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The Price is Not Right! PDF Print E-mail

the_price_is_right.jpgMost of us, in approaching the way in which we go to market with our clients and prospects, employ a variety of techniques to solve problems and land orders. Here are some of the more effective and professional ways to connect with buyers:

Value-Added Selling. Program Selling. The Agency Approach. Close-Out Selling. Solutions-Based Sales. Niche Marketing. Relationship Selling.

There are many varied approaches to promotional products sales, but the most common is selling based on price. This is definitely a hot-button issue in our industry and often an area of contention between the sales force and sales management. Coming from the latter group, I’m not shy about sharing my perspectives on price-based selling. So let the sharing begin ...

Check out this scenario:

You’ve been developing an exciting new account called Smackoff Concepts and they’ve asked you to quote them on 2,500 USB drives. You really want the order and the client, so you sharpen your pencil and quote the $15,000 project at a 30 percent margin. When you call Smackoff to follow up, your prospective customer tells you that they found the drives online for almost a dollar less than your price, apples to apples. If you are willing to drop your price to the whole dollar off, you’ve got the order — but this would cut your profit fully in half.

Do you do it?

The answer is ... no. Definitely no. Just say “no.” No, no Nannette. A thousand times no. Dr. No. Hell Triple-FREAKIN’ No!

Tell Smackoff to smack off.

Don’t sell based on price. Ever.

Why? Here’s why ... Because selling on price is based on fear and a position of weakness. It’s what most of your competition does. It doesn’t allow you to offer superlative service, startling creativity and amazing follow-up because you can’t afford to in this down-and-dirty arena of the great unwashed masses. It sends a terrible message to your client and damages your integrity. It cheapens everything you are attempting to accomplish on behalf of the client.

Because selling on price is ignorant. Ignorance on the part of your customers. Ignorance for which you are responsible. Fully educate your clients about the added value you and your company bring to the table. Avoid purchasing departments and purchasing mentalities. Be willing to walk away from orders and projects like this. Be willing to walk away and explain this to your client, and really mean it! Take pride in your professionalism and problem-solving abilities, and your crack responsiveness. Once you’re branded as price-cutter, you’re a commodity peddler in that account from that point on. This perception will never change.

Separate yourself from the lowest common sales denominator. You’re worth more. Your time is worth more. Don’t work with clients who don’t value all you can bring to their marketing and promotional efforts. If you have clients like this, fire them and find new clients. They’re out there. Find them. Partner with them. Create relationships with them. Make it clear that you are an extension of their marketing team, not merely a vendor.

I have an account executive here in Southern California who lives this approach every day. He books about $700,000 annually and NEVER cuts his price. When his clients and prospects ask him to do so, he educates them about why he can’t. Does he lose business? Sometimes. But his customers “get” that he’s willing to walk away from that business and that he means what he says — and they respect him for it. More often than not, he gets the project. Don’t sell from fear. You can be VERY successful and never cut your price.

Read through the list of sales approaches at the beginning of this article again. Decide which ones speak to you. Focus on marketing yourself through one or more of these effective methods in order to connect with and bring value to clients and prospects. Be bold, be different, be memorable! And know that, when you quote your customers, you are WORTH it!

Rick Greene, MAS, is the Western regional vice president for HALO/Lee Wayne Corp., the 2009 president of SAAC and the author of the comic fantasy novels “Boofalo!” and “Shroom!” available at www.amazon.com.

 

Comments  

 
0 #12 2009-09-25 17:42
I am working with a group now that wants caps,visors,shi rts,jackets...I have spent a week getting prices,embroide ry,etc....they told me the last person was cheaper...I told them,maybe thats why they are out of business now....They are thinking about that one...I told them that is my price,you are getting me,and I will be around,next time...
 
 
0 #11 2009-09-25 09:22
I think we all have been asked to trim our prices. When that is asked of me I let them know if I do I will be taking food off my table. I then ask which 2 nights next week my family can come to their house for supper. They get the picture real quick and have not had anyone ask me again to lower my prices.
 
 
0 #10 2009-09-24 22:47
Now more than ever, we can\'t succumb to selling on price. Thanks for this story!
 
 
0 #9 2009-03-26 14:26
How ironic that this article came to my inbox today. I am going back and forth with pricing on a simple thing as a pen. Yesterday I gave prices and my client emailed me back saying that the pricing they found online is MUCH better than mine. I educated my client that you get what you pay for, and explained the value of my services over ordering something online and told her to please go ahead and order the pens online if that was what was best for her business. She emailed me this morning and asked me to please help her find something of quality that she could afford. Yes, I think you need to pass up on some of these clients even in the hard times. You may be surprised that many of them will come back to you.
I totally agree with the article. Thanks!
 
 
0 #8 2009-03-26 11:06
THANK YOU! My sentiments EXACTLY! Great article.
 
 
0 #7 2009-03-26 09:28
When you sell on price you leave no room to negotiate, add value or provide exemplary service (which is really what most buyers want). Sometimes at the beginning of a relationship you spend lots more time with your client making sure everything is perfect and building their confidence in you. Once these people are on board and think your prices are too high, you stand your ground firmly. Then when they go elsewhere because of price, at least 75% return to you on the next order. Just keep in touch. They find out for themselves what you are really worth and they want it back. This has happened to me a number of times over the years. The more you learn to say \"NO\" to price cutting the easier it is. I have even seen some clients embarrassed for even asking to lower my price. When you do things perfectly for a client (except price)you become invaluable to them over time. You really are like another employee. They can give you a call and know things are going to be looked after.
No, No, No to price cutting.
 
 
0 #6 2009-03-26 07:41
:Pinch: I just had this very conversation with a rep from ASI. We talked about how they are letting anyone in the business. Those that don\'t know anything but cutting prices. He didn\'t get it. It just infuriates me when other distributors work on such low margins. We have always said to our clients \"Think of us as an extension of your marketing team!\"
 
 
0 #5 2009-03-26 07:33
In theory I totally agree that selling on price is selling your service short, but it is hard to walk away from business that you have cultivated and lose it to an online competitor....somehow the excellent service etc. goes out the window when there is a price differential! It\'s a very tricky tightrope we all walk each day!
 
 
0 #4 2009-03-26 07:27
Most uneducated distributors don\'t realize when they cut their margins to 5 or 10% they are making a huge mistake! They are devaluing our industry and training clients that they can find someone to do it cheaper if they try hard enough!
 
 
0 #3 2009-03-26 07:25
Excellent article! I need to keep this in mind BEFORE I quote prices. I get people who ask me for prices on something simple--like a business card or brochure--and it turns into a long-term relationship. My patience is lost, my profit is gone and I don\'t want to ever do these again... until the next order. And then it happens all over again. I\'m happy for their repeat business but my price precendent has already been set for that customer. I MUST learn for new customers. I had it drilled into me by my boss 10 years ago when I started in this business that 30-35% mark-up was a good margin. Now that I\'ve been moved to commission only, it\'s not so good.
 
 
0 #2 2009-03-26 07:22
Excellent article! Your credibility and professionalism is critical to your short term and long term success. We believe in this wholeheartedly. What we find is suppliers supporting us even more during these times!! Better pricing, more referalls (especially larger orders and extended credit. Suppliers want to give orders, pricing, and credit to those distributors that do not cut price. These are the distributors that have a solid foundation to maximize opportunities in the short and long terms.
 
 
0 #1 2009-03-25 23:59
I hate people who pound me on price! :angry:

As you noted it seems to be getting worse. Thanks for the article. I don\'t know if I have the guts to pass on some of this business in this scary economy
 

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