Sales 101: Learning About Price vs. cost
Ever since there have been documented records, there have been merchants, or as we are called in the modern vernacular, sellers. People want things. People need things. Considering that there will always be a public demand for something, there will always be a need for sellers! It has been said that “Nothing happens until someone sells something.” This is absolutely true. The sales function drives all other aspects of a modern business. Sales should come first, as without sales there is no need for marketing, accounting, manufacturing, human resources, etc.
Ask just about any average salesperson what their biggest problem or objection is and you will most likely hear the word price. “My prices are higher than my competitors” or “Our prices are too high” are often the mantra or excuse for mediocre sales figures. Ask a top salesperson, though, and I suspect you’ll find, in reality, that she has learned that price is rarely the real issue. Let’s consider the acronym PRICE for a moment: Preceived Rreality Iinvestment VSost meexpectation.
Perceived: Sales are usually a process that involves perception or perceived value. Our job as professional salespeople is to sell the value of our goods and services. Once the customer sees that the value of the product or service offers them more than the asking price, the sale goes through and the price question never became an issue at all.
Reality: Let’s face it, very often sellers use the excuse of price for the reason that a sale did not take place. Assuming you are dealing with a qualified lead, and you’re wasting your time if not, the reality is that your lead needs to learn exactly how your product or service meets their needs, closes the gap, and meets their requirements in a timely manner. . conduct. That’s the pure reality.
Investment: The customer must be shown that by buying from you, they are making a smart investment and not simply incurring additional expense. Buyers are not interested in increasing their costs by spending more money. They are interested in solving your problems. They want to make profitable decisions based on perception and education.
costAs a professional salesperson, interested in meeting and exceeding the expectations of your prospects and customers, you should always be aware that price simply does not equal cost. Remember the old axiom … “Beware the cost of the lowest price.” Cost of ownership, turnaround time, and troubleshooting are the real issues that a professional buyer is really looking for.
Expectation: Today’s customer assumes quality. They assume service and delivery. Your buyer expects the products and services you offer to be presented with their best interests in mind and to meet their needs. That is the starting point. Don’t be fooled when a buyer asks you about pricing. If they can maximize its value and get it at a lower price, they will try to get it, but they will buy at its set price if the expected value is there.
To make things even simpler, remember that the customer actually makes the purchase decision only once. The money allocated to purchase your product or service is generally spent once for each purchase decision. For each purchase, the company must grapple with the reality of that decision. The purchased item is then put into service within the structure of the buyers’ company. After this point, various employees and internal departments, such as engineering or maintenance, must deal with that particular purchasing decision. Often there will be ramifications of each purchasing decision within other departments within the company. The true cost of each purchase decision will show over time. Cost issues continue to occur over the life of the purchased product or service, long after the purchase is made.
Cost and price are two very different concerns. Don’t fall into the trap of thinking otherwise. Top salespeople have learned that hard lesson sometime earlier in their careers. Do what all the top salespeople do; Shorten your learning curve by acting on this new information. Move your career into high gear by accelerating your learning of these higher principles.