Simple “Sales Math” Should Be Taught in Schools

Price and Value, Sales Recommendations (presentations)

Thinking back to all of the math I took in high school and college, most of the algebra, calculus, statistics and accounting was never of any use to me in the real word. What would have been really helpful is some basic sales math that most of us use the rest of our lives.

Numbers of course play a huge role for anyone in sales, and business. Look around you and in the news… the NHL season is in danger of being cancelled because players and owners are arguing about percentages of revenue, the “fiscal cliff” is a real concern for many of us,  and we use numbers in a variety of ways to persuade and sell.

We employ numbers to describe degrees of pain, pleasure, profits, losses, income, ROI, and time. And there are smart ways to use numbers on the phone in your sales. Let’s look at a few of them.

Reducing Price to the Ridiculous
This old technique refers to minimizing your price or difference in cost between you and a competitor. “Ridiculous” refers to how insignificant the amount really is when you put it in daily terms.

“Pat, we’re really only talking about a difference of two dollars a day to have the souped-up model.”

(Or, ridiculous could mean how crazy someone could get with this technique, which can sound cheesy: “Chad, it’s only 30 cents per hour difference over the 10-year life of the machine.”)

Raise it to the Outrageous
Conversely, this is taking a savings and extrapolating it over a longer period. It’s useful in pointing out how much someone will save, over a greater period of time, by buying from you.

“You’ll save the shipping cost on every order. On two orders per month at an average of $15 per, we’re looking at $360 for the year.”

Can You Say “Dollars”?
When you want to maximize the perception of a number, say the word “dollars.”

“With us, your savings will be over three-thousand dollars.”

Conversely, to minimize it, just say the number

“To upgrade will only be an extra one-fifty.”

Use Exact Numbers
Stating exact numbers adds more credibility to your statements than using rounded numbers. For example,

“Our program is in place at 358 dealerships,”

…sounds authoritative.

“Our program is in about 400 dealerships,” leaves a feeling that the number might be fudged a bit.

Likewise, if you want to minimize the importance of a number, you could use a rounded figure.

“We’re only looking at a figure for customization somewhere in the 200 range.”

Place Price in a Different Perspective
You probably can recall those hair-pulling situations here you’ve established the savings or additional profits you could help someone realize, but yet, they don’t act on it. It’s normally because they don’t see the number as being significant enough. So put it in terms they can understand.

“Paul, you’re right, we’re only talking about $600 a month savings here. But I bet that would make the monthly payment on one of your delivery vans.”

Or, here’s a powerful one:

“The $200 cost reduction might not seem like a lot, but let’s look at it a different way. You said  you’re profit margin is about 10%. You’d need to do  another $2000 in sales per month just to make the  $200 I’m basically offering you, for free.”

These examples just scratch the surface of how we use numbers all of the time in sales. I’d like to hear yours. Leave your comments below with some numbers-techniques that you use to persuade and sell.

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