Selling a price increase can always be a challenge. Right now the environment for selling a price increase in many industries is next to impossible. There are a lot of customers who are not only pushing back on a price increase, but are also expecting a price discount of some sort. This creates a huge problem for any company trying to increase their prices.
An important issue to address, though, really has nothing to do with timing. There could be many great reasons for a company to take a price increase, but if the salesperson doesn’t believe in it, there’s no way it’s going to happen. I believe more profit is lost because of this issue than any other single reason when it comes to taking a price increase.
When the salesperson fails to believe in the price increase, it’s amazing how quickly the customer won’t believe in it either.
Any smart customer is going to pick up on any hesitation or disbelief a salesperson exhibits when they’re trying to communicate a price increase. The salesperson may try to hide their feelings and be a good company salesperson, but it still comes out in their body language, their tone of voice and many other subtle ways.
It’s for this reason I believe more effort needs to be placed on how the price increase is communicated to the sales force. I’ve been part of many sales meetings where the sales manager or some other higher up takes one minute to announce the increase to the sales team. Just as fast, the manager asks if there are any other questions.
Naturally, nobody responds in the two seconds given for people to ask questions. With that, management thinks everything is good to go with sales. In reality, nothing could be farther from the truth.
Mark my words: Management needs to take whatever time is necessary to lay out all of the details behind the price increase and exactly how the increase in revenue is going to be used. There’s nothing wrong with telling the sales force the price increase is going to help the bottom-line. In fact, the sales force would appreciate hearing it because of the honesty behind it.
Consider these vital tips:
Allow the sales force to discuss the price increase and, more importantly, provide them direction and input as to what they should be telling the customers.
Work the plan out in advance to give the sales force time to get comfortable.
Allow them to develop talking points for each major customer with whom they will be sharing the increase.
Most of all, make sure management believes in it 200%! You can never expect a sales force to embrace something if their management has not fully embraced it. My rule is that the most enthusiastic person about the increase must be the person at the top. If the person at the top does not embrace it, then the person below will not and so on through the entire company.
For sales managers, it’s essential you support your team. Before and after each major call one of your salespeople makes with a customer, discuss it with the salesperson to keep them motivated and on track. For you the sales manager, this means you too have to be absolutely sold on the reasons for the increase.
Now, for those people who fail to believe the reasons for the increase, then the issue becomes real simple. By taking the increase, it is going to allow the company to continue providing the same level of service, etc. Failing to take the increase at this time will mean the company will have to make changes. This, of course, may very well impede the level of service and support we’ve been able to provide to our customers and they’ve come to expect from us.
For a price increase to have it’s full positive effect, everyone in the company must be sold on it. This is crucial before even one attempt has been made to deliver the price increase to the customer.
So, have you sold yourself on your company’s price increase?
Copyright 2011, Mark Hunter “The Sales Hunter.” Sales Motivation Blog.