Margin Protection
 
With the economy as tight as it is, more and more businesses are feeling pressure to reduce prices. A local business owner was complaining that every time his competition drops their price to get business, it puts more pressure on him. In fact, a favorite tactic of many prospects is to get several competing bids and use the lowest bid to leverage a lower price from the others.
 
Margin protection is a huge problem for many businesses. Unfortunately, many salespeople feel that dropping price is the only way to consistently, reliably, and predictably bring in business. In fact, some operators even feel pressure to bid jobs at cost, just to keep their workers on payroll. It's a vicious circle that can consume a business.
 
Two questions to ask yourself are...
 
1. How do I get into these situations?
2. How do I avoid it?
 
First, if you find yourself under pressure to reduce margin, your prospect may see you as a commodity. After all, one nail is as good as another, right? So your product or service (although you try very hard to convince them otherwise) looks just like your competitor's product or service to the prospect. However, the reality is that people DO pay more for the same thing all the time.  For example, you may pay 69 cents for a bag of lettuce, or $3, the difference is one is a head of lettuce, the other is a bag of "salad." But those are packaged and processed differently you say? You’re right, so why doesn't your prospect see your product or service with that same amount of difference?
 
Second, don't put yourself in this position in the first place.  Rather than waiting for prospects to ask for a proposal, go out and dig up new prospects that have a need for what you offer, but haven't yet acted on that need.  This way you'll be the first in the door. And when you use a proven system that takes your prospect from introduction to close, the competition never comes into play. Margins are protected, the bottom line is bigger and you sleep much better at night!