The Value of Advice:
Price comes Secondary
Squeezing the Margins
In my 20 years in sales, I have probably heard the question “How much does it cost?” over 30,000 times. Unless you have an endless flow of money, it is typically the first thing that comes to mind when considering any purchase. Instinctively as a salesperson we tend to avoid answering the question without somehow slipping in the chance to explain the features, benefits and value of the product we are selling. Of course, some of us will play the lowest priced game. In my humble opinion, this race to zero is a zero-sum game in which we are both squeezing our margins and diminishing our value as salespeople. Regardless of where your price falls on the industry scale, it’s not the cost that matters most to the customer.
The Legendary Salesperson
I remember one of my mentors, Damon. He was legendary in the Investment wholesaling game. Before I got to know him, his claim to fame was that he was the first in my job position to make a million dollars a year! If you are making over seven figures in your mid-thirties you are doing something right. Everyone wanted to know what his secret was. I recall sitting with a prospective client and his name came up. He mentioned that Damon was the best salesperson he has ever met. As a curious young salesperson, I had to ask “What makes him the best?”. The prospect proceeded to tell a story of a young Damon coming into his office. He had no intention of doing any business with Damon but took the meeting out of courtesy due to his persistence. Damon’s products were significantly more expensive and adding a new company to their shelf was a hassle. After a nice fact-finding meeting, it was obvious that the prospect liked the lower pricing, felt comfortable with the existing relationship and was quite happy with his current provider. Upon leaving, Damon asked “Is there anything that is on your mind that is keeping you up at night? Anything.” The prospect said “There is, however it isn’t something you could help me with.” Damon responded by saying “Try me.” The client then proceeded to talk about how one of his product providers hasn’t gotten back to him about an information folder and product guide. He had some questions about a new product from the existing company and was waiting a week for the rep to get back to him.
The next day a package arrived for the prospect with a note “I know this isn’t from my company however here’s the information guide that you were looking for. I knew it was important to you so I made some calls and got a copy for you. Please don’t hesitate to call me if you have any questions regarding this product. I took the time to study it and can help you position it with your clients – Damon”. The prospect was so impressed with Damon that he sold out of the existing relationship and moved close to $50million to Damon. To this day, Damon is his number one product provider with over $200million in assets under management with him. What message did Damon send to his client? For starters, Damon and his company are more interested in your satisfaction than in getting you to buy. If it was important to the client, it was important to Damon.
Of course, he didn’t want the business to go to the other competition by providing the details of this new product, but he was willing to bank on the fact that having a trustworthy company with his best interest in mind is more important than a cheaper product. By truly putting the client’s best interest in mind even if it meant highlighting another competitor, it proved that Damon’s intention, in the end, was to build trust.
400-Million Dollar Sale
When I was a young salesperson I had a sticky note on my cubicle that said “My goal is not to close a sale but to open a relationship.” I believe in this philosophy. When I truly understood that people buy from people and not entirely on features, my income significantly increased. My team won top sales that year as we sold 400 Million dollars in sales. As far as I know, this continues to be the record for the most sales ever sold in a single year by one team.
Another saying that I still use today is “Price is an issue in the absence of value”. Show a client value and provide sound advice and price becomes secondary. This is evident in the number of people who drive luxury cars in the city. There are more cost-efficient means to get from A to B. A Toyota Corolla can still travel the same distance as a luxury Mercedes Benz however the owner of the Benz sees value over and above the price of the car.
There is always the chance that you will lose a customer on price; but why not make it about more than the price from the beginning? Be more of a consultant and offer advice that indicates you care more about their overall satisfaction than their money. If the customer still decides to choose the competitor, after all, be ready when that competitor falls short as you will be the first person they will call. You won’t have to prove yourself a second time.
“Value added is worth more than the price paid”
Here are 5 questions you can ask to show prospects that you want to add value:
- What are your top priorities right now?
- Potential Follow up – Do you have a particular strategy to address this issue?
- Are you having problems with (insert a few pain points) like some of our other clients?
- Potential Follow up – Can you tell me more about (pain point)?
- Is your current solution solving these issues as well as you like?
- Potential Follow up – What made you choose this solution?
- What would it do to your overall situation if you could handle these issues more effectively?
- Potential Follow up – How would this impact your role personally?
- Is there anything preventing us from working together? Don’t worry my feelings won’t get hurt.
- Potential Follow-up – Okay my feelings hurt a bit but can I take candy from your front desk before I go?
So as you grow into your personal and professional life, be a person of value. Uncover problems, provide solutions, address objectives and give more than expected. If you continue to do this, the price will never be an issue as you are invaluable