You’ve read the books, attended the seminars and crunched the numbers. No doubt about it…you must raise your prices. In fact, you may have to triple your prices to make the kind of money that will make it worth your while to stay in business one more day. Otherwise, this year will bring you just what the last year did…debt and heartache. Sigh. Time to bite the bullet.
You announce the price increase at the weekly staff meeting. The meeting room becomes pin-drop quiet. Your salespeople look at you with unblinking eyes and dropped jaws.
Here’s a four-point plan for selling your team on your higher prices. Better get started! Because, if they don’t buy your prices, neither will your customers.
1. You gotta believe!
Once upon a time, I was working on budgeting and selling price strategy with the owner of a Plumbing business. There was a knock on his office door, and one of his team members said...
“Hey boss, I need to ask you about this job I went on today.”
The owner responded, “No problem. How can I help?”
“Well, the heating system was initially installed by Fred’s Plumbing Company. (A competitor.) I see why Fred doesn’t want to come back to this job. The layout of the house is pretty complicated and I think he may have been in over his head. The boiler piping is a mess. Of course, I didn’t mention this to the owner, but now she wants me to give her a price to bring the system up to speed. Could you help me price it out?”
The owner said, “Well, let’s give her a break. How many hours do you think it will take? Eight? Ok, charge her for six. Oh, heck, make it five hours. She is going to wail when she figures out what we charge per hour!”
I was shocked! Wouldn’t she be delighted to have someone knowledgeable and willing work on her system? There were no indicators that this job would lead to a price complaint.
Until the owner buys the price, the team won’t sell at that price
Do you believe your selling price? Would you rather close your doors than lower your price? Do what it takes to settle on a selling price that you can buy. Use as much real cost data and billable hour information as you can. Take a guess, when you need to. Put together a budget. Create a selling price that covers all your costs and includes a healthy profit. Then, commit to it.
2. Be worth it.
If you are going to be more expensive than your competitors, you going to have to be a lot better than they are. No fair charging top dollar for bottom drawer service. Clean the place up, paint and polish your trucks and equipment, write operations manuals, commit to a formal training program, etc. Do more for your customers at each level of your organization. Spend time and money on solid marketing. Help your team and your customers understand the advantage of using your company, and not the other guys.
You must be worth more if you’re going to charge more. The company can improve its image. And, your team members may need to raise their self-esteem. What can you do to help your salespeople realize their true worth?
John Ward, owner of Applewood Plumbing and Heating in Denver, Colorado, has a nice way of welcoming a new hire to his service team. He drives him through the best neighborhoods in Denver. He tells him that this is where their customers live. And, John tells him that they deserve to live as well as their customers. It’s a powerful message.
3. Hold them accountable and teach them the skills to win.
It takes scorekeeping. How much are team members selling, and not selling? Based on your budget, you need so much in sales each day, week, month, and year. Keep track of that information. Without it, as the owner, you are driving blind.
Keeping score will also help you help your team. How are they doing in sales, productivity, call backs, customer complaints? If you don’t know the score, you can’t help them get better. The data clues you in to what each salesperson needs to do to improve. Here’s a simple scoreboard…Red is under goal, Green is at or above goal.
Look into Dale Carnegie, Tom Hopkins, Brian Tracy, Dennis Waitley, Mark Victor Hansen…or search All Business for Sales Training. J All good sales programs teach the basics…communication, discipline, accountability, service, follow-up. Teach your team the skills they need to sell your wonderful services at a realistic price. Unless you know how to sell value, you will be condemned to selling on price.
The ultimate sales training? Hop in the truck with one of your service techs and go on a few calls. Observe your salespeople on the store floor. Take turns: You work with one customer. Then, have your team member work with another customer. Debrief and learn from each other. You’ll demonstrate that you believe in your services and prices…and that you’re committed to each employee’s success.
4. Address the real problem.
What is the real reason that team members don’t want you to raise the prices? They are scared to death!
Picture one of your salespeople. What if the customer says, “No?” The “No” hurts. And, he doesn’t want your customer to think he is a crook or a rip-off artist. Without sales skills, the easiest way to get to, “Yes,” is to lower the price.
Acknowledge the fear. You may want to share the budget with him, and show him why you must raise prices to provide a good salary, benefits, nice equipment, etc. He is worth it…and so are your customers. And, bottom line, sales are part of the gig. Good salesmanship doesn’t involve sleazy tactics. Good sales happen when good people do their best to listen, and offer solutions to problems. It’s all about fair play, service and love. Love your team. Love your customers. And charge what you must.
Be sure to mention that in the weekly staff meeting.
Image examples of Scorecards to use with your team (click to enlarge images):
