Selling Your Price: How to escape the race to the bargain basement
A Consultant With A Purpose – Customers are caught in the price trap, too.
Two weeks later, on a sunny Wednesday morning, a grinning Scott appeared in Christine’s office doorway.
“Got a minute?” he asked.
“Sure. Come on in.” Christine sized him up as he crossed the room and bounced into a seat at her conference table. “You look like you’re having a good day,” she observed.
“I’m having a great day,” he said happily. “I’ve had a great two weeks.”
“This wouldn’t have anything to do with Doc Wright, would it?”
Scott leaned back and laced his fingers behind his head. “Funny you should mention him,” he said. “As of yesterday afternoon, Dr. Wright is a participating member in our Partner Plus program — and very glad to be one, I might add. I lowered their acquisition costs, I increased my share of their business, and I didn’t cut my prices.”
“That’s great, Scott,” she said, enjoying his triumph. “Congratulations.”
“I lowered their acquisition costs, I increased my share of their business, and I didn’t cut my prices.”
“Christine, using Action Selling with a regular route customer was amazing,” he said. “I’ve been calling on the people in Doc Wright’s office for almost three years. They like me. We always got along fine. But they never opened up about their business like this. And they were happy to do it! It was like, ‘Oh, you’re actually interested in how this place works? And you might be able to do more for us than take orders and match prices? Well, let us tell you.’
“It was almost embarrassing,” he added. “They were perfectly willing to look at me as a consultant with a purpose. All I had to do was act like one.”
“You mean that all you had to do was to act like a better one than your competitors,” she corrected him.
“The salesperson who wins is the one who walks arm-in-arm with the customer toward the best solution.”
“Well, evidently I did something right. Remember when you said that the salesperson who wins is the one who
walks arm-in-arm with the customer toward the best solution? We practically skipped.”
“It wasn’t hard to get them to look at the issue of cutting consumable costs from a broader perspective?” Christine asked.
“Heck no!” Scott said. “When we started talking about things like inventory management and simplifying the ordering process, they saw so many ways we could reduce their headaches that lowering costs became almost a side issue. The fact that Partner Plus will cut their total acquisition cost was like icing on the cake.”
“Why don’t you walk me through what you did,” Christine said.
“That’s why I’m here. The last Act of Action Selling, Act 9, is to ‘Replay the Call’ and look for things you could improve upon next time. May I do that with you?”
“Sure,” she said. And good for you to think of it, Scott. “Let’s start with Act 1, your Commitment Objectives. Did they turn out to be appropriate for the situation or did you have to adjust them at some point?”
“They were the right ones,” he said. “Susan the office manager agreed to talk to me about the acquisition-cost issue. Just as I hoped, once she had an idea of the kinds of issues and needs I might be able to help solve, she jumped onto my team and helped arrange meetings with Dr. Wright and the user buyers — the hygienists and the dental assistant. After those meetings, it was no problem gaining everyone’s commitment to let me present a proposal.”
“How about Act 2?” Christine asked.
People Skills: “I remember names because I write these things down.”
“‘People skills?’ I’ve gotten to know these people fairly well, so establishing rapport on a personal level at the beginning of the meetings was easier than it is with new prospects. Mostly I asked about their families. I remember the names because I always make a point of writing these things down.”
“Good idea. So I take it you were able to move quickly into Act 3 in your meetings with each of the buyer types. How did the questions we prepared for Back-Tracking Benefits of Partner Plus allow you to zero in on high-yield needs? What could you have done better?”
“I hit the jackpot with the question to Susan about what problems arise between the time products are ordered and the time they reach the hands of the users,” Scott said. “After nearly half an hour I mentioned that I’d only asked for a few minutes of her time and I was afraid I might be imposing on her too much. She waved me off and went right on talking. Inventory management turned out to be a huge issue, so I asked several more questions to clarify that.
“I thought of asking specifically about inventory management in my meetings with Dr. Wright and the users,” he continued. “But I decided to stick with the same kind of broad question about problems that arise after ordering, and see if they’d bring it up themselves. Sure enough, Dr. Wright jumped on inventory. To him, the issues were inefficiency and added costs. As for the users, inventory management was their top concern as a job-satisfaction issue. One of the hygienists, Jennifer, said it drives her insane to walk into the supply room and find a year’s worth of cotton rolls but just an empty box of the item she’s looking for. It was obvious this had been a source of friction for some time, but they didn’t know what to do about it except get mad at one another.”
UDM wants Efficiency and ROI. User buyers want Job Satisfaction.
“I think it was smart to stick with your broad questions and let the customers be the ones to bring up inventory management,” Christine said. “Of course, if you’re talking to a different customer next week…”
Scott interrupted to finish the thought. “If I’m Back-Tracking Benefits for Partner Plus with different customers next week, and inventory management doesn’t appear on their list of problems, I know the first thing I’m going to ask a question about.” Ahead of you that time, wasn’t I, Christine, he thought. There’s a first.
“OK, on to Act 4,” she said. “In your meetings with each of the three buyer types, what agreement did you reach on their needs with respect to a solution for their acquisition-cost problem?”
“By the end of those meetings it was clear we weren’t just talking about how to cut product costs. I mean, sure, Dr. Wright looked at things from the standpoint of ROI as well as efficiency. For the others, efficiency was mainly a question of reducing their own headaches. But in the end, everyone agreed they needed a solution that would do three things. One, improve inventory management. Two, simplify the ordering process. Three, reduce the total cost and the inefficiencies associated with product acquisition.”
“Let me guess,” Christine said: “Susan was the main driver behind the need to simplify the ordering process.”
Price Shopping actually makes the buyer feel unprofessional.
“Right. The users liked that idea too, but Susan loved it. Turns out she was sick of thumbing through brochures and flyers for this week’s lowest prices on stuff like disinfectant. And she was sick of haggling with me and other sales reps. She saw the whole game as an annoying waste of time. She said it made her feel unprofessional, as if she were always rummaging through grocery coupons instead of running a professional operation. Christine, the price-shopping thing was as big a pain for her as it was for me!”
Scott shook his head in self-reproach. “Like I said, it was kind of embarrassing. Once we got into the consulting process I really expected Susan to call me on it: ‘Do you mean that all this time you’ve had a way out of the price trap for both of us? Why the heck didn’t we do this a year ago?’ She never said it, but I’m pretty sure she was thinking it.”
Yeah, me too, Christine thought. Or at least, why didn’t you do it as soon as you learned about Action Selling? Again she envisioned a national follow-up program for Partner Dental’s sales reps Definitely, she decided.
“I figured that Susan might be an ally,” Scott continued, “but I had no idea of the kind of support I’d get. When she helped me fine tune my proposal before I presented it to the whole group, that proposal was hers. She owned it. ”
“Well then, never forget the moment when you realized that she had taken ownership,” Christine said. “Remember what it looked like and felt like. Because that’s how you’ll always know when you’ve been acting like a consultant with a purpose and not like some guy who sells commodities.”
She waited for Scott to digest that. Then she said, “Tell me about Acts 5 through 8 in your proposal meeting. How did you manage to sell your company and product solution, ask for commitment, and confirm the sale, all in the course of a single proposal meeting yesterday afternoon?”
Solution: Tie Features to the Needs identified earlier.
Scott’s grin returned. “It works just like Action Selling says, doesn’t it? When I sell my company and my product simply by explaining how we can provide the best solution to important needs the customers have already agreed to, I don’t have to put everyone to sleep with a 60-minute PowerPoint presentation. I just tied back the features of Partner Plus to the key needs we had identified. It wasn’t difficult to show how Partner Plus will simplify ordering and straighten out their inventory-control problems; that’s what it’s designed to do. And the savings they’ll get from consolidated shipments alone will reduce their costs as much as any amount of discount shopping they could do.”
“So when you asked for commitment at the end of your presentation, you got it?”
“And they were glad to give it,” he said.
“What about Act 8 — Confirm the Sale? I’m sure you thanked them and assured them they were making the right decision. What ‘future event’ did you recommend to ward off buyer’s remorse?”
“I set an appointment for Friday afternoon to train Susan and the users on the online-ordering function on the Partner Plus web site,” he said. “They won’t really need my help much, if at all, but they’re looking forward to getting started.”
Christine considered everything he had told her. “You obviously did a good job,” she said. “Now, if there was one part of the process where you think you could have handled things better, what would it be?”
Scott already had given that some thought. “In yesterday’s presentation meeting, I think I went on a little too long about how Partner Plus could cut total acquisition costs. Sure, that was the original issue, but Dr. Wright was satisfied with the cost piece before I quit talking about it. Even he was really more interested in streamlining the whole acquisition process. He asked a few questions about inventory that I hadn’t anticipated. Nothing I couldn’t handle — but I think I was slow to appreciate how much the emphasis in the whole deal had shifted away from cutting costs and toward managing the purchasing process.”
“The whole deal shifted from cutting costs to managing the purchasing process.”
“Let me see if I understand,” Christine said. “When we spoke before, you realized that sometimes a customer takes you to Act 3, instead of vice versa. Your signal was Susan’s statement that Doc Wright had told her to cut costs when she asked you to lower your price on surface disinfectant. In your sales calls at Doc Wright’s office over the past two weeks, you learned that a customer’s stated need isn’t necessarily the real need. Sometimes customers don’t understand their needs, and your consulting assistance can help them enormously.”
“Yep,” Scott said. “And before you say it, I need to listen to what the customer is telling me and then use my Action Selling skills in every single sales call. I made 50,000 one-dollar mistakes last year. I’m done doing that.”
“I made 50,000 one-dollar mistakes last year. I’m done doing that.”
Christine regarded him with satisfaction. “Well Scott,” she said, “correct me if I’m wrong, but you seem to have concluded that Action Selling applies to regular route customers just as much as to new prospects. You also seem to feel that it offers you a way out of the commodity trap and a way to protect your margins — an alternative to competing on price alone in a race to the bargain basement. Is that correct?”
“Yes,” he agreed sheepishly. “I don’t know why I didn’t get it the first time, but I get it now.”
“Then I have just one more question. How interested are you in me finding you a training course on price negotiation?”
Scott was still laughing when he left Christine’s office, as if that were the funniest idea he ever heard.