Price is the ultimate decision factor in the absence of differentiation. 🎯


By Lee Salz

One of the toughest sales challenges is dealing with the dreaded price issue. Yet, price is a discussion point in just about every buying experience. Buyers seek to make an acquisition for the cheapest price possible. While many argue that the right sales strategy is to position ” value” or argue ” best,” that explanation is tough for salespeople to swallow.
What salespeople really desire to understand is what is unique, why it is unique, to whom it is unique, and under what circumstances those unique aspects should matter to a prospective buyer.
With that understanding, they are able to explain what buyers get for the additional dollars invested. The good news is that buyers seek answers to the same questions as salespeople when trying to justify spending a penny more for something that appears, on the surface, to be the same as something else.
Comparing apples to apples
Imagine you desire an apple and have two choices. Both apples are the same size, weight, type, color and flavor. However, one of the apples is priced twenty percent higher than the other. Which apple would you buy? Of course, you would buy the cheaper one, given the sameness of the two.
However, what if the more expensive apple was organic and that was important to you? Which apple would you buy now? Or, what if the more expensive apple could be bought down the street and the cheaper apple was five miles away? Which apple would you buy if you didn’t have a car?
Price is the ultimate decision factor in the absence of differentiation.
However, differentiation is not limited to the product. There are factors beyond the product’s attributes that affect buying decisions. Saying that something is unique or different isn’t enough to justify spending additional dollars. Helping buyers recognize the importance of those differences is the key to justifying higher pricing.
Paying for free water
Consider water as a product. Water is readily available for free in taps throughout the United States. However, millions of people elect to buy bottled water because of a perceived difference in water quality. Ironically, few people know the location from where the water was bottled.
Take a trip to Target and you can buy a case of twenty-four, pre-filled water bottles for five dollars, which is about twenty cents per bottle. People buy those, not just for the perceived quality difference, but also because of the unit packaging of small quantities.
Stop by the gas station and the same bottle of water is $2 each. You get the privilege of paying 10 times the price for the convenience.
Come back to Target and you find refillable water bottles for use with free tap water. These empty water bottles cost as much as $20 each. You can buy almost 100 pre-filled bottles of water in Target for the same price as one empty, refillable water bottle. People buy the empty water bottles because they are fancier than the pre-filled ones and some buy them for ecological reasons to reduce plastic waste. In contrast to the pre-filled water bottles, one can also make a return-on-investment argument that the water becomes free after the initial $20 of water has been consumed.
While a select few people talk about water taste as a buying-decision factor, the buying-decision for most people is driven by packaging and location of the product. In other words, the quality of the product is not what leads people, in most cases, to buy it.
Price matters
All buying decisions come down to price with buyers attempting to rationalize (or justify) why something is more expensive than something else. The effectiveness of the salesperson, in helping the buyer see the importance of the differentiating aspects, determines whether or not the buyer can justify the higher price.
When the dreaded price issue arises as the buyer tells a salesperson that his price is higher than the competitor’s, the issue isn’t price. It’s a symptom of the real issue. What the buyer is communicating to the salesperson is that he didn’t position what was unique and why those unique aspects should be important to the buyer. In other words, the price issue isn’t a closing issue, but rather a symptom of an issue earlier in the buying process.


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