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Consultative Selling Pays Off

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High Payback Consultative Selling

Consultative selling techniques are key to winning sales where premium prices are the norm. With a focus on value and benefits, this style of selling has an excellent track record for producing results.

Dozens of corporate buyer surveys regularly indicate that price is not the number one or two factor in their purchase decisions.  Other factors, such as vendor reputation, product quality and overall value usually ranked higher than price.

Yet buyers often convince salespeople that price is their primary buying criteria.  Why?  They obviously want all the benefits the salesperson can provide but at a lower price, further boosting the value they receive.  Indeed, it’s really about maximizing value, and price is just one of the components of value.

In today’s competitive environment, buyers often have the upper hand, especially when consultative selling techniques aren’t being used.  Many buyers are even taking sales training and negotiations courses to be able to outmaneuver salespeople who try to sell products and services at healthy margins.  Below are just a few of the techniques we teach for selling value.

 

Avoiding the Price Trap

So, how can salespeople use consultative selling techniques to avoid the price trap and instead sell value?

  1. Assess how prior purchases were made.  What were the most important criteria at that time?
  2. Gather information on expected financial results and perform a ROI analysis
  3. Understand the prospect’s buying criteria and ensure you meet that criteria better than your competition
  4. Understand how the prospect benefits personally by a successful implementation of your solution, and explain how you’ll ensure those benefits are realized
  5. Gain strategic commitments, such as the prospect providing financial or competing vendor data, that boost closing odds

 

Using Consultative Selling Techniques Strategically

But, what happens if you do need to make some concessions or help your buyer save face?

  1. Practice consultative selling techniques and perform a complete needs assessment prior to entering into a negotiation
  2. Make sure you’re dealing with the ultimate decision maker before agreeing to any concessions
  3. See if you can trade a reduced price for a higher volume commitment, more favorable terms or referrals
  4. Offer high-value, high-margin services instead of cash discounts.  These services could include extended warranties or upgraded maintenance contracts
  5. In heavy negotiations, pre-plan your approach with negotiation tactics like the walk-away point or splitting the difference
  6. Make sure you don’t grant concessions too early — tie any concessions to a signed agreement

 

Those adept at consultative selling often out-earn their product-selling counterparts.  Why?  Because value-oriented salespeople are great at selling premium-priced, high-margin products and services.  Typically, these high margins provide for fat commission checks and better job security.

Not only does value trump price in the minds of buyers, salespeople using consultative selling techniques have more success and bigger paychecks than the more product oriented salespeople.

 

 

All Rights Reserved.  The Sales Alliance Inc.  San Diego, CaliforniaA

 

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Discounting Sales: Don’t !!!

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 Sales discounts and negotiation

 

Customers are trained to asked for sales discounts and negotiate.  Why?  Because salespeople often oblige and fail to realize that the customer already perceives a benefit and wants to maximize value by getting these benefits at a lower price.  And salespeople, hearing repeated price objections, begin to themselves believe that their products and services are not worth the asking price. When we lack 100% confidence and conviction in the value of our solutions, it shows—and the end result is that customers succeed in negotiating sales discounts.  So, what can we do?

 

  1. Quantify the benefits of your product or service to the customer and show the financial savings!  Develop an ROI (Return-On-Investment) worksheet.
  2. Reference other customers who realized savings quickly.  Clip relevant articles that support the benefits and payback of your product or service.
  3. Avoid on-the-spot sales discounts as lowering prices can deflates the customer’s perception of the value you offer.
  4. If you do need to provide sales discounts, don’t do it without asking for something in return (e.g. a commit for certain quantities or shorter payment periods).  And if you need to give something to secure the order, consider including additional products or services in order to minimize the financial impact on your firm (e.g. you provide the customer with a $250 service that may only cost your firm $100 to provide).
  5. If you have the ability to make concessions, don’t let the customer know, or you’ll invite additional negotiations.
  6. If the customer does ask for sales discounts or concessions, determine his or her motivation prior to responding.  In many instances, granting sales discounts or concessions will not resolve the issue and will hurt your chances for the sale.

 

 

Possible Customer Motivations for Requesting Sales Discounts

  • The customer is not sold and does not believe in the value of your proposal
  • S/he is comparing “apples to oranges” and doesn’t understand why your product costs more
  • The customer is sold but does not see how the benefits she’ll get justifies the price
  • S/he is sold and as a good businessperson is simply trying to see if s/he can get a better price
  • S/he is sold but wants a “personal win” (e.g. a “good deal” in order to look good to the boss)

 

Remember, while it is common for customers to ask for sales discounts and concessions, the best and most skilled salespeople are adept at securing orders by stressing value rather than reducing cost.

  
All Rights Reserved.  The Sales Alliance Inc.  San Diego, California.

 

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You Get What You Negotiate

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sales negotiation skills techniques

 

It has been said, “if you don’t ask for it, you’ll never get it.”  Indeed, one hallmark of a sales pro is business and sales negotiation skills. But besides skills, effective sales negotiations are dependent on personal values, beliefs and attitudes.  To boost your personal success, put into action the following sales negotiations tips:

 

Sales Negotiation Skills and Tips

  1. ASSESS NEEDS THOROUGHLY:  The best way to negotiate sales is to completely understand what your client or prospect is seeking and why.  The more needs and issues you can identify, the more ways you have to structure an arrangement that works for both sides.
  2. QUANTIFY BENEFITS:  Understanding the financial and intangible benefits that the client will likely realize after purchasing your product or service helps deflect price and value objections during the negotiation stage of the sale and helps reduce the need to discount.
  3. MAINTAIN CONTROL:  The one most in control has the ability to negotiate the best deal.  Examples of maintaining control include: setting meeting agendas, initiating a negotiation call (when the other side may not have the luxury of as much time as you) and setting other types of limits.
  4. BEWARE OF DIVULGING TOO MUCH:  Letting the other party know more than they need to can give them the upper hand.  Examples include: that you need one more sale this month to make quota, that your product pricing is expected to be reduced in the future and that you have granted more favorable terms to other clients.
  5. HAVE A WALK-AWAY:  Pre-determine the point at which the deal makes no sense (e.g. anything below a certain price level, any terms beyond net 90) and walk away from the sale when that point is reached.  Knowing in advance when to walk away can both help you avoid unprofitable sales and spur the client into agreeing to the minimum terms you need.
  6. CREATE A BACK UP PLAN:  Should the negotiation fail, have a back up plan (e.g. an alternate product to propose or a trial program).  Many failing business deals have been revived due to well-conceived back up plans.
  7. FOCUS ON A WIN-WIN:  Since most salespeople are looking to enhance relationships to solidify future business, it is imperative that clients see value and fairness during the sales negotiations.

 

Without a doubt, learning how others successfully conduct sales negotiations is key to improving your sales results and personal earnings.  Remember, “You get what you negotiate!”

 

All Rights Reserved.  The Sales Alliance Inc.  San Diego, CA

 

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