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

Find a New Sales Job

There are a million myths about the selling profession. What’s most frustrating is that many “sales trainers” dole these out as quality sales tips.

Here are 10 of my not-so-favorites presented in no particular order.

Myth #1
Salespeople lie more than buyers. The math on this one is simple. A sales professional has a lot more to lose by lying than a buyer. As an example, I’ve asked dozens of professional buyers if they’ve ever lied about pricing. I haven’t found any who said they hadn’t engaged in this practice. A salesperson would be committing sales suicide to lie about a price.

Myth #2
The internet will replace all sales professionals. Ever see a website find a decision maker or uncover a prospect’s budget? How about discovering a buying time frame or learning about the competitive landscape?

Myth #3
Ninety-two percent of our communication with customers is through body language. If this were true, then phones, emails, text messages, marketing collateral, etc. would be virtually useless.

Myth #4
If you can just get your foot in the door, you’re halfway there. If this is how you get an audience with prospects, you’ve already alienated them. They aren’t listening to a word you’re saying either.

Myth #5
ABC (Always Be Closing). People are hardwired to resist being pushed. Push enough and they’ll run – and not toward you. The close is merely the final and natural step in a well-orchestrated sales process.

Myth #6
People buy on price. Price is always a consideration, but it actually ranks number five for buyers in study after study. Availability, risk, service and quality are more important to a buyer than price. Buyers ask about availability and price because we can immediately give them hard numbers on these items. Risk, service and quality are learned through relationship and time.

Myth #7
There is a stereotypical sales personality. If that were true, a pre-hire sales test would exist that could effectively weed out the non-sales types. There isn’t such a test (i.e. one that works) because all successful sales professionals are different.

Myth #8
Sales professionals only care about making money. Studies show that income ranks below a number of other factors such as job satisfaction and professional growth for sales professionals just as it does for people in other occupations.

Myth #9
Sales is just a game of numbers. This might have been true 15+ years ago – but not today. Sales is an information and relationship game. Quality, not quantity.

Myth #10
Working for the best vendor or supplier means you’ll win the sale. Creating a relationship with a prospect that is based on your good character and work ethic gets the business. Besides, the prospect decides who is the best vendor.

©2010 Scott R. Sheaffer

I received this email from Anne H. in St. Paul, Minnesota last week. What she experienced is a forceful reminder to all of us.

A Customer Shows Anne Her Value In A Crystal Clear Way

Dear Scott,

I am writing to you today to tell you about a most unbelievable experience I had with one of my customers. I say “unbelievable,” but based on what you’ve been preaching, I guess I shouldn’t be so surprised.

The person I normally communicate with at the customer called me and asked that I make an appointment with him. He didn’t seem willing to tell me why we needed to meet. I was actually a little concerned.

At the meeting he quickly told me that the services that I provide to their company are so valuable to his success, and the company’s success, that he didn’t want to lose me as a trusted partner.

He then said something that I couldn’t believe. He said, “We want you to take a look at the prices you are giving us and ensure that the effort you and your company expend is in line with what you’re charging us. If you’re not making a reasonable profit, it will compromise our alliance. We trust you to be reasonable and fair.”

He was subtly telling me to raise my prices to firm up the relationship!

It showed me that what you’ve been telling us is right on target. Customers will pay for the value we bring to the table and the strength of the partnership.

Sorry to go on for so long but I had to share this with you. Our entire sales team subscribes to your blog and we frequently discuss/debate your topics.

Keep Selling,

Anne

Thanks, Anne
Thanks, Anne, for emailing your experience and allowing me to share it with the readers.

Your experience has beautifully proven what we all know to be true.

• The value we bring to the customer is always more important than price.
• The partnership we have with our customers is everything.
• Do a good job and your customer will quite literally give you a raise.

©2010 Scott R. Sheaffer