How to Pre-Qualify a Sales Lead

Hi readers,

Apologies for the long hiatus…been busy with my travels and tours and enjoying the monsoons hit the sub-continent!

Been thinking about writing on this subject for some time and was waiting for the right impetus to do so…this impetus came to me recently when one of my key account managers came upto me and asked me…”you have written and spoken extensively about qualifying sales leads,….BUT what about pre-qualifying sales leads??”

That was it and here I am …

(Please read my other blog on the subject- https://ashishtandon.wordpress.com/2013/05/06/steps-to-qualify-your-sales-leads/)

So now you got a long list of prospects?  Don’t know where to start?

Your challenge is to focus your time and energy on the prospects who are the most likely to buy.  And that means pre-qualifying your sales leads….before you call them.

and here I believe is what you need to do..

  • Step One: Visualize Your Target. Ask yourself the following questions: What is the specific benefit or improvement of my customers’ lives that will occur as the result of them using my product? How will they feel differently because they are using it? Who is most likely to experience these positive feelings? What is their income, position, experience and level of authority? Your goal for this step is to determine your ideal customer.LIVE A DAY OF YOU TARGET CUSTOMER !!
  • Step Two: Identify Your Strengths. Ask yourself the following questions: What is that we do better than any other company? Why should our ideal customer buy from us rather than the competition? If our competitors were asked (and answered honestly) what would they say that our company does better than anyone else? Your goal for this step is to determine what’s unique about your company’s offer, so that you can match those characteristics more closely to the expectations of potential customers.DEFINE AND UNDERSTAND YOUR USP!! and repeat that USP over and over and over again…
  • Step Three: Match Strengths and Targets. Ask yourself the following question: who, specifically, are the customers who would value and appreciate what our offering does better than our competitor’s offering? Your goal for this step is to determine specific type of customer which is the best match for your offering. This is a process of elimination, not inclusion! You want to pick your shots, so think like a sniper rather than a machine gunner.LOOK AT THE LOWEST HANGING FRUIT BY APPLYING YOUR OFFER TO THEIR IMMEDIATE NEED !! its that simple….
  • Step Four: Concentrate your Sales Efforts. Focus on those few customers who can benefit the most from your company’s offering. Your ideal customer should want your product, need your offering, be able to use your offering and afford your offering. Making sales calls with customers who don’t fit the profile you’ve created will probably be a waste of your valuable time.FOCUS ..FOCUS…FOCUS…
  • Step Five: Provide Feedback to Marketing. If you’re still getting long lists of undifferentiated leads, you need to help your marketing team (or whomever is passing you those leads) to better focus their lead generation efforts.  Your goal in this step is to make the four step process above more automatic, so that you don’t have to spend your own time eliminating unlikely prospects. MAKE MARKETING WORK!!

For more blogs on sales management, career management,marketing , please go to https://ashishtandon.wordpress.com

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please follow me and leave your comments-feel free to use my work for your sales processes!!

Ten Ways to Make Cold Calling Easy

Hi Readers,

This blog is a natural follow up to the blog that I posted yesterday which drew numerous visits…thanks for your continued interest and for the shares.

Yesterday I spoke of the ways to conquer your fear of cold calling https://ashishtandon.wordpress.com/2013/02/17/how-to-conquer-fear-of-cold-calling/

In this post I would like to touch upon the topic of ways to make cold calling easy and also FUN!! Yes Cold calling can be real fun and can help you break the monotony of your daily routine!! Dont believe me , then read on….

Many sales professionals dread cold calling, and that included me when I had just come on board as a sales rep with J&J in 1992.

And that dread, unfortunately, makes them ineffective when they pick up the phone to make the calls. If you’re not careful, you can end up in a cycle, where your fear of cold calling creates more failure, making you hate it even more.

It needn’t be that way. Fear (or hate) of cold calling is a very solvable problem,

The following according to me , are the suggested ten best ways to overcome the fear of cold calling…

  1. Make some phone calls. The fear that you’re creating for yourself is far worse than the reality of cold calling so overcome fear by doing.
  2. Make a lot of phone calls. The more calls you make, the more success you will have and the less you’ll notice the ones that don’t work out.
  3. Prepare. Know the goal, what you want to say, how you want to say it and how you want to represent yourself, your company, and your offering.
  4. Practice. Practice your cold calling conversation out loud and role-play with friends or colleagues. Then focus on your prospect rather than your fear.
  5. Start easy. Begin with your less important leads. Once you feel more comfortable, start working on the more important leads.
  6. Stay calm. If a prospect is rude, remember that they’re probably just be having a bad day and then move on. Don’t take it personal.
  7. Don’t project. Your priorities and your prospect’s priorities are different. Don’t read negative meaning into early conversations with your prospect.
  8. Keep your perspective. Some things are out of your control. But what is within your control is continuing to prospect and continuing to make calls.
  9. Make it a Game. Give yourself 1 point for every “no” answer, when you reach 100, give yourself a prize. (If a prospect says “yes,” that’s a bonus!)
  10. Have fun. The fate of the world does not rest on you and your telephone, so loosen up and be creative.

 

The Essential Sales Proposal Checklist- key to sales super stardom!

Hi readers,

I did not mention this key, actually critical ingredient which should be in the armory of every sales rep who aspires for sales super stardom!

I have been writing proposals for the last 18 years; proposals to my CEO, to my boss, to the investors, to my clients when I worked in B2B assignments.

Apart from developing the essential skills to help you CLOSE your sale, you need to possess above average proposal writing skills that hook your customer and get you to the final deal!

From my experience the following check list always works, till it became assimilated within me and I did not have to refer to it to send across proposals…but it takes effort and lots of focus to get this right , so please do not take short cuts. Believe me when I say this- that will be a short cut to a serious berating from your boss or worse!!

First things first- 

Examine the current draft of your sales proposal carefully. Then answer the following questions as honestly as you can:

  • Does the customer know who we are? ( Brief about the company, short, to the point always works)
  • Is the customer expecting us to bid on this? (Dont use the proposal as a shot in the dark, you must have generated traction to be able to send a proposal!!)
  • Does the executive summary address customer needs? ( Analyse customer’s need and then write the executive summary , customized to THAT SPECIFIC NEED…be strategic in your thinking big guy!!)
  • Is the executive summary one page or less? (It better be targeted at 1 page pal)
  • Have we replaced all the jargon that’s meaningful only to us? (Please dont assume that the client speaks your jargon and lingo!! assumption is professional sales hara kiri!!)
  • Are we sure that another vendor doesn’t have the inside track? ( Get inside the grapevine to get a hook around this one)
  • Does the proposal follow the customer’s specified format and outline? (Ask the client his preferred format- it not only gets you an opportunity to engage with the client, and develop a working relationship with him, but also puts you in a favorable light with your client, who will probably have higher regard for your professionalism than you competitor!! strategic eh…)
  • Have we removed all the meaningless marketing fluff (e.g. “state-of-the-art”)? (Again…please NO JARGON)
  • Has someone edited out other customer names from boilerplate material? ( There is no tearing hurry folks…dont assume and do a poor cut and paste job….it will be the end of you)
  • Is the writing clear and forceful rather than flat and technical? (Dispense with the tech jargon, and use lucid, clear prose and descriptions..always works)
  • Has the proposal been edited so that it contains no glaring grammatical errors? (Brush up your Grammar guys!!)
    Can the proposal convince the customer that we can actually deliver? (Use factual information, discussion points already mentioned in minuted of meeting and simple to understand graphs and charts…always works !!)
  • Does the proposal define how we’ll measure customer satisfaction? (Sales metrics, sales analytics, tools and dashboards HAVE to be a part of ANY proposal !! thats the real winner )
  • Is the proposal being submitted on time and to the right people? (Keep to the deadlines!!)

If the answer to ANY of these question is “NO” then you’ll lose the sale. It’s as simple as that.

The True Meaning of B2B Sales in the Solutions Marketing context

Hi readers,

My understanding of Solutions Sales in a B2B business has been enhanced considerably after my MBA program where I had taken Solutions Marketing as one of my key electives.

Based on my experience in B2B solution sales of 18 years and contemporary coursework in Solutions Marketing taught by Prof. Stephen Hurley, I am sharing what I believe is the essence of B2B sales in a Solutions marketing context.

B2B sales, as I was taught, and which I have practiced  is heavily dependent on an ROI analysis. The numbers used in the ROI analysis are the customer’s numbers, gathered through effective questioning.

(NOTE-2 key skills MUST HAVEs for a successful solutions sales professional- Financial analysis capability AND Interviewing /researching skills)
I taught my B2B sales people to look for ways of contributing to the prosperity of their customers’ business in five key areas: (1) sales, (2) employee or process productivity, (3) profits, (4) competitive advantage, and (5) cost control…If a B2B salesperson is talking about anything other than those five issues they are probably wasting their time and their customer’s time.

(NOTE- Keeping a focus on issues that are top priority for your client is key to success, otherwise there is the real danger to scatter your thoughts and energy all over the place and end up delivering nothing to your client, and certainly losing your incentives!!)

The five elements, mentioned above are interesting because they’re a map of what most companies think are important — and therefore provide hooks for B2B selling. 

I claim that there are only important two (2) goals inside every company: 1) increasing sales revenue and 2) decreasing cost of sales.  

To illustrate this point, let’s look at the five elements mentioned earlier

  1. Sales.  Nobody wants to decrease their sales, so this element is simply a restatement of the goal to increase sales revenue.
  2. Employee/Process Productivity.   Increased productivity decreases the cost of doing business, thereby decreasing the cost of sales.  If you increase productivity somewhere in a company in such a way that it increases the cost of sales, you’re decreasing profitability, which is stupid.
  3. Profits.  Increased revenue and decreased profitability means more profit, by definition.
  4. Competitive Advantage.  Any one can beat a competitor by giving away more value for less money; the trick is to grow at the competitor’s expense and still remain profitable.  Therefore, competitive advantage consists entirely of increasing revenues while either decreasing the cost of sales or keeping them stable.  Even product development (like building a better mousetrap) is actually just a way to increase revenues by making more sales.
  5. Cost Control.  You’d have to be an imbecile to control costs in one part of company in a way that ends up increasing the cost of sales and/or decreasing revenue.  Therefore, the only meaningful cost control consists of decreasing the cost of sales.

To repeat, there are only two (2) things important in a company: 1) increasing sales revenue and 2) decreasing cost of sales.

Therefore, if your B2B offering, through a solutions sales proposal,  focuses on helping your customer do either of those two things, you’ve got something that’s worth buying.

And if your product does both of those things, you’ve got a real winner.

So, in order to help you succeed in your product driven solutions sales efforts, you need to brush up your solutions marketing skills!!

Why You Need to Become a Great Explainer

Hi readers,

After posting the blogs related to sales over the past few weeks, I have been asked by my friends and readers – why are you openly sharing your “secrets” with the world?

My answer to this is simple- I only share my views based on experiences spread over 18 years of engagement at different levels as a sales professional. The points mentioned have real stories behind them and by mentioning these points I give nothing away. The only way to really understand these points is to know the context behind each and every point mentioned, which is only possible if you know the stiry behind that point.

Therefore in order to become a great sales trainer you also need to be a great story teller, a great explainer.

NOW being a great expainer is a skill that not only helps you train a crack team, BUT also helps you sell well to your clients, including your C-suite executives.

A speech is only so many pretty words until you drive home the message in a way that connects with the audience. That’s why you need to pay more attention to how you use explanation to describe benefits, challenges, and to set expectations.

“Explanation is a key attribute of leadership communications. Leaders know to inject their communications with verve and enthusiasm as a means of persuasion, but they also need to include an explanation for the excitement. What does it mean and why are we doing it are critical questions that every leader must answer with straightforward explanations.”

There are three ways to become an effective explainer:

  1. Define what it is.
  2. Define what it isn’t.
  3. Define what you want people to do.

But a great explainer doesnt just list a slew of benefits.

Too much detail can put an audience to sleep, but too few details won’t be convincing. It calls for a fine balancing act that comes only with practice.

I cite a recent example – Obama explained in an interview the importance of using taxpayer funds to assist GM and Chrysler in 2009.

“Our auto industry is the foundation for economies all across the Midwest and ultimately, for the country as a whole. And had we allowed GM or Chrysler simply to liquidate, that would have been a huge anti-stimulus on the economy as a whole, and could have dragged us even deeper into recession or even depression.”

Your B2B Customers Field Guide

Hi readers,

I have been blogging about the issues that dog sales reps, marketing managers in the B2B space today and have been getting a decent response to the content.

This post is based on what my team posed to me during one of the training programs that I led during my stint as the P&L head for a business recently in Africa.

This topic was discussed for almost the full session lasting an entire day and took the most out of me!!

So i think this topic deserves mention here in some detail- so here goes.

My take on who are the key stakeholders in the B2B business eco-system, who are the key gate keepers ( yep you cant wish them away, except if you become strategic in your approach!!) and most important, the decision makers, who will finally take the call on your pitch and give you the all important contract!!

The Engineering Guru (The GEEK..eeek!!)

  • Why he’s a stakeholder: Everyone trusts him to know whether something will actually work, including the solution you’re selling.
  • Quote: “Dialectial interference at subwavelength frequencies is manageable… if you’ve got reticular imaging, of course!”
  • Pros: Is usually willing to meet with sales folks.
  • Cons: He can and will bore you to tears.
  • Warning: May refer to specific Star Trek episodes during business conversations.
  • How to sell to him: Show that you and your firm are technically competent.  If you can’t talk major tech, bring along one of your own engineers.

The Purchasing Manager (Guy who hands you over your purchase order)

  • Why he’s a stakeholder: Controls the list of approved vendors.
  • Quote: “If you can convince me, you can convince anybody.”
  • Pros: Once you’re on his list, you’re there forever.
  • Cons: Can sometimes stop a deal permanently.
  • Warning: He’s so terrified of being exposed as useless that, if left out of the loop, he may act, well, loopy.
  • How to sell to him: Convince him that you would personally value his YES more than anyone else’s opinion because you know that he’s “naturally skeptical.”

The Head of Human Resources (surprise …surprise!!)

  • Why she’s a stakeholder: She knows everything about everyone.
  • Quote: “There are free donuts in the break room.”
  • Pros: Usually doesn’t wield all that much power.
  • Cons: Will stroke the gossip mill if you flub up.
  • Warning: Can be surprisingly devious.
  • How to sell to her: Invite her to key meetings.  Ask her who else should be attending.  And be the one who brings the donuts.

The Departmental Manager (Indentor..remember your friend on the shop floor)

  • Why she’s a stakeholder: She’s the one who actually needs your solution.
  • Quote: “We’re up to our ass in alligators here!”
  • Pros: Has problems that need solving.
  • Cons: Is usually too busy to listen to you.
  • Warning: She may be on the edge of burn-out, in which case she’ll be taking a leave of absence.
  • How to sell to her: Get the Engineering Guru to help you understand the manager’s problems, then get HIM to present YOUR solution to address HER problem.

The CEO’s Toady (Title May Vary, BUT you will get to know him pretty much earlier on in the engagement)

  • Why he’s a stakeholder: He’s the spy who watches the CEO’s back.
  • Quote: “He can’t see you right now, but I’ll be happy to hear you out.”
  • Pros: Incredibly easy to butter up.
  • Cons: Has all the CEO’s character flaws with none of his charisma.
  • Warning: Will be suspicious of any attempt to cultivate a relationship with the CEO.
  • How to sell to him: Since everyone at customer’s firm secrets hates him, he’ll appreciate any positive attention.  Ask his advice on how to get the CEO on board.

The Chief Financial Officer (Mr. Money Bags!! the treasury keeper and has the ears of the board!!)

  • Why he’s a stakeholder: Holds the purse-strings of everyone’s budget.
  • Quote: “We expect to see a significant ROI within three weeks.”
  • Pros: Can actually cut you a check.
  • Cons: Probably won’t cut the check unless forced to do so.
  • Warning: Secretly thinks that the concept of spending money to make money is “crazy talk.”
  • How to sell to him: When you present to him, make it quick, and stick to the numbers.  Don’t talk about solutions; talk about ROI.

The CEO’s Admin (Ace up your sleeve to keep away the other nasties!!)

  • Why she’s a stakeholder: She actually runs the company.
  • Quote: “I’ll bring this to his attention as soon as it’s appropriate.”
  • Pros: Probably won’t attend many meetings.
  • Cons: When she does, she’ll take detailed notes.
  • Warning: She may be, uh…, “overly close” to the CEO.
  • Care and Feeding: Always keep her in the loop. Ask her advice about how to work through the corporate bureaucracy. After all, she’s the expert

The CEO (THE BIG GUY with an ego to match!!)

  • Why he’s a stakeholder: He thinks he runs the company.
  • Quote: “If it doesn’t raise the stock price, I’m not interested.”
  • Pros: Is surprising easy to sell to.
  • Cons: Is surrounded by people who don’t want you to sell to him.
  • Warning: May suffer from “CEO Disease”, a malady where the CEO’s sphincter expands to cover his entire body, causing subsequent itching that can only be assuaged by underling osculation.
  • How to sell to him: Treat him like an equal.  And why not?  You’ve got something he needs; he’s got something you want.

Your Best Response to Three Common Objections faced today!!

Hi Guys,

I can totally relate to the reality of the markets today…

Since 2008, its been an uphill task for us all in sales and more so for our wonderful marketers, and its sad to see so many good folks lose their dignity, their livelihoods and their reputations in the face of some real tough objections ( brickwalls) coming from their clients, some of whom probably swore to be by your side through thick n thin….but have gone away just and market sentiments tanked!!

So lets look at some very difficult objections that sales reps have been facing recently and what could probably be the best answer to address these client objections

  • Common Objection 1: “I can get it cheaper elsewhere.”Response: “In today’s world we can almost always get something cheaper.  I’ve found that when smart people invest their money they look for three things: the finest quality, the best service and lowest price. However, I’ve also noticed that no company can consistently offer all three-the finest quality and the best service at the lowest price.  Which two of the three is most important to you in the long term?”
  • Common Objection 2: “I have a friend in the business.”Response:“There’s an old saying – I don’t know how true it is – that sometimes friendship and business don’t mix.  If you bought from a friend you might not say anything if you weren’t happy with the purchase, but with me you can just get on my case until you get what you want.”
  • Common Objection 3: “I did business with your company in the past and they were unprofessional.”Response: “I can really appreciate that.  I really hate it when that kind of thing happens to me.  You know, though, suppose the shoe were on the other foot and it was your company that had acted unprofessionally.  You’d probably fire the person responsible. That’s probably what we had to do, and now it’s my job to make certain that you’re treated right.”

If you know of other common objections please do let me know and give me the opportunity to share some insights with you all.

Five Critical Negotiation Skills for qualified success

Hi readers,

I did write on the subject of negotiation by mentioning 9 rules that may be helpful to executives while negotiating complex deals…and I know for a fact that since the financial debacle of 2008, the deals have only gotten complex !!!

Here is the link to my earlier post of the subject for your reference 9 Rules for Negotiating a Complex Deal

After giving this subject much thought, I decided to share these 5 skills that I personally believe have been crucial to my successes while negotiating with my suppliers, while negotiating with my sales teams, my logistics team, my production staff, my contract labor AND my clients and trade channel partners!!

So here goes….

  • Completely and honestly assess your relative position. Information is everything, and so is making sure you’ve got a completely honest and straightforward assessment of your position and your opponent’s, going in.  In my view it takes guts to look your self objectively in the mirror and say to yourself that given the information that you have you may have to decide a strategy- which may often mean, retraction, or simply “holding your ground”.
  • Study precedent, inside and out. Precedent means terms you and your opponent have agreed to in prior negotiations with other companies. It doesn’t matter if the terms were confidential; assume everybody knows everything. There’s virtually no defense against precedent in a negotiation. But remember, it works both ways.
  •  Plan for all contingencies, up front. Go in with a solid plan: Good cop, bad cop; worst case scenario; bottom line terms; under what circumstances do you walk out; which terms are negotiable and to what extent; when to hold back and when to offer a negotiating chit; the extent of your authority, etc. Anticipate all the same things from your opponent’s side.This definitely requires a 360 degree view and assessment of the negotiation process. Introspect, think , strategise and then act logically, without getting emotionally  involved in the process.
  •  Never negotiate with yourself. Under no circumstances should you offer revised terms until your opponent has countered. Make sure they’ve responded fully on every term before you counter. Of course, feel free to try to use this in reverse, but most are savvy to it and it may hurt your credibility.
  • Always seek to raise your opponent’s risk. This is especially critical in prolonged negotiations with ongoing litigation. Your actions, both at the negotiating table and in the court room, must always be designed to raise your opponent’s risk. Also, your opponent must believe you’re willing and able to go the distance. That means a big war chest and minimal exploitable vulnerability.

Your inputs and ideas are welcome….

 

 

 

10 Rules for Effective Strategic Planning

Hi readers,

I have been sharing my knowledge in the area of sales management and marketing with you all for the past few weeks. I think I did chip in with elements of strategy that I shared with you.

So in order to further this discussion on the subject of strategy , I decided to share this blog with you.

Strategic planning is a time consuming and very challenging process- I would know it because I have had to lead my team in such sessions during my stint as the P&L head for a CPG business in Africa!

I figured that in order to deliver a workable strategy through and iterative process, there were certain fundamentals that one has to be mindful of in the process of strategic planning and delivery.

These 10 rules are

  • The definition. First things first. Strategic planning is any process meant to determine a company’s future direction, including its key goals, strategies for achieving them, and business plans.
  • Executive owner and facilitator. You need a member of the executive staff to own the process from start to finish, plus an objective facilitator from outside the company with expertise in this sort of thing. 
  • The team. The team must be committed to participating in the entire process from start to finish. It’s usually executive management. There can be additions but there’s a size tradeoff: bigger equals more ideas but harder to manage.  
  • Rules of engagement. The facilitator or executive owner sets ground rules or rules of engagement, i.e. attack the problem, not the person; be quiet unless you have something material to add; don’t beat issues to death; no cell phones; that sort of thing.
  • The problem and process objectives. You’re doing this for a reason. Agree on the problem statement and objectives of the process. You can also give it a name if that will help galvanize everyone.
  • Situation or SWOT analysis. Takes time, but it must be brutally honest and objective with no sugarcoating. If you don’t know where you stand versus the competition, the entire process is a waste of incredibly valuable executive time.
  • No sacred cows. Executives get too close to and emotionally wrapped up in their groups, responsibilities, programs, and products. The team has to get beyond all the subjectivity to achieve open and honest perspective. Everything’s on the table.
  • Brainstorm. Be completely open to any ideas. When they’re all listed, have each person pick their top three ideas (weighted first = 3 points, second = 2 points, third = 1 point), then add it up, take the top x ideas, assign each to an exec who develops a business plan.
  • Coalesce. Present the plans, debate, coalesce on company direction, key goals, strategies, etc. Several meetings and iterations are fine, including bouncing off the next level of management and a controlled group of outsiders to get feedback (optional).  
  • Plan and execute. Develop a set of plans for communicating the new direction down through the organization and externally, affecting organizational and behavioral change, product development and launch, marketing and sales, etc. The devil’s in the details. 

My sincere thanks to my teacher, Dr. Daniel Deneffe, Global marketing strategy director, Arthur D’Little, who inspired me to research on the subject and to present this to you all.

Thanks also to all my teachers who taught me at my alma maters, the HULT School, Boston, and IMI, Delhi.

3 Strategies for Successful Pricing during a Downtown

Hi readers,

Since 2008, its been a struggle across the globe for leading brands- those providing cutting edge services and great products are on their edge trying to figure out strategies that will not only help them tide over this global recession and depressed demand, but also enable them to make decent profits.

Not an easy as it sounds.

The US markets have been sputtering at below par GDP for over 4 years, the Nigerian market, largely unaffected by global money markets has managed to delightfully buck the trend and has grown at over 5%, and growth in India currently stands at 5.5%, well much higher than that in the US, much lower than that seen in China, BUT well below its real potential.

Those who wish ( or wished ) to invest in India are cagey at best, or have already given up on the India story “fairy tale”perpetrated by the Indian Government and their spin doctors!

Business leader after another has painted an abysmal picture of the Indian economy and would rather take their investment plans overseas than sit on piles of cash here, with no returns.

So what are the facts-

The current economic climate might be the worst some managers have yet seen. With customers so jittery, the stakes for getting pricing right are high, and managers may be unprepared to avoid common pitfalls of pricing in tough times.

Based on my assessment of strategies used by successful businesses in past economic downturns, I have put together 3 generic strategic directions that the enterprise may want to consider before formulating and deploying a strategy that works in this downturn

  • Understand how price-sensitive customers will behave – and act on that knowledge more quickly than competitors.

A recession, is an opportunity to learn faster about changing customer behavior and gain advantage through this insight. You look not only at the taillights of the car in front but the car in front of him (and in front of him). By paying attention to your customers’ customers (and their customers), you can identify problems before your business crashes into some unforeseen pricing reality.

Essentially it entails that you need to develop client/consumer insights beyond your nose. This requires first class grip on analytics ( big data need of the hour!!), practicing DILO (Day in the life of) and spending more time with trade channel partners, with THEIR clients and comprehending their needs.

  • Consider the longer-term strategy before changing prices.

“The great danger is you take sensible short-term decisions that screw up your long term brand value,” says Cram.

What this means is this- dont get pressured into taking decisions on impulse- if the board or the CEO (under pressure from the board) starts breathing down your neck, action AND NOT reaction may be the best strategy. You need to understand that in times of crisis and pressure, anger and reactions are normal- problem is, that if it starts to impact the board and the CEOs behavior, some where down the line, the reaction needs to stop; better it starts with YOU and you put your head down to really think hard and think through and then put your well thought case to your CEO or the board. You will be better served when you are seen as a sane voice in a room full of senior executives gone insane with pressure!!

AND dont forget- your logic and a long term perspective has to be the underlying theme for your pricing strategy.

  • Be sympathetic to cash-strapped customers – and take care not to start a destructive price war by accident.

Make sure your price cuts don’t appear to be panicked reactions to falling sales. Your rivals will be watching you closely, and you don’t want to start a price war. If that’s a possibility, it’s better to promise to match competitors’ prices. And if it’s your competition that’s slashing process, think carefully before following suit. Your rival’s decision,  might be ”the idiot decision of one manager who is going to get fired.”

I could not agree more on this. Panic an knee jerk reaction to a competitors pricing policy is NOT the answer for ensuring long term sustainability of the business, the top line and the bottom line.