Stop talking price and talk value instead
Peter Finkelstein, Barrett's sales strategist, and I have been discussing the increasing spate of businesses and salespeople complaining about 'price' being their biggest issue when it comes to not closing enough sales.
"Our prices are higher than our rivals. That's the main reason for us losing business opportunities..."
Peter and I have heard that statement at just about every sales training course we have ever run. Not just in Australia, but as Peter will attest, in South Africa, the UK, USA, Germany, France and Dubai.
In our opinion, using the price argument is a lazy excuse: blaming high prices for the failing to get a deal is an easy way out for salespeople and leads to nowhere fast. But let's not be too quick to blame the salespeople for this situation. Why? Well, one of the main reasons salespeople fall into this trap is that many businesses do not have clearly defined customer-centric value propositions which salespeople can believe and demonstrate effectively with their clients.
The other biggie is that many salespeople have not been taught how to have business conversations about real value (beyond product) with their clients and therefore lack the confidence and competence to do so, which is why they default to the price excuse. Companies who continue training their salespeople in product knowledge only are setting their salespeople up for a price fall and will lose margin and sales.
So don't be fooled, just having lower prices is definitely not THE solution to your sales woes. Before you and your salespeople go down the 'price is too high' track let's look at the facts first.
Price is an arbitrary figure with no inherent value in itself; it is just a number and means absolutely nothing until it is made relative to something of value. For example, you want to buy a pair of sunglasses: you can go to a pharmacy or $2 shop and by a cheap no name pair for between $5-20, or you can buy an expensive designer brand for $300. They are both perfectly good sunglasses yet why will some people pay more for one than the other? Because those people perceive the designer brand is of greater value to them than the other. Value to them could mean a number of things like prestige, one-upmanship, superiority, aesthetics/design, and so on.
And this is exactly the point we need to understand as salespeople and business leaders: the client does not really see a price; they see and are looking for value. So our real mission as salespeople is to find out what value means to each of our clients and we can only do that if we ask questions and don't assume we know what is best for our clients before we ask them. By doing this we can begin to move away from the price conversations so many salespeople find themselves in.
So how do you understand specifically what value means to each of your clients, especially when products are struggling to differentiate themselves and quality is becoming a commodity in many instances?
Well, businesses and their sales teams need to shift their client conversations away from product as the central focus to conversations centered on effectiveness, efficiency, risk and total cost of ownership which includes price and other things like access, storage, knowledge, distribution, funding, warehousing, logistics, funding, quality, right for use, etc.
Teaching our salespeople, especially our B2B salespeople, how business works; how our businesses can work in concert with our clients' businesses; how we can create real value is crucial to migrating from the product price discussion to business relationships of real value for parties concerned.
Remember, everybody lives by selling something.
Sue Barrett is a sales expert, business speaker, adviser, sales facilitator and entrepreneur and founded Barrett Consulting to provide expert sales consulting, sales training, sales coaching and assessments. Her business Barrett P/L partners with its clients to improve their sales operations. Visit www.barrett.com.au