SPENDING TOO MUCH ENERGY AND TIME ON PRICE INSTEAD OF BUILDING A UNIQUE VALUE PROPOSITION
THE STATUS QUO FOR B2B SALES
In B2B sales, many salespeople believe their job consists of the following: set up appointments, then once in the appointment, ask a few questions, demonstrate the product or solution, answer the prospect’s questions, then provide a price quote. If the price seems right, the customer buys. If it doesn’t, they hedge, so they need to adjust the price till it seems right to the customer, then they purchase.
That’s not selling. That’s order taking. And it’s undermining the profitability of the company. If your sales reps think of sales this way, they will struggle and struggle to close deals and meet quota. The best reps almost always refuse to cut prices and instead work on building value.
What is our mistake as sales leaders? We too quickly allow our reps to cut prices because we don’t teach and require our teams to build value.
SALES IS BUILDING VALUE, PLAIN AND SIMPLE
Sales really only consists of one thing: building value. The best sales people meet their quotas because they know how to build value rather than focus on price.
No one ever purchases anything at any price unless they believe the value of the purchase is greater than the price they pay. As soon as someone perceives the value to be greater than the price they will pay (and we’re not just talking the money part of the price), they will pull the trigger and purchase.
So, the next time you or your team wants to slash prices, wait! Instead, build value!
WHAT DO YOU MEAN BY “VALUE”?
A lot of people, when they hear the word ‘value’, think of ‘bargain’. Wrong again!
Value means something the prospect values enough to pay the price. In other words, not a bargain, but something valuable!
What is the value of a high-end sports car? Remember, the customer will pay for the bundle of benefits they believe they will receive if they purchase. Usually, one benefit outweighs all of the others. Is it the ‘need for speed’ or is it the prestige of the brand parked in the driveway?
You’ve heard of the phrase ‘value proposition’. What does that really mean? It means proposing a bundle of benefits that, combined, deliver a value to the customer greater than the price you are asking.
If they aren’t willing to pay the price you are asking, it’s not because the price is too high, it’s because you have not structured the bundle of benefits in a way that they believe the value to be higher than the price you’re asking.
Let me repeat that: if they aren’t willing to pay the price, it’s not because the price is too high.
Yes, you can lower the price to match your inability to build value, but too often salespeople lower the price without thinking. Often, lowering the price doesn’t build value; it simply de-values the solution you are selling.
So the next time you run into an objection over price, don’t even consider lowering the price. Instead, ask yourself, “How can I build value for this customer so that they believe the price is a no brainer for the bundle of benefits I’m proposing?”
If you missed the previous posts, check out: