Thursday, February 12, 2009

Increase Profit and Revenues in Tough Times - Part 2

Yesterday sales trainer Ron Karr gave us some excellent ways to increase profits by avoiding lowering prices in this economy. Today he's back with a unique way to increase profit - raising your prices!

"You may be asking yourself how you can possibly do this in a down economy," says Karr. "The answer is simple. Just ask for it! You need to remember a few points of power you have, especially when dealing with existing customers."

--You are the devil they know vs. the devil they don't know. Things are going well. Why take the chance of screwing things up? There is a value for an insurance policy.

--Link your value proposition to how you can help them weather this storm and be ahead of their competition.

--Nobody will protect your value except for you. That is your job!

CASE IN POINT: Michele Litzky, Principle of a Hoboken-based PR firm was attending a meeting with a current client to discuss 2009 strategies. While waiting in the conference room, she noticed a piece of paper on the floor that had two lines: "Cancel firm Litzky", and second line said "reduce fee".

When the client walked in the room, Michele asked if this note was left on purpose. The President said no, it was left unintentionally from an internal meeting. Michele immediately changed the direction of the meeting and revisited the significant positive outcomes they had provided the firm with a recent publicity campaign. After restating her value proposition, the client, which wanted to either cancel her services or reduce her fee, wound up giving her two additional projects and agreed to a fee increase after 90 days.

This is a classic example of how one needs to operate in today's environment!

"Whatever you do, please do not act with a bunker mentality," continues Karr. "There are opportunities out there and there are people who are actually raising prices. If you don't believe me, look at the new sports stadiums going up. Seats in those stadiums are much more expensive than in the old stadiums. And they are selling them. Maybe not as fast as they would like, but they are selling!"

"People want to save money. People need to reduce costs. But more importantly, people need to succeed. Is your conversation centered on reducing prices? Or it is centered on how you are going to help others succeed?"

"Again, you may need to reduce your prices," says Karr. "However, make sure you do not do it until you have tried everything else first. If you do reduce your prices, remember to get something in return. And then be accountable for making up the lost profitability with increased volume somewhere else. Every action creates a reaction. At the end of the day, you still need to meet or exceed your quota."

Ron Karr is a professional speaker, consultant, trainer and author who specializes in helping organizations build and maintain high performing sales cultures. Visit him at www.RonKarr.com and sign up for his free Titan Sales E-Report.

No comments: