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.
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-BUYERS. There 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.