Tuesday, January 13, 2009

Dont Hire Salespeople Who Are Price Buyers Themselves

Writen by Bill Lee

Some salespeople actually agree with customers when they complain that the prices their company is quoting are too high. After all, when these salespeople are out in the marketplace making purchases themselves, they usually look for a bargain, too. They are actually price buyers themselves.

When they buy furniture, they go to a discount furniture store.

If they were to buy a suit of clothes, they would go to an outlet mall to purchase last year's styles.

And when they need building materials for a home project, they might even spurn their own employer and head out to a local salvage yard in search of discontinued merchandise.

What is a price buyer, anyway?

My definition of a price buyer is someone who almost totally disregards all aspects of the purchase except for the price. With little regard to how much their time is worth, price buyers will spend endless hours trying to save a buck. You know, the kind of people who will drive all the way across town and burn up $5 in gasoline just to save fifty cents on a case of dog food.

And they can make some of the most highly convincing arguments you've ever heard that the only way that they will ever take a prospect away from the competition is by using a low-ball price to give them a marketing advantage.

They are far more effective at selling the boss on cutting the price than they are at selling the customer on paying the company's asking price.

Do you have any salespeople who fit this description? If so, be careful, because it's likely that they will take the customer's side every time. When their gross margin is compared to your more quality-conscientious salespeople, they will almost always be near the bottom of the list.

Price buyers rarely think of value. They have never grasped the concept that in the long run, people who concentrate on price to the detriment of all else will usually pay more.

When interviewing for salespeople, consider adding questions like these to your list of interview questions:

• How many new customers did you attract to your company last year?

• Approximately how much new business -- in dollars -- did these new customers purchase last year.

• What techniques did you use to attract these new customers to your former company?

• How competitive do you believe your former company's prices were?

• When you run into a pricing objection, how do you typically handle it?

• What is your gross margin running so far this year?

• What do you believe that people mean when they say that there is a big difference between true cost and the price on the face of the invoice?

Recommendation: Don't be guilty of wishful thinking. If you don't get the kinds of answers you're looking for when you ask these questions, find yourself another sales candidate.

Bill Lee is author of 30 Ways Managers Shoot Themselves in the Foot ($21.95) and Gross Margin: 26 Factors Affecting Your Bottom Line ($29.95). Both books are plus $^ S&H for the first book and $1 S&H for each additional book. See Shopping Cart at http://www.BillLeeOnLine.com

No comments: