Inside Sales Telesales Tips Blog

Price Negotiation and sticker shock: why sometimes even the experts fail

I don't care how smart or seasoned a sales exec --- or sales trainer --- is, sometimes he or she will fail to bring in a big deal. Today, it's true confession time. I'm going to tell you about a deal I lost this year, then tell you a question I could have asked that might have saved it for me. I don't want you to lose the deal like I did, so listen up!

First, a little background. My sales training company has had another great year this year. We're unique, totally customized, and my customers will tell you I'm the hardest working classroom trainer in the biz. We don't have trouble convincing prospects that we're the best. But even when they know we're the best, we still have to negotiate the price. Sometimes they can't afford it. And lots of times, if that's the case, they won't tell you. They just won't answer your calls (sound familiar? It should. It happens to all of us.)

This particular prospect was a really huge company that I'd guess most of you had heard of. They'd had a bad experience with their prior training company. I spent an hour on the phone with their sales exec, and he liked what we had to say, and how we'd solve the problem. He had loads of telesales reps, and it was going to require about 6 weeks of my time as well as the resources of an additional person from my company. As the call was about to end, I asked "price issues aside, are you convinced this is the training solution you want?" He replied that it was, and asked for a proposal. I said I'd get it to him within 24 hours, and did.

But after receiving my proposal, he never returned my calls, and totally went dark. I'd lost the business, and guessed that it was probably sticker shock. I always tell the people I train that you're gonna lose some, but the greats in this business learn from the losses, and don't replicate them. So in retrospect, what I should have done right after I asked that earlier question, was ask the following:

"Now that you've told me that this is the course you want, what are your expectations in terms of the investment required to move forward with it?"

In other words, tell me what you think you're going to pay. This is a really huge question, particularly important if you're located in a part of the country where folks are used to paying top dollar for high-end solutions (think SF, Boston, New York), and you're selling into geographical areas that may have lower expectations in terms of pricing. In my business, there are loads of people selling sales training for $100 per person per day, and most of them are located away from the geographical areas mentioned above. I put way too much time into customization and delivery to compete in that price space. And just about every one of you reading this post will have a similar sales situation in terms of price expectations based on geography as well.

So let's distill two great questions from this experience of mine, so you can learn from my experience. You'll want to use these questions when the prospect loves your solution, but doesn't yet know what your pricing will be. Be sure to ask the following:

1) "Price issues aside, are you convinced this is the [solution] you want?" (and the prospect answers affirmatively)

2) "Now that you've told me that this is the [solution] you want, what are your expectations in terms of the investment required to move forward with it?"

The prospect's answer to your second question will tell you whether you've got an instant go, you need to negotiate a bit, or you need to walk away. The best sales people always want to know why they've lost a transaction, but if a disgruntled prospect doesn't return your calls, you'll never know why.

When you've got a prospect that just loves your solution, be forewarned: if you don't ask the above two questions, you could lose the deal. Add those questions to your Best Practices playbook, and you'll do a superb job at price negotiation.

Job interview ripoff: Here’s how you can get free consulting by making your candidates work for nothing!

Got your attention? If you're a telesales rep or manager, and you're looking for work, I want to expose a couple of scams that have the end result of putting you to work making a profit for the company that's interviewing you, while you get paid nothing. Today's blog post is the result of an email I got from Alan, a very good rep that took one of my telesales courses a while back.

Alan wrote:
I have a question for you. I received an e-mail from an old colleague who is looking for a job and got an odd request from a company he is applying to. In summary, here is the e-mail, "The interview process is such: meet with [Hiring] Manager and then VP of Sales. The final stage is for me to go into their corporate office and make an hour's worth of customer sales calls (via telephone). I am supposed to be supplied a call script and other information prior to making these initial calls. I find it weird making calls without being an employee and not yet having any internal sales training." (Geoff,) Do you think this is a legitimate request or a red flag?

It's a red flag to me. A couple of months ago, I wrote a post about an innovative interviewing done by Marc Cook, who mocks up a sales situation, then has a potential hiree call him. I liked the idea, so do read my post on it.

By contrast, what I don't like about the situation Alan's friend finds himself in is that in making calls to real prospects, he's essentially giving the company interviewing him an hour's worth of free consulting. He might do a great job, move the sales process to the next step, then not get the job. He also won't know enough about the product or service to answer meaningful prospect questions, so the calls could be real duds, too.

Don't think I'm being too far-fetched on thinking this is a ripoff, either. Several years ago, a friend of mine who was a terrific inside sales manager began interviewing for a management position with a new company. Twice she was called in for interviews. They asked her to white-board a telesales operation from head to foot in the first interview, then asked her about comp plans in the second. When they called her back for a third interview, she asked if they were going to hire her, or just wanted another hour's worth of free consulting (yay, Barinda!) It turns out that the CEO of this particular company had a reputation for getting free consulting by picking the brains of candidates he was never intending to hire in the first place.

So folks, free work during an interview is a scam. As far as the hiring process goes in general, I don't like personality tests (meaningless), W2 forms (no one has a right to see your private income data) or drug tests (your body and medical situation are not owned by your employer, only your time is). Slave labor went out of vogue in this country some time ago. If you're treated unfairly during the interview process, think of how you'll be treated on the job. In the case of Alan's friend, the interviewer doesn't know enough about what makes a superior inside sales rep to be able to hire one. How the heck is that person going to manage the "successful" candidate that gets hired?

In Asia, a popular saying is "cash is king." The Asians have it right. There are lots of hiring scams, unfair interviewing processes, and crappy interviewing techniques out there. If you've ever been scammed or insulted during an interview process, tell us about it. Once I get a decent response, I'll publish a warning list on this site. Should make for some interesting reading.

Inheriting a Sales team: Now what do I do?

Today's post comes from Bangkok, where I'm doing some sales consulting for Frank, who's just inherited a sales team that in the past has been effective, but now the numbers are dropping and the company is concerned. Frank was brought in to run Operations, and has a sales team where two reps are over-quota performers and the rest are functioning below par.

There are other important issues Frank needs to address, some of which are in the area of team communication. The team has never been formally trained, and there is no current training budget. The top performing rep refuses to share the reasons for his success with other members of the team. The result of these two issues is that there are no best practices to be shared because they have not been codified.

This post is potentially important to all of you. If you're a telesales rep, you may one day be promoted to managing a team of inside sales people, and I guarantee that you won't be moving into a "perfect" situation, because there are none. If you're currently in Management, you may be dropped into a situation where most of your inherited reps are functioning at a rudimentary level, and you'll either have to grow them or dismiss them. And in today's austere world, you may have no money to hire us to help solve your problem through one of our telesales training courses. So what are you going to do, and where do you start?

As I told Frank in our consulting session, two of the first things to look at are what makes his best reps successful, and how their behaviors can be factored into creating a meaningful set of key performance indicators for everyone else. Let's look into this further:

1) What behaviors constitute top performance? Frank's top rep constantly blows out his quota numbers, but won't share his best practices. So Frank's going to have to "go along" on sales calls to observe and log best sales practices. This means listening to calls or going out on joint sales calls (his reps are hybrids, and work both on the phone and face-to-face). From this, Frank should begin to cobble together a list of best practices. He may not have to completely reinvent the wheel, because he can start with my 20 Characteristics of a Superior Sales Rep article, and build from there.

2) Which key performance indicators need to be exceeded for a rep to be constantly over quota? Frank's business is advertising sales for a publishing company. His top reps already know how many calls and appointments it typically takes to make a sale. And Frank already knows what the average sales price is. From this, he can derive a list of KPIs that will indicate how many calls a rep has to make each day to meet his or her monthly quota. The dilemma or course is that superior reps take fewer calls to meet quota, but Frank is starting from scratch. So Frank will have to build a different KPI list for every rep. He wants everyone to meet quota, but clearly, his junior-level reps are going to have to work either harder or smarter to get the job done. After reading my blog article on How to build better KPIs, Frank will be on his way to deriving his own KPIs.

In a perfect world, Frank would have inherited a sales team with already meaningful KPIs established, and all his team members would be in agreement as to what behaviors make them successful salespeople within the context of what they're selling. Obviously, this is what superior sales training does, but he's walked into a situation in which "hire and fire" is the norm, and sales training is seen as an unnecessary expense. He's trying to change that. Eventually, we may be able to come in and train his team. Until we do, I've given him some valuable ideas on what he can do in the meantime to increase sales performance. I imagine many of you reading this post have a similar dilemma, and many of the rest of you will too, eventually. Many sales managers are brought in to solve a problem: there are no "cushy" sales management jobs. Sometimes the hardest part of solving any problem is knowing exactly where to start. If you're not facing this dilemma today, print out this post and add it to your Best Management playbook. You'll probably be faced with a similar problem sometime in your future. As your sales management career evolves, so will the size of the issues with which you'll be dealing. And that's why you're getting paid the big bucks, right?

Taking the Ethical High Road: Sometimes it means “taking one for the team”

You know that I like to occasionally pontificate on ethical issues, like treating people the way you'd like to be treated, or doing the best thing to make our clients' lives better. But sometimes, in doing so, it takes money out of our pockets. I call that "taking one for the team." And that's what today's post is all about.
Sometimes it costs us to do the right thing. I was fortunate enough to work for some really ethical companies. One of them, Atron, a company that sold hardware-based testing tools, allowed me as a salesperson to authorize the return of any equipment I'd sold that didn't make my customers 100% happy. In having that policy, we sold a lot of product and got a reputation for being honest. And that loyalty brought us tons of business.

But it doesn't always work out that way. Sometimes you do the right thing, but the stars don't line up, and you're the bad guy or gal.  And you just have to take the "high road" and just have the philosophy that sometimes the best intentions fail. But if you fail for all the right reasons, is it still failure? Maybe not.
Here are two stories from my own world. Do either of these situations resonate with you?

1) One of my telesales training clients was one of the best-known names in the computer industry. They asked me to train 50 or so of their lead development reps, which were managed at an outsource bureau hundreds of miles away from the home office. So these reps were not actual employees of my client; they worked at a subcontracting firm. I traveled to meet the outsource management team and some of the reps. The reps told me confidentially how bad the working conditions were. And I confirmed it: the reps were being annoyed by management to the point of abuse, and no training in the world was going to improve their confidence level. To a person, the reps wanted to leave, and were all actively searching for other opportunities with other companies. It was truly the outsource bureau from hell, and I'd never experienced a worse work situation in our industry. So I returned and told the client what I'd found, and that I wasn't going to take the training contract. With working conditions as bad as they were, I told my client that he'd be wasting his money on training until either the management conditions were fixed there, or he found another bureau. My client wanted me to reconsider, but I felt that no amount of money was worth taking the job in the present condition. And I didn't want my client to waste his money, either.

2) In another situation with an equally well-known company, I was asked by my client, a middle manager there, to begin interviewing potential inside sales reps that would shortly be hired to sell a software solution that would soon be coming out of engineering. This consulting project called for an overview and recommendations for setting up a telesales department, but not specifically to interview candidates. In this consulting project, because my client was going on vacation, he asked that I not divulge what we were doing, if asked, to his Director, because this was going "under the radar." Naturally, two days after my client left for vacation, the Director called me in for an ad hoc meeting and warned me not to interview people. So what did I do? I went home and quit the project. Later, my client called me, upset that I'd quit. One problem was that I couldn't tell him I'd quit because I didn't trust him. But that was the reason.

In both of these situations, I walked away from significant projects because they were ethically screwed up. Also in both cases, much to my chagrin, the client ended up disliking me because I left. These still eat at me a bit because I always figure there might have been a way to salvage the relationship with these managers. But I don't regret for one minute pulling out of those projects.

I'm writing about this because we're in tough economic times today (hey, if you've got enough bills to pay, times are always tough economically). We all need to make money, and the companies we work for need to see their bottom lines improve, too. But there's occasionally something lurking around the corner that's going to pay us money, but just doesn't feel right. I'm not going to provide examples, because I'm sure you can come up with one or two on your own. When you make ethical decisions that cost you money, you take a short term loss. But you'll feel good that you made a tough decision for the right reasons, and you'll have a reputation that can't be bought with money. So go out and have a great Quarter, and add making tough ethical decisions to your Best Practices Playbook.