When I sold radio advertising, selling to my customer the idea to have advertising on my radio station wasn’t an issue ; On the other hand selling my prices was a real challenge, especially in the middle of the financial crisis with the cuts in the marketing/communication budgets.
It doesn’t matter your offer, your client is far to be stupid. He have to make an “expense”, that we gonna call investment. And like all investments, your customer expect a profit from this investment, therefore it is your job to make the calculs and to show him from A+B that this investment is profitable, even more, that it cost almost nothing !
To illustrate my article, I will use again the advices that I gave to an interior architect about the sale of a service for a retail store. This service had a cost of 36 000€, this is how to sale the price :
First, we will take as much as information to understand the ins and outs of the final customer, here is a part of our conversation :
- How long will the merchant keep this new store configuration
- 10 years
- How many more customers can attract this business after the renovation ?
- My customer think about an increase around 30%
- After the renovation, will it always attract the same type of customer, or will it allow it to attract new customers with a superior purchasing power ?
- The customers will mostly remain the same. But the objectif is also to attract new customers with a superior purchasing power.
The most important in this part of the argumentation, is to deliver simples and concrets numbers. The aim is to make our customer aware that this operation is almost “transparent” in the long term.
- So, If I understand it good, your final client will invest 36 000€ for a service that he will keep around 10 years ?
- 36 000€ on 10 years, this is only 3 600€ per year, which mean 300€ per month.
- Seen like this actually it seems cheaper
- 300€ on 4 weeks per month, this is only 75€ per week, on 6 days we got 12,50€ per day. Knowing this, how many additional sales your client must do, to repay this investment daily.
- 1 would be enough !
- And with the expect increase of 30% because of the renovation of this retail store, this objectif is reliable ?
- Yes of course !
This isn’t an investment of 36 000€, but, only 12,50€ per day !
You maybe think that I play with numbers, But I just give vision to the client.
With a daily investment of 12,50€, the final client will have a new, clean, fresh shop, but also increase of the business by attracting new kind of customers with a superior purchasing power. The investment is therefore transparent.
With this kind of argument, your customer can only approve because there is simples mathematical data. You invent nothing because you just use the informations that your client gave you few minutes before your argument, (that’s why it is really important to ask the right questions).
The way is always the same, doesn’t matter in which industries you work. In the radio advertising industry, I always thought about the cost per listener, cost per day, and how many additional sales were necessary to repay the investment.
For the BtoC industries
For exemple, if you sell ultra high definition TV in a store, your way of thinking could be the cost per hour of utilisation, with this formula :
- PA : Purchasing Price (the price you sell the TV)
- NA : How many years the client will keep this TV
- CA : Cost per year of your TV
- JV : How many days per year the client watch the TV
- CP : Cost per day
- NV : The amount of hours per day your customer will watch the TV
- CH : Cost per hour
So, for a TV that you sell 2000€, a customer who would keep the TV 4 years, watching it 300 days per years and 3 hours per day, this would cost only 0,56€ per hour !
In conclusion, the way of thinking for selling your price is always the same : A careful client discovery with relevant questions, an easy encrypted reasoning filled by the information that your customer gave you, to give him the vision and the enthusiasm.
Aware that this exercise require a certain step back on its own activity, Monsieur B is here to help you to built your sales argument and your sales strategy ; let him a message on the page contact.