Most everyone has heard the story about the two industrious brothers who set out to make a fortune by buying watermelons for a buck each and selling them for ten dollars a dozen. They set up their stand alongside the road and business was going gangbusters. While counting their money, they came up a little short. They finally figured it out; they needed a bigger truck.” Believe it or not, the story has been around since 1900 when Paul Nathan, wrote a book called “How to Make Money in the Printing Business.”
Research shows that price is virtually never the primary reason someone buys something. It’s also usually not the second reason—maybe the third. With the prices of smart phones these days you know. what I’m talking about. Most of us have a feeling that a higher price is equated with quality and value. Even if you shop the discounters, such as Marshalls and TJ Max, if you’re like me you wonder—are these prices really good? Often the products are last year’s merchandise and a little behind the style. Check in this time next year for today’s styles.
When times are tight, businesses have a tendency to cut their price. A business doesn’t cut wages when it lowers prices so wages as a percentage of sales goes up and sales go up because of lower prices. These two factors spell disaster long term.
Statistics tell us that price is infinitely more important to salespeople than customers. If a salesperson is concerned about price, they tell their customers, they think their prices are too high and invite the customer to beat them up on price.
Of course price matters. If you don’t talk about it to your customer, what are you communicating? It says you’re scared and don’t think your merchandise is worth what you’re selling it for. Until you can discuss price with confidence and credibility, you’re in trouble. Words like regular price, list price, best price, and lowest price, you are clearly implying that the price is negotiable. Your eye movements can also invite the customer to beat you up on price. When you say a price, you don’t believe, you almost always break off eye contact and look down.
1. All things being equal, do customers buy on price? Says who? Don’t fall into believing this trash. You can probably remember the time you paid full ticket for something and were really happy. Maybe it’s that new Apple Watch. Check out why people are buying them.
2. It’s your job to explain to the customer that not everything is equal and why the customer should pay you more. This brings us back to value, what extra things does your customer want? Can you give these things to them? Do these things make your company different? These are things you learned in your first selling class right?
3. Things are never equal, really. Coffee isn’t coffee or is it? My hunch is a lot of coffee is the same, but you would never know it. From Starbucks to Dunkin’ Donuts to your “home-town town coffee roaster,” each has you believing you should pay their price.
Maybe the glass on your front door is cleaner?
Adopted from “How to Sell at Prices Higher than your Competitor, ”
Lisbeth has been teaching businesses how to improve their customer service and the customer experience for over 20 years. To schedule a consultation or have her speak at your business, reach her at [email protected] If she’s not in her office, she can often be found mornings at the YMCA in East Greenbush, New York.