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5 Reasons Your Margins are Eroding Before Your Eyes


In today's price-sensitive environment, purchasing managers are having an absolute hay-day with sales representatives. Somewhere along the line, we, as sales folks, have lost our ability to maneuver price objections and squeeze additional margin points out of the sale. Through all of my travels, meetings, appointments, and conversations, I've identified 5 key reasons why margins are eroding before our eyes every single day, and a few ways we can prepare for them and overcome them. It's time we take back the sales conversation, create value, and earn what we're worth!


  1. Knowledge & training gap:

  • Let's be real honest for a second: quality sales training and education has fallen by the wayside. On the other end of the spectrum, purchasing managers have been trained and tested to beat us down on price. Today's sales representatives focus more on price and competition than what truly moves the profit needle: value. Identify pain and deliver value, and the price doesn't dictate the conversation. Without identifying value, we become "just another vendor" and it comes down to price and price only.

  • Try this: Prior to meeting with a purchasing manager regarding a program, quote, or opportunity, know they are going to bring up price. It can be tempting to throw a price out there to be the "first to the table" or the fastest. Take a step back and think, "how can I possibly give a competitive quote without having all of the details first?" Develop a list of strategic questions needed to give an accurate, fair quote while exposing pain points the company and/or purchasing manager may have regarding this specific quote. Do not mention price until you've done this, as this questioning method will open the door for additional margin points.

2. Lack of a sales story:

  • Imagine agreeing to take 30 minutes of your busy day to meet with a new internet provider for your personal home. As soon as the meeting kicks off, you know exactly how the next 29 minutes are going to progress. Instead of asking questions about your current situation, issues, hopes and/or aspirations for a new service, it becomes as 30 minute rambling about how perfect, helpful, and amazing their service is. Guess what? This is the approach we've begun using on our customers and they feel that pain. Instead of identifying problems and crafting a solution, we've resorted to word-vomit and believe we have a "one-size fits all" method of solving their problems. When we do this, we don't craft a solution at all - we brag about ourselves in an effort to get our point across. To be blunt, our customer does not care about how long we've been in business, how many facilities we have, or how large of a company we are. They care about one thing and one thing only: having their problem solved so they can continue growing their business. This is where having a sales story is crucial.

  • Try this: Take a step back and think about what your company does for your customers. No, not "ship products every Tuesday and Thursday." What do you really solve for your customers? What do you do that your competition cannot? How do you help your customer grow their bottom line? What sets you apart from others in your industry? What makes you the partner of choice? Jot a few notes down as you think of this. Your sales story will look something like the following: "Customers turn to XYZ when they are wanting to (improve in area, ex. increase sales efficiency) and (eliminate current issue, ex. reduce sales turnover) in order to (client goal).

3. Acting as a vendor and not a consultant:

  • As mentioned above, you do not want to simply be known as a vendor. A vendor is the guy or gal who shows up on a "milk run" at the same time every week to drop off donuts (also known as a donut dropper). Don't be that sales rep. Times have changed dramatically through the Covid-19 pandemic. Everyone's time just became more valuable; with folks working remote, in-person meetings being limited, and the overall craziness that has ensued over the last 2 years, purchasing managers and executives no longer have the time nor patience for a weekly "check-in." If you're going to meet up or schedule an appointment, you better provide value and help them grow their business or you will be replaced.

  • Try this: Always schedule a block of time. Whether it's with the purchasing manager/team, an executive, or the counter sales team, you want their full attention - even if it's only for 15-20 minutes. When the meeting is scheduled, send them an itinerary. Doing this will control the meeting and keep everyone on track, making the most of the time you have. Lastly, don't word vomit (see 2nd point above). If you're scheduling a product demo or service presentation, do not lead with a presentation. Ask questions about their current offering or situation, identify present issues or concerns, and be respectful of their time. DO YOUR HOMEWORK. If you need to schedule a follow-up meeting, fine. Do not lead with a presentation or immediately resort to throwing information about how great you or your product are. That's what vendors do; you're a valued consultant to their business, and valued consultants deserve to be compensated for their expertise.

4. Not asking the right questions at the right time:

  • I feel that today's sales struggles are a direct result of not asking quality, strategic questions necessary to identify pain points and craft a value-based solution to our clients and customers. When we do ask quality questions, we stop at the surface when, if we asked 2-3 additional questions, we could potentially identify a deeper issue or personal problem that your solution or company may solve. It's strange to say out loud, but you want your customer to feel a little pain; if they don't they don't need you as their business partner. Always being prepared to listen, ask quality, in-depth questions, and hammering home on pain points with take your partnership and selling skills to the next level.

  • Try this: Prior to your sales call, craft a list of (minimum) 10 strategic questions you need to ask in order to identify your customer's problem or concern. Beneath each question, anticipate the response your customer may state based on the knowledge you have of the industry and your customer's current situation. Then, craft subset questions you will ask in order to dive into those issues further. Take notes throughout the entire meeting, type them up on a Word document, and send the notes over to your customer after the meeting. This shows thoroughness, attentiveness, understanding, and an overall care for finding a solution to their problem; a deadly combination for providing value and increasing your margins.

5. Leading with price/trying to close too early:

  • The allure of a quick quote can be exciting and enticing. Many of my sales folk feel they need to be the fastest to respond or the first to the party. I'm not saying you should be last by any means; everyone needs and deserves fast answers, especially in today's instant gratification society. However, you owe it to yourself and your company to do your due diligence prior to throwing a price out there. Ask questions like the ones listed below to get a gauge on how to quote the project or opportunity. This alone may be enough to secure additional margin points and show your customer you care more than others who simply lead with price. You must know the intricate details of the project if you plan on putting your customer in a position to win the bid.

  • Try this: Ask questions that may help identify the needs your customer has in order to secure the project or quote. By doing this, you've let your customer know you care more about their overall business and future business than you do about a quick, one-time sell. "If you lead with price, you run the risk of a one-time sale." Don't jump the gun; ask the right questions and you'll secure more sales at higher margins than ever before. A few examples of strategic questions may be:

  1. "How quickly do you need this quote back?"

  2. "Which of my competitors will be quoting this project also?"

  3. "What margin do you need to make on this project to be satisfied with the sale?"

  4. "Is this a one-time order or will there be others like this in the future?"

  5. "Is there anything I can do to help you secure this project and other future projects like this one?"

It's time for sales representatives, sales leaders, and executives to re-take the wheel when it comes to sales conversations. When we go about it the right way, ask the right questions, and craft a value-based solution, we can close more sales at higher margins than ever before, all while cementing ourselves as a valued business partner in our industry. Let's make 2022 the year of the salesmen.



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