Checkbook
Get Paid What You Are Worth
YOU MIGHT RECALL the funny scene in the movie Jerry McGuire where sports agent Jerry McGuire and his potential client Rod Tidwell are on the phone, yelling back and forth as Rod questions his agent’s resolve to represent him successfully. It all culminates in the famous line, “Show me the money!”
If salespeople would apply this mantra as part of their selling strategy, they would make a lot more money and save countless hours pursuing unqualified opportunities. “Show me the money, Mr. Prospect. Are you willing and able to invest in my product or service before I spend my time writing up a proposal?”
Many salespeople are weak in this stage of the sales process that we call “checkbook.” They fail to ask enough qualifying questions to determine whether their solution fits the prospect’s budget—their checkbook. They learn too late that the prospect is buying only on price, not value. They discount too quickly when faced with a good negotiator, or they write a proposal for a prospect who is really just doing research to make sure his existing vendor is still offering him a good price and value.
Here are a couple of common scenarios we hear from frustrated salespeople who are not getting paid what they are worth. In the first, the salesperson does her best to discuss the prospect’s budget, only to hear that the prospect has no idea how much money has been committed to the project. “Just put some numbers together for a review,” he tells her. The dutiful salesperson puts in hours of time writing a proposal, often involving personnel from other departments. The salesperson then meets with the prospect to go over the proposal. The prospect flips to the back page, looks at the investment required, and says, “That’s too high … more than I wanted to spend.” Since the salesperson has spent so much time on the proposal, she doesn’t want to lose the deal, so she quickly lowers her price without applying any selling skills such as countering with a concession strategy or simply asking more questions. As a result, she wins the business on thin margins, resulting in a very thin commission check.
In the second scenario, the prospect asks the salesperson to redo the entire proposal because the investment is too high. The salesperson still doesn’t know the budget and invests even more time writing up a new recommendation. He presents the new and improved proposal to the prospect only to hear, “We are going to put this on the back burner. It’s just not in the budget this year.”
It’s tempting for the salesperson to take the easy way out and blame the company’s pricing structure: “If our company had better pricing, I could close some business.” Salespeople also blame their prospects: “In today’s economy, no one buys on value … only on low price.” It’s easy to poke holes in these excuses by asking the following questions:
If no one is buying on price, why is your higher-price competitor still in business?
If your prospects are only interested in a low price, why are they setting an appointment with you knowing you are positioned in the market as the high-price, high-value solution?
The reality is that it’s not about the company pricing model or the prospect. It’s about lack of soft and hard skills. When we cover the checkbook segment of the sales process during sales training, we ask our participants two questions:
1. When would you like to find out whether your prospect is willing and able to invest in your service: before you write a proposal or after you write a proposal?” (One hundred percent of the participants raise their hands and reply, “Before.”)
2. When do you find out that your prospect is willing and able to invest in your products or services: before you write a proposal or after you write a proposal?” (The response dramatically changes as half the participants raise their hands and reply, “After.”)
It is the knowing-and-doing gap showing up again. Salespeople know what they should do. They know they should discuss and agree on the investment for their product or services before writing up any type of recommendation. But way too many still waste their time writing practice proposals that end up sitting on someone’s desk or in the wastebasket.
The frustrated owner or sales manager does her best to correct the price-shopping and practice-proposal problem. She reinforces the value of their product or service to the team one more time. Money is invested in negotiation skills training. She explains the importance of uncovering the prospect’s budget before writing up a recommendation. In some companies, compensation plans are changed in hopes of getting the salesperson to sell at full margin. Yet many of these well-intended strategies don’t work as well as desired because they don’t get to the root of why salespeople don’t charge or get paid what they are worth.
Certain sales and negotiation skills are absolutely helpful when trying to uncover and validate the prospect’s budget. However, these hard selling skills will only be executed if you are able to manage your emotions and apply equally important soft skills.
Our observation of salespeople who are exceptionally good at closing business at full margin indicates that they possess many similar emotional intelligence qualities: self-awareness, assertiveness, self-confidence. They are self-aware and recognize certain triggers from prospects and customers that tempt them to discount. Assertiveness shows up again in this selling stage. Good salespeople are comfortable asking for what they need. And they know they need to get the prospect’s budget before they invest time in writing a proposal. Self-confident salespeople know they bring high value and outcomes to their customers, and that conviction helps them stand their ground during tough negotiations.
Let’s explore each of these competencies and a few more to see their correlation in helping you uncover your prospect’s budget and get paid what you are worth. Our discussion will help you better qualify opportunities, decrease writer’s cramp caused by practice proposals, and increase your commissions.
In order to become comfortable discussing budgets with your prospects, it’s important to understand your relationship to money because it plays a big role in effectively executing the checkbook stage of the selling process.
During training, we take participants down memory lane with an exercise where they discuss with peers how money was viewed in their childhood homes. We ask them to discuss what message they received from their parents regarding money. Here are the common statements we hear:
“It’s not polite to talk about money.”
“Money doesn’t grow on trees.”
“Money is the root of all evil.”
“Don’t buy something unless it’s on sale.”
“Do you think I’m made of money?”
“Money can’t buy you happiness.”
If you take a look at these messages, none are very useful in helping a salesperson feel comfortable talking about money and charging for value. Statements such as “Money is the root of all evil” actually imply that if you are getting paid what you are worth, perhaps you are taking advantage of your prospect or customer.
A key emotional intelligence skill used during the checkbook stage is self-awareness. You must recognize triggers that cause you to concede to prices or terms that are not a true win-win for you or your company.
Consider the statement, “It’s not polite to talk about money” and the possible emotional triggers it can elicit. A client shares this story from her childhood. Chantal recalled a favorite uncle who had just purchased a new car and was showing it off to her mother and father. She didn’t know talking about money was considered bad manners so she piped up and asked, “How much did it cost?” Both parents quickly admonished her for asking the question. Her lesson learned at an early age was that money was none of her business.
After taking part in our exercise, Chantal became aware of the real reason she wasn’t discussing money with her prospects and customers. Unknowingly, she was taking Mom, Dad, and Uncle to her appointments.
When she heard prospects say something like, “I am not comfortable sharing my budget with you,” Chantal immediately went into flight mode and asked no further questions. She was a polite and unprofitable salesperson because she wasted a lot of time pursuing unqualified prospects who couldn’t afford her services.
Once Chantal became aware of the trigger, she recognized how an old, outdated belief system concerning money was affecting her sales meetings. She was able to change her response and become more assertive. She initiated better money conversations with prospects, which uncovered their budgets and resulted in solutions better aligned with their checkbooks.
Selling skills were not holding Chantal back from getting paid what she was worth; soft skills were.
Other clients share stories of how money was a point of contention in their homes. One parent was a spender, for example, and another a saver. The lesson our clients learned at an early age was to avoid the discussion of money because it creates arguments and hard feelings. These salespeople avoid the money conversation because of this association. They cross their fingers and hope the prospect has money to invest while wasting time pursuing unqualified opportunities. And as we all know, hope is not a good selling strategy.
Change Your Response and Change Your Results
As we have mentioned, emotional intelligence skills can be learned. You are not destined to live with old thinking-and-doing patterns.
Self-aware salespeople understand possible triggers from the past and choose a different response. When the prospect says they don’t know the budget or are hesitant to share it, the salesperson uses their empathy, assertiveness, and reality-testing skills to qualify the opportunity. They ask further questions to ensure they are not getting set up to write another practice proposal. Is the prospect willing and able to do business?
“Mr. Prospect, most of our clients don’t have a budget. That’s not unusual. (Empathy.) However, other clients with similar challenges have invested between X and Y in order to eliminate the problem. Is that a range you are comfortable with?” (Assertiveness and reality testing.)
The salesperson is comfortable asking for a range and most prospects have a range in mind, even if the purchase is not a line item on the profit-and loss-statement.
“Mr. Prospect, I’m curious about your hesitation to tell us your budget. Is it because you think we are going to come up with a magical number that just happens to use up your whole budget without giving you lower-priced options? (Empathy. The prospect might have had a bad experience with a salesperson taking advantage of him.) Or is it something else? If you are not comfortable giving us this information, we might have a problem. When we work with clients, we see it as a partnership. And at the foundation of that partnership is trust that we are not going to abuse your openness and honesty. What do you suggest we do?” (Assertiveness and reality testing.)
Emotional intelligence is about common sense. And common sense tells you that your prospects always have some type of budget; otherwise, how can they tell you that your prices are too high?
Examine your relationship with money. If you aren’t comfortable talking about it, then you’ll need to get comfortable wasting time and energy on unqualified opportunities.
What’s your money talk?
Learn to Deal with Good Negotiators
Strong negotiators are skilled at using tactics designed to create emotional reactions. Jeanette Nyden, author of Negotiation Rules (Sales Gravy Press, 2009), addresses the importance of emotion management in negotiations. “It is imperative that you recognize tactics so you are not drawn into reactionary conversations,” she writes. “If you hold the line, and calmly pack your bag, the prospect’s tactic is not effective. If you get weak in the knees, and give in, it is effective. Ultimately, it is your choice to respond.”
What great advice! Years ago, one of my clients successfully used a negotiating tactic with me. We were just getting ready to finalize a sizable project when he did the “throw-in-one-more-thing” tactic. He said, “This all looks good. By the way, we are having a retreat for our senior executives up at the Ritz Carlton in Beaver Creek, Colorado. It’s on the weekend so we invite you to bring your husband. Could you throw in a morning of training that weekend?”
The idea of a weekend in the mountains with my husband at beautiful Beaver Creek Resort was enticing. I got excited and let my emotions get the best of me. I quickly said “yes” without any concession strategy such as, “How about if I throw in the morning training at half my fee?” Was it lack of selling skills or emotion management skills that led me to reply “yes” too quickly? It was absolutely a lack of soft skills, impulse control being one, that prevented me from using my hard skills of negotiation.
It’s important to learn negotiation tactics and selling skills to recognize when they are being used during a meeting. I would never have spotted the tactic, however late, had I not invested in negotiation skills training for myself. When another prospect attempted a similar tactic that caused the excitement response, I recognized it. This time I did a much better job of managing my emotions and applied an effective counteroffer.
Case Study
A colleague shared a story that is a good example of a salesperson refusing to be influenced by prospects who use emotional triggers during negotiation. In this case, her soft skills yielded hard sales results.
Beverly is a consultant and presentation skills trainer. She had met with her prospect twice, interviewed all the buying influences, and had discussed budget. Deal flow was progressing nicely and they were ready to sign the contract.
As she and the prospect were outlining the final rollout of the training, her prospect leaned back in his chair and said, “Okay, let’s discuss your fees.” Beverly was a little puzzled, as they had already discussed her training fees. The prospect informed Beverly that he never paid full price for anything. He then asked her what she could do about her pricing. The prospect was using a negotiation tactic. Lower your price, he implied, or we may not have a deal.
Beverly did not have formal negotiation or sales training under her belt. What she did have was high self-regard and assertiveness. Beverly wasn’t arrogant, but she knew the value she brought to her clients. She simply stated her position, the truth.
“Dan, I can’t discount because I work with too many clients in this area and all of them are very comfortable paying this investment due to the return they get from my training. I am not sure what to do since I can’t lower my price. It wouldn’t be fair to all of the other companies that I have worked with that have paid that investment. And the reality is, my calendar is really booked. It doesn’t make sense to discount.”
Dan was more than a little surprised at Beverly’s unflinching commitment to her price. In the end, he hired Beverly and told her that she was the first “vendor” he’d ever paid at full fee.
Beverly managed her emotions and earned a new client without eroding her margins. Her confidence in her value helped Beverly stand her ground and not cave to price concessions. Soft skills earned this contract at full fee, not selling skills.
She also unknowingly applied a powerful negotiation skill, explained next.
Years ago, I attended my first negotiation skills training class. The instructor was a confident woman who walked across the room, put one foot up on the table, and opened the workshop with these words, “If you can’t walk, you can’t talk.” She went on to explain the importance of not being attached to the outcome of a negotiation, referring to the power of being willing to walk away. This is an example of mindset over process. If you don’t have the right mindset, and manage your emotions, you will not get paid what you’re worth.
Walking away is not just a tactic made up by negotiation skills trainers. It’s based on research that shows people want what they can’t or don’t have. In sales, the skill is often referred to as the “takeaway.” Take the offer off the table and people seem to want it more than ever.
Retailers have used this concept for years. “Receive 50 percent off today!” “Only four more left!” Think of Black Friday and Cyber Monday. What is really driving people to get up at the strangest hours of the morning? Are the deals really that good or is it the concept of scarcity and the fear they might miss out on a good deal?
Most salespeople are hesitant to use this powerful approach. This puzzled us for years, and we kept throwing the wrong solutions at the problem in order to gain more buy-in to this selling concept. We’d share success stories and specific examples of how and when to use this tactic. Clients would practice and role-play in order to get comfortable with the idea of the “takeaway” or “walk away.” Despite all this, we didn’t see an increase in application of the method.
Once we gained an understanding of emotional intelligence, however, we discovered the root cause for lack of buy-in: poor emotion management. Salespeople lack self-awareness of how they respond to negotiation tactics used by prospects during a sales situation. When a prospect starts to negotiate, many salespeople go into fight-or-flight mode. They try to save the deal by discounting rather than showing a willingness to walk away.
Consider these common negotiation tactics used by prospects and the possible emotions they trigger—emotions that cause salespeople to discount without further questioning or counterstrategies.
“Your competitor is 20 percent lower. Can you match their price?” (Panic, anger, desperation)
“We’d like to go with you. We think you have the best solution. However, your price is a little high.” (Flattery, panic, optimism)
“We’ve had a really tough year. Can you do any better?” (Empathy and feeling sorry for the prospect)
It’s important to note that these statements are tactics taught in formal negotiation skills training. They are designed to tap into a salesperson’s head, his emotions, and get the salesperson to lower his price.
With self-awareness, you can have a “walk-away mindset,” which allows you to remain calm and cool. Clarity of thought helps you redirect the conversation to one of value not price. Here are some examples of effective responses to such sales tactics:
PROSPECT: “Your competition is 20 percent lower. Can you match their price?”
SALESPERSON: “I appreciate you being open about sharing their price. However, I am curious. Why are you still open to looking at us when you get the same value elsewhere at a lower price? As much as we’d like your business, if the competition can deliver the same value at the price you say, we can’t blame you for going with them.”
The salesperson is managing his emotions and not reacting to the negotiation tactic. He is asking the prospect a very common-sense question. If the competitor is offering the exact same value at a lower price, what’s the reason he is still in the game? Now, the prospect must justify the reason for wanting to continue the conversation with the salesperson.
PROSPECT: “We’d like to go with you. We think you have the best solution. However, your price is a little high.”
SALESPERSON: “Thank you. I appreciate your confidence in us. Let’s review the proposal and figure out the highest return-on-investment areas. Then you and I can take a closer look at what we can remove from the proposal in order to hit your budget.”
Instead of reacting and quickly discounting, the salesperson asks the prospect to make a choice on what he wants to remove from the proposal. It’s not about what can be discounted, it’s about what the prospect is willing and able to commit to in order to solve a problem or take advantage of an opportunity.
PROSPECT: “We’ve had a really tough year. Can you do any better?”
SALESPERSON: “I can understand. It’s been a tough year for many of my customers. Would it make sense to further discuss if you should even be making this purchase? It might be better to delay this decision until next year.”
The salesperson is showing empathy, but also putting the responsibility of the purchase back on the prospect. She is comfortable walking away from the business, as it really might be the best thing to do for this prospect at this time.
There are many more responses and scenarios we could share that prove salespeople can execute strong selling skills when they improve their ability to manage emotions.
Another reason salespeople don’t apply the powerful tactic of walking away relates to the beginning of the sales process: the sales pipeline.
Salespeople with empty sales pipelines have desperation breath. Prospects can spot this a mile away and leverage it to their financial advantage. Salespeople with empty sales pipelines have a hard time walking away from anything. Negotiation skills and tactics cannot be applied because their mindset is one of scarcity, not abundance.
When you have a full sales pipeline, you have a much greater chance of showing up to meetings with a wealthy mindset—a different attitude. Your thoughts change from “I need this deal” to “I can only take on serious prospects. I don’t have time to write up practice proposals. And why in the world would I discount? I have too many other good opportunities to pursue.”
Review the key concepts again in Chapter 3. Are you putting in the work of consistent prospecting to achieve the reward of a full sales pipeline? Do you have a defined sales activity plan that ensures consistent leads and qualified appointments?
When you have a full pipeline you are willing to walk away from opportunities that are not profitable or are a waste of time. This frees you to walk toward prospects that have full budgets and are committed to investing in your products and services.
Salespeople claim they bring high value to customers because of their personal expertise and commitment to service. They boast that they are working for the number one company in the industry. Testimonials from satisfied clients fill their websites and brochures. So if the salesperson believes she is the best and her company is the best, why is that same salesperson so quick to discount? Perhaps her sales and marketing rhetoric is empty and she lacks the confidence and conviction in her ability and her company’s value.
Years ago, when I was a vice president of sales, I received a valuable lesson on the importance of conviction from one of my sales reps. We sold athletic wear to schools and part of the product offering was tennis shoes. It was a very competitive business.
We were not the only distributor of certain brands of tennis shoes, and often competed with small mom-and-pop stores that could undercut our prices due to low overhead. Other competitors used tennis shoes as a loss leader to gain entry into an account.
Jamie, one of my Florida reps, was outselling everyone in this product category. Even better, she was selling our highest-priced shoe at full margin. Her sales were all the more impressive because other salespeople across the country claimed they could only sell the shoes if we offered a significant discount or threw a freebie into the purchase. In many cases, we lowered our prices to win and retain the business.
After analyzing sales, I presumed that Jamie had developed a very persuasive sales presentation or value proposition. I called her, hoping to learn more about her approach in order to share it with the rest of the team. The answer was surprisingly short and easy.
“Well, I don’t know exactly what I am saying or doing,” she said. “I just don’t give them an option on pricing since I know I will offer them the best service and so will the company. And the reason I can sell the high-priced shoes is because I don’t even mention the cheaper ones. These shoes offer a better value and will last longer, wouldn’t you agree?”
Jamie’s simple logic is a classic demonstration of how belief in yourself, your company, and your product wins over any complicated pricing or discount strategy. It’s called self-regard. Jamie was confident of her ability to deliver high value, and that confidence was better than any selling script. If you are not convinced you bring value, why should a customer pay your price? Jamie unknowingly was also applying the “walk-away” sales principle. She was willing to walk from business that wasn’t open to paying full price for her product and service.
Another story about conviction comes from a colleague in the sales training business. This gentleman had only been in the business two years when we met at a conference. He was very excited, as he had just sold his first keynote presentation. He was especially excited because he asked and received $15,000 for his one-hour presentation.
My jaw dropped when I heard this, because people commanding those fees generally have a bestselling book, have been in the business for a decade or more, or are a recognized thought leader in a particular industry. He was none of the above. My colleague’s conviction and confidence are what allowed him to ask and receive top speaking fees. He wasn’t cocky, but he had high self-regard and was confident of his ability to deliver results. Soft skills put hard dollars in his pocket.
Action Steps for Improving Your Ability to Get Paid What You Are Worth
The checkbook stage can be a challenging one to master because it’s often misdiagnosed. Salespeople naturally focus on improving hard selling skills to improve outcomes, not realizing that lack of soft skills is equally important in getting paid what you are worth. We always recommend you examine both in order to diagnose and improve your results.
Most salespeople are not aware of their money talk that follows them into adulthood. Many are not aware of negotiation tactics designed to get a salesperson emotional. Some are not convinced of the value they bring to their clients. The result is that they waste time and money with prospects who are not willing or able to invest in their services.
Here are three steps to help you conquer this selling stage and earn the revenues that you work hard for and deserve:
1. Identify your emotional triggers regarding money.
2. Educate yourself on negotiation tactics.
3. Examine your convictions about the value of your company and your own abilities.
Step #1: Identify Your Emotional Triggers Regarding Money
Think about how you handle money conversations with your prospects and customers. What statements, questions, or objections from them trigger a response that results in you discounting your fees? How do you respond when prospects say they don’t have a budget or they are not willing to share it with you? Do you go into flight mode and write up yet another practice proposal? Do you revert back to the age of six and apply your childhood money scripts?
Once you identify the triggers, work on changing your response by visualizing and practicing better answers. See yourself being assertive and asking for what you need. Schedule downtime and ask yourself a few questions. What’s driving your response? Is it fear of losing the business (even when it’s not profitable business)? Are you worried you will offend the prospect by being assertive and asking for what you need?
Purchase a book that helps you recognize self-limiting beliefs about money. We often recommend the Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth (HarperBusiness, 2005) by T. Harv Eker because it aligns philosophically with our beliefs as to why salespeople don’t reach their earning potential. We especially like one of Eker’s wealth principles: “Consciousness is observing your thoughts and actions so you can live from true choice in the present rather than being run by programming from the past.”
Apply basic common sense. For example, would you like working with a real estate agent who kept showing you houses out of your price range? Or would you rather work with one who asked your budget and invested her time in showing you what you wanted, needed, and could afford?
Treat your prospects with that same respect and have conversations with them about their budgets before wasting everyone’s time with recommendations they can’t afford or use.
Step #2: Educate Yourself on Negotiating Tactics
Author and Poet Maya Angelou said, “When you know better, you do better.” Learn about yourself and your money talk. Learn to recognize and handle negotiating tactics by enrolling in a workshop. Sophisticated buyers have been trained in negotiation skills so it’s important that you show up to meetings equally prepared to engage in creating win-win outcomes for you and your company.
KARASS seminars, founded by Dr. Chester Karass, are conducted by experts in negotiation skills training. Dr. Karass says, “In business as in life, you don’t get what you deserve, you get what you negotiate.”
Here are a few useful negotiating tips from Dr. Karass. Note the emotional intelligence skills involved.
Take the win-win approach to negotiations to find a better deal for both parties. (Interpersonal relationships.)
Lose the need to be liked and get used to conflict. (Emotion management.)
Practice good listening skills—always. (Problem solving and empathy.)
Always test the resolve of the other party. (Reality testing.)
Remember: When you know better, you do better.
Step #3: Examine Your Convictions about the Value of Your Company and Your Own Abilities
If you forget or have doubts about your value, ask your best clients what has changed or improved for them due to working with you or your company. The conversation will remind you of the value you bring that you may be taking for granted. It helps increase your self-confidence and conviction, which makes you more comfortable discussing price and value with future prospects. Keep a “brag folder” in your office. Fill it with testimonials, case studies, and thank-you notes, reminders of the value you bring.
Raise your self-awareness of your relationship to money. Identify triggers that lower your price, value, and commissions. Get your prospects to “show you the money” before you write up a proposal or recommendation.
And always, value yourself and what you bring to your clients.