Winning the price war comes when during the sales process your clients know the value and outcomes they will be getting and price isn’t even mentioned.
We own a second home in Charleston, South Carolina that we rent out during the summer months. For the past year we have been very unhappy with our current property manager. Our home is just not cared for or rented out at the level we would like it to be.
Over this Thanksgiving break, while we were spending a week down there, we decided to shop around for a new property manager. I reached out to this one firm that had been calling and sending direct mail pieces to us for about a month. Their marketing was great, really talked about the high-level of personal attention they provided, their unique style of caring for your property, and the increased level of rental income they could produce even given the short summer season.
Of all the property managers we talked with, this was the one we were most intrigued by. Care of our property and personalized attention were the two big things we felt we were lacking from our current property manager.
We met with this new agency, were impressed with what we heard, and were ready to sign the contract. When they presented their paper work, they were so pleased to share that, even without asking us, they had cut their management fee from twenty-five percent to twenty. A significant savings for us.
And while we were pleased, I remember thinking, why? At no point in any of our conversations had we shared that price was an issue or a concern. In fact, if they had really listened, they would have found that we would not have been opposed to paying more for a property manager that met our expectations.
“One of the most common mistakes I see with sales professionals is that most assume price is going to be an automatic part of the sales conversation.”
So that begs the question, are you negotiating price, giving it away, before you even have to? One of the most common mistakes I see with sales professionals is that most assume price is going to be an automatic part of the sales conversation. Far too often offering to cut or negotiate the price without even understanding if you have to.
If you are losing the war on price, it may because you are surrendering before the battle begins.
Four Strategies To Get Out Of The Price War –
Create A Sales Strategy and Selling Process that is Optimized To Provide Value to Your Customers
Select The Right Target
– if you want to stop giving away price you have to make sure you are focused on customers who are more value-driven. Every industry and price point has a target and you need to understand yours. Knowing who values what you offer in terms of service, quality, and those other extras that you have to offer, is who you need to be focused on. That is your “right target.” For a property management company wanting to charge more we are the “right target.” What we value most is personalized service and care of our property, two things for which we were willing to pay more.
Ask and Listen
– understand the sales interview is so important and key to understanding what your customers most value. You need to ask great open-ended questions and then really slow down and listen. Making sure that the sales interview is about letting customers talk 80 percent of the time and you talking 20 percent. During the interview with our new property management company they asked great questions, which gave us the opportunity to share all of our concerns, our goals, and what we wanted in a new company. Again, none of which were about price. They asked great questions, but forgot the important step of listening.
Shift Your Paradigm
– probably most important strategy is to shift your own paradigm. Take price of out the conversation unless your customer brings it up, or you hear that price is important to them. This is the only place where our “new property management company” missed the boat. We never mentioned price as an issue or a concern, yet they gave it away anyhow. Understand that price is not what you are selling, and with the right target market, it (price) is not what matters most. Take it off the table; build your sales process around the value(s) and the outcomes your customers will receive.
– customers have to understand what they are paying for and feel good about what they are spending. When you have asked great questions and really listened you understand what matters to your customers most. So, you can position what you are selling as a direct solution to their challenges. Our “new property management company” did a great job of this. As they presented the contract they made sure that every challenge or concern we had was going to be met, and we saw the value right away. We felt heard, understood and validated – incidentally three things that would have easily convinced us to pay more for the service.
Negotiating price should always be the last thing you are discussing when talking with customers. (12 things every sales superstar knows article) If you have chosen the right target market, asked great questions and really listened, then positioning your sale as value add and solution focused, customers are more than willing to meet at your price level.
Getting the price you want is about your ability to ensure your customers understand the value they are getting, and your ability to quit using price as an automatic sales strategy.