• Operating as efficiently as possible
• Fulfilling the needs of their own customers, and
• Meeting growth and financial targets.

7 rules

Research by the Chally Group identified these seven behavioral rules customers expect salespeople to follow:

1. Salespeople must be personally accountable for customers’ desired results. Salespeople must act as the single point of contact for customers and ensure that the customers buy the best solutions and achieve the value expected. Sales reps must act as business agents who are responsible for every aspect of the relationship between the buyer and seller.
2. Salespeople must understand customers’ businesses. This means understanding how customers’ businesses work — including their business strategies. Salespeople must then providing sound advice based on those strategies.
3. Salespeople must be on the side of the customer. Customers expect a salesperson to be their representative within the seller’s organization. Salespeople must be advocates and expediters, representing the best interests of the customer throughout the sales process.
4. Salespeople must bring customers applications. Customers want salespeople who think beyond features and benefits to applications. Customers want to know how to use products and services to achieve their goals. The best salespeople act as consultants, assisting customers in their goals to capture the promised value of features and benefits through effective application.
5. Salespeople must be easily accessible. There’s no difference between “global” and “local” in today’s business environment. The best salespeople are travelers who leap geographic and cultural boundaries to relieve customers’ stresses.
6. Salespeople must be problem-solvers. In yesterday’s sales world, the closing of the sale marked the end of the sales engagement and the salesperson’s responsibilities. Today the closing of the sale marks the beginning of a relationship. Customers expect salespeople to not only solve their problems during the transaction itself, but throughout the full term of the business relationship. The best salespeople act as troubleshooters who realize the inevitability of problems and commit to solving them quickly and effectively.
7. Salespeople must be innovative. Because change is the only constant in today’s environment, salespeople are expected to stay on top of customers’ needs and respond to them with proactive and continuous innovation.

Adapted from Achieve Sales Excellence by Howard Stevens and Theodore Kinni.

If you think the questions sound like complete nonsense, you may be at least partly right. But there is a point to them.

Interviewers who ask what type of animal the candidate is most like or what historical figure the candidate resembles most are used to:

throw the person off balance

see how the person thinks on his feet, or

reestablish the interviewer as the person controlling the flow of conversation (if the interviewee has begun to take control, asking more questions than they’re answering).

It’s an effective tactic, specifically because it catches the interviewee off guard. What’s more? The answer may inadvertently reveal something about the candidate’s personality the interviewer may not have known. Either way, it’s an effective way to switch gears and move into another line of questioning.

It may also put the candidate by breaking up a serious line of questioning with some levity (e.g., “If you were a cartoon character, who would you be?” or “If there was one bumper sticker that reflected your day-to-day life, what would it say?”).

That said, from an interviewer’s perspective, these questions should only be used sparingly, if at all. The last thing you want is for an interviewee to walk away thinking you seemed more interested in knowing about cartoon characters and bumper stickers than their ability to successfully handle the job at hand.

On the same token, if the question seems to make the interviewee uncomfortable, it might help to swoop in and provide a light response (e.g., “I’ve always thought of myself as a bit of an Elmer Fudd,” etc.).

What’s the craziest question you’ve ever been asked/or asked in an interview? What’s the best response you ever heard?

Feel free to share your thoughts in the comments section below.

Based in part on “Crazy Interview Questions,” CareerChoiceGuide.com

1. Go back through the customers who’ve left comments on your blog and single out the ones who’ve expressed great opinions. Ask them to write a post for you on a topic they’re especially passionate about. You also might want to tap a non-blogger — like a salesperson — to make a guest appearance.
2. Review the past blog entries you’ve made that have stirred the greatest controversy. Is there a topic you’ve changed your mind about? Something that’s worth a second look? A better argument or example that would back your point?
3. If you’re not doing it now, start scheduling blog topics. Fill in a calendar for the next week or month with an idea for each blog post. If something better arises in the meantime, great — just bump the planned topic into a new slot. This planning will avoid the last-minute panic that takes over when your well of ideas runs dry and you’ve got to create a new post. (Remember, an effective blog must contain at least two or three new post every week.)

How do you come up with new ideas for your blog? Let us know in the Comments Box below.

What a study shows

A comprehensive study completed at the University of Minnesota shows that sales professionals remember only about half of what is said to them during a simulated meeting. It also concludes that sales professionals can improve their listening skills simply by concentrating more on what’s being said to them rather than what they will say in response.

Prioritizing listening over talking in a sales situation is easier said than done. With practice and resolve, a salesperson can acquire the mental agility to become a better listener by mastering these six mental listening exercises:

1. Listen ahead. Try to anticipate where a discussion is leading to during the prospect’s dialogue. Determining the conclusion in advance of your required response allows you to relax and improve information absorption.
2. Periodically validate communicated information. By mentally striving to validate the accuracy and completeness of information points made by the prospect, you can allow yourself to absorb more information easier that may help you understand the prospect’s position better.
3. Utilize active listening techniques. By periodically summarizing the major points communicated by the prospect and reaffirming your interpretation of the points made back to the prospect, you add a tremendous amount of clarity to the information exchange.
4. Strive to understand versus “judging.” Be working to consciously understand what the prospect is saying versus the natural tendency of judging, approving or disapproving what’s said will allow you to absorb what is actually said.
5. Use your eyes to “get the rest of the story.” By paying attention to the prospect’s body language, you can see what the whole body is trying to tell you, not just the mouth.
6. Maintain a mental repertoire of common responses. By mentally developing and rehearsing how you’re going to strategically respond to common sales objections, you will be able to listen more effectively. A comprehensive inventory of common responses will also give you more confidence in any selling situation.

By practicing these six techniques, salespeople will realize that how they talk or present their product or service is relatively unimportant when compared to how and what they listen to.

Mark Smock is President of www.business-buyer-directory.com

A federal grand jury has returned a 15-count criminal indictment against Mark Kamholz, and his New York employer, Tonawanda Coke Corp., for criminal violations of the Clean Air Act, the hazardous waste law and obstruction of justice.

Kamholz also faces a criminal fine that could reach $550,000. The company faces over $1 million in criminal penalties.

The government charged Kamholz with criminal violations of the Clean Air Act for his role in releasing toxic benzene emissions and hiding this from EPA investigators.  He’s accused of:

• hiding a pressure relief valve that spewed the benzene vapors into the air
• directing an employee not to tell EPA inspectors about the illegal valve and emissions release, and
• operating equipment without required pollution controls.

Kamholz is also alleged to have directed employees to dispose of benzene- and mercury-containing hazardous wastes on the ground and storing some of the waste in an abandoned rail car on the company’s property.

The obstruction of justice charges allege that Kamholz directed workers not to tell EPA inspectors about the relief valve or that the company was operating even when its pollution control equipment was turned off.

Here are four key strategies for staying on top as the marketplace shifts:

1. Focus on high-probability buyers. Prospects can use technology to check out how you — and your prices — stack up against the competition. But you can turn the tables by doing your own research to determine which prospects offer the best fit for your products. One way to do it: Perform an audit of sales from the last year to pinpoint which type of prospects (e.g., SIC, title, region, industry, etc.) are most likely to buy.  Save time by moving high-probability prospects to the front of the pipeline and avoiding prospects who have little or no chance of becoming buyers.
2. Anticipate prospects’ objections. With so many companies competing for each prospect’s business, it’s never been more crucial to convey what sets your products and services apart. Proactive sales and marketing pros do competitive research prior to meeting with prospects so they have a clear sense of: what they can offer that other competitors can’t, which specific benefits to focus on and where existing suppliers may be coming up short.
3. Embrace new modes of communication. E-mail, cell phones, BlackBerrys, social networks, text messages … they’ve all changed the way prospects do business. As a result, a lot more sales and marketing pros make it a point to ask prospects early on how they prefer to communicate. It empowers prospects by making them partners in the selling process. It also lets your company know the best way to contact them, or if there’s a separate e-mail address or cell phone number prospects prefer to use for business. Agreeing upon a specific way to contact one another may also lead to shorter sales cycles. The more options and flexibility buyers have, the more comfortable they’ll feel doing business with you.
4. Stand pat on value. In this economy, a lot of companies are eager to win back buyers by slashing prices and offering one-time discounts. Value-added salespeople realize this is a short-term strategy. They respond by emphasizing the ROI their products and services offer long term, as well as their ability to help prospects overcome some of their biggest challenges. Businesses that understand prospects’ challenges are more likely to earn their trust and build a win-win partnership.

Adapted from Selling in Tough Times: Secrets to Selling When No One is Buying by Tom Hopkins.

The promise was that healthcare reform wouldn’t force employers to drop or change existing plans. A close look at the new regs could lead you to believe otherwise.

Specifically, following the reform rules will almost certainly lead to higher costs for employers. Because, essentially, the rules say you can keep your plan if you don’t:

• Significantly cut or reduce benefits. For example, firms can’t eliminate coverage for people with chronic conditions like diabetes.
• Significantly raise co-pays. Grandfathered plans can’t increase staff co-pays by more than $5 (adjusted annually for inflation) or a percentage equal to medical inflation plus 15 percentage points. For instance, a plan would lose grandfathered status if co-pays rose from $30 to $50 over two years.
• Significantly raise deductibles. Plans can increase deductibles only by a percentage equal to medical inflation plus 15%.
• Significantly lower employer contributions. Grandfathered plans can’t decrease the percentage of premiums that employers pay by more than five percentage points.

And as a result of the rules, according to Department of Health and Human Services estimates, in 2013, as much as 64% of large businesses will not be grandfathered and 80% of  small businesses will have to give up their existing plans.

Go here for the full details  on “Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act.”

More than 70% of prospects say they’d be willing to pay as much as 10% more for a product or service if a company …

Exceeded their expectations.

That’s according to a recent Strativity Group study of 2,000 people’s buying habits, which also revealed:

• more than a third of buyers would be willing to pay as much as 25% more if the company provided superior service after the sale
• satisfied customers are three times more likely to continue doing business with the same company for 10 years or more
• those who’ve had a negative buyer experience are 10 times more likely to stop doing business with a company within a year, and
• the three things customers value most in a sales rep are: 1) the ability to resolve problems effectively, 2) common sense and 3) the ability to consistently exceed expectations.

That’s a huge wake-up call for anyone who still blames the economy for lower closing rates. More importantly, it reinforces the notion that service before, during and after the sale is the key to winning (and keeping) more buyers.

It may also provide a valuable opportunity for marketing and sales pros — use testimonials and key metrics to demonstrate how your company provides top-notch service.

One metric that may come in handy: the length of your average buyer relationship.

Long-term buyer relationships are a strong indication of the level of service a company is capable of providing.

Source: “70 Percent of Consumers Will Pay More for Positive Experience,” Sales and Marketing Management Magazine, 7/31/10.

It’s about future intentions

Customer satisfaction ratings indicate how people feel after the sale. Customer loyalty is the best barometer of future intentions.

Satisfaction is based on what you (the salesperson) did in the past. Loyalty is measured by what your customers intend to do in the future.

What creates customer loyalty?

Great prices, quality, product features and service are key components of customer satisfaction. But salespeople are the driving force behind generating customer loyalty.

In fact, customers who felt their salespeople stood out from the pack were 10 to 15 times more likely to remain loyal, according to a recent study.

When satisfaction doesn’t lead to loyalty

New research has shown that 80% of customers who switched suppliers in the past few years were “satisfied” with their existing supplier at the time they moved their business.

Why don’t satisfied customers become loyal customers? There are five reasons:

1. Problems sour the relationship. Although the customer may have been satisfied initially with the purchase, unresolved problems develop in the relationship. Suspicion that there will always be problems quickly sour the business relationship and block any opportunity to get the customer to become a repeat buyer.
2. Poor follow up. The same salesperson who spends months or even years pursuing a new customer fails to ensure that the customer’s orders are processed and fulfilled in a satisfactory manner.
3. Communication breakdown. Once the sale is made, the salesperson turns the servicing function over to others within his or her company. As communications with the customer weaken, the salesperson is at risk of losing future sales.
4. The original decision maker leaves and is replaced by someone who has a personal relationship with a competitor.
5. Easy return. If the customer is still doing business with a former supplier, it’s easy for him or her to return to that supplier if problems develop.

Complacency undermines loyalty

The last thing any sales pro wants to do is take a customer’s loyalty for granted.

One way to avoid becoming complacent with customers is to try to stop thinking about “account maintenance” and start thinking about “account development.”

Training tip: Ask your salespeople for examples of customers they considered to be satisfied who suddenly switched to competitors without warning. Then try to pinpoint the reasons for the defections.

The key to customer loyalty is not just what you deliver, but how you deliver, service and support it. Meeting your customers’ expectations is not enough. Customers want to know you care. Customers want you to make them feel important.

To develop loyal customers, try to get close to them — not just during the sales process, but after it, too. Here are some questions to ask yourself that’ll help you keep up to date with what customers want, need and expect from you:

• Why do they buy from you — what needs are they fulfilling?
• How well are you meeting those needs?
• How can you improve what you’re doing?
• What are you not doing that they’d like you to do?
• What do they find most valuable about your product or service?
• What do they find most valuable about your competition?
• What is likely to change in their businesses that’ll have on impact on what they need from you?

Developing loyal customers

After you’ve answered those questions, use these strategies to develop loyal customers:

1. Demonstrate a “we’re here to solve your problems” attitude. Customers want a positive response when they run into problems or have serious questions. You may not always be able to answer their questions or meet their deadlines. But you can usually negotiate a workable compromise if your attitude is positive.
2. Come up with new ideas for your customers. You have expertise and knowledge. You know what’s happening in your industry, and you know what your customers need. Make a serious effort to share those thoughts.
3. Don’t be afraid to say, “We can’t do it.” This is not the same as saying, “We can’t help you.” It’s being honest. But don’t stop there. Try to help the customer get what is needed. It’ll build customer confidence and credibility for your company.
4. When you make a mistake, admit to it right away. Don’t try to cover it up with excuses. The customer knows what’s going on and the experience will cast doubt on your credibility. Once you admit the mistake, start talking about solving the problem.

Dial your IT chief’s extension and ask him or her for your company’s annual spending levels on a few of these tech “biggies”:

• e-mail
• desktop systems, and
• your ERP system.

And give ’em 24 hours to get you an answer.

Most won’t be able to do it. In fact, 62% of CIOs admitted they were “not at all confident” or merely “somewhat confident” their departments could provide an accurate answer in that time frame.

That’s according to a new survey of CIOs by tech solutions firm Apptio.

Some of the other alarming findings:
•    IT often has no system to track or allocate costs
•    There’s zero transparency in the budgeting breakdown of tech costs
•    IT performs only an annual calculation of the total cost of ownership, and
•    Senior managers barely understand the cost per IT service.

The consequences of these shortcomings last much longer than budgeting time: Just 14% of CIOs feel they’re very well equipped to make accurate cost-based or ROI-based decisions year-round.

So what’s a cost-conscious company to do? There are some best practices that can increase understanding of where
those tech dollars go – and whether or not they’re going to the most profitable pursuits:

1. Put more Finance in IT. A mere 12% of IT costs are billed back based on accounting principles like activity-based costing or consumption-based allocation. And more than half of IT departments have no regular financial reporting process. No company can afford to have a department with as many dollars at its disposal as IT lack these accounting staples.

2. Press for frequent updates. Once IT’s doing a better job of tracking the annual cost to deliver and maintain each IT service, it’s time to go a step further. Be certain IT is updating the total cost of ownership frequently. Ideal: monthly, though only 12% of your peers do this now.

3. Open the dialogue. This isn’t strictly an issue between Finance and IT. You need other managers involved, too. And IT has some very specific ideas on how they want to get into that conversation: They suggest showing managers the cost and usage (frequency or volume of use) of each IT service as a valuable way to discuss the demand for those services.

For more on the survey “Market Intelligence Report: CIO Survey on Total Cost of Ownership and Return on Investment for IT Projects,” go to www.apptio.com

Walkers and talkers.

Talkers are the ones who will explain in detail why they’re unhappy, giving your company the chance to make changes.

But they’re usually a small minority. Research shows that 91% of unhappy customers are walkers. They just walk away without telling you why.

Why they walk

Research pinpoints three reasons customers walk:

1. The salesperson didn’t care enough about the customer’s needs, preferences or problems.
2. The salesperson was more concerned with style, while the customer was looking for substance.
3. The product/service provided more of a solution for the salesperson’s problems than it did for the customer’s problems.

Keeping the walkers happy

When you ask customers whether they’re satisfied, listen closely to the response. Walkers tend to withdraw when you ask questions like, “Was everything okay with your last order?”

If they stumble and stammer, it’s a sign they’re ready to walk. They’re also likely to say things like “sure” or “fine.”

Respond to these kinds of replies by pushing a little harder to get the customer to open up. One thing you could say: “It sounds like you’re not totally satisfied. Could you tell me how we let you down? I’d like to make sure this doesn’t happen again.”

Adapted from Managing the Customer Experience by Joe Wheeler and Shaun Smith (Prentice-Hall).

Sen. Charles Schumer (D-NY) and Rep. Paul Tonko (D-NY) have introduced new legislation into the Senate and House of Representatives intended to extend by six months the HIRE Act, which was signed into law by President Obama on March 18, 2010. As it currently stands, the HIRE Act provides tax incentives for businesses hiring unemployed workers. These benefits include: a 6.2% payroll tax incentive for employers who hire unemployed workers this year, until Jan. 1, 2011, and a $1,000 general business tax credit for each worker retained by the employer for at least one year.

Under the HIRE Now Tax Cut Extension Act of 2010, qualified employers hiring qualified employees from July 22, 2010, through June 30, 2011, would be entitled to take advantage of the HIRE Act’s benefits for an additional six months. The legislation is before the House Ways and Means Committee and the Senate Committee on Finance.

For more on the details, forms and requirements of the HIRE Act, go here.

1. Conduct your own competitive analysis. Budgets are tight and so is competition. So it’s safe to assume prospects are going to consider all of their buying options before making a final decision. Proactive salespeople compensate by doing their own competitive research up front. That way they’re well prepared to overcome any objections (or perhaps even avoid them altogether). Competitive research also helps salespeople uncover where a prospect’s existing supplier is coming up short, and how to capitalize. Finally, presenting prospects with your own analysis allows you to control the comparison process, answer any questions the prospect has and present the data in a way that works in your favor.
2. Use the web to build stronger relationships. Social networking is increasingly popular with sales organizations these days, and rightfully so. Best-in-class companies like Zappos and Best Buy use business networking sites such as Twitter and LinkedIn to boost sales, increase loyalty and respond to service requests ASAP. But networking sites are just one way to boost sales and loyalty via the Internet. E-zines, e-newsletters, blogs, message boards and e-mail surveys are all popular ways for salespeople to stay on buyers’ radars and gain actionable feedback, while building stronger relationships in the process. These resources are also a great way to promote your company’s brand, as well as any special offers buyers can benefit from.
3. Let buyers dictate how you communicate. Technology offers countless ways for salespeople to communicate with buyers — e-mail, cell phones, text messages, social networking, etc. But the reality is most buyers prefer one mode of communication to all others. But that one mode is different for everyone. So sometimes it’s best to let the situation dictate what’s appropriate. In other cases, it may help to simply ask prospects, “What’s the best way for me to contact you?” It empowers prospects by giving them control of the process, but it also lets them know you’re willing to handle things according to their preference.
4. Reinforce the value of your service. With so many buying options available online, it’s never been more crucial for sales pros to convey the value they personally bring to the table. How can you maximize the return buyers should expect to see from their investments, increase the effectiveness of the products/services they purchase or help them avoid bad buying decisions? Why should prospects allow you to guide them through the buying process instead of just doing their own research and making an informed decision? Salespeople who are prepared to answer these questions are in a much better position to earn buyers’ trust, and, ultimately, win more sales in today’s tech-dependent marketplace.

Based in part on Own the Room by David Booth.
For more info, visit www.eloqui.com

Some of their workers may not be able to understand the training, and companies are in denial about that.

Research by the Conference Board of Canada shows employers acknowledge that literacy among workers is a problem, but they’re not aware there are issues in their own workforce.

In a survey, 64% of employers thought safety policies were fully understood, but only 40% of workers said they completely “got” the material.

This isn’t entirely an issue of workers who speak English as a second language.

The problem is often that many workers read at a sixth grade level.

An employee who has the necessary language skills to carry out everyday work may not be able to understand certain safety documents.

Example: What would happen if a worker had to interpret information about a chemical on a wordy Material Safety Data Sheet, in an emergency?

The Conference Board report gives several suggestions for countering this potential problem. While it might be a tall order for small- and medium-size companies to provide their own adult literacy classes, there are things they can do:

• Look into adult literacy classes offered by local schools and make that information available to employees, and
• Provide regular reading comprehension practice for workers by giving them tasks that require some reading so they keep up their skills.

1. The skeptics. Salespeople who run into a brick wall with some prospects could be dealing with closet cynics. While the salesperson is making a presentation, these prospects may be dismissing everything being said about a product or service as hype. Recommended approach: Back up claims with hard statistics.

2. The comparers. Some prospects will refuse to make a decision until they’ve shopped around. Recommended approach: Accommodate these prospects by giving them space to check your claims against the competition’s.

3. Now-or-never prospects. These prospects want your product or service in a hurry. Otherwise, they feel the deal isn’t worth it. Recommended approach: Make sure the product or service is accessible without having the person jump through hoops or wait too long to start benefiting from it.

4. Disappointed prospects. Prospects who’ve had bad experiences with a comparable product or service in the past may be tough to sell. Recommended approach: Show them why the problems they’ve experienced in the past will not crop up again in the future.

5. Confused prospects. Customers who aren’t quite sure what your product can do for them will be hesitant buyers. Recommended approach: Ask the prospect whether he or she has all of the information they’d like to make an informed decision about your company.

VITOs — Very Important Top Officers — have the ultimate veto power at any prospect company. Here are the seven most common mistakes salespeople make when talking to VITOs:

1. Try to avoid the phrase, “Do you understand? Followed by anything. It’s a direct challenge to VITOs’ ego, power and authority. “As you may be aware” or “Were you aware of?” should be avoided for the same reason. Always assume knowledge when dealing with VITOs.
2. It’s usually not a good idea to start a sentence with “Let me tell you” or “Let me ask you,” because these are phrases that executives use with subordinates.
3. Try to avoid the use of the word “I,” which takes the focus off VITO. Forget about you. Ask whether VITO wants X to happen.
4. Don’t say, “In my opinion.” If VITO wants your opinion, you’ll know. Only VITO’s opinion is up for discussion. Use phrases such as “In your opinion.”
5. Don’t say “Listen to this.” No matter what this links up to, telling VITO to listener is a nonstarter. Saying something like “Which one of these (benefits/results) is of the greatest importance to you?” may get a better result.
6. Don’t say “You should.” The only person who gets to say what VITO should do is VITO. Language such as “Should we?” or “Would it be best if we?” is much more appropriate.
7. Don’t ask VITO, “Is this a good time?” Just jump into what you have to say. If it’s not a good time, VITO will let you know.

Adapted from Selling to Vito by Anthony Parinello (Adams Media, Holbrook, MA). Mr. Parinello is an author and sales consultant. Today a number of Fortune 100 and over 1.5 million salespeople have adopted VITO Selling.

In his book A Seat at the Table, sales guru Marc Miller cites a recent MasterCard study where more than 1,000 customers were asked to rate MasterCard’s salespeople on a scale of 1-10, based on the service they provided.

Customers rated MasterCard’s reps an anemic 4.1. But when the company’s salespeople were asked to rate their own performance on the same scale, they gave themselves a 9.9.

Wait … What?

How does that happen?

Miller’s research points to two key selling skills that customers now place increased emphasis upon (and the majority of salespeople tend to overlook):

1. Strategic value: Strategic value refers to a rep’s (or company’s) ability to provide specific benefits that make the products and services being offered more valuable than competitors’. Many salespeople focus on a stock list of key selling points, while the best in the business tailor their value propositions to each prospect’s individual needs.
2. Service after the Sale: Of the customers who changed suppliers during the past year, more than half of them did so because of poor service after the sale. Over the past 10 years, competition in most markets has increased, on top of which, the down economy has created a cut-throat sales atmosphere, where companies are falling over one another to steal away buyers. In addition, a lot of companies are enforcing tighter restrictions on new purchases. One of the key side effects: Most prospects are reluctant to consider changing suppliers unless there’s a compelling reason to do so. In light of that, prospects are more interested in partnering with a sales organization they know is looking out for their long-term goals. Salespeople who focus on closing a one-time deal will more than likely find themselves out in the cold.

Source: A Seat at the Table by Marc Miller.

Sometimes, just the tiniest change in pricing strategy can make the biggest difference — for better or worse.

Everyone knows that, now more than ever, buyers are sensitive to price. That’s why getting the pricing part of your business right is so important. Rafi Mohammed, author of “The 1% Windfall: How Successful Companies Use Price to Profit and Grow,” details the pricing mistakes you need to avoid to be successful today:

1. Using ironclad markups. The most common mistake in pricing involves setting prices by marking up costs (“I need a 30% margin”). While easy to implement, these “cost-plus” prices bear absolutely no relation to the amount that consumers are willing to pay. As a result, profits are left on the table daily.
2. Failing to capture value. Manhattan street vendors understand the principle of value-based pricing. The moment that it looks like rain, they raise their umbrella prices. This hike has nothing to do with costs; instead it’s all about capturing the increased value that customers place on a safe haven from rain. The right way to set prices involves capturing the value that customers place on a product by “thinking like a customer.” Do you take into account what your customers perceive — now — as worthwhile attributes of your product or service?
3. Offering unnecessary discounts. Many companies are uncomfortable setting prices above what they consider to be “fair” and are quick to offer unnecessary discounts, rather than charging what the market will bear or charging for the value of the product or service.
4. Offering initial discounts. Many people believe that offering a discount as an incentive to trial a product will lead to future full price purchases. That rarely works out. Offering periodic discounts serves price sensitive customers (which is a great strategy) but often devalues a product in customers’ minds. This devaluation can impede future full price purchases.
5. Using “one price fits all.” Customers are often interested in a product but refrain from purchasing simply because the pricing plan doesn’t work for them. While some want to purchase outright, others may prefer to rent, lease, prepay, or all-you-can-eat. Innovative pricing plans attract customers by providing ownership options, mitigating uncertain value, offering price assurance, and overcoming financial constraints.
6. Using “one product fits all.” One of the easiest ways to enhance profits and better serve customers is to offer good, better, and best versions. These options allow customers to choose how much to pay for a product. Think about it in the context of restaurants that offer early-bird, regular, and chef’s-table options. Price sensitive gourmands come for the early-bird specials while well-heeled diners willingly pay an extra $50 to sit at the chef’s table.
7. Ignoring differential pricing. For any product, some customers are willing to pay more than others. Differential pricing involves offering tactics that identify and offer discounts to price sensitive customers by using hurdles, customer characteristics, selling characteristics, and selling strategy tactics. For example, customers who look out for, cut out, organize, carry, and then redeem coupons are demonstrating (jumping a hurdle) that low prices are important to them.

Companies have been working tirelessly to cut costs anywhere and everywhere they can since the economy went south. And cost-cutting efforts have made their way to the Dumpsters and store rooms of many businesses.

Folks in the facilities game call it “lean maintenance.”

Sounds much more elaborate than it really is. In reality, your organization only needs to take small steps to secure some big savings.

Think of it: The people who maintain your company’s physical plant have a bird’s-eye view of what’s being wasted, misused and underused around your company every day. Here’s how to harness this info and the minor changes you can make to start saving money immediately.

Step #1: Identify your best ‘intelligence’

Naturally, the best place to start is by identifying the folks within your organization who have the info you’re after. You’ll want to seek the opinions of the obvious choices: Maintenance, cleaning people, groundskeepers.

But don’t overlook the more “unofficial” players who have some insight. For example, admins often end up in default “cleanup” mode, whether it’s reloading the copier or neatening up the company fridge. They may be able to offer some unexpected savings suggestions.

Step # 2: Start small

Once you get people to flag areas to tighten up, you probably want to focus on the low-hanging fruit first. A filter: Choose projects where the cost is small and ones you can easily do with tools or materials you already have.

One company found that by simply changing the paintbrushes it uses, it could slash the amount of paint and time needed to complete the job. A quick fix with an instant payoff.

Step #3:  Understand where bigger wins are

If you’re interested in tackling bigger maintenance projects, be sure you understand which ones have the best cost-cutting potential. Check out the possible savings of maintenance budget dollars:

• Re-engineering of equipment and maintenance improvements to equipment: 39%
• More extensive application of predictive maintenance: 27%
• Preventive maintenance improvement and the correct application: 26%, and
• Improvements in the storeroom: 7%.

Adapted from “Avoid Waste: Lean Maintenance Can Reduce Overall Costs,” by Joel Levitt, at
www.pem-mag.com

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