This is an excerpt from my second book, Managing the Sales Process, available on Amazon.com. You can find a series of these excerpts in a dedicated blog category to get a broad overview, post-by-post, of the book (they are listed in reverse order in the category, so start with the oldest).
From Chapter 1 – The Core Attributes of Sales Failure
Uncomfortable talking about money
In many societies, people are raised to believe that it is impolite to talk about money. Maybe it is considered impolite to ask how much someone makes, how much they paid for their car, or how much money they spend on the engagement ring for their fiancé. After years or even decades of socially enforced discretion about money, many people just avoid the subject altogether. Better safe than sorry.
That is all well and good, unless you are in sales. Sure, there are other jobs where you have to talk about money, like banking or financial services. In sales, however, some salespeople choose to see talking about money as optional and opt out of it.
Why is this a problem? A sale isn’t complete until it is paid for, and in most cases the payment is in money. A salesperson who delays talking about money in working through the sales process also delays the possibility that a price objection will kill the deal. Now salespeople should not be in the business of killing the deal, but the timing in talking about money can save a bunch of time.
Most sales experts agree that a price should not be quoted until value has been established. In the context of the sales process, this generally happens during needs analysis and proposal. However, it is important to ensure that a prospect has an adequate budget as a part of the qualification process, which is the first thing that should be determined when an initial sales meeting begins. More on that later.
So how to bridge the gap? It is important to establish a monetary parameter early, but not quote a price. In this way, time won’t be wasted, but the deal won’t be killed too early ─ both are important!
By way of example, in the qualification process the salesperson first might ask about the general nature of the problem in need of a solution and then respond with a general range of pricing. The salesperson might say, for example, “Well, we need to get more information before suggesting a solution and quoting a price, but a complete solution to a situation like that usually runs in the neighborhood of $40,000-$60,000. Is there room in the budget for a solution of that caliber?” When choosing a range, keep in mind that many prospects may only hear the low number and report that back to their boss. It is better to err on the high side and later come down than the opposite to avoid this potential misunderstanding that can become a problem.
The range can even be more general. For instance, “A solution like that is more likely to run into five figures rather than four. Does it make sense to explore something in that price range?”
The salesperson has made no commitment to price at this point, and for that matter neither has the prospect, but at least the ballpark has been established for later discussion. If the client is comfortable with the range, then it makes sense to move forward. If he or she pushes back at this point and indicates that a desire to spend hundreds for a solution that will surely cost thousands, then a ton of time has been saved between qualification and when the proposal is rejected because it’s far more expensive than the prospect expected.
Before getting too excited if the answer is positive, it may also make sense to ensure that the prospect doesn’t have money issues by confirming who is involved in the decision process and if that person also is aware of and in support of an expense at this level.
Salespeople who are afraid to talk about money spend a lot of time selling before they discover that the deal just can’t be closed. Ask your prospective sales candidates to talk about some of their largest deals and see how comfortable they are throwing around numbers. If they look a little queasy, just imagine how you will feel when you look at the results they generate.
Authors note (AKA shameless plugs)
So, this 7-step sales process and associated topics…. Yup, I write about that a lot. I’ve been working with it since I developed it about 25 years ago – in my own diverse work experiences, with my teams when I had them, and with clients ever since.
If you would like to develop you own personalized and customized, highly effective and efficient B2B selling system, here are some further steps you can take:
The Salesman’s Guide to Dating is a free or very cheap (depending on Amazon) Kindle book that walks you through the sales process using the familiar analogy of dating. It’s a good, fun and quick way to get your mind around the whole process and how the pieces fit together.
Building Your Sales Process (BYSP) is a free and very thorough exploration of the same 7-step process that will walk you through the development of your own customized, personal B2B selling system. When you are done, you will know exactly what to do to get new business.
The Momentum Selling System® is an inexpensive but very robust online sales training course that is similar to BYSP, but goes deeper into the concepts behind each of the steps, and also helps you develop a plan not only for the 7-step process but also addresses mindset, repeat business and client base management.
If none of that sounds right, I do personal coaching and offer a free 30-minute intake session so that we can both learn if it makes sense to work together 1-on-1. If this sounds interesting, click over to the coaching page on this site and sign up for the free session.
Here’s to your success!