The Problem You're uncomfortable asking customers for what a project should cost. When the client says, “Boy, that's a lot of money,” you go back and cut your price. You settle for less than you could have made, and the client gets a smaller piece of their dream. “People have their own concept of how much money is a lot of money,” says Jack Hauber, a sales coach with the Sandler Sales Institute. If you think $500,000 is a lot of money for a remodeling job, he says, you will hate to ask for it regardless of what the prospect thinks is a lot of money.
Your feelings about money could be counterproductive if:
- You don't make major purchases without consulting many people and taking days or weeks to ponder the decision.
- Your markups are far below those of your competitors.
- You often negotiate your prices, justifying your actions by calling them exceptions.
- Your clients nickel-and-dime you throughout projects.
Most perceptions about money are deeply ingrained during childhood. Hauber recommends two strategies for “getting your head out of the way” when it comes to talking about money.
Baby steps: Incrementally raise your comfort level. If you're the owner and you use 30% markups but your competitors use 60%, go to 35%, then to 40%. If you're the salesperson and the prospect's budget is under your estimate, practice on low-risk jobs where “you can easily say, ‘I think it's going to be more than that.' Don't practice on the person who's talking about spending a million,” Hauber says.
Memorize a response: What comments trigger your deep-seated beliefs involving money? Rather than trying to understand the client's perspective, it's far easier to memorize a rote response, Hauber points out. The solution may be as simple as saying, “I appreciate your telling me that. When you say X, what do you mean? Can you tell me more about your concern?”
How One Remodeler Does It Kelvin Pierce, president of Commonwealth Home Remodelers, Vienna, Va., says that he “pretty much hated sales” for years. He claims that he succeeded to the extent he did only because he was the owner of the company and clients sensed a high degree of integrity, even though he wasn't very outgoing or gregarious.
Pierce's eventual turnaround came when he reoriented his “belief system” about matters such as money and fear of rejection. It took time, and Hauber's help, Pierce says.
He now believes in the prices he sets, says that he has “the courage to say no when I need to say no,” has more control of the sales process, and has a few different responses to objections. “Before, I would look at prospects and not know what to say,” Pierce comments. “Now I know what to say.”
Jack Hauber, Sandler Sales System, email@example.com, 301.590.8700, ext. 11.