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WHEN PEOPLE look to make a purchase, they assess three different elements that affect the overall cost; price, quality and service.
Price looks at what consumers pay for what they buy. But overall cost is a significant factor in a customer’s perception of price. They look at what a product or service will cost them over time, the perceived level of value or quality they are paying for and what the long-term service cost will be.
Most consumers tell salespeople they want a low price, but what they really want is low cost. Customers don’t just want the cheapest option, they want the product or service that best solves their problem, answers their need or fulfils their desires.
Many people recognise that they get what they pay for, and are often aware that the distaste of poor quality lasts far longer than the sweetness of a low price.
Buyers will object to price when they feel that what they’re being asked to pay is higher than the perceived value of the transaction.
What can you do to raise your clients’ perception of the relative value of what you are selling?
The best way is to find out what their needs are and to 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 a secondary consideration for them.
Real sales pros focus on the 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 or get more resistance when the perceived value is low.
To change the relationship between price and value in the buyer’s mind, you need to focus on raising the value perception. Lowering price only makes them view your original price, or a new, lower one, with suspicion.
Practically, it is helpful to not introduce price too early in the sales process, especially not before you’ve had the opportunity to build a value proposition.
If you have a buyer who’s a price-only shopper, you’ll need to decide if compromising your margin and product value is worth their business in the long run.
Often, potential customers who make a big deal out of price and who expect price adjustments will ultimately require other concessions too. Use their attitude about price and cost as a barometer of the overall quality of the potential supplier/customer relationship you could have with them. Remember, once you’ve set a pricing precedent with a client, you’ll live with it for the life of that relationship and potentially with anyone they might refer you to.
* Pieter Scholtz is the co-master franchisor for ActionCoach in Southern Africa and is also a leading business and executive coach. For more info visit www.actioncoachsa.co.za
