" When it comes to the price issue, there are three components involved: price, cost and perceived value," says Tom Connor Sales consultant and author of soft sell.
" Price is what the customer says is too high and objects to. Cost is what it costs to do something wrong, late, or not at all. That's the real issue. For example; if you buy cheap tires for you car and have 3 flats. The service fees, replacement costs and time is more expensive than if you bought quality tires to begin with." Most salespeople focus on price issue instead of perceived value. Its really more of an issue for the salesperson than the customer.
When we lower price, we lower perceived value. When you raise price, you raise perceived value. The price will always seem high if the perceived value is low.
Salespeople go into the sales process with a concern that their price is too high. They need to understand that if a high priced product has high quality and service, perceived value is higher. " if salespeople view what they are selling as a commodity, they will consistently default back to the price issue says Connor. "
If the customer perceives that the salespeople are more concerned about themselves, then there won't be a long term relationship. " Salespeople need to focus on customer needs. " According Connor, that long term relationship goes directly back to the issue of price and service.
If a salesperson has a long term, solid relationship with a customer, that gives the salesperson the right and leverage to raise prices and even make mistakes from time to time.
" If the salespeople focus on the quality of the relationship, rather than the transaction, they may not sell as much in the short term, but the lifetime value of the customer will be greater."
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