The Importance of Price

them happy.

Unless you are Wal-Mart or The Dollar Store, whose entire business models are built around very small margins and high controls on their inventories, the ?lowest-price? approach will probably fail you. Selling on price is an indi- cation of a weak-minded and poorly trained individual or organization. As I mentioned earlier, plenty of organiza- tions that have used the lowest-price model have filed for bankruptcy or closed their doors this year alone.

If you are going to sell fewer products due to a tight- ened economy, you have to do a better job of determin- ing your prospects? needs. You must then do a great job of

building value and making your customers feel confident that your product will solve their problems in order to get the price you need to stay solvent.

Remember: Everyone is aware that things are tight. You have to make adjustments to respond to this knowl- edge, but lowering price shouldn?t be one of them. A lower price might even convey a reduction in value to clients. People who are ready and willing to spend money during economic hardship are conditioned to believe that they can get a better deal?either because others are not buying or because your competitors are (incorrectly) using price to get their attention. Do the math, and you will discover that this lower-price-with-less-volume formula will not work out for you. You have to learn how to sell your product and justify the price by building value, selling yourself and your company, and creating a wow experience.

It is also important to understand that those who are ready to buy will not just shop your product against a com- petitor?s like product; they?re also comparing your product to unlike products. As they become more concerned about money, they become more selective about what they choose to purchase. So the question is what they will spend their money on. A lot of salespeople and managers miss this point; they only focus on what they sell without bothering to consider that their prospects may be contemplating com- pletely unrelated investments. They become so concerned with direct competition that they overlook unrelated prod- ucts and services that become competitive choices for the now more selective buyer.

An example of this might be the car dealer who is so worried about losing a deal to his direct competitor down the street that he shortcuts building value into the auto- mobile. He discounts his price to compete with the other dealer down the street while the prospect decides to invest the $40,000 in a new kitchen for his home instead?all because the dealership failed to build real value. During periods of contraction, tfte issue becomes where individuals direct tfteir money. Remember this rule: Money will find wftat people perceive as value; not tfte lowest price. If a prospect isn?t com- pletely convinced of the usefulness of your product or ser- vice, that person will elect to do something else with his or her money.

The value proposition is greatly misunderstood. Hopefully, the following example can clarify it for you. If I sell you a book for $30 and you give me $30, the real- ity is that you either believe that the book is worth more than $30, or you don?t value your $30. You might feel like the book is worth $30, but because I didn?t really convince you that it is worth more, you may decide that your money would be better invested in dinner with the family. People will not give you any amount of money if they think what they are getting is worth exactly tftat mucft. They will only do so when they believe that what they are getting is worth much more!

What does this have to do with selling in a changing economy and being able to advance and conquer? Every- tfting. Periods of contraction require that you enhance value by taking the following specific steps.

? Do a better job of identifying what the buyer is try- ing to accomplish with your product. ?Wftat is tfte number one tfting you want tftis product to do for you or ftelp you do??

? Demonstrate how your product?s worth is greater than the price you are asking for it. Take the time to cre- atively build value that exceeds price and ensures that the prospect is making the right decision.

? Demonstrate how your product will sufficiently solve problems and why the customer will love it. People buy for two reasons: (1) to solve a problem; and (2) for love and to feel good. If they don?t believe one of those two things, price will not matter. ?On a scale from 1 to 10, ftow would you rate tftis product??

? Be sure that the proposition you are presenting is within your customer?s financial means. Having too much of a product is the fastest way of forcing you to cut your price.

? Become thoroughly versed in the fact that price is a myth?one that is disproven every day when people give up their money for something they desire. Check out my book, Sell to Survive, in which there is an entire chapter on this topic of the price myth, how it is a destructive belief, and how it is destructive to creating your own economy. You can find it at www.selltosurvive.com, or you can call my office at 1-800-368-5771.

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Date: 2016-06-12; view: 98