Way before the Covid pandemic hit, many businesses had been concerned about China’s impact on their bottom lines. Whether they sold B2B or B2C, we all have heard how companies’ margins are often razor thin because everything these days seems to be left to a price game. China, online shopping, cutthroat competition. It can be a rough game.
Low-cost competitors such as China, Amazon, etc., may be impacting your business because your company has no indisputable value proposition. Too often the value proposition is something like, “We provide ‘peace of mind.’” Search that phrase; you will find it is used over 140 million times. Clichés don’t sell.
Are your salespeople able to spell out the specific value of your product, service, or company? Here is a simple example with a strong message for every business.
True story: I was shopping for a bike part. I could buy from Amazon or Walmart, or I can buy it from a local bike store. I scoured the internet first, find out where I can buy this product and how much it is offered for on the internet. Like many consumers, I like to touch and feel a product first, so I drive to my local bike shop to see the speedometer I was after.
The young man took the speedometer out of its case and showed it me. I asked how much, and he told me a price about 2.5 times similar parts I had seen online. I told him that. I asked why I should pay more. He described the unique features in detail, the warranty, and that the bike store itself stood behind all their items beyond the manufacturers warranty. He then asked if I might like a free tune up on my bike and if he might put the meter on my bike for me. Wow. To me that was a value proposition worth paying for. Do your salespeople have authority to go above and beyond in a reasonable manner? Yes, I bought it there.
If the salesman had been unable to describe the details to me, and properly compare the product to others offered online for less, and, if he didn’t have the authority to offer to help me, he would have been unable to convey a compelling value proposition beyond the product itself. He made buying from him convenient and saved me time! Like me, customers will pay more if you save us time and make things more convenient for us.
This is what we call providing enough differentiation to overcome the price objection. Too few companies provide these product and/or service comparisons to the front-line sales teams. Further, they do not provide the authority to offer added services that will help the customer, but not bankrupt the company. Too many times, the ability to provide the added services are not even discussed internally.
Buyers of all products and services want to know they are making the right decision when selecting a seller.
Ask your sales team how they describe the ways in which your company/product/service saves their customers time.
What can you move off the customer’s plate and onto yours that will justify a slightly higher price?
