Selling Price vs. Value
Great salespeople know that customers buy value, not just price. However, many salespeople have trouble differentiating price from value. The American Heritage Dictionary defines value as “worth measured in usefulness or importance.” With customers, value is created with a customized selling approach which includes all the proactive things we do to the exclusion of price.
Color, style, quality, store reputation and price are not only the order of importance in reaching a selection, they are also the general order in which basic added value is first achieved. Notice that in this array, price, while significant, is the least important criteria consumers use to select floor coverings. It only makes sense; the first four reasons are prerequisites to any sale in the home furnishings industry. Without these fundamentals, there is no value. If your female consumer had to, rather than keep a hideous color and design away from the decor of her home, she might pay you to keep it at your store—or more likely shop elsewhere.
Price by itself isn’t even a benefit to the customer—it’s just another feature, and its only benefit is itself.
I am not saying people do not have a budget, but if color, style, quality, and store reputation are missing, what good is a low price? Ironically, maybe I just answered the question of what causes the uncertainty and desperation of price-oriented salespeople. If you cannot begin building value within these basic parameters, a low price is all you have to offer. When salespeople fail to build value (what your product will contribute to a room) they become insecure about what they are selling and succumb to price and price only. It explains why price is everything to some salespeople.
Sometimes I overhear sales representatives telling women, “But you don’t need to spend that much.” Maybe these salespeople think they are doing their customer a favor—they aren’t! Realize that we are selling fashion; so, if she wants to buy the dream of a perfectly beautiful home, why not let her. If it costs more, so what?
Added value is all the benefits that the salesperson must create to survive competitive situations. While value must include color, style, and quality foremost, it also encompasses function, relationships, atmosphere, service, and the integrity of your store. Added value always includes the subtle nuances like a proper greeting, returning calls, courtesies and kindnesses, fulfilling promises, and keeping appointments—all of which creates trust and makes a big difference between you and your competition.
Most salespeople know the difference between a feature and a benefit, and yet it is amazing how much time “product heads” spend rambling about sales features of their merchandise. A feature identifies anything that labels a specific attribute or a certain, “What is it called?” Obviously, features are manufactured into the product to give some type of benefit. The benefit of each feature is a personalized value that answers the customer’s need.
People do not buy features, they buy benefits—what a product or service will do for them. An important function of the salesperson’s job is to translate important features to the customer into benefit statements. The most often used method of doing this is to use a bridging statement such as “and what that means…” However, for sales reps to be able to truly translate the features of a product into benefits to the customer, they need to find out what the desires, needs, and problems are for the customer (qualifying). Armed with that knowledge, the sales rep can explain the direct benefits of their product. Value is then created by the consumer’s perception of what your product will do for them—the benefit.
Realize that appeals to the emotion are always greater than appeals to logic. People do not buy technical knowledge; they buy color, design and prestige. She came into your store looking for the dream of a beautiful home. If, when working with the customer, you are able to weave a vision of her dreams coming true, the product you are presenting becomes more valuable. We do not just sell products and services—we primarily sell fashion ideas and solutions to people and people sell our products and services to themselves rationalized by logic. Selling is making your product worth more than she is seeking.
Always speak with your customer not at them. Traditional product selling tailored merchandise to the customer, while selling with dialog tailors the customer to the product. Dialog selling is an equal exchange that the customer helps direct. In dialog selling, you can position features and benefits to strengthen a solution with your customer without hammering at the customer.
Of course, a huge part of building added value is the art of being liked. To do this, we must make the customer feel important and appreciated. By asking the right questions, listening, solving problems, and making the customer believe in you, you create meaningful value. The Golden Rule applies in everything, and especially to whoever you are selling to.
In his book Integrity Selling, Ron Willingham said, “Selling isn’t something you do to someone; it’s something you do for and with someone.”
Purchasing fashion is about style, skill, and personality! I call it “Humanistic Selling.” With likeability, trust, and the feeling that they know you – you will create the successful combination for increased sales, more repeat business, greater profits, and a windfall of referrals.
Finally, if I told you that if you build value, you will rarely have a price objection, I would be kidding myself and everyone else. Just because color, style, quality and other added value are the prerequisites of total worth, that does not mean that price is unimportant to the customer. The price objection may still come up no matter how much value you have created. And, like any objection, it can cost you the sale when not managed correctly. My next column will discuss how to handle the price objection.
Good selling to you.