How to Defend Your Price?

Atol Business Solutions CEO Blaž Mertelj explains how to defend your price in common sales situation, how to attack your client, how to create client value, the meaning of sales complexity and investment in sales (Atol INSIGHTS). 

How to defend a price in a common sales situation ? 

I am sure you are familiar with this situation: »We present our product and we say the price and immediately we get the answer that this is too much, your competitor's have better prices«. 

Our price is attacked so we defend it. This sounds like, we have many advantages, we name some features, many of them are not relevant to our client.

Quite often we don't even say the right price because we don't know we are able to defend it, that is even worse. But why do we have to defend it? Because buyers actually don't know why they should buy and how much this is worth and frankly nether do sellers.

So here is the answer: "You have to know the value to the client, we have to know what we actually bring them, but this is not enough, the buyer has to know it to, it is the only situation where there won't be an attack to your price". But in order to know that you need information, you need to know why they should buy from their prospective.

In B2B »selling to businesses« you are offering topically improves their business and every improvement in business means bringing value. So understand the buyers problem or competitors shortcomings, understand how much this cost to your buyer (how much your offering actually brings), because whatever cost you have eliminated or opportunity that they miss, you have brought back to them it has significant value. As long as this value is more than your price difference or special price, that defence won't be necessary.

Could you explain what did you mean by attacking ? 

I know that this attack world does not fit into really into standard sales practices. But we have difficult business environment right now and sellers are expected to bring value to buyers, so they have to challenge buyers and being more aggressive, being challenging is not a bed thing, many services has shown that. Only sellers who know exactly what they are selling and why is this good for buyers can act aggressive, convincing, challenging, so it is actually an additional point of their sales team and also perception by the client.

So what do I mean by attack? If you know exactly what you bring to your client, and together with client you have understood the value, like loosing for example 100 k eur per year, you can calculate that each month they loose around 10K eur, so with your solution, with whatever you are bringing that money to them, so it is quite ok if you say this buyer to this manager who is responsible person, why you don't make this decision today? Forget about the cost that is like 5K EUR higher that the competitors, but here we are we can start in a week, and bay doing so we can start gaining that money (10K EUR per month) immediately. You can attack by asking questions: Why not immediately? Or How can you afford not to start immediately? and similar questions, of course formulate them by yourself. 

Do the clients immediately see the value you bring, are they thinking in this way or you need to somehow help them get the value?

Sure, this is an obvious question. Of course in the meeting they wont tell you we are loosing that much and if you brought your offering to us, your solution that would immediately bring this value, of course not. It is important before that really understand what their issue is, why are the considering buying a solution, looking for a new suppler, or changing the way how they work? 

But this is a long process, to understand them, to build the confidence with buyers so that they open up and tell you why and what lies behind. Of course during that process they would probably or they have to explain you number behind, of course with every reason, every difficulty they face if we as the right questions like: How many times this happens? How much money did this cost you the last time? or something like that, we will collect the data later together we can say: "So this happens like two times last year, and three times previous year? And each time it cost you approximately 70k EUR?" You know, you can come up with tangible value, that currently this problem cost them, and the rest is as I said before: "If they believe our solution is actually helping them with this it automatically said how much our solution is worth to them." 

This sound really complex, isn't that too difficult to do ? 

Yes it is complex! Specially when you are in real sales situation. Clients don't give you the answers that you would expect. It will always surprise you and beside that you should really carefully listen. So maintaining such a flow of complex approach is really difficult. However you need a system, if it is well documented, and you do train, you can maintain this structural approach and you know what follows next. 

Of course with the right coaching, it is definitely worth it. Just imagine, if our price is being attacked and be lowering for 10%, this might be half or more of our earnings. We are throwing all that money that our company need to develop our marketing, sales, to develop our R&D or various other functions, we throw most of that out of the window because we don't know why they should pay so much. So investing in such approach and also training and coaching, so that all sellers are comfortable in executing this in a proper manner, is definitely worth the investment.

You meant investing in sales, how much that that mean ?

As I siad before, it is important to convince seller that they would need to change, so they want to change, however it is not that difficult. Showing them that they can't meet their targets and this being enough for them to want to be better, often doesn't work, for some yes for some no. Also the bonus schemes, insenti programs with some sellers work with some don't. In this difficult times sometimes targets are simply considered too exaggerated too ambitious, and in very moment seller thinks that he tends to get demotivated and not feeling to get responsible for improving them performance. 

So I would suggest you discuss with your sellers also strategic thinks, like what is happening in the market place, that the situation is more and more competitive and that sellers simply have to adjust, they have to talk with customers more, they have to understand buyers and them situations in general, in order to be successful next year and the years after, whoever is leding in their sales approaches has a very difficult future agreed of them, so sellers should also make sure that they stay competitive.

Blaž Mertelj

Managing Director, 

Senior Consultant

Should sales people be problem solvers or problem builders?

The conventional view of a successful “solution sales” person is as a problem solver. But that traditional perspective is being questioned in a number of quarters, not least because of the research that underpinned the publication of “The Challenger Sale”.

The fact that you have a solution to your prospect’s “problem” is probably irrelevant in the grand scheme of things, even if what you have to offer is - by whatever questionable criteria you might choose to apply - the “best” solution available. 

Your prospects can't afford to solve all their problems

Given half a chance, your prospects will always be able to identify more problems, issues or opportunities than they can possibly have the resources to deal with. So identifying a problem and offering a suitably qualified solution isn’t enough.

Before you stand a chance of winning the prospect’s business, you need to help them to the conclusion that the problem is worth solving and - here’s the really important part - that it is more important to solve that problem than all the others that are clamouring for their attention.

Shine a light on that problem!

So being a good problem solver isn’t enough. Really successful sales people are problem builders. Often they are even problem creators or (at least) illuminators. They know how to elevate the importance of getting a problem solved in the prospect’s mind.

And if they can’t, they are smart enough to qualify out or at least to recognise that there’s a lot of work to be done to educate the prospect on the need for change, and on the costs, risks and consequences of sticking with the status quo.

Tell them something they don't know

I just referred to “problem creators or illuminators”, and it’s probably worth explaining what I mean. Research by the CEB and others has powerfully validated the idea that drawing a prospect’s attention to a previously unrecognised issue, or giving them a fresh perspective on an already recognised problem is much more likely to lead to sales success than the traditional problem-solving solution-selling approach.

In the cut and thrust of the traditional solution-selling world, you need to out-execute all the other solution sellers from all the other competitors in order to win the recommendation, and even then, for the reasons I’ve highlighted above, you may not win the business.

What problem-builder sales people (the CEB identifies them as “Challengers”) do is to develop the problem - and its consequences - to the point where the prospect concludes that they simply have to do something.

Passing the WIIFM test

If you are the sales person that has led them towards that conclusion, it’s clear - and borne out by results in the field - that you’re much more likely to achieve a positive outcome.

By the way, it’s not just your champion you need to persuade. You also need to convince all the other vested stakeholder interests in the prospect organisation that this issue takes precedence over their pet projects as well.

You’ve got to find ways of anticipating and answering the “what’s in it for me (and my department, and the company)” question for all the relevant stakeholders. You can absolutely count on the fact that a number of them are going to ask something along the lines of “tell me again why need to do this?”, and you (and your sponsor) had better have a compelling answer.

The essence of selling = change management

Sales is an exercise in change management. You need to help your prospect answer “why change” and “why now” before explaining “why change to you”. And you had better be spending way more time on those first two questions than a conventional solution sales person might, because you can count on the fact that those are the areas where the really significant discussions are taking place inside the prospect.

Have you built a strong enough case for change?

If you’re a salesperson, I encourage you to ask the following question, honestly and rationally, of your top 10 deals: “have I really done all that I could to build the case for change within my prospect?”

And if you're a sales leader, dependent on your team’s performance to hit your numbers in this and future quarters, I’d be really nervous if I felt I didn’t know that my sales people knew the answers to those questions, and were doing something about them.

Top sales people aren’t just problem builders - they are also, by and large, superb storytellers.

References

Apollo B. (2013). Inflexion-Points: Smart Ideas for Accelerating Revenue Growth. Should sales people be problem solvers or problem builders? Retrieved June 12, 2013 from http://www.inflexion-point.com/Blog/bid/94647/Should-sales-people-be-problem-solvers-or-problem-builders.

Tamara Ćetković

Consultant, Coach & Project Manager

9 Years of Atol Business Solutions

May 2013 represents a significant milestone at Atol as we mark our nine-year anniversary, almost a decade as a company. It was 9 years ago that Atol, began its journey into business consulting.

What started as a small company rapidly blossomed into one of the one of regional leading consulting companies, based on our most distinctive knowledge that offer clients the best solution to improve their sales, implement solutions into practice and adjust them for specific situations.

"From its inception, Atol has had a tremendous impact on the sales of complex solutions and products” said Blaž Mertelj, CEO of Atol Busienss Soltutions. “Each year, we help more and more companies to improve sales with organisational solutions and customized tools” notes Mertelj.

Atol has been responsible to deliver exceptional client service to number of companies from varius industries accros following solutions:

• Acquiring new customers
• Information flow and Connectivity
• Improved control over Sales
• Entering new markets
• Sales network optimization
• Closing of deals
• Sales team training
• Successful realization of sales
• Optimisation of distribution and purchasing

The company looks to continue its future leading role in managing the sales process. 

Blaž Mertelj

Managing Director & Senior Consultant

What are the 3 levels of sales qualification?

CSO Insights’ latest global study of sales forecast accuracy suggests that - on a deal-by-deal basis - it is at close to an all-time low at 46.5%. To put that in context, simply tossing a coin would give more accurate results. 

Apollo B. (2013) in recent study of CEOs and Sales Leaders identify that the two primary root causes are poor sales qualification and ineffective (sometimes spectacularly incompetent) sales execution.

When we dug in and tried to understand what the top performers did differently, two key patterns emerged: they saw qualification as a process, not an event, and they qualified deals at multiple levels: account, opportunity and sponsor(s).

Is sales qualification process or an event?

In a complex, often dynamic sales environment, it’s dangerous to see qualification as a one-time event or stage. Qualification is something that happens progressively, and can and should be refined throughout the life of the project.

Top qualifiers typically revisited their qualification of projects at regular intervals, and often explicitly re-qualified every deal before allowing it to be promoted to the next phase of the pipeline. 

Weighted scoring systems, and additional stage-related questions were regarded as particularly useful - as was management insistence on formally re-evaluating projects against clear (and often progressively more stringent) criteria as the deal evolved.

It’s essential that you avoid making the system over-complex, or replacing informed judgement with mechanical processes. You should start by evaluating your recent wins and losses and looking for the handful of indicators that can be most strongly linked to success or failure.

The 3 levels of qualification

Apollo B. (2013) identify that highly effective qualifiers look at a hierarchy of related factors when determining which projects to invest in.

1. Organisation-level qualification 

• At the highest level, they judge whether the prospect organisation is a company they want to do business with, and have the potential to establish a profitable long-term multi-project relationship with. This is often the earliest level of qualification: it can pre-date the identification of a specific opportunity.
• Top qualifiers typically have a clear sense of what an “ideal customer” looks like, and these criteria are more likely to be documented and shared across the organisation, and marketing tasked with reaching out to and into targeted organisations.

2. Opportunity-level qualification

• At the next level, top qualifiers have a clear sense of what they are looking for in specific projects or opportunities - factors that determine whether the customer is likely to buy anything, whether they are likely to buy from the vendor, and whether the deal is likely to be profitable even if the sale is made.
• The specific factors will vary somewhat from one product or market to another, but in most situations some variation of the Pareto principle will apply: a relatively small number of indicators will have the highest predictive value.

3. Stakeholder-level qualification

• The third level of qualification relates to the stakeholders, sponsors and decision-makers who are involved in the project. A critical question is whether your putative sponsor or champion is a true “mobiliser” - someone who has the power to make change happen within his or her organisation.
• Top qualifiers we have spoken to regard qualification of their sponsor(s) as a critical element in determining whether to invest resources in the opportunity. There’s little value to be gained in winning the recommendation of someone who lacks the authority and influence to navigate their preference through their organisation’s internal approval process.

References 

Apollo B. (2013). Inflexion-Points: Smart Ideas for Accelerating Revenue Growth. The 3 levels of sales qualification: account, opportunity, sponsor. Retrieved May 8, 2013 from http://www.inflexion-point.com/Blog/bid/95959/The-3-levels-of-sales-qualification-account-opportunity-sponsor 

Blaž Mertelj

Managing Director & Senior Consultant

Solution Selling – Where’s the Problem?

Selling undifferentiated products is tough.  Margins are declining, competition is increasing, and the buyer has all the power. Wouldn’t it be so much nicer if you could sell highly profitable value-added solutions instead? 

Apollo (2009) in artilce Solution Selling – Where’s the Problem? try  identify common attributes that organizations are facing when trying  to transform themselves from a product-driven to a solution-led sales organisation. 

The study found that the results were far beyond expectations. These include the following (Apollo B., 2009): 

• The transition is harder than it first appears – which is why many companies find themselves state of limbo that combines the worst of both worlds, saddled with expensive “value added” strategies that create little or no true customer value, but simply add cost and complexity to the operation. Before you decide that solution selling is for you, think carefully if you are prepared to commit your organisation to the change?  

• Becoming “solution-led” (or customer-centric, or any of the other related fashionable terms) can never be achieved simply by sending sales people on a course - it frequently requires profound changes to an organisation’s structure, priorities and mindset. 

• Much of the activity that are taken for granted creates no meaningful value to your prospects and customers, and will need to be eliminated. You will find that some – maybe many – of your people are unable to make the transformation. 

The potential of organisation  can be transformed in a way that can create lasting competitive advantage, if you are prepared to make the necessary commitment and if you can develop the right offerings for the right markets. But if you fail, you may end up worse off than you were before.

Organisations who have expressed their ambition to transform themselves from a product-driven to a solution-led sales organisation needs to (Apollo B., 2009): 

• Be thoughtful about whether becoming solution-led is right for your organisation;  
• Be sure that you are prepared to commit to the journey;  
• Be clear about where your real value lies. 

And remember: "If your prospect hasn’t acknowledged a problem, there can be no solution – and that the only one that is entitled to call it a solution is the customer."

References 

Apollo B. (2009). Inflexion-Points: Smart Ideas for Accelerating Revenue Growth. Solution Selling – Where’s the Problem? Retrieved April 22, 2013 from http://www.inflexion-point.com/Blog/bid/25660/Solution-Selling-Where-s-the-Problem.

Blaž Mertelj

Managing Director & Senior Consultant

Common Attributes of a Top Seller Set 3

The third set of common attributes that a top salesperson may possess are listed in the article, What Makes a Great Salesperson? Links Between Our Heritage and the Future, by Sardar and Patton (2002). 

These include the following:

• job commitment

• strategic orientation

• intellect

• mental alertness

• sociability

• authoritative

• dependability

• persistence

• courage

• ability to improvise

• inquisitiveness

• forcefulness

• tenacity

• straightforwardness

Combining some of these qualities with those that you already possess may be the perfect fit for you in your sales situation. However, having these qualities do not automatically guarantee success. 

Now that you know the attributes of a top seller and how to define a top seller, hopefully you will be on your way to being the best of the best in sales. Sales is a strenuous, challenging, and demanding occupation, and being a top salesperson is not easy. Having an idea of the attributes needed to be a top salesperson will help you achieve top seller status. 

Despite the studys and surveys presented in the previous three blogs we will try to find the answer in one of the next posts if top salespeople are born or made? Can anyone become a top seller by studying, practicing, concentrating, and focusing on his own performance? 

References

Ruth A., Wysocki A.: Top Sellers: Characteristics of a Superior Salesperson Institute of Food and Agricultural Sciences, University of Florida. http://edis.ifas.ufl.edu/sn004 [December, 2012].

Sardar, A., & Patton, M.A. What makes a great salesperson?: Links between our heritage and the future. Retrieved February 7, 2002 from the Internet. [Site cannot be linked. To access online, direct your browser to <http://130.195.95.71:8081/www/ANZMAC1999/Site/S/Sardar.pdf>. 

Blanka Cigler

Senior Consultant, Coach

 and Project Manager

Common Attributes of a Top Seller Set 2

The second set of common attributes were identified by Drs. Jeanne and Herbert Greenberg. They suggest that a salesperson needs three basic traits to be successful: empathy, ego drive, and ego strength (Greenberg and Greenberg, 1983).

Empathy is defined as the ability of the salesperson to relate to customers effectively. An example of empathy is where a salesperson making a lot of money is selling insurance to less fortunate individuals. If the salesperson understands that the customer can only afford the bare necessities, he is more likely to make the sale by not pressuring the customer into buying something the customer cannot afford. In other words, being able to understand the customer's financial situation. Empathy is the guidance mechanism that allows the salesperson to follow the prospect through evasions and objections until the prospect's real needs are targeted and the sale is closed (Greenberg and Greenberg, 1983).

Ego drive is defined as gaining personal gratification by persuading another individual to do what you want him to do. The Greenbergs believe that the ego-driven individual is only satisfied when victory (the sale) is achieved. An example of ego-drive is where a salesperson is on the road visiting prospective customers, but he keeps getting rejected. In other words, the ego-driven individual will not be happy until he has made the sale. Ego drive is the motive force launching the salesperson toward the potential customer (Greenberg and Greenberg, 1983).

Ego strength is defined as the resilience to move onto the next sales situation after being rejected. An example of ego strength is where a salesperson pursues the customer until the sale is finished. In other words, "never give up.” Ego strength is having the stamina to follow the prospect through evasions and objections until the sale is closed (Greenberg and Greenberg, 1983).

While deficiencies in empathy, ego-drive, and ego-strength can guarantee sales failure, possessing them does not automatically guarantee sales success (Greenberg and Greenberg, 1983). In addition, having the ability to deal with complex ideas and concepts, make quick analyses and judgments, negotiate systematically and persistently, and manage/organize time are also traits that can improve sales performance. 

References

Greenberg, H.M., & Greenberg, J. (1983). The personality of a top salesperson. Nations Business. Retrieved February 6, 2002 from http://www.calipercanada.com/personality.htm.

Blanka Cigler

Senior Consultant, Coach

 and Project Manager