The Importance of Value When Price is a Problem
December 7, 2021 by Jim Moushon

The Importance of Value When Price is a Problem

Price is often the “elephant in the room” when it comes to closing a sale. There will always be someone who will undercut your price. Any customer who buys on price alone, will leave you in a heartbeat. There is no loyalty with that type of customer and little hope of a long-term relationship. However, if you are truly convinced your product or service is of the highest quality, lowering your price to match a competitor isn’t necessarily in your best interest. It can send a message to the buyer that your product or service was overpriced to begin with. It also lowers the value of your product or service in the eyes of the buyer and can negatively impact their perception of you and your company. 

Staying true to the value of your product or service can enhance your reputation and that of your company if done in the right way. For example, a major paint manufacturer was always a few dollars per gallon higher than their competitors. They were rarely going to win business on price. Their challenge was to demonstrate the value of their product by showing how the quality of their paint could save the customer money overall. The quality of their paint was so superior it would cover in one coat while their competitors would need two or three coats to achieve the same results. Thus, though the price per gallon was more expensive, the total cost of the entire project was 15% less than the competition. 

There is a three-step process, called a Value Link, that educates the customer on the value of your product or service.

  1. Summarize and Verify. Discover what the customer really needs by listening actively and questioning effectively. Summarize what they told you they needed and ask for verification of the accuracy of your summary.
  2. Offer Your Solution. Based on what the customer has told you, offer your recommendation or solution to those stated needs.
  3. State the Benefits. Demonstrate how the benefits of your recommendation or solution addresses their needs. 

Here’s an example of a value link statement: “You’ve said that you need to have a full range of investment options in your portfolio. (Summary of needs). Is that correct? (Verification). Based on what you’ve told me, Senior Planning is a good fit for you because it includes the full spectrum of investment opportunities. (Solution). It will allow you to balance your investments and look towards the future, all of which you said were important to you.” (Benefits).

For more information about active listening, effective questioning, and Value Link statements, please visit Communispond’s website at www.communispond.com and explore our course, Socratic Selling Skills®.