The Top Three Sales Mistakes Made that Lead to Price Shopping

Denver-Based Sales Leadership Development Available Nationwide

Posted: June 22, 2009

“My sales team is getting price shopped. The only way we get the business is to give a discount. Margins are eroding.” All of these statements are pains expressed in good times and bad. The current recession has added pressure to these pain points, testing even the most seasoned sales professional.

So how do you get beyond the price game? First, quit blaming external factors. Jim Collins, author of “How the Mighty Fall,” identified that companies in Stage 3 of failure blame other people or external factors rather than confront the frightening reality that the organization might be in serious trouble due to their own denial. The reality is your sales team might be the problem, not the economy. Here are three areas to examine, confront and change:

1. The Sales Activity Plan
This is all the activity that leads to an appointment. Many organizations make the mistake of measuring appointments, not activity, and end up working on a lagging indicator which often leads to empty sales pipelines. Put a number to each specific sales activity so your team knows if they are winning or losing; i.e. 4 networking events per month, 6 influence meetings, 5 introductions given for referral partners and clients. Empty pipelines always lead to desperation and discounting. The more robust the sales pipeline, the easier it is to execute good selling and negotiation skills. Oscar-winning actor Denzel Washington shares what his Dad once told him, “Do the work so you can do the work you want.” Sales professionals still winning business at full margin have consistently done the work for years.

2. Does your organization deserve the business?
When is the last time you have done business with your company? I heard Diane LaSalle, author of ‘Priceless’, speak two years ago. She shared the case study of a spa that engaged her firm to help improve new and repeat business. Diane’s firm set out to determine if the spa deserved the business and documented every step of the customer experience with the spa. The first disconnect they noted was the difficulty in finding the spa. The sign was hidden and her team drove by it six times. (What do you think the frustration level is for the typical customer trying to get to their appointment on time?) The second disconnect came when checking in for their luxury appointment. The counters were extremely high, requiring most women to get on their tip toes to even make eye contact with the receptionist. Getting the picture? At your next sales meeting, run through a detailed discussion of each step of your sales process and rate the client experience on a scale of 1 – 10. Confront the reality. Would you do business with your organization at full price?

3. Your Teams' Ability to Persuade, Influence and Negotiate
Many sales managers make the mistake of focusing their time and energy on training sales skills. Then the salesperson gets in front of a professionally trained negotiator and buckles like a paper cup. The reason is not lack of knowledge. The reason is the salesperson’s mindset.

My first negotiation workshop was over 15 years ago. The number one thing I took away from the instructor was: “If you can’t walk, you can’t talk.” (By the way, it’s easier to walk with a full sales pipeline.) The instructor’s point was that you must be mentally ready for negotiations before any skill training has meaning. Mindset means checking into your sales team’s value of themselves or your services. You can’t give away something you don’t have. If a salesperson doesn’t feel they are of value, why should the prospect?

Once the proper mindset is in place, focus on skill training. Salespeople have a bad habit of trying to convince the prospect of the value of solving the problem. Stop! Put the responsibility of solving the problem on the prospect. People believe their own data and a good salesperson facilitates that type of sales conversation. “What value is the organization putting on solving this issue? Is solving this issue in the top five priorities for the company? What happens if we are having this same conversation in a year?

Take a hard look at the sales activity plan. Ask the tough question: do we really deserve the business? Get the right mindset and skill set to sell beyond price.

Examine and confront the reality. Is it the economy or your sales team?
Good Selling!

Colleen Stanley
CSO – Chief Selling Officer

PS. Pick up Jim Collin’s new book. It’s a good read.