Nothing turns a salesperson’s smile upside down faster than the customer who responds to a fair quote with this statement: “Your price is higher than your competitors!” So, why do customers ask for a lower price in the first place? Simple truth is, most consumers they think they should. Professional and novice bargain hunters alike feel they deserve the best deal possible without giving any thought whatsoever to costs incurred by a business.
In retail, the trick is not so much about meeting or beating the competitors’ pricing as it is about justifying to the customer why your prices are higher. Remember, nothing can put you out of business quicker than selling at exceptionally low prices and thinking you can make it up in volume. Successful businesses know how to sell their products at premium prices.
Statistics show if you cut your price by 10%—which might not seem like much at first—you will have to at least double the volume you’re currently selling or higher. The consumer might think she needs a low price, but what she really wants is the right product for her situation and to understand why she’s being asked to pay the price you’ve given. Avoid inviting the customer to beat you up on price by not promoting or merchandising cheap products. You must connect your price to the value of your product and how it addresses the customer’s particular situation. The best salespeople understand this and maintain focus on keeping the buyer on track to close the sale.
The only way you can really cut prices and still make a healthy profit is to mark your merchandise way up and then lower the price over time. This strategy, otherwise known as “skimming,” differs from “penetration pricing,” which promotes consistently low-priced products to grab market share. Take it from me, a former liquidator, if you want to be perceived as legitimate, the price drop should never be made by the salesperson—only the owner or manager.
Back when there wasn’t a glut of products and you were the only game in town, you could sell just because your store existed. However, the proliferation of big boxes, mass merchants and even online retailers has changed the game. Effective selling in today’s market is more about being an educator and demonstrating your position as an expert in your market. They need your help and guidance and it’s up to you to know what that means.
Ultimately, success in sales is about understanding the decision-making process and guiding consumers through the process. Customers tend to get off track because they might not know exactly what they’re looking for—especially in a market inundated with endless choices. Your job as the professional RSA is to lead her to the right conclusion by asking a series of questions to more precisely determine her needs and wants.
The decision-making process means first identifying the problem. But first you must master your product knowledge so you can explain the features that will provide the best solution for the consumer. You always give the one that is best for your customer. Remember, it’s harder to trade up than it is to trade down.
Lisbeth Calandrino has been promoting retail strategies for the last 20 years. To have her speak at your business or to schedule a consultation, contact her at lcalandrino@nycap.rr.com
