Find Your Market's Sweet Spot
Enter the Project Grow Challenge presented by Entrepreneur and Canon USA for a chance to win up to $25,000 in funding for your business. Deadline is Sept. 15 2015. Click here to enter.
A new sense of "responsible consumerism" has spread--or, if you take a very long view of history, returned--and people now need more sensible, defensible justifications for buying what they want to buy, and what you want to sell to them. The good news is that almost anything can be sold to anybody at any time, if there is desire for it on their part, and if you have a sufficiently compelling money-at-a-discount story to tell. It is imperative that you develop ways to make yours a money-at-a-discount proposition.
I was once retained as a consultant to an individual who lectured on methods of preventing theft by employees and vendors' delivery staff. This individual was a reformed thief who knew how it was done from having done it. (This kind of theft is a little-known problem of huge magnitude. In the typical convenience store, for example, the theft equals or even exceeds the owner's profit.)
This expert ex-thief was teaching business owners how to prevent this sort of loss--and they were thrilled. In fact, he had boxes full of testimonial letters from store owners and executives citing specific amounts of money saved in the weeks or months following his seminar. These letters documented the saving of thousands of dollars per store. Some big companies reported savings of as much as $100,000 in just a couple of months by applying what they learned.
He had no idea what he was worth. He was charging only $500 to conduct his all-day seminar, and he had one little reference notebook with six audio recordings that recapped the seminar, simply packaged in a bag, that he was selling for about $30.
Let me confess: The first thing I suggested was that he raise his fees. In fact, I convinced him to triple his fee from $500 to $1,500 immediately. To his shock (but not mine), there was very little protest and no loss of clients. Shortly after that, the fee was raised to $2,500 with just a little client grumbling. Even at $2,500 a day, he was such a bargain that no one could afford to grumble too much. In essence, we were now selling up to $100,000 for $2,500. Who wouldn't buy that? And we had the proof to demonstrate it. Within a year, his fee was $7,500, and then doubled to $15,000, and he was still attracting more business than he could handle.
This Selling Strategy is Vital in The New Economy
I based his entire marketing program on proving that he was offering money at a discount. In other words, we showed the prospect such a large, compelling return on investment that he or she couldn't say no, regardless of the price, and provided a preponderance of proof that the bargain was real. So, there is the secret magic formula, in just seven words: Prove you offer money-at-a-discount.
There are numerous consultants in the fields of real estate mortgages, office leases, utility bill auditing, and freight cost reduction who guarantee that they'll help clients save at least $10,000, and require fees of only $1,000 to $2,000 or a percentage of monies saved. Well, who wouldn't agree to that deal?
That's the kind of money-at-a-discount "picture" you have to engineer and present for your product or service. The same basic principle applies to negotiating other types of financial transactions. Again, you can sell just about anything if you can show the buyer how the thing (not the buyer) pays for the purchase--how the thing is, in effect, free.
You may never come across a situation where that demonstration is as clear-cut as it was with my client in the theft control business. I know I haven't come across another such situation. But the technique can be applied, to some degree, to most businesses. It may take some long, hard thought, some research and some patience, but I assure you it's worth all that and more.
Sometimes this has a great deal to do with who you choose to sell to. This is a good place to point out the impact of "The Who Factor" in your income and success in selling. In many cases, the single most important factor governing a sales professional's income is who he chooses to sell to. Not what he is selling, not its virtues and weaknesses, not its price, not competition, not his own sales skill level. Who he chooses to sell to. Stubborn marketers and sales professionals refuse to acknowledge how much "The Who Factor" matters, instead striving for improvement that is fundamentally unavailable from better propositions, better presentations, better skills or greater effort.
Going back to my theft expert, there was a "sweet spot" for him in the grocery store industry once his fees topped $15,000. An owner of one or even two neighborhood stores was not a good prospect; he had the problem, but the entire amount of inventory in the stores and his sales volume was too small. A big corporation with 30, 40, 50 stores was not ideal because he had to sell to salaried executives who weren't having their own money stolen. The entrepreneurial owner of 4 to 12 stores was ideal.
Consider something like private air travel, whether charter or fractional jet ownership. It is so costly, there's no possible money-at-a-discount argument to be made, at least to most businesspeople. I fly private, and to fly, say, from one of our homes near Cleveland to Orlando and back can cost $15,000 by private jet. To fly first class on Continental costs no more than $1,500, or $3,000 if Carla and I are both traveling.
Sure, flying private, you get free valet parking for your car and don't have to buy magazines at the airport, but c'mon. One of the very few types of people this can be sold to with a money-at-discount story is the person whose time has enormously high value in terms of billable hours or deal-making. In private practice, for example, cosmetic surgeons and cosmetic dentists call it "chair-side value." So a client of mine, a dentist, (who has case values from $40,000 to $100,000+ and will chalk up about $20,000 for every day chair-side, and has more patients on a waiting list than he can accept) sacrifices $20,000 for every day he's away. If he goes to speak at a seminar and loses a day going, a day there, and a day flying back, he's out of pocket $60,000.
So if he flies there by private jet in the morning, speaks, and flies home that same afternoon, he "makes" $40,000. I'm in roughly the same position: My time at home, meeting with clients, or writing is worth, on average, about $30,000 a day. If I can buy a day for less than that with private jet travel vs. a commercial flight, I'm buying money-at-a-discount. Of course, I also have to be the sort of person who really wants to travel this way before it can be sold to me, but then the money-at-discount rationale helps a lot.
There's a similar, multifaceted profile to be identified for the ideal prospect for any product or service at any price point, and your income and enjoyment from selling will rise dramatically the more time you spend selling only to your ideal prospects.