In sales, price should never be permitted to become the only issue.  Price is only one of three components of any purchase...and almost always the least important. 

The value of anything can be accurately measured only in terms of TOTAL cost. And the total cost to any buyer consists of more, so much more than price. What about lost time? Aggravation? Embarrassment? Feeling cheated? And worst of all, with a business-to-business sale, what about creating problems for the buyer with the buyer's own customers? Most everyone understands the concept of "value-added." How many calculate the cost of problems caused by "bargains" which are invariably revealed to be far more expensive than once assumed?

Almost everything sold today is a commodity. That is, almost everything sold today is available from several different sources. Buyers have lots of choices ...including not buying. The astute salesperson understands all this. Hence the great importance of carefully calculating TOTAL cost to determine real value. 

More than 30 research studies of "customer satisfaction" reveal that feeling appreciated (as opposed to merely being appreciated), convenience, and reliability are rated most important by the thousands of people who participated in these studies. What about price?  Revealingly, the results of these same research studies indicate that price was ranked no higher than ninth and, on average, 13th in importance.

Time has value. Peace of mind has value. Elimination of risk has value.  With very few exceptions, customers will pay a little more for them if helped to understand how important they truly are. One effective strategy is to ask questions such as "What if...?", "How important is..." and "What would it be worth to..." early in the cultivation/solicitation process.  Take notes. Ask about "worst nightmares" as well as previous problems with others. (They may be the same.) Express a sincere desire (indeed a determination) to prevent such "nightmares" and "problems" from ever occurring again.

For centuries, we have known that almost no one in sales ever gets rich with orders; rather, with re-orders. In other words, repeat business.  Therefore, the proper long-term objective is NOT customer satisfaction; rather, customer loyalty. People buy from people. People keep buying from the people they respect, they trust, and on whom they can depend.  And these same people will generate leads to others only if they feel loyalty that has been earned over time.

Of course, "price shopping" makes sense but only if we are talking about exactly the same item, and, if the total cost is precisely the same.  (How often does that occur?) Setting a price is an art and a science, requiring both intuition and analysis. And price should be positioned within the frame-of-reference of total cost in order to have credibility.  So, accurately measure that total cost by quantifying what are usually (and incorrectly) viewed as "intangibles." 

There is nothing intangible about damaged goods or a delivery that arrives 72 hours after it was urgently needed (and promised). There is nothing intangible about a customer's rage in response to such situations. There is nothing intangible about the damage that can be done to that customer's relations with others.

Set an appropriate price. Measure total cost. Explain real value. If the customer still insists on price as the only factor and refuses to consider anything else, politely but quickly end the discussion. There are some sales you really cannot afford. Period.

Find the full list of Robert Morris's Business Nuggets featured by Eastbook.com here.
 

 

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