With the November 6th election right around the corner, and debate season in full swing, no issue weighs more heavily on the minds of the American voters than the future of the U.S. economy. As we eagerly await signs of sustained economic improvement, sales professionals and marketers should be aware that an emergence from the Great Recession brings with it the opportunity to adapt sales and marketing efforts to the improving economy.
Sales professionals have no doubt have felt the strain of lackluster economic conditions as much as any other profession. Pricing and negotiations are among the most challenging and critical aspects of the sales professional's operating reality - even during the best of economic times.
Negotiating with customers who are operating in a heightened state of price sensitivity certainly makes things even more difficult. During a recession, he or she probably feels quite a bit more pressure to concede on price if they feel it will ensure a deal or prolong a customer relationship, even though the slightest price concessions can have dramatic effects on a company's bottom line.
But as things turn from bad to better, sales professionals can actually look forward to new opportunities which arise as a result of improving conditions. In a recent contribution to Inc.com, Geoffrey James suggests that there are ways in which sales and marketing professionals can change their general approach and take advantage of the recovering economy. Speaking specifically on topic of discounting price, James writes:
"A weak economy allows buyers to call the shots, which means that in order to sell you must be flexible in your pricing. In a growing economy, though, buyers are often more concerned with making the best decision rather than the cheapest one. Don't fight a price war when your customers are looking for the highest quality product."
A sales professional may enter a price negotiation expecting the customer to be overly sensitive to price, but the reality of a recovering economy has the customer more concerned with making the smartest purchasing decision, rather than the cheapest.
A recent white paper by Carew International CEO Jeff Seeley further explores the topic of handling price objections and defending against price erosion during negotiations. This can be of particular value to sales professionals as they prepare to firm up their defense of price as economic conditions improve. In summary:
- A prerequisite to defending your price is knowing the issues and concerns that your customer is facing. Each of these issues comes with an associated economic and/or psychological cost, and each of these costs has an impact on the customer's bottom line.
- On the other end of the scale are your organization's products or services, and the features, advantages and benefits which are offered to offset the needs and concerns of the customer.
- The price that the customer should be willing to pay can be up to, but no more than, the offset cost.
- If the customer's needs/costs continue to outweigh the price associated with the benefits, the customer will pass on the purchase or seek lower cost alternatives from another provider.