Everywhere you look today it seems you see something about "big box" competition taking away business by cutting prices. Is that really true? Are your customers all about price, or do they come to you for something more?
I once teamed with a publisher to revitalize a trade magazine in the power equipment market. It was struggling even though it was a good product and had the lowest price for advertising. The first thing the new publisher did was raise all the prices. Everyone in the company thought he was nuts, but his retort was, "now I have something I can sell." (And he did, too!)
Your prices might be higher than the "big box" down the road, but you have something to sell beyond the hardware in inventory.
Consultant, author and business owner Larry Steinmetz shares three elements necessary to sell more expensive items:
- Credibility — the customer must believe you and trust your organization.
- Sell value — price equals how much an item costs, while value equals what you get compared to what you paid. Your price is never high; the number may be, but you're selling value.
- Respect for your customers — people who can pay your price haven't gotten where they are by being stupid. Respect their needs, concerns and expectations.
So, what do you do when a customer says, "Why should I buy from you when I can get the same thing cheaper at the box?"
First response is simple. Never concede that your product is the same. It's not a commodity. Nobody gets the same level of service from two different places. Your salespeople may not even deliver the same level of service month to month. Remember, you're selling value, service, quality and technical support to go with the hardware. If a customer says the only thing that matters is price, he's lying — to you for sure, and probably to himself, as well.
In this issue we're featuring a company, Ace Tool, that has proven these to be more than good suggestions. Putting them to work every day, there's no doubt that the team understands the difference between value and price; and which they represent.