Sales Training on the RIGHT PRICE


Jim Meisenheimer addressed this subject in his latest newsletter. You can read about his personal experience and then I’ll give you some basic ways to get the RIGHT PRICE. Here’s Jim:

Value Statements – Learn How To Create Value
To Avoid The Fatal Flaw in Selling

How would you like to win every sales opportunity that you work on? It would be nice work if you could arrange it. How would you like to lose every sales opportunity that you work on? No doubt, you’d like to take a pass on that one.

While neither scenario is likely, there is one quality that separates the two extremes. It’s the quality of preparation. Let me give you an example.

Eight years ago I stayed at the Vancouver Hyatt for four days. I was there for a Canadian Management Seminar on sales management. Most of my trips are shorter ones and when I’m scheduled to be away that long I’ll often try to buy a small gift for Bernadette, my wife.

There was an underground mall beneath the Hyatt. On the evening of the second day of the seminar, I decided to go for a walk and while stretching my legs, see if I could find an appropriate gift for Bernadette.

One small shop caught my eye. It was a specialty shop that sold jewelry made from a variety of gems and minerals. Naturally I was more interested in the minerals.

I walked into the store and did my ninety second browse and search tour. The shop seemed to have a number of nice and reasonably priced pieces that I was looking for. The shopkeeper saw me and said, “hello.” I returned the greeting and left soon after.

The next night I returned. I had a plan. I had identified two pieces of jewelry that I thought Bernadette would like. Before entering the store, I thought about my approach and the amount of money I wanted to spend. I also thought about the specific words I’d use.

I walked directly over to the shopkeeper. I said, “I need to get my wife a gift tonight.”

He told me to look around and call him if I needed assistance. I spotted the necklace and earrings I wanted. They were malachite, a green marble like mineral. The price was $125 Canadian. I waved for the shopkeeper. He came right over.

I asked him, “How much better can you do on the price?”

He reached for his calculator, punched in a few numbers and said he could give me a 14% discount.

Looking straight down at the jewelry, I sighed, “That’s more than I wanted to spend.” I remained silent, and once again he punched more numbers into his calculator.

Finally he looked up and said, “I’ll give you 20% off.” I bought the necklace and earrings and got the discount as a bonus.

I was ready to pay list price. He didn’t ask, so he didn’t know.

His strategy was to talk price. It should have been to show me the value.

I was prepared and he wasn’t – the fatal flaw in selling.

It pays to be prepared – in fact it pays very well!

Me again. Okay, if you are the shop owner, you need to know, before your customers ask, about what extra value, price discounts, or incentives you will give customers.

You want to create a win-win feeling. Reward your customer instead of lowering your price. In the case mentioned above, gift wrapping could have earned the shop owner 20% more.

Listen to what your customer is saying and what they mean.

What Jim wanted was the best deal. Not a cheap price. You can add value, or you can subtract dollars (and profit).

Most coffee shops I visit have high prices compared to a non-coffee shop cup of joe, but the added value is their punch card. After 10 or 12 full price purchases, I get a free drink.

How can you apply this to your business?

By the way, here’s more information from Jim:

FYIThis is chapter 29 in my book titled – How To Double Your Sales Without Quadrupling Your Effort. If you like this chapter – you’ll love the rest of the book.

Go here for more information:

Words of Wisdom . . .

Stupidity is the deliberate cultivation of ignorance.
William Gaddis

Learning teaches more in one year than experience in twenty.
Roger Ascham

You write a hit play the same way you write a flop. William Saroyan

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Is it Google-soft yet?


Is Google going to become the next Microsoft? I’m referring to the domination of Google and how the public, (or at the the “geeks”), reacted when Microsoft became dominate in software development and computer operating systems.

Google is on a winning streak and there are lessons to learn when it comes to marketing and advertising. First of all, most Google services are free to the user and paid for by advertisers. Gee, that’s how traditional radio works too!

They even have ways for me and you to customize our web pages with search tools like the one on this page at the top right.

Here’s a story from Adweek about Google:


Google Continues Search Dominance

January 29, 2008 By Brian Morrissey NEW YORK

It appears Google’s competitors in Internet search have an uphill climb. New research shows how the company is putting even more distance between itself and its rivals. Efficient Frontier, a search-marketing tech provider, examined more than 17 billion impressions and 270 million clicks on search ads running through its system during the fourth quarter of 2007 and the same period a year earlier. The results show the yawning gap Google has opened with its rivals, Microsoft and Yahoo!, because it continues to attract a growing majority of Internet searches. (READ MORE)

Chamber of Commerce jumps on the Blog-wagon!


The Fort Wayne Chamber of Commerce is undergoing a metamorphosis and working on being more relevant to their members and potential members. Phil Laux, who served as the President of the Chamber for a dozen years retired at the end of 2007 and they are in the final stages of seeking his replacement.

Currently the Chamber is being run by the various department heads and moving forward. At a recent meeting (November) they unveiled their new logo and as the weeks pass they continue to do more and more to get up to speed in the fast moving business environment.

Now they have a blog. Here’s their announcement from my email today:

Business Community Gets ‘Daily Dose’ with Chamber Blog

2007 Chamber Day photo

The Chamber announces the launch of ‘The Daily Dose,’ a blog focused on the Chamber, Chamber members and the Northeast Indiana business community.

The mission statement reads: “The Daily Dose is the Chamber’s answer to timely, member-focused business news and content. Get your ‘daily dose’ of the latest Chamber happenings and information relevant to you, your business and the greater Northeast Indiana community.”

The blog, currently available at www.chamberdailydose.blogspot.com will be housed on the Chamber’s new web site when it is launched in spring 2008. Interested readers may sign up to receive information posted on the blog by email or RSS feed. Members are invited to post comments and create a meaningful two-way dialogue.

“The Daily Dose is exactly the right communication tool we need to help strengthen our relationship with our members,” said Shannon McNett-Silcox, Vice President of Member Relations. “We are pleased to be opening the door to mutual dialogue and look forward to keeping our membership informed and up-to-date. This blog is yet another step in our Chamber revitalization process – and a cutting-edge step at that.”

The term blog is a shortened form of “web log.” The modern blog evolved in the early 1990s from the online diary, where people kept running account of their lives. Blogs are now widely regarded as important, interactive corporate communication tools to provide information, resources and to post thoughts and comments.

Sears-mart?

UPDATE: CLICK HERE FOR THE LATEST NEWS. (2/14/08)

Being a midwesterner, it has been sad seeing the demise of Sears, based in Chicagoland, and K-mart, which was headquartered in Metro Detroit where I lived 8 years.

Laura Ries has posted a commentary on her blog regarding the direction Sears and K-mart are going and why:

The Sad Saga of Sears

Searslogo_2

With the Kmart marriage going bad, employees jumping ship and a patriarch who doesn’t appear to know what he is doing, Sears is falling apart. Sears’ shares, which reached a high of $195.18 in April, fell to $98.49 on Monday as news broke that Aylwin Lewis, its president and chief executive, would step down.

With 3,800 Sears and Kmart stores, the company is still the fourth largest retailer in the U.S., but its future looks gloomy with many analysts suggesting they sell off the remaining assets for scrap.

How did it all go wrong? It is not such a mystery. A quick look at history explains the downfall of this American icon.

During the last century, Sears, Roebuck and Co. was the gold standard in the industry. Sears was the biggest, most profitable retailer in America. Hard to believe now, especially if you were born after 1985, but it is true. Sears was the “it” company of its day. The public, investors and Wall Street thought it could do no wrong.

The beginning of the end usually starts with that kind of thinking. When you think you can do anything with your brand, it all starts to fall apart.

Searsandroebuck1900

Sears began as a mail-order catalog business back in the late 1800’s targeting primarily farmers. In 1925, the first retail store was opened and success came quickly. In particular, the Sears store-branded merchandise was a hit. After WW II things really took off. Sales hit $1 billion dollars in 1945 and doubled just a year later.

As the early explosive growth of a category slows (and it always does), a company usually tries expansion to compensate. This is the fatal flaw.

As sales of its core durable goods started to fall off, Sears started stocking more clothing to compensate. And so began the beginning of the end.

In the 1980s with sales continuing to slide, Sears sought expansion through diversification. Sears bought real estate company Coldwell Banker and stock brokerage firm Dean Witter Reynolds. Sears also launched the Discover credit card.

The purchases culminated in the now infamous “stocks to socks strategy.” Brilliant! You can buy your socks, your stocks, your real estate, your daughter’s prom dress all at Sears. Did it work? Of course not.

Expansion might help in the short term, but in the long term expansion a company unfocused. And an unfocused company stuck in the mushy middle of its category is ripe picking for competition. As an industry matures, competitors come in and steal market share from above you as well as below you. This is exactly what happened to Sears.

While Sears stayed in the middle of the department-store market, the department-store industry was diverging into two separate industries, one at the low end and one at the high end.

At the low end, Wal-Mart and Target have become big money-makers. Target has almost twice the revenues of Sears and Wal-Mart has more than 10 times the revenues. In 2006, Sears did $30.0 billion in sales while Target did $59.5 billion and Wal-Mart did an incredible $348.7 billion.

At the high end, retailers like Nordstrom and Saks Fifth Avenue are doing well as are a host of high-end boutiques.

What should Sears have done? Management-school logic would suggest that Sears, Roebuck and Co. should have either moved upscale or downscale in the department-store industry. But that’s not sound marketing logic.

Marketing logic states that once you have a strong position in the mind, you can’t change it. Therefore, the marketing answer to every problem is always the same.

Focus.

When faced with a broadening of its category, Sears should have narrowed its focus and become a specialist. Instead of shifting to the softer side of Sears, the retailer should have further embraced its harder side.

The harder side is where Sears was the strongest and had the most credibility anyway. Sears was once America’s leading seller of major appliances with 41 percent of the market. That share is steadily eroding as Lowe’s, Home Depot and Best Buy take appliance business away from Sears.

The mistakes of Sears have been compounding for decades. The company kept expanding into softer goods when they should have been focusing on harder goods.

Instead of advancing into its weakness (clothing and soft goods) by buying Lands End for $1.9 billion, Sears should have been retreating to its strength in hard goods and bought Black & Decker.

And let’s not forget, Sears has some of the strongest hard-good brands in the industry like Kenmore, Craftsman and DieHard. These brands could have crowned Sears as the hard goods king and blocked much of the progress Home Depot has been able to make.

Lampert_2

But I think the final straw for Sears was Eddie Lampert’s unwise take-over. High-flying hedge-fund legend, Eddie Lampert acquired Kmart in 2003 and Sears in 2005. Combining the two struggling retailers was suppose to deliver synergy but instead brought misery.

Combining two losers doesn’t make a winner. It just doubles your problems. Sears and its owner Eddie Lampert whose fund holds 48% of the company are in deep trouble.

Eddie Lampert, a man who was once called the Warren Buffet of his generation, may have ruled out that comparison for good.

Lampert’s rise and current fall are emblematic of the recent trend of having money managers buy and run companies. The implication is that great value can be created by simply managing assets better. But nothing could be further from the truth. Managing assets usually translates into going over expenses and looking for ways to cut costs. And while saving money and cutting waste are good, those steps alone don’t make a company powerful.

What makes a company powerful? Size, strength, stock price? None of these.

What makes a company powerful is owning powerful brands. Powerful brands are brands that are singular, dominant and in growing categories.

Today, neither Sears nor Kmart are powerful brands. Bad news for Lampert and his legacy.

Warren Buffet is famous for buying the right brands on their way up. Lampert will unfortunately be known for buying the wrong brands on their way down.


More good news for radio advertisiers


From my email from Mediapost:

Nielsen: Radio Key To Reaching African-Americans
by Erik Sass
A recent analysis of ad spending by Nielsen Monitor-Plus shows that advertisers use radio more than any other medium to reach African-American audiences. From October 2006-September 2007, they spent about $805 million on African-American radio formats, representing roughly 35% of a total $2.3 billion spent targeting the demographic. – Read the whole story..

Phone numbers

An interesting study regarding phone numbers was released. Especially note the rise in recall when using radio.

Significantly Higher Ad Recall for Vanity vs. Numeric 800 Numbers

Advertisers can expect an 84% improvement in recall rates for vanity 800 numbers vs. numeric phone numbers shown in visual media (TV, billboard, print) – and a much more significant 9-times higher recall rate in the case of audio (radio) ads, according to a recent study.

The study, conducted by Infosurv, e-Rewards and 800response, sought to determine the consumer recall rates of vanity 800 numbers compared with recall rates of numeric toll-free phone numbers that are used in visual and audio advertisements.

Among other findings of the study:

  • Some 65% of survey respondents were able to correctly recall the vanity 800 number that was featured in a visual advertisement.
  • Over 72% of consumers correctly recalled the vanity 800 number after hearing one 30-second radio advertisement, compared with just 5% of consumers who correctly recalled the numeric toll-free number:

800response-toll-free-audio-recall-vanity-vs-numeric.jpg

  • 58% of consumers prefer to dial a vanity 800 number vs. a numeric toll-free to reach a local business.

800response-toll-free-consumers-prefer-dialing.jpg

  • 94% of consumers surveyed could identify 800 as toll-free, vs. 70%, 56% & 55% recognizing 888, 877, and 866 as toll-free, respectively.

800response-toll-free-prefix-most-recognized.jpg

Re inventing the Wall Street Journal

Is the WSJ a publication dealing with business and financial issues?

Or should the WSJ become less specialized on their content, and instead become a lifestyle publication?

Your answer and mine don’t matter at this point, because it appears that option 2 is in play. It has been announced that the WSJ will cover sports. The New York Times reports:

Mr. Murdoch says he wants The Journal to expand nonbusiness coverage, especially in areas like politics, government and entertainment, while also making it more inviting and easier to read. Adding sports reporting would seem to fit into that strategy.

The Journal regularly covers the business of sports, but does not cover the sports themselves extensively. But in recent years, seeking more ads aimed at consumers rather than businesses, it has greatly expanded its lifestyle and consumer reporting, adding “softer” sections like Personal Journal and Weekend Journal, and a Saturday newspaper.

People at the paper who have been briefed on the plan say it is very likely that a sports page, possibly tucked into Personal Journal, will be created in the next few months. But they cautioned that it was not yet clear how often the page would appear or what kinds of articles it would contain. (READ MORE)