Selling on value, not price, involves a fine balance of confidence, personal rapport, and doing your homework. It's undoubtedly become more difficult as technology gives consumers greater access to price information and insights into what your competitors are up to – but stick with selling value and your prospects in the long term should be brighter.
However, what if you've told your prospects in minute detail about all the great value they will receive by purchasing your product - but they just don't seem to get it. You realise that if only they were able to understand the value in your products and services then price would not be such an issue – but how?
Here are ten steps which, if learned and applied, will guarantee that your prospects will see the value in your products and services so that price is no longer the big issue. They are just commonsense really – but ignore them at your peril.
1. Choose Your Targets Wisely
New companies often make one fatal mistake that forces them to compromise on price, i.e. they don't narrow their target market, and don't appreciate that their products will not suit everyone.
The way to resolve this is to research every potential client to see if they are a good candidate to meet your price needs. This saves you from wasting time talking to people who only want the cheapest deal.
Probably about one-third of consumers are purely hung up on price, while the other two-thirds are open to at least hearing your argument on value, says Tom Reilly, an author and value-based shopping expert.
2. Get to Know your Customers
3. Have Conversations that Matter
The conversations you want to have with your prospects should include so much value that at the end they actually thank you for speaking with them!! The conversation will flow naturally if during the discourse you get them to realise that "eureka moment" when all their problems become clear, and they understand how you can solve them.
This sort of clarity and information is of great value because they will see that you have a valuable skill and they will want to have future conversations with you to continue gaining clarity in other areas. They will see having conversations and having a relationship with you as valuable.
4. See Discounting as a Last Resort
Value-based selling should be the foundation of all of your sales efforts. Establishing the value of your items puts your salespeople on a strong footing - and educating your customers about that value makes it possible to avoid the discounts/promotions that eat into margins.
Too often discounts have been the first resort, particularly for retailers who want to attract new customers or increase their overall sales. Unfortunately, they’re also a lose-lose proposition as in the short term, discounts eat directly into profits.
In the long term, making everything all about price devalues your products. The price you can sell an item for is the price that customers will expect you to sell it for. When you end your promotion or other discount and try to return the products to their original prices, customers will see it as a markup instead of a return to the basic value of the item.
Relying on value selling eliminates these problems. The price of an item becomes secondary to what the product can provide.
5. Advertise Your Strengths and Experience
Salespeople don't always understand the ways their product brings value. Make sure your sales team are fully prepared by educating them on how your company stands out, ensuring that they are conversant with the history of your company and the product, which helps build their confidence in the product. Document testimonials from past successes and don't be shy to show them to potential customers.
6. Confidence is Key
When you're highlighting the value of a product over cheaper competitors, you shouldn't be vacillating on price or negotiating. Avoid words and phrases that suggest flexibility, things like saying "generally, we charge" or "your price." You are asking people for money – this is not the time to show a lack of conviction.
This is the time to mention the advantages you bring to market: global sourcing, logistic support programmes and other things that go beyond the features of a single product or service. Highlight why your product's value is worth their consideration over lower-priced options without dragging your competitors through the dirt.
If there is no alternative to dropping the price, do it without hesitation and without getting defensive.
7. EmphasiSe Your Customer Service
The toughest job selling value to customers is getting them to picture the full depth and breadth of everything your company has to offer. Talk to them not just about the product but how quickly you can provide their order, how easy it is to use, the support that is provided if necessary – just pass on the feeling that you care about them. Provide good customer service throughout the lifespan of the customer, not just at the beginning of the relationship.
8. Personal Touches
Develop a rapport with your customers by getting to know their needs and business background. Sending cards for special personal occasions, gifts where appropriate – and the personal touch of a hand-written thank you all contribute towards a special relationship.
9. Allow your Customers to Discover the Value for Themselves
If you tell your prospect immediately about the value you offer, they may or may not see this as relevant, of interest or, indeed, of value. However, if you ask the right questions so that your prospect tells you the value of solving their problem, they will then see this value as relevant, of interest and of value.
10. Add vAlue
Once your prospect has told you the value they will receive from solving their problem, they will be receptive to listening and appreciating how you can add even more value. This is because, at this stage, they will have effectively sold themselves on taking action to solve the problem and the more value they can see that they will receive, the easier it is for them to justify buying your products and services.
Value is always long term
In summary, as a consequence of not selling from the word go while you ask the right questions, your prospect will feel at ease and see both the value in solving their problem plus they will see the value in having a relationship with you.
You are then in a position to help them justify a buying decision by adding more value to what value they have already discovered for themselves. This all leads to a decision based on value and not on price. "Value is always long term," Reilly says. "Price is short term."
Sources
- http://www.inc.com/guides/201107/how-to-sell-on-value-rather-than-price.html
- http://www.businessknowhow.com/marketing/value-price.htm
- http://www.tomhopkins.com/blog/presentation/selling-value-vs-price
- http://www.retaildoc.com/blog/retailers-how-to-sell-on-value-over-price
- http://www.forbes.com/sites/micahsolomon/2015/01/26/see-through-yoga-pants-and-uh-transparency-issues-the-consumer-trend-of-values-based-buying/#27aab40dbc59
- https://www.linkedin.com/pulse/20140718205427-21745122-people-buy-based-on-value-not-price
- http://redfusionmedia.com/the-mystery-of-why-people-buy-its-the-perceived-value
- http://vanseodesign.com/marketing/value-perception/
- http://www.marketingdonut.co.uk/marketing/marketing-strategy/pricing/why-value-based-pricing-works-best
- The Strategy and Tactics of Pricing, Tom Nagle and John Hogan, 2016