Salespeople who complain about price as a barrier need to wear bicycle helmets.
As a salesperson, the next time you feel you are losing deals because of price, take your prospect to a cycle shop and ask them if they were to ride a bike, which one of the helmets they would buy – the one that’s on sale for $10 or the sleek, ventilated $150 model that promises it meets all testing standards?
The bet is they’ll opt to buy the $150 model. Why? You need guaranteed protection from a helmet in a crash; as a cyclist you need good ventilation; and if you’re racing, you need a good aerodynamic design. All of which are promised by the more expensive model.
The same is true for many of the products and services being sold every day by professional sales people. Everyone wants a low price. But it’s what customers need that really counts. As a salesperson it’s your job to determine what is needed and then show the customer how you can meet those needs.
In many major buyer organisations today executives are paid based on the amount they can shaved off a purchase price. As a result, they look not at value, not at risk, but at the price. And as they push suppliers for the lowest price they usually increase the risk of failure.
Most reasonable prospects will pay a higher price for guarantees. Here’s what buyers are saying is important to them:
- On-time delivery
- Help and guidance with complex purchases. People who make multiple, varied or complex purchases are often not as knowledgeable as you might think about what they are buying. If you see your role as that of an advisor to a harried prospect, you can get an advantage over your competition.
- Quantity, quality, timeliness, accuracy. Customers need to get what they’ve ordered. They need it on time and in top condition.
- Minimal stock carrying costs. Your prospects might need just-in-time inventory, which means nothing is received late and they don’t have to keep too much on hand. Prospects will tell you they want a low price, but they will cut you off as a vendor if you foul up delivery.
- A technically current, financially sound vendor. Many low-price competitors go broke fairly quickly because they’re cutting corners somewhere. Smart buyers are more concerned with the stability of your company, the quality of your product and your ability to deliver on time than they are about prices.
- More certainty on A items than on B or C items. A items are those a business can never be without; B and C items are less important. In the airline industry, for example, fuel is an A item, ice for drinks might be a B item because they are important for passenger satisfaction and service, but not crucial for flight operation, and drink stirrers a C item. The lack of B or C items won’t put a company out of business; lack of an A item spells major disaster. Know where your product or service fits in the hierarchy.
Remember everybody lives by selling something.