|Date Published||November 26, 2013|
|Article Author||Hamish Knox|
|Article Type||PULSE Interactive Newsletter Nov. 2013|
|Tags||Oilfield HUB Member, Oilfield PULSE, PULSE Interactive November Newsletter, Sales, Training|
Before you choose to answer your prospectâ€™s â€œhow muchâ€ question, consider if you are unintentionally helping your prospect lower your prices.
While a common trick of the amateur salesperson is offering increasing discounts to win business, I havenâ€™t met a professional salesperson who uses this tactic.
Unfortunately, the professional salesperson can still be guilty of helping their prospect lower their prices by â€œanchoringâ€ their prospect.
Anchoring is a quirk of the brain which causes us to latch on to a piece of informationâ€“the anchorâ€“and base our decisions in relation to the anchor. In a selling situation, a salesperson â€œanchorsâ€ their prospect by revealing their price too early.
For example, a software salesperson quotes a prospect $25,000 to implement before any of the prospectâ€™s problems are discussed. As the meeting progresses, the salesperson uncovers that fixing the prospectâ€™s problems will actually require a $35,000 investment.
Not a huge stretch from $25,000 to $35,000, but because the prospect is â€œanchoredâ€ at $25,000, the salesperson has two choices. Either fight their prospect up to $35,000, which has a low chance of success, or sell a $35,000 project for $25,000, which costs them commission and probably gets them a (figurative) slap from their boss.
For a salesperson to make anchoring work for them they need to understand not just what problems their prospect has, but the financial impact of those problems to their prospectâ€™s business.
Letâ€™s return to the software salesperson. This time, instead of anchoring their prospect with a number that may not be accurate, the salesperson acknowledges their prospectâ€™s request and asks permission to ask questions about the prospectâ€™s problems before suggesting a solution and price.
By focusing on their prospectâ€™s problems, the salesperson learns that their prospect feels their problems are costing them $50,000 per year. Now the salesperson can confidently quote a $35,000 solution to their prospectâ€™s problems without fighting their prospect or losing commission.
Anchoring isnâ€™t a cure-all. Letâ€™s pretend the prospectâ€™s problems in the scene above only cost them $10,000 per year and the smallest package the software salesperson could offer was $15,000. At that point itâ€™s best for the salesperson to tell their prospect that they arenâ€™t a good fit and close their file.
Before you put out your next quote or answer â€œhow much,â€ consider if you truly understand your prospectâ€™s problems and the financial impact of those problems on their business. If not, chances are youâ€™re helping your prospect lower your prices.