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Hi. In my conversations with entrepreneurs starting out as well as those who are expanding their enterprises, I have found some common challenges they come up with in our discussions. If you can solve these problems you can change the world, you can do anything and go anywhere and be guaranteed success. So what are these critical challenges that present themselves as roadblocks to success?
Top of their list is undoubtedly this one.
They don’t know how or they don’t believe that they can sell on value instead of price.
Until they overcome this mindset they can never really succeed. Until they understand the true value that their solution is providing to their target market, they will define themselves, their value, the price of their product and all their marketing efforts falsely. How can I say that? Well it’s simple, if you are not clear on the value you deliver, you will promote and price your product or service on the basis of what other people in the market are charging for similar or competing items. By doing that you have automatically opted to sell yourself as a commodity, you are simply selling on price. You are relying on supply and demand, and you will ALWAYS LOSE!
You will have to start with 0% market share, you will have to compete with the established players in the market, you will have to pay your dues to muscle your way into the market the hard way. You will waste a large portion of your marketing spend to just get seen and heard, before you can even sell a product. You will have to prove that your “new” product is better than established competitors who have a longer and better track record than you do. Why should their existing customers change to your product, and take risks with you, when they have a safe bet, albeit with a product that is inferior to yours? There’s a lot of pain right there! That’s a mission all by itself, and for most entrepreneurs, their passion is in their product or service. It’s their new baby they want the whole world to love too. So what do they do? They may dig deep in their pockets to pay marketing experts to do it for them – good luck to you. Or they will try it small scale themselves and in 99% of the cases the results are predictable, small results, slow progress, but better than nothing, but not enough to survive on. Is there another better way?
Yes. Fortunately there is. Stop selling on price and sell on value instead. It’s much much easier and it works every time. What do I mean by selling on value. Let’s look at a for instance. Let’s say I bring out a new “Super Widget” that can instantly sanitize the air in any room. Wow great invention! Let’s say it costs me $50 to make, so I ask all my friends and people that i meet how much they would pay for it, and I average their answers out. To get a number they each think about how much are currently paying for competing products such as air spray deodorizers, special cleaning chemicals or whatever else they are using and let’s say they come up with a number like $100. Sounds good, a 100% markup. No, that’s bad, it’s not going to work.
At $100 they are only comparable, new customers discount what they are willing to pay against the risks of the new widget not working for them they way they expect it to. So you decide to sell it at $90 to create a price incentive to try it out.
Add in the costs of your marketing, carrying inventory, distribution and support and your product is a loser.
What’s a guaranteed alternative that will work? Selling on value will every time. So…
What is Selling on Value?
Selling on value is the process of determining the value of your product not based on it’s built-in value (e.g. fast, long lasting, accurate, reliable) but instead on it’s value to the customer (ease, convenience, saves them time, etc.). To do that you need to interview your customer to find the pain they have that your product can fix for them. What is a driving need the customer has that you can fulfill, and how much is that worth to the customer. Remember people respond more to achieving pleasure of avoiding pain than to features, benefits of the product. They are only interested in what it will do for them.
So selling on value rather than price involves six steps.
1. Determine customer pain that you can fix. Make sure customer is fully aware of their pain (very important).
2. Get customer to quantify the value of a solution to them (not to you), and determine their urgency to solve it.
3. Reveal to customer your unique solution and create belief in customer that this will work to make the pain go away, and make them vividly aware of what good things it will facilitate (e.g. dreams, business targets, growth, happy customers, etc).
4. Re-affirm and re-assure customer based on their own pains and dreams and value they ascribed to each, how this product will solve their problem. Then provide in minimal detail the supporting claims of features that provide benefits and how they give the customer an advantage.
5. Show the customer how they can get the solution as easily as possible – price plans, payment plans, delivery options, product options and extras – then presume the sale and close the deal.
6. Answer “objections” if any by re-affirming the specific personal value the customer will derive from your product.
Can you guarantee a sale every time – No. But remember that people only buy because of the emotion stirred within them about meeting their deepest needs, and not about how wonderful products are or how “cheap” they are. How does your product make your customer feel about themselves?
We teach entrepreneurs how to find the value in their products, but more importantly how to identify the value they can deliver within the customers in their target market. Secondly we show them how to leverage that into more sales, more often. We all love to focus on “our” product, but instead we need to become unselfish and focus instead on helping them find and feel their needs and showing them how they can experience the deep satisfaction of their needs. So remember WIIFM (What’s In It For Me) which the radio station that your customer’s mind is always tuned in to. So go there, they’ll love you for it.
See my other article about the “10 reasons to never sell on price” .
Pierre Basson – Business Mentor Extraordinaire
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