If you ever hear the objection, “Your price is too high”, read on.
We’ve all heard that it’s necessary to sell value and not price. That to add value, we have to find our best advantages, focus on those key differentiators, and communicate the differences to our customers. I’m not disagreeing with that concept, and in fact, use the technique in our business daily. However, here is some food for thought for the end of July.
General Pencil Company, based in Jersey City, NJ, has been making high quality pencils since 1889. In fact, they are the oldest pencil company in the country. Using the same machinery to manufacture pencils for over 100 years has provided a lot of families a respectable living in the Jersey City area. Their pencil makers consider themselves craftspeople who are proud of their expertise.
Now you may be wondering, in these days of gel pens, thin markers, ball points, roller-balls, Cross pens and Mont Blancs, why anyone would use a pencil. Actually, 2.8 BILLION pencils are used in the US, alone. (Ever visit your accountant, or observe an English professor at work?) One pencil is capable of writing up to 45,000 words. Last point of pencil fact (for those of you who call on accountants and professors…) people used to use bread crumbs as erasers before someone had the bright idea to use rubber. OK, so there are the facts.
What’s this have to do with selling value, not price, anyway? And how is this background on General Pencil relevant to you?
A few years ago, General Pencil almost went out of business. It seems customers became accustomed to paying $1 per box instead of $1 per pencil. The company was suffering and the employees were concerned about losing their jobs. They couldn’t compete in the marketplace with price. But here’s what happened.
Someone at General Pencil had a great idea. Instead of “cheapening” their manufacturing process, their product, or even their packaging to meet the competitor’s price, they decided to find a different target customer. Going after the types of customers who truly care about the pencil feel, the lead, the eraser, and a high quality pencil wasn’t difficult. They just needed to think about it.
Artists, architects, and those in artistic fields care deeply about having quality pencils. They aren’t afraid to pay more money for excellent tools that will make them more successful at their craft. Price isn’t an objection for them.
Instead of lowering their prices, General Pencil re-focused their energies on the market that appreciates their products the most.
So what about you? Who are you marketing to? If you are selling a high quality product or service to people who are accustomed to buying “cheap”, that’s not your target and you’re probably wasting your time. Before you potentially throw the baby out with the bathwater, answer these 5 questions below and be honest with yourself:
1. What do your favorite customers have in common? (i.e. size of business, location, business philosophy, etc.)
2. How long have these customers done business with you or your company?
3. How appreciative are these customers about what you provide for them? Are they constantly complaining about price, or do they see value in what you offer?
4. How much do you enjoy calling on these customers. Are these people you like to hang out with, or is it painful to call on them?
5. If you lost your best customers, what would you do? Could you go after a different market segment (like General Pencil) re-package or de-emphasize key product/service features to go after a different market? How would you do this? (c) Renee Walkup, SalesPEAK, 678 587-9911 www.salespeak.com |
