I was to attend a conference and training and could not make any changes in my itinerary.

To my great surprise BA in the US was only communicating through the website and computerised telephone lines. Promised e-mail confirmations were not sent by BA which left me as a passenger in total darkness. It cost me a small fortune to get through by phone and after different mistakes and non-reactions from the part of BA I was finally on my way back to Europe.

After getting back I called BA to inform them about my dissatisfaction. The only reaction was that the airline was sorry but there would be no compensation for my costs.

It shows again that the customer is not considered as important for big corporations.

Well, I will just shift to other airlines for at least the coming 2 years...

Our research shows that 72% of salespeople cave in when the buyer resists price.

This results in companies losing millions of profit dollars every year because their salespeople fail to defend their prices.

They discount when they should hold the line on prices.

There is a blend of emotional and tactical reasons why salespeople relent on price objections. How many of these ten reasons apply to you?

Emotional reasons why salespeople lose to price objections:

1.    Fear. You fear losing the sale. Fear is a powerful motivator—more powerful than greed. Humans are hard-wired to detect danger and nothing signals danger more for a salesperson than the possibility of losing a sale.

2.    Guilt. You feel guilty selling at that price. Other customers may be paying less and you feel guilty charging more to this customer. Wrap in some fear that the buyer will discover others pay less and your guilt is amplified by your fear.

3.    Conviction. You do not believe that your product is better than the competition’s product. You lack the passion you need to defend your price. It’s difficult to convince others of your value when you suffer from a lack of confidence in your package.

4.    Exhaustion. You are tired of the battle. You believe that it takes too much effort to hold the line on your prices. You feel that it is easier to discount than fight for your profit.

5.    Courage. You give up too early. You lack the will to continue. Your fear is too overwhelming and you decide that it is less painful to cave in to your fear than fight for your profit. When buyers object to price, first they test your price; then, they test your resolve.

Tactical reasons why salespeople lose to price objections:

6.    You fail to penetrate the account high enough to talk to the high-level decision maker who controls the purse strings. Research shows that 90% of salespeople do not penetrate at this level, mostly because high-level decision makers intimidate them, or salespeople fear alienating a lower level contact by going over their heads.

7.    Your buyer is more prepared than you are for the price discussion. There are many legitimate reasons to lose a sale—wrong product, availability, and even price—but being out-prepared for the negotiation by the customer is not one of them.

8.    You lack the know-how to hold the line on prices. You never learned how to fight this battle tactically. This generally means a lack of training.

9.    You copy a price competitor’s price strategy. You cannot be an industry leader if you are a follower on price. You alone control your prices. The competition may cut their prices, but you cut your prices. Copying them means that you tacitly admit your product or service is no better than the competition’s.

10.    You quit too early. For whatever reason, you stop selling before the buyer stops buying. Maybe it is a lack of resolve or knowledge of how to continue the battle. The sale is never over until you or the customer calls it off. Why would you quit if the buyer does not quit?

Do you see yourself in any of these reasons? If so, use this insight to improve your results.

Study. Prepare. Infuse yourself with passion about your product.

Be ready for price resistance. Anticipating that price may become an issue is not the same as soliciting a price objection.

You need not fear price resistance if you are prepared and believe in what you sell.

You need not feel guilty holding the line on price when you are convinced of your value.

You need not give up too early when you are prepared for the battle.

By Mike Sigers

• Don't use an activity-based incentive plan for senior sales reps or big-time closers.
  These programs are best for inside sales teams or call centers. "Activity-based compensation works better with younger, less experienced teams," Cabrera says. "Senior, seasoned sales professionals are going to be turned off by that type of compensation. They want to get paid for closing deals."
• Do make the program visible online.
  What good is dangling a carrot that no one sees? "Nine times out of ten, management thinks it's created this wonderful bonus or program, and you talk to individual reps and they have no idea it's there," Cabrera says. "An automated, Web-based program allows people to see, 'OK, you asked me to make ten calls, and I made eleven,' or 'I'm down five calls; I'd better get my act together.'"
• Do ditch the Excel spreadsheet.
  It's vital to have an understanding between reps and the company about what the goals are and how they'll be measured. That's hard to do with a spreadsheet.
  
  "Excel is great, but it wasn't designed to manage sales teams in this way," Cabrera says. "For anyone using Salesforce.com, they can go to the Xactly app exchange, sign up, and get it working. No implementation. The hurdle isn't nearly what people think it is, and the benefits are huge."
• Don't use activity-based rewards as a substitute for good management.
  Rewarding reps for a certain behavior is OK, as long as it's not a stand-in for the kind of good management salespeople need to ultimately make quota.
  
  "A lot of companies will use incentives on things like call reports, so that at the end of the week a field guy has to say, 'I visited these ten accounts,'" Cabrera observes. "But the amount of money that you have to motivate a behavior is so valuable, to use it on, 'Is your CRM system up-to-date?' is a waste. I'm not saying that getting [salespeople] to use CRM or make a certain number of calls a day isn't important, because those behaviors can lead to sales. But don't water down the power of your incentive program by asking it to do what good management should be doing already."

Anthony Cole, of the Anthony Cole Training Group, agrees with Cabrera on this point especially. No matter what, he says, solid sales management is fundamental if managers want to create winning sales teams. No incentive program should be considered a replacement for a steady diet of coaching, assisting salespeople with developing prospecting messages, managing their territories, finding and qualifying opportunities, and all the other skills at which top reps excel.

"This is a puzzle with many pieces," Cole notes. "If a sales manager is masterful about helping salespeople discover why the activities are meaningful to their individual success, and he or she is also good at coaching and motivating, and the company has a meaningful incentive program, then this kind of incentive will work, and you'll see the results you're looking for."

Source: Sellingpower

Making the bottom line your top priority may not be the best way to improve profitability. Recent research shows that CEOs who put stakeholders’ interests ahead of profits generate greater workforce engagement—and thus deliver the superior financial results that they have made a secondary goal.

This finding is based on survey data gathered from 520 business organizations in 17 countries, many of them emerging markets. We were testing the hypothesis that if a CEO’s primary focus is on profit maximization, employees develop negative feelings toward the organization. They tend to perceive the CEO as autocratic and focused on the short term, and they report being somewhat less willing to sacrifice for the company. Corporate performance is poorer as a result.

But when the CEO makes it a priority to balance the concerns of customers, employees, and the community while also taking environmental impact into account, employees perceive him or her as visionary and participatory. They report being more willing to exert extra effort, and corporate results improve. This research, which was conducted with Mary Sully de Luque, of Thunderbird School of Global Management; David A. Waldman, of Arizona State University West; and Robert J. House, of the University of Pennsylvania, underscores the risk of single-mindedly pursuing profit.

Author: Nathan T. Washburn (Harvard Business Review)