128 Defending Your Price

<p>Salespeople don't set the price of what they sell.  This is usually an obscure outcome decided by someone else inside the machine.  It might actually be an elaborate process, where multiple variables are carefully calibrated, mathematical formulae are applied and a price is arrived at.  Or, it might be a slightly moist index finger boldly thrust skyward to come up with a number.  The latter is often the case when arriving at pricing for services. Regardless, the salespersons task is to sell at that price.  This is where we get into trouble.</p> <p> </p> <p>Salespeople are total wimps when it comes to price.  We have learnt that getting a sale is what counts and price is an obstacle in that process.  If we are on a fixed salary and bonus or base salary and commission, the two usual cases in Japan, we get paid when we make a sale.  Do we know the profit margin attached to each sale? Usually no and actually we don't often care either, as long as we get paid.  We are just happy to (A) not get rejected by the buyer and (B) get a win, however small. Our self-esteem is totally tied up with getting sales, modest in size or otherwise.</p> <p> </p> <p>The instinct of the salesperson then is to make the price as malleable as possible.  Offering a discount seems to get the buyer in a good mood and more likely to give us a yes.  This reduced price immediately impacts our commission and if we keep doing this, will also impact our bonus and job security, as we don't bring in enough revenue relative to the target.</p> <p> </p> <p>The key problem is that the salespeople often don't believe in their own product or service.  Because of this they can discount with gay abandon.  This is a short-term gain for long-term pain.  The ability to meet the price requirement is a critical piece of the salesperson’s skill set.  Dropping the price may be easy, but we never build the skills to really succeed in this profession.  It usually is a path to our removal by the sales manager, who understands we are unable to sell.</p> <p> </p> <p>Am