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Defending Price or Selling Value…

What do IKEA; free breakfast; and the memory of my Dad have in common with selling value?  (Really Gary?  Slow day?)  No, really. 

I visit the IKEA cafeteria some Monday mornings.  Since they opened in 2011 they’ve offered a Monday morning breakfast special – free breakfast.  Free – my Dad would be proud. 

It’s a simple affair; scrambled eggs; potatoes; two strips of bacon; and coffee.  And the setting (if you’ve never been in an IKEA store) is a large cafeteria, in a “very-big-box” retail store (400,000+ square feet big).  The parking lot at my office borders the IKEA store, so it’s a short walk for a free breakfast.  Free. 

Let’s pretend you are the sales rep and I am your prospect.  If you were selling me the value of this IKEA breakfast, what would you focus on?  Go on – take a moment and write it down.  We’ll come back to it. 

My fellow sales professionals have worked with me recently on ways to articulate value during their sales process.  In my opinion, selling value (vs. addressing price) is a huge challenge for us.  There are many reasons for this, but generally, I believe value tends to be vague; usually varies by person; and can be very hard to quantify.  

Our prospects often gravitate towards price, don’t they?  And we can inadvertently help this migration by offering things like TCO or ROI calculators.  Guess what the calculators drawn the prospect’s attention to?  Hint – it’s not the “Return” (that’s the number we came up with); it’s the “Cost” in the TCO or the “Investment” in the Return on Investment.  Unlike value, cost is specific; measurable; objective; and doesn’t vary by person. 

My Dad was a “Depression-Era Baby”.  That meant was he was very cost-conscious.  No matter how hard a salesman tried to sell him value, ultimately the price was the determining factor.  I suppose growing up in the Depression had that effect.  When you own little and make even less, everything seems unaffordable. 

In spite of our recent recession, I think we still live in an era of affluence.  However, we don’t like to pay high prices – that’s why prospects often pit sales people against one another to compete for their business.  Do you compete on price?  Your prospect hopes so: 

The Law of the Marketplace: 

If only one price can be obtained for any quotation, the price will be unreasonable.

                                  Unknown Sage 

And who doesn’t enjoy getting a deal? 

         It’s not the cheaper things

That we want to possess

But expensive things

That cost a little less.

                                  Rolf B. White 

An accurate depiction of my Dad’s perspective.  He preferred the higher quality; he listened to the sales presentation featuring value; he just wanted it to cost a little less.  And if he had to make a choice, price often won out over value.  (Although occasionally, he was able to obtain both – and that made for a very good day.) 

Like a free IKEA breakfast on Monday’s – it definitely fits the definition of “a little less”.  My value?  Hint – it’s not the price.  It’s getting out of the office for a few minutes of quiet time to work on a project.  It’s the pleasant, outdoor walk in Colorado sunshine. And it’s the fond memories of my Dad.  I’m visualizing his proud smile as if he joined me for the free breakfast. 

Curious – are those the value statements you wrote down? 

GAP 

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2 Comments


  1. Philip Noftsinger
    Mar 27, 2012

    Excellent positioning of price vs value. Asking yourself how you would sign up new clients if your industry offerred the product for free is a great way to assess the value of your particular product.


    • Gary
      Apr 02, 2012

      Hi Phil. I agree – good idea for getting price out of the way. Thanks for adding your wisdom. GAP

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