There isn’t a single sales approach, technique or rule that appeals to or even applies to everyone. Some of the best ones cause a small percentage of people to get very upset about them. Why? I guess when they have struggled so long they don’t think it’s fair to discover that there’s a simpler way. One person in attendance last week in Chicago thought so much of this approach he called me a dumb-ass. Fortunately, there were 75 others who loved it and half of them had already used it successfully.
The Rule of Ratios, which I explain in detail in Baseline Selling, helps you to justify a higher selling price. The Rule says that when you quantify your prospect’s problem, the cost of the problem must be at least double the cost of the solution.
In order to get to the Rule of Ratios, you have to be able to find the problem – the real problem – and the compelling reasons that would cause your prospect to do business with you.
For instance, in a recent selling situation, Mark, the salesperson, learned that his prospect’s system was broken. Not a compelling reason, just a reason. He learned that the company had lost customers as a result of the broken system. Not a compelling reason, just a reason. He learned that they lost their largest customer. Not a compelling reason, just a reason. He learned that the customer did over a million dollars a year with the company – now we have a compelling reason and we got it quantified. He asked how this problem affected John, the prospect, personally and learned that John has been working until midnight each day for the past two months. Just a reason. Mark asked how John’s wife felt about his hours and learned that she has been giving him grief for the last seven weeks and his kids hardly recognize him. Mark identified THE compelling reason. John, the prospect, will spend what it takes, not to fix the system, but so that he can be home with his family, the single most compelling reason there is. And if Mark is the only one that gets to that compelling reason, he will be the only salesperson who knows what to present and how to charge for it.
The Rule of Ratios says that this compelling reason justifies a solution of up to $500,000 as long as Mark provides a needs and budget appropriate solution.
Review your copy of Baseline Selling to learn more about how to uncover Compelling Reasons and quantify the selling price using the Rule of Ratios.