Handling Price Rises

Everyone hates a price rise!

"We can’t do that!", " It is too expensive!", " No one will buy that!", " We are uncompetitive!". The comments go on.

Interestingly having watched warranty sales people over many years handle pricing and product changes it is the sales person who has more problem with the price change not the customer.

Prices change daily up or down with any other tangible product with hardly a murmur but when it comes to the intangible product, “the warranty” all hell seems to break loose!

Sales results immediately plummet! Sales people stop asking! Confidence is gone over night!

Why is this? I guess over the years we have trained sales people to have great empathy with our customers. To put themself in the shoes of the customer so they can then position their sales presentation that satisfies the customer’s needs and wants and at the same time overcoming customers fears and frustrations.

The reality is the sales person is turning their thoughts “It is too expensive! No one will buy that! We are uncompetitive!” into their reality. In essence we all create our fears from our thoughts and so don’t take action because we are more scared of the perceived outcome; “They won’t buy that! Or, they are going to complain about the price.” In other words the salesperson has created a blockage to action in their mind which flows through to their words stopping them continuing to present the product in a positive light.

So how do we overcome this?

First the sales person needs to understand what is happening – their thoughts are creating their reality. Remove the negative thought and replace it with positive ones and overnight you will see a change in performance. You need to change the underlying belief levels.

This is a very powerful concept to understand and can be life changing for many people. Not only for selling warranty but all parts of life. Many people fail in life to achieve their dreams as they have already created their reality by thinking and focusing on all the reasons why they can’t do something, rather than thinking of the end result and all the positive things that will bring.

You can change many of these negative thoughts by

1. Developing positive self talk – "This warranty is cheap", "I am really looking after the customer by showing them the benfits of the warranty!", "We have got the best warranty in the market place!"
2. Holding a team “Grist Session” to get out all the issues, to develop positive strategies going forward that help each other develop a positive mindset
3. Create the right atmosphere that encourages a positive, supportive and fun loving, achievement orientated team
4. Regular one on one coaching – this is very powerful and often overlooked and under valued

The other reality which is often overlooked by sales people is that the warranty is not being bought by the same customer every day. In other words your customer on average only buys a new Plasma or Fridge once every 5 years or so, and the customer doesn’t know the warranty price. Only you the salesperson is aware of any changes. Not the customer.

Remember the customer doesn’t buy price! They buy the benefits. Focus on the benefits and value the warranty brings. Not the price! In Part 2 of “The Secrets of Selling Extended Warranty” e-course I teach you how to understand those benefits. You can sign up for the course at the top right hand corner of this blog.

I look forward to hearing your thoughts.

To your sales success!

Alistair