Benefits are What Matters
In the competitive world of sales, it’s common for sales teams to believe that their prices are too high. However, this perception often arises because customers lack other points of comparison. A leading property developer once noted, “We do not go to the market looking for the lowest price. There are other factors to consider….it’s really quality that’s the most important thing.” Quality is a significant benefit, and the challenge lies in presenting enough relevant benefits to justify the price. A well-defined sales strategy that focuses on these benefits is crucial for overcoming price objections and effectively communicating the value of your product.
It’s crucial to question whether the price is the real issue even when an order is lost. Customers might say, “your price was too high” simply to end the conversation, but this might not be the true reason. Looking further into their concerns can reveal more accurate insights.
A case in point involves a client we supported who acquired their principal competitor. Both companies had long assumed that the other had lower manufacturing costs, leading to a price war that ultimately drove one company out of business. This situation highlights the dangers of competing solely on price without understanding the market’s full dynamics.
A more effective strategy is to focus on selling the benefits of your product, demonstrating the value it delivers, which can justify a premium price. This approach is particularly effective when engaging architects or engineers early in the specification process.
As part of your sales strategy, it’s essential to clearly define the value your product offers. We often find that sales teams can list surprisingly few benefits during training sessions. Conducting market research with designers, installers, and facilities managers can uncover additional benefits that may not be fully appreciated or understood. Even seemingly minor benefits can add up to a compelling value proposition.
Benefits typically fall into three categories: functional, emotional, and cost-related. Functional benefits include tangible attributes like corrosion resistance, long lifespan, color range, and recycled content. Some functional benefits differentiate products through added services such as design advice, standard specifications, BIM content, or bespoke designs. Emotional benefits arise from perceptions shaped by marketing activities, such as brand reputation, confidence in quality, and sustainability. Cost benefits go beyond price to include factors like ease of purchase, installation time, and reliability in fulfilling promises.
It’s also crucial to understand which benefits are most important to different stakeholders. For instance, low operating costs are significant to the client but may not matter to the installer. In contrast, good availability, short lead times, and ease of installation are critical to installers.
Engaging early in the design process is vital for effectively selling value features. The Quantity Surveyor often starts the project by defining a budget, with 70% to 80% of project costs determined at the concept stage. If your product isn’t included at this point, it becomes much harder to justify a price premium later, even if you can demonstrate superior value.
When a Purchasing Manager claims that your product is too expensive, it’s helpful to ask informed questions about the specification, availability, and competitors’ shortcomings. This approach can distinguish between genuine price concerns and mere negotiation tactics.
Understanding and promoting the full range of your product’s benefits to each member of the project team is essential. By engaging early in the design process, consistently monitoring progress, and strategically questioning throughout the project’s lifecycle, you can differentiate genuine price issues from negotiation tactics, ensuring your product’s value is recognised and appreciated. This comprehensive sales strategy not only helps in securing projects but also builds a stronger market position.
