It’s all about value and not price, so sell customers on what it is that makes your delivery and installation service worth the money says T21 managing director Paul Laville
Here’s a question for you. A customer is close to buying a brand new 4K TV with a matching Blu-ray player and a very nice soundbar. Say it costs £2,000 for the package in total. Now, you’re talking about delivery and basic installation, which costs £50, and the customer is pushing you to waive the fee. He seems like a really nice guy, he’s spending a lot of money already and he’s asking you to do him a favour. Free delivery and you’ve got yourself a deal.
It’s not advertised, but let’s say that you do have the option, at your discretion, to waive the charge. All you have to do is key in a discount code. Your manager won’t even query it. The question is, do you?
Questions like these tend to spark lively debates in our sales strategy workshops, and this one usually provokes discussions on what’s known in sales parlance as the ‘discount trap’. I’m sure you’ve heard of this, but if you haven’t, it describes a situation where a retailer – either knowingly or unknowingly – establishes a culture of discounting to such a degree that the only reason customers shop at their store is because they are rewarded with a multitude of bargains, freebies and not much else.
Some businesses can work like this, despite the obvious risks, but for many retailers, being pulled into the discount trap is only marginally preferable to being lowered slowly into a pool of ravenous sharks.
But if product prices are being driven ever downwards, and customers are responding to that, what can you do to stay out of the trap? Charging for services, such as delivery and installation, can help, but these assets are only part of the story.
Look at all your core strengths: your expertise, your location, the quality of your shopping environment, your customer care, your service plan – in fact, any and every point of difference or marginal gain your have over your competitors. If you make all of these the focus of your customers’ shopping experience, then not only can you sidestep the discount trap, there’s an increased chance you’ll be able to nurture a strong culture of value and loyalty throughout your customer base.
It sounds great, but on the shopfloor, getting customers to buy into these assets is often much easier said than done. Some customers simply fail to see the value of such things.
If that’s happening frequently, then look at whether or not your assets really add a significant benefit to your customers. If not, develop each one into something that does. Take your delivery service, for example, and make it the best delivery service in town. Exceed your customers’ expectations.
Secondly, don’t just give it away. If you have the best delivery service in town, sell it. With as much enthusiasm and energy and passion as you do your products. Services can be more difficult to sell than products. You can’t always see a service, you can’t touch it, it’s not like an object on a shelf. So you have to work harder at it. As a service provider myself, I know this for a fact.
Here’s a great tip – think of the relationship between cost and value and how you define those two things.
In business terms, cost is what you lose from a transaction and value is what you gain. Which means that if shoppers are motivated only by price, they’re focusing only on cost, namely the money they’re losing. Telling customers that they’re saving money can help, but if you sell based on ‘savings’, you’re still focusing on cost, because all you’re doing is telling them they’ll lose less money in the transaction.
It’s far more effective if you show customers what they will gain. Selling on gains, or value, involves a balance of confidence, excellent rapport-building skills and knowing your features and benefits inside out. Don’t forget that services have features and benefits too, just the same as products. So, if you want to sell assets, strengths, services and promises which, although they’re less tangible than products, have real value gains – that’s where you start.
Where you go from there depends largely on your selling skills, but creating an environment in-store that helps sell the quality and benefits of your assets will help encourage your customers to buy into them. In fact, if you want to take it further and be really successful at increasing your value proposition to customers, then the most crucial part of the process begins with…
Well, come on. I can’t tell you everything for free can I?