Avoiding Price Pressure“It is unwise to pay too much, but it’s worse to pay too little. When you pay too much, all you lose is a little money – that is all When you pay too little, you sometimes lose everything because the thing you bought was incapable of doing the thing it was bought to do. The common law of business prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that, you will have enough to pay for something better.” --John Ruskin, 1819 -1900 Popular myth: People always buy on price Reality: People never buy on price! They make a price versus value judgement and if no perceived value in the additional premium is demonstrated, the ‘cheaper’ option wins. Example: Dominic has to fly to New York from the UK to secure a business contract worth £10m. Dominic has been working on this project for 6 months and is meeting the Chairman, CEO and Finance Director of the prospect organisation. His meeting is at 10am USA time and, due to other commitments, he can’t leave the UK until late afternoon on the previous day. Recognising Added ValueDoes Dominic book an economy seat for his 5 hour flight or a business class seat at more than five times the price? Of course he books a business class seat because the airline sales person has identified (and got agreement to) the value of Dominic being able to rehearse his presentation one last time, re-read through his notes in peace, get some sleep whilst travelling, use the arrivals lounge in New York to shower and change (his prospect is meeting him at arrivals) etc etc……… Clever questions driving acknowledged needs and wantsThrough some cute questioning, the airline sales person also identified that Dominic works on a commission only basis – he’s on 0.5% of the 'order'. Dominic is prepared to fund the cost of business class travel personally if his company refuses… We paint the vivid picture above to illustrate the importance that Salespunch™ places on correctly defining where the competitive strengths of your product / service lay. Typically, within a few days of work with a small task group of sales, marketing and product experts, Salespunch™ methodology, SalesMap™ creates sales proposition mindmaps that focus on the customer’s business in order to identify issues that need addressing and how your product / service can address them---particularly where you can deliver something superior to the competition. Linked to this, importantly, is recognition of which members of the customer organisation should be involved in the decision-making process together with the key questions that need to be asked to gain agreement to perceived customer value for your solution. If your sales team has fallen into the trap of simply quoting ‘competitive’ prices against your competitors’ sales efforts, call Salespunch™ now to find out how working with your Salespunch™ coach, will enable you to make your customers an offer they can’t refuse. "No one ever buys on price. They make a price-versus-value decision." --Sevet’s Law Contact Salespunch™ - Now! |
Defining your competitive sales propositions. A mind-mapping process designed to establish the competitive strengths of your offering and for identifying the key issues and opportunities that they address for the customer.
Any organisation that has to sell things (and most do), needs to be able to communicate value to its customers if it is to optimise its long-term profitability. The sales team in particular needs to be able to articulate value to its customers to demonstrate that their cost / benefit equation is stronger than the competitions’. But what is customer benefit? It is clearly not just a long list of the company’s offerings in terms of features and advantages. It is only a benefit if the customer gains ‘pay-off’ in relation to their needs and wants. The salesperson’s job is to define these needs and wants through careful positioning, questioning and listening but to do this, the value propositions of the organisation and its products / services need to be clearly defined..... Click here for more
In ‘How to develop value propositions’ we learned how to analyse what we have for our customers and the envisaged benefits for different decision-makers and influencers. This documents the ‘theory’ of why our customers should buy from us, whereas our sales propositions translate the theory into practice. A simple equation tells us that the features of our product / service (facts) that deliver advantages (functions) factored by the customer’s needs and wants equal benefits (pay-off). We could have a long list of features and advantages but with no needs and wants the equation amounts to zero benefits. The variable a salesperson therefore needs to work on is the definition of customer needs and wants in relation to the previously analysed value propositions. Click here for more To arrange an exploratory conversation with your coach, please contact Salespunch™ - Now! 01883 621088 |