Such a no brainer question right? Who wouldn’t  want to achieve the same revenue with only 1 sale? But then we see this happening everyday with salespeople.

Somehow magically some salesperson can just forget that it takes the same amount of time to close a $1000 deal vs a $10,000 deal.

Why does this happen? Well there is the perceived notion that a smaller deal is always easier to close and takes a shorter time. Perhaps that might be true but it’s very dependent on the product or service that you’re selling.

Even if you manage to close the deal, have you considered the other ‘costs’ involved? These kind of customers are unlikely able to pay too much (since your price point is enough to make it small) , will likely be more demanding and very troublesome too since their perceived investment is a significant one. They’ll probably be bugging you everyday on why you are not giving them enough support.

A recent discussion had me involved in determining whether an organization was a right fit for our company to partner with. I spoke with the founders and felt that they were in the same dilemma of targeting a perceived larger market with a low price point.

I asked them how much they charged for each person that signs up for their training services and they replied $200 per person per day…

My jaw literally dropped upon hearing that. How are they making any money or even hope to cover their costs? Given that trainings are inherently not scalable.

I told them I charged 10 times or more per person for our training services. I think they got the point. Basically the time and effort taken for them to close the same revenue as I do with only 1 real would be 10 times or even more!

That said I think they were bright individuals and hopefully with my feedback and encounter they would tweak their pricing and business model.

Keep this is mind the next time you set your process or try to sell something.