How to Stop Competing On Price and Have More Work Than You Can Handle.
One of the first things business owners tell me is that they need more sales and the second thing is that they are constantly competing on price to win sales. Here’s what I have found …
A young man whose accountant told him he was stupid to go into business attended one of my programs. ‘Steve’ needed more sales. He wanted more leads. One of the lessons was about how to put together a sales process, so Steve not only understood what the steps were that he actually went through for a sale to be made, he was able to track where they were up to and decide the next action to move the sale forward.
Steve followed the action taught to him about how to follow up and converted 40% of his ‘lost’ quotes within the next week. Steve told me that one piece of his advice has increased his business tenfold. The message: they are not lost until they say no. Put together your step by step sales process and follow up.
Another tradesman I work with, ‘Mel,’ was stuck competing on price. Mel was finding he was having to quote so low on jobs he just couldn’t make any money. We addressed what he was talking to people about and found that he was talking about the technical part of the job, not what it really meant to the customer to have the job done. With the right questions in hand, Mel was not only able to achieve the prices he wanted, winning a job 4 weeks ago for TWICE the price of a competitor, he also charges a fee for parts of the initial concepts that he used to do for free. The message: find out what your customers are really looking for and sell them that. Prepare the questions to bring their thoughts and feelings out in your meeting.
The third top tip is to know how much you make on each item, job or hour. Working with a young salesman in January he told me that he was adding 35% to the cost price of products. The problem for young ‘Adam’ was that he was meant to making 35% on the sale price of the items. He was working hard to hit his targets and was doing very well, except the money didn’t seem to be there. Adding 35% to your cost price gives you a 26% profit on your sale price. That difference in gross profit is often the reason businesses don’t make money. Adam changed how he calculated his sale price and has a very happy boss.