Sales Machine

A reader writes:

I started out as a field tech, moved into assistant service manager role, and after being awarded for outstanding sales support, I became an account manager. I struggle with getting out of the technical role and into the sales mindset. Any advice?

Wow. That’s a big question. I could point you at a bunch of sales training books, but if you approach selling like a typical technician, it’s unlikely that stuff would make much sense. Instead, I’m going to recommend doing something that’s quick and easy. Put in techie-terms, I’m going to teach you the business equivalent of a “Vulcan mind meld.” Here’s the process:

• Step #1. Locate. Find the most talented and successful account manager in your company and ask (beg, if necessary) to let you shadow him (or her) on a couple of weeks worth of sales calls.
• Step #2. Observe. Watch how he presents himself, opens up a conversation, moves the sale forward. Observe the words he uses, the way he moves his body, the way he interacts with individuals. Take notes on your tricorder.
• Step #3. Investigate. After each sales call, ask your role model to describe what he was THINKING at each point in the sales call. You want to understand the basic beliefs and assumptions that support the successful sales behavior.
• Step #4. Imitate. After you’ve done this for two weeks, you should have a pretty good understanding of the way that a sales professional THINKS about selling, and how that thinking manifests itself in specific behavior.
• Step #5. Integrate. Start trying to think and behave identically to the sales professional. It will seem odd at first and you’ll be tempted to start talking technical. However, if you emulate both the thought process and the outward behavior, you’ll eventually get similar results.

Over time, what you’ve learned will “morph” into something that’s more personalized to your character. You’ll be thinking like a sales professional and therefore making more sales than if you stick with your current behavior.

Let us know how it turns out, OK?

Readers: any further suggestions?

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Having a problem with a customer, a manager, a career or a campaign? Email me and maybe I’ll post advice on this blog. Anonymity guaranteed.

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A reader writes:

I work for a software development company. We were the first in our country to develop a software for automating everything in gas stations (ticket printing, tank inventories, customer credit handling, and 100% web access). Nowadays we’ve got competitors and even a company that was born from copying our software. All of our competitors are selling with a lower price than we are. We do have some differences which make us better but most people look at price rather than quality or other values. What should our sales team do to make the difference bigger so that people look at our benefits rather than our prices?

Customers are smart. They want you and your competitors to get into a price war so that they can spend as little as possible to get their problems solved. They want everyone to compete for their business, so they try to blur the differences or “differentiators” (as they’re sometimes called) that might justify a higher price.

That’s what’s happening here. To promote their own interests, your customers are pretending that your product is just like everyone else’s. They even have some evidence of this, in that one of your competitors actually copied your software. Your challenge is to make the customer realize that those differences have value so that they not only won’t mind paying a higher price.

The key to doing that is making certain that the customer — not your product or firm — is the core of all your sales messages, and making sure that there are financial proof-points. Here’s what you do:

• Step #1: Realize that price isn’t the issue. Research reveals that even with fully commoditized products (where there’s no differentiation at all between competitive offerings), low price is the dominant factor in the buying decision only 15 percent of the time. In the majority of cases, other factors (convenience, location, brand familiarity, personality of the sales rep, etc.) are either more important or just as important. So even if your offering didn’t have differentiators, you could still command a higher price, as long as that price is not wildly out of line with the competition. (See: “How to Sell Overpriced Services.”)
• Step #2: Determine the value of your differentiators to the customer. Don’t accept your customers’ pretended opinion that price trumps everything. Instead, estimate the financial impact of your product differentiators on the customer. Example: If your system uniquely uses the web to retrieve information on average gas prices in your region, estimate the impact that feature might have on the customer. Thinking about financial impact forces you to consider the problem/solution from the customer’s perspective, rather than your own, internal, technical perspective.
• Step #3: Express those differences from the customer’s viewpoint. Stop talking about your product or your firm. Instead, craft a set of sales messages that use the second person (e.g. “YOU” in English) rather than the first person (e.g. “WE” or “I” in English) to tell a story that’s meaningful to the customer. For example, rather than saying something like: “We have a leading-edge, early warning system” say something like: “You will be warned when the average gas price spikes, so that you can reprice quickly — at an average saving of $1,000 per station, per day.”
• Step #4: Retrain your sales team. Now that you’ve recrafted your messages, retrain your sales team to sell your solution as it’s seen from the customer’s viewpoint. Make sure that the sales team can eloquently express the financial impact on the customer as a proof point that more than justifies the higher price. (Please note that this will probably mean throwing out most of your marketing materials, if they’re anything like the wretched stuff that U.S. software firms produce.) Important: Also train your team to NEVER discount, because discounting undercuts the value of your uniqueness.

The above is based, by the by, on a conversation that I had a couple of weeks ago with Dean Schantz, a senior Consultant with Corporate Visions Inc., a top sales consulting organization. Very smart guy.

One more suggestion. This is specific to your company’s situation, so I’m breaking it out here. If one of your competitors actually stole your code, you should immediately bring a lawsuit against them. When you publicize the lawsuit (a press release should do), make it clear that you’re bringing suit not to get your money back, but to save gas station owners from potential problems. Explain that the old version (now fixed in the real version) contains “significant” bugs that you’ve since fixed. Then call on all that vendor’s customers and offer them a special rate to “upgrade” to the real deal. You’ll put them out of business in six months.

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Having a problem with a customer, a manager, a career or a campaign? Email me and maybe I’ll post advice on this blog. Anonymity guaranteed.

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Here’s an easy way to get a dream sales job — the kind of job that will make you want to come to work every day. The method is pretty simple, but it’s powerful stuff.

In yesterday’s post “Can This Sales Career Be Saved?” a 41-year old sales professional confessed that, despite a career with some notable successes, she had “no idea what to do.”

Her situation isn’t uncommon among sales pros. I’ve noticed that a some people get into sales because 1) they wanted to make big money and 2) weren’t qualified to do anything else. As a result, there are a fair number of folk who aren’t all that happy and, frankly, aren’t as successful as they could be.

If that’s where you’re at, here’s a different way to think about your “job search”:

• Step 1: Figure out what you really enjoy. In my experience, most people don’t know what they truly enjoy in life, or if they do, they automatically assume that they can’t make a living doing it, or being around it. You need to decide what really turns you on? Is it rocket ships? Quilting? Computer games? Politics? Whatever it is, I can guarantee you that there’s a reasonably well-paying sales job that’s somewhere in the thick of it. By the way, this step isn’t easy. Most people are so caught up in their workaday lives that they no longer know what would really gets them revved up in the morning.
• Step 2: Discover where money is changing hands. There is not a single pursuit anywhere on the planet that doesn’t involve some kind of sales function. The more money that’s changing hands, the more there’s a need for a talented sales professional. The more you learn about the “business” of your area of interest, the easier it will be to find your dream sales job. Please note, though, that the job title may not be “sales rep.” It may be “agent” or “fund-raiser” or something like that. But it will be a sales job all the same.
• Step 3: Network within that area of interest. Once you know where there’s a need for a sales professional, it’s a simple matter of getting yourself known within the “business” end of that area of interest. Go to conferences and meetings, on your own dime if need be. Talk to as many people as possible. Use your sales skills to build a network and find a job where you’re as close as possible to whatever you really love doing.
• Step 4: Rake in the success. Sales professionals who take this approach to finding a sales job are always far more successful than those who just chase the cash. The reason is simple. Your ability to sell is directly dependent upon your passion for what you’re selling. If you lack that passion, you’ll be mediocre, at best. But with that passion — nothing can stop you.

For example, suppose you love nothing more than the ballet, but are not physically able to dance professionally. In the case the “ballet” business, the place where the most money changes hands in fund-raising. So if you love being around ballet and enjoy being part of that world, you’re best bet as a sales professional is in the area of fund-raising and (if you’ve got the sales writing skills) grant writing.

Similarly, suppose you love playing computer games. There are many, many places in the game business where money changes hands, but the part that probably involves the most money is the licensing of game characters for other media and for promotional products (like toys). Many of the deals are in the million-dollar category and all of them are custom, which means that a sales professional can add a LOT of value.

I just talked to a guy who had a life-long fascination with rockets and space travel. He now has a job selling reservations on future commercial space flights, and he’s booked many millions of dollars in revenue… in just a couple of years. That’s the power of passion when it comes to sales.

Of course, there are some people for whom selling itself is pure enjoyment — regardless of what they’re selling. If that’s you, congratulations! You’ll always have a job and you’ll always make plenty of money. And you’ll be smiling while you do it.

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A reader writes:

I’m a 41 year old female with experience in different fields (from retail to medical office manager to account executive for a local newspaper) but have no idea what I want to do. Everyone says I’m terrific at sales, have a great personality BUT I’ve had 10 jobs in the last 15 years. Some have been part time (I have been raising my kids) and the others are full time.

I left the Account Executive position because, although I did 70% over my goal within 4 months of getting hired, they doubled my next month’s goal and territory. Feeling overwhelmed, I just walked. I then became an Operations Manager for several months (no experience, but they were training me) but then they asked me to relocate. I was not willing to do that, so I walked…without another job.

I look at the local classified, am on Monster and CareerBuilder daily, and have taken countless “tests” for the “right” career. But without several years of experience, I’m not sure how to get in. I also want to file for divorce, so I need to work full time because I’m going to become a single parent. Your advice please.

I have a friend who goes through jobs with similar frequency. He starts every job talking about how much he enjoys it but within a few weeks he’s grousing about his manager and complaining about this and that, until he finally get fed up and quits (or gets fired). It astounds me that he never quite seems to figure out that the one thing that all his horrible sales jobs have in common is… him.

It’s hard for me not to see you in a similar light. You were over your goal as an account executive, so the company raised your goals. What did you expect them to do? Shrink them? When you were being trained to be an operations manager, you bailed when they wanted to relocate you. I can understand not wanting to move, but it sounds like you bailed out at the spur of the moment, rather than fighting to be assigned locally.

The fact that you’re 41 and still taking tests for the “right” career tells me that you’re direction-less. And your statement that you have “no idea what you want to do” reminds me of the famous dialog in Alice’s Adventures In Wonderland:

• Alice: “Can you tell me, please, which way I ought to go from here?”
• Cheshire Cat: “That depends a good deal on where you want to go.”
• Alice: “I don’t much care where…”
• Cheshire Cat: “Then it doesn’t matter which way you go.”
• Alice: “…so long as I get somewhere.”
• Cheshire Cat: “Oh, you’re sure to do that, if you only walk long enough.”

My advice to you is to figure out what you want to do with your life and career, get a job that moves you in that direction, and make a decision to stick with it even when it turns out not to be exactly as you’d like it to be. Check out tomorrow’s post, “How to Find Your Dream Sales Job” — it may help you decide what you really want to do.

And, by the way, unless something is horribly wrong with your marriage, I’d hold off on that divorce until you get a clearer idea of what you want out of life. Please don’t put your kids through that kind of pain just because you’ve got the mid-life flakies. Seriously.

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Having a problem with a customer, a manager, a career or a campaign? Email me and maybe I’ll post advice on this blog. Anonymity guaranteed.

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It’s surprising how many sales professionals mysteriously lose their ability to sell when they’re working on inside issues. A reader writes:

I was recently hired in a sales leadership role, to which I was bringing deep experience. Over the first few weeks, I gathered data and information, which led me to conclude that my territory was doomed to failure (as it had previously failed) if we followed our company’s current strategy. Since I reported directly to the CEO, I wrote him a professional report explaining why the current strategy would fail, what should change, and how the firm would benefit from that change, with a detailed cost/benefit analysis. The CEOs response was: “I felt you were criticizing me!” Everything went downhill from there and I was canned. The way I saw it, I had a choice between speaking up and losing my job in three months, or being quiet and losing my job in six. What do you think?

I think you didn’t use your “deep experience” in sales to sell your ideas. Your CEO felt you were criticizing him because… you were criticizing him. The fact that your argument was compelling, and backed with a cost/benefit analysis, just made the situation worse. No wonder you got canned. That was lousy salesmanship!

Suppose you had a customer that was doing something stupid and hadn’t yet figured out what was wrong. How successful do you think that you’d be selling to that customer if you opened your cycle by sending them a detailed report that said: “You’ve been doing stupid things, and you’ve been too stupid to figure that out, and here’s what you need to do differently?”

You should have treated your CEO like a customer. Here’s how:

STEP 1. Lay the Groundwork. Spend one-on-one time with the boss, finding areas where he is open to new ideas and planting seeds of discontent with the current strategy. Ask questions like: “Why did this strategy fail in the past?” “What other strategies have you considered?” and “What strategy might we pursue if this strategy doesn’t pan out?” This is, of course, very basic consultative sales theory.

STEP 2. Offer a Face-saving Alternative. Give the boss an excuse to change strategies without looking like an idiot. Blame changes in the outside world that have suddenly made the current strategy financially impractical, rather accusing the boss of persistent woodenheadedness. Example: “Due to rapidly changing market conditions, our current strategy will require an additional $25 million in marketing to guarantee success.”

STEP 3. Transfer Ownership of the New Strategy. Package your new idea as something that the boss created, and which you have subsequently fleshed out into a practical alternative to the current strategy. Example: “As you suggested in our meeting on 6/20, the most viable alternative to our current strategy is… And here are some suggestions for implementing your backup plan…”

STEP 4. Present the Alternative in Person. Because the boss feels ownership of the current strategy, the alternative strategy should be presented face-to-face (or even lips-to-butt), so that you can better sense the boss’s reaction and help him make the transition. This is exactly like presenting your solution to a customer and then closing the deal.

Is the above routine more hassle than writing an “I’m right; you’re wrong” report and dropping it on the boss’s desk like a dead mackerel? Absolutely. But unless you’re willing to sell your ideas, you can’t expect other people to buy into them.

For future reference, you can get some more detailed information on handling bosses in these feature articles: How to Manage Your Boss and How to Sell an Idea.

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Having a problem with a customer, a manager, a career or a campaign? Email me and maybe I’ll post advice on this blog. Anonymity guaranteed.

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I just ran across the clearest description of how to become a great “closer.” It’s in the new book “Perfect Selling” by Linda Richardson, founder of the top sales training firm Richardson. You’ll have to buy the book if you want the full instructions (it’s a quick read, but content-rich), but here’s my abbreviated version:

• ACTION #1. Know what you want the customer to do before beginning the call. Create a concrete, measurable call objective describing the results you want to see at the end of the call. Example: “Get a copy of the customer’s org chart and an appointment to meet with 3 decision-makers within three weeks.” Or: “Close the sale and take the order.” Avoid mushy, unmeasurable goals like: “Get to know the customer better” or “Build relationship and rapport.” Remember: if you don’t have a measurable objective, you can’t possibly close on it.
  Click on “Closing Rule #2: Set an Objective for details.
• ACTION #2. Ask for Feedback Throughout the Call. Ask questions like “How does that sound to you?” and “What do you think?” whenever you make a statement about your solution or capabilities. You’ll either get feedback that will help you better position yourself and your offering, or you’ll get a series of green lights that will let you know that it’s appropriate to move to the close. If you wait until the end of the call to gather this feedback, it will be too late to make adjustments and try to turn the lights from yellow to green.
  Click on “Closing Rule #4: Always be Checking” for details.
• ACTION #3. Ask for the Business or Nail Down the Next Step. To keep the momentum going, you either confidently ask for the business or (if the sales cycle isn’t over) ask for the next step. If you’re asking for the business, make it simple like: “We can start on that tomorrow; do I have your go-ahead.” Or: “We very much want to support you in this; Can we move forward?” If you’re asking for the next step, position it as part of a process. Example: “We discussed the role of the district heads; how would you feel if we met with them next week?”
  Click on “Finally: How to Close” for details.

The most important imperative here is to maintain momentum. By deciding what you want, moving the meeting in that direction, checking to see that you’re on target, you build confidence that leads naturally towards the close.

You might notice that this isn’t exactly brain surgery. And there will probably be some of you to whom the above is second nature. But the truth is that the ability to close — easily, quickly and consistently — is the single most valuable skill that any sales professional can have. And as with any great art, it’s important to remember, and practice, the basics. Here’s a good place to start: “Closing Rule #1: Think Like a Closer.”

Readers: Any further suggestions?

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Having a problem with a customer, a manager, a career or a campaign? Email me and maybe I’ll post advice on this blog. Anonymity guaranteed.

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A reader writes:

I have been in my sales job job now for about 3 months. I have just found out that I am going to be deploying. I am still at work and will continue to work until I have to leave for active duty, but I just can’t help but feel guilty for putting this company through a lot of hassle because now they are going to have to retrain someone to fill my position until I get back. The company was aware that I am in the National Guard and hired me anyway, but the guilt that I feel is hard to cope with. I want to do my best here at work. Any advice for me?

Absolutely. Stop feeling guilty.

Your company should be (and probably is) PROUD that you’re serving your country. Training a replacement and holding your job for you is a way that your firm can show support for our armed forces. It’s the least they can do, considering that this government has completely failed to ask businesses (or anyone else, other than our volunteer armed forces) to sacrifice something for the war effort.

What’s more, the fact that you care enough about your firm to feel guilty, and cared enough about your country to volunteer for service, shows that you’re the kind of top-quality person whom every company wants to employ. That is why your firm employed you, even though they knew there was a risk that you might be deployed.

That being said, I recommend that you use your deployment to strengthen your relationship with your workplace peers. Send them frequent emails and updates. Keep them informed of what you’re experiencing. When you come back, I think you’ll find that you’ll be welcomed with open arms.
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Having a problem with a customer, a manager, a career or a campaign? Email me and maybe I’ll post advice on this blog. Anonymity guaranteed.

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If your business model involves complex sales proposals, you know how difficult it can be to get the writing process started. Here’s a trick from the uber-guru of proposals, Tom Sant, author of Persuasive Business Proposals.

Before you and your teams begin writing, conduct a brainstorming session, using the following questions as creative spurs:

• What does the customer want to happen?
• What does the customer believe that they need?
• What is the customer’s problem or issue?
• Why is this problem important to them?
• What parts of the business are affected by this problem?
• What corporate goals are not being achieved?
• How will they measure success (financially, technically, other)?
• Which success measurement is most important to them?
• What will we propose?
• How will we do this work?
• What proof can we offer that we are qualified and competent?
• What is our value proposition?
• How can we demonstrate that the value we propose to offer is credible?

As you work on these questions and flesh them out creatively, you’ll build up the raw material that can transform your proposal into a document that will (at the very least) get you on the short list.

Then, when you actually write the proposal, follow the rules in the previous post “The Essential Sales Proposal Checklist” and avoid the errors described in the previous post “Ten Gaffes of Proposal Writing.”

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Having a problem with a customer, a manager, a career or a campaign? Email me and maybe I’ll post advice on this blog. Anonymity guaranteed.

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A reader writes:

I like nothing more than strategy, messaging, and marketing. In this capacity I have done some great things over the years — including some big-ticket sales along the way. Problem is, none of it took place as a quota-carrying member of a traditionally-structured sales force. Worse, my background also includes a good deal of communications and advertising — even (god forbid!) journalism. I have noticed all of the jobs I want in my field going to people who, despite their titles, all started as salesmen and have always been part of that culture. Meanwhile, I’ve been out of work for a year. How do I position myself as a member of a sales organization when I’ve never actually been a salesman?

You have two possible approaches:

1. Lie. The only way you can position yourself as having been a “member of a sales organization” is to leave the false impression in the mind of your prospective employer that you actually know how to sell.
2. Pay Your Dues. There are plenty of jobs in sales available out there in the real world. However, they involve real work as opposed to “strategy” and “messaging,” which are nothing more than the spouting of hot air.

You say you “have done…some big ticket sales” even though you weren’t in the sales role. Oh, really? Gee, I’ll bet there was a real sales rep around somewhere when these big ticket sales came down. I’ll bet euros to croissants you just were along for the ride. How do I know this? Simple. If you knew how to sell, you wouldn’t have been “out of work for year.” People who know how to sell can always sell their services to somebody.

It annoys me when marketeers take credit for the hard work of the sales team. And it annoys me even more when marketeers describe themselves as being involved in “strategy” and “messaging.” That stuff makes me cringe, since I have NEVER seen a B2B marketing group create either a strategy or a message that made sense to anybody except other marketing geeks.

All too many B2B marketeers get caught up in these grandiose fantasies that they’re strategists, plotting the future course of the company, and creating vast and powerful market programs that the sales team simply executes — creating revenue and profit.

Hogwash.

As a (god forbid!) journalist, I’m constantly exposed to marketing executives inside a wide range of companies and industries. And since I write about organizational culture and technology usage inside sales teams, I’m also in touch with sales professionals in those same companies. I can tell you with the authority of years of experience that your average sales rep knows far more about how the business world really works than your average marketing vice president.

You would not believe the stupidity that I’ve seen among marketing executives, even inside Fortune 100 firms.

For example, a few weeks ago I interviewed a marketing executive for a MAJOR software company. When I asked what differentiated his product from the competition, his response was: “it’s easy to use, makes people more productive, and provides a competitive advantage.” When I pointed out that every business software makes the same claim, the best he could come up with was: “uhh, well, we really do it.”

That dunderhead probably pulls $250,000 a year (not including stock options) and he can’t answer a simple product positioning question without sounding plain-wrap. He wasn’t just an empty suit, he was a waste of the wool that the suit was made of. But the worst thing about this encounter was that it wasn’t at all unusual. I run into similar dunderheads (or the “strategies” and “messages” that they’ve created) several times a week at minimum.

Now, don’t get me wrong. I’ve met some smart marketing execs. These unsung heroes clearly understand that their purpose in the corporation is to make selling easier. They work hard to understand what kind of leads the sales folk need, and make a real effort to provide tools and support to make it easier to turn prospects into customers.

Unfortunately, those paragons are few and far between. And while I apologize for tarring all marketing folk with the same brush, if you don’t like me slamming your profession, why not get out there yourself and pitch the parasites out on their useless behinds?

So, reader, here’s my advice: Forget about these fantasies about “messaging” and “strategy.” If you want to claim you’ve got sales experience, go out get a real job. In sales.

Let me put it to you bluntly. There’s a reason that candidates with sales experience are getting the jobs that you want.

It’s because they deserve them.

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Having a problem with a customer, a manager, a career or a campaign? Email me and maybe I’ll post advice on this blog. Anonymity guaranteed.

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Price wars happen in many industries and they can kill your margins — and make it more difficult to close business. A reader writes:

I am on the sales team of a large company manufacturing flexible packaging material by the conversion of polymers. As the oil prices continue to rise, the basic raw material for our industry is rising as well. We are finding it difficult to absorb the cost increase and so our financial guys want to increase prices to match. However, we can’t pass the increase on to our customers, because majority of them don’t try to understand our problem and our competitors are still hanging on to their previous pricing. Do you have a value-based selling strategy or remedy that can help?

Sure, but first let’s diagnose the problem a little more clearly. Your problem isn’t that your cost of goods has gone up, because the cost of goods has similarly gone up for your competitors. Unless your cost structure is wildly inefficient (compared to your competition), the real problem is that both you and your competitors are waiting for the other guy to raise prices first before raising your own prices. In other words, the rise in oil prices has precipitated your entire industry into a price war.

You say that your customer’s don’t “try to understand” the situation. That’s incorrect. They understand it all too well. They know that they’ll eventually have to pay more for your product if oil prices remain high. They’re hoping to pick up some bargains while you and your competitors play “chicken” to see who’s going to raise prices first. They’re also hoping that oil prices will drop before your industry raises its prices, in which case their industry won’t have to pass the price increase to their own customers.

For the purposes of this discussion, let’s assume that oil prices are going to remain relatively high for the foreseeable future. If that’s true, then it is inevitable that ALL the firms in your industry will eventually raise their prices, because no industry can operate unprofitably forever.

So you know you’re going to be raising your prices at some point. The only question is timing. If you raise your prices first, you’ll risk losing customers. If you wait until the competitors raise their prices, you’ll end up losing money. What to do? Here are your options:

1. Tough it out. If you’ve got the deep pockets, you simply hang tight, keep selling at a loss, until the competitors raise prices. Then you rush in and grab customers before raising your own prices. Note that by doing so, you’re training the customers to jump ship whenever anybody has a lower price. This will come back to bite you.
2. Raise and Pray. If you don’t have deep pockets, you raise your prices and pray that your customers stick with you. This will probably only work if you’ve built up some really strong customer relationships. Since your offering lacks market differentiation, the only thing that will keep a customer “in the fold” is probably their desire to continue doing business with you, personally.
3. Fix prices. This is illegal in most countries, but not in all countries. If it’s not illegal in your country, you can get together with your competitors and decide to raise prices in lockstep. If it is illegal in your country, you can announce that you’ll raise your prices but won’t keep them high unless your competitors follow suit. (Airlines in the U.S. do this; occasionally it works.)
4. Limit customer risk. Rather than raising your prices to match the rise in oil prices, raise them a bit more than that, but guarantee that same price for, say, two years (even if the price of oil goes even higher) if the customer will sign a long-term contract. Include a proviso that if the price of oil drops, your price will drop proportionately. That way you’re always getting a premium and the customer reduces catastrophic risk.
5. Rubbish the competition. Raise your prices and then position the competition as being irresponsible and likely to go out of business if they don’t do the same. This raises the specter that the customer may end up without a supply of the product at some critical point because they’re buying from boneheads. In other words, you raise the customer’s fear level in order to make your high price into a (temporary) positive market differentiator.

If the above measures sound desperate, that’s because they are.

The long term solution to getting clobbered by price wars is to become a strategic vendor rather than a commodity vendor. Price wars are only possible when when the products from different vendors are so identical that the customer doesn’t care who supplies them.

Had I been in your position, I would have tried to completely “own” your customer’s product packaging problem. I would have positioned my firm as an strategic outsourcer who could provide a complete packaging service at a lower cost than they could run it themselves.

If that were the case, it would cost your customers more money to build their own packaging capability than they’d save by going to a lower-cost commodity supplier, and you’d be able to pass the expense along, just as if you were an internal group.

Unfortunately, it’s too late at this point to become a strategic vendor, so you’re pretty much screwed. Sorry.

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