May 29, 2008

The Power Of A Drop - Sales Tip

Sales Tip: When And How To Use A Drop

If you are directly selling a product or service, or even assisting with others selling, you may know about an expression called a "drop". A "drop" is when you offer a potential price, with full intention to drop to a lower price. The psychological reason for the drop is that a client will feel like they are getting a better deal when they pay less money for a service they really, really want.

So, I recommend utilizing a drop when you're selling most of the time.* The way to make sure you have a drop to offer, is to make sure you start your price bid above where you hope to end up. To do this, you must offer more than the client needs, with the intention to reduce the price by eliminating the extra product or service that isn't necessary at this time. That may sound like playing games, but it isn't. People like to negotiate. You're letting them negotiate with you.

I use two different systems to create a drop. One is where I've offered more of the product or service than they need to buy, say 12,000 units, instead of 10,000 or 7,000 units. When they see the price for 12,000 units, and it is too high, they'll ask for a lower price. I'll ask if it is the down payment or the monthly that is the issue. Now the drop becomes a selling tool, too. Because I now have insight into whether or not they'll buy at 10,000 or 7,000. In addition, I learn how I need to structure the final deal, because if it is a down-payment option, I may need to offer a deal with less money down or build a creative solution to help them get in the door.

Another method to drop is to offer additional services that they'd LIKE but don't NEED to buy. I use this type of drop with ARRiiVE frequently. If someone wants help with capturing Top 10 Google position, I'll offer that solution, along with a Blog consultation, and additional service for monthly consultation after the project. Many clients zero-out the blog consultation and some don't sign up for the monthly consultation until AFTER the completion of the Top 10 is successfully implemented. So, this drop is useful.

You can also combine drops. For example, I could combine the blog consult with adding more phrases, then zeroing out phrases and the blog consult to arrive at a more compact solution that fits the budget they're seeking.

Try using a drop in your selling. You'll capture an additional 30% more deals if you master using this closing technique successfully.

*A drop is not recommended when you are responding to an official RFP. In that case, go in with your best price up front and make sure you differentiate ahead of the RFP release to position your solution as best meeting the client's perceived and created needs.

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