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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Serie: Jeb Blount
- Sprache: Englisch
- Veröffentlichungsjahr: 2022
A practical guide for successfully navigating the single greatest growth and profit improvement opportunity for B2B enterprises: price increases The payoff for implementing price increases without losing customers is massive! Effective price increase campaigns are far more effective at boosting topline revenue and generating profits than acquiring new customers. The problem is that price increase initiatives--whether broad-based or targeted to specific accounts--strike fear and anxiety into the hearts of sales professionals and account managers who are tasked with selling them to their customers. Approaching customers with price increases sits at the tip top of the pantheon of things salespeople hate to do because they fear that raising prices will reduce sales volume or open the door to competitors. Yet when sold effectively, customers accept price increases, remain loyal, and often buy even more. In Selling the Price Increase: The Ultimate B2B Field Guide for Raising Prices Without Losing Customers, celebrated sales trainer Jeb Blount reveals the strategies, tactics, techniques, and frameworks that allow you to successfully master price increase initiatives. From crafting effective price increase messages to protecting hard-won relationships, handling common objections, and making the case for the value you deliver, this comprehensive guide walks you through each step of the price increase sales process. In each chapter, you'll find practical exercises designed to help you master the Selling the Price Increase system. As you dive into these powerful insights, and with each new chapter, you'll gain greater and greater confidence in your ability to successfully engage customers in price increase conversations. You'll learn: * How to navigate multiple price increase scenarios: broad-based, targeted, non-negotiable, negotiable, defending, presenting, and asking * The eight price increase narratives and three drivers of customer price increase acceptance * How to neutralize and get past the five big price increase fears and anxieties * How to avoid the big mistakes that trigger resentment and drive customers into the arms of your competitors * The 9-Box Risk-Profile Framework for targeting accounts for price increases * A repeatable process for confidently approaching price increase conversations * The Five-Step Price Increase Messaging Framework * Proven frameworks for reducing resistance and handling price increase objections * How to negotiate profitable outcomes with high-risk profile accounts * Winning strategies for coaching and leading successful price increase initiatives Following in the footsteps of his blockbuster bestsellers Fanatical Prospecting, Sales EQ, Objections, Inked, and Virtual Selling, Jeb Blount's Selling the Price Increase puts the same strategies employed by his clients--a who's who of the world's most prestigious organizations--right into your hands. Selling the Price Increase is an essential handbook for sales professionals, account managers, customer success teams, and other revenue generation leaders looking for a page-turning and insightful roadmap to navigating the essential--and nerve-wracking--world of price increases.
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Table of Contents
Cover
Title Page
Copyright
Dedication
Preface: A Tactical Field Guide and System for Selling Price Increases
Foreword
Acknowledgments
PART I: Disrupt the Mindset of Fear
1 Sales Professionals Hate Price Increases
Salespeople Hate Price Increases
Price Increases Matter
Types of Price Increase Initiatives
Challenges
Notes
2 The Five Fears
Nobody Wants a Price Increase
We Want Happy Customers, Not Conflict
Mastering the Fear of Rejection
3 Awareness and the Origin of Fear
The Origin of Fear
The Curse of Fight or Flight
The Obstacle of Rejection
4 Developing Emotional Self-Control
Developing Obstacle Immunity
Becoming Rejection Proof
Four Keys to Developing Price Increase Obstacle Immunity
Notes
5 Stop Worrying, Start Preparing
Preparation and Practice
Know Your Emotional Triggers
Leverage Positive Visualization and Self-Talk
Part One Wrap-Up: Reflections
PART II: Protect Customer Relationships
6 Relationships Matter
Price Increase Initiatives Are Dual Focused
Navigating Imperfection
We Feel, Then We Think
Customers Are People
Note
7 Triggering Resentment and Contempt
Treading on Raw Emotions
The Gangrene of Relationships
Making Amends
The Procrastination Train Wreck
Procrastination Can Put Customers in a Bad Position
8 Wait, I Don't Even Know You!
Instant Resentment
Neglect: The Grim Reaper of Account Retention
9 Price Increases When You Have All the Power
You Need Me More Than I Need You
10 Make Breaking Up Hard to Do
Leveraging the Status Quo Bias
Be the Safest Choice
Just Manage Your Accounts
Part Two Wrap-Up: Reflections
Note
PART III: Approaching Price Increase Conversations
11 The Three Approaches to Price Increase Conversations
Price Increase Initiative Scenarios
The Three Approaches: Presenting, Asking, and Defending
12 Defending Price Increases: Between a Rock and a Hard Place
Most Customers Don't Get Angry over Price Increases
Be Responsive
Do Not Email It In
Talk with People
Message Matters: Be Knowledgeable
If You Make Them Angry, Don't Make It Worse
Shut Up and Listen
13 The Price Increase Sales Process
Bend Win Probability in Your Favor with Negotiable Price Increases
Presenting versus Asking
The Five-Step Price Increase Sales Process
Deep Dive
14 The Price Increase Risk Profile
The 9-Box Risk Analysis Template
Risk Profile Elements
Losing Customers on Purpose
15 Planning the Price Increase Conversation
16 Set the Stage
Customers Resist Change
Prime Customers for Change
Give Customers a “Heads Up”
Leverage the Law of Reciprocity
Set a Formal Appointment for the Price Increase Conversation
Part Three Wrap-Up: Reflections
Note
PART IV: Making Your Case
17 Message Matters
Confidence Is the Key Ingredient
Emotional Contagion: Customers Respond in Kind
Developing Confidence
Trust the Process
Change Your Self-Talk
Change Your Physiology
Change Your Words
Avoid Projecting
Notes
18 Influencing Price Increase Acceptance
The Three Drivers of Price Increase Acceptance
Answering WIIFM
Authenticity
Notes
19 The Eight Price Increase Narratives
Economic Fairness Narrative
Maintain Quality Narrative
Continue Services Narrative
Reverse Value Narrative
Reciprocity Narrative
Past Value Narrative
Present Value Narrative
Future Value Narrative
20 The Price Increase Because Statement
The Five-Step Price Increase Because Statement Framework
Personalized, One to One Because Statements
One for Many Because Statements
Crafting Because Statements
Note
21 The Formal Price Increase Business Case
Sutton's Law: Go Where the Money Is
Derisking the Large Account Price Increase
Sutton's Corollary
Approaching the Formal Business Case Presentation
Price Increase Business Case Structure
Weaving the Narratives
Part Four Wrap-Up: Reflections
PART V: Closing, Handling Objections, and Negotiating
22 Closing
The Assumptive Close Framework for Price Increases
Shut Up
23 The Ledge Technique
Look Out! Here Comes Fight or Flight
Use the Ledge
Note
24 Four Techniques for Handling Price Increase Objections
Just Let Them Vent
Enroll Them
Space and Time
Relate, Explain, Confirm
25 Negotiating the Price Increase: D.E.A.L. Framework
D.E.A.L. Negotiation Framework
26 Discover
Capitulate
Counter
Confront
Clarify
Get the Issues on the Table
27 Explain
Do the Math
The Value Equation
28 Protect the Points
What Your Customer Is Really Negotiating For
Leverage Funny Money to Protect Your Points
Note
29 Align and Lock
Negotiation Map
Deploying the Give-Take Playlist
Lock It Down
Prepare to Win
Part Five Wrap-Up: Reflections
PART VI: Leading and Coaching Price Increase Initiatives
30 The Battle Begins
Leaders Hesitate
Transforming a Sales Team into a Price Increase Machine
The Three Pillars of Leadership Excellence
You Need Your People More than They Need You
31 Leading Price Increase Initiatives
You Are Always on Stage
Salespeople Buy In for Their Reasons, Not Yours
32 Managing Price Increases
Big Hat, No Cattle
Ninety Percent of Strategy Is Execution
33 Coaching Price Increases
Knowledge Acquisition Versus Knowledge Application
Coaching for Improved Price Increase Initiative Performance
Part Six Wrap-Up: Reflections
About the Author
Training, Workshops, and Speaking
Index
End User License Agreement
List of Tables
Chapter 17
Table 17.1 Managing Nonverbal Communication
Table 17.2 The Words You Use
Chapter 32
Table 32.1 Mapping the Process by Price Increase Initiative
List of Illustrations
Chapter 13
Figure 13.1 The Five-Step Price Increase Sales Process
Figure 13.2 The Sales EQ Proven Process
Chapter 14
Figure 14.1 9-Box Risk Analysis Template
Figure 14.2 Price Increase Risk Analysis Elements
Figure 14.3 Price Increase Risk Analysis Example
Figure 14.4 Price Increase Risk Profile Scenarios
Figure 14.5 Fit Matrix
Chapter 20
Figure 20.1 The Five-Step Price Increase Because Statement Framework
Chapter 25
Figure 25.1 D.E.A.L. Negotiation Framework
Chapter 28
Figure 28.1 Funny Money Inventory and Value Bridges
Chapter 29
Figure 29.1 The Sales Negotiation Map
Figure 29.2 The Give-Take Playlist
Chapter 30
Figure 30.1 Three Pillars of Leadership Excellence
Guide
Cover
Table of Contents
Title Page
Copyright
Dedication
Preface: A Tactical Field Guide and System for Selling Price Increases
Foreword
Acknowledgments
Begin Reading
About the Author
Training, Workshops, and Speaking
Index
End User License Agreement
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More Books by Jeb Blount
The Virtual Training: The Art of Conducting Powerful Virtual Training That Engages Learners and Makes Knowledge Stick
(Wiley, 2021)
Virtual Selling: A Quick-Start Guide to Leveraging Video, Technology, and Virtual Communication Channels to Engage Remote Buyers and Close Deals Fast
(Wiley, 2020)
Inked: The Ultimate Guide to Powerful Closing and Sales Negotiation Tactics That Unlock YES and Seal the Deal
(Wiley, 2020)
Fanatical Military Recruiting: The Ultimate Guide to Leveraging High-Impact Prospecting to Engage Qualified Applicants, Win the War for Talent, and Make Mission Fast
(Wiley, 2019)
Objections: The Ultimate Guide for Mastering the Art and Science of Getting Past No
(Wiley, 2018)
Sales EQ: How Ultra-High Performers Leverage Sales-Specific Emotional Intelligence to Close the Complex Deal
(Wiley, 2017)
Fanatical Prospecting: The Ultimate Guide to Opening Sales Conversations and Filling the Pipeline by Leveraging Social Selling, Telephone, E-mail, Text, and Cold Calling
(Wiley, 2015)
People Love You: The Real Secret to Delivering Legendary Customer Experiences
(Wiley, 2013)
People Follow You: The Real Secret to What Matters Most in Leadership
(Wiley, 2011)
People Buy You: The Real Secret to What Matters Most in Business
(Wiley, 2010)
SELLING THE PRICE INCREASE
THE ULTIMATE B2B FIELD GUIDE FOR RAISING PRICES WITHOUT LOSING CUSTOMERS
JEB BLOUNT
SALESGRAVY.COM
Copyright © 2022 by Jeb Blount. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 750-4470, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permission.
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. Further, readers should be aware that websites listed in this work may have changed or disappeared between when this work was written and when it is read. Neither the publisher nor authors shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993 or fax (317) 572-4002.
Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic formats. For more information about Wiley products, visit our web site at www.wiley.com.
Library of Congress Cataloging-in-Publication Data
Names: Blount, Jeb, author.
Title: Selling the price increase : the ultimate B2B field guide for raising prices without losing customers / Jeb Blount.
Description: Hoboken, New Jersey : Wiley, [2022] | Includes index.
Identifiers: LCCN 2022015171 (print) | LCCN 2022015172 (ebook) | ISBN 9781119899297 (cloth) | ISBN 9781119899310 (ebook) | ISBN 9781119899303 (epub)
Subjects: LCSH: Willingness to pay. | Selling. | Business communication.
Classification: LCC HF5415.349 .B56 2022 (print) | LCC HF5415.349 (ebook) | DDC 658.8—dc23/eng/20220401
LC record available at https://lccn.loc.gov/2022015171
LC ebook record available at https://lccn.loc.gov/2022015172
COVER DESIGN: PAUL MCCARTHY
COVER ART: © ZO3LISTIC/SHUTTERSTOCK
For Brooke Holt, Sales Gravy's first Million Dollar Club member. Thank you for the pivotal role you have played in turning Sales Gravy into a training powerhouse.
Preface: A Tactical Field Guide and System for Selling Price Increases
B2B organizations have counted on their sales teams to sell price increases to customers since the beginning of the Industrial Revolution more than 125 years ago. However, in the twenty-first century, as disruptive economic cycles have become more frequent and shareholder pressure for growth and profitability has become more acute, executives are exerting greater pressure than ever on their sales organizations to extract price increases from customers.
Inflation, demand surges, supply shortages, increased costs, shareholder demands, growth initiatives, mergers, and capital-intensive investments can all lead to the need to approach customers with price increases – as can the regular costs of doing business. Likewise, in our hyper-competitive marketplace it is common to acquire new customers at low (sometimes unprofitable) price points with the intent to raise those prices down the road once the relationship, trust, and value exchange are anchored.
In all cases, it is critical to the financial health of B2B organizations that sales professionals hone the skills to successfully approach price increase conversations with customers.
Over the past 10 years, my team at Sales Gravy has helped hundreds of organizations teach their sales professionals how to successfully sell price increases without losing customers. We've developed a repeatable system that reduces anxiety, builds confidence, and is easy to learn, coach, and deploy in the field.
Still, since more than 80 percent of training dollars are invested in developing sales skills for the purpose of acquiring new customers, I recognize that most sellers and leaders are not going to receive professional training for selling price increases. For this reason, I wrote Selling the Price Increase as a tactical field guide for frontline sales professionals, account managers, and sales leaders who wish to improve their price increase sales skills and acumen.
In these pages, I give you a complete system for selling price increases. You'll learn strategies, tactics, and techniques for approaching customers confidently and gaining price increase acceptance without damaging long-term relationships.
Part One
is a discussion about how to manage the fears, worries, and disruptive emotions you feel when approaching price increase conversations with customers.
Part Two
dives into the keys to protecting relationships and retaining customers. You'll learn how to get price increases without causing customers to resent you for it.
Part Three
teaches you a repeatable framework for targeting, planning, and setting the stage for crucial price increase conversations.
Part Four
focuses on how to build messaging that reduces resistance and facilitates acceptance.
Part Five
gives frameworks and tactics for handling price increase objections and negotiating better price increase outcomes.
Part Six
teaches front-line sales leaders how to lead price increase initiatives and coach price increase sales skills. (Note that I also include “Coaching Tips” for leaders throughout the book.)
Along the way, I've included exercises designed to help you master the Selling the Price Increase system. Parts One through Five are for front-line sales professionals, account managers, and customer service professionals. In Part Six, the focus shifts to managers, who need additional skills to lead their teams through price increases.
Foreword
For legions of sales professionals and account managers, the conversation that follows is an all too familiar and maddening reality:
MANAGER:
Before I close out this morning's meeting, I need you to inform our clients that we're going to be increasing prices by 10 percent.
SALESPERSON:
Okay, but what should we tell them?
MANAGER:
I'll leave that up to you.
SALESPERSON:
Yes, but what reason do we give them for raising our prices?
MANAGER:
Well, there's a lot of reasons! Cost of material is up. Labor cost is up. Cost of doing business in general is up. Pick one!
SALESPERSON:
How do you suggest we deliver this news?
MANAGER:
I'm sure you'll figure it out. That's why we pay you the big bucks.
SALESPERSON:
Will these increases be effective immediately, or will there be a grace period before they actually kick in?
MANAGER:
It's immediate.
SALESPERSON:
Well, they're not going to be happy about that! We are going to lose customers to our competitors!
MANAGER:
Look, you have the relationships so I'm sure you'll find a way to break the bad news to them gently without upsetting them.
SALESPERSON:
Well…okay. I'll do my best.
MANAGER:
Great! Now, if there's nothing else, this meeting is adjourned. Let's get out there, close some deals, and let's stay positive.
This common scenario is why so many companies fail to maximize price increases, sales professionals and their leaders feel frustrated, and unhappy customers are lost along the way.
Sales professionals are ill prepared to talk with customers about price increases because they don't get trained and there are almost no resources to help them develop the skills to do so. If you scour the internet for information on how to sell price increases, you'll be hard pressed to find any system, process, or framework for these crucial conversations.
That is why this new book from my friend Jeb Blount is so important. As far as I can tell, no one in history has ever written an entire book on how to approach B2B customers with price increases. But that's Jeb – grab a piece of the sales puzzle, blow it out, and show you exactly how to do it. This is why I wasn't surprised when I learned that he was writing Selling the Price Increase because, quite frankly, it is a book that only Jeb could write.
If you've ever had to deliver price increase news to a customer, then you know it isn't easy. Yet when sold effectively, customers accept price increases, remain loyal, and often buy even more. In Selling the Price Increase, Jeb gives you exactly what you need to successfully sell and defend price increases without losing your customers.
Jeb knows sales. He is one of the most gifted sales strategists of our generation. Pick a subject, sales discipline, or situation and Jeb has studied it, done it, and understands it. This is why when Jeb talks, salespeople pay attention, and you should too.
—Victor Antonio,Author of Mastering the Upsell
Acknowledgments
Writing a book is incredibly disruptive. It turns life upside down. “The book” takes precedence over everything. People, family, business, life, and fun are put on hold. Everything is sacrificed for the book.
I owe deep gratitude to my wife, Carrie, who endured this process with grace (for the 14th time) while I spent hours hunkered down “in the zone” writing.
Mary Lester, you deserve a special place in heaven for dealing with my rotten mood swings when business got in the way of writing. Thank you very much for the herculean job you did managing my crazy schedule to give me time to focus on this book.
Shannon Vargo, once again you answered my call. When I told you that the trends were in our favor and we needed to get this book to market fast, you didn't hesitate. Thank you very much for trusting me.
Christina Verigan, thank you for being with me every step of the way on this book. You have been my rock throughout this challenging writing process. You are an awesome partner!
Deborah Schindlar and Sally Baker, thank you as always for your tremendous support.
Abby Lester and Sarah Kitchen, thank you so much for proofreading and editing. We are so blessed to have you on our team.
Finally, thank you to the entire Sales Gravy team for all that you do to bring my books to life in the classroom and the positive and lasting impact you make on the sales profession.
PART IDisrupt the Mindset of Fear
1Sales Professionals Hate Price Increases
I clearly remember the very first time in my career that I was asked to go out and get price increases from my customers. My boss called a meeting with all of the account managers in our region. At the meeting, he handed each of us a list of our accounts and the monthly revenue volume of each account.
I sunk in my seat as he dropped the bomb. We each needed to get a net 6 percent increase from our account base. He asked us to go through the list and choose the accounts to approach for price increases. He gave us until the end of the week.
Back at my office, as I started pouring over my accounts, I became sick to my stomach. I'd worked hard to establish those relationships. Many customers had become friends. Raising their prices felt like a form of betrayal.
As I evaluated each customer, I found good reasons why I shouldn't approach them with a price increase. I went through the list again and again but could only identify a few accounts to go after. I came to the conclusion that it would be impossible to net a 6 percent increase on my customer base.
When I met with my boss at the end of the week, I unloaded all of my excuses. But to no avail. He told me flatly and firmly that our leadership wanted a 6 percent increase and there would be no excuses. I had no choice.
I left that meeting feeling deflated and consumed with fear for how my customers would respond. I almost quit my job over it. Prior to being told I had to sell price increases to my customers, I loved my job. Now, I was questioning everything. I'd rather have done a thousand cold calls from inside a shark tank than approach a single customer with a price increase.
Mostly though, I was afraid. I procrastinated and avoided those conversations until I was forced to get the job done because I was out of time. I made lots of mistakes and fear got the best of me. It was one of the worst periods of my sales career. I made it through that awful ordeal but the lessons I learned about confronting fear stuck with me.
Salespeople Hate Price Increases
Over the years I developed thicker skin and a more effective approach to price increase conversations. But I still don't like to do it. It's one of things I share in common with most sales professionals and account managers – nobody likes price increases.
The truth is that salespeople love close sales, love to give discounts, love to make our customers happy, love to solve problems. But, as a rule, we have a psychological aversion to and loathe selling price increases.
Approaching customers with price increases sits at the tip top of the pantheon of things sales professionals hate. It sits higher than collecting receivables, cold calling, and entering data into the CRM.
Given the choice between selling price increases and doing anything else – and I mean anything – salespeople will always choose anything else. There are many reasons why, including:
Conflict avoidance
Fear of rejection
Desire to be liked by their customers
Awkwardness of communicating price increases
Sympathy for customers
Fear of losing customers, sales, and income
No buy-in to the justification for the price increase
The price increase is not aligned with compensation
Lack of understanding of the impact of price increases on their organization
Price Increases Matter
One of the reasons that I hated price increases and believed that I was betraying my customers is that I didn’t understand basic business fundamentals. I didn’t understand that price increase campaigns are far more effective at generating profit and free cash flow than increasing top-line revenue through sales volume increases or acquiring new customers.
Nothing else in the business-to-business sales arsenal protects the health of your company like price increases. They protect the enterprise during inflationary periods, produce capital for investment in growth, help improve quality and service delivery, boost stock prices, and protect jobs.
The payoff for price increases is massive. They can drop through as much as 400 percent more profit as increases in sales volume. For example, a 1 percent increase in sales volume, will produce 3.3 percent in profit. However, a 1 percent increase in price, when sales volume remains stable, delivers an 11.1 percent increase in operating profit.1
The bottom line is that increasing prices is the single greatest profit improvement opportunity and strategy for B2B enterprises.2 That is, of course, if you retain your customers along the way.
Customer retention is exactly why your company leans so heavily on you to execute price increase campaigns. Sales professionals have the most intimate knowledge of the customer base, are skilled communicators, and professional closers.
Except that, in overwhelming numbers, sales professionals express deep anxiety and lack of confidence with price increase initiatives. They fear that they will lose customers and permanently damage important relationships. They feel that they lack the skills to approach price increase conversations effectively. Compounding this is the fact that most companies provide little to no formal training for selling price increases, even for frontline leaders who must coach this critical skill set.
Without a process, system, or framework for selling price increases and handling subsequent objections, sellers usually underperform in these crucial conversations. Price increase initiatives then become little more than anxiety filled distractions that negatively impact overall sales performance. It’s no wonder that upwards of 70 percent of leaders express little confidence in their sales teams’ ability to execute price increase conversations effectively.3
Types of Price Increase Initiatives
In this book, we'll address the most common B2B price increase scenarios for which you will be responsible.
Broad-Based Price Increase Campaigns
Broad-based campaigns are executed at the enterprise, divisional, or regional level and impact many customers at the same time. They typically require the entire sales and service team to engage.
Targeted, Account-Based Price Increases
These initiatives target specific accounts at contract renewal, on reorders, or for specific line items. Targeted price increases are usually leveraged to improve the profitability of specific accounts and to optimize pricing that was set too low when the customer was acquired.
Non-negotiable
With non-negotiable price increases, your organization has calculated that the reward of implementing the price increase is high while the risk of losing customers is low. Marketing will usually take the lead with messaging and notifying customers of the impending increase. Sales and customer service will primarily be responsible for answering customer questions, calming dissatisfaction, and defending the price increase.
Non-negotiable with Exceptions
In some cases, non-negotiable price increases may be administered with exceptions for certain classes of customers like new accounts, strategic accounts, accounts that are in jeopardy due to service issues, and angry customers who push back hard.
The sales and service teams will be responsible for identifying the accounts marked for exceptions and communicating the reasons behind the exceptions to the management team. Your primary role will be to defend the price increases when confronted by upset customers so that the increases stick.
Negotiable
With larger accounts, bigger price increases, complexity, risk, and competitive pressure comes the need to negotiate with customers that push back. This is where talented sales professionals with knowledge of the accounts and established relationships are needed most.
With negotiable price increases there will be greater emphasis placed on account targeting, pre-planning, messaging, risk management, and business case presentation. Leaders will need to set clear individual goals and objectives and define reasonable negotiating parameters.
Format
Within these initiatives, price increases may be applied in a unit-based format to individual line items, which is typical for physical products, or a broad-based format on the entire account's billing, which is typical for services.
Challenges
As sales and service professionals, we all face different challenges with selling price increases to our customer base. If you didn't have challenges, it is unlikely that you would be reading this book.
These challenges are often unique to your industry, product or service, account sizes and types, stakeholder relationships, competitors, and region, and the various scenarios listed above.
In sales and customer service, there are few one-size-fits-all solutions or applications. Therefore, as you advance through the lessons in this book, use your unique challenges as a guide to inform where you need to place the most attention, what you need to adjust for your specific situation, the ideas and lessons you take with you, and what you leave behind.
In the remainder of Part One, we'll focus on techniques for rising above fear and the emotional hang-ups that create anxiety and hold you back from effectively selling price increases. A key takeaway from this section – and one that will be repeated often throughout the book – is:
In every price increase conversation, the person who exerts the greatest emotional control has the highest probability of achieving their desired outcome
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Before we get started, I want you to take a moment to complete this short exercise on price increase challenges.
Exercise 1.1 Price Increase Challenges
Reflect on past experiences with selling price increases, as well as immediate concerns about pending price increase initiatives and conversations.
List what you feel are your biggest challenges with presenting, defending, and negotiating pricing increases.
Leadership and Coaching Pro Tip
Bringing Challenges to the Surface
Price increase initiative roll outs naturally induce anxiety among your team members. Immediately they'll begin to worry and play the worst case scenarios in their heads.
An easy exercise to help bring their concerns and fears to the surface is to break them into small groups and have them list what they feel will be their biggest challenges with selling the price increase.
Once your team begins talking about their challenges, it will naturally help dial back anxiety levels and reduce their fears. They'll vent, learn from each other, and share best practices.
Importantly, the discussion will help you focus your training and coaching on the areas that will help your team perform at a high level.
Notes
1
. Michael V. Marn and Robert L. Rosiello, “Managing Price, Gaining Profit,”
Harvard Business Review
, September–October 1992.
https://hbr.org/1992/09/managing-price-gaining-profit
.
2
. Stephen Mewborn, Justin Murphy, and Glen Williams. “Clearing the Roadblocks to Better B2B Pricing,” Bain & Company, December 10, 2014.
https://www.bain.com/insights/clearing-the-roadblocks-to-better-b2b-pricing/
.
3
. Erik Peterson and Tim Riesterer,
The Expansion Sale: Four Must-Win Conversations to Keep and Grow Your Customers
(New York: McGraw Hill, 2020), 50.
2The Five Fears
When it comes to approaching price increases, sales professionals tend to worry about five potential outcomes. They fear that their customer will:
Defect to a competitor, and they will lose the account.
Stop buying or reduce purchases of a particular product or service.
Bring up past service deficiencies or product-quality defects as an objection to the price increase.
No longer like or trust them, and the once-friendly relationship they had with the account stakeholders will disintegrate.
Get angry, argue, or pummel them with hard objections and rejection.
Though these five fears are not completely unfounded, at the heart of each one of these worries is the deep-seated fear of conflict and rejection. These fears cause you to hesitate, procrastinate, hide from potential conflict, and make excuses. They cloud objectivity, leading to anxiety, insecurity, and worry.
Worry is a byproduct of the human safety bias. Our brains are programmed to be hypervigilant in detecting and avoiding risk, so we are almost always focused on what could go wrong rather than what could go right.
In my first experience with price increases I wasted a lot of energy and time wrapped up in fear, anxiety, and worry over pending price increase conversations. My fear caused me to procrastinate until it was almost too late, which ultimately made those price increase conversations much worse than they had to be.
But, despite the worry and fear, it was still my job to sell price increases, and that job was never going to go away, no matter how much I wished that it would.
Nobody Wants a Price Increase
When I'm training people how to sell price increases, I start my classes with this: “Raise your hand if you'd like to pay more.” No one ever puts up a hand, because nobody wants to pay more. I seriously doubt that you've ever received a call from a customer asking you to please, please raise your prices because they want to pay more.
When the companies you buy from tell you that their prices are going up, you don't do a happy dance and post on Facebook about your lucky circumstances. It is more likely that you call or write customer service to complain, seek out competitors, express your displeasure to friends and family, post something nasty about that company on social media, and sometimes get angry.
We Want Happy Customers, Not Conflict
As sales and customer service professionals, we are specialists at building relationships. We live to make our customers happy. We're good at discounting to get the deals closed and keeping customers satisfied.
Conflict with customers over price increases is not natural for us. We want customers to appreciate, accept, and like us, not reject us. It is this need to feel accepted that makes approaching customers with price increases such a powerful emotional destabilizer.
The fear of rejection can push you to emotional extremes, causing you to hesitate, procrastinate, avoid price increase conversations, and make big mistakes when you finally do engage your customers. It erodes confidence, making it easier for customers to push you around and get their way.
When you choose a career in sales, you are choosing a career in which you will be forced to face conflict and deal with the potential of rejection. There is no way around this. Price increases are a norm—not an exception. So you have a choice. Either cause yourself unnecessary stress and worry over a job you will still have to do, or learn to control your emotional responses, gain confidence, and rise above your fear of rejection.
You may be able to avoid the emotional discomfort of approaching customers with price increases in the short term by dragging your feet. But sooner or later, the roosters will come home to roost and you will be forced to have that conversation—usually not on the best of terms.
Mastering the Fear of Rejection
The fear of rejection is your Achilles' heel when approaching customers with price increases. This is why mastering your fear is the real secret to mastering price increase conversations.
In every price increase conversation, the person who exerts the greatest emotional control has the highest probability of achieving their desired outcome.
It's natural to feel like you have little control when dealing with savvy customers who have many alternatives and threaten to go to competitors when there is even a hint of a potential price increase. In these situations you must focus on what you can control rather than what you cannot:
Your actions
Your reactions
Your mindset
That's it – nothing more. You can choose to be disciplined and prepared with your messaging and business case. You can choose to plan for objections and pushback. You can choose your attitude and beliefs. And in emotionally tense price increase situations, you have absolute control over your emotional discipline and response to the fear of rejection.
But let's not minimize just how difficult it is to rise above the fear of rejection and choose your response. It is very difficult to quell your emotions and approach price increase conversations with relaxed, assertive confidence when everything inside you just wants to run.
At this point, it would be easy for me to tell you to get over it and use dispassionate clichés, like “just let it roll off your back.” But that would be completely disingenuous, especially since I've walked in your shoes. We've all experienced the insecurity and emotional disruption that comes with this insidious fear. We have all been there – because we are all human.
The truth that few people will tell you is that your fear of rejection, and the worry that stems from it, is not a psychological problem. Rather, it is biological and baked into your human DNA.
Unchecked, it will hold you back as a sales professional and severely impede your ability to get the price increases you deserve. But, because the fear of rejection is biological rather than psychological, unless you are a sociopath, you can't just snap your fingers and detach from this emotion. It doesn't work that way.
Instead, you'll need to deploy sustainable techniques to rise above this fear. This begins with awareness that the emotion is happening, which allows your rational mind to take the helm, make sense of the feeling, and choose your behavior and response.
