People don’t like to be sold, but they love to buy.
-Jeffrey Gitomer, author of The Sales Bible
“Sales are the only point in the business cycle where resources flow into the business, which makes completing transactions critically important.” (107)
“When you’re starting a new business, the object is to get to the point where you make your first profitable transaction as quickly as you possibly can, because that’s the point where (your work) transitions from being a project to being a business.”
The Four Pricing Methods
1.) Replacement Cost – “How much would it cost to replace?”
2.) Market Comparison – “How much are other things like this selling for?”
3.) Discounted Cash Flow/Net Present Value – “How much is it worth if it can bring in money over time?”
4.) Value Comparison – “Who is this particularly valuable to, and by how much more?”
“(Out of these four methods,) value comparison is typically the optimal way to price your offer, since the value of an offer to a specific group can be quite high, resulting in a much better price. Use the other methods as a baseline, but focus on discovering how much your offer is worth to the party you hope to sell it to, then set your price appropriately.” (113)
“Value-based selling is the process of understanding and reinforcing the reasons why your offer is valuable to the purchaser.” (114)
“Value-based selling is not about talking – it’s about listening.”
“Asking good questions is the best way to identify what your offer is worth to your prospect…Instead of barging in with a premature, boilerplate hard sell, successful salespeople focus on asking detailed questions to get to the root of what the prospect really wants.” (114-115)
“By encouraging your prospects to tell you more about what they need, you reap two major benefits. First, you increase the prospect’s confidence in your understanding of the situation, increasing their confidence in your ability to deliver a solution. Second, you’ll discover information that will help you emphasize just how valuable your offer is, which helps you in framing the price of your offer versus the value it will provide.” (115)
Concept Page on PersonalMBA.com – Value-Based Selling
There is only one boss: the customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.
-Sam Walton, founder of Wal-Mart
“Understanding the other party’s next best alternative gives you a major sales advantage: you can structure your agreement so it’s better than their next best option.” (117)
A buffer is a third party you hire to negotiate on your behalf. They help you negotiate the best deal without compromising your relationship with the other party.
“As a social force, reciprocation is one of the primary psychological tendencies that underlie human cooperation…Here’s the tricky part: the desire to reciprocate is not necessarily in proportion to the original benefit provided.” (124)
An example of this given by Robert Cialdini in his bestseller Influence: The Psychology of Persuasion is how certain car salesmen offer a gift up front. “Can I get you a coffee? Would you like a soda? Some water? Cookies? Is there anything I can do to make you more comfortable?” It seems like a small gift, but studies have shown that this gets people to spend thousands of dollars more on average.
“Being generous is one of the best things you can do to improve your results as a salesperson. By giving away value and helping others as much as you can, they’ll respect you; it will build your reputation, but it will also increase the probability that they will be interested enough when you do present your call-to-action.” (125)
We confess our little faults to persuade people that we have no large ones.
-Francois de la Rouchefoucald, 17th-century poet
Making a damaging admission improves trust. As an example, Josh Kaufman mentions a time when he was looking to buy a car: one dealership made sure to photograph every detail of the car – including a small chip in the paint on the left side. This minor flaw wasn’t an issue for Kaufman, but the fact that the dealership was completely open about it got him to trust that the dealership wasn’t covering anything else up and he bought the car.
“Instead of making them wonder (what the catch is), tell them yourself. By being up front with your prospects regarding drawbacks and trade-offs, you’ll enhance your trustworthiness and close more sales.” (126)
“Your primary job as a salesperson is to identify and eliminate barriers standing in the way of completing the transaction. Eliminate your prospect’s objections and barriers, and you’ll close the deal.”
Key Concept – Common Barriers to Purchase
Risk Reversal is a strategy that transfers some (or all) of the risk of a transaction from the buyer to the seller, eliminating another major barrier to purchase.