By Victor Antonio, Sales Influence

A few months ago I discovered that I was having an allergic reaction to coffee.  More specifically, I was allergic to a protein common in coffee beans.  Being an ardent coffee drinker, you can well imagine the horror and withdrawal symptoms I had to endure.

So I turned my attention to tea of which I mentally associate with being sick.  When I was young and got sick, my mother would always force me to drink a cup of Lipton tea.  Just the smell of tea caused me to feel queasy.  But like anything else in life, if you try it long enough, you’ll get use to it.  Studies have shown that over time mere exposure to something or somebody will cause you to accept them more readily. 

While walking through the mall one day I decided to venture into a tea nirvana store called Teavana.  As soon as you walk your senses are immediately overwhelmed with the various scents of tea offered and the assortment of tea paraphernalia you can use to brew your mystical concoction.

A young man by the name James walks up and asked if he could help and our conversation and transaction went something like this:

“James, I’m curious to see what you have available.”

“Well, let me take you over by the counter and let’s see what you like.” As gestured for me to follow him.

James then started breaking out these huge sample drums of exotic teas for me to get a whiff of.  After having olfactory overload my senses settled on an exotic tea with a hint of caramel flavoring called “Golden Monkey”.  You have to love the name!

“Well, what’s your final decision?” he asked.

“I think I’m going with the Golden Monkey.” I responded with a hint of humor in my voice.

“Would you like the big canister or the small canister?  The big one is only one dollar more.”

“If that’s the case, let’s go with the big one.”

James then placed the canister on the weighing scale and started adding scoops of Golden Monkey tea.  As he scooped in the tea my attention wandered a bit enjoying the beautiful theme and décor of the store.

“That will be $75.” He stated loudly to grab my attention.

“What?”

“Seventy-five dollars and fifty four cents.” He repeated.

“Holy buckets!  Ya’ gotta be kidding me!” I said “I didn’t want to spend that much on tea.  What’s in that Golden Monkey, gold?” I answered sa rcastically.

James just stared at me not knowing how to respond.

“James, I’m sure it’s worth it but I’m a novice tea drinker use to buying 100 tea bags for $5; this is quite a jump.”

“How much were you looking to spend?” he asked.

“I don’t know, but not that much!”  I shot back.Then there was an uncomfortable moment of silence between both of use as we evaluate where to go to next.

“James, just give me $20 worth.”

He then proceeded to empty the canister a scoop at a time until the scale’s display read $25.

“That’s good enough.” I said.

After the transaction was complete I walked out of the store with twenty-five dollars worth of Golden Monkey tea and a sense of confusion and disappointment.  I was excited to try the new tea, but I was a bit perturbed at having spent so much money on two ounces of tea. 

As I headed out of the mall and walked towards my car, my head was still spinning.  As a sales trainer I enjoy reflecting on the dynamics of a sales transaction and analyzing how the transaction could’ve gone smoother.  There were several questions running through my mind:

1)   Why wasn’t I feeling good about my purchase?  Was it the money?  I mean, maybe the tea really is worth that much. 

2)   Nonetheless, why did that experience or sales transaction leave me empty rather than fulfilled?   

3)   And, would I ever want to go back to Teavana again?

Anatomy of a Sales Transaction

What does this talk of tea have to so with your sales?  Well, whether you selling tea or airplanes, the concept and process of selling are the same.  James committed five mistakes and these five mistakes can be found in the how you may be selling today. 

Mistake 1: Understanding a Client’s Baseline Price Point

All clients have a value or a price in their mind of what they think they should pay for a product or service.  I like to refer to this as the baseline price point (BPP).  The advice I give all my audience when I train them is to first seek to understand, but more specifically understand what the customer’s BBP.  This BPP can be based on the last purchase they made or based on information from their initial research.  Whatever the source, you need to understand what the client’s BPP is.  In this scenario, James never took the time to understand what my BPP was.  I was accustomed to going to the local grocery store and buying pack of 100 for five dollars.  

Mistake 2:  Apples-to-Oranges

When you buy ordinary tea from the store, the majority of them are sold in small teabags for convenience.  In the store the tea is sold in scoops.  So my brain is thinking, incorrectly, “I bought a 100 teabags for $5 dollars this guy wants to sell me scoops for $75 including tax and a container.”  In terms of ounces, that comes out to about $10 an ounce where I’m use to buying tea for a dollar an ounce.  In my mind, the buyer, I was doing an apples-to-orange comparison since I assumed, wrongly, that all teas are created equal. 

Mistake 3:  Selling the Real Value

James should’ve found a way to sell the added value for what I was paying.  For example, I found out later that the ‘Golden Monkey’ tea may be used 3-5 times before throwing it away which automatically increase the value of paying a bigger price.  It also has a wonderful aroma and taste better than your regular garden variety tea.   Again, selling the value in this case should’ve focused on more tea for your buck and how much better it would taste.

Mistake 4: Don’t Keep’em Guessing

Nowhere in the store is there any indication of what the tea cost per ounce.  The consumer is at the mercy of the store attendant.  This made the sticker shock more shocking when I didn’t haven anything to compare the price too.  Again, clients have a BPP from the get-go.  If I had discovered the cost of the tea while browsing, I might’ve asked myself, “Why is it so expensive?” and “How is it better than regular off-the-shelf tea?”  I wasn’t able to ask these questions of James at that moment because I was still reeling back from stic ker-shock.

Mistake 5: Read the buyer

Simple question upfront on James’ part could’ve avoided this awkward situation in the first place.  He had asked me, “What type of tea do you drink today?”  Or, “Where do you buy your tea today?” this situation could’ve been avoided.  Either of these simple questions would’ve been enough for James to qualify me and then calculate how best to approach me.  If I had been an avid tea drinker he would’ve known that I understood the difference in cost when it came to package versus unpackaged tea.  Or, he would’ve discovered that I was a newbie and he needed time to ‘educate’ me on the cost and benefits of exotic tea.

I walked away from the exchange confused because most of the pertinent information (i.e., taste, price) was kept from me.   I would’ve felt otherwise if James had taken the time to:

a) Understand my Baseline Price Point

b) Avoid or correct my Apples-to-Oranges comparison

c) Learn how to sell the real value of the tea since not all teas are created equal

d) Educate me on the price and not keep me guessing

e) Qualify me as a buyer to get an idea of my experience in buying tea

Upfront Pricing

In selling, we often make the same mistake.  We assume the client knows more than we think and understand how much things cost.   The problem is that when we are wrong we get the exact same results James’ got when he tried to sell me the tea. 

Conventional presentation wisdom states that you should first create value in your sales pitch before you start talking about price.  I agree with this up to a point, but I think there’s a better way.  But what if instead of waiting until the end of the sales pitch to present price, we frame or anchor the price up front?   For example, what if James were to say to me,

“Victor, the tea you usually buy is inexpensive and doesn’t really have a lot of taste.  The tea I want you to taste will be a 2 to 3 times more expensive than what you’re use to paying, but once I explain why even you’ll think it’s worth every penny.”

This simple statement establishes an expectation of what’s about to be presented.   If James’ had made this statement, I would’ve been better prepared for the increase in price.  From this point on, all James had to focus in on was creating enough value to warrant or justify the higher price.  He could’ve said,

“Victor, ordinary black tea is only good for 1 cup of tea.  With this rich blend of exotic tea you can reuse use the tea leafs between 3 to 5 times depending on how strong you want to make it.   So although it’s a smaller amount in terms of weight, makes 2 to 3 times more tea than ordinary tea.”

This value–creation statement would’ve allowed me the buyer to begin to guess what the tea might cost.  If I pay  $3 and ounce, I could easily calculate that the tea would be around $6 to $9 per ounce. 

James did an excellent job in describing the richness of the tea and the exquisite blends.  He offered us a small sample for us to taste; an excellent way of getting us to appreciate the taste and smell the exciting aroma of several tea blends.  It was at this point that James, if he had approached this sale correctly, could’ve said,

“Victor can you taste the difference between Teavana’s blends compared to ordinary tea?  In fact, smell the uniqueness of the blend.  So not only are your taste buds stimulated, your olfactory, your sense of smell is also engaged in this experience.”

The Golden Monkey tea had a wonderful taste and the smell combines with hints of caramel really did allow you to enjoy the taste as well as the smell.  By offering a sample, James’ got me the buyer involved and continued to create value.  Again, this would’ve worked in his favor if he had only framed the price conversation early on by hinting that it would be a little more expensive.

Setting Expectations

Whether selling tea, insurance, consumer goods or high-tech equipment, it’s always good to frame the conversation in terms of how much it’s going to cost.  If you don’t, the client will focus more with how much it’s going to cost during the presentation, instead of focusing in on the value you’re trying to create.   This creates what I call ‘customer tension’ and distracts the buyer from focusing in on the message and the value you’re trying to describe. 

Don’t be afraid to mention price early on in the sales pitch.    If you don’t, you may get the same reaction I gave James, “What!?  I’m not paying that much!”   It’s all about building value, not tension when you’re selling.  Lower buyer tension by letting them know early on about the cost so you can focus on building value and the buyer can focus on seeing the value.

All buyers have a BPP, a baseline price point based on a product or service they may have encountered or purchased in the past.  Knowing the client’s BPP will give you an indication of how much value you have to create if your product is priced higher. 

It’s like I always say, “Selling ain’t hard when you know how!”

Victor Antonio, Sales Influence