Back in the late 90s when I was in the market for a new car, the internet was not the ubiquitous and prolific resource for information it is today. In those days, information about the true cost to a dealer of each car on the lot (and, hence, whether or not I was getting a fair deal) was a lot more difficult to determine than it is today. Transparency was not encouraged. Often times, in fact, quite the opposite was true. So the dealers (sellers) usually had the edge, because it took more work than most people were willing to put in to uncover and didn’t bother. And so they could get away with taking most of their customers to the cleaners. But by employing some diligent “offline” research skills, I was able to learn just how much fat was built into the prices they were trying to charge, what incentives the manufacturer of the car I wanted were offering dealers at that time of the year, and what had to be moved off the lot, and by when. When it was all said and done, I knew exactly how much the car I wanted was costing them. By adding to that what I determined was a reasonable profit ($400), I was able to name the price I was willing to pay to that dealer (or, by inference, to another dealer of that same make) for that car.
The transaction was consummated on the spot.
By contrast, in today’s world – where information about your solutions and those of your competitors is available at the click of a prospect’s mouse – how can you keep your sales opportunities from devolving into price wars? How can you sell value when seemingly every bit of information about not only your company’s stuff but also that of your competitors can be found on web pages, blogs, on-line chat groups, and tweets? The answer is that there is one important and very real component of value among a buyer’s decision criteria you can offer that is difficult, if not impossible, to determine second-hand – and it has nothing to do with the product or service being considered. And that is you – the salesperson. The person who’s going to educate the prospect so as to ensure that he is equipped with the knowledge necessary to not only make the best decision, but to not make the worst one. The person who’s going to answer his questions, address his concerns, remove uncertainty, and make him feel more confident of his evaluation.
And while it’s true that prospects can (and, I assure you, do) check out your profile (and that of your competitors’ reps) on LinkedIn to learn a little bit about you, they can’t really judge you and your value until they engage with you. People really do want to buy from people they like and trust, from people with whom they feel comfortable. And therein lies your opportunity to positively differentiate your offering (defined not just as the product or service you’re selling, but the totality of what the prospect is buying – confidence, assurance, peace of mind, and trust, to name a few items) from that of your competitors. Because in addition to the hard, factual evidence all vendors present, a prospect will, throughout a sales campaign, consider softer factors such as, “Post-purchase, I’m going to need to continue working with and relying upon the sales person of whichever company I select. Which one seems the most dependable? Which one has been the most responsive? Which one has been able to get me access to information and resources within his or her organization that I couldn’t get? Which one is providing more value?
That last question is critical, because it means that you as a salesperson have more power than you think to win a deal and win it at your price. Understanding this and using this knowledge will not only help you win business in today’s information-laden environment, it will also help you keep your margins intact.
Look through your pipeline of opportunities for those in which you find yourself in a pure price war. Think about what you can do – what you can offer, what you can create, what you can produce, what you can suggest – to or for your prospect that demonstrates to them that you have their best interests in mind, that you’re watching their back. Then do it. What you’ll start to find is that the dynamic between you and your prospects begins to change, as you start to be viewed less as a vendor rep and more as a valuable resource. And because valued resources are – well, more valuable – you should expect to see price becoming less of an issue with these deals, which means more – and more profitable – business for you..
By Craig James
Retrieved: 15 February 2013 from http://www.eyesonsales.com/content/article/combatting_price_wars/?utm_source=EyesOnSales.com&utm_medium=Email&utm_term=title&utm_campaign=17981&utm_content=Combatting+Price+Wars