subject: Why Price Is Seldom The Reason Behind A Prospect's Buying Decision [print this page] Price is a factor in every salePrice is a factor in every sale. However, it is seldom the primary reason people make a buying decision. If that were the case, luxury vehicles wouldn't exist, designer clothes would remain unsold, and everyone would shop at discount stores. Here are seven reasons why price is the not the real reason behind your prospects buying decision.
1. Low priced products often fail to deliver.
2. Prospect have been burned by the best price.
3. Prospects often want the best solution for their problems.
4. Companies want to maintain their competitive advantage.
5. The lowest price often has strings and conditions attached.
6. The lowest price is often has hidden costs.
7. The buyer's reputation is often at stake.
Three factors affect every product or service: quality, service, and price. No company can offer all three of these. It's a simple economic rule of business.
A business may offer a low priced product but they cannot offer great service. They may claim to have the best service but it's highly unlikely they will offer high-quality products AND the best price. Allow me to put this into perspective.
Walmart, Costco and other big-box stores advertise the lowest price. However, they do not provide great service. In fact, when you listen to their radio ads they never claim that they have great service.
Let's face it, when was the last time you could find an employee to help you at these stores. If you were fortunate to experience this, it was probably a one-time event. If you need help deciding between two similar products, could the person wandering the floor actually help you? Not likely. Home Depot prides themselves on having knowledgeable, helpful staff but you often have to search high and low to find someone.
I have nothing against big-box stores; in fact, I often shop at Costco and Home Depot. However, I don't expect to enlist the help of employee to assist me with my purchase. I also know that it's going to take me longer to make my purchase because I will have to consider a multitude of products. I also know that I'm going to wait in line to pay for my purchase or use a self-checkout unless my timing happens to be perfect. You may argue that Costco and Home Depot have great return policies. But how long did you have wait in line before getting your refund?
This concept holds true in business-to-business selling. Corporate buyers do not gloat to their colleagues that they secured the lowest price on a particular service. In fact, they are more likely to boast that they negotiated a good deal with a great vendor. Having said that, it is critical to understand that smart buyers will aggressively negotiate in order to get a lower price. And they will often make exaggerated claims in an effort to get a better price from the vendor. But when they make their final decision, it will seldom be based on price alone.
As a seller, it is essential that you invest the time to discover the true criteria that your prospects will use to make their buying decision. You also need to uncover their concerns and other obstacles that may prevent them from moving forward with your solution. You need to be assertive with your questioning. You need to ask tough, probing questions that make your prospect think. And, you need to be able to position your solution in terms that make sense to your prospect. If you fail to achieve this then price will be the reason they express when they make the decision to go with a competitor.
I will state that some people look for the lowest price. I have friends that fall into this category and I know from first hand experience that price is focal point for some corporate buyers and business owners. In fact, I have been contacted by companies for sales training and the only thing they wanted to know was how much I charged for my program. My attempts to engage them in a discussion about their specific requirements were thwarted and in the end I quoted my fee knowing full well that I would not secure the business. However, these types of businesses tend to be the minority so I don't lose sleep over the loss.
Here's the bottom line: People get what they pay for and most decision makers want the best solution for their particular situation which means that price is seldom the reason they make a buying decision.
by: Kelley Robertson
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