According to “Sell More and Work Less” author and sales expert Alan Blume, there are four phases to the sales process: identify, qualify, present and close. Blume explains how to finesse the four phases and master the sales process to achieve greater results. Here we cover one of the tips from his book:
Tip 29: Use the one-tenth of 1 percent sales-price rule or create your own
“Let’s say you’re selling a survey research service costing $10,000. Does the dollar amount represent a small or large investment for your prospects? One way to answer the question is to use the one-tenth of 1 percent rule. I created this metric for many of the solutions I represented over the years and it was both simple and helpful. If your company is trying to sell a $10,000 solution to a prospect that has $1 million in annual revenues, your solution would cost them 1 percent of their revenues. That’s a fairly significant number to them.”
This percentage of revenue might prompt some real soul-searching, Blume explains, and might be too big an obstacle for a prospect to overcome. The same solution pitched to a prospect with $25 million in revenue, however, would mean the purchase would fall well under the one-tenth of 1 percent mark and would likely go down much more easily.
Working backward toward the cost of the solution, Blume says, tailors that solution to a prospect’s individual situation, making a sale far more likely. “Find[ing] a working ratio between the investment for your solution and the target household income”—and presenting your solution to a prospect in those terms—may counter objections based on price before they can take root.
The next time you’re working with a prospect, try this tip or develop your own “rule” and help your client see the cost of your solution in the right light.
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Alan Blume is an author, and as founder and CEO of StartUpSelling Inc., he works with small businesses on lead generation, sales, marketing, website design and branding. For more information, go to www.StartUpSelling.com.