Professional Sales Speaker
Relationship Selling – Focusing on Value, Not Price
Most business people involved in sales are NOT FOOLS! Yet, most continue to sell their wares, whether they be big ticket automobiles or inexpensive services, high technology electronics or the basic staples of life, based upon price. They do so because the fundamentals of selling remain the same, namely — It is easiest to sell based upon low price. Or is it?
What appears the quickest and easiest way to make a sale may actually be the most difficult, especially when trying to maintain sales growth over the long run. Consumers and Business-to-Business buyers alike may be easily enticed to buy based upon price today, but impetus of a “low priced bargain” quickly wears off while the reality of low quality and “poor value” remain even beyond the life of the product or service.
Are there products that should be sold based primarily upon price? Absolutely! Consumables that have very little direct impact upon the consumer. For instance, sand, gravel and aggregate used in construction. However, the vast majority of the time we underestimate the full impact of products and services upon our customers. Think about an impulse or necessity purchase you made recently that disappointed you. It may have been from a fast food restaurant after missing lunch or a shirt or top that you purchased in a hurry. Was the meal cold or tasteless? Did the shirt or top shrink the first time you wore it? If so, what is you attitude today toward that business establishment which made the sale?
In most instances, customer loyalty requires numerous “good-to-great” experiences to develop, but only one “lackluster-to-bad” experience to destroy. Back to the restaurant example, whether fast food or fine dining, have you ever frequented any eatery for a prolonged period of time and then suddenly had one bad experience? If so, did you return? For most people the answer will be “No,” at least not for some considerable length of time. Why? Because when we have a bad experience, that single event offsets all of the preceding good experiences. Our confidence is shattered. In a word, we have lost TRUST.
Instinctively we want to protect our self from the possibility of another subsequent bad experience, which we naturally assume will occur again if we return there. Depending the nature and severity of our “bad” experience, it may fade in time, as the prior good experiences counterbalance the single “bad' experience. In a few months or years, we may decide to “give that establishment another chance.”
The question for the offending business is twofold: First, how many times during the intervening period would we have bought form them had we not have been turned off; and secondly, to how many others have we communicated our displeasure with that business? The answers to these two questions add up to the amount of business they have lost.
Is price therefore unimportant? Certainly not. However, price is rarely the best basis upon which to present a buying decision for your products and services to your customers. This is true for many reasons, which I will cover later in this book. For now it is sufficient to note that normally the later in a purchase decision that price is introduced, the better it is for the seller, as long as the prospective purchaser is truly a “qualified buyer.”
The greatest drawback to price based selling is that it results in the good or service that is sold becoming a a commodity and a commodity by definition is a product or service that has no differentiating qualities or characteristics from competing products or services in its class. Early in my business career I spent four years in the international grain export business and then six years in the petroleum business. Both were fungible products. In other words there was NO brand distinction between the products. The soybeans or corn of one exporter were mixed together in the grain elevator with those of other competing companies. It was the same in the petroleum industry. Gasoline, diesel and jet fuel from one refining company were mixed with that of others. The products were fungible. We put a gallon of unleaded regular gasoline into the pipeline along with any others. We did not receive out of the pipeline our discrete gallon of gasoline, but rather a gallon of fungible product.
Commoditization and fungibility destroy brand! Price selling creates commodities and likewise destroys brand. When brand is destroyed all that is left as a selling differentiator is price and price has only one place to go, DOWN! Don't be FOOLed. Over the long term it is far easier and vastly more satisfying to sell VALUE than PRICE.
*(This content was digested from John's forthcoming book on relationship selling.)
