Why am I so adamant that we must never ever ever ever complain about our higher prices? There are two very easy, very simple, and very practical answers:
- Job Security. It’s the job of a professional salesperson to justify our premium price. Key word: JOB. That’s what we do! Our job is to articulate and create value to justify the fact that what we sell is higher priced than what our competitors sell. It’s truly that simple. Our higher priced products or services provide us job security. Think about it. If we had the lowest-priced crap in the market, our companies would not need to employ us. They could simply post the price on the Internet and proclaim to the world, “We’ve got the lowest price crap right here. Come and get yours now.” Seriously, who needs highly compensated salespeople to sell the lowest priced offering? Please stop complaining that your products are priced too high because that’s akin to admitting that you are unable to do one of the primary jobs that justifies your existence.
- Compensation. You know that nice base salary some of you have? Or that generous commission plan? Those expense reimbursements or the entertainment budget? Where do you think that money comes from? Darn right. The money that pays you comes from the gross margin we are able to capture when we sell something. Gross margin results from our ability to sell products and services above what they cost. Our companies pay us from that profit margin.
Profit is a good thing, not a dirty word. So when you complain that you can’t sell at the price your company wants to charge in the market, that’s like telling your employer that you don’t want to be paid at the same rate. Not sure how you feel about it, but to me, that’s not the best move. And as president of our sales union, I would ask you to reconsider your approach.
HIGHER PRICES OFFER SALESPEOPLE BETTER OPPORTUNITIES
Being priced above the market is a good thing. Higher prices communicate higher value to the customer. Frankly, I could make the argument that in many cases it would be more difficult articulating the value you create when your price is too low. Customers are not stupid. Everyone knows that there is no such thing as a free lunch, and buyers are rightfully suspicious when hearing that you have the best offering and the lowest price. That doesn’t make sense and people understand that they get what they pay for. My dad has another great expression that my kids love to quote. Buy cheap, get cheap. It says it all.
Last year, Anthony Iannarino had one of his very high-end clients invite me to lead a few breakout sessions on prospecting at their annual sales kickoff. One of the treats for me was getting to listen to Anthony deliver the keynote talk to the sales team. He is a great speaker and I learn every time I hear him. His client sells fractional private jet ownership priced at the very top of the market—and for good reason. During his talk Anthony tackled the highest-price topic head-on. He chuckled telling the sales force that they were lucky their prices were so high because it gave them plenty to talk about with potential clients. Their pricing structure created the perfect opportunity to describe the many differentiators (including extra safety precautions and redundant crews and aircraft) that this company provided compared to its competitors. Anthony asked this team to consider how hard it would be selling for their lowest-priced competitor.
He joked wondering what in the world those salespeople would talk about with prospects because their bargain basement price precluded them offering similar service levels to clients. And when you really think about it, how many super-high net worth individuals, the kind of people in the market for fractional jet ownership, are looking for a provider who cuts corners to offer a lower price? My gut tells me these clients would be more than happy to pay a premium, knowing that when they’re flying (often 43,000 feet above the earth) on their own private airline that it is indeed profitable and positioned to provide the absolute highest standards when it comes to service and safety.
If you think that you can only succeed in sales with the very best product (or service) or when you have the lowest priced offering, I would question whether you truly understand the job of a professional salesperson.
Excerpted with permission from Sales Truth: Debunk the Myths. Apply Powerful Principles. Win More New Sales by Mike Weinberg, copyright Mike Weinburg.