Every price is too high until you establish value
Early last week I was attending a sales meeting with a client. I was presenting a workshop on the second day, but wanted to sit in on the first day so I’d have a better understanding of what they were working on in the meeting. It was a wise move. I always learn from this type of work with my clients.
The company’s CEO spoke, and it was powerful. He comes from a sales background, but it was more than that. He has great common sense, and inspires confidence. He said something that fit with my workshop, and it blew me away. I have always sold premium products and solutions, and the investment has been priced that way. He shared that if you discount price at 10%, it takes 50% more revenue to make up for the discounted margin.
HR Chally shared results from a survey they did with 15,000 buying professionals. They listed the four main buying influences and asked the participants to rate, as a percentage, what affected their decision to buy. The percentage of the four factors were:
· Competitive Price 18%
· Quality of product/service 21%
· Total customer solution 22%
· Competence of the salesperson 39%
The survey reinforced the need for Level Five, value creation sales calls, and it showed that when we do get into a selling situation, only 18% of the time is price the driving factor. In a Level Five sales call you are working to understand the customer's situation by asking questions. You are working to find a solution you can offer that differentiates you and going one step further. You are bringing ideas to the table that helps your customer think differently. You are being a competent sales person, focused on your customer.
I work with the philosophy that every price is too high until you establish value. Selling at Level Five creates value. It may take a little longer to establish that value, but you also won’t need to sell 50% more to make up for a discount.