My salespeople sell well only with discounts but at a great sacrifice in profits.  Is there no way around this? - Jenny (Business Owner)-Taguig City

I have both bad news and plenty of good news for you.

First, let’s spill the bad news.  If your salespeople are able to sell only by cutting prices, then chances are your salespeople are under-skilled, lazy or both. Much worse, the entire category of business you are in may have spiraled into a costly price war already.  The good news though, is that there are ways out of your predicament, some of which are strategic and others more tactical in approach.

The strategic approach involves a shift in paradigm from being sales or market driven to market driving.  Further to that, there are avenues of relief via strategic innovation. For either or both of these, there is no other better source of game-changing framework, tools and insights than the Asian Marketing Guru and Mansmith’s Chairman, Josiah Go.  You may want to check out his programs in our website: www.mansmith.net.

On the other hand, the tactical approach involves arming salespeople with the capability to sell value, handle commoditization attempts by buyers and negotiate their way out of merely handing over price cuts. Let’s go through each of them.

1. Sell Value
Value selling necessitates a deeper understanding of the customer for it to work. Hence, lethargic salespeople would rather just blabber about product information and price, thinking such will be a shorter route. It is a shorter one indeed—toward sales with lower profit or even the loss of a sales opportunity altogether. 

Value selling involves understanding the dynamics of customer needs, wants and constraints vis-à-vis the sense of importance or urgency and emotional involvement, relative to the customer’s situation and thereafter leveraging on such to develop a sales value proposition that presents the sum of benefits to be far greater than the cost of acquiring and enjoying it.

2. Handle Commoditization Attempts
Professional buyers know all too well the deadly potency of using commoditization to induce price discounting from under-skilled salespeople. Undoubtedly, the ability to handle commoditization separates the sales professional from the amateur salespeople.  Great sales professionals are more often able to minimize the impact or avoid this predicament altogether, while average sales professionals are able to use counter offensive- defensive tactics to weave out of this potentially sticky situation.

The last thing one should do is to go all out defensive. Instead, one should throw back the question and the pressure using “selling jujitsu.”  Let the buyer have the onus of proving your product or service is indeed a commodity as they allege it to be.  Meanwhile, u-turn back to selling the value. In the case of sales amateurs, they tend to take the path of least resistance, which is to give away the product or service with a costly discount or price cut.  Unfortunately, this may even turn out to be a sinking quagmire should the buyer shift gears to further bargaining.

3. Negotiate Way Out of Mere Discounting
Don’t bargain; negotiate if need be! If your salespeople are not aware of the difference between bargaining and negotiating, then they are way far off from helping you steer clear of profit wasters. 

In this regard, you may want to check out Mansmith’s negotiation courses designed to aptly redirect salespeople from merely closing deals to securing precious profits.  Navigating out of the discounting vortex requires knowledge and tools that help prepare salespeople in optimizing return on negotiations using the concession management process, the negotiation information tactics matrix and the simple mathematics of negotiations.

Conclusion
Commoditization is oftentimes a ploy to coax salespeople to throw the white towel on pricing.  As you are now aware, this takes a terrible toll on profitability. However, such can be minimized if not avoided. There are strategic solutions as well as tactical remedies.  Both can be availed of to complement each other. 

Avoid commoditization. Sell more profitably!

Rowen Untivero is a Partner and Chief Sales Strategist of Mansmith and Fielders, Inc. and is the developer/training master of Selling Science and 3 Negotiation Courses (Tactical, Strategic and Language of Negotiation), where related framework, processes, strategies and tools can exclusively be learned. Please send your questions, comments or feedback to mentors@mansmith.net, visit www.mansmith.net or text 0918-81-168-88.