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A few years ago, one of my clients in the furniture business was telling me a story about one of his best salespeople, Will Shulte, who called on the national headquarters of a rental company to present their office seating line. He wanted to become the primary supplier for the company’s rental business.
Will already knew that his seating was priced at least 20 percent higher than the product the rental company was carrying. His approach was to build his presentation around the quality and performance of his product in order to justify the additional investment.
At his first meeting with the company, Will realized that this sale was not going to be easy. Price, as anticipated, continued to be the primary objection. But even after several unsuccessful calls on the buyer, Will persisted in looking for the right hot button. Finally, he found a way to let facts and figures do the selling for him.
Will did an analysis based on the rental company’s records of replacement costs, repair costs, and life of the chairs they were using (his competitor’s product). He compared these figures with similar records on his chairs used in specific large industrial installations. When this analysis was laid in front of the decision-makers, Will Shulte made his sale. He showed the rental company that, even though they were paying less for his competitor’s chairs initially, they were really paying more in the long run! With his products, they would pay less in returns and repairs and enjoy a longer rental life. And the real icing on the cake came later for Will’s customer, when the resale of Will’s chairs after several years of rental turned out to be higher than the company had experienced before.
Within a short time, Will turned that company into one of the largest purchasers of his company’s seating products in the United States. And he did it with a simple yet very effective technique: he creatively illustrated to them the unique factors of product (quality) differentiation and showed them what the real value was. He also demonstrated a high interest in that customer¹s needs as well as a true eagerness for the business.
We can all learn something from Will Shulte. Price is not a singular, obvious number; price can be very complex. There is price as it appears on the surface, and there is actual cost. What is your product’s true cost after considering every aspect of savings and benefit? Remember, anyone can cut prices, but it’s a risky strategy at best. Price cutting is a far more expensive exercise than most people realize. A better alternative to discounting in this scenario would be to add value by explaining product superiority or unique benefits that would accrue to the buyer when he selects this product.
All salespeople should understand margins, the impact of price-cutting, and the creative alternatives that can protect your sacred margins. Without “margin protection”, the future viability of your enterprise is questionable! On that occasion when you are selling what is perceived by your buyer as a commodity, new challenges present themselves. When product differentiation doesn’t exist, we must excel in other ways to secure the business. |
