People are often heard to say that customers only buy on price and that there isn’t anything else, but in this Vlog, Grant makes the case that price is only one criteria of purchase. There are more…
Often, when I’m doing sales seminars and I talk about price, someone will say to me ‘but people only buy on price, there isn’t anything else’ and at that point I’ll often ask people to go out into the hotel car park and just write down the first makes a vehicle that they see. Of course, when they come back they will give me different vehicles; Mercedes, Audi, BMW, Ford… but surely if people buy on price, they should only be one car in the car park – the cheapest.
Of course, cost is a factor, but it is only one of the criteria of purchase that people have, amongst many others. There are at least three other factors that are just as important as price.
The first one is risk. If you don’t believe something’s going to solve the problems that you need it to solve, you won’t buy. For example; there’s no point buying a cheap software platform that you bring into your business and simply won’t work.
The second one is emotion. A pair of unbranded trainers simply won’t provide the same sense of winning as a pair of Nike’s and, therefore, we are willing to pay more for the ticks on those trainers.
The third is convenience. If you’re driving home from work, and realise you’ve run out of milk, would you really drive 10 minutes out of your way to save a few pennies on a pint of milk, or would you just get it from the nearest petrol station?
The other factor, that would change your perception of price is the context. You see price is fixed, but value is relative. For example, you would probably expect to pay more for a cold drink from a refrigerator, in a park, on a very hot summers day, than you would expect to pay walking around a supermarket doing your weekly shop. The fact is, when you’re thirsty on a very hot day in a park, the relative value of a refrigerated drink goes up.
So the next time you’re being hammered on price, think about the many other variables you have that you can play with.
There may be small changes to the spoken word in this transcript in order to facilitate the readability of the written English
As always Grant – on the button. Good to be reminded of car park exercise.
Thanks Chris. Yes, the car park exercise is always a winner!