Price is always an emotive issue. "We have to lower the price to keep in line with the competitors." I hear the same statement from sales teams throughout the country. "How do you expect us to sell at this price?" they say, or "I couldn't make the sale, Boss, the customer was putting too much pressure on me to lower the price." Actually, price is not the most important issue as far as your customers are concerned.
The only time when price is the only issue is when a customer can see no difference between you and your competitors. In fact, sometimes you can be more competitive by increasing your price! Don't believe me? Take your sales hat off for a second and put on your customer hat. When you buy something, anything... do you always buy the cheapest? What about the coffee you have at home? Is it the cheapest coffee you could buy? Probably not! And your hi-fi? When you went out at Christmas to spend your bonus at Hi-fi Corporation, did you buy the cheapest possible box to play your CDs? Probably not!
When we are customers we don't buy the cheapest but as soon as we become salespeople we think that our customers only care about price, it is just not true... Still don't believe me?
Imagine you have two cars in front of you. One is a 1971 VW Beetle, price on the window is R1000. Then next to it there is a brand new, straight out of the box Mercedes Benz S class 500, Price on the window R750,000. What is the first question you ask about the VW?
"Does it work?"
The first thing you will want to know, "Is there any chance of you getting the thing going at all?". This is always the question you ask about the cheapest? Now... What is the very last question you would ask about the Merc? That's right! "Does it work?"
You know that, at that price, of course it will work. When your customers see your product or service selling at a higher price they never question its ability to do the task, they may not be able to afford it, but they will want it. Quality is often measured by price, especially amongst your customers who may not know all the technical differences between your product or service and that of your competitors. By charging your premium price you are differentiating yourself from your competition. Your customers will subconsciously believe that yours is better quality because the price is higher, making it easier to sell. Still don't believe me?
Okay... one last test! If you think that your customer always buys the cheapest, do yourself a favour. Next time you go and visit that customer, arrive 15 minutes early, take a walk round the car park, find your customer's parking space and look at his car.
If you find the cheapest possible car to get him to work in the morning then you're probably right, he always buys the cheapest. But if you find, as I suspect you will, that there is a Camry, a BMW or a Merc in that parking space then you know they don't always buy the cheapest and there are other items involved in the decision, like quality, delivery, comfort, relationship, value for money, reputation, etc. etc. etc...
Don't fall into the trap of pricing down the bottom of the market with the rats and mice in your industry. Be confident to charge your premium price and, as long as you can back it up with a quality product and service, you will gain a greater market share of more profitable business.
I totally agree with the article. some people have a phobia for the cheapest product in the market. I believe that a fresh and exclusive packaging on the right product sells at a reasonably high price.
it is just a matter of making the costumer relate to the product. Posted on 15 May 2006 13:13
here here... i work on a brand that sold cheap cheap cheap' and when relaunched new look and CI they are making so much more money! i never buy cheap- you get home and it doesnt work, or you wash and you cant wear again etc- if you tell me it's cheap i want to know the catch! Posted on 16 May 2006 08:43
I dont agree with that twist if two companys had the vw Beetle same milage,same condition ,the best priced guy will get the deal. Even though South Africans CRY about service they are'nt willing to pay even a little more for it.(in general) Posted on 16 Jul 2006 11:17
"A 3 page paper recommending that Coke develop and market sparkling juices. Consumers around the world have been clear that they prefer juices over colas; Coke is strongly attached to carbonation. The suggested solution is that Coke add light carbonation to 100% juice drinks to revitalize sales while still providing customers with the fruit juices they favor. Bibliography lists 4 sources".
I fully aggree. the point realy is that If I NEED a product X, i will get it by all means. tHE TRUE MATTER HERE IS THAT SALES PEOPLE MOST OF THE TIME want to sell and move on. If we were realistic with wanting to sell to clients, we would need a system that Assists clients to Identify a need then we have to provide a solution to that need as coke is doung...providing the Fruit juice lovers and The cola lovers and not insisting on atotally carbonated product range. So pricing does play a role however it is in most cases not the reason clients dont buy or salesman dont make sales rather THE NEED. Posted on 20 Jul 2006 16:26
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