The Director Sales of Royal Pine had reasons to celebrate. His long battle with marketing had paid off finally. The company had decided to expand the furniture product categories. Now he wouldn’t hear constant complaints from his sales force on losing out on the budget and middle-income segments. He had looked forward to sharing the good news with his team in the mid-year sales conference.
So, this was quite what he had not expected. As he presented the slides on new products that could pull in sales from lower and middle-income groups, a hand went up. The Director knew this meant trouble. The question was from the lone senior who was just short of his quotas most of the time but who always brought up uncomfortable issues. “Sir” began the senior salesperson, “These additional categories will only complicate selling. The new range will confuse our dealers and our visits will become less productive. In the end, price is what every buyer is concerned about. That’s the overriding factor in selling” A murmur rippled through the group as the team discussed pros and cons in whispers.
The President immediately stood up and rescued the situation saying “This is only a part of what we plan to do. Our new product team will come back in a few weeks with some exciting plans”. He then asked the Sales Director to meet him separately, and voiced his concerns about the sales people’s ability to manage price. A sales veteran himself, the President shared a valuable insight which solved the problem. What could that have been?
Surprising truth: Forget the buyer, have you checked your price psychology in the first place?
Studies on buyer behaviour show that once need is established, Customers buy what they want. You show your Customer how your company’s car can meet both his business and leisure needs. He then goes out and buys a more expensive model from competition. How does price explain that? What the Customer wants is often a function of the value he perceives in a product regardless of price.
Frequently, the issue is more with the price conscious Salesperson than a price sensitive Customer. Value selling, therefore recommends that the Salesperson himself or herself must not become oversensitive to price. Only then can price be kept in its proper place in your interaction with Customer.
Two psychological aspects that influence attitude towards price in a transaction
- Salesperson’s own obsession with price – Like a rabbit caught in an automobile’s headlights, a Salesperson constantly who hears “you are expensive” gets hypnotized. The effect? The Salesperson speaks of price even before the Customer gets around to it. Perhaps the Salesperson wants to get rid of the tension himself! A more positive approach is to focus on Value Selling and stress it. Price can be presented like the filling between the buns of benefits. For this to happen, the salesperson obviously must believe in own price.
- Price becomes Customer’s weapon of choice, when there is no other value being perceived – price is that it is the only weapon the Customer has, when no other value is perceived.
So, how can we use this insight? Simply ensure you have a meaningful agenda for each meeting with Customer and price is not presented unless need is convincingly established and value is clearly demonstrated. Then price becomes a secondary factor as keep the Customer’s focus entirely on value.
To pick up more price selling strategies access Mercuri’s Insight document on “Are your people struggling to sell price?”
