Price is not the only thing that matters and it is never the first thing.
I am lucky! In my job, I get to meet hundreds and sometimes thousands of salespeople every month. Some of them I meet briefly when they attend my seminars and others I get to know quite well when they attend any of the training courses I am involved in. If there is one complaint that I hear more than any other from salespeople it is the “price” complaint.
“We live in a price-driven market” or “Price is the only criteria” or “The only way we can compete is to drop our price” or “I couldn’t make the sale because the others were cheaper.” or “How do “they” expect us to sell this product at these prices?”
Now I appreciate that salespeople can moan. They are renowned for it, nothing is quite the way they would like it. I have been a salesperson for over 40 years, I know what I am talking about!
There are two basic economic truths that will never appear in any economic textbook.
1. The weather is never quite right for the farmers.
2. The economic climate is never quite right for the salesman.
Salesmen are always hoping to have the best product to sell at the cheapest price (with the highest commission of course).
But in this case, they are wrong. Price is not the main issue as far as the customer is concerned, it never is!
“We don’t live in a price-driven market, we live in a quality-driven market.”
“Price is never the only criteria that matters.”
“Sometimes you can become more competitive by increasing your price.”
Okay, I know some of you are shaking your heads right now. You know that price is the only thing that matters because that buyer told you so yesterday. Well….. I would like you to hold back on making up your mind just yet. Read through to the end and just maybe you will see a different perspective. And just maybe you will be better able to sell your quality products at that premium price that we are all going for.
Don’t believe me? Okay… To start with I would like you to take off your Salesperson’s hat for a few minutes and put on that other hat that you often wear. That’s right, your customer hat. The one thing that we all have in common is that we are all customers.
Now… As a customer do you always buy the cheapest products in the marketplace?
Well, do you?
What about the car you drive? Is it the cheapest possible vehicle you could buy that will get you safely from A to B? Probably not. You have probably spent a little more on the car you drive because it is bigger, or faster, or is the sort of car that your neighbours will admire.
What about the coffee you have at home, is it the cheapest coffee you could buy? Probably not.
And the Bluetooth music box that you bought last year to play all those MP3’s that are mounting up, was it the cheapest piece of equipment that the shop could offer? Probably not.
You see…. we know as customers that we do not just buy the cheapest. We buy perhaps, the best we can afford, or we have a quality requirement in our minds and we buy the most reasonably priced for that quality, but we do not buy the cheapest.
So why do we forget this when we put on our sales hat again? We think our customers want to buy the cheapest but this is rarely the case. The customer will have in his mind various criteria that will influence his decision to buy and yes… one of those criteria will be the price but this is not at the top of his list.
First and foremost the product or service has to “Work”. It doesn’t matter how cheap it is if it doesn’t do the job it is meant to do. Similarly, the other factors influencing the decision to buy will also usually take preference over price. Among these factors could be delivery, reliability, colour, availability, packaging, order quantities, etc. And even the relationship you have with your customer can be a much more important factor than price.
Sometimes, of course, there is a trade-off. Some customers will be happy to wait a couple of months for their product and pay a lesser price, but others would certainly not.
Quality, however, is different, quality does matter! The first question that a customer will always ask is “Does it work?” Will the product or service do what it is supposed to do, and that’s quality!
Once you have conveyed a quality message across to your customers you are in a much better position to be able to command a premium price for your product or service.