Perceived Value
by Don Sanders, 10/22/2004
What causes someone to perceive a higher value in a product? Is it the item itself or the way in which it is presented by the salesperson? Most likely a customer’s reaction to a product is the result of your convincing her that the products she buys from you are exactly what she wants and needs. When you consistently create higher value, you will be rewarded with customer loyalty, a rarity in today’s highly competitive marketplace.
All customers basically want one thing--to receive a fair value in return for the money they spend with you. Some customers base all of their buying decisions on price, but the majority of people place orders based on what they think a particular product is worth. In order to increase your profitability and value for everything you are selling, the following things must be done on a consistent basis.
Use Value to Generate Profit
Since most salespeople survive on commissions, the greater they are the better. There is no faster way to increase the number of commissions, as well as their amounts, than by selling products upon which customers place a high value. Common sense dictates that the larger the value assigned to an item the more you can charge for it. As the “value circle” gets larger, so do your profits.
Move Out of the Pack
Here’s another benefit to selling products with a higher perceived value. When you do so, you separate yourself from the price-based selling wars. In the past few years, too many salespeople have sold on price and have been consistently defeated and demoralized. When you are able to master the art of creating higher value, you will never have to worry about the prices you quote again. The value you create for customers causes them to focus less on the price and more on the quality of the products you have sold them.
Beat Your Competitors
One of the easiest ways to increase perceived value for any product is to be the first salesperson to show it to your customers. In the promotional products business, that can be difficult since everyone sells the same types of products. Careful planning and an alert eye can keep the successful distributor ahead of the pack. Here’s how one distributor left his competition in the dust:
Four years ago I began my promotional products career in a very competitive market. It seemed like everyone I called on was either happy with their current vendor or was only interested in me if I had a cheaper price. Since I knew that price-based selling was not the answer, I decided to change my presentation to create more value for my products.
At my first opportunity, I attended a large regional show in order to find new suppliers to the industry, or ones that I knew had recently come out with some completely new products. At every booth I visited, I only asked to see products that were totally new to the industry. By focusing on only those products, I could become the first distributor in my marketplace showing them to customers and prospects. Furthermore, I asked each supplier that I visited to sell me samples of their new products at the end of show day. That way, I could be out the next day demonstrating them to my prospects and customers. By taking the new products home with me, I wasted no time on shipping.
Since I have put my new plan in place, I have picked up more than fifty new products at seven different regional shows and acquired nine new highly profitable customers. And even better-- it seems that none of my competitors have caught onto my higher value selling program!
Show Them How to Use What You Sell
Another excellent way to increase the perceived value of any product is to create a unique purpose for it. This requires “thinking outside the box;” and in many cases, it will require you to think “way outside of the box.” In order to be successful, you need to glean the following information:
The customer’s goal for the promotion
The promotion’s target audience
How the customer wants the product to be packaged
How the customer will deliver the product
To further insure success, show a keen interest in each of your customer’s promotions. Rather than immediately throwing out a price, find out what the intended use will be for a given product, then provide a solution before even quoting a price. Become a selling “detective” by determining answers to the following situations:
If you are selling caps, find out who is going to be wearing them.
If you are selling cube pads, find out on whose desk they are likely to end up.
If you are selling pens, find out who will be writing with them.
If you are selling food products, find out who will be enjoying them.
Don’t be a Mass Marketer
With the prevalence of generic catalogs in the marketplace, the creation of value has become even more difficult for some distributors. These standard industry catalogs come in all forms, and have caused many distributors to base their sales presentations on price. In an effort to beat their competitors, they use lines like these on new calls:
“Our company is known for low prices.”
“We will give you 20% off the catalog price.”
“Let me know what they quote, and I will beat it.”
“I can save you a lot of money.”
Think about it. Distributors who say these things must think so little of themselves that they resort to this type of “pity” selling before they even know what the prospect wants. Making yourself known for only one thing--low prices--is a sure way to never make any money. The more profound effect is that they make it hard for others to make money, as well. One good thing about price cutters is that they are easily identified. Their generic industry catalog probably sits on the desk of the next person you will be calling on!
Create Value to Knock Out the Price Slasher
Salespeople who take orders based only on price never take the time to find out what the customer really wants. Instead, they take the easy way out by trying to prove that their worth is based only on the cheaper price. The actual value of products is of no concern to them, so they are never able to pass the true value of the product along to their customers. Successful distributors further create value, and beat the price cutters, by creating their own unique advertising materials.
Package Items Together
After finding out your customer’s budget for the current promotion, take a few lower-priced items and bundle them together. By doing this, you are making all the items inseparable, thus forcing them to work off of each other. An easy example might be the combination of a pen and a scratch pad. By showing the customer that the pad is more effective with the pen, you are creating a unique item at a different price point. By offering to shrink wrap them together, you are going even further in creating value. This combination will make it possible for this new item to be priced at a higher point.
Make Your Own Sales Sheets
Some distributors do not use industry catalogs. In place of generic offerings, they create their own sales sheets. With the advent of color printers, enlightened distributors are now able to create their own customized sales materials. By taking this step, you are further insuring your uniqueness and creativity.
Make Yourself Priceless
No matter what product is sold, its perceived value is higher when it is coupled with superior service. That means that the price of any product can be of higher value when it is sold according to the best basic steps of selling--calling people back promptly, taking care of problems expediently, and working enthusiastically. Many distributors are less successful than they could be, because they fail to understand the importance of personalized service when selling promotional products. Here is how one distributor used service to create a higher value for his products:
For over a year, I called on a large company who purchased more than $100,000 yearly in promotional items. I finally qualified as an approved vendor, and I was able to sell them more than $25,000 worth of product after my second year of working with them. Even though that amount was a nice book of business, I knew I was leaving numerous orders to my competitors. Since I wanted this business, too, I decided to develop a unique sales plan for this client that would create more value for the products I was selling them.
In the past I had used standard selling practices, such as making frequent personal calls on the marketing director, sending follow-up materials by mail, and phoning when necessary. I knew that if I continued this standard routine, I would probably not substantially increase the amount of orders I was writing. So I tried a completely different approach. I stopped mailing and calling but increased the number of personal visits. In fact, I created a set schedule for the visits. I decided that Tuesday would become the day I would call on this customer and I did so every Tuesday.
Of course, my routine varied with every visit. Sometimes I asked to see my contact; other times, I simply dropped off samples. Some weeks I only left catalogs at the front desk. The one consistent thing I did was to make sure that someone saw my face on every visit. After ten consecutive Tuesday visits, I guess I had made my point. It seemed that everyone in the office had grown accustomed to my showing up on Tuesdays. As a result of my persistence, my sales volume with the company has now grown to more than $75,000. It seems this customer was willing to pay more for consistent service.
The suggestions included in this article are but a few of the ways that higher perceived value can be created for the products you are selling. Since value is in the eye of the beholder, it is extremely important that you always look sharply at everyone and everything you are selling. By asking the proper questions, laying the proper groundwork, and never selling yourself short, you will create higher values for the products you are selling. After all, higher value means higher profit. Isn’t that what we are all looking for?