Sales Tip: Understanding How to Compete With the “Lowest Price” Mentality

We are all familiar with the quote, “The bitterness of poor quality remains long after the sweetness of low price is forgotten,” or we have at least experienced its reality. Buyers are always looking for the lowest price. They have been trained that their job is to buy at the lowest price. Their job performance is evaluated based on how effectively they buy at the lowest price. Let me explain how to overcome the low-price buying mentality.

You will never win every sale because some buyers or decision makers will never deviate from lowest price buying. They will never be persuaded that lowest price is not in their best interest. Let me share the following quote from John Ruskin. Read this quote carefully because it is profound.

“There is hardly anything in the world that someone cannot make a little worse and sell a little cheaper, and the people who consider price only are this man’s lawful prey. It’s unwise to pay too little. When you pay too much, you lose a little money...that is all. When you pay too little, you sometimes lose everything because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot...it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run; and if you do that, you will have enough to pay for something better.”

Salespeople are their own worst enemy. They have trained buyers to focus on the lowest price by always offering a price lower than the competition. We hear these words from sales and marketing people all the time: “Guaranteed lowest price,” “Shop the competition and I will beat their price by 10 percent,” “I’ll beat any quote you have; I really want your business.” As salespeople we believe low price will win the sale and we have taught this concept to our customers. Lowest price can generate several unfavorable consequences such as low margins, poor quality, poor service and unhappy customers.

Here is the formula to deal with the buyer’s low-price mentality: Instead of offering a low price, offer value. Value is a term that encompasses but is not limited to quality, service, functionality, delivery, benefits, features, reputations of the manufacturer or seller, recognition or awards, current and past customers, your personal reputation or anything else that might be of value to the buyer. Remind the buyer of past purchases where the lowest price did not deliver the anticipated result. Rekindle the pain associated with a low price purchase gone bad. Ask them how much value they experienced in a low price purchase that arrived two weeks late, causing their manufacturing plant to shut down.

Salespeople need to re-train buyers to focus on value and not price. Over time buyers will come to understand that even when all things seem equal, including price, there is still a major difference between one product and the next, and that difference might boil down to just one thing: the salesperson. When the buyer focuses on price, the successful salesperson will sell value. Value is what the buyer truly wants.

Utah Pulse