Remove Price From the Sales Equation

If price is an objection raised during some or most of your sales presentations and it requires you to lower your price (i.e, income) or lose the order, it is time for you to improve your selling skills in this area.

Let’s review some ideas that will hopefully help your selling skills and boost your income.

First, price is only an issue in the absence of value.

If your product can be shown to be of value, then the price becomes a minor issue. However, this value has to be presented in a way that proves that it far outweighs the price.

If you don’t — or can’t — prove value through a demonstration and a professional presentation of the true cost savings, your product may not be what your customer needs. If that is the case, a lower price won’t close the order anyway.

In our business, there are any number of values to be sold, but first you have to find out what your prospect needs by asking questions. Then you can determine what product values and benefits address those needs.

A product’s value can take many forms. Many things are considered valuable, such as cost savings, protection of property, protection of job and protection of personnel, or safety, pride in the property, reduction of time spent, improving quality of results and others that you should learn about before making your presentation.

Second, price is only part of the cost.

Sell cost, not price. A gallon of all-purpose cleaner is priced at 50 percent more than your competitors. How do you go about selling that? Maybe your product can save your customer 25 percent. Example: Product A’s price per gallon is $9.60 vs. Product B’s price per gallon of $6.40 — that is 50 percent more for Product A than Product B.

But if Product A is diluted to 1 ounce per gallon while Product B is diluted to 2 ounces per gallon. If you measured properly, that’s a 25 percent savings. If you don’t sell the “working gallon” and point out the true cost, you and your prospect both lose. Remember, you buy cleaners by the gallon, but you use them by the ounce.

Someone I know recently refinanced a home at the cost of approximately $3,200. In this case, the reduction of monthly payments at the lower interest rate repaid the $3,200 in just over one year. It didn’t cost $3,200, but instead saved thousands over the term of the new mortgage and the return on investment (ROI) was approximately 13 months. Sell the ROI.

Here is another example that relates to equipment sales.

Your customer is mopping his kitchen floor three to four times a day, seven days a week and is really just spreading the soil around. You show up with a machine that allows this customer to scrub the floors once or twice a day, because they are much cleaner each time, and it saves three labor hours each day, seven days each week. This totals 21 hours per week, multiplied by 4.3 weeks per month. Use the labor rate of $10 per hour. Not only is the kitchen floor cleaner and safer, but your customer will save $900 per month on labor. The price of your machine is $2,000, and your customer’s ROI is just over 2 months. Lease the machine for approximately $100 a month and your customer now has improved cash flow of $800 per month. There is no cost, only savings. You and your customer both win.

If you make the proper demonstration and presentation in the above examples, price will not be an issue.

Finally, price is almost always bigger in the mind of the seller than in the mind of the buyer, but not if you, the seller, think in terms of cost savings.

When your prospect tells you in one form or another that your price is too high, it may not be in those exact words, but you know what they are saying. Use the following words: “I can appreciate that you are concerned about price, but let me explain.” Then go on to say something like: “Your price on this machine is about $5 a day, which translates into a cost savings of $___ a month over what you are spending today. So you see, there really is a terrific cost savings. You get your investment back in ___ months.” At this point, the price objection is long gone and the issue is cost savings.

When the price objection comes up, or any other objection for that matter, use this technique: cushion the objection as in the example above. “I can appreciate your concern,” and go on selling your values. You have not agreed with your prospect that your price is too high. You’re not disagreeing or arguing with your prospect. You only acknowledge their thinking and go back to explaining why your fantastic widget will be so terrific for them to own.

To share your selling ideas, fax: (414) 228-1134, contact Mr. Dixon at (877) 379-3566 or e-mail.