How Reverse Sticker Shock Can Kill Your Deal

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What happens if you provide a prospect with pricing that is too low? Find out the peril of that approach in this episode of the Sales Management Minute.

A salesperson came across a huge opportunity that looked like a guaranteed win. This Fortune 1000 prospect was being gouged by a competitor and was not happy with the service or technology offered. This salesperson’s company could cut the prospect’s price in half, which was an industry competitive price point, and still have a great margin on the account. The salesperson put together the proposal with a 50% price reduction with more service and technology; and presented it to her contact person.

Yet, her prospect did not react as you may expect. Rather than being delighted by the savings, his face was filled with fear – reverse sticker shock. Come to find out that he had selected the other provider three years earlier and so he was responsible for the company overpaying.

How could he go to his boss and recommend this change without having to explain why they were grossly overpaying for the last several years?

The salesperson tried to counsel him through the discussion, but she never got the deal. That company continued to overpay for ten years – until the contact left the company. My bet is that proposal quickly went into the shredder never to be seen by anyone.

Before being quick to offer a huge savings to a prospect, consider the many vantage points that affect how that new pricing will be received and perceived.

See you next time on the Sales Management Minute.

Lee B. Salz is a leading sales management strategist specializing in helping companies build scalable, high-performance sales organizations through hiring the right salespeople, effectively onboarding them, and aligning their sales activities with business objectives through process, metrics and compensation. He is the Founder and CEO of Sales Architects, Business Expert Webinars and The Revenue Accelerator. Lee has authored several books including award-winning,  best-seller “Hire Right, Higher Profits.” He is a results-driven sales management consultant and a passionate, dynamic speaker . Lee can be reached at lsalz@SalesArchitects.net or 763.416.4321.