Believe.
Sue and I had two separate client meetings on Tuesday. Our clients were different from an “industry” and “size” standpoint, but at their essence, the same. Throughout the day both of our clients weaved in the concept of “believe” into our discussion. I don’t typically take notes during meetings, but my pen hit the paper several times and in all CAPs I wrote BELIEVE. BELIEVE. BELIEVE. At the same time I noticed that my ears perked up and a little smile emerged. I remained engaged in the discussion (this doesn’t always happen) really wanting to hear more. There is a certain thrill, a contagious positive spirit that results when you engage with people who “believe” in what they do.
Believe: to have a firm conviction as to the goodness, efficacy, or ability of something (Webster). Easier said than done – isn’t it? You know, when you’re at the heartbeat of a company, when you are a driving force for its success or failure …when you eat, breathe, sleep your offering… “believing” is a prerequisite. As many of us have experienced, for a company to prosper just about everyone at the nucleolus of the company must “believe”. If the core team isn’t complete with “believers” then a company has a problem. Non-believers need to leave, or the company will at best languish and at worst die.
It is very reasonable to sustain believers at the core of the firm. But, the question is how do you harness and sustain the power of “believe” as you grow in “people”, as you expand in territory and when times are tough. It isn’t easy. It is possible. I’ve experienced several companies double in size while people and budgets were simultaneously cut. How? There was a powerful force from the top that rallied the core team of “believers” to keep their eyes firmly on the prize and increased their productivity to make up for the losses.
But these star teams of believers are few and far between. More prevalent are the worker bees who don’t believe in the company’s value proposition and how to sell that value proposition into their prospect. These are the people who think that everyone is price sensitive, “fire sale” pricing is necessary and that without a promotion they can’t sell.
Does this sound like your company?
My message to you is if you are a “believer” then share the Kool-Aid with everyone in your firm so that they believe as well. Train them. Engage them. Give them the reason and the tools to believe. Sound the Rally Cry and get everyone sprinting towards the same PRIZE. You’ll be amaze by what a herculean team of believers can achieve. I’ve seen it and I’ve experienced it. It’s absolutely exhilarating.
Price. Stop the FIRE SALE!
I spoke at a small conference a few weeks ago and was asked to address the role of “price” in a down market. There was much debate, of course, as to the state of the market (recovering or not) but for me, the state of the market and the semantics of whether it’s down or recovering, did not impact my position. Very simplistically – you’re either built to compete on price – or you are not.
I was thumbing through some articles in preparation for the presentation and came across an interesting quote from Reed Holden, a leading pricing strategist who explained that, “Pricing should not be used as a Band-Aid solution for bleeding income statements. Rather, they should be a part of a long-term plan for fiscal fitness”. I knew who would be in the audience at this meeting and I knew that these individuals did not build their business to be the “low cost provider”. If they had – I would have said “fantastic – go out there…. compete on price and gobble up market share”. But alas, not one of them was. So, instead I began my message with “Think you’re going to win the price war? They’d like to see you die trying”. And, then I uncovered the low cost providers who could sustain their low cost pricing structure now, during recovery and beyond.
The Price Death Spiral
I knew what the reaction would be in the room. Super. So now what? You are telling me I can’t compete on price, but price is a factor in every single discussion that we have with prospects. Yes, I knew the reality. I obviously didn’t have the holy grail but I felt I could provide a few basic levers to pull before resorting to the ”fire sale”.
Know your Unique Bundle Of Promises: If price were not a factor in the discussion what would you compete on? Sounds simple – it’s not. Know the key benefits that are unique to your company and that make the competition irrelevant. And, know how to convey that message.
You had me at “hello”: Well if “hello” is “fire sale” pricing and that’s what made your prospect fall in love – you’re in trouble. Set the stage from your first impression. Differentiate your offering from the first time the prospect sees your offering. Give the prospect something to talk about other than price.
Check out your product line: I always fall back on the BMW 3, 5, 7 series example. The 3 series has fewer features at a lower price, 5 series more features and a higher price and so on. The value proposition for each is equal but BMW has created an offering to meet the needs of each prospect’s feature and price requirements. Check out your offering. Do you have a line of lower priced products / services with fewer features / benefits? Or, are you left to drop your pants on your core product because you don’t have any other options?
Go ahead – use promotion: Promotion is short lived. If you have a product or service that renews – then create a promo pricing structure that allows for a ramp up so that there isn’t sticker shock at the renewal.
Invest in those who love you: Clients who are loved – love back. The longer they stay, the more they spend. The less price sensitive they are, the more they refer you new business. Get out of complete acquisition mode and invest in your most powerful revenue source – your clients.
Empower your extended sales force: Time after time, referrals convert higher and a referred client typically pays more. But, referrals don’t just “come to you”. You need to ask for them, you need to tell your extended sales force what you want them to say and you need to thank that extended sales force over and over again for the referral.
Never negotiate from a position of weakness: This is when we separate the killer sales people from order takers. Anyone can order take. The sales person who will prevail is the one who can sell in the complete value proposition (benefits and price) through needs identification and objection handling.
And, if all else fails then yes go ahead and cut that price. But, on your invoice be SURE to highlight what the original prices was and the discount or value add you are providing.
Mystery Shop: Business Center and Condo
Mystery Shop In Progress
We’ve decided to mystery shop business centers. We’ll shoot for weekly posts on results - but can’t promise!… Just for fun and to kick-start the program, we mystery shopped one business center operator in the mid-west and a renown developer of residential condos in New England. I happen to know that both companies offer a premium priced products and provide the features / benefits to support their respective price points. However, when I played the role of the prospect, the sales person didn’t share the “benefits” with me. Here’s what happened.
Business Center Provider:
I called the business center provider at 11:00am – their time. Ring. Ring. Ring. The receptionist answered my call in the third ring (not bad). I told her that I was interested in office space in her city. She told me that she could not help me but would put me in touch with someone who could. She sent me to voicemail. Note: I don’t know what your average deal value is but let’s pretend it’s $12,000. This receptionist just put a $12,000 call into voicemail. I received a call back the next day. Note: That was too long. I’m a shopper and I called 3 other locations during that time. She should have called me back that day. When I finally spoke with the salesperson I told her that I was interested in office space and asked about my options. She first told me about her Virtual Office program. Note: Why did she try to down sell me to a Virtual Office when I specifically asked for an office? Providing an overview of your complete product range is important. But, understanding a person’s needs first is critical to providing the prospect with the office plan that is best in line with this or her business. I told her again that I really wanted an office and asked her for my options. She told me that she had a corner office for $xxx and an interior office for $xxx and that I would pay for services on top of that. Note: A different approach would have been to engage me in a dialogue by asking me about my needs and my business. Then she could have described the office with the features and benefits that were best in line with my needs – bolstering up the benefits side of the value equation. The next step could have been an invitation to come in and experience the office for myself. Regardless of her response -
5 Steps to Shifting Out of the Price Death Spiral
5 Top Tips - Selling Your Value
Compete on the benefits side of the value equation – not on the price side.
If you would like to start at the beginning, please check out my previous “Death Spiral” entry…
Below are FIVE key steps you’ll want to take to shift the prominence of price in your dialogue with prospects and customers.
1. Master One Activity
Gause’s law of “mutual exclusion” provides a perfect foundation for identifying your unique promises. He stipulates that a species will only survive if it masters at least one activity better than its enemies do. It must run faster, dig deeper or climb higher. Identify the key areas that your company has mastered and will comprise your BOP (Bundle of Promises).
2. Ensure your value proposition surpasses the competition
To establish a compelling BOP you must know your customer, competition and yourself. Clearly there is a relationship between you and your prospect. However, that prospect is building the same relationship with your competitor. Develop a BOP that provides a value proposition that far outweighs that of your competition.