Selling on price

/Selling on price

Why Dropping Your Price Can Give You More Than You Bargained For

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cost-cutDropping prices doesn’t benefit anyone; nope not even the customer.

If you’ve been in sales for any length of time, you may have said, “If I don’t drop the price, I won’t get the sale.” I’ve probably said it myself; that was before I realized what I was doing. I kept telling myself that getting the sale was more important than getting my price. What I was doing was killing my confidence. Whenever someone asked me to drop a price, I wondered if they had spoken to my last customer. I also thought will I have to go lower to get this sale? I was on my downward spiral.  I watched my sales people struggle with the same problem; how low should we go?

Inexperienced sales people will tell me they’re trying to show the customer they have fair prices. You don’t need low prices to show the customer you know what you’re doing. If you continue to do this, you collect ‘price conscious’ customers who will never pay a higher price.

Dropping a price is like telling a lie. You have to start telling more lies to cover up the other ones. Have you ever had an incident when a customer returned weeks later and you couldn’t remember the price you gave them? Telling lies can erode your confidence.

Cutting costs can put you out of business. Why would you want to do that?

According to Lawrence Steinmetz, in his classic book, How to Sell at Prices Higher than Your Competition, says the following: 

“Most Sales reps who are most successful DON’T MESS WITH PRICE-BUYERSThere are times when you just don’t sell.” This is an old book but everything in it is right on!

Besides, my experience tells me that  dropping the price doesn’t necessarily guarantee you’ll get the sale.Sometimes you’re being tested by the customer. Unless you’re really good at “the drop,” the customer often leaves and takes your lower price to your competition. I remember when I bought my appliances for my house 20 years ago. Those were the days with ‘price matching.’ I shopped until I dropped and finally said to one retailer, give me your lowest price so we don’t have to do this forever!

Let’s go back to why the customer doesn’t win either. If they pay less than your original ‘asking price,’ they wonder why the price was so high to begin with. Wasn’t the original price real? So now the price/value equation is lost. 

If sales are your profession, you have to protect its integrity as well as your own.  Great salespeople get pleasure out of servicing their customers, helping to solve problems and getting the best out of their situation. Price or investment is the byproduct of the solution and should not be the focus. Stores like the Dollar Store are definitely price focused.  However, when I’m in the store, I always look for brand names that are discounted. Then I feel like I get my dollars’ worth.

Consider that the customer is also trying to get their dollars’ worth. They want to know that their purchase is worth more than the price they paid. This is where you come in. It’s your job to explain to the customer that your product, and your brand are worth the price. You do this by focusing on the problem and defining it so when you come up with the solution, the price seems more than fair.

Successful salespeople rely on value rather than price to cement the sale. The customer has to decide that your product will do the job; until that is established, price never matters. If the product doesn’t work, why would anyone buy it?

Unless you’re the Dollar Store, price cutting will eventually lead you out of business. Isn’t that the first things businesses do when they’re going out of business?

Lisbeth Calandrino has been teaching  salespeople  the “price/value” equation for the past twenty years and how to sell at profitable prices. Lisbeth spent 14 years with 7 “liquidator furniture and carpet stores” in the Northeast. She has spent her life negotiating price. To have teach pricing strategies to your employees, reach her at 518.495.5380, EST or Lcalandrino@nycap.rr.com. Check out her website, lisbethcalandrino.com.

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By |2017-09-22T12:32:31-04:00March 9th, 2016|beliefs, Blog, Selling on price|0 Comments

7 Lies Customers Tell and How You Can Still Sell Them

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Liar, liar pants on fire.

Liar, liar pants on fire.

Even seasoned professionals get taken in by customers who use statements to put them off. Rather than take it up with the customer they just give up.

Customer can bend the truth, especially if they haven’t made up their mind about buying. They will say just about anything to get out of the store. As a salesperson, if you’ve done your best, there is no reason to back off from the customer.

START BY NOT BELIEVING THE CUSTOMER’S EXCUSES! If you believe them, it’s over. If you believe them you do not believe in yourself or your business. 

Here are 7 standard customer lies and ideas for selling them.

  1. I can’t afford it. Now we all have had times when we couldn’t afford something; that doesn’t mean we didn’t buy it!

If you’ve explained the value of your product and how it will help the customer, they should be able to see that living without it would be a mistake. Ignore the statement and review the customer’s “conditions of satisfaction.” Give them the features and benefits that fit the customer’s key concerns. You can also suggest a product that is less money and explain the comparison. The customer may don’t let the customer scare you. Your job is to make them feel you have their best interest at heart, and your product is what they need.

  1. We’re just looking.” You’ve heard this a million times and you might be tempted to leave them alone. My suggestion, don’t.

Yes, people just look but if you leave them alone while they’re looking you run the risk of looking like you don’t care. Statements like, “We have some new products, and can I point them out to you?

“We have a huge store; can I help you find the right products?

These statements should be followed up with rapport building statements; anything other than trying to sell them. Talk about their kids, the weather or their smart phone.

3.”I have to ask my husband or my wife.”

One reason the customer might say this is because she or he doesn’t trust your judgment. If they don’t believe what you’re saying, they certainly don’t want to make the decision alone.  It may be true that they aren’t the decision maker so “nicely” review two or three benefits that fit their situation and be quiet.”

  1. “We weren’t prepared to buy; we have to look around.”

Don’t be afraid to tell them you understand, but you don’t want them to lose out on the product or pricing. Before they look around suggest that you review your product with them. Check out what they said about their situation and explain how your product fits the bill.

  1. I’ll know it when I see it.”

This is really a funny statement. If you ask them what it will look like they won’t be able to tell you. They may say you don’t have it. This is a good time to ask them to describe the perfect product to you. If you can get them to talk about it, you will probably come up with new ideas.

  1. It’s too expensive.”

This is a wonderful statement and gives you lots to work with. Review their budget with them and review how the product will work for them. This is similar, to “I can’t afford it.”

  1. “Your competition is cheaper.”

Your competition might be cheaper but are they as nice as you? In other words, building rapport and showing you care is more important than ever. Explain what makes you different and what you’re willing to do for them. Cheaper doesn’t always mean better even if it’s the same product.

What special treats do you have for your customers? A comfortable showroom, an interactive web site that really helps the customer finds the right products. Plenty of social media chatter that shows that customer’s trusts you. You might familiarize yourself with your customer’s online reputation.

How about this? A print out coupon they can only get on their smart phone while they’re in your store.  If you have “wiggle” room, make sure it sounds legitimate. It might do the trick.

Once you’re done, don’t forget to ask the customer  what she thinks about what you’ve said.  This is an easy closing statement that is overlooked by most salespeople.

Lisbeth has been doing sales and customer service training for over 20 years. Reach her at Lcalandrino@nycap.rr.com.

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9 Ways to Handle Pricing Before you Make it a Problem

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Are you shooting yourself in the foot with your pricing? Thanks to Mike Myatt for photo.

Are you shooting yourself in the foot with your pricing? Thanks to Mike Myatt for photo.

Everyone has their own take on pricing; some ideas are better than others.

This week I produced a  training video with  Tony J. LaGreca, president of Edmar Floorcare. His product is a vacuum that cleans deep pile carpet. One of the features of the vacuum is a sonic bar that vibrates at 200 per second. Tony pointed out I could say 12,000 per minute and that big numbers are better. I started thinking, numbers do matter.

 

Here’s my take on numbers.

 

  1. Customers like big numbers when they’re in their favor. Instead of telling the customer that the sale price on the $100 item is $40.00 why not tell them it’s 60% off? The bottom line is the same but 60% has a bigger punch.

 

  1. Always remember to explain to the customer how much they’ve saved rather than how much they spent. They can continue to justify their purchase for the next year.

 

  1. Everyone is looking for a savings or discount; this is why Marshalls and T.J. Max do such great business. The Goodwill is so busy they are now opening a boutique style shop. At least 1/3 of the Millenniums shop at Goodwill. So if they’re your customer, don’t forget they want to save money and are looking to save a buck. Check out the stats on the Millenniums.

 

  1. Let’s not forget the concept of “Lagniappe” something given or obtained gratuitously or by way of good measure. This expression thought of as New Orleans based, means giving the customer a tiny gift to tell them how much you care. It also helps soften the price; especially if the item is expensive. Think about serving coffee, bottled water or popcorn to make the customer feel welcome. Most retailers have a “kid’s corner” so the mother can shop. Ikea even has baby food in the fridge as well as a “Manland” baby sitting service with pinball machines and video games.

 

 

  1. If a  customer asks why you don’t carry the imposter  say you don’t think it’s a good product or it’s  worth the money. That will stop them in their tracks.

 

  1. When customers say, “I’ll be back,” ask them what they think about your prices. What do you have to lose? Pay attention to their answers and don’t justify your prices. Just listen. You can then ask the customer if you could explain why your prices are higher.

 

  1. Watch social media and see what your customers are saying about pricing in general. Are they talking about paying supermarket prices or the price of gas?

 

  1. Try different price points and test them on various products. Do customers like the $10.99 concept or is $11.00 okay? It was a big problem when JC Penney changed theirs to whole numbers.

 

  1. Connect with your customers on an emotional level, get to know them. The more you know about them and their buying habits the less likely you are to drop your prices.

 

The smartest thing you can do is not assume that price is the problem. Understand your products and the value you provide for your customers.

Lisbeth has been helping businesses build retail marketing and sales strategies for over 20 years. To schedule a consultation or have her speak at your business, reach her at Lcalandrino@nycap.rr.com .

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By |2017-03-03T12:06:52-04:00August 24th, 2015|Blog, Sales, Selling on price, The Millenniums|0 Comments

Do Customers Always Buy on Price? 3 Ways to get out of the Rat Race

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priceMost everyone has heard the story about the two industrious brothers who set out to make a fortune by buying watermelons for a buck each and selling them for ten dollars a dozen. They set up their stand alongside the road and business was going gangbusters. While counting their money, they came up a little short. They finally figured it out; they needed a bigger truck.” Believe it or not, the story has been around since 1900 when Paul Nathan, wrote a book called “How to Make Money in the Printing Business.”

Research shows that price is virtually never the primary reason someone buys something. It’s also usually not the second reason—maybe the third. With the prices of smart phones these days you know. what I’m talking about. Most of us have a feeling that a higher price is equated with quality and value. Even if you shop the discounters, such as Marshalls and TJ Max, if you’re like me you wonder—are these prices really good? Often the products are last year’s merchandise and a little behind the style. Check in this time next year for today’s styles.

When times are tight, businesses have a tendency to cut their price. A business doesn’t cut wages when it lowers prices so wages as a percentage of sales goes up and sales go up because of lower prices. These two factors spell disaster long term.

Statistics tell us that price is infinitely more important to salespeople than customers. If a salesperson is concerned about price, they tell their customers, they think their prices are too high and invite the customer to beat them up on price.
Of course price matters. If you don’t talk about it to your customer, what are you communicating? It says you’re scared and don’t think your merchandise is worth what you’re selling it for. Until you can discuss price with confidence and credibility, you’re in trouble. Words like regular price, list price, best price, and lowest price, you are clearly implying that the price is negotiable. Your eye movements can also invite the customer to beat you up on price. When you say a price, you don’t believe, you almost always break off eye contact and look down.
1. All things being equal, do customers buy on price? Says who? Don’t fall into believing this trash. You can probably remember the time you paid full ticket for something and were really happy. Maybe it’s that new Apple Watch. Check out why people are buying them.
2. It’s your job to explain to the customer that not everything is equal and why the customer should pay you more. This brings us back to value, what extra things does your customer want? Can you give these things to them? Do these things make your company different? These are things you learned in your first selling class right?
3. Things are never equal, really. Coffee isn’t coffee or is it? My hunch is a lot of coffee is the same, but you would never know it. From Starbucks to Dunkin’ Donuts to your “home-town town coffee roaster,” each has you believing you should pay their price.

Maybe the glass on your front door is cleaner?

Adopted from “How to Sell at Prices Higher than your Competitor, ” Lawrence L. Steinmetz.

Lisbeth has been teaching businesses how to improve their customer service and the customer experience for over 20 years. To schedule a consultation or have her speak at your business, reach her at Lcalandrino@nycap.rr.com. If she’s not in her office, she can often be found mornings at the YMCA in East Greenbush, New York. 

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