Sales Blog with Professional Sales Tips

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When it’s time to provide pricing for a customer most companies tend to rely almost exclusively on their costs to determine the selling price. But that is a mistake. Sometimes we can make huge margins on certain items and still be competitive. At other times we have to tighten our belts because if we didn’t our selling price would not be in the ballpark; to do otherwise would be foolish from a marketing perspective.

Every day companies around the globe price items too low and too high because they primarily look at the costs when pricing. The fallout from this is lost business from pricing too high and lost dollars from pricing too low. Obviously there must be a floor on gross profit when creating a selling price, but other than that, cost shouldn’t be a significant factor.

The reality is that we need to price according to what the market, and more specifically the customer, will bear. We need to focus on what the final sales price should be, not on the cost in determining a sales price. Our customers don’t know, and probably don’t care, what our profit margins and costs are; they are solely interested in the sales price and this should be your focus too.

Studies show that salespeople frequently have gross profit percentages on their orders that tend to congregate around numbers divisible by five. Now why in the world is that? The reason is the math is faster and they are erroneously focusing only on cost in their calculations. The foolishness of this is that the salesperson is either under pricing and leaving commission dollars on the table or overpricing and jeopardizing the sale - all for the sake of mathematical convenience and a selling price based solely on cost.

Calculating a sales price based on market variables takes more time and effort. If you take the time, you’ll make more money and lose fewer sales.

Bluebirds. It’s a term you don’t hear too much anymore, but it’s still a good one. The definition is hard to pin down but I’ll give it a try. Bluebirds: When a salesperson receives a large order that was gotten without a tremendous amount of work. Here’s an example. You’ve been working for six months to close a large order when out of nowhere a company you’ve never heard of before contacts you. Within one week you close an order with this company that is larger than the one you’ve been working on for six months. Bluebirds happen to all salespeople and when you least expect it.

Once, early in my sales career, I was talking to my sales manager about my results at the end of a good month. He said to me, “Scott, you had a great month, congratulations.” I responded by saying, “Well, if it wouldn’t have been for that big Bluebird my results would have actually been kind of stinky.” He was a big tall guy and responded by wagging his finger at me saying, “Every order you have to earn. The easy ones are payment for the really hard ones. Some are easy and some are really hard, but you earned every single one of them. Don’t ever diminish the value of your sales efforts, no matter how small or big.”

He was absolutely right. Nothing is easy in sales. At the end of the month, quarter or year you look at your results in total. How you got there is not the issue; the issue is that you got there. Think about it, you normally don’t get recognized for the really hard orders you close. You don’t go around trumpeting how great a salesperson you are for getting a really tough one. Conversely you don’t need to diminish your successes if they don’t require a large amount of blood, sweat and tears.

The attitude that your accomplishment is somehow less when you get a Bluebird must come from our Puritan backgrounds. If it feels good and it’s easy, it must be bad. Stop doing this to yourself. Give yourself a mental boost and accept and enjoy all your sales successes, no matter how hard, or easy, they are.

There are four types of customers in every company.

1. The customers you are currently selling. These are the customers, big and small, that are paying the bills. They constitute the “customer base.” You have accumulated these customers intentionally, accidentally, by good luck, by bad luck, etc.

2. The customers you used to sell. For one reason or another the customer has left the fold. The reasons for this are endless: out of business, moved to a competitor, don’t have a need for your products or services anymore, etc. It is difficult to know why we lose many of our customers.

3. The ones you would like to be selling. I’ve never met a VP of Sales who didn’t have a grand vision for the kinds of customers his “salespeople-should-be-getting.” No company is ever happy with the customers they have; they want bigger and better ones. They want brand names. They want ones that they’d be proud to talk about at a party. This can be a source of discomfort for the salesforce. Salespeople look around and think, “Gee, we may not have the sexiest sounding customers, but they are paying my bills and the company’s. What’s the problem?”

4. The ones you should be selling. This is where the rubber hits the road. After careful consideration it is possible to determine what your sweet spot is. A smart company will ask the question, “What kinds of customers will leverage our strengths and make us the most money?”

Current customers are important because they pay the bills, today. But current customers that are high maintenance and low revenue can hurt more than they help. Sift through these and terminate some of them. Free up your time to find better customers.

The junk pile of lost customers can be sorted. Look for the ones that might be salvageable and that have a lot of potential. Have a fresh face contact them and see if they can be resurrected. Things may have changed since you last dealt with them. A change in chemistry may be all that is needed.

If your ideal customer description doesn’t fit the type of customer you’d like to talk about at the country club, then either come down to earth or get a job where you sell that kind of customer. Determining your best prospect is one of the most important things you and your company can do. You don’t have to wait for your employer to do this; you can start today in your own account base or territory. Accurately defining your sales sweet spot will cause your sales effectiveness to expand exponentially.

The title of this post sounds like something your mother would have told you. Guess what? She was right. I’ve spent many years making customer and prospect calls with salespeople. One of the most common things I see is salespeople not paying attention to the customer or prospect. Do I need to tell you how detrimental this can be to the sales process? The salesperson has worked for days, weeks or months to secure the appointment and then doesn’t treat the meeting as they should, with sacred respect. Getting in front of a prospect or customer can be difficult; take advantage of the time they are giving you.

Let me break the problem down into three common components.

1. The salesperson runs through their presentation at lightening speed. It’s obvious that the salesperson is bored, and even disinterested, in what they are saying and just wants to get through it. But what the salesperson forgets is that the customer or prospect hasn’t heard it before. The customer or prospect is not bored; this is new stuff to them. Your company has spent a lot of time and money helping you develop a good presentation (well, we hope they have, not always true). Slow down! Give the customer or prospect a chance to absorb all of the information.

2. The salesperson never really makes eye contact. I can’t begin to tell you how many sales presentations I’ve seen where the customer or prospect is literally beginning to fall asleep. I’ve seen others where they were looking at emails during the salesperson’s pitch. Basic presentation skills require that you look at who you are talking to and adjust what you are saying accordingly. If your customer or prospect is not paying attention, change strategies. You’re wasting everyone’s time if you don’t.

3. The salesperson has little or no energy while presenting. One of my pet peeves. Communications 101 says that without energy your message will be less believable, exciting, interesting and motivating. I wish I had a dollar for every time I’ve said to a salesperson, “All you needed was a 500cc injection of adrenalin and your presentation would have been much better received.” If you can’t muster some energy and enthusiasm when presenting, you may be in the wrong career.

Slow down, look at the customer or prospect and keep a high degree of energy and enthusiasm during your presentations and appointments. None of these things are rocket science, but they can absolutely make or break your effectiveness.

When I began my sales career my sales manager used to beat on me about the importance of qualifying prospects. After a few months on the job I realized that his emphasis was well placed. What a time waster it can be spending your valuable time and energy with unqualified prospects. I observed that this was a huge differentiator between the top sales producers and those with lesser success.

The way we qualify prospects is by getting information. The primary way we get this kind of information is by asking pertinent questions. Most new salespeople tiptoe when it comes to asking questions to quickly qualify a prospect. A prospect once told me that he understood that I was there to sell him something and our meeting wasn’t purely a social call. He actually encouraged me to ask him qualifying questions so we could get down to business. Our customers and prospects can teach us so much about sales.

I’ve been doing business recently with a Fortune 500 company that knows how to qualify a prospect. The salesperson had obviously been well coached and did a great job. I wasn’t the least bit offended by his questions and it saved both of us a lot of time. Here is how he covered his bases.

Decision Maker = “Would you be the signatory on the contract?”
Legal = “What is the legal approval process on contracts at your company?”
Budget = “What are your current costs for this service and what is your budget?”
Product Fit = “From what I’ve described so far, do you feel our service will meet or exceed your requirements?”
Competition = “Who is providing your service now and what other vendors are you considering?”
Time frame = “On what date do you want to have a contract signed?”

He had these questions written down on a legal pad in preparation for the call. Fantastic! I knew, and he knew, that we weren’t meeting, at least initially, just to socialize. We were meeting to see if we should join into a partnership and he wasn’t going to waste a lot of his time, or mine, in determining if marriage was a possibility. Once he qualified me he started to work on our business relationship and the details of our transaction. I appreciated his professionalism and respect for my time.

When prospecting, quickly qualify by boldly asking the questions you need to ask. Your prospects understand you have contacted them to sell them something and they don’t want to invest their time in you unless they feel they could benefit (WIIFM). And you certainly don’t want to invest your time if you don’t think the relationship will yield sales. Both you and the prospect are qualifying one another. Get to the point.