Exposing Sales Myths #7 – Money Talks

Grant Leboff: Mark I think your myth number seven, is something that a lot of sales people get really hung up on, and that’s ‘it’s all about the price’. That’s what matters, that’s what people buy on, and of course we know that isn’t the case at all, in the main. So just explain how that works and how it unravels.

Mark Blackmore Well nobody buys anything just because of the price. Marks and Spencer are a great example at the moment, their clothes side is struggling, their food side is doing incredibly well. Now I don’t know whether you have been into Marks and Spencer’s simply food recently, but they are on the higher side of price. However, providing the customer sees that they have a credible solution to match their compelling need – and providing that’s in line with the price – it doesn’t matter. And that’s what we mean by perceived value. We don’t all buy the cheapest cut, we don’t all wear the cheapest clothes, we don’t all go on the cheapest holidays – why not? It’s because we have certain needs that we want from a product, then we look for that credible solution. Now of course we want to value, but it’s not about the cheapest price.

Grant Leboff: So what advice can you give to a salesperson who is very hung up on price? I have had salespeople trying to sell to me in my office – I’m sure you have as well – where you can almost see them cringing as they tell you what the price is. They are almost ashamed of it, I don’t know why. I suppose it is because they believe it’s the ultimate thing on which they are going to get screwed. So how do you help a salesperson gets beyond that?

Mark Blackmore Well you need to draw a line of perceived value. If my product is falling underneath that line, then clearly I’ve got a problem because you’re seeing that the price is more expensive than the value that you are getting back. There are two ways that I can get you back to the value line. You can reduce the price; now nobody wants to do that, because everybody wants to protect their margins, so the only way that I can increase the value and get to the line, is by increasing the value.

Now I can tell you all about the bells and whistles on that product and that will ‘c r e a t e’ more value, but none of that means anything if you don’t want it. The two words that I think sales people often should say is ‘so what’. You’re giving me all this added value but actually do I want that value? Look at some of the cut-price supermarkets right now – the Aldi’s and the Lidl’s of this world – they are the guys who are doing incredibly well. The reason for that is, actually, because they are giving the customer what they want. Therefore, the minute a customer says ‘so what’ is the minute that you’ve actually lost the race.

So it’s all about understanding ‘yes’, you need a more credible solution but delivering against a compelling need.

Grant Leboff: And that goes back to understanding your customers properly and what your value proposition is in the first place.

Mark Blackmore Absolutely right.

There may be small changes to the spoken word in this transcript in order make it more readable.