Determining the total cost of a product is not as simple as looking at two different prices. Price may get the most attention in the decision making process but cannot be looked at as the only factor. Here are some other important factors to consider in the total cost of a product:
Ø Quality of the product- How long will it last and what are the repair costs if it needs to be repaired?
Ø Brand- Is this a well known brand and will they be around in the future?
Ø Customer Service- Is the company easy to get a hold of? What kind of after sale service do they provide?
Ø Return Process- How convenient is the return process?
Ø Money Back Guarantee- Do they offer a guarantee?
Additionally, lowest price doesn’t often equal best value. In fact, if the price for a product or service is far lower than the other competitor prices, this should raise a red flag. The old adage of “you get what you pay for” is especially true here. A customer will often say their decision starts and ends with price. This could be due to the fact that they don’t see any additional value in your product or service. This is a great opportunity for the salesperson to help differentiate his or her product or service from the competition. For example, does the customer understand how your product or service will make their life better? Do they understand what the true differences are in the price? If you sell a service rather than a product then you have some additional ways of quantifying value to your customers. Here are a few ways you can ensure your customers are looking at the total cost:
Ø Show them how your service saves them time and then quantify the labor savings into cost savings.
Ø If your service is better than your competitors and results in fewer customers calling into their Customer Service Dept; quantify the savings of reduced Customer Service calls.
Ø If they receive greater visibility as a result of your service, quantify the value of that information.
Ø Show them how your service impacts their COGS (Cost of Goods Sold) and quantify that impact.