8 Sales Principles I've learned - Part 2
Here are 8 important sales principles to increase your close rate - Part 2. (Be sure to check our Part 1). In this video, I cover the last 4 principles that I've learned from years of experience living and breathing sales. We cover how to set expectations, giving clear pricing, negotiating position and resolving concerns.
Transcription:
Welcome to Business Tips with Michael Tobian. Today’s topic is 8 sales principles I’ve learned from
experience – Part 2
- In my last video, I gave a little information about my background as a sales person, from my experiences as a child, all the way up through my career. That video was Part 1 of 8 sales principles I’ve developed, in which I covered the first 4 principles.
Number 1 - Genuinely Believe in your product (or find something else to sell).
Number 2 – Listen to your customer
Number 3 – Be confident
Number 4- avoid manipulation and dishonesty.
This video is part 2 where we will cover the final 4 principles. Let’s jump right in
Number 5 – Set expectations to avoid issues later
- A big mistake many sales people make is over promising and under delivering. It is so tempting to set your expectations very high and promise your client the world. That’s fine if you are going to deliver the world. I have found though, that many products or services we offer are limited in their scope. When I sign up a national act for event entertainment with my agency DanceBands.com, I’ve learned that the last thing I want is for them to be frustrated down the road with not getting enough work from us. I have learned to be very realistic with our acts as to what kind of work I expect them to get from us. Also, I frequently recommend that bands not sign up exclusively with our agency, if I don’t think it will be a win win scenario. The last thing either of us need is to be in a relationship that isn’t a good fit. I have a competitor that signs up everyone they possibly can. They try hard to convince everyone to list with them as an agency. Many of their acts get frustrated and leave their agency after a while. We have never had an exclusive act leave our agency. Our bands and acts love the relationship they have with us and we only work with people that we love working with. It’s great.
- Similarly, when I sign up a listing to sell a business as a business broker, I am very clear to set realistic expectations. When a potential client asks how long I think it may take to sell, I tell them that the average business takes 7-8 months to sell and then discuss with them factors that help businesses sell faster or slower. Many people that are used to real estate sales are used to faster sales times when they sign up with a real estate agent. Business sales are much different. If a buyer gets an SBA loan (which is often the case), that SBA loan process could take 2-3 months. Clients who are given clear expectations from you will appreciate it. Regardless of if it helps you make the sale, it will save you a tremendous amount of headache down the road as you fulfil your end of the service agreement or when you deliver the product. If they reach out to a competitor that promises them something unrealistic, that may be a good opportunity to build some trust with them. They will realize that something is wrong with the other quote they received when you have shot it straight with them
Number 6 - Give Clear options and pricing
- Nothing is worse than a sales person that won’t just tell you how much it costs. Bad sales people are so worried about sticker shock that they are hesitant to get down to the brass tax with people. My bands and acts that I provide are not cheap. Sometimes they are the most expensive options on the market. But there is a reason we charge what we do and I can’t wait to tell my potential clients all about it. If a sales person won’t answer my question of how much it costs, it’s a big red flag for me. It does bring up an interesting problem though. If your product is expensive, you are going to want the opportunity to explain why it is worth what you are charging. Well, good news, you still can explain it after letting them know the cost. In fact, they will probably be very curious. Unless their budget just doesn’t allow for it, I rarely lose a sale because I’m too expensive. My products are worth what I charge. If my client DOES have budget constraints, then they aren’t going to be able to afford it anyway and often I have lower budget options for them. So, when it is time to give them the price, give it to them confidently. As a business broker, we require a year long exclusive contract, because we only get paid when we sell the business and we put a significant amount of resources and investment into the listing upfront. I have an associate at our firm that told me that he frequently has clients express a concern with this times period of exclusivity. I was surprise dto hear this because I rarely have clients with this concern. I suspect the problem is a result of him not explaining clearly enough the reason for the policy and not being confident enough in the explanation.
Number 7 – Always strengthen your negotiation position
- You will frequently be in situations where you will be negotiating the price or terms of your services. If you find yourself negotiating a lower price or more favorable terms for your client, realize that whoever makes the first suggestion of different terms, is usually in the weaker negotiating position. They may suggest a price much higher than you were expecting to have to negotiate. If you are offering a product and your client asks for a discount, it is their turn to propose something. You have already proposed a price. They said it was too high. It makes no sense for you to keep giving them prices until they say yes. When dealing with a client that has expressed that they would like me to give them a new price, I usually say something like “well, I’ve already told you what we charge. That is what I’m proposing. If you want to make a counter offer, I’m happy to look at it and see what we can do”. It is very difficult to argue with that position. If they insist on a new proposal, I may suggest something slightly lower than the first. If they are interested in your services, they will let you know what they can afford. Then you can have a discussion with them as to how you might make something work.
Number 8 – Resolve Concerns
- If you feel your product is worthwhile for them and you get a “no” from them, you might try to see what the real issue is. I often find that their real concern is lost in some kind of misunderstanding. I try to approach the conversation with as little pressure as possible while inquiring as to why they feel it won’t work for them. Ask a simple open ended question and then let them talk. You might try asking “What is it that is making you hesitant” or “is there a situation where this would be a good fit for you”? The more open ended the question the better, IF you follow my second principle and LISTEN to what they have to say. Ultimately, it may just not be a good fit for them but many deals are saved in this resolving concerns part of negotiations. If both parties are willing to discuss if there is a deal to be made, then there often is. Well, that’s it. 8 Sales principles I’ve learned from experience. Follow these and be genuine and honest in your sales approach and you are going to have a lot of success selling your product. Make sure to check out Part 1 where we cover the first 4 principles and please do share and subscribe for more business tips of all kinds. Thanks!