Funny thing about price-fixated buyers: They’re always suspicious about hidden costs – yet they willingly ignore the biggest hidden cost of all.
“Just give me the bottom line,” they’ll tell you. “Price, shipping, taxes, everything. I don’t want any nasty surprises later on.”
Of course, those who buy primarily on price are asking for nasty surprises later on – when their “bargain” purchase fails to deliver value.
Who buys on price?
Price buyers often give lip service to value, of course. They just don’t want to pay more for it, says sales guru Paul Cherry. Typically, these include buyers who are:
- Those on the front lines, who just want a quick cheap fix and can’t see the bigger picture.
- Midlevel buyers who don’t have, or are unwilling to exercise, much discretion except over price issues.
- Hard-nosed buyers or purchasing types who see their own value-add in terms of how much they can knock you down. They may even downplay value, claiming, “Everything’s equal, it comes down to price.”
Put a price on low value
To sell on value, in an ideal world you would reach those enlightened decision makers who understand your value proposition. Problem is, we’re not living in that world, and you may be obliged to deal with the pure price buyers.
Don’t try to argue with them. Instead, try talking to them in their own language – by putting a price tag on low value.
First, acknowledge their needs and concerns: “I completely understand your concerns about hidden costs and charges,” you might say. “Let’s talk about what you can expect to pay, so there are no surprises.”
Sounds good so far to a price buyer, right? Now you have an opportunity to put value on the table.
“Let’s talk about repair costs. Over the life of this product, you can expect to pay X on repairs. That’s 23% less than industry average, by the way.
“And let’s not forget replacement costs. The documented average service life for our product is 10 years, so you’ll need to budget in about 10% a year for replacement costs. Industry average is 20% a year.”
What you’re doing, of course, is a life-cycle cost analysis. You’re just reframing it as price.
Yes, you’ll end up with a higher overall “price” than your straight invoice price. But what matters is your price relative to competitors. When lowball rivals are asked to quantify the price of low quality, they won’t or can’t.
You can keep going down the list, attaching a price to:
- Shorter lead time
- Ease of use
- Reduced hours
- Elimination of paperwork
- Improvement of performance output.
Focus on profits, not price
Another way to change the conversation: Talk profits, not price. Companies are not really in business to save money. Otherwise they’d just shut their doors altogether. They’re in business to meet performance targets and generate profits.
That’s why framing value in terms of profits is likely to make sense even to the most budget-conscious buyers. It’s all about boosting the bottom line.
When value-selling a product or solution, lead customers to the answers to these questions:
“How will this product or solution help you:
- Minimize your risks?
- Enhance your success?
- Free up valuable time or resources?
- Eliminate headaches?
- Reduce overhead or eliminate other costs?”
For price-bound buyers, invite them to think of these benefits as “credits” or “discounts” against the total price.
Total cost of ownership
Remember, the most important ingredient in value selling is to establish factors that have a direct impact on the customer’s bottom line. If you don’t use that approach, the sales discussion will undoubtedly regress back to the price on the invoice. And that’s far from the real price that your buyer will have to pay.
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