Sales Blog with Sales Tips

If you’re phobic about math, stay with me for one moment while I define a simple statistical term for today’s sales tips post.

Correlation. It’s the statistical relationship between two or more random variables. In short, if one thing changes, how much and in what direction does it affect something else?

See, that wasn’t too bad.

Example
As the collective IQ of the US Congress decreases (a purely anecdotal observation on my part), the American public’s dissatisfaction with their performance increases. Summary: smart is going down while unhappiness is on the rise.

There are many interesting correlations in sales (“interesting correlations in sales” is an oxymoron that you will probably never see or hear again the rest of your life). I’m going to talk about just one in today’s sales tips blog.

Sales Application
The example given above is called a negative correlation. As one number moves in one direction, the other moves in the opposite direction.

Did you know there’s a negative correlation between sales cycle duration and pricing? As sales cycles get longer, our pricing typically declines.

Our customers are very aware of this phenomenon and they can use it as a silent negotiating technique.

Why We Decrease Pricing As Time Increases

• We think any delay is caused by competitive inroads. The customer must really be checking out the competition and is finding pricing significantly below ours.
• Stalling is a form of a customer objection, and we instinctively lower our pricing in response to all objections.
• We’re afraid the customer has lost interest. Maybe a price concession will get them back in the game.
• We don’t know the customer’s budget, but we’re afraid our quote may have exceeded it. Just to play it safe, we’ll reduce our pricing.
• We’re impatient.
• Our sales manager wants us to close business as quickly as possible.

Sales Blog Wrap-Up
Getting out of this habit requires that we understand this is nothing more than a head game. One we play alone.

Its fundamental cause is a fear of losing the deal.

When we discount pricing because the buyer is delaying, we make pricing decisions from a soft position of assumption and conjecture.

There are a million reasons that cause sales cycles to lengthen. Most of the time we don’t know why. More often than not, it has nothing to do with pricing. Instead of discounting, we need to be asking questions.

There is little or no correlation. Resist the temptation.

©2010 Scott R. Sheaffer

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Omniscience is a noun defined as a state of having infinite knowledge and understanding. In short, God.

Sales professionals knowingly or unknowingly slip into the bad habit of believing that customers are omniscient. We think our customers know everything about everything. They don’t.

Negotiation 101
This fear puts us at a disadvantage when negotiating. We all know that we can’t effectively negotiate with customers if they know everything. Actually, if we just think they know all the cards we’re holding, we handicap our ability to negotiate.

5 Sales Tips To Kill The Omniscience Myth
The following represent areas where we frequently assume the customer has unlimited information. These are ranked in order of occurrence with the most frequent listed first.

1. Competitors. Admit it. We all think our customers are a Wikipedia of information about all of our competitors. We compete against our competitors every day and yet we have knowledge gaps about them. Our customers are going to know less than we do.

1. (tie) Commissions, costs and profit margins. I couldn’t decide whether to make this first or second so I’m calling it a tie. Our customers do not know, nor would it be possible for them to know, what our commissions, costs and profit margins are.

Every minute there are thousands of sales professionals around the globe needlessly discounting prices because they believe the customer knows all of our financials.

2. How badly we need this order. A good sales professional knows to never act desperate. It sends out the “I really need this order or I’m going to have to live under a bridge” vibe. This scent is definitely a sales repellent.

The only way customers are going to know we really need an order is if we tell them or if we telegraph it by our actions.

3. Our company’s weaknesses. Obviously, we know most of the dirty laundry about our company. We know about the product that doesn’t work when the humidity level goes above 90 percent. We know our service department had a high employee turnover last year.

We even know about our sales manager’s affair with the president’s assistant (actually, the customer may know about this last one since everyone in North America has figured it out).

We know all the bad and the ugly because we work for our company. The customer doesn’t.

4. Strategic accounts. We want all of our customers to know they are important to us. But we also know that not all customers are created equal. On average, the top 30% of our customers account for 60% of our sales and 90% of our gross profit.

We fear that our large strategic customers will become heavy handed with us because of our dependency on them.

Unless we tell or telegraph this information, there’s really no avenue for them to discover how they are positioned in our account base.

We shouldn’t have to rely on a few customers in the first place, but that’s for another sales tips post.

Wrap Up
Our customers haven’t contracted with the CIA. We are not being wiretapped by them.

They don’t know everything.

©2010 Scott R. Sheaffer

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As sales professionals we constantly put a positive spin on our company and its products and services. We can’t help ourselves; it’s how we’re wired. We’ve been trained to do this since our first days as sales pups.

While this habit is admirable and ingrained in our psyche, there are times when we need to set it aside.

The power of positive speaking won’t always give us the results we’re looking for.

Here’s How I Got In Trouble
I’ll never forget a sales presentation I made to a group of telecom engineers. I was new to sales and felt like I was at the top of my game. I was prepared, presented well and hit all the points I wanted to cover. That PowerPoint was the culmination of all the best sales tips I had ever heard.

But I made a major mistake.

I failed to tailor my presentation to the audience and covered only the points I wanted to cover.

Sales Tips 101: Not All Audiences Are Created Equal
Whenever we go into the “salesy” mode with engineers and their ilk, they immediately hit their cerebral off-switches. Why? They have little need to feel good about a purchase. They want to objectively weigh the positives and negatives before buying.

They want facts.

There’s A Place For Negatives
People who primarily operate in the world of hard data want to hear the good, the bad and the ugly. They won’t make a decision if they hear only one side of the equation.

Wouldn’t we prefer that our customers and potential customers hear the bad and the ugly from us rather than our competitors anyway?

When I was speaking to those telecom engineers I needed to give them both sides of the t-chart. They would have at least listened to a balanced and accurate assessment of my product’s strengths and weaknesses.

Instead, they didn’t process a word I said.

The Paradox
Ironically, when we reveal a product or service weakness it gives us more credibility. This is especially true for technical audiences.

They assume if we’re willing to divulge a weakness, we might be worthy of their trust.

They might really listen to what we have to say as a result. Now, we’re talking their language.

©2010 Scott R. Sheaffer

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