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 Rumbauskas

Frank J. Rumbauskas, Jr., author of the New York Times Best-Seller "Never Cold Call Again: Achieve Sales Greatness Without Cold Calling," spent several difficult years in sales, frustrated and convinced that there must be a better way than the familiar chants of "cold call more" and "increase your activity" so frequently heard from well-meaning but otherwise clueless sales managers.

While working as an account executive for a Fortune 100 company in the mid 1990s, Mr. Rumbauskas was mentored by another A.E. who went from entry- level sales to upper management in 3 years, something unheard of in this particular organization. This top producer revealed a very basic principle to Mr. Rumbauskas. He immediately applied it and suddenly began to achieve tremendous results. That simple principle forms the basis of this entire program. Mr. Rumbauskas has taken it, perfected it, designed systems around it, and is now able to apply it to any and all sales jobs. He went on to successfully start and run two sales agencies based on these principles before moving into sales training.

His biggest strength compared to other sales trainers and authors is the fact that he is now a business owner who meets with salespeople on a regular basis. He is careful to observe everything they do right as well as everything they do wrong, and his training materials reflect this firsthand experience.

Originally from Linden, New Jersey, Mr. Rumbauskas now resides in Phoenix, Arizona. He is actively involved with various community and civic organizations in the Phoenix area, and is an active entrepreneur - he owns a mortgage protection life insurance agency which uses the principles he teaches to generate business without cold calling, and is a major holder in an emerging wireless internet company. He enjoys reading the great number of success stories we receive from students of this program. If you have a success story you haven't yet shared with us, please do so!