“Remember you should never quote a price until you’ve established the value behind your product and service” – Jerry Pilkey in today’s Tip 753
How do you differentiate yourself from your competitor?
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Scott Ingram: You’re listening to the Daily Sales Tips podcast and I’m your host, Scott Ingram. Today’s tip comes from Jerry Pilkey. Jerry is President of Selling Solutions where he provides customized sales training, onsite and online by incorporating a simple philosophy into every session; “don’t ever quote price until you have established value”. As a Professor, Author, and Sales Educator, he has produced 15 sales and customer service training courses. Here he is:
Jerry Pilkey: Your price is too high. If you’re frequently hearing this response, you have to review your sales process in a hurry. Your price is too high, is a typical response to those who have been all too quick to offer up a price. You quote your price, the customer doesn’t like it. And it’s pretty much over at that point. And I’ll give you an example of that.
I learned this the hard way. Many years ago, I was given the opportunity to sell in the foodservice industry. I was right at retail. I was given a territory. I walked in the back door of a kitchen and I said, “Hey Peter, I’m Jerry. And I’m your new foodservice sales rep.” He said, “How much is your French Fries?” And without asking any qualifying questions, for example, how many do you buy? What product are you buying? What brand are you buying? I simply offered up a price. I grabbed my product book. I searched through thinking that this is going to be my first sale. I offered up a price, his response, “Too much. Get out.” Where can you go at that point other than, “Okay, Peter, how much do you want to pay?”
It then becomes a price negotiation and you’ve set the stage for all other future dealings. The question you want to ask yourself is “How much do I want to sell my product for?” Establish what you’re willing to comfortably ask for your product and build your value proposition around it. As you plan and prepare for your proposal presentation, ask yourself this question. What is the perceived value of my offering to this customer and can I successfully justify how its value and my service exceed my asking price?
You will be asked to reduce your price. It’s human nature to want to negotiate. That said here’s some things to consider when presenting, as they relate to your ability to justify and ultimately combat the inevitable requests for a price reduction.
Remember you should never quote a price until you’ve established the value behind your product and service, which I didn’t do on my first sales call. If you jump in too quickly with your price, you can go back and try to justify, but the likelihood of success is minimal. Decide in advance, what’s your solution is worth. Before you can sell anyone. You need to be absolutely convinced that what you’re offering is worth the asking price. If you’re not convinced yourself, your presentation will not be convincing. If you imply that your price is negotiable, it will always be negotiable. Present your proposal with conviction and confidence that you are providing the customer with the best possible pricing. And do that the first time.
How have you differentiated yourself from your competitor? You must position yourself differently just because the competition sells on price does not mean that you have to do the same, find a way to show the customer that you’re different, that you add value to the relationship. The customer must view you as a partner in business. Once you establish that position and you truly represent value to the customer, pricing will become secondary and you will win on your price.
Position yourself as a professional, the way you dress, the way you project yourself, the way you answer their questions, your overall approach to doing business will determine their approach to doing business with you. There are two different types of buyers when it comes to price, there are those that say they want the best price, but if you ask, you’ll find that they truly care about what they’re getting and simply want the best value and most appropriate products for their business. This is where you can really excel in terms of selling to their needs and keeping them cost appropriate. Then there are those that simply buy the cheapest, lowest quality product on the market. These are the real price buyers. Recognize them and be prepared to leave them for your competitors.
Scott Ingram: To connect with Jerry on LinkedIn and for more about his educational platforms, just click over to DailySales.Tips/753
Once you’ve done that. Be sure to come back tomorrow for another great sales tip. Thanks for listening!