The next time you feel you are losing deals because of price, take your prospect to a cycle shop and ask them to buy a bike helmet. Here is why.
Topic – Overcoming the ‘price’ argument
Mentor – Sue Barrett
- Have prospects happy to pay a premium
- Low price increases the risk of failure
- Show them what they need NOT what they want
Kevin Turner: I’m sad about today, because today is the final day we get to talk to Sue Barrett. It’s been a delightful week chatting with Sue, Sue Barrett from http://www.barrett.com.au. Use any one of the links on any one of the pages on REUNCUT today or all this week to take you through to Sue’s website. So many compelling articles there and reasons why you’d want to do business with them, and why you so easily could.
We’re going to publish a blog article today, it’s up there for you right now in our blog section. It’s headed up, “If You Complain About Price Being a Barrier, Wear a Bicycle Helmet.” Good morning, Sue, how are you?
Sue Barrett: I’m well, Kevin, thank you.
Kevin Turner: Tell me the meaning behind that statement?
Sue Barrett: Okay. A lot of sales people default to the price argument, and get themselves in a bit of a pickle in sort of a price war. They don’t know how to get themselves out of it. We wrote this article to provide a practical example and to put people on the spot as to what they would really choose when their life came to it. So as an example, we wrote in this article next time a customer says, “Can I get a lower price?” We suggest you take them to a bicycle shop, and you ask them to actually choose a helmet. Would they choose a $10.00 or a sleek, ventilated $150.00 model that actually would help protect them in case of an accident. You can see where we’re going here, can’t you?
Kevin Turner: Absolutely. Yeah. It would be even more powerful if you asked them if they were buying a helmet for their child.
Sue Barrett: Well exactly. So we’ve got various options we could use, of course. So we want to find out, they may not be a bike rider, but they may have children that do ride bikes. So again, it’s coming back and making it very personal to people about what value really is. This is where I see sales people let themselves down, because they end up just selling product and price, not the genuine real value that they actually deliver. There’s a whole lot of other topics that they could actually talk about that actually cost customers, or add value to customers that may not actually be ascribed underneath a particular price point, if you like. Because price is an arbitrary figure until value is ascribed to it.
Kevin Turner: Yeah. I heard a wonderful story and I hope you don’t mind me sharing this with you. But it describes the difference … If you’re so concerned about discounting. There was a story about a barber shop that had opened, was very successful until someone opened across the road and they were offering haircuts at $10.00 which was very, very cheap. Half the cost of what this barber shop was. So they put up a sign that said, “We fix $10.00 haircuts.” It’s a lovely statement about what you’re prepared to pay for to get quality, isn’t it?
Sue Barrett: Well that’s right. I mean, there’s another lovely story about this man and his rather fancy car with a ding in the right hand driver’s door rocking up at 7:30 when the panel beater was opening up. The panel beater had been there for years and years and years and always had work to do. This bloke said, “I’ve got this meeting to go to, can you fix my door blah, blah, blah, how much will it cost?” The bloke looks at him and says, “Two thousand bucks,” and he went, “Oh, oh.” But he says, “I’ll get you out of here, it’s fine.”
Eventually what happens is the guy gets to the door, takes the inside cover off the door, gets a tapper … You know those little tappers? Gets his little hammer, just hits the little spot and the door bounces back as good as new. Puts the inside door back on and then goes to charge the guys $2,000. This guy’s kind of incredulous, “How come I should pay two thousand bucks for that?” He goes, “25 years of knowing where to exactly hit it in the right spot.”
Kevin Turner: That’s so true.
Sue Barrett: I saved you half an hour, or five hours, whatever.
Kevin Turner: Yep. That’s what you pay for. You pay for that experience.
Sue Barrett: Exactly.
Kevin Turner: Let me ask you, Sue. You’ve written it in the blog article we published today, but what is it that buyers are saying that’s important to them?
Sue Barrett: Well, I think if we look beyond the product and the price and now think about the systems that they operate in … Depending on the customer and the types of business of course, but let’s just think about some generalities, a lot of people are time poor. So if we’re going to promise on-time delivery and we commit to that, there’s something worthy in that. But also too, what they’re looking for from sales people is not more product information but help and guidance in making complex purchasing decisions. Clearing the clutter. Giving that expertise, that domain expertise to help people get to what they want quickly, more effectively, more efficiently.
Then we’re looking at things like quantity, quality, timeliness, accuracy, those sorts of things. Customers just don’t want to have their time wasted. I’m going to pay money for something, you better be good at what you do. Again, who are we dealing with? You might be selling something cheap, then go out of business the next day. So continuity of supply, quality of supply. Then identifying with customers what’s most important to them versus what’s nice and incidental. Once you identify those sorts of things about what customers are really looking for, now you can actually talk about having a value conversation. The price point that you’re making now actually has some merit to it.
Kevin Turner: Wonderful. Just so well said. Check out the blog article on today’s post. Sue, unfortunately I have to say farewell to you for this week. We’d love to have you back on the show anytime you want to come in. So thank you very much for your time.
Sue Barrett: My pleasure, Kevin. It’s been a thrill, and I look forward to speaking to you in the future. Good luck to everyone, cheers.