I have spent over 1,000 hours researching building material salespeople who have acquired sufficient knowledge, wisdom, and judgment to sell at a relatively high gross margin. Notice the words I used. I did not use luck or false promises. Selling at a reasonably high gross margin requires dedication and commitment.
Fortunately for me, I had a boss who recognized my passion for studying this subject and instilled in me the importance of keeping good notes each time I interviewed a salesperson who provided solid evidence of how he or she approached pricing.
While virtually all salespeople strive for their customer base to believe they are keeping them competitive in the marketplace, those with the highest gross margins don’t emphasize price; rather, they emphasize accuracy, timeliness, and a highly professional level of communication.
Pricing isn’t really much of a factor unless all else is equal. It is the job of the salesperson to supply the evidence that all else is not equal. The key word is evidence. Most salespeople claim to have outstanding service, but only a few keep score. In fact, I don’t believe I have ever heard a salesperson say to a prospect, “We have really crappy service, but rock bottom prices.” Virtually all salespeople claim to have terrific service.
If salespeople can’t produce documentation that their company performs at a consistently higher level than their competitors, it is extremely difficult to avoid service squabbles. So keep score! Document your company’s service level and use that documentation as a sales tool.
One of my favorite questions to ask salespeople in seminars is, “If I do business with you on this job, what are the odds that your material will arrive on the job by the time you say it will?”
The answer I usually hear is, “Pretty good.” What I’d like to hear is, “Well, year-to-date, 91.7% of the time, we have had material on the job by the time we committed it would be there.”
No matter how hard they try, contractors run out of material. They forget to place an order. They need an emergency delivery yesterday. Their window order missed the deadline. They need a Saturday delivery and your drivers don’t work on weekends.
This is the real world. How well does your company solve real world problems?
Avoid doing business with price buyers. When you sell price buyers, you don’t have enough profit to afford the services contractors need to be efficient. Price buyers will change suppliers over a 10-cent difference in price, and are often your most demanding customers.
Salespeople who live by the sword (price) usually die by the sword (price). It is difficult to remain competitive when you’re selling price buyers. Your price is almost never consistently low enough.
Companies in our industry that earn top dollar—9% to 12% before income taxes—rarely have the lowest price, but they frequently provide the highest level of service. They can afford to buy the delivery equipment to enable their contractor customers to better control their costs. They can afford to field a high-quality, well-trained, sales force.
As a salesperson, do you look, act, and feel as if you are worth every dollar you charge for the products you sell? Top dollar salespeople look like they are successful. They are confident in themselves, but no one would ever accuse them of being arrogant. They ask excellent questions. They want to know what they must do to be even more valuable to their customers. They enjoy being of service.
On just about every sales force there are a handful of salespeople whose gross margins lead the field. Their customers rarely question anything these salespeople have to say. They are respected. They are trustworthy. And they are leaders both on the job and off the job. Their customers seek their wise counsel.
These men and women are known for their wisdom.
