In this economy, we're all feeling the pinch. That can make us anxious to bend over backwards to appease prospects. While it's important to keep your clients happy, you don't want to cut into your profit by giving things away. Take this advice from sales trainer Mark Hunter and think before you commit to that freebie.
"When the market gets soft and sales become a little harder to come by, it's easy to start flinching at every hesitation you see from a prospect," says Hunter. "The problem is that each time you acknowledge a flinch by the customer, you make another commitment and give them something extra. At the time you may think it's critical to close the sale, but it rarely is, especially when what you end up offering the customer is something they really don't need."
"Think about this for a moment: if you were offered something for free, would you turn it down? No, you'd accept what's being offered, but you may not place much value in it. In fact, you may not even use what was given to you. In the same way, your customer will readily accept what you offer them, but they may not place any value on it. The end result? You cut into your profit and, in some situations, wind up making a sale with no profit at all because of the little extras that were offered up along the way."
Contact Mark Hunter, The Sales Hunter for your next Conference or Sales Meeting. To see and hear Mark Hunter now visit www.TheSalesHunter.com
Showing posts with label profit. Show all posts
Showing posts with label profit. Show all posts
Thursday, March 5, 2009
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.
"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.
Wednesday, February 11, 2009
Increase Profit and Revenues in Tough Times
Sales trainer Ron Karr recently posted an excellent article detailing ways for you to increase profit - advice we could all use! Stay tuned today and tomorrow for his expert advice.
"Think about this. If you reduced your fees or prices by 20%, you would need to increase your sales volume by 400% to make the same profit you were making before the price cut. This is what Donald D. Juschartz, County Extension Director at Michigan State University, discovered in his study of how Price vs. Volume relationship may alter the retailer's thinking."
"In declining markets, it is very tempting to lower one's prices to hold on to business, especially if your customers are demanding it. Yet, some are probably lowering prices too fast too soon. And in some cases, it may not even be necessary. Realize that for every price reduction you agree to, you are going to have to sell more to make the same."
"This is the time to hone your skills to avoid price reductions whenever possible," continues Karr. "And in case you need to give in at some point, there are things you can do to limit your losses and in some cases wind up ahead of the game."
--Many customers are going to ask you for a price reduction and even threaten to take your business away. Do not give in. You need to restate your value proposition and ensure the value they are getting from you far outweighs any price concession they are being offered by the competition
--Do not get angry. It is very frustrating to constantly have to restate your value proposition and continue to make it stronger. Get over it! That is the job of a rain maker and sales professional. In tough times, you have to do it more and you have to be better at it.
--If you have tried everything and there is nothing more you can do, make a strategic decision if this business is for you. Will the precedent of discounting affect your overall market position? If not, do what you have to do. If it does, then you may want to take the risk of losing that customer. Anytime one raises a price, 20% of existing customers usually cannot come along for the ride. In a declining market with declining prices, you may want to view the act of staying firm with your current price structure as a form of a price increase.
--If you decide to reduce your price, never do so without getting anything in return. Here are some examples of what you can request in exchange for a reduction in price:
- Longer term of agreement
- Increased volume for existing product
- Placement of additional products
- Reduction in service
- Improved terms
- Referrals
Keep going and do what you can to keep from reducing your prices. It's a slippery slope from there. We'll be back tomorrow with more ideas from Karr on increasing your profits, no matter what the economic situation.
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.
"Think about this. If you reduced your fees or prices by 20%, you would need to increase your sales volume by 400% to make the same profit you were making before the price cut. This is what Donald D. Juschartz, County Extension Director at Michigan State University, discovered in his study of how Price vs. Volume relationship may alter the retailer's thinking."
"In declining markets, it is very tempting to lower one's prices to hold on to business, especially if your customers are demanding it. Yet, some are probably lowering prices too fast too soon. And in some cases, it may not even be necessary. Realize that for every price reduction you agree to, you are going to have to sell more to make the same."
"This is the time to hone your skills to avoid price reductions whenever possible," continues Karr. "And in case you need to give in at some point, there are things you can do to limit your losses and in some cases wind up ahead of the game."
--Many customers are going to ask you for a price reduction and even threaten to take your business away. Do not give in. You need to restate your value proposition and ensure the value they are getting from you far outweighs any price concession they are being offered by the competition
--Do not get angry. It is very frustrating to constantly have to restate your value proposition and continue to make it stronger. Get over it! That is the job of a rain maker and sales professional. In tough times, you have to do it more and you have to be better at it.
--If you have tried everything and there is nothing more you can do, make a strategic decision if this business is for you. Will the precedent of discounting affect your overall market position? If not, do what you have to do. If it does, then you may want to take the risk of losing that customer. Anytime one raises a price, 20% of existing customers usually cannot come along for the ride. In a declining market with declining prices, you may want to view the act of staying firm with your current price structure as a form of a price increase.
--If you decide to reduce your price, never do so without getting anything in return. Here are some examples of what you can request in exchange for a reduction in price:
- Longer term of agreement
- Increased volume for existing product
- Placement of additional products
- Reduction in service
- Improved terms
- Referrals
Keep going and do what you can to keep from reducing your prices. It's a slippery slope from there. We'll be back tomorrow with more ideas from Karr on increasing your profits, no matter what the economic situation.
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.
Friday, October 26, 2007
Building Referral Business
This week we're talking about W. Edwards Deming's quote about profit in business coming from repeat customers. Today, we'll address how to get your customers to "bring their friends with them" through referrals.
Referral expert Paul McCord has some useful insights:
"Acquiring referrals from clients is not as simple as 'doing a good job' and then asking for referrals," says McCord. "Generating a large number of highly qualified referrals from a client is a process that starts from the moment the prospect is first met, not a one-time act after the sale has been completed. It requires an understanding of what a successful referral is based on, and how to exploit the referral to insure a successful contact with the referee."
Here are McCord's 4 Pillars of a Successful Referral:
Your Relationship with Your ClientYour relationship with your client must be built on trust and respect. Most clients will not give referrals to people they trust and respect unless they trust and respect you.
Your Client's Purchasing ExperienceClients assume that whomever they refer you to will be more critical and more demanding than they themselves have been. Consequently, you must provide the client the exact purchasing experience they want and demonstrate that you will not embarrass them in front of their friends, family, co-workers and acquaintances.
Your Client's Relationship with the Referred ProspectWith a referral, you are trying to build a relationship with the referred prospect based on their relationship with your client. You must know the relationship between the two. If the prospect trusts and respects your client, you begin your relationship with that prospect with some of that trust and respect imbued to you. Likewise, if the prospect distrusts and disrespects your client, you begin the relationship with some of that distrust and disrespect imbued to you. You must know where you stand with the prospect before you contact them.
The Method Used to Contact the Referred ProspectBased on the client/prospect bond, you must determine how best to contact the prospect to produce the greatest opportunity to acquire a meeting. If the client/prospect relationship is extremely strong, virtually any contact method, including a phone call from the salesperson mentioning the client's name will suffice. But, for a weak relationship, the rep must strive to use the strongest contact method possible, such as, a client letter or phone call, or a lunch meeting between the client, prospect and rep.
Author of "Creating a Million Dollar a Year Sales Income: Sales Success through Client Referrals," Paul McCord is president of McCord & Associates, a sales training and management-consulting firm.
Referral expert Paul McCord has some useful insights:
"Acquiring referrals from clients is not as simple as 'doing a good job' and then asking for referrals," says McCord. "Generating a large number of highly qualified referrals from a client is a process that starts from the moment the prospect is first met, not a one-time act after the sale has been completed. It requires an understanding of what a successful referral is based on, and how to exploit the referral to insure a successful contact with the referee."
Here are McCord's 4 Pillars of a Successful Referral:
Your Relationship with Your ClientYour relationship with your client must be built on trust and respect. Most clients will not give referrals to people they trust and respect unless they trust and respect you.
Your Client's Purchasing ExperienceClients assume that whomever they refer you to will be more critical and more demanding than they themselves have been. Consequently, you must provide the client the exact purchasing experience they want and demonstrate that you will not embarrass them in front of their friends, family, co-workers and acquaintances.
Your Client's Relationship with the Referred ProspectWith a referral, you are trying to build a relationship with the referred prospect based on their relationship with your client. You must know the relationship between the two. If the prospect trusts and respects your client, you begin your relationship with that prospect with some of that trust and respect imbued to you. Likewise, if the prospect distrusts and disrespects your client, you begin the relationship with some of that distrust and disrespect imbued to you. You must know where you stand with the prospect before you contact them.
The Method Used to Contact the Referred ProspectBased on the client/prospect bond, you must determine how best to contact the prospect to produce the greatest opportunity to acquire a meeting. If the client/prospect relationship is extremely strong, virtually any contact method, including a phone call from the salesperson mentioning the client's name will suffice. But, for a weak relationship, the rep must strive to use the strongest contact method possible, such as, a client letter or phone call, or a lunch meeting between the client, prospect and rep.
Author of "Creating a Million Dollar a Year Sales Income: Sales Success through Client Referrals," Paul McCord is president of McCord & Associates, a sales training and management-consulting firm.
Thursday, October 25, 2007
People Are Talking
Today we're looking at the second element in W. Edwards Deming's formula for profit in business: getting your customers to boast about you.
Sales and marketing coach Dr. Rachna D. Jain has some tips for easily and effectively garnering testimonials:
Let your customers know right up front. Start every new customer relationship with a brief explanation of how you appreciate testimonials and how they help you serve your customers better. Ask all new customers/clients if they would be willing to provide you a testimonial if they are satisfied with your service.
Ask for them. Very often, sales reps will take step one, but never take step two. The client has agreed to provide a testimonial, but the business owner never follows up and asks for the testimonial. It's most effective to ask when your client or customer is especially pleased or satisfied with your service.
Make it easy. Make it as easy as possible for your clients to provide you with the testimonial. Consider having a pre-designed form, or a standard email. You may even want to ask certain questions to help shape the tone or format of what your client shares. For example, if you really want your clients to comment on your "outstanding customer service orientation," you might put a question or two in the form about this.
Write it yourself. Sometimes, clients will agree to provide a testimonial, but never actually do it. In these cases, it's perfectly acceptable to offer to write the testimonial yourself and have the client sign it. Ask the client if you might call him/her for 10-15 minutes for a brief interview about the high points of your business or service. Then write what you hear, and send it to the client for approval.
Get permission. It's very important to get your clients' permission to use their name, city/state, or website address in your own marketing. Most clients will understand that you are obtaining a testimonial for your marketing efforts. I have always found it wise to ask them to sign a brief statement which demonstrates that they have given permission for the information to be used.
Offer something in return. Most satisfied clients will give you a strong testimonial without expecting anything in return. For myself, I've found that offering a small "thank you" (a brief coaching session, a copy of one of my books, a discount on a class or training) goes a long way to helping clients feel valued and appreciated for their extra time and effort.
Dr. Rachna D. Jain is a sales and marketing coach. To learn more, contact Dr. Jain directly, or to sign up for her free newsletter, Sales and Marketing Secrets, please visit her website.
Sales and marketing coach Dr. Rachna D. Jain has some tips for easily and effectively garnering testimonials:
Let your customers know right up front. Start every new customer relationship with a brief explanation of how you appreciate testimonials and how they help you serve your customers better. Ask all new customers/clients if they would be willing to provide you a testimonial if they are satisfied with your service.
Ask for them. Very often, sales reps will take step one, but never take step two. The client has agreed to provide a testimonial, but the business owner never follows up and asks for the testimonial. It's most effective to ask when your client or customer is especially pleased or satisfied with your service.
Make it easy. Make it as easy as possible for your clients to provide you with the testimonial. Consider having a pre-designed form, or a standard email. You may even want to ask certain questions to help shape the tone or format of what your client shares. For example, if you really want your clients to comment on your "outstanding customer service orientation," you might put a question or two in the form about this.
Write it yourself. Sometimes, clients will agree to provide a testimonial, but never actually do it. In these cases, it's perfectly acceptable to offer to write the testimonial yourself and have the client sign it. Ask the client if you might call him/her for 10-15 minutes for a brief interview about the high points of your business or service. Then write what you hear, and send it to the client for approval.
Get permission. It's very important to get your clients' permission to use their name, city/state, or website address in your own marketing. Most clients will understand that you are obtaining a testimonial for your marketing efforts. I have always found it wise to ask them to sign a brief statement which demonstrates that they have given permission for the information to be used.
Offer something in return. Most satisfied clients will give you a strong testimonial without expecting anything in return. For myself, I've found that offering a small "thank you" (a brief coaching session, a copy of one of my books, a discount on a class or training) goes a long way to helping clients feel valued and appreciated for their extra time and effort.
Dr. Rachna D. Jain is a sales and marketing coach. To learn more, contact Dr. Jain directly, or to sign up for her free newsletter, Sales and Marketing Secrets, please visit her website.
Monday, October 22, 2007
Quote of the Week
"Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them." -- W. Edwards Deming
SalesDog asks:
So, what are you doing to earn repeat business from your customers?
How many of your customers boast about you? And, are you asking them for testimonials?
Do you consistently ask for referrals?
This week we'll share some tips to help you build repeat business, earn glowing testimonials, and referral business.
To share your hot tips, click on the Post a Comment link below.
SalesDog asks:
So, what are you doing to earn repeat business from your customers?
How many of your customers boast about you? And, are you asking them for testimonials?
Do you consistently ask for referrals?
This week we'll share some tips to help you build repeat business, earn glowing testimonials, and referral business.
To share your hot tips, click on the Post a Comment link below.
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