Losing Sales Because You’re Too Expensive? (Part 2)

In Part 1 I mentioned that the salesperson often discovers the problems associated with pricing when they are well into the selling process. However, if they had paid attention to all the key spots, they would find out that the pricing issues already existed BEFORE the sales visit took place. Assuming they had chosen the right target companies (these would be those fulfilling certain selection criteria distilled from the characteristics of currently strong supporting customers) and that they are meeting the right individuals within those companies (individuals who are in positions that can advance or progress the sale), the salesperson has still to contend with yet another “enemy” before they can overcome the high price issue. An enemy that can truly be formidable at times. This enemy is none other than the customers’ state of inertia (characterized by situations such as: letting things carry on as they have always been; no changes needed when things are not broken; liking things as they are; the company having no problems currently to worry about; the current problem is a small one that can be ignored, etc.). Herein lies the platform to “sell value”. When value is clearly perceived by the customer, price becomes less of an issue. There are numerous value selling processes propagated through books and many sales professionals know more than one approach to selling value. However, many of these “value selling processes” have certain common characteristics. Many equate “value” to better products, better ingredients making those products, the company’s competitive advantages, etc. Those using arguments based on better products or better ingredients are quickly shot down when customers fail to perceive how they are better than the competition, and even if they are better, whether the customers require such higher levels of quality, given the price they have to pay, when a “normal” quality product might also do. If a salesperson attempts enumerating their company’s competitive advantages to demonstrate value, how could they be advantages when customers fail to perceive their importance to them? Despite some earnest efforts, the salesperson today rarely succeeds in convincing the customer of “value” using the above. So, how can value be “sold”? I believe the answer lies in educating the customer to see how dire their situation can become if nothing is done to eradicate a current seemingly small problem. Fear is perhaps the key. As the customer is not expected to know everything, it is the salesperson’s job to show them what they need to know. Instead of just telling customers what can befall them if problems remain unsolved, it is more powerful to hear potentially dire consequences from the lips of customers. How can this be done? By asking them certain questions to which the answers would constitute potentially dire consequences of inaction in resolving current problems, a situation or situations which they can AVOID NOW. Such questions would include: “What would the situation be like in 3 or 6 months’ times if this problem remains unresolved?” “If you were to put a dollar value to it, what losses are you looking at as a result of this issue?” I like illustrating this further with an analogy. If you asked someone what’s the value of a bottle of mineral water while you’re having this conversation in town, they’ll probably tell you the price of a bottle of mineral water they would pay for from a nearby convenience store. However, if you hypothetically asked someone who had been lost in the desert for a couple of days the same question, the answer will unlikely be the price of a bottle if obtained from a convenience store! That same bottle of water will be priceless in such a situation. The same goes for selling value. The value of what we sell does not change in the eyes of the customer simply because we’ve made a “better product” or we have altered the ingredients and made it different. In the analogy above, the only way value is fully appreciated is when we change the context or circumstances the customers see themselves in (e.g. from the convenience in town to being marooned in the desert for a couple of days!). Likewise, value can only be appreciated by the customer if we make them see what they could stand to lose from an unresolved issue or problem. Our products and services therefore form the “solution” to prevent the problem from occurring or worsening. Therefore, the job of a professional salesperson today is to get the customer to see what they stand to lose if the problem or potential problem remains unattended by a solution like yours. Get them to describe the possible consequences through some of the questions suggested above rather than just telling them what it could be. To lend more teeth to this, monetize the problem (put a dollar value to how much they stand to lose) so they can compare the price of our solution to the amount they stand to lose. This is truly the proper way to compare price – not against what our competition is charging but against what the customer stands to save by investing the price of our solution. Some may argue that we should use a more positive approach to attract the customer to invest in our solutions (i.e. sharing with them on what they can stand to gain by using our solution, rather than what they stand to lose if they don’t). But as mentioned earlier, FEAR is the key. Many customers are more motivated to avoid a problem then to gain something. Avoiding something negative has a stronger pull for most of us. This is probably a “human” thing, as entire industries have thrived playing on the fears of the public. When we succeed in getting the customer to see the worth of our solution in preventing further losses for them, our price then becomes a worthwhile investment indicator for loss prevention.