Selling the Price Increase

1. Overcome fear and build confidence to effectively sell price increases

In every price increase conversation, the person who exerts the greatest emotional control has the highest probability of achieving their desired outcome.

Fear of rejection is the biggest obstacle for salespeople when approaching price increase conversations. This fear is deeply rooted in human evolution, as rejection once meant potential death for our ancestors. To overcome this, salespeople must:

• Develop "obstacle immunity" by intentionally seeking out rejection and uncomfortable situations
• Practice emotional self-control through techniques like positive visualization and self-talk
• Focus on preparation and practice to build confidence

By mastering these skills, salespeople can approach price increase conversations with relaxed, assertive confidence, significantly improving their chances of success.

2. Protect customer relationships while implementing price increases

Nobody likes a price increase, but they'll accept it when you treat them with respect, give them a reasonable explanation, invest in the relationship, and deliver value.

Proactive relationship management is crucial for successful price increases. To protect and strengthen customer relationships:

• Consistently deliver value and solve problems for customers
• Invest in building deep, personal connections with key stakeholders
• Communicate transparently and give customers advance notice of price increases
• Appeal to customers' sense of fairness and reciprocity

By focusing on these aspects, salespeople can make it "hard to break up" with them, reducing the risk of losing customers during price increase initiatives.

3. Follow a systematic approach to price increase conversations

Winging it and leaving outcomes to chance is exceedingly stupid.

The Five-Step Price Increase Sales Process provides a framework for successful conversations:

1. Set the stage
2. Prepare
3. Make your case
4. Leverage the assumptive close
5. Handle objections and negotiate

This process helps salespeople:

• Reduce anxiety and increase confidence
• Improve consistency and predictability of outcomes
• Ensure thorough preparation and effective execution

By following this systematic approach, salespeople can significantly increase their chances of securing price increases while maintaining positive customer relationships.

4. Craft compelling narratives and messages for price increases

Vivid, customer-centric narratives grease the skids of price increase acceptance.

Eight price increase narratives form the building blocks of effective messaging:

1. Economic fairness
2. Maintain quality
3. Continue services
4. Reverse value
5. Reciprocity
6. Past value
7. Present value
8. Future value

When crafting messages:

• Use the "because" statement framework to increase compliance
• Tailor narratives to each customer's unique situation
• Focus on answering the customer's "What's in it for me?" (WIIFM) question
• Ensure authenticity and transparency in communication

By mastering these narratives and messaging techniques, salespeople can more effectively communicate the value and necessity of price increases to their customers.

5. Master the art of closing and handling objections in price increase discussions

After you put the price increase on the table, be silent. Despite the alarm bells going off in your adrenaline-soaked mind, despite your pounding heart, sweaty palms, and fear, bite your tongue and give your customer space to respond.

The assumptive close is the most effective technique for securing price increases. To execute it successfully:

1. Deliver a confident because statement
2. State the price increase effective date
3. Shut up and wait for the customer's response

When handling objections:

• Use the "ledge" technique to interrupt the fight-or-flight response
• Apply the four situational frameworks: Just let them vent, Enroll them, Space and time, Relate-Explain-Confirm
• Stay calm and maintain emotional control throughout the conversation

By mastering these closing and objection-handling techniques, salespeople can navigate even the most challenging price increase conversations with confidence and success.

6. Negotiate price increases strategically to maximize profits

When you feel that you don't have value to articulate, it is easy to make the mistake of delivering a purely fact-based message. What you must not forget is that humans base acceptance on emotions first. We feel first, then think.

The D.E.A.L. Negotiation Framework provides a structure for effective price increase negotiations:

• Discover: Clarify and understand the customer's position
• Explain: Defend your position with compelling value narratives
• Align: Use give-and-take strategies to reach an agreement
• Lock: Secure tangible confirmation of the agreed-upon price increase

Key strategies for successful negotiations:

• Leverage "funny money" concessions to protect price increase points
• Use precise, irregular increments when making concessions
• Prepare a Give-Take Playlist in advance
• Focus on the value equation: Measurable Business Outcomes + Emotional Outcomes - Price = Value

By applying these negotiation strategies, salespeople can maximize profits while maintaining positive customer relationships.

7. Lead and coach teams through successful price increase initiatives

You need your people more than they need you.

The Three Pillars of Leadership Excellence for price increase initiatives are:

1. Leading: Shaping strategy and inspiring vision
2. Managing: Organizing, planning, and directing tactics
3. Coaching: Developing people through training and feedback

To effectively lead price increase initiatives:

• Clearly articulate the "why" behind the initiative
• Align compensation and incentives with price increase goals
• Provide comprehensive training and support for the sales team
• Monitor progress and offer ongoing coaching and feedback

By excelling in these leadership areas, managers can transform their sales teams into price increase machines, driving significant revenue and profit growth for their organizations.

Last updated: August 20, 2024