“U.S. Inflation Rate Accelerates to a 40-Year High of 7.5%.” “Strong consumer demand and pandemic-related supply constraints continued to push up prices in January.” “Wholesale prices jump 9.7% in January, further evidence of red-hot inflation.”
Headlines like these have seemingly become commonplace over the last six months. Whether you believe these inflationary trends are transitory or longer lasting, as a business selling goods and services to other businesses you are likely to be raising prices to recover rising wage and supply costs and to try to maintain your margins. Subsequently you will face difficult discussions with your customers (and prospects) — with your sales team at the front line of these interactions.
Sales professionals are (not surprisingly) focused on selling — prospecting for new opportunities to serve customers and to provide them with differentiated solutions, driving value for them and revenues for you. Sales teams often do not have a vast store of knowledge to communicate price increases. And unless they have been around 40 years, these communications are surely not as developed or practiced as a prospecting call.
With the extent of the price increases in this current environment, your salespeople cannot afford to wing it. Your sales leadership and sales enablement teams must provide the right training and tools now to make these necessary albeit unwanted communications more digestible — for your team and your customer. Here are five key areas to focus your teams’ efforts.
UNDERSTAND MARKET CIRCUMSTANCES AND DRIVERS, AND PRACTICE EMPATHY
To truly serve customers, salespeople need to serve as sources of insight and market knowledge. Thus to the greatest extent possible, arm your salespeople with information about:
- The market drivers of the pricing changes
- Efforts your firm has taken to mitigate these impacts
- How your business is communicating this information in as timely a manner as possible to enable your customers to react and protect their margins
Most of all implore your sales force to be empathetic: listen to your customers, understand their issues and concerns, and be on the lookout for potential ways to offset these impacts with other solutions that may reduce costs elsewhere. A strategy of Seek to Serve, Not to Sell™ helps selling organizations maintain sustainable revenue performance throughout all market conditions.
TREAT EVERY INTERACTION AS A POTENTIAL OPPORTUNITY
During customer discussions, your salespeople should be on high alert to uncover alternative solutions that mitigate some or all of the price increase impact. For hard goods perhaps there exists an alternative part or redesign support. For software or services that may translate to bundled approaches or volume agreements that reach a discount threshold. There may also exist solutions you offer that your customer has not yet deployed that may help lower costs in another business area (i.e., cross-sell or up-sell). Ultimately, salespeople should not treat buyer communications about price increases as a scripted interaction but rather as a discovery session. Salespeople can feel like they are selling once more — while customers gain a trusted advisor.
POSITION AND ENABLE YOUR SALES TEAM TO HANDLE THE EXPECTED OBJECTIONS RAISED
Whether the price change is within your control or not, customers will likely raise some objections. Prepare your sales force to effectively handle these interactions with reframes:
- Appreciate the buyer surfacing the objection.
- Acknowledge the underlying concern (empathy).
- Understand the source of the objection.
- Position a strength, preferably a new offering or a differentiated approach you are taking.
- State the benefit of the interaction (timely communication, alternative approaches, etc.).
- Offer a relevant example of how this can help them / has helped others.
COMMIT TO EFFECTIVE AND TIMELY EXECUTION
Depending on the circumstance there may be a specific window of time (e.g., contract renewal, supplier price increases for you) that make the communication of these price changes time-sensitive. Typically, the faster you communicate the increases, the better you protect your margins — and the more time a customer has to respond and protect their margins. Make the actions and expected outcomes clear to your sales team. Help them understand why this is important to the company, to their success and to your customer.
PRACTICE FOR BETTER — MAYBE EVEN PERFECT — INTERACTIONS
If communicating price increases is not a developed skill among your team, take the time to practice the communications in mock scenarios. Record a sample effective interaction, arm them with cheat sheets on how to handle the call and the objections, and coach them to success. Then reinforce and remind often. Whatever your sales training and enablement strategy, do not let your salespeople use your customers or prospects as practice dummies.
GET THE PLAYBOOK TO ENABLE YOUR TEAMS TO COMMUNICATE PRICE INCREASES
Do not let price shock or sales communication fumbles derail your deals. Prepare your sales teams to handle price conversations and objections with ease and refinement — for our inflationary environment today and for any shifts into the future. We can help.
Learn how Mereo revenue consultants developed the playbook for objection handling strategies, price messaging and sales tools for Nextworld — a cloud-based ERP software provider — helping this new firm enter the marketplace competitively and confidently.