Why so large a cost, having so short a lease, does thou upon your fading mansion spend? -William Shakespeare
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Just tell me how much it costs is probably the most dreaded sentence any salesman can hear. Why? Not because of what it's asking, but because of what it's saying.
When a potential customer asks you the cost of the product at the beginning or even the middle of your sales cycle, they're often not trying to gather information, they're trying to get rid of you and usually, it works.
I have been selling a premium product for the past 10-plus years. I'm no stranger to the sentence, "but you guys are too expensive." In fact, I would be shocked if a week went by in the past ten years where I didn't hear it (I need to vacation more).
I recently shadowed a sales representative selling financial software and below is how his conversation with his prospect went:
Salesman: I understand you used to use our software but no longer do
Client: That's right, we found a less expensive option
Salesman: I understand that cost is important to you. You're not alone there. I always ask the clients I'm speaking with what their three biggest challenges are and normally the response is 1. cost/productivity 2. talent retention and 3. risk mitigation. Would you agree?
Client: Yes, especially number two. It's hard to get young talent to stay.
Salesman: What I've noticed is that firms are paying larger salaries, offering flexible work schedules and even signing bonuses to attract and keep talent. Are you doing these things?
Client: To an extent yes.
Salesman: But what we've found is that most firms are missing a critical component. Millennials expect a firm to have the most recent and up do date technology available. This generation has grown up so entrenched with technology that they don't just expect it, but in the absence of it, they're actually uncomfortable. Would you agree?
Client: Sure, but how much does the most "up to date software" cost me?
Salesman: Without gathering some more information, I'm not entirely sure which package would work for you, so I really can't say.
Client: Just tell me, ballpark how much?
Salesman: It's somewhere between free and a kings ransom. To be candid, at this point cost really wouldn't matter because you have no idea what the software is capable of. You don't yet know that it could save you over 300 billable hours a year, allow your customers to access their key financial data anytime, anywhere. Allow the most talented young financial advisors the ability to work remotely from anywhere at anytime. You wouldn't know about any of that yet, so what would the cost even mean?
Before we get in to cost let me ask you one question, "is there a cost to NOT knowing what the most current software is capable of?"
Client: Yes, I'm sure there is but I can only spend so much..
Salesman: I have found that there are two types of entrepreneurs I deal with: 1. those that make decisions based on how much money they can save or 2. those that make decisions based on how much money they can make. Which one are you?
Client: Well, obviously I want to make money
Salesman: I want you to make more money too. Let's set up a demo of the product, take a look at it's capabilities and see if it's a good fit. I'm confident that you'll find it to be extremely valuable.
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What did he do well? What could he have done better? I have some thoughts on this for sure. I was impressed by some things and there are things I think he could have improved upon. I'll weigh in in the comment section if anyone wants to discuss.
Happy selling out there!
-tng
I would have punched your associate. ______________________________________________________ My wife is between EMRs at the moment. The one she was using recently "upgraded" to a "vastly-improved" feature set which came with a vastly-expanded cost; she went from $20 a month to $90 a month for a bunch of features she doesn't need and can't use. This has been pretty common for people in her industry; the company has held three webinars so far that were supposed to be about all the nifty new things the EMR does but have each time devolved into apologias and chaos. Meanwhile, there's a small firm that rolled their own for their own use that the grapevine has caught ahold of and this three-man shop is now having to ramp up to deal with pretty much every former customer of the EMR signing on (at twice the price they were paying). Meanwhile there's blood in the water so everyone with an EMR even vaguely appropriate to my wife's practice is banging down the door trying to get her to demo this and download that. So I've seen this sort of conversation a lot. Your associate's approach was asinine, condescending, unresponsive, inflammatory and rude. _______________________________________________________ - "Just how much does it cost? Remember, I was a customer until I judged your value to not match your price." - "Fuck your question, let's change the subject to something else. Never mind that you have a ballpark idea of what it costs, I have a to-the-dime estimate of what you were paying, and when asked a direct question I feel the need to prevaricate." - "Yes, I would agree that millenials are a pain in the ass. Your point? How much does it fucking cost?" - "I know your employees and their needs better than you, wouldn't you agree? Fuck you, it costs what it costs." - "I'm going to politely decline to rise to the bait of your condescension if you would just please give me a price, as if I were an adult." - "But you're not an adult, you're a child! You see, I arranged this meeting and looked over your old account without making the first fucking effort to understand your business ahead of time and I would only do that to someone I consider feeble or naive! So I'll deflect the question again by asking you your pain point!" - "Fuck you. No numbers for me, no numbers for you." - "Maybe I should try fellating your ego." - "Yes, I have an ego." - "Good ego. Nice ego. Sucky sucky ego. Let's make an appointment to waste more of your time; I promise there will be more ego stroking and ball-cradling." __________________________________________________________ Your associate is assuming their clients lack the sophistication to understand a fee schedule. They're passing up on the opportunity to let the customer contemplate the value-add. And they're neglecting the fact that their customers probably have a Yahoo group where they can post "Hey, how much does TNGSoft cost?" Now they control that conversation, not you. They're getting pricing from (at best) friends or (at worst) random strangers on the Internet and when next you meet with them, the discussion is going to be even more adversarial. Sure, pricing is proprietary but I'll bet you guys have a range you can work within. And yeah - the Internet can't tell me what I'll pay for a Honda Fit but it'll bloody well get me close, and then I can evaluate it based on similar offers from similar vendors. Your guy? He's arguing he's too much of a special little flower to be considered within the marketplace. And if he really were, his customers would be calling on HIM.
I'm glad I wasn't sipping a beverage while reading that reinterpretation of the conversation. Most of it would have ended up coming out my nose. Seriously though, ALL EMR software eats a giant dong. The hospital I work for has literally spent hundreds of millions of dollars to accomplish nothing but pissing all their staff off.
I'm developing my own set of rules as a customer for sales people. 1. I'm not buying an appointment. Unless you are willing to tell me more than you are supposed to I'm not sitting down to talk to you. I want prices, I want specifics, otherwise go fuck yourself. An appointment is a waste of my fucking time if I'm not really really interested. 2. I have a list of trigger words and sales techniques that if I'm presented with will end the meeting immediately. I'll provide the list at the meeting or beforehand. Words: a."Charity" I don't give a fuck about what charities you support, I don't give a damn about how you will help me to give. I'm pretty sure that the average seller and I aren't divvying up our loot in a like manner, I'll not boor you with my good deeds don't bother me with yours. b. "Fortune 500" just don't say it. c. "Social Media" Told a guy trying to sell a POS and credit card service that "I don't give a shit about social media, so you should probably not talk about it to me." It's not true that I don't give a shit but so far 80% of my social media businness has come from an app called "Next Door" that doesn't integrate with any POS, 10% has come from yelp and google maps, 5% from Yik Yak and the rest from Facebook. I don't need a POS that integrates with Facebook and Twitter. The guy proceeded to burn fifteen minutes repeatedly bringing up social media ever few minutes. It was supposed to be a fifteen minute presentation. Techniques: Presenting me with any testimony from a business man like me. As if being shown platitudes from a flour smudged baker or or a flower shop owner with shears in her hand will get my dollar. GET TO THE PRICING MOTHERFUCKER!!!! Putting me on the phone with someone else during the sales bullshit session. So far one credit card company might be worth looking at closer if I can get my sales up. Their system has less data tools than square but with increased sales I could save some decent bread. Untill I get my sales higher the savings wouldn't be worth the hassle of changing over and loosing the data breakdowns. They are local and I've heard good things about them. All the rest can burn in the eternal fires of hell.
Make sure that the percent is below 3% each month. Take the total fees on the CC statement and divide it by the total sales. This equals what is called your "net effective rate." -If you are below 3% you shouldt wortty too much. But, where they get new, small businesses like yours is to lease terminals etc. -Don't do it. Buy them. Let's say you are doing $20k a month in credit card sales and you have square at 2.7%. The lowest anyone else will POSSIBLY get you to, at a blended rate, is maybe 2.2%. -That .5 basis point equates to $100 a month. It's literally not worth you spending any time dealing with sales reps for $100 a month. -That's a best case savings too. Best thing you said in regards to the type of sale/environment I was describing in the scenario is this: You have a bunch of people selling you without even broaching step 1. -the most important step. I hope your business is doing well. you enjoying it?So far one credit card company might be worth looking at closer if I can get my sales up.
-STOP FOCUSING ON CREDIT CARD COMPANIES! -Seriously, it's a waste of time at this point of your business. Stick with square, unless it's lack of customer service is a problem. I'm not buying an appointment.
-In my opinion, that's where this sales rep went wrong from the get-go. When I was with him it was evident that he was "selling to the demo." He wasted to get a booked appointment for one of his solution architects to show the software. You never sell to the demo until you've established that there is 1. a problem that needs solving and you both agree on what it is. 2. You've established that the customer recognizes that if they don't solve the problem they're in trouble 3. They recognize that your product is a good solution to the problem. -THEN you can sell the appointment for the demo.
The local processor that I'm considering has stupid low rates for debit cards with a reasonable fee structure for everything else. The kicker is that less than half of my transactions are credit and some days it's less than a third which takes the sting off credit card costs. It also means that I have to raise sales a lot more to make switching attractive. Even small fees make a large impact on the cost benefit. The neighborhood loves small businesses and consciously carries cash to do business with them. Sales are increasing slowly but surely every week. I paid off all my costs, retired a additional thousand in debt my first month with money left over (I took nothing but tip money for myself). I have about 2k in start up costs that II need to retire (new startup costs have reared their head, pushing my debt up). I'll do better this month, better sales, less waste. I think it will be another month and a half before I bring on an employee part time. Coffee margins are great but it's a low sales high margin endeavor. Money is good when you work your own shop but labor costs are a killer. The business has very few moving parts. Aside from rent and utilities I have 3 vendors. It's easily manageable, which is nice. There is an assisted living complex for schizophrenic's in spitting distance from the shop, bunch of odd balls but they are mostly in control. They get 5 dollars a day to spend, and when they choose to glean their five dollars of joy with coffee I make their money go as far as I can. There is a big tire shop down the street, which is sending some random out of neighborhood business my way. A large empty building that sits kitty corner to my shop is being redeveloped into five store fronts which should be good for business. One of the slots is leased to an AT&T store which should drive foot traffic. The neighborhood, like the the town, is getting rapidly more expensive to rent and buy in. A shitty run down apartment complex two blocks away just evicted all their tenants and will likely either be torn down or remodeled. Rapid gentrification should be good for me and mine but is going to hurt a lot of people. The town is growing out of reach of young creative types and will pay the price down the road if it doesn't get it's shit together as far as affordable housing goes. There is almost no rhyme or reason to when I'm busy and when I'm dead. My best hour of the day can be my worst the next week. Pastries are the worst, loose money on them part of the week sell out during the next. Margins on baked goods are tighter than coffee. Baked good also make up a smaller portion of my inventory and are a necessary evil. Hopefully more business will bring greater predictability. Getting almost no business from the college that's about six blocks from the shop. Giving away free drip coffee for here today to anyone with a college I. D. So far I've gotten fifteen likes on my give away post but no feet. I should have posted this on #coffeewithCgod guess I'll link to this. Didn't know I'd be so chatty.
I'd say one glaring 'error' was this line: Firstly, it comes off as a bit aggressive. Secondly, the client must have at least some idea of what the software is capable of if they used to use it and are currently using an alternative. And who's to say they haven't done research on the latest version? Thirdly, flat out telling someone that they have no idea during a pitch seems like a fast-track to nowhere. In the rest of the conversation the salesmen seemed knowledgeable and was mostly making pertinent observations about the client's business area. But in the paragraph that contained the aforementioned sentence he just seemed a bit too assertive. The salesman should've presented the advantages in relation to competitor's software rather than assumptions on the client's knowledge. Do you agree?To be candid, at this point cost really wouldn't matter because you have no idea what the software is capable of.
To be candid, at this point cost really wouldn't matter because you have no idea what the software is capable of. If I were the one presenting, I would have given a range on what the price could be and let him know that this price range is variable based on what product suite you go with -which it is. He, is familiar with this and will understand. I would assure him that once I let him know about the new, advanced capabilities he would see that the value of the software exceeds the costs. Then I would proceed. But there comes a point when you have to answer the "cost" question, it's all in how you answer it. "Let's say you are at your daughters soccer game and one of your customers sends you an email requesting their financial statements from 2012. You can access this information, securely via our online portal from your cell phone in less than a minute. What does that mean for you? How does that differentiate you from other firms? In this scenario, by utilizing our cloud capabilities you have, after business hours, responded to your customer quickly and thoroughly and you did it without missing a minute of your daughters game." this is powerful stuff. Thanks for the reply rezzeJI'd say one glaring 'error' was this line:
-I'd say he had a number of glaring errors, but that was certainly one of them. He really did a poor job of framing the call. He had a clear objective in his mind that he wanted a demo. Period. He was so hyper focused on it that he didn't "hear" his client. It's perfectly reasonable for his customer to ask about price, especially since in this case his customer is using a competitors product. The salesman should've presented the advantages in relation to competitor's software
-Yes, I agree to an extent. But he also needs to show that his software is in a new class unto itself. It's a cloud based software which allows his clients firm to forge real-time connections with their customers, anytime from anywhere. He needs to paint a picture of what that means.
nowaypablo -did you end up reading the Challeger Sale?
Started it but it'll take me a while to finish with my workload. Lookin forward to it!