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BILL LEE: Gross Margin: Who Is Accountable?

Here are some of the basic rules I believe salespeople should be taught before they hit the road with the authority to lower prices:

• Resist quoting a price on the initial sales call.
• Resist taking a set of prints from a contractor on the first call. Reason? You don’t know enough about how he builds a house to prepare an accurate takeoff.
• When everything is considered, your company’s prices are already competitive. If they were not competitive, your company would not be generating its current level of sales volume.
• When customers and/or prospects tell salespeople their prices are not competitive, they are most likely testing the salesperson’s resolve.
• If salespeople are not willing to hold their prices, they’ll never know what it’s like to get full price. Holding firm takes courage.
• If you “buy” your way into a new customer, your price advantage is only temporary.
• Learn to recognize the difference between a negotiating tactic and a legitimate competitive situation.

When quoting a customer or a prospect, the salesperson should:

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• Earn the right to quote by first providing value.
• Have resolve in your voice: “The price is _________!”
• Offer evidence as to why you believe the price is competitive: “I am confident these are really good prices. I’ve been authorized to quote these same prices for the several days and none of my customers have complained.”
• We spend a fortune keeping up with what’s going on in the market. We belong to one of the largest buying groups in the country. We would be out of business if we didn’t keep our customers competitive.

Negotiating is a game. Make sure your salespeople know the rules.

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