for all
involved.
what growth rates are reasonable?
The level of growth that is considered “reasonable” will
vary depending on the age of the business, industry and
how well it is run. New businesses can have amazing
growth rates because they’re working from a small base.
some of the large, heavy industrial corporations rejoice
when they get growth of 15%.
Also it depends on what industry you are in. for instance,
aged care at the moment is booming so you can expect
most businesses to have strong growth rates whereas other
industries are in decline and growth is incredibly difficult
to achieve.
MISTAke 2: lAck of chAnGe
The old axiom “To get a different result you need to do
things differently” is highly applicable to the process of
increasing sales.
sales growth generally doesn’t happen purely through
working harder. You’ve got to work smarter. There needs to
be a fundamental shift in the way you are generating sales
for there to be a significant increase in sales.
Once you have clear and practical sales goals for the year,
you then need to do a gap analysis. That is, look at the
difference between what you want and what you’ve got, to
determine what changes are required to achieve those sales
levels. Perhaps you need a better system for generating
leads, or more products and services to sell or perhaps
better internal administration. Then take these changes
and break them down into specific steps and allocate a
completion date and person responsible for each step.
MISTAke 3: lAck of AccounTABIlITY
This is particularly an issue when there are more than one
or two people in the business. It needs to be clear who
is accountable for sales performance in the business and
what that specifically entails.
A lot of activity is required to achieve sales growth.
Nobody ever achieved sales growth by just sitting around
and thinking about it. Clearly specify what type of activity
you want to see; client visits, speaking gigs, mail outs,
quotations, follow-up phone calls etc.
Then set levels for each activity, for instance 3 client
visits per week. These are commonly referred to
in planning as KPI’s or Key Performance Indicators.
Your aim in implementing KPI’s is to give people a
structure to work within, to help them manage their
own activity and know what they are meant to be
working on. This ultimately enables everyone to be
more productive.
NZsM / feb 4TH 2009 / 10
fRI 6 MARTHu 5 MARWeD 4 MARTue 3 MAR
MON 2 MARTHu 26 febWeD 25 feb
Tue 24 febMON 23 feb
WeD 18 febTue 17 febMON 16 febfRI 13 feb
THu 12 febWeD 11 febTue 10 febMON 9 feb
fRI 27 feb
suN 1 MAR
sAT 28 feb
suN 22 feb
sAT 21 febfRI 20 febTHu 19 feb
suN 15 feb
sAT 14 feb
suN 8 feb
sAT 7 feb
fRI 6 febWeD 4 feb THu 5 feb
suN 8 MAR
sAT 7 MAR
NZsMCALeNDAR
Workshop – How To Cold Call & Have funTop Achievers sales TrainingAuckland - east
Workshop – NetworkingTop Achievers sales TrainingAuckland - east
Key Account ManagementDavid formanAuckland
Workshop – Cold Calling & ProspectingTop Achievers sales TrainingAuckland - southsales basics seminar GeewizAuckland sales skills Level OneeMAAuckland
excellence in sales & Marketing sMINZAuckland
exceeding Customer expectationsGeewizAuckland
sales basics seminarGeewizWellington sales skills Twoessential sales skilsZealmark GroupAucklandsales skills Level OneeMAAuckland
Advanced serious sellingRichard GeeWellington
Professional selling skills CoreAchieveGlobalAuckland
Advanced serious selling Geewiz
Wellington
exceeding Customer expectationsGeewizWellington
Professional selling skills CoreAchieveGlobalAuckland
Advanced serious selling Geewiz Wellington
Advanced serious sellingGeewizAuckland
Jamie ford presents “Are You Tough enough?”Rev sales NetworkAuckland
sales skills Oneessential sales skilsZealmark GroupAuckland
sales skills Oneessential sales skilsZealmark GroupAuckland sales ManagementDavid formanAuckland
Professional selling skills CoreAchieveGlobalAuckland
Professional sales CoachingAchieveGlobalAuckland
Professional sales CoachingAchieveGlobalAuckland
Key Account ManagementDavid formanAuckland
feb 23-25NegotiationDavid formanAuckland
feb 23-26sales DevelpmentDavid formanAuckland
sales ManagementDavid formanAuckland
sales ManagementDavid formanAuckland
sales ManagementDavid formanAuckland
NZsM / NOV 12TH 2008 / 11
OnE IdEa PER daY, PER CUstOmER// encouraging Your Reps to Add Value
The greatest way to build sales is to get existing
sales reps who are calling on existing custom-
ers to add value, and help customers make more
informed decisions, from their extensive product and
service knowledge.
A simple strategy to implement with your sales force is
called ‘One Idea Per Day, Per Customer’.
In every sales team you build your business one
customer at a time, one transaction at a time, so
following through on this philosophy, show your sales
reps how they can add one idea as a suggestion, not
an opinion, to each customer at each visit. Gradually
over time they will have a reasonable success rate and
become confident enough to keep on adding ideas
which will increase the range of products purchased.
The most important thing is to encourage the customer
to make the idea or suggestion themselves, which
means you don’t use the words ‘I’ or ‘we’. Instead
use the words ‘some of our other customers have’ to
introduce the suggestion or the product idea. A sales
representative is better known for being an ideas
suggestion person than a hard, pushy salesperson.
One way to encourage the ideas is to take some of your
products or services and encourage the reps to select
a particular product or service for that week or the
interval between your sales meetings, and get them to
brainstorm and write down as many possible methods
of communicating an idea or a benefit about that
product or service.
Then all they have to do is to take one of those ideas
and mention it to each customer they call on.
The advantage of having different products or services
scattered around your sales team is that you will find that at
the next sales meeting each one of them will
have had some successes and they will be able to pass on
those ideas which worked, and encourage the rest of the
team to try them.
sales promotions, where products are featured with special
bonus offers, discount offers or special incentives, will
always work well as encouragement incentives, but make
sure that your sales team has sufficient supplies of leaflets,
handouts, or flyers to leave with the customer about the
special promotion.
Remember that human beings are visual people and like
to see pictures, graphics, or visualisation of new products
or services. An idea that has a graphic showing how it can
be used, or a physical product to actually look at, or an
enthusiastic story to show how other customers have used it,
is more likely to be listened to.
Just consider that if you called on ten customers a day and
suggested one idea to each one of them, and had a 50%
success rate, at the end of the week you would have added
25 new lines to your group of customers. At the end of the
month 100 new lines, at the end of the quarter 300 new
lines, and satisfied customers.
Where did it all start? Just suggesting one idea, per day, per
customer.
An idea a day works – how many ideas can you come up
with?
by Richard Gee
T W O M I N u T e T O P - u P
Richard gee is a leading sales and marketing coach, author and seminar presenter.
Visit his website at www.geewiz.co.nz.
NZsM / feb 4TH 2009 / 12
R e s O u R C e C O R N e R
A business classic, How I Raised Myself from Failure to Success in Selling is
for anyone whose job it is to sell. Whether you are selling houses or mu-
tual funds, advertisements or ideas -- or anything else -- this book is for you.
When frank bettger was twenty-nine he was a failed insurance salesman. by the
time he was forty he owned a country estate and could have retired. What are
the selling secrets that turned bettger’s life around from defeat to unparalleled
success and fame as one of the highest paid salesmen in America?
The answer is inside “How I Raised Myself from failure to success in selling.”
bettger reveals his personal experiences and explains the foolproof principles
that he developed and perfected. He shares instructive anecdotes and step-
by-step guidelines on how to develop the style, spirit, and presence of a
winning salesperson. No matter what you sell, you will be more efficient and
profitable -- and more valuable to your company -- when you apply bettger’s
keen insights on:
- The power of enthusiasm
- How to conquer fear
- The key word for turning a skeptical client into an
enthusiastic buyer
- The quickest way to win confidence
- seven golden rules for closing a sale
hOw I RaIsEd mYsElf fROm faIlURE tO sUCCEss In sEllIngby frank bettiger Published by fireside books
$29.98 from
NZsM / feb 4TH 2009 / 13
NZsM / feb 4TH 2009 / 14
“
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haVE YOU sUbsCRIbEd tO nZ salEs managER? It’s fREE!
subscribe to NZ sales Manager and go in the draw to win a copy of the excellent book Kites Rise Against The Wind – Positive and Powerful Ideas to Unlock Your Potential, written by New Zealand’s own performance psychologist and motivational expert Charles Donoghue, this is
an essential book for all high achievers and their managers.
To enter the draw simply visit www.nzsalesmanager.co.nz and sign up before 5pm, Monday 16th february to get a copy of NZ sales Manager
delivered straight to your inbox every second Wednesday.
winner will be notified by email and published in the february 18th issue of NZ sales Manager.
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The important thing is to learn a lesson every time you lose. Life is a learning process and you have to try to learn what’s best for you. Let me tell you, life is not fun when you’re banging your head against a brick wall all the time.
John McEnroe
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