the dark art of psychological pricing strategy

“Psychological pricing involves far more than just presenting value. It also involves knowing your buyer better than he knows himself.”

~ Chandell Labbozzetta

What Does Psychological Pricing Entail?

I’d like you to think very carefully about the above question because it is absolutely critical to your understanding of psychological pricing and why people do – or do not – push back when you tell them the price.

Most of the time it’s not actually the dollar amount they’re pushing against – contrary to popular belief not everyone wants to buy the cheapest product available.

… It’s not even the value proposition you present (although that’s important as I’ve mentioned elsewhere).

… At the heart of every sale the buyer has to say “yes” to two questions:

  1. Do I trust this person and believe what they are telling me is true; and
  2. Do I like this person enough to work with them or the company they represent. (Note the modifier “enough” because it’s very important)

This means that one way or another you have to create some level of rapport AND you absolutely MUST show that you understand them. If you can’t do those two things then you might just as well throw your pricing strategy out the window – it doesn’t matter if you charge $2, $200, $20,000 or any other amount – you’ll be confronted with suspicion and objections. 

 

It’s About the Psychology!

I started my career in sales when sales training was mostly a question of scripts and pushing for the sale… And I hated it with a passion.

I really didn’t like the way that it made me feel and I would watch my mentors kind of push people into signing on the dotted line, see the hunted look in the victim’s eyes and vow never to do that to anyone.

So, I didn’t.

Instead, I studied up on the product.

I studied up on the person / company I was visiting.

I prepared myself thoroughly.

… And closed an incredibly high number of appointments and sales and won almost every sales award.

I quickly realised that it wasn’t a question of the price of the product, success lay in my understanding of the psychology of the buyer – once I had that, my pricing strategy fell right into place and the buyer would happily accept the product that I had already guessed would be most appealing to them.

In other words, my psychological pricing strategy became:

  1. Understand my buyer’s psychology and preferences;
  2. Select the product or package that was best aligned (the one they were really going to fall in love with); and
  3. Offer them that particular thing they already wanted.

This worked like a charm – unfortunately, it was very difficult to teach others – and if my prospect was in a hurry I couldn’t quite close the sale.

The Benefits of Psychological Pricing (No Degree Necessary)

You might be thinking – “Oh great, now I’ve got to get a degree in psychology if I want to sell.”

Actually, that did cross my mind at one stage and I was getting ready to enrol.

And then…

I went to a Neuro-Linguistic Programming (NLP) course. Practitioner level (for me) was more about sorting myself out as I’ve mentioned in my book Confident Closing: Sales secrets that grew a business by 400% in six months and how they can work for you! In Master Practitioner, however, I learned how to discover a person’s buying strategy in less than 5 minutes. At last, I had found the key!

This offered two incredible benefits:

  1. For myself: My preparation time was slashed and my system for understanding the other person became far more certain;
  2. For others: at last I had a simple multi-step formula that other people could implement flawlessly.

This one simple technique – layered on to the strategies I’d learned earlier cut 30 minutes off my sales calls and made it easy to get through to decision-makers. It also totally transformed my pricing strategy and the way I presented my pricing whether I was selling packages worth thousands, tens-of-thousands, or even hundreds-of thousands AND it was easily replicable.

What If I’m Not a Natural People Reader?

The great thing about this technique is that you’ll quickly discover that if you have ears and eyes you can learn to read people easily and effortlessly (which is not just helpful in your business life as you can imagine). It’s even better when you realise that once you are familiar with this technique and you add the tiny refinement I teach my students, you can move away from painful small talk and become the person your prospects and clients love to talking to so they always take your calls.

Becoming THE Preferred Supplier

This one small tweak took a powerful process to the next level and meant that skyrocketing sales was a no-brainer and taking advantage of psychological pricing meant that clients took the most suitable package for their needs close to 100% of the time – instead of playing it safe and taking something that wasn’t quite right for them.

If you’d like to learn more about how to do this yourself, why not join our next program?

Just imagine what would happen if you spent more time talking to ideal prospects and closing sales with qualified people in the next 3 months than you had in the past 3 years. This simple technique puts your pricing strategy on steroids – and makes every sales call fun and energising.

Sales Graph Hand Drawing By Businessman

“When your sales strategy depends on scripts rather than relationships and communications, any challenge or economic change can quickly become a crisis.”

~ Chandell Labbozzetta

How to Increase Your Sales Conversion
Rate

When your sales team and management focuses on tactics rather than strategy, you start to see the onset of what I call “Sales Sclerosis” or a hardening of the sales arteries.

Just as hardening of the arteries in your body is indicated by specific health problems – and can kill you if you ignore it – so the hardening arteries in your sales training and sales systems can be seen from some subtle indicators, long before they actually kill your lead flow.

When I was called to diagnose and cure the sales woes of a major Australian recruiting company they were already seeing their new sales decline and struggling to keep existing clients in a changing employment economy.

It turned out that the sales team had all been put through a highly tactical-focused sales training by a well-known company and they had all been told to “follow the script, or else!” Even the sales manager had been seduced buy the reputation of this company and, as sales started to slow and client retention slipped the advice was, “Just keep doing this, you’re learning and these are typical learner struggles.”

It wasn’t until the results for the second consecutive quarter showed a worrying decline that they started to doubt the sales process because, of course, ‘the pandemic changed everything.’ The truth is, that it didn’t really change everything, it just caused some disruption in an economy that had been quite stale for some years. This kind of disruption is part of life, so it should be part of your business philosophy as well.

If you’re trying to hire a sales trainer, there’s one question you need to get an answer to: “Are you teaching a fixed sales methodology?” If they say, “Yes, that’s the fastest way to increase sales conversion rate;” you should realise that it’s also very limiting. The answer you are looking for is: “No,  we teach an empowering mindset and flexible tools so you can sell anything to anyone.”

How to Develop Sales Skills and Cure Sales Sclerosis

Like so many other areas of life, building a successful sales team that delivers results in-season and out-of-season starts with your philosophy of sales. It is far, far easier to teach sales using a fixed script and system… and that method can be effective in specific economic scenarios, BUT there is a glaring problem with this approach: when the economy shifts or the perception of the economy shifts, the methodology stops working and your sales team is stuck with a tool that no longer works.

That is what happened to the recruiting company I mentioned before. The team had been taught a methodology and told to use it no matter what! There were even penalties applied if they were found to have deviated from the script – and of course, as soon as sales calls were shifted to online, recording them became painless. Instead of being tools to help them achieve results, the changing climate turned this methodology into a trap that stopped them making sales.

That’s why I am absolutely opposed to sales trainers that remove autonomy, judgement, and personal development from the sales equation. Techniques and tactics are useful, but the most skilled sales people (those who consistently deliver outstanding results) also hone their communication, judgement, and personal skills so that they have the flexibility to analyse any situation and determine whether the problem lies in the solution they are offering or in the sales presentation they are making.

Why Sales Training is Important

Too many sales people are taught that there is only one way to sell a particular item. That was what had happened in this team, even though several of them had been selling fairly successfully for some years.

When I started working with this team, one of the members was ready to quit. He had simply got sick of being forced into an uncomfortable methodology. His sales numbers had been fine at first, so he had ignored the sense of discomfort, but as his results dropped he really started to hate his job and complained that is was dull, he hated the constant rejection, and team meetings were simply miserable.

His numbers didn’t change right away, but as soon as he was given the tools to read his audience, the freedom to respond to his judgement, and the confidence to determine the root of both rejection and acceptance, his attitude changed. He started to look forward to his sales calls again. Six months later, he had developed his own style of sales that was incredibly flexible and effective and the team had started turning to him to resolve tricky sales situations where the clients’ need was evident, but they were struggling to see the value.

 

Developing a Resilient Sales Strategy

A resilient sales strategy is one that works in every economy. You can identify people who have learned a resilient sales strategy by their confidence, strong communication skills, and flexible thinking. Often, these people aren’t your typical extroverted personalities – they can even be quiet and reserved – which just makes their sales presentation and follow up even more authentic and persuasive.

A resilient sales strategy is a lifelong skill because it can be transferred to any context and media: one-to-many, one-to-one, TV, face-to-face meetings, life audiences, virtual meetings and it results in positive outcomes for (almost) everyone involved.

If you’re interested in learning more about how to develop a resilient sales strategy for your or your team, go to https://3sales.me/morecc to discover more.

“The easiest way to maximise your profits is to get the perfect balance between price and value. Do that, and your price elasticity is close to infinite.”

~ Chandell Labbozzetta

How Do You Determine the Value Your Service Delivers?

The higher the perceived value of your product or service, the easier it is to charge a high price for it. I’ve noticed that you get a lot more objections during sales conversations when a prospect thinks the price is too low for the value you present than if they think it is expensive.

When I’m working with a business or a department to assess their price, we start with the bottom-line price (see Pricing Strategies to Increase Sales In Service Businesses) and – in a completely separate exercise – we brainstorm all the ways in which it adds value.

I have some specific exercises that I use to explore many different aspects of the value proposition including:

  • Time saved
  • Peace of mind
  • $ value
  • Freedom gained
  • Customer benefits
  • Employee benefits
  • Owner benefits

Like all brainstorming efforts, the real value of this exercise is exposed when you have ‘bled out’ your ideas at least twice. We don’t stop until we have more than 100 specific value prospects listed because it’s only then that you are starting to dive below the surface and come up with things that make a real differential.

Talking to your clients is another way of learning how they perceive the value of your service. You’ll often discover aspects of the value that you overlooked, but which are really important to your existing (and future) customers.

The more clearly you (and your sales team) can articulate the specific problems your product or service solves and the way it improves people’s lives, businesses, and incomes, the easier it becomes to sell more and to raise your prices on everything you sell.

Do Price Hacks (like ending your prices with a 9 or 7) Really Have an Effect on Sales?

There’s a lot of nonsense talked about the importance of ending your price with a 9 or a 7. The data is based on very specific products in a specific niche at a particular time in the evolution of the internet. For most service businesses – and even products – it makes very little difference.

EXCEPT…

when you jump the line to another decimal place – or when you jump up another digit between 10,000 and 100,000. Let me demonstrate:

  • There is a whole category reaching from $1 to $99 – in this range it doesn’t really matter which particular number you choose (if you stack the value to price ratio correctly).
  • $100 – $999 is another category and again, in this price range there’s no difference.
  • $1000 – $10,000 is the next bracket in which your absolute digits have very little impact on whether people buy or not.
  • $10,000 – $20,000 – $30,000 … $99,999 all exist as separate price brackets that can make or break a sale.
  • After this, the ‘new decimal place’ rule is back in play – there is very little difference (to the buyer) between $100,000 and $800,000 as long as the value is demonstrated.

So… Your best pricing strategy to boost sales is to ask:

  1. Given the verifiable value of my product or service, which price bracket does it fit into?
  2. Is there anything I could do to nudge it into a higher price bracket?
  3. How can I position my product or service so that the price I am asking, it is a steal?

In my experience, businesses that focus on this strategy make more profits and sales than those who hyper-ventilate over whether their price should end in a 7, a 9, a 5, or a 3 – and (in any case) for most service businesses, you won’t actually get enough experimental data to make an informed decision.

 

The Most Powerful Sales-Oriented Pricing Technique for Service Businesses

“What your customers say they will do and what they will actually do are two completely different animals.”

~ Chandell Labbozzetta

Talk to the people who didn’t buy – and ask them what stopped them.

Talk to the people who did buy – and ask them what tipped the scales.

Above all… LISTEN to your customer feedback and questions, and those of people who have been referred to you.

The biggest mistake business owners make is that of listening too hard to non-buyers (who have opinions, but not experience) and not paying enough attention to their customers and the people they refer.

One of my clients (a personal trainer) doubled her sales after talking to someone who was referred to her. She asked the person, “What did Jim say that made you call me?”

“Oh, he said that you’d make every muscle ache, but that I’d never even dream of skipping a session because they were so much fun and the results were evident.”

As soon as she started talking about people never wanting to skip a session and organising their holidays around her availability she saw an immediate change – but it wasn’t something she had really considered talking about previously.

 

“You shall not pass!”
~ Gandalf the Grey

What is a Pricing Strategy and Should I Use One?

When I ask many service business owners what their pricing strategy is and how they arrived at their current prices, I’m usually greeted with an embarrassed silence followed by answers like:

  • My pricing strategy was developed by looking at my competitors and finding out what they charge;
  • I always set my prices by adding or subtracting $x or x% from my competition;
  • I carefully calculate how much it will cost me to deliver the service and add a fixed margin;
  • My pricing is based on an hourly rate;
  • My initial pricing is designed to get customers in the door and then I expect them to see the value I deliver and agree to pay a higher ongoing rate;

Sometimes I also get responses like:

  • My pricing strategy is based on the value I deliver; OR
  • Pricing varies depending on who I am talking to and what I think they will agree to pay.

A pricing strategy is like every other strategy you implement in your life: it is either conscious or unconscious. If you expect people to pay you for your services then you do have a pricing strategy, the question you need to ask is…

Am I Using the Most Effective Sales Oriented Pricing Strategy to Increase My Profits?

The truth is, pricing options for any item are almost infinitely elastic – and that is especially true for service businesses.

The cost of the ingredients used to prepare food at a Michelin Star restaurant has very little relationship to the price diners pay to eat there… (Although those restaurants aren’t always an example of profit-maximising pricing!) At Masa in New York City, you can pay $650-$800 per person for sushi – and you need to book your table well in advance. Meanwhile, at the food court down the street, you can get an almost identical quantity of take-away food for $8.95 – or you can pick some sushi up at the grocery store for even less. One sales oriented pricing strategy is based on exclusivity and scarcity, the other is based on volume… And that doesn’t even take into account the many other styles in between these extremes.

However, at the top-end of the pricing scale products and services have a cachet that gets them talked about and leads to more opportunities and more sales, so higher prices almost always drive both your profits and your sales upwards.

When it comes to service businesses, your pricing strategy must ensure that you not only cover your costs, but also include a profit margin that you are happy to sustain. From this point, everything you add to your service should also increase your profit margin.

So…

  • If your core product costs $1000 to deliver and you decide you want a 50% margin, then you need to charge $1500 (or more)
  • If you add another service that costs you $1000 to deliver, then your margin should be higher than 50% (let’s say 75%) – so you charge $1750 for that extra

This is called cost-plus pricing… And as far as I’m concerned it’s a good strategy for establishing your absolute bottom line – that line below which you will not go!

Did You Calculate Your Pricing Using a Specific Strategy?

You’d be surprised how many people don’t really have a pricing strategy at all.

I mentioned the typical responses I get from service business owners during my sales trainings when I ask how they arrived at their current prices. But the truth is that after a little more digging, they plucked a number out of the air.

Even if they checked out the competition’s prices, they never asked if that price was profitable or even realistic for their business once they factored in all the costs and overheads they needed to cover. 

I’m starting here, because most businesses are so anxious to get people in the door that they don’t think about what it will take to cover your costs. The truth is that if you can’t pay your bills you:

  1. Won’t stay in business very long; and
  2. Won’t be able to satisfy your customers and serve them adequately.

So, Before you mention your price to anyone, you need to work out how much money you need to make per week and how that affects your prices. From that bottom line, you can go up as far as you like (remember Masa!)

How Will a Price Increase Effect Your Sales?

I want you to think about how you feel when you are about to deliver work at a price that barely pays your bills…

You made an offer at a price so low that you are embarrassed to even think about it now – but at the time you were overjoyed to think that something would come into your bank account. Now you have to deliver the result. Your motivation is low and you’re desperately hoping that the client will sign up for a more profitable deal, but you are afraid they are just price-shoppers. Everything you do feels like hard work.

Now compare that with the project for which you are charging a profitable rate. You are much more responsive to the client because you aren’t racing against the clock to make it work. They are much more likely to agree to another profitable project because they aren’t price-shopping… So, you make more sales from a price increase, because you are more motivated, energised, and confident about your ability to deliver the end-result.

You feel the difference. Your clients feel the difference. And your prospects feel the difference too.

Therefore, you make more sales in total… And each sale is more profitable.

STOP selling on your terms. START selling on theirs.

Stacey was talking about her ‘failure’ to land a client…

“I must be charging too much or else I said something to turn him away. I thought Jon was ready to sign the contract, but it’s been three days and he hasn’t contacted me yet.

“Wait a minute, Stacey. You can’t just assume that things have fallen through like that. There are lots of reasons why he might not have got back to you. Have you tried calling him?

“No.” Stacey’s voice was glum. “This is what happens all the time. I think prospects are excited to work with me, but then they disappear.”

Stacey was making a common assumption that was killing her results… and her enthusiasm. Maybe you have caught yourself thinking the same thing:

She assumed that her prospects were as preoccupied with this one problem and its solution as she was.

What is Goal Setting?

The truth is that whatever problem you solve for clients is just one aspect of their business. They are busy fulfilling their responsibilities and solving a range of problems so even if the problem you solve is urgent, it’s not the only thing they are thinking about.

How to Handle This Reality and Make Everyone Happy…

  1. Follow up consistently. If necessary use more than one mode of communication. Your desire not to be a pest may be holding both you and your prospect back from achieving your desired outcomes. Presumably you have already had a conversation during which your prospect demonstrated their need of a solution and you explained your expertise in that area. Therefore, you already have a clear invitation to be involved. Don’t back away until they tell you to do so. Silence does not equal rejection.
  2. Ask questions and discover exactly what your prospect needs to make a decision. The chances are that their decision making strategy is different from your own and it’s your job to discover what it is and tailor your communication to meet their style.

These two simple techniques can transform your business results because suddenly you discover that the problem was never your solution or your price, it was ‘just’ a communication problem.

The Importance of Communication in Business… Not Just in Sales

I coach a lot of management and project teams, as well as sales teams because effective internal and external communication lies at the heart of business success… and is responsible for many failures as well.

Here are some of the key elements required for successful communication:

  1. Understanding your own preferred communication styles and strategies;
  2. Identify others’ preferred communication styles and strategies;
    Effectively use a variety of communication styles and speak to different strategies;
    Ask questions so you discover what people are really thinking rather than assume you know that;

When I asked Stacey how she responded when people seemed to ‘disappear’ and whether she followed them up and asked questions like ‘What do you still need to help you make a decision?’ Stacey’s expression said everything I needed to know.

She was judging her prospects by herself. Since she made decisions quickly after one discussion and hated saying ‘no’ she assumed that silence meant, “I’m definitely not interested but I don’t want to hurt your feelings.”

Things might not have changed, but she was facing a real shortfall so she decided to call Jon and ask him if he was still interested in her proposal.

“You were right. He wasn’t trying to shut me off!” was Stacey’s text to me that afternoon.

Communication is just as important in teams… and it’s even more important to know what it takes to get your team members on board since you’ll probably be working on many new ideas and projects over time. 

Maybe you only need to hear an idea once before you evaluate it and make a decision, but Sally needs to hear it at least three times… and Jim will need to be reassured constantly that it’s the right move. Once you understand the dynamics you’re dealing with you can build your communication around them and you’ll find it easier to get the support and resources you need.

Communication Makes Good Things Happen

You won’t win every deal, and you won’t get support for every idea, but if you know how to identify other people’s communication styles and strategies, ask good questions that enable others to express their opinions and needs, and have a variety of tools to help you communicate effectively you’ll soon discover that more exciting things happen around you than ever before.

Whats Second Nature To You... Is Transformational To Others

Transforming the Way You Think About What You Do

Have you ever made a comment in passing, only to have the other person jump on it with great enthusiasm as though the ordinary (to you) item you mentioned was a ground-breaking insight?

I was talking to a client the other day and she was telling me her internal struggles with the idea of raising prices and how she’d fought against my advice to do so because she felt inadequate even though she often had people say how marvellous her work was and how it changed their life.

In her words:

“It wasn’t until I actually followed the strategy you laid out for me that I realised how much more impact I created when I charged higher prices in the context of everything else you helped me set up.

Suddenly my clients paid more attention and followed instructions better… so guess what? Their results multiplied and my business grew even faster!”

The trigger was my simple statement:

“For you, it’s second nature. For others, this is life-changing.”

Here’s the deal, when you don’t put yourself out there and share your expertise because you assume that people already know the information you have, you’re not merely depriving yourself of sales and opportunities, you’re preventing other people from moving ahead and solving their problems too… and that’s a serious problem!

You probably remember the old saying: “One man’s meat is another man’s poison.”

It’s a dramatic way of stating that we’re all different and therefore, you should never underestimate the unique value you deliver to your clients.

At the same time, never underestimate the value that others can deliver to you and don’t just measure things in $ terms.

When you give yourself real credit for the value you deliver to clients there’s an almost magical transformation that takes place in yourself and your business. I’ve noticed that the week we work on this in my Profitable Business Accelerator is often the week that everybody reports a shift in their profits and other measures of success.

So ask yourself the question today:

“What is something that is second nature to me, that would deliver huge value to others who don’t know what I know?”

… if you can’t think of anything immediately, I can guarantee that you are shortchanging yourself and undermining your own confidence.

We Don't Give Ourselves Enough Credit

Often, the things that come easily to you are highly valued by your colleagues and clients. If you reflect on what specific things these are, you will feel motivated and appreciated and you will find that others will accept your ideas and proposals more easily.

Accelerate Your Sales Challenge

This week commit to spending at least 10 minutes before you start each workday making a list of all the things you can think of that add value to your clients. Review your list and keep adding to it each day.

… Tip: stick with it for a full 10 minutes (set a timer) even if you are sure there is nothing to add. The review will cement what you already know you are good at that adds value in your mind, and once your unconscious mind know that you are going to persist anyway it will offer more positive contributions.

#TuesdayTips

The elevator pitch is one of the essential business tools you need.  It’s rumoured that the elevator pitch came out of the process screenplay writers used to get the attention of producers and directors in Hollywood.  They were so hard to book time with that script writers would go to the movie office and wait for the producers and directors to arrive in their cars. Then they would get into the elevator with them, and spend the 30 seconds while they arrived at the floor to pitch the concept of their script.

An elevator pitch is not the only way to pitch your business, it’s not even the ideal way to pitch it, but it is an important way of getting your foot in the door.

Basically, an elevator pitch is your chance to describe your business and capture someone’s attention within 30 seconds.  Often, when people are asked what they do, they respond with a job title, or a profession like, “Oh, I do SEO.” “I’m a finance broker.”  That’s not really a conversation opener, because you already know (or think you know) what that means, so you lose interest.

An elevator pitch should be designed to capture a person’s attention and attract an emotional response because people buy on emotions and benefits, not on features. They’ll usually buy to solve problems too, so if you’ve got a solution to a significant problem that I’m experiencing, I will pay whatever I need to pay to get rid of that problem.  People are far more likely to spend money to move away from pain, than towards pleasure. So your elevator pitch is a very elegant way of being able to present the problem you solve very succinctly. 

If you were a mortgage broker your elevator pitch might go something like this: –

“You know how when you put an application in for a loan and you don’t actually get the loan but it goes as a mark on your credit rating whether you got it or not and that can influence how you get loans in the future? 

Well, what we do is we offer a specialised consultative service whereby it helps people to ensure that when they apply for the loan, that’s the loan they’re going to get, not adversely affecting their credit rating and making sure that the product is right for them. 

In fact, we just recently helped a solicitor to manage a situation with his client where he’d been to several brokers and had a problem with his credit rating. We were able to find the right product for him and save him around $2000 a month on repayments.”

What’s the problem, what’s the solution, what’s the evidence of each.

A florist’s elevator pitch might go like this: – “You know how a lot of wedding florists are out there arranging flowers that look fantastic when they leave the box, but halfway through the ceremony they’re wilting and  going brown already?

Well, what we do is we make sure that we understand what the needs of the bride and the bridal party are and where the wedding’s going to be and actually provide a consultative service to make sure that they have everything they need and that the right suggestions of floral arrangements are made for the particular day and the look and feel that’s designed by the bride for her special day. 

In fact we recently had a bride that came in and wanted red and white carnations.  Here, let me show you the pictures of how beautiful they looked.”

Your elevator pitch is a fantastic tool to use at networking events, because it’s a conversation opener, rather than a closer.

Not many people actually know what a Life Coach does, or what neuro-linguistic programming is.  So, if I go up to someone at a networking event and say I’m an NLP trainer or a Life Coach, they say, “Oh, that’s nice.”,  If I follow up with “Have you heard of NLP?” they’re kind of stuck.  Maybe they have, maybe they haven’t, but they don’t want to look stupid, and they’re not really interested.

But if I say,

”You know how sometimes people feel like they’re doing everything they can to increase their business and it just seems like they get rejection after rejection and that often makes them feel like they’re not very good at what they do? 

Well, what we do is we actually make people identify where those belief systems are coming from and use hypnotic processes to allow them to make changes at the unconscious level. 

In fact, I recently worked with a guy who had such a belief about money which actually stemmed from something his grandfather used to say, and he just used to hear him saying it in passing. We did a simple process that took around 10 minutes and that week he went and closed a $100,000 sale, one that he had been working on for about 3 months without any joy.”

I haven’t said I’m an NLP trainer, I’ve told you about a problem, I’ve told you about a solution and I’ve given you evidence on how I solved that problem.

People buy on problems and solutions, they don’t buy on features, and they don’t care what I call myself.  Maybe if they’re interested in doing some business with me they might want to find out a little bit more about that.  So the next question is, “Oh, how did you do that?” or “What hypnotic processes? Do you really believe in hypnosis?” It opens a conversation. Instead of engaging in a situation where they get stuck with a label, I’m drawing their attention to a potential problem that they might actually have.

Rather than saying, “I’m this and I can help anyone, tell your friends and family and anyone you know who has legs to come and see me.” I’ve told them the kinds of people I work with, and the problems I solve.  I don’t work with everybody. There are NLP trainers out there who work with children – I don’t work with children, it’s not a specialty area of mine. There are NLP trainers out there that focus on holistic, I tend to look at NLP in the context of business, in terms of how you communicate with people, how you are having joint communications, how are you projecting yourself within your business.

Sometimes when I mention hypnosis in a business context people are clearly thinking that hypnosis has nothing to do with business.  That’s actually why I like to put it in there, because it stops people in their tracks, and in the context of a $100,000 dollar sale it draws attention.  Here’s a secret: It takes people to run businesses, and the people that run those businesses have emotions and sometimes they don’t know what to do with them, so you need to be able to resourcefully deal with your emotions in order to represent your business.  Hypnosis helps people deal with the emotions that are stopping them from doing business really well.

If you sign up for our mailing list you will receive a special elevator pitch tool, but I want to lead you through the NLP way of phrasing your elevator pitch because it’s very purposeful and specific.  It’s deeply rooted in the science of communication, so you’ll find these patterns under different labels all over the place.  People use them because they are powerful and proven.

Opening with, “You know how a lot of people have XYZ problem …” draws the person’s attention to what you’re about to say next … it starts them searching their minds to find out whether that’s a problem for them and they try to think of times when they felt that way or when they had that problem.

Continuing with, “Well, what I do is …” frames the problem in terms of your specific solution and draws their thinking forwards from the problem to the solution.

And finally, “In fact, …” displays convincing evidence that your solution works, and cements the kind of people you help and results you get firmly in their mind.

So effectively you are answering several questions in your 30 second pitch:-

  • What are the problems that your service answers?
  • What are common solutions to the problem?
  • How do you solve that problem?
  • And then where is some evidence that you’ve been able to do that?

You may develop several elevator pitches that reflect different facets of your business, but each one should focus on a single aspect.  If you are not sure about how to develop your elevator pitch sign up to our mailing list and you’ll receive our fantastic Elevator Pitch Tool.

Meta Description:  A perfect elevator pitch is an essential business tool to gain the attention of your ideal clients, and help them refer others to you.

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Book your complimentary 30-minute Discovery Session with Chandell.

By popular demand we have turned many of our multi-day workshops into multi-week online courses with a live day to kick them off. Learn more at https://businessgrowth.mykajabi.com/masteryoursales

#TuesdayTips

“I really think you’ll love this skincare product, it’s 100% plant-based and all the packaging is environmentally-friendly and …”

“That’s not what I’m really looking for in my skin-care regime.  I want quick, easy, and effective.” was my response.

“But …”

And she’s lost me.  She didn’t listen.  Yes, I care about the environment, I care about the ingredients and all that – but when it comes to skin-care I care more about how it makes my skin look and feel, and how easy it is to use.  I’m busy, and every product I use needs to fit in with my lifestyle.

When you are selling something, listen to your prospect and ask questions so that you can work out what is most important to them, and discover why they would consider buying your product in the first place. 

You can only sell if people are interested in buying from us, so why do people buy?

People Buy When They Know It Is For Them

One of the problems service-based businesses face is that clients have to buy your services before they can fully understand the benefits you bring to them.  I hear this a lot from service operators and it frustrates me intensely. 

If you think about it you understand exactly why prospects won’t buy into something that they know little about because you wouldn’t do it yourself.  Savvy business owners stop complaining and start educating their prospects about the value of the service and what it will actually do for them.

I’d like you to meet Elizabeth, a Natural Therapies Practitioner who also offers Kinesiology, Emotional Freedom Technique and several other very valuable modalities.   She charges $125p/hour for her sessions and all of the clients she has worked with have had amazing transformations in their health and well-being so she has some very convincing testimonials and case studies.

Like most service business owners, Elizabeth needs more clients but she had trouble getting people to buy an introductory session to learn how these modalities might help them.

That’s not just Elizabeth’s problem, it’s a problem for many of us!  Why would anyone want to invest $125 just to find out whether something can help them? Most people have other things to do with $125 than just ‘try’ something out.  Even worse, what if I decided to give it a whirl and didn’t get the result straight away? I would probably go out and tell others about how Kinesiology doesn’t work and label Elizabeth as a quack to some of my friends/family. Terrible, but it does happen.

Elizabeth and I discussed the importance of educating people about Kinesiology and those other modalities – and how they could help.

How Can You Educate Your Prospects?

Elizabeth could hold a free monthly information session. Say, the first Monday of the month you can run an education session for 5-10 people that tells them about kinesiology, explains the problems it solves and the conditions it treats.  You might even provide a quick demonstration – but you mostly want to focus on the results it has given others.  You might make it free, or you might charge a small fee – but your goal for this session is not to make money, it is to get people in the door, so you need to balance a perception of value, with a ‘no-brainer’ situation.

This gives people who would never pay $125 just to ‘try it out’ the chance to get to know you and understand what you do without spending money on something they know nothing about. You can really raise their value perception. But you can also talk about what kinesiology can do for your prospect. Maybe they need it, maybe they don’t. Perhaps they really need it desperately, but they might not know that.   Once you’ve got them in the session you can talk about all these issues kinesiology and the other modalities address, and something triggers their response,  “Oh, I see value in that now, because it will release this issue that I’ve got, can I come and have a session?”

Problem solving, and how your solution helps people is much more interesting than if you talk about processes like muscle testing. Most prospects won’t really resonate with the details of your process because they don’t care – but if I’m a chronic migraine sufferer and you say, “I’ve got this thing called kinesiology, it helps with migraines and here’s the proof, come and talk to me about it.” then that’s helping me solve a real problem.  I don’t connect with the features of kinesiology, I connect with the benefits of it.  So what’s the end outcome? Ask yourself that question and then talk about those things – the solution to urgent problems.

Create Opportunities to Educate

Look, I get the struggle to attract clients, but I work on the philosophy of empowerment – I’m all about empowering people to move towards the goals they really want.  Complaining about the economy won’t change anything (although what we focus on does get out energy), but taking action to change will. I hope you’re starting to see how valuable this material is – if you understand yourself, and put yourself in your buyer’s shoes, you’ll find ways to help them understand the value of what you do.

You need to think creatively about demonstrating the value of your service – education does take effort, but it is much more effective than sitting around complaining about not having clients, or people being unwilling to pay your prices.

Meta Description:  Understanding what is important to your prospect in their buying decision is a crucial factor in closing sales.

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Book your complimentary 30-minute Discovery Session with Chandell.

By popular demand we have turned many of our multi-day workshops into multi-week online courses with a live day to kick them off. Learn more at https://businessgrowth.mykajabi.com/masteryoursales

#TuesdayTips

I see sales people and business owners all the time who assume they know exactly what their prospects and clients want.  Sometimes they are right.  Sometimes not.

If you think that people aren’t biting on the bait you’re putting out because you’re not getting the words right, think again.  That may be the reason, but what if it’s not?  It always pays off to examine other possibilities.

Most people will tell you exactly what they need and are listening for if you listen carefully enough.  Sometimes I do role plays with my clients where I actually get them to sell to me and it’s really interesting watching them just make assumptions about what my needs might be rather than spending some time asking me questions.

If you believe that you listen to others, then ask yourself how often do you actually hear what’s being said in response? That is the truly important thing, because often we think we’re listening, but we actually have a conversation going on inside our head while the other person is talking, “Oh my God, he said that! I must have to bring the conversation around to this other thing,” and before I know it I’ve missed half of what he said.  

We make assumptions like this with our clients all the time – we assume what it is that they need, and what we think they want and what they should have and all that sort of thing.  And we ignore the reality that we aren’t the one that needs to get them to the point of decision – they need to get themselves there based on the things that you’re saying.

When you’re selling you’re influencing and it’s the art of influence, it’s not the art of beating others into submission.  So I use the metaphor that you can lead a horse to water but you can’t make it drink, and the way people sometimes go about trying to sell to their clients, it’s like they’re dragging the horses and they’ve shoving their head in the water – drown or buy!  But a better way is to give your clients a thirst – feeding them salt so that by the time we’ve led them to the water they’re thirsty enough to drink.

If you were a Travel Agent in a situation where you’d looking to give people information about a holiday, you could make an assumption that they want to do some really great tours and that might not actually be what they’re looking for.  Some people love tours, but when I go travelling, the last thing I want to do is get on a bus with a whole bunch of people and be tied to the schedule when it’s time to go to the next place, because if I’ve seen that then I’m done and I want to move on. Or perhaps I want to stay here a little bit longer and have a look for a little bit longer, I don’t want to be on somebody else’s watch.

If you asked the right questions, you’d work this out and you might suggest some private tours which I’d probably be happy to pay more for because I would enjoy myself a lot more than if I was being dragged around.

So if you ask me. “How is it that you decided you were going to visit America this year?”

I might respond “Well, I always wanted to see the Grand Canyon, there’s something about it that just kind of draws me there.  I get caught up in the idea of going to this wondrous place and I imagine that the energy there is absolutely amazing and breath-taking and I just really want to be able to experience that.” 

That gives you the opportunity to ask more questions, “So what’s important to you about the experience, or what activities do you really want to take part in? and, Do you want to do the Grand Canyon by foot or do you want to do it by helicopter?  What sort of experience is important to you?  Have you given any thought to that?”

The chances are I’ll respond, “No, I’m really not sure, can you tell me what people do there?” Then I’m inviting you to actually give me some more information.

Now, most people would jump in there and start to do their sales pitch, but we haven’t stepped up the value, or gathered anywhere near enough information yet to be able to pitch to them, so don’t jump in too quickly.

Motivation questions are really important because I’m learning what’s really important to them about that project and getting insights that I can’t get any other way.  I can learn what information she already has, or what challenges she’s facing.

Once you’ve got information about what’s important to your client you need to demonstrate what you can do to meet those motivations.

If you ask somebody “What are the problems in your business at the moment?”  They’re usually not going to give you a direct answer.  They will probably be rather defensive, guarded and cynical about why you are asking that question.  Any answer that they do give you will probably only scrape the surface of the problem.  So if you want to uncover the problems they really want to solve you need to use indirect questions.

The answers to these questions help you to chunk down on the information because if the answer was, “I need some help.”  you need to understand how they define help.  As we discussed earlier, everyone’s language map is a little different, so this requires us to drill down and discover what the client means when he talks about ‘help’.  If I just jump in and offer what I would consider ‘help’ I might mean something completely different.

So you need to find that out from the client, because if you make an assumption about what that is then you might potentially lose out on, or you could upset the client because they might have expected ‘A’, and you’ve delivered solution ‘B’ thinking that was what they wanted. 

What this does is it helps you to identify the problems and that’s the key element of the questioning. When I have a meeting with someone, I like to take an interest in them, because I am interested in what’s important to them. If I go in and start pitching my product straight away in terms of what it could offer them, I then look like I’m trying to be interesting rather than being interested in how I can help them.

The more questions you ask before you start providing solutions, the more likely it is that your solutions will be welcomed enthusiastically.  Your client will know that you have listened to them, and will see that you understand their problem, so don’t be too quick to put them in a box and write the label – keep asking questions until you are certain that what you assumed is really true.

Meta Description:  Assumptions create misunderstanding.  Questions create clarity.  Don’t assume you know the answer, develop questions that help you find out what the answer really is.

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Book your complimentary 30-minute Discovery Session with Chandell.

By popular demand we have turned many of our multi-day workshops into multi-week online courses with a live day to kick them off. Learn more at https://businessgrowth.mykajabi.com/masteryoursales

#TuesdayTips

This is the final part of a detailed look at the 5-Step Sales Process.  So far we have looked at the importance of :-

  • Building Rapport; [Link to #20]
  • Asking Questions; [Link to #21]
  • Establishing Need & Value-Add; [Link to #22]
  • Proposing a Solution; [Link to #23]

– and now we will look at Closing the Sale – the part that puts the money in your pocket and commits you to doing the work.

Closing the sale doesn’t happen in a vacuum.  In fact, by the time you have completed step #4 you should know quite clearly whether or not you are going to make the sale.  If you find yourself losing sales at this point then you need to look closely at what you are doing in the previous steps.  Maybe you are not listening hard enough in the early part of the discussion, or maybe you are rushing ahead to the close.

I always love it when we get to this part of the Confident Closing workshops and participants share about their experiences with closing.  We had one that was extremely fascinating with two participants who had the same results (low sales closure rates) for completely opposite reasons. One man said that he was surprised when he walked away without closing a deal because prospects were always very, very interested in his product throughout the presentation, but when it came to the final decision they weren’t buying.  We went through his sales presentation process as a role-pay exercise and then I asked the group, “Why doesn’t he close more sales?”

The answer came back immediately, “He never asked for the sale.”

The participant was amazed.  “You wanted the product.  You could see it’s value to your business.  You told me that all the way through.”

“Yes, but you never told me how I could buy it or asked me to make a commitment.  I almost felt like a dog that was being teased with a treat.”

It took a few minutes to convince him, but he finally realised what his problem was. “Wow! I’ve wasted so many opportunities just because I assumed that it was obvious that people should buy.”

I met with this man a few weeks later and he said, “Chandell, Confident Closing was amazing – totally worth the 2-days I invested in it; but it was those few minutes after I presented my sales pitch that have really transformed my business.  I’ve changed my close rate from around 15% to over 80% just by adding 2 sentences to my pitch. ‘Do you think that would be of value to your business?’ and ‘Would you like to buy this?’  I can’t believe how much money I used to throw away.”

Anyway, we moved from this man’s sales process to one of the other men in the room.  My first impression of this second man was, “Why has he come to Confident Closing?  Surely he is already a fantastic sales person.”

It turned out that his closing rate was terrible, and I found that hard to believe, so when we came to the demonstration I asked him to come up and demonstrate his sales pitch.  The woman he was selling to had a hard time answering any of his questions – because he kept answering them for her – and he arrived at the closing portion within about 4 minutes of starting his pitch after totally missing the boat on every single one of the preceding 4 steps.

By the time he asked for the sale (which he did brilliantly), he had told her 15 generic reasons why she needed his service for her business (most of which did not apply to her); he had not discovered anything particular about what she did and he’d offered about 4 solutions that were clearly generic.  She had no reason to buy, and no interest in doing so, but he spent quite some time trying to persuade her.

He accepted the feedback, but clearly didn’t understand what people meant, so I offered to show him what it felt like.  I used his exact tactics to sell him one of my programs (not a strategy I would EVER use in real life).  After about 8 minutes he turned to us with a hunted look in his eyes. “I see what you mean.  I feel as though I’ve been bludgeoned with a blunt axe and I don’t ever want to meet you again.  There’s no way I would ever say ‘yes,’ to your offer, no matter how appealing it was.”

It was a very enlightening process for everyone in the room.  This second man came back to a later training with me and he had completely revamped his sales process.  The biggest lesson he learned was that if you spend  enough time on the first 4 steps, you don’t need to bludgeon anyone into buying at step 5.  When you ask for the sale, your ideal clients will simply agree to buy, and the others will go away with no regrets.

Do you have a favourite selling process?  How is it working for you?  Tell us about it in the comments. 

Meta Description:  Your sales conversation went really well, and you were sure that your prospect was going to buy, but you walk away without a firm deal.  What happened?  How can you make sure it doesn’t happen again.

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Book your complimentary 30-minute Discovery Session with Chandell.

By popular demand we have turned many of our multi-day workshops into multi-week online courses with a live day to kick them off. Learn more at https://businessgrowth.mykajabi.com/masteryoursales

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