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Do you know what your prospects value?

Bill Lee

I recently published an article criticizing salespeople who open conversations with prospects by offering to quote a few prices. The reason I am critical of that approach to selling is because it’s frequently an invitation for prospects to base their buying decision on price.

I believe a salesperson’s goal should be to first learn what “other than price” or “in addition to price” the prospect values. That’s the purpose of asking open-ended questions in the first place: to learn what kinds of values your prospects appreciate.

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We had a customer once who I don’t believe ever once asked for a lower price. His hot button was on-time delivery. This builder was highly organized, almost to a fault. He was extremely rigid in scheduling his subs and when material was late arriving on a jobsite, his plans would no longer function. If you wanted to lose this builder’s business, just fail to deliver material by the time it was promised.

It’s natural for business people to do everything in their power to control costs. While paying too much for material will certainly inflate costs, so will doing business with a supplier who is frequently out of stock or is inconsistent on having material on the job by the time it was promised.

Have you ever wondered why most salespeople seem to place a great deal more emphasis on the competitiveness of their pricing than they do the other factors that can disrupt the flow of a job? In my opinion it’s because pricing is easier to calculate. It’s a lazy person’s solution to differentiation. A low-ball price can be generated with very little effort whatsoever. If salespeople have (or take) pricing authority, they don’t have to involve any other resource in the company. No telephone calls! No wasted time! It’s fast and oftentimes effective.

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Manipulating pricing also has a direct effect on gross margin. Once salespeople set a precedent for price cutting, it becomes more and more difficult for them to maintain their pricing resolve on future occasions when they need an advantage to lock up an order.

It takes a proactive and committed mindset to break the habit of using price as your differentiator. It can be accomplished, however, by developing selling skills that give salespeople insights into what their customers and prospects value most.

There are two particular skills that will change the way salespeople are perceived by their clientele: the first is a better understanding of the business side of home building; the second is developing the practice of asking well-designed questions, the answers to which provide the salesperson with greater insight into the specific services a particular customer most values.

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Sample Question: “In a highly competitive housing market like you are operating in here in Highlands, I know you must have uncovered areas in the construction process where you must concentrate to prevent money from falling through the cracks, so to speak. As your research uncovers these areas, would you share them with me, especially those that involve suppliers? Armed with the insights your research is uncovering, our people can work more in concert with your efforts to help your systems flow more smoothly.”

What I am promoting with this suggestion is a subtle way for supplier salespeople to persuade their builder customers to focus more of their attention on areas other than the prices they are paying for material. Price will always be a factor builders must consider, but price shouldn’t be such a prominent factor that it dwarfs other opportunities to enhance your business profitability.

While pricing is important, it is a pretty shallow factor to focus on almost exclusively.

Bill Lee is a respected sales and business consultant in the LBM industry. For more information, contact Bill at leeresourcesinc@gmail.com

 

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