Introduction
Josh Sweeney: Hi, I’m Josh Sweeney, joined by my co-host, Taylor Barnes. Taylor, how are you today?
Taylor Barnes: I’m good, man.
Challenge Illustration
Taylor Barnes: I’m ducking and dodging. I got customers coming at me, trying to beat me up on price. I’m all on my own. I’m up against the ropes. I’m fighting back because we will not meet in the middle. We need to hold the line, Josh.
Josh Sweeney: Oh, man, I don’t know if this is like an Evander Holyfield moment, if you’re gonna get your ear bit off or if you’re pulling a rope-a-dope, like what is it?
Taylor Barnes: I’ve seen both.
Challenge Follow up ( I too have been through this… )
Taylor Barnes: I’ve gotten my ear bit off and I’ve been rope-a-doping and, man, how many times do you see this, Josh, just people getting beat up all the time on price?
Josh Sweeney: Oh, yeah, it happens.
The leaders challenge/purpose
Josh Sweeney: I mean, it happens for a ton of different reasons, which we’re going to talk about and, you know, we really just have to train our sales reps on how to handle these situations, how to be proactive and make sure we’re not getting beat up on price, right? We have to provide a certain level of value in our service and that level of value oftentimes costs money, right? We have to have everything in place to make that happen. So, what is the first reason you see people get beat up on price?
Taylor Barnes: On a daily, almost hourly situation, what I see is salespeople positioning themselves as a low-cost leader. That’s number one, is they go out there and they sell on price. They sell, you know, “Here’s what I do and I can do it at the lowest price. Here’s what we’re great at, and I can do it at the lowest price,” because they think that the customer is buying on price so that’s immediately what they go for is in the low-cost leader. Now, I will tell you, the reason that you get beat up on price after that is because if they hear your tone on being the low-cost leader and they, the customer, has got any inclination of a lower price somewhere else, well, they’re going to pull that lever with you immediately and say, “Well, I’ve got a lower price over here,” and all of a sudden, what are you doing? You’re immediately negotiating against yourself. Number one that I see all the time, Josh, people sell on price.
Josh Sweeney: Yeah. So, I mean, this happens both like overtly and different ways it comes out, right? So, you can just flat out know from the website that they’re a low-cost leader, right? They compete on price, that’s where, you know, “Hey, we got the best prices, we sell at the lowest price,” you know, very obvious things. And then there’s other things, like you said, there’s tone and then there’s — I’ve seen other people actually negotiate themselves down on the first call.
Taylor Barnes: Yes.
Josh Sweeney: You know, as a vendor of revenue operations and sales operations, you know, tools and training, you know, I’ve sat with somebody and heard them on their first call, “Well, oh, if that’s not right, well, then we can give you a better price.” I’m like that person didn’t even ask about price yet. This is the first meeting.
Taylor Barnes: Yeah.
Josh Sweeney: Right? You’re still talking about what challenges they’re having and how you can solve them and doing the intros and you’re already negotiating yourself down. Yeah, so there’s all kinds of ways this can come out.
Taylor Barnes: Just makes me laugh, Josh, because what you just said, I’m telling you, I hear it so often in my own organizations and other organizations that I work with, they come out and they say, “Yeah, it’s $100, but that’s list price.”
Josh Sweeney: Right.
Taylor Barnes: Before discounts. It’s like, well, they might have paid $100, you know? And trust me on this, guys and girls, the customer, especially if they’re in procurement, they will utilize their silence, okay? So expect silence on the other end of the phone when you talk about price. Don’t worry about it. But stop negotiating against yourselves. I agree with you 100 percent, Josh Sweeney, I think that’s one. And then kind of segue into what you were saying, I think people tend to lean on selling on price versus value, right? And that’s where, gosh, especially if you’ve got something special. I mean, man, that’s really where people shoot themselves in the foot. Just to give you an example, when we talk about our IP, okay? Our IP from an organizational point of view is, specifically, we’ve got engineers all over the world that we project manage at a very granular level and the competition typically says, “I’ve got a pool of people, pick one, and then you can have ’em,” right? Well, that’s the value that we sell on. We sell the end result, right? It’s kind of like the babysitter analogy that I always like to use. Every time a babysitter comes over, I say, “Hey, you know, what do you do for a living?” And she says, “Well, I sell babysitting.” I was like, “Give me more.” “I sell an hourly rate, $14 to $50.” “Give me more,” and she just looks at me with a question. I’m like, no, you sell date night. You sell —
Josh Sweeney: Right.
Taylor Barnes: — date night. That’s the end result that you sell. So, sell on the value. I sell — I don’t sell engineering rates. I don’t sell little widgets and pieces. I sell a good experience. I sell an end result. I sell an end result that’s going to make everything better for them. So, people tend to kind of say, “No, we’re selling engineers at $20 an hour. We’re selling this widget or this piece of clothing at $29 an hour.” We don’t sell the fact that great end result, we don’t sell the fact that this human being is going to look phenomenal in this outfit and they’re going to go out and make a great impression wherever they’re going. We don’t sell too much in the value. That’s another reason that this happens a lot, Josh.
Josh Sweeney: I love the babysitter analogy because it’s just so straightforward and basic and, you know, at just a core level, right? I mean, we don’t think about that, not everybody thinks about that in their business, you know? There’s the babysitter, you can get a babysitter, and they can just sell it for 10 bucks an hour for their time, right? They can sell date night, you know? I would go even further and say I would even pay more, you know, and I do pay more when I find out that there’s a babysitter that just make sure the kids, you know, keep all their limbs but they’re on their phone the whole time versus like we had an awesome babysitter when ours was younger and it was actually a guy which was better than most of the girls that we had there because he played football and I had two boys.
Taylor Barnes: There you go, yeah.
Josh Sweeney: You know, he played football for the school so he would play games with them, they would throw the football in the yard, like I’m like, “Wait a second, so not only are you babysitting but you’re going to keep them active and do things with them and not just be on your phone the whole time?” Man, that’s worth the money, you know? That’s selling value, you know? And we can do all of that in our business.
Taylor Barnes: I’m going to need that guy’s number, by the way.
Josh Sweeney: Yeah, I’ll send it over.
Taylor Barnes: 100 percent. Yeah, so that’s another one, Josh. I mean, I don’t know about you, but a lot of times, it kind of feeds into the first one. I think a lot of times, our reps go after the wrong kind of customer, the wrong kind of customer that is all about the price, right? That considers what you do a commodity.
Josh Sweeney: Oh, yeah.
Taylor Barnes: Now, look, if they consider what you do as a commodity and, look, maybe you are in the commodities business and, if so, then you have to be very price conscious, such as a Walmart and a Target selling specific SKU numbers and clothes and pharmacy drugs for x, y, z price because there’s lots of different places to get ’em, sure. If that’s in your business, then by all means, you really need to be — you really need to lean into that. But if you’re like a lot of other organizations out there that really have a value prop, that have a true intellectual property that’s going to bring massive value to your industry, then you want to make sure that you’re going after customers that aren’t going to try to be the low price — the procurement effort is going to be on the lowest possible price. There’s so many customers out there, Josh Sweeney, in our business, there’s so many big, big IT organizations out there, that’s all that they’re concerned about because they’re selling this massive outsourcing managed service for like a 10-year contract and they’re trying to backfill it with the lowest possible costs and there are good moments in that when it’s easy business but, man, if you’re going after a customer that is really only concerned with the price, I think, Josh, that might just be a bad fit for a customer.
Josh Sweeney: Yeah. I mean, there’s a ton of bad fit customers and we, as sales leaders, you know, have to train them to identify — train our reps how to identify those and they always say something early on where you’re like, “Uh, that’s not really working.” I mean, I just had this happen the other week, had a prospect come in, “Hey, let me look at what, you know, we’d love to hear about your services,” and told them about the services, says, you know, “Hey, it starts at this price point,” right? Let’s say it’s $4,000. He’s like, “Well, I’m more at like $2000, you know? I’m thinking I need to get something going for $2,000 then I can go up from there.” I’m like, “No problem. You know, that’s not a good fit for us but, you know, let me know who you find. I’ll send you over a few referrals to people I think work in, you know, work based on those rates,” right? “And what you might be looking for, so no problem, I’ll pass you off to the next person.” But, you know, a lot of sales reps try to recover those, try to come up with something, you know? And sometimes it’s the right time and sometimes it’s not, but saying no and saying it’s a bad fit saves you a lot of time and headaches really, you know, in negotiating the deal. What’s the last one we have on the list here?
Taylor Barnes: Probably — and I look at this and, gosh, this is so much easier said than done but educating the client on why you. Not what you do necessarily but why you. I mean, naturally, you need to identify who you are as an organization and what you do well so the who and the what are very important, obviously, especially when you’re introducing the company, but educating the client on why specifically you is an enormous part of this because, again, if you go, “The reason that you need to deal with me is because I’m a low-cost leader,” well, then you kind of just dug your own grave a little bit, right? But if you educate the client in terms of, “Here’s why us. Here’s why other customers chose us. Here is some tremendous feedback that we got. Here’s an example of not a price, of a project that went incredibly well from an end result point of view because they chose us.” Educating the client on why you, having very clear value propositions, having very clear canned statements in terms of why you originally, that means that if you educate — well, not every time, obviously, because customers can get squirrely sometimes, but if you lead on that kind of education, you’re going to significantly reduce the painful conversation, which is, “You’re not the low-cost leader, I see as cheaper price.” My response to that a lot of times is, “Of course you do, because they’re not as good as us. Of course you do, because they aren’t the same value as us. Of course you do, because they do it that way, we do it our way, and here’s examples on why it needs to be through us.” So I think educating the client, Josh, is a huge part of this.
Josh Sweeney: Yeah, and I think, you know, it’s not just educating on the value, right? There’s a lot of ways to educate on the value that we have to have. I also find that it’s educating on the service that is being provided. So, a lot of times, if somebody doesn’t have a background in your industry, the decisions that have to be made are made because they lack a certain knowledge so we have to educate them about the industry. You know, you can get a cheap — I like to use Wi-Fi, you know, just because we’re IT, I guess, you can get the cheap Wi-Fi, you can get the Cisco Meraki, right? Like one is top tier, premium, it’s going to solve all these problems, it’s going to integrate with everything else. The tools are there, the quality of service controls are there, all kinds of things are built in. Or you can get the other one, right? And the challenge a lot of times is the customer doesn’t understand the difference, right? They look at one and the other and go, “Both of them provide Internet and Wi-Fi, This one’s four times the price. I’m not picking that one,” right? But we really didn’t educate them on the solution and why, kind of similar to, you know, I use the example of the bad fit client talking about price immediately but the next step in that is if I don’t want to just dis — you know, say, “Hey, it’s not a good fit for us,” we have to then step up and educate them on why this price matters, why is there a minimum amount. I see this in a lot of service industries where it’s, you know, somebody says, “Well, I want to generate leads and I’m going to spend $500 a month on ads and, when it works, I’ll spend more,” and what we found is when we actually work with industry experts and talk to other people in these areas, they’re like, “Look, there is a minimum to be successful, you know? The minimum is $5,000 or you’re just not gonna get any results.”
Taylor Barnes: Yeah, right.
Josh Sweeney: So there is no ramp up, there’s — the starting point is a different starting point than you may be comfortable with so it might not be a good time. So there’s a lot of other education that we have to provide as sales leaders, as sales reps, just to make sure there’s not a major disconnect in what’s being asked for.
Taylor Barnes: Yeah, agree with you 100 percent.
Solutions
Taylor Barnes: So let’s get into some of the solutions. So, you just brought up a good one, which is, you know, on the education side. Now, naturally, we’ve got to make sure that our frontline understands, you know, what to say and what not to say. So, Josh, I know you’ve done a lot of this kind of coaching as well with organizations, talk to me about how do you go about looking at an organization and telling them what to say and what not to say? Do you build do’s and don’ts?
Josh Sweeney: Yeah, that’s — the best way I like to do it is go listen to a rep and record their call, right? So when they hit click to call in their CRM and it auto records it so that you as a leader can go back and listen to those calls, the best thing to do is carve out a few hours, listen to some of those calls, find out some of the things they said, bring those altogether and use that in your training, right? Because then you don’t have to go to a singular rep and call them out and tell them, “Hey, I listened to your call and this is what you did,” right? Like that’s not going to help from a culture and a sales culture perspective. You gather all of those together and you schedule a one-hour training and say, “Look, you know, here’s some of the things I heard on the calls, I want to reinforce those are good things to say. Here’s some things we don’t want to say and here’s why.” I think the why is also a big important piece of that. So, you know, not just, “Don’t say that,” but, “Don’t say that and here’s the reason we shouldn’t do that and here’s what it leads to.”
Taylor Barnes: Yeah, yeah, I agree with that 100 percent. You know, another one that I see a lot that isn’t very, very tough. I don’t know who’s got marketing departments and who doesn’t or who outsources marketing or whatever, but get some readily available material that can educate the client on the value during the sales process, right? So, we talked about value proposition, we talked about why us, we talked about intellectual property, we talked about a lot of these things. How about creating just a very, you know, easy-to-read, easy-to-consume something that explains exactly why you? I think we’d be naive to say that that doesn’t get torn up and thrown away sometimes, of course it does. That’s what people do, you know? But if you don’t have that available, then you’re not going to be able to — I guess what I’m getting at, it is really challenging to say everything on the phone call. It’s really challenging to say everything on that intro Teams meeting. Perhaps you’ve got a forum that will give you a possibility to present something and, in that case, fantastic. But, if not, you need to have some quick go-to material that educates the client on the value during the sales cycle because, that way, again, it just — repetitive, repetitive tone here, if you keep doing that and you don’t have a bunch of these documents that say, “999, 899, 799,” you will not leave them with this mentality that they’re going to get the best possible price from you. What you’re going to leave him with is that they’re going to get the best possible value from you. So, I think a quick go-to material on that, Josh, is a really good, easy solution for folks.
Josh Sweeney: Yeah, and the great thing about having this material, for me, and the thing that I love about this is it also provides multiple other touch points so you’re not just waiting for the next meeting a week later, right? We’re in the holidays so somebody says, “Well, we’ll talk in the new year,” right? And all of a sudden, it’s been two or three weeks, you know? When you have content to educate the client, all of the sudden, you have another touch point. “Hey, I know we’re talking in the new year, just wanted to provide this comparison document,” like using the example of the Wi-Fi, “This Wi-Fi versus this one, you know? This is why we selected this, these are the challenges you’re going to have if you don’t select it.” So there’s comparison documents, there’s educational documents, there’s value in positioning of the company so there’s all kinds of documents that we really should be using as touch points throughout the sales cycle in between those sales — more sales-oriented and close-oriented meetings.
Taylor Barnes: Yeah, agree with you 100 percent. I think there’s a big value in identifying a bad fit from the beginning when we talk about customers that might just be really focused on, you know, price. So, you’ve been there. You’ve talked at length about your value, you’ve talked at length about the why you, and then they go, “Yeah, yeah, yeah, but what does it cost? Yeah, yeah, yeah, but what’s the rate? Yeah, yeah, yeah, but what’s the damage there?” And they just really try to get down to the smallest possible consumable unit so that they can figure out, “How do I take that smallest possible consumable unit and then build my procurement model on it?” Right? That is possibly, if you’re in the commodities business, an okay fit, but if you’re not, if you’re in some other type of business that I think, you know, a lot of us are, you need to be able to identify a bad fit from the beginning. If they’re really concerned with price and they really want to be low cost or only deal with the low-cost leaders, well, then you have a decision that you have to make. Sometimes, again, I think it’d be naive not to look at volume. If you want to give them a great deal because the volume is simply massive, okay, well, then maybe you’ve got a logical business reason to do that, but you have to make sure that you are identifying a possible bad fit from the beginning and you can just break ties and like you said, Josh, earlier, “Let me refer you to somebody that I think might be more of a fit for you here,” and just wash your hands of it and move on. I think that’s a big one.
Josh Sweeney: Yeah, I think it’s probably the hardest thing to do out of what we’ve already talked about, right? Like teaching your reps what not to say and what to say and reviewing the calls, creating material and providing material and training them to send it proactively, you are getting insistent change management, but identifying a bad fit and training a rep to know that and move on and utilize that time at other places, I would say is one of the hardest challenges I’ve seen. I mean, are you running into that? Because they always don’t want to lose that one deal or they’ll name that one that they thought was a bad fit but it ended up being the big customer and it’s like the one unique one keeps them from saving lots of time in the future.
Taylor Barnes: Yeah, yeah, I do. And, look, I’m not saying that I’m the best, you know, manager in terms of this type of thing, I can tell you that the longer that I’ve been doing this, the more I say no because, again, it really comes down to, “Is that a good fit? Do they believe in our value? Are they gonna be a good long-term partner?” Whatever it is, whatever you have to go through, but that’s as sales leaders, right? And that’s who we’re talking to here. It is easier for us to say that at a high-level, strategic and vision point of view. It is really tough for the salesperson who’s trying to make a living —
Josh Sweeney: Yeah.
Taylor Barnes: — by converting deals. So, we as leaders have got to be, (a), empathetic. We’ve got to not just look at what’s on paper and say, “No, that doesn’t work, throw it out,” right? We have to dig in and we have to make a true, like good business decision, well thought-out decision and, as leaders, all we can do is make business decisions on the information that we’re provided, right? That’s the best sort — that’s the best chance of us making the right decision. So, you know, basically, I agree, Josh, teaching the reps what to say, what not to say, teaching the reps to take that a step further if they think this isn’t a good fit, that’s a whole different ball of wax, you know what I mean? And it’s much more challenging for a sales rep who might have a fish on the hook to let that fish go.
Josh Sweeney: Most definitely. So, the last one I think we have is, you know, really just selling the end result. So, this goes back to the challenge around selling value is, you know, selling the sizzle, not the steak, you know? What are you going to end up with? Where are you going to be when this is done? And keeping them focused on the end goal and the vision and I think I heard a good one in real estate as like a sales tactic one time that might go for this end result. So, the scenario was, you know, you’re showing all these houses and there’s always something wrong with the house, right? You know, it’s — they’re usually not perfect, you know? There’s something that’s off but there’s something that the person likes, right? The couple likes. So, the scenario here was the wife really loves big, tall windows in the living room, right? So they go in and you look and she’s like, “Oh, I love the windows,” just loves the windows and you’re like, “Okay, mental check, loves the windows,” right? And then you go into the other room there and she said, they’re like, “Well, you know, this one room for the kids are kinda small, you know? Not sure about that,” you know? And what they said was, “What you need to do is you need to harp on the windows as the real estate agent.” You need to — you come back out and you’re like, “How are you feeling about the house?” “Well, I really liked this and, you know, but that room’s small.” “Yeah, but just picture yourself sitting on the couch, you know, or having friends over and those big windows letting all the light in,” you know? It’s that end result, you know? Where are you going to spend most of your time, right? You’re going to spend most of your time with the family in the living room, not in the bedroom where you’re going to sleep and your kid needs a bed, right? There’s other play rooms or whatever it is, you know? So it’s really selling that end result, selling that end state. How else do you see in other industries other than real estate, of course, that, you know, selling that end result, what they’re really going to get.
Taylor Barnes: Well, I think, you know, to kind of apply it a little bit to what I was mentioning earlier on, selling an engineer rate, for instance, or selling a contractor — if you’re in the general contracting business, selling out contractors or whatever your situation is, if you happen to be selling people for a TNM or projects at a TNM thing. You know, selling the end result is absolutely the most important part but I like the way that you said that real estate example so here’s a hack. What we do when we go into this is we don’t say that it’s going to be perfect, we don’t say that the people are going to get along with every single on-site contact, we don’t say that it’s going to be, you know, seamless throughout, we don’t say that nobody’s ever going to get sick or show up late or any of that, right? So, the end result that you’re selling also can be fairly pragmatic and I think customers, the lady in the house in the example that you used, really appreciates that, right? So, you can lean on what’s very, very important to them and then you can also lean on the fact that it is going to be nearly perfect, almost perfect, just about perfect, almost 100 percent, maybe 90, maybe 95, whatever it is, but being open and honest about that end result and really what that end result looks like. That end result doesn’t mean that it’s going to be utopia. That doesn’t mean it’s going to be the most perfect engagement of all time. No one bats a thousand, right? No one. So, selling the end result, along with, “When things go wrong, here’s how we fix them. When things are, you know, here’s how we mitigate against possible risks.” In the people business, hey, they’re people. They can have a bad day, they can get sick, they can, you know, not show up, they can take another job. People are the most unpredictable people on earth, no pun intended. So that’s one of those things where you have to also — when you’re selling the end result, you also want to sell the, “Here’s really what to expect,” and I think if you do that, they’re going to see enormous value in you because you’re being very honest and pragmatic about it. The end result is obviously a success. That’s what you want to sell is a success. You don’t want to sell a perfect utilization rate, a perfect 100 percent service level agreement, a perfect milestone achievement on every step. You want to sell the end result and, “When things happen, which they will, here’s how I’m going to manage to them,” and if you do all that, they’re going wonder, “Man, I don’t even know if I need to talk about price because they’ve got everything in order,” and they want to know what it costs and whatnot but it becomes such a lower priority for them when you bring in all of these things that you’re going to bring to the table. Price, our goal as sales leaders, price needs to be third, fourth, fifth, whatever it is, and in our business, Josh, we tend to say it’s like the third or fourth most important thing. If it’s the first most important thing, we need to have a look if it’s the right customer, not to digress into another solution, but that is what I see having the most impact is selling the end result and telling them when things happen, how I’m going to manage to it.
Josh Sweeney: Definitely.
Final Question
Josh Sweeney: So with the final question and our final question to you as sales leaders is how are you helping your sales rep sell value instead of price?
Taylor Barnes: And this has been Purpose-Driven Sales with Barnes and Sweeney. Now, go lead on purpose.
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