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Selling on price is a costly mistake

On reading this month’s Selling column, I was reminded of an experience I had many years ago when I decided to buy a watch. I visited a jewellery store and after greeting me, the salesperson began to ask a few questions about the type of watch that I might prefer – classic or sports, mechanical or quartz, etc.

My responses were very specific because I wanted to analyse how she would handle me, and the sale. Good sales staff quickly recognise shopper types and alter their sales pitch accordingly.

For example, on this day I was not the ‘chatty customer’, nor was I a ‘wanderer’ or a ‘showroomer’. And most of all I was definitely not a ‘bargain hunter’. I was an ‘on-a-mission’ shopper wanting to identify a suitable watch, and buy it.

The salesperson began qualifying me by asking about my budget. I was clear that I had just started looking and price was less important than quality. I emphasised that I wanted to buy a watch that would last for many years.

It had to be water resistant, suitable to be worn on all occasions, and I was not brand-conscious: the watch, rather than the brand, was most important.

She gathered three models that might suit my needs and immediately started talking about price. One model caught my eye and I asked her about its features. She continued talking about the price – and then offered a large discount before I had even handled the other two! She either ignored all my cues or didn’t understand them.

She had one approach to selling: price. Not value, price.

"All too often sales staff don’t ‘read’ customer cues and continue on their merry way, selling to everyone in exactly the same way"

As Jeremy Miller points out this month, price is not a feature: “Unless you’re selling a commodity, price is not the reason why consumers buy products. Price may be a factor for helping consumers select one brand over another, but it’s rarely the reason why that consumer sought to buy that product in the first place. Selling on price should therefore be avoided.”

All too often sales staff don’t ‘read’ customer cues and continue on their merry way, selling to everyone in exactly the same way.

Most importantly, they often don’t understand the difference between features, benefits, value and price. All four are important in varying ways to the customer.

A feature is fact: “This product can do X.” It is something that your product has or is, and usually has no inherent value. However, it is important for the salesperson to mention and demonstrate the features because what might be obvious to him or her may not be obvious to the customer.

Crucially, a feature might be very important to one person but not to another. For example, a water resistant watch was critical to me but another customer might not care at all.

That’s where ‘benefits’ come in. Whereas a feature is a fact – the watch is water resistant – a benefit is subjective.

These are the outcomes or results that users will hope to experience by using the product, and this can be the very reason why they purchase.

The benefit to me of having a water resistant watch is that I can wear it when I hit the surf. For another person who does not swim or surf, this feature is not relevant because there’s no benefit.

A benefit is something that is designed to help the customer – it’s about what’s in it for them. That’s why benefits should be mentioned after the product’s features, because it’s about customer preference.

Value is another subjective issue. What has value to one person can be worthless to another. It’s often about longer-term goals and objectives – for example, I wanted to own the watch for many years.

Value extends beyond what your product or service can do for your customer and aligns its benefits with their larger goals and objectives. Again, value is about the customer’s perspective, whereas price is another fact.

Most customers – not all – care more about value than price. Price is about today; value is about tomorrow and long after.











ABOUT THE AUTHOR
Coleby Nicholson

Managing Editor • Jeweller Magazine


Coleby Nicholson is publisher and managing editor of Jeweller magazine. He has covered the jewellery industry for more than a decade and specialises in business-to-business aspects of the industry.

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Wednesday, 11 December, 2019 04:11am
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