By Neal Glatt

Record high gas prices are just the latest hurdle to businesses struggling to make profit in a rapidly changing economic environment with massively increased costs.  One thing is clear: raising prices in 2022 is necessary to survive.  Here’s how to sell contracts and renewals with enough profit, even enough to afford gas…

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Raising prices on renewal contracts should start with an open conversation with customers.  Many contractors go wrong when they just send an email or form letter.  For clients, it can feel impersonal and lead to low renewal rates.  Lower percentage increases can seem petty while bigger price increases can seem extreme.  Either way, clients who are not renewed personally become flight risks when the price increases.

But when renewals happen face-to-face, and to a lesser extent via a phone conversation, great salespeople can better articulate their value and can actually increase client loyalty.  By reviewing the past performance and explaining the increased supply chain and labor costs, it becomes clear to clients that increased prices are essential to continue offering the same level of service.  It can also be helpful to explain the modified level of service that would happen if pricing remained constant (although this can lead some ameteur salespeople into trouble if they actually sell this solution).

In both renewals and new contracts, the underlying key to increase profits is the ability to sell a solution on value.  The amazing thing about value selling is that once the skill is learned, it doesn’t matter if the price premium is 5% or 25% over the low bidder.  The best value sellers can actually sell contracts at double the price of the lowest bid in competitive environments.

Selling on value requires a well-defined sales system, lots of practice, specific techniques, and qualified prospects.  Attempting to sell value solutions with buyers who don’t have the right buying reasons, budget, or ability to make decisions will only lead to wasted time and money.  But for those salespeople who have learned to sell on value, rising gas prices is actually a wonderful opportunity to have cost-increase conversations that can unlock increased profit margins at higher revenues.

For those who plow snow, now is the time to start contract renewal conversations.  If you want to level up your ability to sell on value, consider joining Neal and Phil for two days of sales training at the Snowfighters Institute Forum for Sales events where you’ll learn how they scaled snow businesses while charging significant price premiums over the competition.  For the 2022 season, the Forum for Sales is being offered June 14-15 at Ventrac’s Factory and Proving Ground in Ohio, as well as August 10-11 at Foley CAT in New Jersey.  One recent Forum for Sales attendee reported that he exceeded his 2021 snow sales goal by over $200,000 after attending!  Click the links above to learn more and register today.

If you can’t wait to learn how to sell on value, check out the GrowTheBench course Value Based Selling on demand here.  You’ll learn the mindset, strategy, and practice to sell at a premium and make the profit your business needs for today’s increased costs.

Check out Neal's interview on the GrowTheBench weekly podcast for more thoughts on this topic: