Don’t aspire to be the cheapest
Price is always an emotive issue. “We have to lower the price to keep in line with the competitors.” I hear the same statement from sales teams throughout the country. “How do you expect us to sell at this price?” they say, or “I couldn’t make the sale Boss, the customer was putting too much pressure on me to lower the price.” Actually price is not the most important issue as far as your customers are concerned.
The only time when price is the only issue, is when your customers can see no difference between you and your competitors. In fact, sometimes you can be more competitive by increasing your price! Don’t believe me? Take your sales hat off for a second and put on your customer hat. When you buy something, anything… do you always buy the cheapest? What about the coffee you have at home? Is it the cheapest coffee you could buy? Probably not! And your music player? When you went out at Christmas to spend your bonus at Dion Wired, did you buy the cheapest possible box to play your music? Probably not! When we are customers we don’t buy the cheapest, but as soon as we become salespeople we think that our customers only care about price. It is just not true.
Still don’t believe me?
“Does it work?”
Imagine you have two cars in front of you. One is a 1995 VW Citi Golf, price on the window is R10,000. Then next to it there is a brand new, straight out of the box Mercedes Benz S class 500, price on the window R1,000,000. What is the first question you ask about the VW?
The first thing you will want to know, is there any chance of you getting the thing going at all? This is always the question you ask about the cheapest. Now, what is the very last question you would ask about the Merc? That’s right! “Does it work?” You know that, at that price, of course it will work. When your customers see your product or service selling at a higher price they never question its ability to do the task, they may not be able to afford it, but they will want it. Quality is often measured by price, especially amongst your customers who may not know all the technical differences between your product or service and that of your competitors. By charging your premium price you are differentiating yourself from your competition. Your customers will subconsciously believe that yours is better quality because the price is higher, making it easier to sell. Still don’t believe me?
Okay, one last test! If you think that your customer always buys the cheapest, do yourself a favour. Next time you go and visit that customer arrive 15 minutes early, take a walk round the car park, find your customer’s parking space and look at his car. If you find the cheapest possible car to get him to work in the morning then you’re probably right, he always buys the cheapest. But if you find, as I suspect you will, that there is a Volvo, a BMW or a Mercedes in that parking space then you know they don’t always buy the cheapest and that they are just negotiating with you. There are other issues involved in the decision, like quality, delivery, comfort, relationship, value for money, reputation, etc. etc. etc…
Don’t fall into the trap of pricing down to the bottom of the market with the rats and mice in your industry. Be confident to charge your premium price and, as long as you can back it up with a quality product and service, you will gain a greater market share of more profitable business.