Thoughtful Thursdays – When price is the only measurement
Let’s face it, there will be times when your customer will tell you that price is the only measurement. This sometimes happens when there are staffing changes at your customer. Perhaps a new purchaser is bringing in a supplier they have a relationship with or they want to make their mark on with the company by reducing costs. They are not outwardly interested in hearing about the value you bring. All they want is a price reduction. They may not even tell you what you the details of are up against, only that there is another supplier in the mix.
What ever the case, you must be prepared to ask and answer important questions before responding with a lower price:
- Is the piece of business profitable?
- Are there opportunities to grow?
- What will the lifetime value of this customer?
- What are the customers paying habits?
- Does your company need the cash flow?
- Will a lower price affect the rest of your business?
- Can you walk away and be happy without the business?
- Can you quantify the value of doing business with your company?
- How important is the business to your company?
The bottom line is that in most cases, no one like to walk away from business. Also, no matter what anyone says, the value you bring is real and must be communicated and reinforced.
As they say, there is room for bears and room for bulls, but there is no room for pigs. This applies to customers as well as suppliers.
Sometimes a price concession is the only way to retain business. However, this does not mean that value it to be ignored. As a matter of fact, value becomes even more important or you may find yourself in the same position with this customer a year from now.
Continue to build strong relationships with your customers at all levels and mitigate the chances of your products and service being reduced to a commodity.
Good selling,
Richard
Have a question about sales? Contact Sakanashi and Associates Inc. and I will respond.
Please share Thoughtful Thursdays posts with people you feel may find the topic interesting and helpful.
Comments are closed.