What if you were given the green light to go after new
business and sell at any price you wanted? You could discount as much as you
felt necessary to get the order. What do you think the results would
be?
Well, 30 companies in the test below were doing just
that. The results are really interesting.
The
business department of a major university conducted a test on 100 companies.
They divided them into three groups according to how they
sold.
~
The first group of 30 companies sold strictly on price. The sales people had as
much flexibility as they felt they needed to get the business.
~
The second group of 40 companies was allowed to give heavily controlled price
discounts.
~
The third group of 30 companies gave no discounts and sold at book
price.
The
results...
Group one sold the least amount on a
per sales person basis, earned less gross profit, return on investment was the
poorest in the industry. Price buyers would search for the sales people who
sell on price and try to squeeze the price even lower. The sales people
constantly complained that there was no loyalty among buyers.
Group two had a higher sales per person
than group one, earned a higher gross profit and had a better return on
investment. The sales people complained that if they had lower prices they could
sell more.
Group three had the highest per person
sales, the highest gross profit and the best return on investment.
THE
SALES PEOPLE WERE BETTER TRAINED IN SELLING STRATEGIES AND WERE ABLE JUSTIFY
THEIR PRICE RATHER THAN DISCOUNT IT!
