What Price are WE Willing to Pay?
Ed Lemco’s June 15, 2009 Commentary to Sales Tracking Members ***
Tracking sales steps every day continues to prove that volume is not a product of reducing price. This is clearly evidenced by members in the group who are outselling their competition by a huge amount while maintaining profit margins as much as double what the competition appears to retain. A zeal for the deal and making it easier to buy will trump a price bid nearly every time.
We keep re-establishing: it is all about the price we are willing to pay to provide the accommodation and level of services that support a buying decision from the customer. We pay the price by being open more hours and having enough staff to provide a superior customer experience. These factors make time for the customer to realize what they gain with their purchase. We pay the price by providing constant vigilance and support of a proven sales process subject to constant erosion by a sales team that will, like water, inevitably follow the path of least resistance.
We pay the price by being willing to work harder than our competition. We are providing more of what the customer is really looking for – attention. This is why we sell more at a higher price – we have paid the price to do so. We have even earned the right to push the edge of the envelope by providing the exposure, attention and overall experience the customer really wants.
Tere is no question that more customers than in the past are coming to us with low prices quoted by other dealers. If all they received was a price quote, they will be very receptive to a higher level of attention. We make sure, however, that we provide this higher level of attention before engaging in price discussions. We have paid the price to be in this position; let’s not squander that expense.
Assume the “only” price and allow the customer to pay it when price is not the issue. When price is really the issue, we have paid the price to be able to respond to it by being able to work “every deal for every dollar”, which always comes down to: Can I replace the unit or can I replace the customer? You have paid the price to count all of the money before making the decision. The process should always leave the decision of “reject the deal” to senior management, who should not only count all of the money, but also consider the full merits of the deal including the impact on inventory and future allocation. The sales manager has the authority to say “yes” within established parameters but is never given the authority to say “no”.