“Not asking for a price increase currently erodes trust with your buyer.” – Mark Schenkius in today’s Tip 1104
Why you should ask for a price increase now?
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Scott Ingram: You’re listening to the Daily Sales Tips podcast and I’m your host, Scott Ingram. Today’s tip comes from Mark Schenkius. Mark is the founder of ROI 10 where he helps sales professionals get better at dealing with buyers. He’s also the author of “The Other Side of Sales,” where he shares his perspective after 15 years in procurement. Here he is:
Mark Schenkius: We have all seen the news; inflations of 5% or more are not uncommon these days. Raw materials, energy, labour. Just to name a few that cause this surge in inflation around the world.
That opens a big question for the entire sales community. What to do with this?
I mean, if turnover stays the same and costs increase, this means profits decrease as well or perhaps this even means a loss if margins have been low already.
In any case, it’s not a situation you should accept just like that, however from my experience talking to sales professionals around the world, they struggle to discuss this with their customers because they also know how tough buyers can be.
They are scared to put these requests on the table. And I understand that all too well.
To help you with that, I’m here to provide you with an interesting provocation. Here goes:
‘Not asking for a price increase currently erodes trust with your buyer’.
There, I said it. But more interestingly, here’s why:
If you do not ask for a price increase in the current market situation, you are basically saying to your customer or buyer: “I can take a 5 or 6% inflationary hit on my margin, because margins were already good beforehand”.
As a buyer, this would make me feel bad about our past dealings believing I have historically overpaid for the products or services you have provided. And that’s one of the worst feelings to have as a buyer.
Remember, a buyer never truly understands the cost structure of the product or service you provide. So, a lot of their decision-making is a mixture of emotions and facts.
Therefore, it is always important to make them feel good about current ánd past dealings.
So, in case you were struggling to go and see your buyer. Just do it. They expect you to.
Happy negotiations everyone!
Scott Ingram: For more insights from the professional buyer’s perspective. Definitely check out Mark’s book: “The Other Side of Sales,” and as always we’ll have links to that and more for you at DailySales.Tips/1104.
Once you’ve clicked over there, be sure to click back here for another great sales tip. Thanks for listening!