In all moments of selling, there are many things that can go wrong. And when something goes wrong, it is in fact time to say “Houston, we have a problem.”  But who is the “we” that caused the problem?

How to Avoid Selling on Price

I have always loved President Theodore Roosevelt’s quote on problems: “If you could kick the person in the pants who is most responsible for most of your trouble you would not sit for a month.”  Just like in tennis or golf, many of our problems are self-induced.  They are “unforced errors.”

Our sales coaches, we are always dealing with sales challenges that span the entirety of the typical sales process.  From the opening moments of finding a lead to uncovering an opportunity to presenting and getting a decision, there are many things that can go wrong.  And when something goes wrong, it is in fact time to say “Houston, we have a problem.”  But who is the “we” that caused the problem?

Speaking of Houston, I was there this week delivering a keynote address at the 2022 Mid America Lenders Conference.  My training was on selling in a rate-sensitive environment which is a hot topic given that 2022 will be a year with multiple rate increases.  In my keynote, I asked the attendees if they were working on the right end or the wrong end of the problem.  When a prospect asks you at the end of the sales process for a concession (rate or terms), that tends to be a real trouble spot for salespeople.

Every company we work with believes in the power of having a value-based selling approach.  None of them want to be the low-cost provider in their respective industry.  And while we are called upon to help with last-minute or late-cycle negotiations, that is working on the wrong end of the problem.  The right end of the problem is at the beginning of the sales process where it is essential to introduce value into the equation.  After all, the primary reason why salespeople struggle to defend value at the end of the sales process is that they fail to introduce that value at the beginning of the sales process.  

From the sales assessment tool that we use by Objective Management Group, here are the skills of a value-based seller:

• Focused on value over price
• Comfortable discussing money
• High threshold for money
• Willing to walk if the prospect does not see value
• Always positions value
• Sales process supports value
• Learns why prospects will buy
• Doesn’t need approval
• Asks enough & great questions
• Avoids making assumptions
• Quickly develops rapport
• Not compelled to quote

Start helping yourself by positioning your value early.  Make it impossible for your prospect to miss it.  Find out if your prospect values it and protect your bottom line.

Do your lenders provide your prospects and clients with the consultative financial and business advice that establishes value and makes you rate-resistant?

One of the areas where we are spending a significant amount of training time in 2022 is on sales negotiation strategies, value-based selling, as well as sales negotiation techniques.

As a 29-year-old sales training company dedicated to serving the needs of financial institutions, we have learned much about the challenges that confront those institutions on an almost daily basis. From concerns around regulations to concerns around declining net interest margins to concerns around intense competition, it is fair to say that times have been quite challenging. And now in 2022, we are likely to see several rounds of rate increases that will provide another challenge to profitable loan growth.

One of the areas where we are spending a significant amount of training time in 2022 is on sales negotiation strategies as well as sales negotiation techniques. And based upon my numerous conversations with CEOs and Presidents, the ability to sell value has become quite a conundrum. The leader gathers his or her lenders together for a meeting and says the following with passion: “We are better than our competition so stop cutting rates to get deals done.”

The reaction to this is almost always the same. The lenders smile and nod their heads in tacit agreement. Then after the CEO walks out of the room, the lenders have the meeting after the meeting where they commiserate and ask each other how long their CEO is going to spend on Fantasy Island. After all, it is brutal out there in the field. And the thinking goes if they don’t match or beat rates then it will be all but impossible to win deals.

All of that leads me to want to talk about working the “right end of the problem.” The knee-jerk reaction is to focus on negotiation training and that is not a bad thing. But the right end of the problem means recognizing where the problem is really starting and that is during the very first sales call or conversation. What’s the problem? Simple – the lender is not providing any value as they speed through the process with the prize being able to send the prospect a term sheet. And since the prospect does not see or experience any value…because the prospect is not taken through a differentiated experience…and because rates are easy to understand and compare, the prospect simply decides to use rate as their yardstick in comparing the difference between the available options.

The key is to add value early in the sales process by tailoring your message for resonance. Differentiate yourself from your competition by taking a consultative sales approach. Get the prospect to wonder why other banks have never asked them the questions you are asking them.

After all, the main reason why lenders don’t do a very good job of defending value is quite simple. It is hard to defend something that was never provided in the first place. Time to start working on the right end of the problem – how your bank and your lenders can differentiate and provide your prospects and client with the consultative financial and business advice that makes you “rate-resistant.”

One of the top challenges we discuss with sales managers and leaders is how to get their salespeople to start selling value and stop caving on price.

In this blog, we will discuss the best way to respond to a prospect who tells you that your competition has a lower or better price.

The death of value has come slowly…but you could see it coming for quite some time. Some might blame the economy. Others might blame technology or even hyper-competition from other providers. But do you know who rarely gets blamed? Salespeople.

When we are in front of sales leadership teams the number one challenge we wind up discussing is getting salespeople to start value-based selling and stop caving on price. Let me be clear about something – selling based on price is a sales strategy. It’s just not a very good sales strategy (unless you are Walmart). Seth Godin called selling on price “the race to the bottom” and he went on to say it is a race you can’t win and it is a race you don’t want to win.

John Ruskin wrote these words that will forever be true: “It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money — that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do.”

So, what is the best way to respond to a prospect who tells you that ABC Company has a lower or better price? If you believe in the power of gradual self-discovery then you should ask the prospect one simple question – “why do you think that is?”

Or what about simply responding with “thanks for sharing that with me…what if I tell you I can’t do that…where would that leave you and me?”

I may have been born yesterday but I stayed up all night studying so here is my question for you: is it possible you wind up fighting on price because you offer to fight?”

And if you need to walk away, perhaps you should suggest to your prospect that they add a contingency factor to the lowest priced bid for when they figure out that what they bought is not capable of doing what they need it to do. Of course, if they do that, then they would probably have the money to buy your offering instead.