Price or Value?

by | Dec 4, 2013 | Selling Value

One of our sales people was dealing with a customer that had solicited 3 bids. One from us and the others from 2 local companies. One is well known with a solid reputation and one that was fairly new with little infrastructure. The customer tells our sales person- you need to sharpen your pencil – one of the most popular clichés in selling.

The customer then says we need to compare apples to apples. But is that possible? Can you really go line item by line item to see if all the equipment, labor and process are the same? What do you say to the customer?

In my first book, Don’t Just Stand There Sell Something, you’ll read, “…if you can’t present business value, you can only present cost and you’re pretending that the value is at as big as the cost”… But cost doesn’t equal value, with rare exceptions. As you build the value for the customer, price objections melt.

Yet, it’s hard when you realize that your competition has one foot in the door. If the only issue is price, then your competitors may disrupt your process and even win the business over you. Price is all a prospect sees until they see the value in what you’re offering. Price is the one common denominator that every competitor can sell against. It is especially effective when the competition can say “me too” on the value proposition. Your job is to make sure that your value trumps theirs.

We are told as sales professionals that the last thing we should bring up is “price”. When price is the lead, you’re already in a losing position. Rarely is price the only value, unless you’re selling a commodity like granola or tooth paste. Major retailers use slogans like: Wal-Mart:-Everyday Low Prices or Save Money-Live Better. Or Target: Expect More. Pay Less. These are great when you’re in a price war, but not when the customer is buying a more complex product or service.

Professional sellers need to guide every conversation towards the unique value they bring to their customers. Value equals meeting customer’s specific needs and ideally meeting needs that they haven’t even thought of. It’s also important to note that value is always in the eyes of the prospect or customer. What we value is irrelevant. Only the customer can decide what value you provide as compared with the competition. Value is intensified when the customer sees the clear benefits of your solution and how it will meet their needs. If you convey value and your competitors focus on price you’re in the position of strength.

Value = Benefit/Cost is a formula that works every time.

The more benefits the customer sees, the less of an issue cost becomes. Take for instance Apple Computer’s laptops. If you talk with anyone that uses Apple products they will swear by them and can easily tell you why they choose Apple even though they are always more expensive. Apple delivers such value – speed, design, ease of use – that they make the price a non-issue. Customers of Apple become fans – they can even articulate the benefits of the products about as well as those working at Apple.

That’s what value is all about. It’s making price a non-issue because the benefits far outweigh the cost. So the next time a customer brings up the issue of price, you can do the following:

  • Ask questions that address the value they expect based on their needs.
  • Present your unique values as part of your value proposition.
  • Articulate how your benefits specifically meet their needs.

As we close this year out, God bless and good selling for a very prosperous 2014!