“There is no more ‘free’,” price consultant Tom Reilly declared. “There is a fee for free. Somebody has to pay for all that ‘free.’”
“Do you think ‘free’ grew on a tree?” Reilly asked the joint meeting of the National Fastener Distributors Association and Pacific-West Fastener Association.
Credit: Greg Christensen Photography
In presentations on “Crush Price Objections” and “Value-Added Selling” Reilly advised conference attendees that the “only response to price resistance you will ever need: ‘Mr. Buyer, if your real concern is money, that is the most compelling reason you should choose our solution’.”
“Long-term is always a better discussion with a customer than short-term,” Reilly said.
You are offering “total solution” rather than “naked products’. You are a partner vs. warehouse. It is relationship vs. transaction. It is ‘money’ vs. ‘price’.”
Refer to yourself as a “partner” and your competition as a “supplier.”
A key to crushing price objections is differentiation. “Sell your value,” Reilly said. “List ways you can contribute to the customer’s bottom line.”
Reilly argued against giving salespeople price-cutting authority. Studies show when salespeople are given authority to reduce prices, they do and they give as much as allowed, he explained. He described value-added selling as a “customer-oriented, need-satisfaction, conceptual model of selling. A conceptual sale is arguing a case bigger than products.”
“Value is a long-term, not short-term concept, yet price shoppers base their decision on the short-term issue of acquisition price,” Reilly explained. “Use the need-satisfaction model of selling to stretch the buyer’s time horizon.”
Value-added talking points could include all three: Company, product and salesperson examples of value-added. Finish with what makes your company unique.
Questions that point the buyer toward long term include: If you were to fast-forward a year to two from now, what would cause you to say that you made a great decision to partner with us for this project?”
“Walk me through your project or process start to finish. Long term, how do you see us creating value for you?”
“Humans are impatient,” Reilly acknowledged. “Stretch the time horizon beyond ‘we want it now.’”
To move beyond price, ask questions to cause the buyer to talk bigger about their needs, Reilly said.
In contrast, “price shoppers want to strip value,” he said. Show them why “cheap price is a lousy value.”
“If the customer is not sold on the concept of marriage, he is not buying it,’ Reilly said. “Sell the concept, stretch the time horizon and enlarge the conversation.”
Among Reilly’s suggested questions:
- “Beyond the product, what do you need from your partners?”
- “What is your greatest concern on this project?”
- “How would a broader partnership with our company help you swell your bottom line?”
“Put your best stuff on one piece of paper,” Reilly advised. That is your company’s “elevator speech.”
The elevator speech is a “succinct overview designed to pique interest in hearing more.” It is useful upon meeting, in canvassing calls, sales letters and composing emails. In 50 words or less, the elevator speech should tell the potential customer “who we are, what we sell and to whom we sell.”
“Less is more, white space is good, make it easy to read and process, feature your talking points about your value-added and avoid telling everything you know in the elevator speech,” Reilly said.
“Be clear on your value proposition: What can the customer expect to happen long-term from your solution?” Web: nfda-fastener.org – pac-west.org – TomReillyTraining.com
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