B2B Sales Top Challenges: Product Value vs Product Price

According to recent statistics, only 40% out of all the products created by companies tend to survive in the market.

Whatever your product is (digital service, electric generator or cookware), you will have to work regularly to increase its value for potential customers. Why? Because your competitors are already doing it.

Do you have a blog, a news feed, an online product showcase? No? Well, your competitors do. Most likely, the customers will perceive their digital presentations as more valuable to them, which means they’ll go to your competitor instead of you.

Is it possible to maximize price and value?

As Warren Buffett used to say, ‘for some reason people are more price oriented rather than value oriented. Price is what you pay. Value is what you get.’

Depending on the situation in the market, the price can be increased or decreased. It depends on the business goals, but the business itself should not be affected by the price change. To increase the product price, it’s enough to change the numbers and monitor customer dissatisfaction.

You can’t do that the same way with value, but you can increase it too. Moreover, value must be increased if there is any chance to do so.

Our recommendations:

1. Work on quality. Offer the best quality in your segment. No, you don’t need to completely ‘redesign’ the product. It is enough to analyze it and make it better than your competitors. When the competitors improve their product range and catch up with you, you need to respond even better. Try to be always ahead of your competitors. Then you will have time to experiment with the product, to innovate, to test and analyze the situation. It is your competitors who will have to chase you, not the other way around.
2. Content. Develop useful content for your audience. Present the product in a clear and attractive way. For example, for the alcoholic beverage sector, you could create a ‘quick guide to drink taste combinations’ or even develop a full-fledged book for those new to the art of mixology.
3. Show the opportunity. The customer always wants to get something at a bargain price. Get busy with regular mailings with targeted offers. To attract even more customers, set a time limit on the promotion.

When and how to communicate the price

Strange as it may seem, it is often more difficult for a salesperson to communicate a price than it is for a customer to ask it. The sales manager, having made an excellent presentation, is scared to face the moment when he has to communicate the price of the proposed products. But in this position he finds himself every time through his own fault.

You must first determine the value of your product for yourself: what it is so good and prominent that you have to pay so much for it. If you have failed to convey to a prospect all the advantages of your product, any price you name will seem high to him. Therefore, a clever salesman always keeps in mind the main advantages of the product, emphasizing them every time the buyer will ask questions.

3 effective techniques for telling the price to a potential customer

The ability to introduce the price to the customer at the right time is based on the knowledge of certain techniques. Here are three of them, as the most “selling”.

1. Sandwich

The point is, you reveal the price not at the end of the presentation, but in the process of talking about the product. Mention it along the way casually and continue the conversation, describing all the benefits of the product. The client has heard the price, but all his attention is focused on the advantages of the product, which should bring him benefit.

‘Sandwich’ refers to the fact that the price revealing is hidden inside the product presentation.

Example:

You are talking to a prospect from a large construction corporation who has shown interest in your windows for installation in the buildings they are constructing. Your text might sound like this: ‘Do you want our plastic windows in a complete set? We offer you to buy them for 1500 euros (fictitious price) per set. Apart from the windows themselves, you also get a wide anti-vandal window sill and a mosquito net as protection against flying insects’.

2.  Monetization

Communicating the price of the product should occur simultaneously with the calculation and demonstration of the buyer’s benefit in monetary terms.

Example:

In the process of communication with the buyer (for example, with the owner of an office building) you can build a dialog as follows: ‘If you put energy-saving double-glazed windows in every office, you can save on heating by about 30%’. Then ask the person how much he/she pays for office building heating now, subtract 30% from this amount and calculate the payment for the whole heating season. Against the background of the impressive amount of savings for the owner of the office building the price for the windows will seem to be more than reasonable and will be accepted without hesitation.

3. Price Range

In this case, it is obligatory to communicate several variants of the price, usually three. And do start with the highest.

Example:

This time it is a company selling and installing double-glazed windows. The customer voices the problem: ‘We need kitchen plastic windows with turnkey installation. How much will this service cost?.’ Your answer: ‘We have a Premium set – 2000 euros per set, a Standard set – 1500 euros, and Economy set – 990 euros (all prices are fictitious).’ Most likely, the client will choose the ‘Standard’ option.

2 recommendations on how not to scare people away with price

1.         Do not be in a hurry to reveal the price

If you tells about how much the product costs at the very beginning of the conversation, a prospect can’t help but think about his expenses only. Everything that you would then say about the undoubted value of the product with a nice expression on your face and a friendly tone, will fly past his ears. Try to push the moment of revealing the price closer to the final.

2.         Do not pause after the price revealing

Do not shade the communication of the price with a long pause, looking hopefully into the eyes of the client. By doing so, you put him in an uncomfortable position. It is better to change the subject and ask a simple question that will distract the customer from the announced figure and make him answer.

Example:

‘A set of energy-efficient windows will cost you 1,500 euros. By the way, when are you finishing the new school complex? As I heard, it is being built according to a unique project and will become the hallmark of our city?.’

All these tips are built on one basis, without which it is impossible to correctly communicate the product price to the client – it is a preliminary preparation for the dialog. If you have taken enough time to identify the advantages of your products, to think through the answers to possible questions from the client, then success in negotiations is assured.

In Conclusion

Price and product value are two concepts that stand side by side, influencing each other. Price is determined by two factors: objective costs (production cost) and subjective assessment of usefulness (value). By increasing the value of your product, you create the preconditions for an increase in price. It is recommended to reveal the price after the value has been communicated to and understood by the prospect. If you want to know more about solutions to improve the value of your products, we are here to help you.

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