The Seven Steps to Raising Your Selling Prices!
How
many times have customers told you your “price was too high?”
I
can tell you right now …
Raise
the perceived value of your solution and you will sell easily
at
higher prices.
You’ve heard we’re in the information age. Most of us thought that meant that
everything was going to be run by computers. Well they help, but computers are
not the only thing that the information
age is really about. The real value of the information age is your ability to
pass on knowledge to your customers on how to use your products and services at
the moment it is needed.
When you provide your prospects and customers
information on how to best use your products or services, you will teach them
how to improve their life. When customers use that knowledge, they are showing
wisdom. Now be honest, haven’t you always thought your customers who buy your
best offers to be wiser then most. Now you have a name for it, Knowledge
Centered Selling. Customers who live a better life, because of you, are
loyal and high dollar buyers.
To sell at high prices you must teach your customer
why, and how, your solution will work for them. The teaching can be done with
mailings, faxing, personal contact, e-mail, web site information, audio or
videocassettes, even public speaking about your product features … and their
real value to the customer. The process of “Knowledge Centered Selling”
increases the perceived value of your product or service allowing you to sell
more to the confused prospect and definitely allowing you to charge higher
prices.
One Sunday morning I was reading the colorful adds
that are stuck in our local paper. I saw a beautiful red wood deck for $989
surrounding a Jacuzzi. A family was pictured enjoying the summer evening and I
wanted a deck just like it. I jumped up and yelled to my kids. “We’re going to
the hardware store, bring the keys to the pickup.”
At the lumberyard, the clerk looked at my picture and led me to the back of the building. There, in a very neat stack against the outside wall, was a pile of redwood timbers with steel bands around it and a package of nails stapled to one end.
The clerk proudly pointed to my new deck stacked on
the ground. I looked up in total surprise and cried, “A deck, that’s not a
deck, that’s fire wood, I can’t build a deck.” Realizing that he would lose a
sale if I did not know how to build a deck, he spins on dime and heads to the front of the store. Right
there next to the cash register was a display of home improvement videos. The
sales clerk quickly hands me a copy of “You Can Build A Deck” only $19.95.
At the moment I needed the information, I got it. I
went from confused … to enthusiastic. That was Knowledge Centered Selling. Information is everywhere, but knowledge is
information that you can use, and people who use knowledge are called wise. So
I hurriedly went inside to watch my video. After 20 minutes of simple deck
instructions I got a stroke of wisdom and quickly called a carpenter.
Having knowledge available to me gave me the confidence
that I too could build a deck. So I bought it. Luckily I also knew how to use
the yellow pages. By the way the carpenter did not need my video.
After working with small business owners for 27
years. I can tell you that there are two consistent earmarks to a successful
operation. A) the whole company enjoys a real pride and joy when they do
something that helps the customer and, B) there is always a lot of excitement
because something is always new in how they help customers.
These are values that your entire staff can easily
share and enjoy, creating a more loyal and productive group of employees.
As owners we’re disappointed that customers seem
price driven … but how else do they know how to shop? You sell your product
every day. But the customer may only buy once a year. That is simply not enough
exposure to the real solutions you sell to create much value in the customer’s
mind.
If you wish to sell your best offer and keep your
competitors out of the running while selling at the high side of the price
sheet, then start sharing the values that you personally treasure with the
people who buy from you. You do this by creating an ongoing stream of helpful
knowledge for your customers and prospects.
Here’s an example used by a copier dealer in Denver.
After a new copier was placed with a customer, the dealer sent a follow up
letter explaining the finer tips of maintenance. A few weeks later, a fax went
to the company with details about keeping files organized. Then a month later,
he mailed a cassette training tape on managing an office by checklist. Every 20
days some form of Knowledge Centered Selling information went to the
customer. In the first year a total of 18 pieces of knowledge went to the
customer sharing ideas on how to run a better office.
Most of the knowledge had very little to do with the copier. All were valuable pieces of information to the customer. Remember the old sales training story, “No one wants a 3/4 inch drill, they want 3/4 inch holes.” People buy copiers to run an efficient office. Help your customers run an efficient office and you position yourself above the crowd. You sell solutions while others sell ‘boxes.’
If the customer believes they are buying a “box”
they are going to try to buy that “box” as cheap as possible. On the other
hand, if you have shared your common value of office productivity and increased
profits, the customer will see you entirely differently.
When it comes time to replace or upgrade your
equipment, from whom do you believe the customer will prefer to buy? The
firm who is doing Knowledge Centered
Selling, of course. This is like buying an insurance policy that
guarantees you will never loose a customer. The cost of a program like the
one used by the copier company was about $2.00 per contact or $36 a year.
That’s pretty cheap insurance, considering the long-term value of a good
customer.
No one else in the market place even comes close to
developing a customer contact system like this. You are now positioned in the
customers mind at such a superior place that competitors fall to the status of
an “also ran.”
Knowledge Centered Selling works with prospects also.
When a competitor is entrenched at a top notch prospect you have two methods
available for attempting to get the account. The most common is to cut prices
to a point were profit is going to be hard to come by. This is pretty short
sighted for your long-term business health.
Instead, I would use the second method. Develop a
series of informative letters and faxes (maximum one page) just like the ones
you are sending current customers. Be sure to limit the sales points about your
product or service to one in three or four contacts. By teaching the prospect
how to solve the office productivity problems in their company you are setting
yourself up to be the first one called the next time a purchase is made.
I have also found that I get a much warmer reception
from a prospect that I have been helping be more successful over a short period
of time. Even when a prospect is not going to buy they take my phone calls and
are a lot more forthcoming during the sales process. This is a gigantic time
and productivity saver for my efforts as well.
Creating the ongoing information flow can be
accomplished two ways. First, you can start clipping magazine articles and
excerpts from books that you personally found valuable and have one of your
staff people use this as a guideline for writing helpful hints and tips. The
second method is to call upon someone who has developed a complete Knowledge
Centered Selling program in your industry and license the use. If you wish
to create audiotapes (one of my favorite methods for touching customers) you
can simply read the productive ideas onto tape. Be sure to use a professional
recording studio and put the knowledge into a story format.
The customers find the Knowledge Centered Selling
very helpful. The low key ongoing training makes my customer a much more
informed purchaser. The smarter my customers are about my product the more
likely they are to buy the real features they want and need. This builds
valuable and trusting long-term relationships. I have been using, cassettes,
letters, faxes and e-mails for years as a method of finding and keeping quality
customers.
This concept can be boiled down to seven easy to
follow steps.
For most, the real reason is the solution to a
problem they currently have, or a problem they wish to avoid in the future.
Write this down on a big marker board in your company so everyone can assist
you with the Knowledge Centered Selling project. In real life only 10%
of your prospects buy strictly on price. Let this 10% go to your competitor
and make them miserable.
When you take on the ‘better life’ objective, you
have raised your vision way over the competitors who continue to sell product,
price, features and benefits. Your ideas will come from customer success
stories, trade journals, and personal observations.
All humans like to believe they are doing good deeds
on the planet. Sharing the success of your customers recognizes the
contributions of your company to the well-being of other humans. Your staff
will love it.
These tips should be less then 200 words long and
written in quick, easy to read format. Do not make the tips sales pitches for
your product. Remember, we are taking the higher competitive road here. We do
not sell products … we sell solutions to a better life.
I recommend that you rotate your delivery system.
For example I may mail two memos then send the third by fax and hand deliver
the fourth. Consider putting your best information on an audiocassette and
deliver it in a small binder with the your (the owner) picture on the cover.
This moves the customer from doing business with a firm into buying solutions
from a person. Making yourself a focal point of your solutions worked wonders
for Sam Walton. People didn’t do business with the world’s largest retailer,
they buy from Sam.
Remember the “You Can Build A Deck” video. The
accumulated memos make a great prospect brochure. Don’t sell features and
benefits if you want to sell at high prices. Sell the solutions to a better
life that other customers have enjoyed. The memos also make a great speech for
the owner to present at local service clubs.
You will invest as much as $36 a year into
developing a quality buyer. Keep the lifetime value of a customer in mind when
trying to justify the cost of this project. I would rather have 25 customers
buying my best offer then 100 buying my cheapest.
We are no longer in the age of mass merchandising. Today our customers are looking for relationships with vendors and professionals that solve problems or prevent problems. By positioning yourself as the provider of those solutions you are positioning yourself as a firm of vision and service. When prospects feel your commitment to a better life they are anxious to buy your best offers.