“You know, I can get this cheaper from your competitor…”
Not all of us have customers who are making purchases from us, but for those who do, these are words that can start a bad case of the twitches. What do you do? Unless your company has a price-matching policy (a very dangerous strategy which few companies do well), how do you deal with this customer?
For starters, let’s put “price” into perspective. A 1999 Canadian study supports what most people intuitively know – that price is a key driver for purchase. If two companies are perceived as providing equal service levels, customers will inevitably choose the one with the best prices. The second part of the study, however, is a little more revealing. It identifies that if company A provides visibly superior customer service in contrast to company B, 83.7% of people will choose company A – even if company A‘s prices are slightly higher.
A subsequent 2003 survey demonstrated that trust in a company was also a factor that would override price in people’s purchase decisions. 78% of customers will pay more for something when they have significantly greater confidence in a company. People will pay more, for example, for a television being sold by an established retailer than for one being sold at a roadside stand.
The point is that, while price is clearly a key factor in customer’s purchase decisions, it is customer service and integrity that have the greater influence. So how do you deal with price inquiries? Make sure that your customers know that you care, and that you are prepared to listen carefully to understand their needs. Make sure they know the real value that you and your products are bringing to the table. Make sure that you are providing markedly better service than your competitors at every turn. Yes – you’ll still lose about 16% of customers who care only about price. Accept it and move on. Just make sure that you’re the best at what you do, and the sales will follow.