offer value not price

In his second article in a series addressing how retailers can build a more profitable business, Mike Court, managing director of business growth specialist Conexus International, looks at dealing with customer price objections.

In his second article addressing how retailers can generate more profit, Mike Court, of business growth specialist Conexus International, highlights the importance of value and price handling.

How much are you worth? No, I’m not interested in your personal wealth but in helping you establish how much you are worth to your customers.

When making purchases, the buying public has hardened its negotiation style. Once, a customer would never ask for a discount – a store would even less likely give one.

Today’s media are constantly advising consumers to haggle. When they do, the price they see is often not the price they pay. And when they ask, they have often got what they are looking for - success breeds success.

That’s why more and more people are asking for some form of discount.

And that’s why you and your shop floor team must be ‘spot on’ when presenting the value you offer customers, and effectively deal with the price objection you get.

Once learnt properly, price handling is easy – the value the independent offers more than compensates for many price arguments.

For effective price handling the following steps should become a learnt automatic response to any price objection.

A customer asks you to help them with a washing machine purchase. Using good conversational questioning, you’ve established what they want, their budget, urgency for the appliance.

Then ask a closing question. Try this alternative close: “When would you like delivery? We can deliver today – or is tomorrow better?”

The alternative close works, because it gives them a question to answer, rather than think about price. It’s looking good, but then the customer says: “Before I agree, how much is it?”

Damn – and you thought it was going to be so easy. A price objection is normal, so be calm and rational. Then move onto this five-step approach outlined in our boxout (left).

If the customer doesn’t perceive the value you are offering, they will probably buy the cheaper offer, but often the real difference is so small, they can’t be bothered to get into a car and go out of town to save a few quid (even more so now with higher fuel costs).

The key to successful price handling is the belief you and your store colleagues have in the value you offer. Take some time talking through your value proposition with your team, and really understand why buying from you is great value.