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Price Objection - What Price Objection?
By Dr. Rick Johnson
Wednesday, 9th June 2010
A major reality during tough economic times is the simple fact that customers ask for lower prices.
Sales people often encourage this mindset themselves simply by listening to the doom and gloom that the media frenzy promotes on a daily basis. Sales people that don’t understand their value propositions resort to old school training and begin focusing on features and benefits which has a tendency to commoditize their product line.
Effective sales managers understand this phenomenon and help the sales force recognize that it is especially critical in tough economic times to help customers visualize the difference between price and cost. They direct the sales force to focus on value.
Price must not become the major issue and it should be the last issue on the table and not the first. If sales people understand their value propositions and can communicate that value while providing real solutions then price does not become the deciding factor.
- Price isn’t part of your value proposition
- The art of selling has nothing to do with price
- Value trumps price
- Value is determined by the customer --- not you
Value is defined as the dominant benefit you provide that helps your customer produce more, benefit from, and/or profit from or satisfy a need. This is a selling approach that focuses on helping the customer solve their problems without regard to making a sale. That means everyone must be part of the sale!
The Value Proposition if used properly can:
- ELIMINATE or reduce competition.
- Set forth things that make you the only choice.
- Create competitive advantage
The quickest way accelerate decline is to remain excessively concerned with how much can be sold to the customer. The issue is not about any of that nor is it about what products the customer uses; rather, it is about what the customer is buying, then and only then does "share of spend“ become the objective. The focus must be on your Value Propositions that solve a customer's problem.
The Emerging Specialized Role for Professional Sales People today IS NOT TO INCREASE SALES, BUT to systematically and consistently increase the number of customers who choose you to be their #1 supplier........
Effective sales people minimize price significance by:
- Separating selling from problem solving
- Taking all of their industry experience and knowledge to understand the customers needs
- Presenting alternative solutions—defining the value propositions and letting the customer decide
- Applying their knowledge and experience to the customers pain as if it was their company to solve the problem.
People come to conclusions by making comparisons. If you don't let customers and prospects know why it is in their best interests to do business with you or buy your product, they won't. Market driven companies spend time and effort consciously influencing the way they are perceived by customers, prospects, and other stakeholders.
Remember this; price is not a benefit. Selling is not determined by the cost of your product. If you truly "sell" your customers and prospects, they will purchase your products/services no matter what price you determine. By the time your customer wants to discuss price they should be determined to purchase no matter what the cost.
So, find "real" benefits (value) to sell to your customers and prospects. Help them to see how great their life is with your product, and you've got a customer. Point out their current pain, and offer solutions to take the pain away. Discipline yourself to become a total solution provider.