Sales people must do more than just sell: They have to create value and manage customer price expectations. That is the only way a company can maximize its profit.
Creating Value
The product itself is not a value, it is merely a grouping of different features. Its value is relative: It is the link between client's needs and a solution that fulfills them. Sales people must, therefore, understand the business of their customers very well, and then connect it accordingly with the solution they are selling. And the connection must once again be made from the perspective of the customer - not only as a company, but also as an individual. Value perception is different depending on people's positions, different places and different time, and each perspective is individual.
Furthermore, value is not static and tends to change based on market developments. It is up to the sales staff to capture the change as soon as possible and respond appropriately.
In order to establish the product value, sales people must have three essential skills:
- The ability to ask questions.
- The ability to listen.
- The ability to establish credibility.
How to manage price expectations
Purchasing decision to buy at a specific price is not based only on the perceived value. It also depends on the expectations of customers and their experience with how they could influence the price.
A lot of sales people offer price breaks under certain conditions. Such behavior, however, has a long-term negative impact on future price expectations. Therefore, senior sales staff as well as sales managers should introduce a long-term pricing policy based on the value perceived by customers and taking into consideration the actual costs. If someone from the team requires a price exception, it must be assessed individually. If there is a large number of requests for price reductions, then the pricing policy is probably not set correctly.
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