Selling From the Front Porch : When a Low Price is Scary

This is another part from a series of stories from my childhood that in reflecting back, formed most of my foundation for sales and leadership.  Most of these occurred on the front porch of the back deck of the houses of my relatives.  Today was a little different as we are in my uncle’s garage.

A severe Missouri thunderstorm spanned the sky.  Since my uncle’s porch was not covered, we moved into the cover of his garage.  I always enjoyed the garage with all the various tools and machinery.  He also had a large mounted caribou over the deep freeze. 

Lightning bolts were thrown from the sky to the ground, followed by cannon-like thunder.  Sheets of rain poured as we watched a funnel cloud in the distance.  If you have ever experienced seeing a tornado, it is mesmerizing.  The discussion this day revolved around the weather and tractors.

My uncle Allen had just purchased a 2240 John Deere tractor.  It was a beauty with a raw 55 horsepower of power that can handle any kind of work around a small farm.  My dad asked about the price and how it compared to other tractors he shopped for.  We were surprised to learn it was one of the more expensive of the ones on his short list and was several thousand more than the cheapest one, a Ford.

Now don’t get me wrong, anyone in my family enjoys a bargain more than most people you will find.  Whenever I go visit my dad, who does not drive, one of the activities he always wants me to do for him is to take him to the Wal-Mart.  My family is also a regular at auctions and flea markets.

So my next lesson in sales began when Allen said, “Yeah, the Ford was the cheapest.  But I just don’t believe their tractor is reliable.” 

Allen went on to explain the problems his dad had with an old Ford tractor and all the various repair work he had to do on it.  When he told the sales person at the local Ford implement dealer the problems he saw in the past, the first response the salesman had was to gloss over his concerns and offer a lower price.  The salesman committed a cardinal sin of not listening to the client and expecting that a lower price would win him the sale. 

Years later, when I was running a branch of a Savings and Loan in my hometown, a local Realtor told me he had great success in selling property after he had raised the price of the house.  “Sometimes, when something appears too cheap, it won’t sell.  A higher price helps to create excitement for the property,” he said. 

Now don’t get me wrong.  Price is a huge issue.  But the larger issue revolves around a sale being an emotional transaction as much as a mental one.  The buyer needs to feel he is receiving more in value than what he is giving in payment.  That is the definition of a bargain.  Everyone likes bargains.

So in the garage that stormy day, Allen described the reliability of the John Deere and how this would save him repair and down time in the long run.  This would allow him to finish jobs on the farm quicker and get to his occupation as a carpenter.  The biggest cost to Allen was time.  “God only gives you so much time on this earth.  You better use it wisely,” he would say.

He also went on to describe how the John Deere salesman listened to his concerns and suggested a different model that had more horsepower than the original one he wanted.  Allen trusted in the salesman and that is why he got the sale over the other implement dealers in the area.  Jeffrey Gitomer writes, “Being the least expensive won’t get you anywhere if the prospect has no confidence to buy.  Many times, low price actually scares the buyer.”

Yet it surprises me how many times a salesman will respond to the initial objection with a lowering of their price.  This communicates a message that your services or product is of lower value than the price you put on it.  If your strategy is to be a Wal-Mart, the low price leader in your area, you still need to have your customers feel as though they receive more value than what they give their hard earned money for.  Most of our companies do not desire to be the low price leader, so providing value is the key. 

The next time you are confronted with a price objection, find out what the true problem is and speak to that problem. Counter with value. People will pay a little more if they believe they are better being with you than with your competition.