What’s More Important – Value or Price?

Price vs Value

“How do you overcome the objection: Your hayseed costs 10% more than your competitors?” asked a participant in a sales course I was leading.

“Is it worth 10% more?” I responded.

“What do you mean?”

“Well, if you were the farmer and knowing what you know about both products, would you spend 10% more to buy it?” I asked.

“No.”

“Then you shouldn’t try to sell it to him.”

If you don’t believe your product is worth the price, you have five choices:

1. Recognize that there may be value that you are overlooking or taking for granted.

  • Your company’s experience, longevity, reputation, quality assurance, or investment in research. There can be significant value in knowing you are buying from a solid company, one that will stand behind the product in the future.
  • Convenience. Do you deliver quickly and inexpensively? Do you make it easy to buy?
  • Your expertise. Do you add value that your competitors can’t or don’t? Do you give expert advice? Do you take time to understand the customer’s needs and make a recommendation that will work best for her?
  • Do you have educational programs that help your customers use the product more effectively or extensively?
  • Does your company give back and support the community by volunteering, donating to local charities, or mentoring young people?
  • Do you have favourable payment terms, a moneyback guarantee, or warranty that makes buying from you easier?
  • Do you provide better customer service? Answers from well-trained, real people rather than automated help desks that screen callers and make it hard to speak to anyone?
  • Do you have an emergency help line open 24/7?

2. You can add value by finding out what the customer thinks is important and including it in your quote. Your competitor may not have bothered to ask.

3. All things being equal, (and they never are) you might convince your company to add value or lower prices to get the business, but that’s rarely a good long-term strategy.

4. You might help your company recognize and correct inefficiencies that are costing it money so they can afford to reduce prices or increase the value for price.

5. Finally, you might choose to work for someone else. If you cannot in good conscience sell your products because you don’t believe they are worth it, and you can’t achieve any of the first four suggestions, then you might as well sell something you can believe in. Don’t compromise your ethics just to make a quick sale.

FOCUS AREAS: 

February 9, 2016

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