With so many companies paying commissions as a percentage of 
gross margin, it's tempting to quote full price - or at least a 
very high price - when writing proposals.  You'll certainly make 
the biggest commission this way, but the question begs: will you 
lose too many sales on price to make it worthwhile?

If you've read my materials before, you know that I am very blunt 
about speaking the truth, and the truth is that price matters. 
Lots of sales trainers seem to be in total denial of this fact, 
and a lot of managers too, who just happen to be paid on profit 
margin.  They insist that if you're a good salesperson, you can 
sell everything at full price.  But in the real world, price 
matters.  Period.

Even when using the powerful profit justification techniques I 
teach, if your price is out of line, it's out of line.  Your 
prospect will take your profit-justified proposal and ask a 
competitor to provide the same solution at a better price.

As usual, this topic came to mind due to a real life experience 
that happened to me.  It was a conversation yesterday with a 
friend who happened to be the prospect of a salesperson trying to 
make a full-price sale.  The moment she objected to the price, 
the salesperson immediately offered a lower price.  A much lower 
price.

Her reaction?  She was insulted - infuriated - that the sales rep 
tried to pull one over on her.  She rightfully felt that his 
intent was to get as much money as he could out of the sale. 
When the sale was in jeopardy, he instantly dropped his price. 
After all, getting less money is still better than getting none.

I feel the same way when a salesperson marks up a price in an 
attempt to make easy money off of me.  I'm not stupid, and I take 
it as an insult to my intelligence when it happens.

When I was selling based on margin, I gave a fair price up front 
and stuck with it.  I told the prospect flat-out that my price 
was my best price and it could not come down any more.  I 
explained that I feel it's unethical not to give my best price 
up-front because anything else would be an attempt to rip the 
prospect off.  Prospects identified with this and appreciated my 
honesty and frankness.  I got lots of sales this way.

In addition to angering prospects, quoting your full price will 
also cause you to lose more sales than you know.  Prospects will 
consider your quote to be "out of the ballpark" and assume that 
even if you can negotiate, you still won't be within their 
budget, and as a result they won't return your calls when try to 
offer that lower price.  Quoting a fair price up front gives you 
a much better shot at the sale.

Having said all this, quoting a fair price doesn't mean giving 
your maximum discount on every proposal.  Find the right balance 
where your price is fair and competitive but where you're still 
making a good commission.  If your proposals are within that 
range, you'll win plenty of sales and have a generous commission 
check to show for them! 

Frank J. Rumbauskas Jr. is the author of the hit sensation Cold 
Calling Is A Waste Of Time: Sales Success In The Information Age.
His training and products teach salespeople how to generate hot 
leads without cold calling and how to keep their power and 
remain in control of sales situations.  For more information 
please visit http://www.nevercoldcall.com