9 Things Trade Show Booth Buyers Need Other Than Low Price
This article was written by The Brooks Group in their June 2009 Newsletter.
“If your customer truly needs a low price, you can’t afford to sell to him.”Cletus Peichl
Even in tough economic times, don’t fall prey to the trap of believing you can sell low and make it up in volume. We have consistently seen that successful organizations are those that charge premium prices. But in order to charge premium prices and sell your product, your organization will have to build value by delivering on everything else your customers need—everything except low price.
A legitimately qualified prospect must have certain things. What are they? Many salespeople succumb to buyer pressures to get them to cut their prices because they have never analyzed what the customer needs or wants versus what he or she says he or she needs/wants. Buyers do not need a low price. They will tell you they do, they may even think they do, and they certainly have a lot of pressure to try to get a low price. But they don’t really need a low price. In fact, if they truly need a low price, you better not take their order because they may not be able (or willing) to pay you. Let’s examine some of the things that buyers really do need:
1. They Need Two or More Vendors
Sole-sourcing is very perilous. In a world where there are thousands of potential vendors, sole-sourcing is just plain dumb. That is because a fire, flood, tornado, hurricane, software crash, earthquake, volcanic eruption, labor exodus or a labor strike can cause that one, single vendor not to be able to ship on time.
Street-smart prospects learn early that sole-sourcing is very dangerous. So most won’t do it. That means, by definition, that one vendor CAN charge a higher price than the lowest price bidder and get the business. Also, virtually all customers who buy in bid situations reserve the right to reject any and all bids. That is generally stipulated because they know that if they accept the lowest bid they are vulnerable to any idiot who writes down a very small number on a piece of paper, gets the bid and then fails to perform.
2. They Need On-Time Delivery
More than anything else, customers need on-time delivery. And this is true whether it’s a hard-goods product, a high-quality service, data or information. If you can deliver on time, you don’t have to sell at the lowest price. If you can’t deliver on time, forget about commanding a higher price—and with the possible exception of a very short term, you can forget about selling at any price.
3. They Need Help and Guidance on Complex Purchases
Here is your real chance to sell. People who make multiple, varied or complex purchases are often not as knowledgeable as you might believe about everything they are buying. If you, as a salesperson, see your role as being an educator or teacher to a harried prospect, you can get a leg up on your competition. A lot of salespeople still mistakenly believe that selling is telling jokes, being friendly and finding out the other guy’s price so they can slide in under it. They don’t work at educating their customers, and fail to give that extra dimension of valued knowledge and service that gets the respect and loyalty of the prospect. Don’t ever expect a prospect or existing customer to buy strictly from loyalty. But, instead, recognize that if you are a knowledgeable, helpful representative of your products or services, you will always have access to the ears of your customers. This gives you the opportunity to present the reasons why they should pay you a premium price. You have not only helped educate them about what to buy, but have been able to communicate your ability to deliver the kind of quality product or service they need, on time, and can back up their confidence in you with impeccable, ongoing support.
4. They Need to Get What They Buy – Quantity, Quality, Timeliness
They need to get what they’ve ordered. They need to have it on hand, in place, so that they don’t have to shut the place down. This is just another point to emphasize, one more time, the critical importance of your ability to deliver your product or provide timely service to your customer, on time, in top condition as promised.
5. They Need to Minimize Inventory Carrying Costs Without Jeopardizing Their Enterprise’s Needs
Your prospect may need “just-in-time inventory” – nothing late, while not having too much on hand. This is a tough requirement, and if they can be convinced that you can deliver on time you have a strong selling advantage. Any astute operation of any sort needs to try to minimize inventory carrying costs. But understand one thing: all this talk about statistical quality control, and the continuing trend to have “just-in-time” delivery emphasize the importance of just one thing: DELIVERY, not price. They’ll tell you they want low price, but they will cut you off as a vendor if you foul up delivery.
6. They Need to Buy From a Technically Current and Financially Sound Vendor
Ever been left holding a gift card from a retailer that’s gone out of business? It doesn’t matter what kind of hot deals the retailer was offering—if you held onto that gift card one day too long, it was suddenly worthless. One day they were selling, and the next day the doors were locked, the phones shut off, etc. It’s the same for your prospects—they may be tempted to opt for the lowest price vendor, but they can’t risk buying from a vendor that’s in danger of going out of business.
Most astute prospects learn early in the game that you’ve got to buy from whoever is staying abreast of current technology and maintaining a sound business in order to deliver quality product, on time. If they don’t, they’re going to be in a job-threatening situation when they or their employer doesn’t have the needed products or services. Any smart business-to-business buyer is far more concerned over the probability of you being able to deliver on time than they are about your low price. And they’re also concerned about whether you’re going to be around at all.
7. They Need More Certainty on “A” Items (compared to “B” or “C” items)
“A” items are the items a prospect must never be without. “B” items are important and there should never be any problem with their availability. “C” items are so ubiquitous that we don’t need to worry about them. Customers need “A” items; items that are really critical to their business. For example, an airline needs fuel (“A” item) more than they need ice (“B” item). If you’re a drinker you might not agree with that, but most drinkers will agree that they would rather run out of ice than out of fuel, particularly at 30,000 feet. However, if they run out of cocktail stirrers (“C” item) probably no one will get too upset. Thus, lack of “B” and “C” items will not put the airline out of business, but lack of item “A” spells major disaster for the company. That is the real difference between a demand and non-demand item. You need to know where your product or service fits into this hierarchy—and where it fits for each prospect.
8. They Need Courtesy, Speed and Timely Action on the Part of the Salespeople in Accepting Orders, Answering Questions, Responding to Order Problems or Delays
It’s amazing the number of salespeople who really don’t want to talk to their customers—especially once they are customers, not prospects. The customer who can count on you to be responsive will continue to buy from you.
9. They Need Order and Sales Service Department Help
We once talked to a contractor who developed shopping centers, and he told us that one of his biggest problems was getting sales service and information from salespeople, especially when he was getting into something about which he had little knowledge or experience. He said that when he was trying to get information on automatic doors that he needed to install, his concern was about safety, product liability and the maintenance of the doors. The salespeople he talked to didn’t think those questions were important. The fact that they could offer him the lowest prices was what they believed should be the major topic of conversation. He said he didn’t buy from the lower-price guys, but rather from the one company that gave him the answers (and assurances) about his concerns.
A Final Word About Delivery – You Can’t Sell at a High Price Without It
Delivery is incredibly significant in your ability to sell at a high price. The good news is, if you raise your price, you probably can eliminate your delivery problems, improve your gross margin, boost profitability and provide bigger commissions and bonuses – even though your competitors have a lower price than you do. The reason low-price vendors have delivery problems is that in order to sell at a low price, they have to cut back on everything else they do. The volume which may be created by the low price usually results in an inability to produce enough product (this applies to services as well) on time. The first thing that happens is they begin to fall behind on delivery. Then, in order to “hurry up” and deliver, quality begins to suffer. With poor quality, customer complaints start rolling in, and then service goes down the tubes. Planned sales volume of quality goods, with on-time delivery, means that you can sell at a higher price than your competitors.