Bonita Springs, Fla.
“We’re in the worst economy in our lifetime, and I don’t think it’s going to get better in the next year,” Reed Holden, president of Holden Advisors Corp., Concord, Mass., said at a conference here.
Holden spoke about strategies for maintaining realistic prices in the face of a brutal recession during the annual disability insurance conference sponsored by JHA, Portland, Maine.
He called for a calm, analytical response to the recession. “My advice to you is, as quickly as possible, get over it,” Holden said.
“Getting over it” should mean improving products and services and working hard to find genuinely qualified prospects, not cutting prices to unprofitable levels, Holden said.
“You can’t price your way out of a recession,” Holden said.
One way to increase sales reps’ ability to sell based on something other than price is to train them to understand the products they are selling. Another way is to put more effort into using simple screening questionnaires and other techniques to filter good prospects from those who are not actually likely to buy, Holden said.
“Not all customers want and are willing to pay for value,” Holden said.
Building sales reps’ confidence is also important, he said. Effective sales executives “are not banging the ‘we’re going to die’ drum,” Holden said.
If executives at a disability insurer think the reps are focusing too much on price, that may be a symptom of other company problems, Holden added.
Holden recommended that executives who are dissatisfied with their sales reps try going out on sales calls for a day. “You have no idea what it’s like out there,” Holden said.
Holden recalled working with a client company in the electronics industry that thought it was having problems because its sales reps were too quick to discount. In reality, the reps were discounting because the company was unreliable and failed to support them adequately, Holden said.
Holden also emphasized the importance of firing bad customers, including customers who spend a disproportionate amount of time complaining.
“The squeakiest wheel is usually the least profitable,” Holden said.