Sales Training Part 3 – Get The Edge on Price Competition
Get The Edge on Price Competition
Losing business to the price merchants? Then stop walking, talking and acting like them! Remember, 73% of consumers do not buy only where price is the lowest! The biggest danger independent businesses face is not from the low-end price busting merchants. We are our own worst enemy for when we are threatened by price competition, we start competing on price instead of value.
Our challenge lies in being the best at value packaging our business and convincing customers that they are getting value which makes their purchases worth more than the price they are paying. We have many more reasons for people to purchase from us than just price. We need to have enough non-price reasons to buy so that customers gladly pay a little bit more. Only 27% of the market is motivated by price alone. They will ask you only, “How much is it?” Little do they care if you even have the model in stock or can service it; they just want to know if you have the lowest price. They will still call three other businesses and the one who barters on price wins the sale. But at what cost? Do we really need to be spending our valuable time with customers like this? Shouldn’t we be catering to the customer who will bring us repeat business and over time, more sales, higher profit margins and longevity?
Customers today want to know that they have control in what they choose and from whom they choose to purchase. With premium customers, price is not only what they want from their merchants. Buying power is more than just price; it is Value Power. Value Power includes but is not limited to:
* Well-stocked merchandise
* Fair prices
* Knowledgeable staff
Value Power is impressed upon our customers at every opportunity. When they walk in the door they ought to be impressed right away by a knock-out display of your newest product or service. Signage is important. Don’t offer just a sign with price. Make it big – include the value options, the service included with the sale and so on. Sales staff must greet customers readily, with enthusiasm and by name if possible. Value Power must permeate every aspect of your business. You must give the real impression that your goal is to serve your customers and their needs. Advertising must also assure the customer of their ability to get far more than just low price. Much of our ad budget is wasted on barking out low prices rather than advertising the “event” of purchasing a personal watercraft, for example, and the hours of pleasure and family fun it can provide. That is power, not only for you but for the consumer as well. Even if the price merchants captured 100% of the consumers in their niche, they still would own only less than one third of consumers – those who purchase on price alone. No price merchant can beat a good independent business for the upscale customer. If we have done our job correctly, we already own the 17% premium or “gold customer”. The critical power play is for the rest of the confused customers who really do desire a good value but waver between upscale value and low price. Following is a partial list of Battle Tactics that can help you win those customers.
1. Redefine Value and Service. Do Not Defend Price
2. Sell Cost Over Time, Not Price
3. Define Your Market Segment
4. Become the Specialist in Your Business
5. Fight for the Best Customers, Not For All Customers
6. Add Products to Increase Customer Spending
7. Identify and Serve the Highest Need
8. Don’t Talk Like the Price Merchants or You Will Have to Compete With Them