Tall Tale Four - “You Need to Be Cheaper than Your Competition”
Hooey! Horse Pucky! This has to be the most asinine statement to ever come out of anyone’s mouth. If you believe this nonsense then please just start writing us checks for a hefty part of your profits, because that’s what you are essentially doing.
Do you have a “George Costanza” wallet that’s obscenely thick because it’s stuffed with fifties? Do you use hundred dollar bills as fire fodder? Are you in the business of giving people ridiculous deals because you have more money than you know what to do with?
If the answer to these questions is yes then stop reading. This doesn’t apply to you.
Ahhh…still here? Figured that much - keep reading!
Let’s debunk this Tall Tale in stages.
Why can’t this be true?
If this were a true statement it would mean that people made buying decisions based on price.
BUZZZZ, wrong answer.
Never has any living human being ever made a buying decision based on price alone.
So, it’s a combination of things right?
Like price and advertising? You have the lowest price and you’ve gotten it out in front on as many people as possible, right? We think you can guess where this is going.
BUZZZZZZ, wrong again!
People don’t buy because of price and they don’t buy because of advertising. They buy because they are emotionally attached to the product, service or company.
They buy because you or your offering promises to affect them at some level of Maslow’s Hierarchy of Needs. This statement is so significant that it bears repeating. People make buying decision solely based on their emotions and Hierarchy of Needs! Yell that from the highest mountain top.
There’s a rather academic book by a gentlemen named S.I. Hayakawa entitled “Language in Thought and Action.” In this text, old S.I. discusses this concept in detail. Specifically, how language is most effective when geared toward these needs.
Survival, safety, belonging, esteem and self actualization. These are the needs I’m talking about.
Emotion in the sales process comes in many forms: emotionally committed to the product, emotionally committed to the benefits the product will deliver, emotionally committed to the sales person, the brand, the store.
There are lots of different avenues, but they all are emotionally driven. Not reason, not logic, not price, not advertising, not size, shape, color or smell. All of these things can contribute to the sales process, but they do not end with a buying decision.
People want products, services, or information that make them safer, better liked, better people, live longer, look prettier, feel better or live better.
If your offering can somehow be related to these needs, you can forget about the price – because your customer will.
Your Competition Doesn’t Have a Clue
Your competition likely doesn’t know this. By virtue of acknowledging and applying this concept, you will be Sensational.
Ever wonder how Starbucks can get $4 for a cup of coffee? As Larry David said in a “Curb Your Enthusiasm” episode, “What is this, coffee and milk? Who would have thought?”
Starbucks doesn’t sell coffee. Folgers sells coffee. Starbucks sells an experience and a feeling. Because of that, they can get the same amount for a cup of coffee as Folgers does for a six pound bucket of the stuff.
Find an Emotional Attachment
Finding a strong enough emotional attachment to your product will make customers buy at any price, regardless of the competition. You also can make them emotionally committed to you.
Impossible, you say? No not really. You know the old saying “The right tool for the job” or “He’s the best person for the job?” These are clichés for a reason. They are rooted in truth.
If someone feels, without a shadow of a doubt, that you have the right “tool” or that you are the right “man for the job,” they will become emotionally committed to you and they will pay your price.
Everyone will pay a little more for the resident expert. Did you hear that? I said, pay a little more. Not pay a little less than your competitor charges. I said pay more than your competitor.
You need to be the expert. You need to establish yourself as an expert in your field…the end all, be all, of your market segment…“The Go to Guy.” People will gravitate around you and they will pay a premium just to have YOU!
How Do I Become an Expert?
So you want to be the expert? It’s not really as hard as it sounds. Jeffrey Gitomer calls it “the hard work that makes selling easy.” Pat Williams implores people to read if they want power. Even though it’s not that hard to do, 99% of the people don’t do it. Most people are lazy. All you have to do is make a commitment to combat laziness and do the simple things required to be an expert.
Read. They say if you read a book a week for 6 months you will be an expert. If you read a book a week for a year, you will be a national expert. If you read a book a week for 2 years, you will be a global expert. Of course, the books all have to be on a related topic.
When is the last time you read a book in a week? When’s the last time you read a book? Most people will not be able to answer this.
Beware! Harriet Martineau poignantly said, “Readers are plentiful, thinkers are rare.” Reading alone is not enough. You must process the information, tear it apart, and rework it into ideas of your own.
Write. Write articles, write a book, write an e-book, or write a white paper. When you write something, people start to think of you differently.
Do your competitors write? Probably not. Do they read? Not most of them. These things are the things that you can do to become an expert and blow the pants off your competition.
Do You Still Want to Sell Low Price?
Low price is for the slackers who refuse to be interested enough in their target to develop an offering that will affect them at an emotional, needs-based level. It’s for those too lazy to do the hard work (come on, it’s really not that hard) it takes to become an expert.
If you’re stuck in the price game after reading this, you may want to reread and rethink your operation.
It’s plagued you for years. The age old tale is finally set straight.