{"id":155,"date":"2011-05-18T15:34:39","date_gmt":"2011-05-18T15:34:39","guid":{"rendered":"http:\/\/momsnetwork.com\/workathomeblog\/?p=155"},"modified":"2011-06-06T15:42:51","modified_gmt":"2011-06-06T15:42:51","slug":"are-you-giving-away-your-profit","status":"publish","type":"post","link":"http:\/\/momsnetwork.com\/workathomeblog\/2011\/05\/18\/are-you-giving-away-your-profit\/","title":{"rendered":"Are You Giving Away Your Profit?"},"content":{"rendered":"<table border=\"0\" width=\"100%\">\n<tbody>\n<tr>\n<td align=\"center\"><!-- START 300x250 AdPeeps.com Code --><br \/>\n<script src=\"http:\/\/www.media.momsnetwork.com\/adpeeps\/adpeeps.php?bfunction=showad&amp;uid=100000&amp;bmode=off&amp;gpos=center&amp;bzone=300x250&amp;bsize=300x250&amp;btype=3&amp;bpos=default&amp;ver=2.0&amp;btotal=1&amp;btarget=_blank&amp;bborder=0&amp;gspacing=1\" type=\"text\/javascript\">\n<\/script><br \/>\n<noscript><br \/>\n<a href=\"http:\/\/www.media.momsnetwork.com\/adpeeps\/adpeeps.php?bfunction=go&amp;uid=100000&amp;bmode=off&amp;bzone=300x250&amp;bsize=300x250&amp;btype=1&amp;bpos=default&amp;ver=2.0\" target=\"_blank\"><br \/>\n<img loading=\"lazy\" src=\"http:\/\/www.media.momsnetwork.com\/adpeeps\/adpeeps.php?bfunction=showad&amp;uid=100000&amp;bmode=off&amp;bzone=300x250&amp;bsize=300x250&amp;btype=1&amp;bpos=default&amp;ver=2.0\" width=\"300\" height=\"250\" alt=\"Click Here!\" title=\"Click Here!\" border=\"0\" \/><\/a><br \/>\n<\/noscript><br \/>\n<!-- END AdPeeps.com Code --><\/td>\n<td align=\"center\"><script type=\"text\/javascript\">\/\/ <![CDATA[\n google_ad_client = \"pub-3923845094689161\"; \/* 120x240, created 9\/23\/10 *\/ google_ad_slot = \"1698308050\"; google_ad_width = 120; google_ad_height = 240;\n\/\/ ]]><\/script><br \/>\n<script src=\"http:\/\/pagead2.googlesyndication.com\/pagead\/show_ads.js\" type=\"text\/javascript\">\n<\/script><\/td>\n<\/tr>\n<tr>\n<td align=\"center\"><\/td>\n<td align=\"center\"><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div><span style=\"font-family: Arial; font-size: small;\">Want a quick way to destroy sales  motivation and profit at the same time?\u00a0 Picture yourself as a sales  manager who suddenly receives a phone call from a salesperson who is on  the verge of closing a sale.\u00a0 Here&#8217;s a sample of that typical  conversation: <\/span><\/div>\n<div><span style=\"font-family: Arial; font-size: small;\">Salesperson: <em>&#8220;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.\u00a0 I&#8217;m sure once they see how  good our service is, I&#8217;ll be able to convince them to pay the regular  price.&#8221;<\/em><\/span><\/div>\n<div><span style=\"font-family: Arial; font-size: small;\">Hmmm.\u00a0 Really?\u00a0 I&#8217;ll let you fill in  how you feel the sales manager should respond.\u00a0 The sad comment is that  too many times, the sales manager \u2013 after sounding tough on the  telephone for 30 seconds \u2013 then gives way to the idea of lowering the  price by saying something like, <em>&#8220;Well, just this time, but we  certainly can&#8217;t go making this part of our sales tactics with other  customers. The only reason I&#8217;ll say &#8216;yes&#8217; this time is because of how  much business is at stake.&#8221;<\/em><\/span><\/div>\n<div><span style=\"font-family: Arial; font-size: small;\">I can&#8217;t tell you the number of times I  have heard this rationalization.\u00a0 Sadly, what blows me away is the  number of times I have heard it when somebody is trying to land a new  customer \u2013 but then I never hear from these same people a year or two  later expressing what the long-term results have been.\u00a0 Why do  salespeople or sales managers never share with me the long-term outcome  of such &#8220;price reduction&#8221; strategy?\u00a0 Because it never works out the way  the salesperson or the sales manager initially believes it will.<\/span><\/div>\n<div><span style=\"font-family: Arial; font-size: small;\">Let&#8217;s look at this from the customer&#8217;s  perspective. If you bought something at one price, don&#8217;t you think you  would be able to buy it again at the same price?\u00a0 Sure you would.\u00a0 So  why do you as a salesperson think that increasing the price after the  initial sale is going to go smoothly?<\/span><\/div>\n<div><span style=\"font-family: Arial; font-size: small;\"><strong>Cutting your price to secure the initial deal only does one thing &#8211; it takes profit out of your pocket.<\/strong><\/span><\/div>\n<div><span style=\"font-family: Arial; font-size: small;\">Many of you are thinking that this is  all right, because all that is being lost is some profit on the initial  sale.\u00a0 My experience is you&#8217;re giving up profit not only on the initial  sale, but also on any future sales to come.<\/span><\/div>\n<div><span style=\"font-family: Arial; font-size: small;\">The reason is simple (so simple, in  fact, that I can&#8217;t believe so many salespeople still think slashing  price on the initial sale is a viable option).\u00a0 <strong>The first price  the customer gets is what they believe is the <\/strong><\/span><\/div>\n<div><span style=\"font-family: Arial; font-size: small;\"><strong>right price with the right  value.\u00a0 If the price is higher, they believe it to be unfair.<\/strong><\/span><\/div>\n<div><span style=\"font-family: Arial; font-size: small;\">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.\u00a0 The salesperson  justifies in their own mind why increasing the price is just &#8220;not the  right thing to do&#8221; and will &#8220;jeopardize the long-term value of the  customer.&#8221;\u00a0 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!).<\/span><\/div>\n<div><span style=\"font-family: Arial; font-size: small;\"><strong>As tempting as it might be to cut your price to gain a new customer, don&#8217;t do it!<\/strong><\/span><\/div>\n<div><span style=\"font-family: Arial; font-size: small;\">If you can&#8217;t land the customer at the  profit margin your business plan is built upon, then that particular  customer is not worth having.\u00a0 Think I&#8217;m crazy?\u00a0 Run the numbers over  the long-term and you will see what I mean.<\/span><\/div>\n<div><span style=\"font-family: Arial; font-size: small;\">To avoid being in the situation where you feel desperate to get a sale &#8220;at all costs,&#8221; here are some strategies to put in place:<\/span><\/div>\n<div><span style=\"font-family: Arial; font-size: small;\">First, maintain a strong pipeline of  prospective customers.\u00a0 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.<\/span><\/div>\n<div><span style=\"font-family: Arial; font-size: small;\">Second, never attempt to close a sale  until the customer has identified to you the specific objectives and  you&#8217;ve had the opportunity to explore the needs they have.\u00a0 When the  customer understands the benefits you&#8217;re helping them with and the gains  they&#8217;re going to get from those benefits, then you&#8217;re in a much better  position to close the sale by not having to discount your price.<\/span><\/div>\n<div><span style=\"font-family: Arial; font-size: small;\">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&#8217;re  looking for.\u00a0 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.\u00a0 Allow the customer to verbally describe the  benefits for which they are looking. <\/span><\/div>\n<div><span style=\"font-family: Arial; font-size: small;\">This gives you time to expand on  them and, in turn, help the customer see the full value of what it is  you&#8217;re offering them.<\/span><\/div>\n<div><span style=\"font-family: Arial; font-size: small;\">Protect your profit.\u00a0 Protect your sales motivation.\u00a0 Both are too valuable to toss aside, all in the name of making a sale.<\/span><\/div>\n<p><span style=\"font-family: Arial; font-size: small;\"><strong>Mark Hunter, &#8220;The Sales  Hunter,&#8221; is a sales expert who speaks to thousands each year on how to  increase their sales profitability.\u00a0 For more information, to receive a  free weekly email sales tip, or to read his Sales Motivation Blog, visit <\/strong><a title=\"This external link will open in a new window\" href=\"http:\/\/www.thesaleshunter.com\/\" target=\"_blank\"><strong>http:\/\/www.TheSalesHunter.com<\/strong><\/a><strong>. You can also follow him on <\/strong><a title=\"This external link will open in a new window\" href=\"http:\/\/www.twitter.com\/TheSalesHunter\" target=\"_blank\"><strong>http:\/\/www.Twitter.com\/TheSalesHunter<\/strong><\/a><strong>, on <\/strong><a title=\"This external link will open in a new window\" href=\"http:\/\/www.linkedin.com\/in\/MarkHunter\" target=\"_blank\"><strong>http:\/\/www.LinkedIn.com\/in\/MarkHunter<\/strong><\/a><strong>, and on <\/strong><a title=\"This external link will open in a new window\" href=\"http:\/\/www.facebook.com\/TheSalesHunter\" target=\"_blank\"><strong>http:\/\/www.Facebook.com\/TheSalesHunter<\/strong><\/a><strong>. <\/strong><\/span><br \/>\n<script type=\"text\/javascript\">\/\/ <![CDATA[\n google_ad_client = \"pub-3923845094689161\"; google_ad_width = 468; google_ad_height = 60; google_ad_format = \"468x60_as\"; google_ad_type = \"text\"; google_ad_channel =\"\"; google_color_border = \"FFFFFF\"; google_color_bg = \"FFFFFF\"; 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