An efficient and reliable sales team is a key ingredient in the success of any business. If you have confidence in your salespeople, you can feel positive about the company bringing in a steady flow of new business and constantly refreshing its revenue stream.
However, it's important to make sure your team aren't heavily focused on making sales that they ignore all other priorities for the organization - such as actually turning a profit.
If people are incentivized simply to 'sell, sell, sell' and turn as many leads as they can into customers, they might be too quick to slash prices and offer discounts they know will get deals over the line.
While this might seem acceptable if it's securing new business, in the long term, low prices are likely to prove unsustainable and unprofitable for the company.
So what can you do to tackle this problem and improve the capability of your sales team when it comes to pricing?
Focus on confidence
Confidence is a vital concept at the heart of this issue. Your salespeople need to believe in the value of what they're selling, so they can go into every call, meeting or sales pitch with positivity and determination to secure the deal at a reasonable price.
Savvy customers will be quick to tell you there are plenty of alternatives to your product on the market and, if you can't offer a price they like, they'll happily look elsewhere.
Your sales reps should be ready to counter this by making a strong case for what sets your product apart and why your price is fair, given the value the customer stands to receive if they go ahead with the purchase.
This is why it's crucial to invest in product training for your sales team. Professionals who have a detailed understanding of what they're selling and what makes it unique will have the confidence to negotiate with customers and secure the right price.
Think about how you're incentivizing your team
As soon as you start to have concerns about your team selling at prices that don't make financial sense for the business, it's time to think carefully about how you're incentivizing sales.
If reps are given a financial motivation to make as many sales as possible, it shouldn't come as a surprise when they start cutting prices to close deals. People who are used to being measured and compensated on their individual performance can easily lose sight of the bigger picture and overlook the risks of pushing low prices and discounts.
It's important to remember that the sales team shouldn't be blamed for this. There are many reasons why your staff could come under pressure from various sections of the business to increase their closure rate. Senior executives, for example, might be keen to see boosts in sales at particular times of the year to show the company has achieved its quarterly revenue objectives.
Consider how you might be able to change how sales staff are incentivized to move away from the culture of selling at any cost. If profitability is used as the main measure of performance, for example, you could find that your reps are more motivated to sell products that have the highest margins.
Help salespeople understand pricing
For salespeople who spend the majority of their time talking to customers, nurturing relationships and hammering out deals, it can be easy to lose perspective on why prices are set at a certain level and why this matters.
Invest some time in helping your sales team understand the organization's pricing strategy, particularly about key issues such as how you compare to competitors and your wider company objectives.
This is another area where you could see the benefit of providing dedicated training to help people get their heads around complicated or niche topics.
Look into some methods you can use to inject some life and interest into a potentially dry subject, such as:
- Experimenting with different training formats, such as interactive or video-based sessions
- Incorporating an element of gamification
- Put the information in a context that will make sense and provide genuine value in terms of people's jobs by roleplaying hypothetical scenarios
By focusing on training and education, you can help your salespeople form a deeper understanding of core issues and priorities for the business, which will give rise to more positive practices in their day-to-day work.