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Precieved Value vs. Actual Value

With today's economy, there are quite a few sales consultants desperate to make a sale, and because they are desperate they are going straight to reduced prices. Making the sale is great and all, but how about being able to make the sale and maintaining some sort of decent gross while you do it? More and more I've noticed this trend in the auto-industry, and what I've noticed is sales consultants are not building the value into their product. They are jumping straight to special sale discounted (look at me I'm dropping my pants) pricing.

Building Value is becoming a lost art among sales people today. What most sales people don't realize, is customer's aren't necessarily shopping for the best price, they are shopping for the best DEAL. So how do you give a customer a great deal without giving them the best price? By building PRECIEVED VALUE.

Question #1: What wieghs more, a ton of bricks or a ton of feathers?

First response a majority of the time will be the bricks. Why? Because bricks are precieved to be heavy. In reality a ton is a ton regardless if it's a ton of bricks or a ton of feathers, so they weigh the same. Now why do I bring that up? Because its a precieved notion in most peoples minds. Bricks are heavy so they weigh more. Take this logic to building value now. If you can get the customer to precieve your product being worth twice as much as it really is, 90% of the time the customer will purchase it.

I was training a new guy saturday, and had him follow me on a walk-around with the customer. She was looking at a Chevy Cobalt. I gave her a $30,000 dollar walk around on a $15,000 car. I had already done my interview and knew she was not wanting to spend no more than $20,000. I didnt start at the sticker, with the price on it. Instead, I spent thirty minutes building value into all the safety features (daughters first car and mom was buying it) for the mom, and all the appearance features for the daughter. By the time I got to the sticker, they both were telling me it was out of their price range. I asked them, why they say that, and they both responded that they didn't want to spend over $20,000 and even though they loved the car, they couldnt afford it. I asked them how much they thought it was and both responded $25,000+. So then I showed them the MSRP of $15,864. And I didnt even mention the rebates yet. They were estatic. When we sat down to work numbers, I showed them they get an additional $2,500 off in rebates, so the vehicle they thought was worth $25,000 they were getting for around $13,000.

That's just an example. But BUILD VALUE into your product. If it costs $30 dollars, make the customer think its worth $100 dollars. If people believe that what they are buying is worth alot more than what they are paying, it makes the sale easier.

Now what ways do you guys feel that we can use to help build value to our products. Every industry is different, but the ideas should be similiar and be able to use in most industries.

I personally use my wording to build value.

Instead of using:

Cruise Control - Electronic Variable Speed Control
Air-condition-Single/Multi zone Electronic Climate Control
Power Seats- Multi directional Electronic Seat Adjustment with
Lumbar support

Means the exact same thing, just helps bring more value to my products.

What ideas you guys use to build precieved value? - by jrboyd

I agree totally. Value will be the only way forward. Alongside building a relationship with your prospects, clients and customers.

One of the principles our company lives by is create value to create wealth. Give the customer ten times in use value for the item they have paid for.

So if they pay $100 make sure the roi for them is $1000 over time. I know this might sound extreme and yet it works and really focusses the mind on what works for customers.

To your success

Sales Managers Coach - by SalesManagersCoach
Now a real salesman would have sold em two cars at those values....thmbp2; thmbp2;

Kidding..... I like that approach, and witnessed it not long ago while I was in my own sales mode at a dealership and learned a lot from that salesman... That really is the ultimate take away close though isn't it? Build up the value, take away price?

Aloha... :cool: shds; - by rattus58
Bravo JR!

It’s all about laying the foundation so that you can present the product features/benefits that are specifically valuable to that customer and how it will improve their situation.

I like to link the customer with the benefit by involving them in the conversation as follows;

Such as for a contractor buying a truck;

These new, galvanized steel panels are zinc coated to virtually eliminate corrosion even when scratched or chipped. It should keep the truck looking great a lot longer. And (name), wouldn’t that increase the resale value as well?

Or a more aggressive assumptive example;

These great looking 18” alloy wheels are lighter, stronger and easier to clean. Would you chrome them or leave them stock?

Not only does it allow for a value building, mental ownership moment but it also is an up-sell technique such as when they ask you if you want anything from the bakery window with your Starbuck’s Grande Latte. - by Tony_B
Good topic, jrboyd.

I see salespeople lower the value of their product/service all the time. How do they do it?

They subconsciously use the word "just". Example:

The custom closet salesperson who is presenting their design and she gets to one section of the closet and says "over here, we're going to do just shelves." WHAT? JUST shelves??? WTF? You expect someone to pay top dollar for "just shelves?"

Wouldn't it be better to describe the shelves as "fully adjustable shelves so all your stacks of sweaters and sweatshirts will fit beautifully, even if you stack them high or you stack them with just a couple items. These shelves will help you maximize the space in your closet so you can store more clothes in less space."

The same thing happens in car sales where someone is presenting "just the DX model" (because it's the least expensive of three levels of options and the salesperson let's his bias enter into the scenario by using the word "just").

Or in a jewelry store the customer describes an engagement ring as "just half a carat" because to them, that 1 carat diamond is a small sale. But what if the guy saved for two years to be able to buy it? Is it JUST 1 CARAT to him? No!

Memo to all salespeople: Stop using the word "just" in your presentations!

Skip Anderson - by Skip Anderson
Good topic, jrboyd.

They subconsciously use the word "just". Example:

Memo to all salespeople: Stop using the word "just" in your presentations!

Skip Anderson
So here's the deal Mr Carbuyerferyerdaughterfella .... We've put 4 New Tires on, given you a brand new spare, giving you a 100,000 mile warranty from today's mileage, a new custom paint job and we'll detail the car for your daughter. We're giving her full coverage on her insurance and providing you with gap insurance to cover any differnce between the finance balance and book, should you finance this instead of paying cash, and make sure that we do the 27 point inspection and if brakes, fluids, adjustments, alignments or readings are not to the mean of factory spec, we'll adjust, fix, or replace anything within that inspection while we bring it to your attention and... you and your daughter get a delivery dinner worth $100 at the Steak House.

The sum total of these added value packages to your daughters new car is $8,825 and with the lot price of 12,000 that comes to $20,825 plus tax and license or $23,418.64. Our agreement is that this value package for your daughter will be delivered after detailing to you for JUST $16,018.

Tell me it aint so... mon... tell me it aint so.... :sa - by rattus58
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