Editorial Team

Or how to deal will different price level acceptance

Setting the price for a software product is one of the most tedious task for any salesman. And there are several explanations why the prices are so difficult to establish:

• Software can’t really be quantified as a regular product in terms of value and benefits
• In the software industry you are competing with everybody (while making a nice wine will probably make you compete with the fellow farmer next door, your software can be competed by who knows what guy spending his days in a basement and coding)
• Usually the market is very volatile and you can make long terms estimates

Let’s say that after been studying the market up and down, having the costs written down you came up with a price which will probably satisfy something like 90% of your potential clients. Let’s say that price is $100. Great, you market your product, but what about the 10% you are missing with your price? These 10% can mean the difference between making profit or being even.

Let’s imagine what’s happening with the 10% clients you are not reaching. Probably most of them could have a good use of your product, but they don’t have the money to buy it or think that the competition offer is more adequate in terms of costs versus results.

The easiest way to reach your 10% is to make some discounts. Let’s say that you’ll offer a 20% discount. There are good chances that one of the following will happen:

• You will have some of your 10% buying at the discounted price
• Your competition will make a similar step and you will loose the advantage
• Your other clients will be disappointed and lose thrust in your product
• Nobody from your 10% will buy even at discounted prices
• The discounted price could be unimportant for the buying decision

Ok, so there is a good chance that the old trick to offer discounts won’t have a positive effect. What can you do?

Here is how to do it better:

Make a big mailing to your clients (or whatever communication methods you are using) and announce everybody that all they have to do is to contact your sale guy (codename John) in order to get a very special and personal discount, just because you love him (the client). Make your mail as personal as it can be, the entire idea is to make the client believe that this offer is just for him. When the client calls John, give him whatever price the client wants. If the client can only pay 10% of the regular price, give him a 90% discount, but make it feel that he gets this discount because you consider him a beloved friend who happens to buy your product. Here is what will probably happen:

• You get a very satisfied client who will worth his weight in gold sometime later
• Even with a 90% discount you still have 10% revenues from 10% of your potential clients who otherwise wouldn’t buy from you
• John will become a very popular sales guy and everybody will call him for future sales
• You get in a direct contact with some people who wouldn’t normally be contacting you
• You can create a clients database who you can be sure is sensible to discounts
• Your 10% clients will bring other clients who wouldn’t normally be interested by your products
• Some of the 10% clients could actually be very important clients that just haven’t felt ok about the product at your normal price
• The 10% clients will feel like being in heaven getting a very special discount
• Your competition will never know what discounts you are offering

Did I try this? Yes, I did. It works for small and medium software companies.

Gone are the days of the sleazy salesman. Customers are looking to spend their hard-earned money on quality products and services sold by trustworthy sellers, and who can blame them? If you’re having trouble converting prospects into customers, here are a few tips the best salesmen use for successful sales.

Use a Consistent Sales Process

You don’t need to reinvent the wheel in order to make a sale. Concentrate on what works during your interactions with clients. When you find a process that brings you success, apply a version of it to every deal. Once you have the opportunity to analyze which tactics are successful and which aren’t, you’ll be well on your way to a tried-and-true sales process that you can depend on.

Know Your Product

It’s not enough to be a personable salesman anymore. Customers have more access to information and can sniff out an inauthentic seller faster than they can push you out the door. Instead of relying on old-fashioned and pushy sales methods, take the honest route. Make an effort to get to know the product or service you’re selling and why it would work for them. To gain the customer’s trust, you need to prove that you have their needs in mind.

Personalize Your Correspondence

Avoid sending out mass, one-size-fits-all emails to your clients. Take the time to get to know your prospects so that you can personalize the messages you send to them. Making an effort to tailor your words is an important step in gaining your clients’ trust and having your prospects feel that they’re more than just another sale.

Stay Honest

While it’s easy to get caught up in the excitement of closing a sale, don’t stretch the truth to your prospects. If the service or product you’re offering doesn’t have the feature they want, or you can’t lower the price to what they’re looking for, let your prospect know upfront. Otherwise, your dishonesty will come to light eventually and will probably end in a blown deal.

Know When to Walk Away

It’s tough when you’ve invested a great deal of time into a prospect, but know when it’s time to walk away if a deal is going south. Your product should solve a problem the prospect is having or perform a service they want or need. If what you’re selling does neither of these things, it’s time to call it quits. Move on before you’ve overstayed your welcome. The client will look more positively on you if you walk away gracefully, and it may even earn you a referral.

Ask for a Referral Every Time

Speaking of referrals— ask your clients for one every time! These are the easiest sales to make because customers are much more likely to do business with someone their friend or family member recommends. When you’ve had a positive experience with a customer, politely ask them if they know anyone who might require your service or product. If you do receive a referral, follow up right away.

It happen to us all at a point in our sales life. I starred to the empty new word document not knowing what to write. Of course, I’ve had the subject, I’ve had the reasons, but still no ideas to put on paper. It’s called the writer’s block – you’re simply stacked and you can’t write a single line. It can happen when you need to write that sales email, the product presentation for the company site, or the presentation for the conference.

Read more

Risk less when becoming an entrepreneur. Same chances to succeed

Being an entrepreneur is usually more risky than working in the corporate environment for a company. When you work for somebody you just wait for your paycheck to come each month at the exact same time. But if you want to become an entrepreneur, you have to invest some of your best assets in building your independence: time and money. And there is no telling if you are to succeed or to fail miserably.

Considering that going on the entrepreneurship path might just be the riskiest thing I ever did, (Hey Mom, its even more risky than riding my bike – a Honda Nighthawk 🙂 ) I’ve started to look for some not so problematic alternatives. This is how when I’ve decided it might just be the best time to also build my own company. So here I am, working from 9 to 5 in a huge bureaucratic organization and having my own company in the same time – at home. I actually have invented a joke about my life style: when leaving home from the 9 to 5 job, I always say, well its about time to go to the “office” 🙂 Let me present you the advantages and disadvantages of having a regular job and being an entrepreneur in the same time:

Advantages:

• I still get the regular paycheck from the 9 to 5 job
• Working at another company keeps me connected to the market
• I’m completely relaxed in what regards the outcome of my entrepreneurship adventure
• I have more money than I could ever have by doing only one thing
• Having 2 jobs helps me have fresh ideas all the time
• I gain more experience from both working places
• I learn new things as I’m not in a closed environment like I would have been while being only an entrepreneur
• Its more fun and more rewarding

Let’s consider some of the disadvantages:

• I have 0 social life
• I’m always tired and on the run
• Never have enough time to explore on the entrepreneurship
• Missed some business opportunities
• Don’t always have the mood to keep on working at home
• Difficult to stay connected with the clients

So what’s the big story? Well, if you are feeling about entrepreneurship like an insecure, scary thing, having a regular job from 9 to 5 makes entrepreneurship more fun an stress free.

So think about, why not build your own company while still working at your regular job?

Note: this article was written back in 2005. Seems to be valid today.

Old style communication: the hardcopy
Who could consider printed magazines as an additional revenue flow or a brand awareness activity? Hardware shops. Online portals. Community forums. Could be anybody with a strong message to the market.

If you are into publishing printed magazines, there are 2 main revenues flows to be considered:

• Readers subscription
• Advertising pages

How to increase readers subscription revenues
Let’s consider you have a magazine on architecture.
The basic way to have a growing revenue from your magazine is to cash more money from your readers. While increasing the magazine cost is not an option, we might think at the following steps to reach more readers:

Think about the places your readers are more likely to be. Make sure your magazine can be found there.

• At hardware shops
• At banks, trying to get a loan
• At Real Estate companies
• At construction companies
• At the city hall, for getting the construction approval
• In train stations, or any place that is usually crowded, like bus stations, or even hospitals
• Hotels. A free copy of the magazine might be available for the travelers
• Architecture companies and associations
• Is it summer? your clients are probably having a vacation right now. Place your magazine in their hotels
• Construction conferences and events
• Any place where potential future home owners might be
• On the Internet. Are you having an online version of the magazine? make one, and sale the subscription for the online version

Analyze who else could be selling or freely distributing your magazine. Make bundle or distribution contracts.

• Other publications with related readers. Make a bundle with them
• Hardware shops could be offering your magazine to the current clients
• Schools and architecture related Universities
• Libraries
• Passenger transportation companies – give their clients an extra service to the travelers – in trains, busses or maybe airplanes.
• Your advertisers, paying big money for their promos, are willing to distribute the magazine – to make the most of the investment in advertising. Why not send a copy to their sub-distributors/resellers?

What would make your magazine more interesting?

• Discount coupons for the manufacturers products
• Included Cd’s with the electronic format of your content
• Contests with prizes and competitions
• Make targeted discounts. For example, dentists might be willing to buy your subscription to have your magazine in the waiting room. Why not to have a special discount for them?
• Children are an important source for future revenues. Why not include some pages to be drawn by them? The parents will be “forced” to buy the next issue 🙂
• Why not organize a drawing contest for the children? The most interesting building would be featured in the next magazine.

How to increase revenues from advertisers

First of all, the advertisers will need to find out that you have a large number of targeted readers that could buy their products. Make sure you have the media kit to present who is reading your magazine. How can you have your advertisers pay more money?

• Propose them to make contests
• Make some supplemental pages to be added to your regular magazine. Sometimes you could include some flyers to present only their products – in a separate envelope coming with the magazine
• Include a CD with their company/products presentation with the magazine
• Put them on the cover
• Publish dedicated issues for them. Like “August is the X Manufacturer month”
• Organize events for them. Exhibitions, press releases, conferences
• Make an online version of the magazine and put their adds on the site
• Make contracts with advertising companies
• Make contracts with ads designers and branding/image companies
• Publish case studies from the manufacturers