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Are You Giving Away Your Profit?

admin Posted in Working for Success No Comments »

Want a quick way to destroy sales motivation and profit at the same time?  Picture yourself as a sales manager who suddenly receives a phone call from a salesperson who is on the verge of closing a sale.  Here’s a sample of that typical conversation:
Salesperson: “We have to cut our price to get the first order. Then, once they see what we can do for them, we will be able to raise our prices.  I’m sure once they see how good our service is, I’ll be able to convince them to pay the regular price.”
Hmmm.  Really?  I’ll let you fill in how you feel the sales manager should respond.  The sad comment is that too many times, the sales manager – after sounding tough on the telephone for 30 seconds – then gives way to the idea of lowering the price by saying something like, “Well, just this time, but we certainly can’t go making this part of our sales tactics with other customers. The only reason I’ll say ‘yes’ this time is because of how much business is at stake.”
I can’t tell you the number of times I have heard this rationalization.  Sadly, what blows me away is the number of times I have heard it when somebody is trying to land a new customer – but then I never hear from these same people a year or two later expressing what the long-term results have been.  Why do salespeople or sales managers never share with me the long-term outcome of such “price reduction” strategy?  Because it never works out the way the salesperson or the sales manager initially believes it will.
Let’s look at this from the customer’s perspective. If you bought something at one price, don’t you think you would be able to buy it again at the same price?  Sure you would.  So why do you as a salesperson think that increasing the price after the initial sale is going to go smoothly?
Cutting your price to secure the initial deal only does one thing – it takes profit out of your pocket.
Many of you are thinking that this is all right, because all that is being lost is some profit on the initial sale.  My experience is you’re giving up profit not only on the initial sale, but also on any future sales to come.
The reason is simple (so simple, in fact, that I can’t believe so many salespeople still think slashing price on the initial sale is a viable option).  The first price the customer gets is what they believe is the
right price with the right value.  If the price is higher, they believe it to be unfair.
Sales motivation takes an even greater dive when the customer is ready for the next purchase, and the salesperson begins to wander down a dangerous path.  The salesperson justifies in their own mind why increasing the price is just “not the right thing to do” and will “jeopardize the long-term value of the customer.”  In the blink of an eye, with that one thought, the salesperson has committed themselves to lower profit on a going-forward basis (maybe even indefinitely. Yikes!).
As tempting as it might be to cut your price to gain a new customer, don’t do it!
If you can’t land the customer at the profit margin your business plan is built upon, then that particular customer is not worth having.  Think I’m crazy?  Run the numbers over the long-term and you will see what I mean.
To avoid being in the situation where you feel desperate to get a sale “at all costs,” here are some strategies to put in place:
First, maintain a strong pipeline of prospective customers.  Discounting is far more prevalent when a salesperson believes the sale on which they are currently working is the only sale they are going to get.
Second, never attempt to close a sale until the customer has identified to you the specific objectives and you’ve had the opportunity to explore the needs they have.  When the customer understands the benefits you’re helping them with and the gains they’re going to get from those benefits, then you’re in a much better position to close the sale by not having to discount your price.
Too many times, the salesperson gets taken down the price discount road only because they have not taken the time upfront to get the customer to fully explain the benefits they’re looking for.  As tempting as it can be to close a sale quickly, the pressure of the price discount is many times what emerges when you attempt to close too early.  Allow the customer to verbally describe the benefits for which they are looking.
This gives you time to expand on them and, in turn, help the customer see the full value of what it is you’re offering them.
Protect your profit.  Protect your sales motivation.  Both are too valuable to toss aside, all in the name of making a sale.

Mark Hunter, “The Sales Hunter,” is a sales expert who speaks to thousands each year on how to increase their sales profitability.  For more information, to receive a free weekly email sales tip, or to read his Sales Motivation Blog, visit You can also follow him on, on, and on

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Communication and Business: Are You Sending Mixed Signals?

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There are two different types of interactions involved with marketing a business, resourcing and transacting. Knowing the difference between the two (and understanding when to use them) is key to the success of your business.

In order to show you why, I’ll have to explain the essential differences between these two very different interactions.

Consider this scenario: You go into a store and find the item you are looking for, take it to the check-out counter, pay for it and leave. This interaction is an example of a transaction. You have made an overt exchange of perceived equal value. You gave the store money and they gave you the item. This is all very straightforward and unambiguous.

Now consider this one:  You are looking for an address in an unfamiliar part of town and are a bit lost. You show the address to a stranger and he or she gives you directions. You follow the directions and arrive at your destination. This interaction is an example of resourcing. The person who provided the resource (directions) did so without expecting you to provide anything in return. Once again, this is all very straightforward and unambiguous.

Now finally, consider a third scenario, where the line between these two types of interactions was blurred.

While I was working on a website project recently a design tool gave me unexpected results, so I went online, found a website that offered answers on the design tool, typed in my problem, and hit ‘submit.’ The reply I got back was from someone who claimed they could tell me what was wrong and then asked what I would be willing to pay to get the answer. (They even provided me with three amounts to select from.)

This is an example of a mixed transaction/resource interaction. There was no mention of payment until I received the promise of an answer. I expected to be provided with the answer I needed for free, as is often the case when using online forums. The person on the other side expected something in return for the answer, but did not mention it up front. This interaction was not straightforward, and it created a conflict because it was not clear to both sides from the beginning what type of interaction was taking place. My response to this last minute request for payment was irritation, and I abandoned the website.

This example of a mixed transaction/resource interaction is trivial and the consequences small, but that is not always the case. If you market yourself, your products, or your services via the internet, mixed transaction/resource interactions can severely disrupt or irreparably harm your business.

When people interact, the nature of the interaction defines the nature of the relationship. If I am involved in a resourcing interaction, I am sharing what I have, know, or are capable of doing because I care about the person I am sharing with, and I want them to have what I have. In a resourcing interaction, I help you today with the expectation that at sometime in the future, when I need it, you will help me. The essence of resourcing is that an exchange is implied rather than overt, the timeframe in which it is to occur is vague and unspecified, and the value of the resources exchanged may not be equal. Resourcing is the way we build community. Resourcing is about ‘you and me together.’

On the other hand, if I am involved in a transaction, I am bartering, selling, or marketing what I have, know, or are capable of doing because it is a way to exchange what I have for what I need. I will exchange my labor, goods, or knowledge for your money, goods, or services. The essence of transactions is that an exchange is overt, the timeframe is specific, and the value of the exchange is judged to be equal by both sides. If any of these conditions is violated within the context of a transaction, we feel cheated. Transactions are the way we engage in commerce. Transactions are about you and me as separate individuals.

I have drawn a hard and fast distinction between the two, but the boundaries often blur. Internet marketers often have to move seamlessly from resourcing to transactions, while remaining clear about which they are engaged in.

A good example is Facebook. Is Facebook about social community or is it about marketing? Well, both really. Virtually everyone engaged in business on the internet uses Facebook as part of their marketing plan, but in order for it to be effective, it must also be used socially. If you do not create a Facebook community based on genuine community building, it does not matter how many “friends” you have—your marketing efforts will fall on deaf ears.

I recently “attended” a webinar where the speakers made the mistake of initiating a mixed transaction/resourcing interaction. The solicitation offered to teach me something for free. The words “teach” and “free” are key resourcing words and I expected to learn something of value.

I have been involved in enough webinars and teleclasses to know that there would be an offer of a transaction at the end where I could choose to learn more for a price. That’s good marketing if I have already really been taught something of value for free. In this case, that did not happen. The entire webinar was “high level, conceptual, and vague” until the end. The transaction offer was very clear, but I was not interested because I felt that, contrary to what the solicitation originally offered, I had learned nothing of value in the free webinar. I felt robbed of my time, lied to by the presenters, and resentful of their offer of a transaction. Their product may well be excellent, but I will never know. Any good will is gone, and I delete their follow-up emails without even looking at them.

The moral of the story? Make sure you know the difference between resourcing and transactions and know when to use each!


Lynda-Ross Vega: A partner at Vega Behavioral Consulting, Ltd., Lynda-Ross specializes in helping entrepreneurs and coaches build dynamite teams and systems that WORK. She is co-creator of Perceptual Style Theory, a revolutionary psychological assessment system that teaches people how to unleash their deepest potentials for success. For free information on how to succeed as an entrepreneur or coach, create a thriving business and build your bottom line doing more of what you love, visit and

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Why Buyers Love to Delay Buying

admin Posted in Working for Success No Comments »

Salespeople love to complain about buyers. One of the complaints salespeople share the most is that buyers never seem to make up their mind. Just about the time it looks like they’re going to make a buying decision, they suddenly hold off.

Yes, there are times when a buyer legitimately can’t make a decision. Many times, though, the delay is nothing more than a tactic on the part of the buyer to get a better deal.  This is especially true of professional buyers, who see numerous salespeople on a regular basis.  Why should anyone make a decision quickly if they don’t have to? More often than not, the buyers believe that by waiting, they will get a better deal. The salesperson will get scared and will think the only way to secure the sale is to offer a discount.  Buyers believe this because experience has shown them that it works!

Salespeople by nature are scared.  Don’t take offense to my observation, because I include myself in this profession as well.  We, unfortunately, can view things too quickly in a negative manner. For most salespeople, the way out of a situation like this is to immediately offer the buyer a price reduction.  This is exactly what the buyer wants!  They are looking for the salesperson to show some fear and some sense that the sale may not happen at all. Once the buyer smells fear, they know a better deal is about to appear.

This is also a key reason why many professional buyers love to ignore phone calls, emails and all other forms of communication from salespeople. Nothing can make a salesperson more scared than a buyer who doesn’t communicate with them.  If you’re a buyer, it’s hard to find any activities that can result in a higher return on investment than ignoring a salesperson or holding off on making a decision. These tactics usually result in saving money.

Now let’s look at this challenge from a salesperson’s perspective.  Salespeople love to close sales and they also love to close sales quickly, preferably with as little effort as possible.  But effort – particularly mental effort – can make the difference.  This is the ability to understand and rationalize objectively what is happening and what is not happening.  This means understanding why the buyer does need to buy from you and how what you’re selling will allow them to achieve their needs and objectives.  The more you can build this kind of objective thinking into your attitude, the better equipped you are to keep negativity at bay.  Negative thinking is the culprit that takes the biggest toll on a salesperson’s level of success.

As soon as the salesperson begins viewing the situation negatively and how the sale may not occur, it’s only natural for them to think the solution is to lower the price or offer something extra in the form of service.   When the salesperson does this, two things happen. First, it confirms in the buyer’s mind why the smart thing to do is to slow down the decision-making process. Second, it destroys profit margin for the salesperson.

While there are several techniques to counter these outcomes, there really is only one that is foundationally most important – the confidence of the salesperson.   If the salesperson is not confident, then every other tactic or strategy is useless and will have little effect. Everything starts with the salesperson.

Confidence begins with the total belief in your own skill set as a salesperson and total belief in your ability to help the buyer fill the needs they have.  If you don’t believe in both of these, then there is nothing else you can do to prevent the buyer from taking advantage of you by delaying their decision.  Buyers, especially professional buyers, can discern very quickly how confident a salesperson is. If they sense the salesperson is not confident, then they’ll delay their decision. They have nothing to lose and everything to gain by doing so.

On the other hand, if you as the salesperson are determined to regularly and intentionally strengthen your own resolve and your own confidence, your natural reaction to stalling buyers will not be to cave under the pressure.  Your reflex will be to wholeheartedly believe in your product, your price and your potential to help the customer achieve their goals.

Are you going to let fear or confidence determine your future? The choice is yours, so choose wisely.  And profitably.


Mark Hunter, “The Sales Hunter,” helps individuals and companies identify better prospects, close more sales and profitably build more long-term customer relationships. Since 1998, he has consulted nationally and internationally with thousands of salespeople and global companies. You can follow his Sales Motivation Blog at You can also connect with him on Facebook, Twitter, and Linkedin

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