If you prospect for price you are going to get price oriented customers. You are only going to “buy” your way into an account and yes, you are going to set the precedent for the life of that account. So says Mark Hunter in his great new book High-Profit Prospecting published by Amacom.
And allow me to add, if you think that the only weapon you have is price then you are a lousy sales person or you work for a lousy company or both.
Look selling on price is suicide in the long run. And again in the long run it will kill you. But it’s not as simple as all that. First you have to know exactly what your price should be. You have to do your research to make sure that your price is not only fair but marketable. Your price has to make sense.
If you are selling on price as Hunter says you will get price oriented customers. You will get customers who place no value on what you do and how well you do it. All they care about is, well, price, and if that’s all you have been talking about that is what they think you only care about as well. Not to mention the fact that you will give them the impression that it’s all you’ve got.
You always have to remember that any customer who gives you an order because of your low price will not be a loyal customer at all. In fact, he will jump to the next guy who comes in with a price that is even lower than yours. Since he sees no value in what you or the other guy does, he sees no difference in what each of you has to offer thus he doesn’t care where his “cards” are built as long as he wins his company’s award for buying the cheapest stuff available on the market today. Yeah right, that’s who you want to work with! The minute you discover this about a prospect get out and get our fast before you waste another minute of yours and your company’s time.
This is where prospecting the right way comes in. You have to research the accounts you are going after make sure that they are true prospects and not just suspects. I recommend creating an ideal customer profile based on careful contemplation of what you do best and what kind of customer best fits what you do.
Think about your current customers; reflect on the best ones. The ones you have worked with the longest; think about the ones you and your company like dealing with. Then examine those relationships and look for the root reasons why you like these customers and most importantly why they like you. Why do you and these customers like working together. Make a list of all of their characteristics and how they fit so well with what you do and then use that list as a filter for finding new accounts.
This list should include: technology, service, quality, communications, understanding and appreciation of the value you bring to them, chemistry, ease of doing business with, loyalty and last but not least their ability to pay. Then apply these parameters to the customers you are going after. If they match up as closely as possible to the customers with whom you have enjoyed a long time successful relationship then you will be in the right track, and the chances of not only winning this new prospect’s business but establishing a long and productive and yes profitable relationship with that customer will be greatly increased.
I should mention that there are some instances where you do have to sell on price and that is when you have an account that is a perfect fit for you but that you are going to have to do some special pricing to gain entry into that account. Now let’s be clear, I am not talking about the old bait and switch but rather what we call strategic pricing. Pricing that is strategic because you will use it to gain entry into the type of business you want with the company you want as a customer. This type of pricing takes a great deal and research so that you know everything about this target account and enough to justify making a long- term investment in terms of time and money with a plan to value engineer your process so that your price will be competitive but also make you money in the long run.
In short you have to do your homework in advance. Spending time before you even start to prospect a company will save a lot of time, effort, money and aggravation in the long run. It’s only common sense.