Written by Tom Robinson
It is all about price? Only if you let it be!
I recently made a sales call on a former customer. The company several years ago found a cheaper alternative to our product; cheaper not better. Before I even began my pitch she said, “It is all about price today. No one cares about quality. They only want the cheapest price.”
Today small locally owned companies, many who have done business for many years, are being attacked on two fronts. Big box stores advertise “low priced leaders.” and “more saving, more doing.” They use their buying power to negotiate lower prices but the vendor changes the product to meet the price sacrificing quality.
Locally owned companies are also facing competition from new companies springing up many owned by employee laid off in the current economic recession. These companies have no business expertise, no commitment to the future, do not have the right equipment, no insurance, no resources to honor warranties and often do not even have the basic skills to product the product. All they understand is low price.
For example; I had a customer who sold a brand name faucet. She discovered through a customer that a Big Box store down the street was selling the same brand name faucet. She went and looked. the faucet had the same picture and even the same box but the part number was different. My customer bought one of the faucets. She compared the Big Box faucet to the one she sold. The Big Box faucet was four pounds less than the one she was selling.
This retailer could have given up on selling the product because it was a tack on – do you want fries with that – and not her primary product. Instead she bought two postal scales. She set up the two scales in her showroom and placed her product on one and the Big Box product on the other. This display demonstrated that the add on product was worth more than a look alike even under the same brand. She also showed her customers that she sold quality not price. She was able to use this display to demonstrate that others were selling low priced versions of her primary product.
Look at your own product. Make a list of what you do better than the low priced knock off. Be ready to educate the customer. As you educate the customer you will likely discover that they are indeed willing to pay for quality if they understand it. When you sell quality you will also learn what they are willing to spend money and you will be able to modify your product if necessary or you pitch if your product already includes the benefit.
Being the low price leader is easy. You just lower the price. If you lower the price you will need to lower the quality and cut corners or go broke. When you lower the quality you put your reputation and your company at risk. You cannot afford to be the lowest price so sell quality. If a customer is truly only interested in price than maybe they should not be your customer.