Get The Ice Out of Price

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Increased sales and increased margins do not need to be mutually exclusive. In fact, when you get it right, they go hand in hand.

Over the years, I have done alot of selling in highly competitive and highly commoditized industries where my collegues and competitors alike have bitterly complained about the incredible price pressure they receive from their customers. Yet in those same markets and under those same conditions I found myself able to rise above all that to not only get the order but to also get my price without giving away the store.

In all my years of selling, I have found that you cannot sell price. Maybe you can for a while, but if undercutting is all you do, then eventually you will cut yourself right out of business. What people actually buy is value, but it’s up to you to create the value equation.

Those of you familiar with my 3 Truths of Selling philosophy know that I maintain that every human being on the planet will make 5 critical decsions in a precise (not random) order before you can sell them anything. The first decision is about you, the second decision is about your company, the third decision is about your product and Decision # 4 is about the price, but never ever about how much. What your customer wants to know is about the value they will receive.

An email correspondent wrote this to me just today, and it’s fairly typical: ” I have new technology in my office …. I have become very frustrated as a result of the excellent outcomes but few people seeing past the $4,500 price tag.”

So, if it’s all about value, how do we create it to move past absolute price? In my opinion, there are 3 ways to create value:

Create value in self. By showing yourself as a professional, distinctly different, unique and truly interested in understanding the other party.
Create value in your company or business. By demonstrating and articulating why your company is different and exceptional.
Create value in the product or service. By answering the question, what will it do for me, how does it fix my problem, satisfy a need want or desire, or make my life easier.

We won’t be able to address all three of these in this column but here we’ll start with number 1 and then address number 2 and 3 in future posts.

In our eight step High Output Sales System, Locks 1, 2 and 3 are all about the customer making a positive decision about you. (The first way to create value). Every interaction needs to begin by establishing deep levels of trust and rapport and it must be followed by creating a deep understanding of what the customer needs. Yet what happens more often than not, is that a customer (or patient) comes in and says “What have you got and how much is it” The business person then starts spewing features and benefits and then quotes a price. The problem with this is that you just tried to address decsions 3 and 4 about the product and the price and blew right past decisions 1 and 2 which are about you and the company. You have no idea what the customer needs (and even if you do the customer doesn’t know it.)

The power in selling ain’t in telling. The power comes from asking questions so that the customer can hear him or herself giving the answers, and in the process of so doing, two magical thing happen: 1) The customer articulates and gets really clear about what important to them, 2) They now understand that you understand what’s important to them. Even if you already know the answers and even if you already think you know how to help a customer, It is absolutely critical that in the initial stages of a presentation, sales call or consultation that you ask a series of good broad stroked questions that get the customer to express what they need want or desire. You must do this BEFORE you present anything or propose a solution. When you ask questions first and they understand the fact that you understand them, you have just established deep trust and you have gone a long way toward establishing value. And when you can do that, the customer is actually helping you match your product or service’s unique features to their true need. When that happens, price is almost irrelevant.

So just to close this issue off, let’s look at the situation referenced above. If I were the correspondent who wrote today, not knowing anything else, here what I would say to a prospective customer: “we’ve got this great piece of technology, that does many incredible things, but in order to figure out whether it’s right for you, I just need to ask you a couple of questions first, would that be alright?” When the customer invariable responds in the affirmative, I would just start to ask questions about what they like, what they don’t like, what they want, what they don’t want, and when that was all done, I would simply confirm what I heard and then show them how the technolgy addressed the very things they told me were important to them. Now we’ve got value!

Go ahead and try it, I know it works. We offer a full 2 day program which is all about creating value equations. Come visit us in beautiful Vancouver and learn how to get the Ice Out of Price!