Sales Training Courses ask you whether your clients and Prospects Really want a lower Price?
As you know, your customers and prospects want a number of things from you, in order to continue doing business with you and your organisation for years to come. This is one of the best sales training courses in South Africa. I believe that there are four crucial elements, which ensure this will happen:
- Quality reliable products or services, which do what you say they will do.
- Timely service. Deliveries of products or services on time, every time.
- A trusting mutually beneficial relationship with you and your organisation.
- A fair price. This is a price which is lower than the value you, your product and service bring to the mutually beneficial relationship.
Sales Training Shows you that Low price is not a priority
The research I have studied, which spans a twenty year period, describing what businesses expect from their suppliers, suggests that quality reliable products, followed by timely service and trusting relationships, trumps low prices every time. In other words, as long as the first three elements (Quality Products and services, timely delivery and mutually beneficial relationships) are in place, the perceived value on the part of the customer is high. This means that low price is less of a concern. The caveat here though, is that the price must be fair and reasonable.
What do sales people think?
A similar survey conducted, over a similar period, to the one conducted with the businesses above, and surveyed sales people, asking them the same question. The results of these surveys, showed a very different picture. The majority consensus, amongst the sales people polled, was that low prices were far more important than quality products and services, timely deliveries and mutually beneficial relationships. Wow, what a disconnection, between these sales people and the needs and expectations of their customers.
Sales Training Teaches you to Sell Value
It is crystal clear to me that the majority of sales people, choose the easy way of differentiating their product or service, which is lower price. That makes it easy to close single transactions with unsuspecting badly informed consumers. The world of business has changed so dramatically over the past twenty years. The businesses most sales people visit today are no longer in a vacuum of ignorance and the sales person the bearer of much needed knowledge. Consumers have access to everything at their fingertips. They can get access to all the knowledge any sales person has, in the comfort of their offices. The people who make buying decisions, in organisations are very well informed and they know exactly what they want.
Do not sell on price
So any sales person, who thinks they can do the easy sale in the future and try to sell to business at the lowest price, is in for a huge surprise. The informed consumers, at most businesses don’t want to pay a low price. They want value in the form of a fair price, for the right product or service, they buy. The sales professional, who wants to be successful going forward, must find innovative ways to eliminate a challenge or satisfy a need within their customers or prospects businesses, deliver quality products or services on time every time and they must ensure that they develop long term sustainable relationships with their customers. Yes this approach is far more difficult, than offering the lowest price, but the benefits are well worth the effort.
Price and Cost
When it comes to understand the issue around price, there are three crucial elements, which need to be understood.
- The first element is “PRICE”. This is the amount of money, which needs to be exchanged for the product or service.
- The second element is “COST”. This is the amount that the consumer will need to pay in the end, if they make a wrong choice. For example if they choose the cheapest option and have to replace the product within a very short space of time. The price is low, but the cost over time is high.
- Finally the last element is “VALUE”. This is the expectation on the part of the consumer that they will actually get what they pay for.
People ask for a low Price
Most consumers believe that they want to pay a low price, when in reality what they really want is value for money. Consumers will pay any price they deem fair, if they receive either exactly the value they want or more value than they expect. Have you not fallen prey to making a purchase on a sale, when the price you are asked to pay, is far lower than the perceived value the product brings?
The secret to be successful in sales is to know the distinction between low price, low cost and value and to know exactly what you sell, i.e. the value it brings. Once you know the true value your product and service offers to your customers and you can clearly describe this to them. Selling is no longer about the lowest price, but becomes all about solving problems, meeting needs and offering the greatest value for money. The distaste of poor quality lasts far longer than the tantalising attraction of a really low price does.
Handling Price Objections
The obvious solution to a price objection is to lower the price right? Wrong, your prospects or clients will only object to the price, when you have not fully described the value you bring to them. If they feel that you are asking a higher price than the value they perceive, they will get from the transaction, they will obviously see price as a stumbling block. Great sales professionals see a price objection as a closed sale, because the price they charge is fair. So, all they need to do to close the sale is better describe their value proposition, so that their prospect can understand it properly and the sale is closed at that fair price.
Showing your true Value
This sales training course shows you that the best way to show the value you bring, is not as obvious as it may sound. You can never show someone value, unless you first clarify, the exact value you bring in your own mind. What is it you really sell? What are the benefits, in other words what is in it for your customer? Once you are crystal clear on this, you must ensure that you are attempting to sell it to the right person, who needs exactly that value. Once you get these two elements right, showing value becomes really easy.
Action Idea: Research your customers and prospects thoroughly and discover what the things are, which are keeping them up at night. Then using your clear understanding of the benefits your product or service offers, show them how your product or service will help them, solve a challenge, satisfy a need or add real value to them. Show your prospects or clients how your products or service will exceed their expectations and they will see the value you bring and the negotiation will no longer be about low price, but about cost term cost and value.
Focus on Value
As sales professionals, you must focus on benefits or the value your product or service offers, never on the price your customer will pay. Consumers will pay any fair price, when the value exceeds the price they must pay for it. You must raise the value perception in the mind of your customers. You can only do this effectively, when you are crystal clear on what it is your product actually does. Someone buying a drill bit is buying a hole. What is it your customer is really buying?
Try not to speak about price too early in the negotiation, as you may not have had the opportunity to fully describe the intrinsic value your product or service offers yet. If you however encounter a tyre kicker and there are quite a few of these out there, who is only concerned about price, then you must make a decision early on, if that is the type of business you want or not. Is the long term or life time value the customer, worth discounting your fair price or not. Only you can be the judge of that. For me the rule of thumb is simple. If someone is a tyre kicker and is pressing you for a price, which is significantly lower than the value you bring, then you would be wise to walk away from the transaction. Customers like that are never loyal and are not worth the effort they demand.
My experience has shown me that, customers, who require you to make huge concessions on price, expecting to pay a far lower price than the value they receive are a lot of work in the long run and they become the customers down the road, who are the most demanding and they are constantly asking for further concessions, extras etc. I suggest that you use people’s attitude about price, value and cost as a barometer of the overall quality of the potential relationship going forward.
Should you ever lower your price?
Again you need to examine each customer individually, before having a one size fits all philosophy. For example, in my own business, I on occasion offer my clients a lower price. I however ask them to make a concession in return. For example I ask them for a recorded testimonial to place on my website, I request to be allowed to sell my products at the back of the room or I ask them for three referrals. In each of these instances, I gain sufficient utility or value to warrant the reduced price.
My suggestion when dealing with a price objection is simple. Never make your first reaction to a price objection, one where you lower your price. Rather try to better explain the value you and your product offer, find a way to achieve a concession from your customer, which helps maintain a level of fair exchange ( get referrals, etc.) and only in extreme cases, where you see long term value in your decision, actually lower your price. Remember that once you set a price precedent with any client, you will need to live with that decision for the rest of the relationship and of course anyone they may refer you to.
Sales thought: “There is no darkness but ignorance.” – Shakespeare
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