Your customers and clients want several things from you as their supplier. They look for fair price, quality products and a timely service, although not necessarily in this order.
Surveys of sales groups over a 20-year period asking what they thought was most important to consumers have revealed low price comes first, quality next and service last.
Three elements need to be understood in selling situations if you’re going to effectively deal with the challenge of customer satisfaction.
- First is price which is what we, as consumers, pay for what we buy.
- Second is cost – which is what it costs us over time, what it costs us if we do it wrong, do it late or not at all.
- Then there’s perceived value. That’s the value we expect for the money we pay.
Are cost and price the same thing?
Most consumers tell salespeople they want a low price – when what they really want is low cost. Do customers want the cheapest or do they want the product or service that best solves their problem, answers their need or fulfils their desires?
The truth is, most prospects or clients want their problems solved. They recognise they get what they pay for. They also know that the distaste of poor quality lasts far longer than the sweetness of the tantalisingly low price.
Buyers will object to price when they feel what they’re being asked to pay is higher than the perceived value of the transaction. When an ineffective salesperson encounters price resistance, they usually lower the price but it’s not usually a price or cost issue at all, rather one of the perceived value being too low.
Related: Selling Essentials for Entrepreneurs
How do you demonstrate value?
What can you do to raise your customer or clients’ perception of the relative value of what you are selling?
A simple way is to find out what is troubling them most and then show them how your product or service will satisfy, or overcome this need, want, or obstacle and exceed their expectations of value. This way, price will become secondary.
Real sales pros focus on value of their product or service to their customer and not the price they’ll pay. They understand that while price is an issue, it’s usually not the most important one. Price will always seem high when perceived value is low.
Talk about value, not price
The way to change the relationship between price and value in the buyer’s mind is to focus on raising the value perception. Lowering price only makes them view your original price, as well as the new, lower one with suspicion.
It’ll become evident that you don’t want to introduce price too early in the sales process, especially not before you’ve had the opportunity to build a value proposition in the mind of your prospect.
If you have a buyer who’s a price-only shopper (they are out there) you’ll need to decide what their business will be worth to you in the long run, or if it will ever be worth anything.
History has shown that prospects who make a big deal out of price, expecting price adjustments will ultimately require a lot of other concessions and extras as well. Use their attitude about price and cost as a barometer of the overall quality of the supplier / customer relationship.
Remember, once you’ve set a pricing precedent with a client, you’ll live with it for the life of that relationship and, of course, anyone they might refer you to.