One of Warren Buffett’s most famous quotes is, “Price is what you pay; value is what you get.” It’s an idea that largely guides his investment decisions and one he’s used to build his empire. What exactly does this quote mean, though, in the context of sales? And how can we use it to guide our own sales strategy?
Indeed, price and value are not interchangeable, but it can be a tall order for salespeople to overcome price-related oppositions. Selling against price is becoming a more common-day problem, as the world continues to move towards commodity buying. Losing margins and the ability to compete and gain market share are more challenging for sales managers, salespeople and marketing executives trying to find an edge. So, how does one capture market share when price is king and the competition fierce?
The best way to sell against price is to take price off the table before it becomes an issue. Relying solely on capabilities, products or services without any real differentiation is a recipe for disaster.
That said, here are 5 effective ways to sell against price:
1. Build a process
Demonstrate your company’s ability to deliver huge bottom-line impacts for your prospect or customer. Most companies fail to sell against price because they don’t utilize this strategy, or they only create a payback or cost justification. If you only sell by talking about your capabilities, you will commoditize yourself immediately.
By building a sales process that outlines every stage and bottom-line impact, you bring accountability into place which transfers to buyer’s confidence (the No. 1 reason people buy).The process must include a methodology that demonstrates your impact on the market, prospects and customers. You should move away from selling products and services because this is what gets commoditized.
2. Develop a strategy to win market share
Too often sales and marketing people rely on tactics or actions to make a sale. Understanding your market’s needs (not your perception) is the key to developing a strategy. Each market is different, yet most companies use the same communication and sell the same way. If you haven’t conducted any outside research then how do you know what is the next big issue that’s going to drive the market? Aligning to market drivers, coupled with ROI bottom-line impact, is the secret sauce. In other words, doing your homework pays off.
3. Define your new position and realign your offering
Stop being the same old company. Reinvent yourself and realign your core competencies to the market drivers. What do you want to be when you grow up? That’s what it takes to double your revenue. Realigning your offering is an important step today. The markets are shifting at a faster and faster pace, and perceived novelty wins the day.
4. The higher you sell, the more you impact selling against price
After developing a new strategy, selling higher in the organization must be part of the new tactic if you want to eliminate selling on price. Most companies and salespeople don’t know how to sell higher in the organization. Salespeople try and fail, and then give up. The number one reason for this is they try selling with the same message to a higher decision-maker and get rejected immediately. Put simply, they become stuck in a rut.
5. Learn to communicate differently
Companies are still not targeting the whole prospect from the top and by department. When you sell higher in an organization you must craft your message to ALIGN with the person you are targeting. Vice presidents and directors have more responsibility to deliver ROI. That means you as a salesperson need to parrot their language in a way that comes across as genuine. The lesson? Tailor your message to the audience at hand. One sales pitch won’t do it.
Also, don’t forget the importance of tone and demeanor in these encounters. Personality and charisma can take you far, all things being equal. Strive for an air of confidence without coming across as arrogant.
6. Communicate the convenience factor
Does your product expedite processes that once took three times as long? Business owners need to consider the value of their time, even if the price is a bit higher than what they’re used to paying. As a salesperson, you can make the case that your solution will save time, and in the long run, money.
Also, consider integration. Your offering might fit better with other products that the customer is going to purchase or is likely to purchase. Again, ease of use rates highly in most customers’ minds.
Whenever you find yourself selling against a lower-priced competitor, you should start positioning and repositioning your offering and your relationship with the customer to emphasize as many of these differentiators as possible. You might be surprised where it takes you!