How to Sell at Margins Higher Than Your Competitors E-Book

Lawrence L. Steinmetz

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 520

Veröffentlichungsjahr: 2010

Beschreibung

Praise for How to Sell at Margins Higher Than Your Competitor "This is the complete book for both new and experienced salespeople and business owners to learn and re-learn the essentials for success. How to Sell at Margins Higher Than Your Competitors emphasizes the pricing strategies and tactics to increase the market share and profits of any organization. This is a book that is as important to presidents as it is to salespeople." --Bill Scales, CEO, Scales Industrial Technologies, Inc. "As the largest service provider in our industry, we have a significant market advantage. However, we constantly walk the pricing tightrope because, as this book so clearly states, 'business is a game of margins . . . not a game of volume!'" --John K. Harris, CEO, JK Harris & Company, LLC "If you live and die on price, this book could be your only lifeline." --Tom Reilly, CSP, author of Value-Added Selling and Crush Price Objections "How to Sell at Margins Higher Than Your Competitors successfully illustrates profitable sales truths to assist us in selling for maximum return. This book's well-researched, logical, and affirming words validate the simple fact that as a premium company we deserve premium margins. So, while our competitors reduce or match prices out of fear and scarcity, our managers, thanks to this powerful sales tool, can continue quoting and closing with profitable confidence." --Joe Bracket, President, Power Equipment Company "I learned a long time ago that it is pretty difficult to control what my competitors will do, but we must control what we do--like maintaining margins. This book is a 'wow!' that will help my salesmen crack bad habits. Sales organizations should design their entire training programs around the content in this book." --George C. Giessing, President, Brusco-Rich, Inc. "This energizing book is the 'right stuff' for every sales force. It should be a required study for every executive and sales professional who seeks to be successful." --David R. Little, Chairman and CEO, DXP Enterprises, Inc.

Leseprobe

Table of Contents

Praise

Title Page

Copyright Page

PREFACE

CHAPTER 1 - EMPLOYERS CAN FAIL OR GO BROKE—AND YOURS CAN, TOO

SO MOST BUSINESSES FAIL—WHAT’S THAT GOT TO DO WITH MAKING MY PRICES STICK?

IT MAY BE ILLEGAL TO BE CROOKED, BUT IT ISN’T ILLEGAL TO BE STUPID

CAUSES OF BUSINESS FAILURE

WHY COMPANIES CUT PRICE WHEN THEY GET INTO TROUBLE

CHAPTER 2 - BUT COMPETITION KEEPS CUTTING MY PRICE

CUSTOMERS ONLY BUY ON PRICE—OR DO THEY?

DO YOU BUY BECAUSE OF PRICE?

PRICE-BUYER! CAN HIM OR FIX HIM WHO WORKED FOR US WHO WAS A WE’D CAN ANY SALESPERSON

THE HOT STOVE PRINCIPLE

MOST SALESPEOPLE THINK PRICE IS MORE IMPORTANT THAN IT IS

WHAT HAPPENS WHEN YOU DON’T TALK PRICE?

CHAPTER 3 - DETERMINING YOUR COMPETITIVE ADVANTAGE

PRICE

QUALITY

DO YOU APPROVE OF SELLING?

CHAPTER 4 - SERVICE AS YOUR COMPETITIVE ADVANTAGE

WE ARE YOUR FULL-SERVICE BANK—WE ARE OPEN FROM 9:00 TO 5:00

SELLING SERVICE INSTEAD OF PRICE—OR EVEN QUALITY

THE BADLY FLAWED BETTER MOUSETRAP THEORY

DO YOU REALLY LIKE TO PROVIDE YOUR CUSTOMER GREAT SERVICE?

SALESPEOPLE SHOULD PERSONIFY CUSTOMER SERVICE

CHAPTER 5 - WHY YOU REALLY SHOULDN’T MESS WITH PRICE-BUYERS

DELIVERY—THE ULTIMATE COMPETITIVE ADVANTAGE

REASON 1 : THEY CAN’T GET IT

REASON 2: THEY CAN GET IT, BUT . . .

CHAPTER 6 - WHAT BUYERS AND CUSTOMERS REALLY NEED—HINT: IT ISN’T LOW PRICE

THEY NEED TWO OR MORE VENDORS

CUSTOMERS NEED ON-TIME DELIVERY

THEY LIKE THE IDEA THAT THEY’RE CUTTING A DEAL

THEY NEED RESPECT

THEY NEED HELP AND GUIDANCE ON COMPLEX PURCHASES

THEY NEED TO BUY WHAT THEY ARE TOLD TO BUY

THEY NEED TO GET WHAT THEY BUY—QUANTITY, QUALITY, TIMELINESS

THEY NEED TO MINIMIZE INVENTORY CARRYING COSTS WITHOUT JEOPARDIZING THEIR ...

THEY NEED TO BUY FROM A TECHNICALLY CURRENT AND FINANCIALLY SOUND VENDOR

THEY NEED MORE CERTAINTY ON A ITEMS (COMPARED TO B OR C ITEMS)

THEY NEED PRODUCTION/PERFORMANCE CAPABLE VENDORS

THEY NEED COURTESY, SPEED, AND TIMELY ACTION ON THE PART OF SALESPEOPLE IN ...

THEY NEED SPEED AND ACCURACY IN INVOICING AND ACCURATE COST INFORMATION

THEY NEED ORDER AND SALES SERVICE DEPARTMENT HELP

THEY NEED QUALITY TRANSPORTATION CARRIERS USED BY VENDORS

DELIVERY—YOU CAN’T SELL AT A HIGH PRICE WITHOUT IT

CHAPTER 7 - THINGS BUYERS WOULD LIKE BESIDES A LOW PRICE

AN EASY, “NO BRAINER” RELATIONSHIP

RELIABILITY AND DEPENDABILITY

PREDICTABILITY

REACTION TO THEIR NEEDS

SHORT DELIVERY TIMES

HELP AT REDUCING COSTS BY REALIZING SAVINGS

BREADTH AND DEPTH OF QUALITY

TOTAL PRODUCT OFFERINGS

KNOWLEDGE, COMPETENCE, AND FOLLOW-UP

WILLINGNESS TO “GO TO BAT” FOR THE CUSTOMER WHEN PROBLEMS ARISE

COMPLETE KNOWLEDGE OF YOUR PRODUCT OR SERVICE OFFERINGS

KNOWLEDGE OF YOUR PROSPECTS AND CUSTOMERS’ PRODUCTS AND SERVICES

PREPAREDNESS FOR SALES CALLS

REGULAR, PREDICTABLE SALES CALLS

TECHNICAL EDUCATION ABOUT WHAT THEY ARE BUYING, IF RELEVANT

INFREQUENT SHORT SHIPMENTS

EASE OF INTERPRETATION OF VENDOR PRICE LISTS AND QUOTES

EARLY NOTICE OF SHIPMENT OR PRODUCT PROBLEMS

ADVANCE WARNING OF DISCONTINUANCE OF ITEMS

UNDERSTANDABLE AND LEGIBLE SHIPPING DOCUMENTS

CHAPTER 8 - YOUR COMPETITORS’ DELIVERY PROBLEMS WILL GET YOU PROFITABLE SALES

THE ECONOMICS OF PRICING

VOLUME SWINGS ASSOCIATED WITH PRICE CUTTING: DETERMINING HOW MUCH MORE YOU MUST ...

IMPLICATIONS FOR THE REAL WORLD

CHAPTER 9 - YEAH, BUT I’LL MAKE MORE MONEY IF I CUT MY PRICE—AND I DON’T CARE ...

WHAT HAPPENS IF YOU RAISE YOUR PRICE?

YEAH, BUT I’M NOT GOING TO MAKE AS MUCH

WHY GO BROKE TIRED?

NOBODY CAN MAKE ANY MONEY WORKING AT EL CHEAPOS

WE WERE BUSY RIGHT UP TO THE LAST DAY

I STILL SAY I’D MAKE MORE MONEY SELLING AT THE LOWER PRICE

CASE STUDY IN PRICING STRATEGIES

CHAPTER 10 - HOW TO FACE A COMPETITOR’S PRICE CUTS

CHAPTER 11 - THE TWO CARDINAL SINS OF SELLING

INVITING CUSTOMERS TO BEAT YOU UP ON PRICE

ADVERBS AND ADJECTIVES

NOUNS AND PRONOUNS

DEALING WITH TRAINED, SOPHISTICATED PROSPECTS, BUYERS, AND CUSTOMERS

THREE INVIOLATE RULES OF SELLING AT PREMIUM PRICES

CHAPTER 12 - BUYERS MAKE GOOD LIARS . . . IF YOU LET THEM

INTIMIDATION

DENIGRATION

PROSPECTS KNOW THE DIFFERENCES

CUSTOMERS CARE ABOUT THOSE DIFFERENCES

HOW TO TELL WHEN THE PROSPECT IS LYING

WHERE IS THE PROSPECT LOOKING?

THEY GET PERSONAL AND USE OPINION VERBS

CUSTOMERS WILL USE THE SUBJUNCTIVE MODE OF SPEAKING

CHAPTER 13 - HOW TO “HANG IN THERE” UNDER INTENSE PRESSURE TO CUT YOUR PRICE

THE “SO . . .” RESPONSE

THE “WHY NOT?” RESPONSE

THE FIRST “CAN’T GET IT”

THE SECOND “CAN’T GET IT”

THE PROSPECT DOESN’T WANT TO GET IT

“KEEP ON SELLING” STRATEGY

TESTIMONIAL OR CORROBORATION SELLING

LOOK HURT

CHAPTER 14 - INDICATORS THAT YOU ARE UNDERPRICING

IF PEOPLE DON’T WANT TO COME OUT TO THE BALLGAME AND WATCH IT, I CAN’T STOP THEM

MUCH CAN BE OBSERVED BY JUST WATCHING

IF YOU EVER MAKE A PRICING ERROR, YOU SHOULD MAKE IT ON THE HIGH SIDE

CHAPTER 15 - INDICATORS THAT YOU ARE OVERPRICING

BUT I REALLY THINK MY PRICES ARE TOO HIGH

CHAPTER 16 - HOW PROSPECTS WILL ATTEMPT TO GET YOU TO CUT YOUR PRICE

LEARN THE TRICKS AND COMBAT THEM

CHAPTER 17 - HOW TO FINALIZE A TRANSACTION WHEN YOU’RE FACED WITH PRICE RESISTANCE

DEALING WITH RESISTANCE

SALES TECHNIQUES TO USE WITH A PRICE-BUYER

LEARN TO USE STOPPERS

CHAPTER 18 - GENERAL GUIDELINES ON HOW TO PRICE

WHAT YOU SELL (OR YOUR BUSINESS) IS IN A WELL-ESTABLISHED MARKET THAT HAS NOT ...

THERE ARE TOO MANY SIMILAR OR IDENTICAL PRODUCTS IN YOUR MARKET

YOU OWN THE MARKET

IT DOESN’T COST MUCH TO SELL YOUR PRODUCT OR SERVICE

YOU GET A LOT OF HELP WITH THE ADVERTISING AND PROMOTION OF YOUR PRODUCTS OR SERVICES

THERE APPEARS TO BE A BASIC DEMAND FOR YOUR PRODUCT THAT IS PROBABLY GOING TO ...

YOU CAN SPIN OUT ADDITIONAL BUSINESS OPPORTUNITIES BY SELLING ONE PRODUCT AT A ...

YOUR CUSTOMERS KNOW WHAT IT COSTS YOU TO PROVIDE YOUR PRODUCT OR SERVICE

WHEN TO PRICE HIGH AND WHEN TO PRICE LOW

INTENSIVE MARKET COVERAGE VERSUS SELECTIVE MARKET COVERAGE

LARGE MARKET SHARE VERSUS SMALL MARKET SHARE

LOW PROMOTIONAL COSTS VERSUS HIGH PROMOTIONAL COSTS

COMMODITY PRODUCTS VERSUS ESOTERIC/EXOTIC PRODUCTS

MASS-PRODUCED PRODUCTS VERSUS CUSTOM-MADE PRODUCTS

CAPITAL-INTENSIVE PRODUCTS VERSUS LABOR-INTENSIVE PRODUCTS

SINGLE-USE PRODUCT VERSUS MULTIPLE-USE PRODUCT

SHORT PRODUCT LIFE VERSUS LONG PRODUCT LIFE

SLOW PRODUCT OBSOLESCENCE VERSUS FAST PRODUCT OBSOLESCENCE

LOW SERVICE NEEDS VERSUS HIGH SERVICE NEEDS

SLOW TECHNOLOGICAL CHANGE VERSUS RAPID TECHNOLOGICAL CHANGE

SHORT DISTRIBUTION CHANNELS VERSUS LONG DISTRIBUTION CHANNELS

FAST INVENTORY TURNOVER VERSUS SLOW INVENTORY TURNOVER

PROSPECTS FOR LONG-TERM PROFITABILITY VERSUS SHORT-TERM PROFITABILITY

LIKELIHOOD OF SPIN-OUT BUSINESS VERSUS ONE-TIME SALE

LARGE MARKET POTENTIAL VERSUS SMALL MARKET POTENTIAL

INSIGNIFICANT CUSTOMER BENEFITS VERSUS SIGNIFICANT CUSTOMER BENEFITS

BUSINESS-TO-BUSINESS MARKET VERSUS HOUSEHOLD CONSUMER MARKET

LIKELIHOOD OF FUTURE TIE-IN SALES VERSUS NO TIE-IN SALES

NEED FOR LARGE PARTS INVENTORY VERSUS NO PARTS NEEDED

HIGH LEVEL OF TRAINING VERSUS MINIMAL TRAINING REQUIRED FOR PRODUCT USE

GENERIC PARTS REQUIREMENTS VERSUS SPECIALIZED PARTS REQUIREMENTS

EASE OF NEW PRODUCT ENTRENCHMENT VERSUS EASE OF PRODUCT DUPLICATION IN THE MARKETPLACE

RAPID QUALITY ASSESSMENT VERSUS LENGTHY DETERMINATION OF QUALITY

LOW PRODUCT LIABILITY RISK VERSUS HIGH PRODUCT LIABILITY RISK

CONCLUSION

CHAPTER 19 - FINAL THOUGHTS ON SELLING AT PRICES HIGHER THAN YOUR COMPETITORS

LATE DELIVERIES

PARTIAL DELIVERIES

DESTRUCTIVE PRICING

CANCELING OR DELAYING ORDERS

REQUIRING “ADD-ONS” OR RENEGOTIATING ORDERS

SUPPLYING DEFECTIVE PRODUCTS OR PARTS OR UNQUALIFIED PEOPLE

ASSERTING QUICK PAYMENT SCHEDULES

SUBSTITUTING MATERIALS, PARTS, SUPPLIES, OR PEOPLE

HIGH PERSONNEL TURNOVER

LABOR RELATIONS PROBLEMS

A POOR REPUTATION RELATIVE TO ETHICS AND INTEGRITY

IN CONCLUSION: SOME BASIC GUIDELINES

SUMMARY

APPENDIX - THE PREMIUM PRICE SELLER’S READY REFERENCE GUIDE

NOTES

ABOUT THE AUTHORS

INDEX

Praise forHow to Sell at Margins Higher than Your Competitors: Winning Every Sale at Full Price, Rate, or Fee

The two giants in their fields have collaborated to produce a straightforward, no-nonsense blueprint for anyone involved in the selling process. And make no mistake about it, any interaction you have with a client or patient is a “sale.” The only question is whether you’ll have to settle for a cut rate fee or get the fee that you really deserve. You must read this book.

—Nathan Wei, MD Arthritis and Osteoporosis Center of Maryland

A revolutionary manual for improving and protecting your margins. Steinmetz and Brooks combine to give us this unique playbook that will allow us to WIN. Business and sales professionals will continue to reference the teachings and tools to perfect their game.

An absolute must-read for business leaders and sales professionals. Steinmetz and Brooks combine practical, real-world illustrations with great visual teaching techniques to provide a road map for selling at higher margins than the competition.

Larry Steinmetz and Bill Brooks combine their talents and years of practical experience to give your business the edge over the competition. It contains the recipe for protecting your margins and is so practical that you will find it at your right hand much more than on your bookshelf.

—Joseph Neidig Vice President of Human Resources and Administration Red Spot Paint and Varnish Co., Inc.

The chapter “Why You Really Shouldn’t Mess with Price-Buyers” alone justifies the cost (and time) for this book.

—Mike Pierson President Beckwith & Kuffel, Inc.

In my industry, the low price provider is king—but thanks to the hard work of Dr. Steinmetz and Bill Brooks, I’ve never even had to consider cutting my company’s prices. Instead, we’ve broken away from the pack as “the only choice” regardless of price. No matter what you sell or who you sell it to, you owe it to yourself to read this book!

—James A. Canale CEO and President Net2 Technology Group, Inc.

This book is the definitive work on full-margin selling for executives, sales managers, and salespeople alike. It is, undoubtedly, the ultimate source for selling at full price, fee, or margin.

—Jim Taylor CEO Thomas Group

Finally, a book that allows salespeople to understand the impact of “cutting prices” and how to increase sales margins! This is a must-read book for all sales personnel, especially those who want to “make it up in volume.”

—Robin Wall Vice President of Sales Dearing Compressor & Pump Co.

A practical handbook for CEOs, general managers, and sales managers struggling with how to meet competition in the marketplace and at the same time preserve the profit margin required not only to stay in business, but prosper over the long term.

—Edward E. Newcomer Chairman of the Board E. E. Newcomer Enterprises, Inc.

We constantly preach the importance of margins as we have far greater potential to positively influence that outcome, than gross sales revenue itself. A few points on the top line translate to huge gains on the bottom line. Bill Brooks’ insights to help us get there have made a huge difference.

—James MacDonald President R. F. MacDonald Co.

This book reminds us to consider customer relationships in the context of a marathon, not a sprint. It shares our company’s philosophy that building partnerships with customers and offering great service is vital to success. It’s not just about winning customers . . . but keeping them for the long haul.

—Chuck Burns Area Vice President First Citizens Bank

Copyright © 2006 by High Yield Management, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada

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Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Library of Congress Cataloging-in-Publication Data:

ISBN-13 978-0-471-74483-2 (pbk.) ISBN-10 0-471-74483-2 (pbk.)

PREFACE

This is the thirteenth book I’ve written. Every time I write a book, I wait until it’s almost time for page proofs before I write the preface because I like to reflect on what the book really is about in order to say a few succinct statements about the book for the prospective reader.

For this particular book, I am especially mindful of something I wrote in the preface to my first book in 1992. I wrote:

The perspective I got for this preface came from a vacation I took just a week ago. I happened to read a piece of advertising literature of a small (albeit international) manufacturing company in one of the better-known ski resort towns in Colorado. The first paragraph of that company’s literature proudly boasts: ‘We are not just running a business, but living a lifestyle.’ I’m sure the people who are running that company are proud of that statement; genuinely believe that one need not be too serious about running their business—that if you produce a good product, the product will sell itself and one need not worry about the vulgar details of operating a business in a business-like fashion. Another interesting part of this manufacturer’s literature is that the enclosure with this literature compared this company’s prices with competitors’ prices and—you guessed it—this company’s prices were lower than their competitors’. That’s right. They allegedly have a superior product and, furthermore, can sell it at a price lower than their competitors’ and (surely?) make money doing that.

Once you’ve read this book, you will appreciate the sarcasm in the above paragraph. I revisited that Colorado resort town just last week to check out how the business was doing. At no surprise to me, it has vanished without a trace. I pointed out in the original book that one cannot run a business successfully via a series of propitious accidents or in a cavalier manner. We make that point again in this book: Business is a game of margins, not a game of volume. Whether one is running a manufacturing company, a wholesale operation, a distributorship, a retail store, a construction company, a financial institution, or a professional service organization, all too many people operate these enterprises with the idea that one can sell at prices (fees, rates) lower than their competitors and still be successful. Oh, if it were only true—and that easy. That is not to say that one cannot have fun running a business or professional organization. Or that there is no time for a good quality lifestyle. But the basics of running a good (successful) business are not founded on a “fun first, the business (practice) will take care of itself ” attitude. Too much water has gone under the bridge throughout history proving the point that a serious, professional manner has to be established at the helm by those running the operation.

Fortunately, history gives us many lessons in the good and the bad practices that happen in running a business—admittedly, mostly bad, but there are also good examples. The common threads that underpin the good and successful examples are what we have chosen to present in this new version of my original book. We have expanded it in many ways. We have added chapters on things such as the cardinal sins of selling and how to tell when a customer is lying about having a sweeter deal “down the street.” I also added a chapter on how the salesperson can “hang in there” under intense pressure to cut the customer some kind of deal on the price. These additional chapters particularly enhance the book because, based on my experience consulting with companies and conducting more than 2,000 seminars on this subject since writing the first book, I have found these issues to be the more vexing problems for most salespeople. Fortunately, given the time period since publishing the first book, I have developed material that provides solutions to many of these problems.

The original book and this book are about how you sell things at prices higher than your competitors—not how to give things away. The organization of this book is much like the original book and essentially runs as follows: We start with FACTS—and the facts are that most companies do go broke and business is a game of margins, not a game of volume.

The second dimension of this book has to do with UNDERSTANDING. Selling at prices higher than your competitors requires an attitude and an understanding on the part of the salesperson. Some of that understanding includes the following: People (customers) don’t buy on price alone. Furthermore, there are five factors on which one can compete in selling a product or professional service, and price is only one of the five. Quality, service, sales capability, and ability to deliver the product or professional service to the customer, when they need it, where they want it, and on time are the other factors. Each of those remaining four is far more significant than price. Another bit of understanding is that buyers really need and like a lot of things—and low price isn’t necessarily one of them. Sales reps who intend to sell at prices higher than their competitors need to get inside the customer’s head and understand how their customers’ needs and likes can fit with their ability to command a higher price than competitors.

The third section of this book concerns REALITIES. Many business and professional people, as well as many salespeople, simply do not understand the economics of pricing. Most think they do; very few do. For example, have you ever asked a business or professional person or a salesperson how much additional volume of any product they have to sell (or service they have to provide) to make up for a price cut? Usually you’ll get some vague answer, or some wide range of answers like: “Twenty to forty percent more, I guess.” And, once in a while, you even get an honest answer such as, “Gee. I don’t know.” Business and professional people are their own worst enemies, as are sales representatives. They tend to blindly believe that somehow, someway, if they get price competitive (i. e., cut the price) that they will “make it up in volume.” This section of the book, devoted to the realities of the marketplace, is absolutely essential for the business or professional person to understand if he or she is to sell at prices higher than competitors.

It is difficult, if not impossible, to cut price and make it up in volume while, on the opposite end, it is often possible to raise price, lose volume, and make far more money. People who have attended the seminars that I do on “How to Make Your Prices Stick” and “How to Sell at Prices Higher than Your Competitors” have, over the years, related numerous testimonials concerning the fact that raising prices is not the end of the world. Doing so does not cause sales to plummet, and often simply means that the company or the professional organization just makes more money with less aggravation and heartache for those endeavoring to earn a living in that business.

The newer part of this book is the material I added on how the salesperson can avoid being victimized by the hard-charging, demanding price-buyer who puts the salesperson in as awkward a position as the buyer can in an effort to get the salesperson to cut the customer some kind of deal on the price (or other terms of the sale). Many salespeople don’t understand either what to do with an extremely demanding customer or how to tell when a customer is lying, fabricating, or not being 100% truthful with the salesperson about having “a sweeter deal down the street.” In my extensive experience in dealing with these problems as a seller of my own companies’ products and professional services and/or presented to me as a problem that a trainee needed help with, I have had the luxury of time to develop answers to these types of questions and issues. I make the particular point that one does not, as a salesperson, want to call a customer a liar. But customers do lie, or fabricate stories that are not fully true, in an effort to get a salesperson to shoot him/herself in the foot and unnecessarily cut the price or squander away the possible profitable side of the deal. This all new section of the book is an especially valuable addition to the manuscript.

The final and major portion of this book has to do with WHAT TO DO ABOUT IT. Thus, the bulk of this book addresses such things as how to handle price pressure, price resistance, and price competition. We spend a lot of time talking about how to face up to and handle price cutting by your competitors, as well as how to determine if it really is price that is the problem in the mind of the customer. We devote attention to understanding the basics of this statement: Your customer will tell you when your prices are too high—as well as tell you when your prices are too low. By analyzing those indicators of overpricing and underpricing which we develop, the sales rep can determine very accurately whether or not he/she should be able to realize a higher selling price in the marketplace.

Yet another very fundamental system of coping with price pressure in the marketplace is the material that we develop in this section on tricks used by those serving in the role of procurement officers, purchasing agents, or buyers in attempting to get the sales representative to cut his/her own price. From the feedback I have received from my seminar attendees, identifying these tricks has given salespeople strong support in foiling the attempt of buyers to get salespeople to cut their prices.

In this section of the book, we also discuss closing sales in the face of price resistance, as well as sales techniques to use in facing down price resistance. Finally, we address the question of “Stoppers”—the methods and techniques that sales reps use to stop customers from beating on them for additional price reductions.

All in all, I’m very pleased with the end result. I’ve been doing seminars on this subject for so many years I hate to think about when I started. In this book we have assembled a hard-nosed, let’s-face-life-with-reality look at how those companies and individuals who make a lot of money selling at high prices manage to do so. They don’t do it by cutting prices, fees, or rates. They do it by knowing the realities of selling at prices higher than one’s competitors. They face facts, they understand customer buying motives, they face the realities of the economics of selling products and services, and they know what to do about the customer who says, “Your prices (fees, rates) are too high.” Furthermore, they do not become duped by the overly aggressive or out-and-out unscrupulous customer. They face reality, work professionally, and have a good time running their business (or practice) AND enjoying life to its fullest because of their success.

I hope the reader will find this book every bit as productive as those who have heard me speak these words in public and private seminars—and I wonder what the people who worked for that manufacturer in the mountains in Colorado are doing now . . .

LAWRENCE L. STEINMETZ, PHD

Boulder, Colorado

In 1992, Larry Steinmetz graciously asked me to write the introduction to his original book on this topic. Not only was I thrilled to do so, but also I became hooked on his concepts and the breakthrough ideas that his book offered.

Now, more than 13 years later, I have had the privilege of co-authoring the newest, most up-to-date, cutting-edge version of those original ideas in this, its latest version.

This book is intended to deliver to you, the reader, ideas, strategies, tactics, and concepts not available anywhere else in the world. After selling for well over 35 years and speaking, training, and consulting with sales organizations for more than 27 of those years, I am fully convinced that the single biggest issue confronting most sales organizations and salespeople is how to defeat lower priced competitors. Period.

Whether you are a business owner, executive, sales executive, sales manager, or salesperson, this book has great value for you. Dr. Steinmetz and I approached this book with the premise that whether you sell tangible products, an intangible service, large or small ticket products, or anything in-between, there is great value for you within its covers.

Having said that, I invite you to prepare to learn things that can and will deliver great margins to your business. However, please be warned: The ideas you find here could revolutionize your business. They could also, however, cause you great concern as you examine some of your current pricing, selling, and business practices. However, if you face reality and take action, your entire career will be revolutionized. I guarantee it.

WILLIAM T. BROOKS, CSP, CPAE, CMC

Greensboro, North Carolina

CHAPTER 1

EMPLOYERS CAN FAIL OR GO BROKE—AND YOURS CAN, TOO

Our basic problem has been our 14 quarters of losses. And that’s because the price of the equipment we build has been less than the cost.

—Norman J. Ryker

It is, indeed, an unfortunate fact: Most businesses fail. They start off, expand a lot or a little, and then they die. Statistically, 16 out of 17 businesses that start in the United States will fail and/or go out-of-business—most of them in the first two years of their existence. The average life expectancy of all businesses in the United States is estimated at 7.5 years. In fact, one of the headlines used to promote a series of highly successful business management seminars has been, No less a business giant than Thomas J. Watson, the builder of IBM, in the very first paragraph of his book, wrote: