When you sell complex services, the real enemy is not a customer’s demand for the lowest price. It’s having them understand the value of your product in the first place.
As far as the customer is concerned, there are two financial elements in any sales transaction – the price they pay, and the value they get.
They’re all over the price, but usually much less clear about the value.
When you talk to a potential customer for the first time, chances are they will ask about the price even before you have enough information to formulate an answer. There are three main reasons for this:
- We all carry the same colour money in our wallets. Of all the things that go into making up an offer or a deal, price is the one that is the most universal and easiest to understand (at least in theory). As consumers, we all understand the value of money and are able to make instant trade-offs in our head - “Wow! That’s 50 pairs of shoes”, or “Geez! That’s as much as a Tesla/Jeep/Lexus” (insert your favourite car brand here).
- Prices are easy to compare – at least in theory. Once a buyer has seen a number, they’re mentally totting up the value in their heads, comparing it with the value on the page and deciding whether the investment is worth it. Unfortunately, buyers often get this calculation wrong, simply because they are not making an informed comparison.
- The price has either been budgeted for – or not. Understandably, buyers can be nervous about investing too much time and energy in something that might be outside their ability to pay.
Value is broader, and much more difficult for a customer to pin down. That means it’s your job to help them understand the cost impact of the purchase that goes well beyond the price.
Recently I ran my Value Labs program with a professional services firm that had struggled to sell a new compliance product to property developers.
Not only was this a grudge purchase for developers, but there were already other, cheaper solutions on the market, and they were not at all interested, despite the relatively modest fee.
That is, until we discovered that they had a $500,000+ problem that only my client could solve.
Suddenly, this didn’t feel like selling. It felt like helping the developer claim an inheritance from a long-lost, wealthy relative.
There is simply no way to be paid what you are really worth by customers until you first understand it yourself.
What you do might just be the key to helping your customers to compete better, do business better and to reclaim money they don’t realise they are wasting.