My friend Brian is a young salesperson who has experienced much success in the five years since he joined the professional workforce. He is a hard worker and a talented salesman who has also had the advantage of beginning his career in a booming economy. For many young people, the past five years have been an exciting time of growth. What a time to begin your career! And now, all that has changed.
Brian came to me recently to talk through everything he’s been challenged with over the past five months as the global pandemic slowed sales at the major HVAC company where he works. He began to tell me about the new services his company has adapted in order to accommodate a remote workforce while continuing to meet the needs of their clients. The company had invested in new equipment, additional staff, and an extensive training program. All of this impacted the costs they had incurred to actually deliver the needed services. And guess what that means?
Brian has had to tell his clients that prices are going up.
Brian quickly realized that he was going to have to defend this pricing model, something he never anticipated having to do. The clients have questions about the higher prices, naturally. Some of them aren’t happy about paying more, and Brian is in the unfamiliar position of bearing bad news. He admitted that, to his surprise, he was not mentally prepared to take that challenge on. Because Brian never had to defend much over the past five years, this was all new to him. Brian may have become a little bit complacent over those years. He wasn’t prepared to put that work in. If anything, the pandemic has shown young professionals—and all of us—that complacency is the enemy. Things will always change, and we have to be prepared for it.
Defending a higher price, while certainly applicable to the current moment, is something businesses must always be prepared for, regardless of whether there is a global pandemic. It’s especially important in a business-to-business service environment, where the emphasis is often to do better, faster, and cheaper.
If you’re in sales and like Brian, you may also be experiencing pressure around your pricing model. Maybe you’re not used to having difficult conversations like this, and maybe you’re also feeling not up to the challenge of defending the price. By preparing for the conversation and practicing honesty, I can assure you that conversation won’t be so bad.
As you prepare to defend a new pricing model to a customer, consider the following steps:
- Prepare for the discussion. We cannot be less prepared because of the immediacy of the moment. Come ready to answer questions that the buyer might have. Research your competitors—what prices and services are they offering? Create a strategy to show your buyer what only you and your business can offer.
- Focus on the people. What are the customer’s priorities and goals? Ask them what they would like to accomplish. This should guide your discussion.
- If the price is the issue, deal with that first. You‘ll be amazed how many meetings I’ve been to where the price is the issue but people are too timid to bring it up. Acknowledge the pricing concern at the beginning of the conversation. By doing so, you can put the customer’s mind at ease, and begin selling your company’s higher worth.
- Justify the price increase in detail. Explain features such as quality, liability, credibility, and support. There is no set price for qualities like these—their worth is subjective. This gives you space to sell your higher value.
- Come ready to expose and emphasize the risks associated with paying a lower price. A buyer might assume that by choosing a company that offers a lower price, they are purchasing the same product or service for less money. It is important to let them know that by paying less, they may be compromising on quality and getting a lesser product.
Brian and I finished up our time by acting out an upcoming discussion, focusing on these five points. We realized that the key to any crucial conversation is preparation and practice … are you surprised?
Brian had to wrap his mind around the realization that things are always going to change. He had to believe that he could be resilient enough to withstand those changes. Complacency really is the enemy, whether you are good or bad at your job, young or old. Things are going to change, and if you are fit enough to deal with it you’ll be okay.
Yasser Youssef is the president of The Budd Group, one of the leading facility service companies in the country, a North Carolina-based company that provides facility support services in the Southeast. Throughout his career, Youssef has met leaders from all backgrounds, and believes leadership is for everyone. Over the past few years, he has developed an affinity for writing and contributing thought leadership, and is often asked to speak to businesses throughout the country about authentic leadership.