WHAT WE THINK ABOUT WHAT YOU THINK ABOUT.
This is a combination sales strategy and pricing strategy. We used to have a client who sold a certain product to maintenance managers at manufacturing plants. The product sale was a long-term relationship thing. The idea was to get into the plant with the basic product, which would then open the gate for followup services and add-on products. Pretty simple.
Thing is, once you were in the door, there wasnâ€™t much opportunity for competitors, but once your competitors were in the door, there wasnâ€™t much opportunity for you. So our client had an approach that was something like this:
Telephone sales guys, making LOTS of calls every day to a database of prospects.
Simultaneously, every prospect receives two direct mail pieces every month. The first makes an offer (the deal), and suggests a deadline. The other is a simple postcard that hammers the deadline (order now, before you miss the deal).
This, with phone contact, led to a lot of small transactions. But that was fine. Because once you get a transaction, everyone else is locked out.
One thing we learned was that maintenance managers had a certain â€œpurchasing thresholdâ€ below which they did not need to get the purchasing department involved. So, by pricing just below that threshold (which happened to be $2,000), we avoided the heavy negotiation and competitive bidding that comes with the purchasing agent.
So, you get into the house with a $2,000 below-radar transaction. Then, you sell add-on features and consultation services. Once youâ€™re all in place, you start jumping fences into other parts of the plantâ€¦other parts of the company. â€œHey man, imagine what you could do if you had a product like this to work with. Well, guess what. You have a product like thatâ€¦we just installed it down in maintenance.â€
Short term, a very expensive selling process for some small transactions. Long-termâ€¦ pipeline.
Just one more example of a something we learned from our very smart clients.