In a negotiation with a client, the most common point to negotiate is price. A client may say a competitor offers a better price and would like a better deal from you. With a desire to close the deal, the negotiation on price starts to occur and the longer the negotiation goes, the lower the price. This devaluation lowers revenue and profit. The price war is a battle that is lost over and over again.
Instead of asking yourself how low can we drop the price to be competitive with other sellers asking instead what can I do to compete with other sellers beyond price can be the difference between small victories at lower prices and repeated wins for a higher price. By nature of competition, new sellers of similar or identical products to your own will eventually enter the market and take market share away with lower prices. Rather than battling over price, changing the way you play the game allows you to compete and win.
The top sales people in the world rarely are the ones with the lowest price. In fact, the price of a product is often more on the minds of a sales person than it is on a potential client. Great sales people recognize the benefits of a product and sell those instead of price. This is called Value-Conscious Selling and in the majority of cases is a bigger factor to buyers than price alone.
Value-Conscious is defined by three different topics: price, quality and service.
Price does play a role in value-conscious selling. Ultimately, a higher price but with the other two values being perceived as better than competitors will make the difference between paying a lower price or a higher one.
Quality of a product is an important factor to winning based on value over price. A product that is a higher quality version of another, and as such will last significantly longer than a cheaper version can be sold for more on that fact alone. The concept of buy cheap, buy twice can be a major buying influencer to potential clients.
Lastly, service provided by your company can be sold as a value added reason to buy a product for a higher price compared to a competitor. 24/7 customer service is a major selling feature above limited hour customer service. Next day service, compared to 2-3 days also can be a great reason to pay extra. There are other service-based reasons to sell a product on that you will have to determine for your company
Beyond value-conscious selling, several other tactics and strategies can be employed to sell a product and compete beyond price. We here at LePhair have a new service we are calling “Competing and Winning Beyond Price” that will provide you and your company with valuable insight on how to sell smarter. Upselling, cross selling and building superb client relationships will all be covered and developed. We would love to help you sell smarter while competing and winning beyond price.