"Value vs Price"

"It is a common belief that low price is the prime motivator in the consumer's decision to purchase. If this were the case, then we would all be eating at McDonald's and driving Yugo's. How does one explain the success of companies like Rolex; Rolls Royce; Ferarri, Cross Pens and many others???"

For many in the detail business when asked why they did not close a sale the response is: "the customer thought it cost too much."

The key here is to determine why the customer says: "it costs too much."

As mentioned above price is not the motivating factor in a purchase, there are just too many examples of items that sell for not only high prices, but extremely high prices. Why is that?

Take a Rolex watch. It can cost about $10,000 and with all the options as much as $50,000. Obviously the average customer is not going to pay $50,000 for a watch. But there seems to be enough customers that will to keep Rolex "ticking" as a company, right?

You can buy a very good functional watch for $25, and a very nice watch for less than $100, but a Rolex can cost as much as 500 times that. I ask you, is the Rolex 500 times better? Does it keep time 500 times better? Of course not.

So what is it that gives a Rolex 500 times more value?

Key word here is VALUE.

The Rolex customer believes that they get 500 times more value for them vs a $100 watch. It is all about what the customer receives from ownership.

In a detail business you have to sell the benefits of your detail service before selling price.

If a customer does not know why their car needs the service, if they do not know the benefits of the service then they see no value. For that customer the price will never be low enough, even if it is FREE.

We mailed out 10,000 FREE car wash coupons when I owned and operated an exterior car wash and we got back only 500, about 2.5% and it was FREE.

So, it is all about VALUE, and if something has no value then it can never be cheap enough, even if it is free.

However, if the customers perceived value is higher than the cost, they will buy.

So in your presentation of your detail service you need to effectively sell the need their vehicle has and the benefits of the service you provide and why it is so good. If you can communicate a perceived value to them you will get the sale.

For the most part people who come to your shop or call you are not do-it-yourselfers, if they were they would be at home detailing their own cars. But for whatever reason they are asking you to do the work, that is "do-it-for-me."

Remember too that when communicating value to the customer of your detail it is not always the immediate benefit to the vehicle, but the longer term benefit to the customer will be. More value when they are ready to sell the car.

Once a customer has a clear understanding of the benefits derived from using your detail service they are in a frame of mind to hear the price, and only then.

PRICE IS NEVER A FACTOR IN A SALE UNLESS YOU MAKE IT A FACTOR

For this reason you should NEVER tell the customer the price of your service until you have evaluated the needs of the vehicle and explained the benefits to the car and to the customer, long term by purchasing the services you recommend. ALWAYS talk price at the end of your presentation.

That way you have the opportunity to show need, build value into their perception of your detail service.

NEVER POST PRICES OR PUT THEM ON A MENU

If the customer has the price before any conversation takes place about the needs of the car or before you can create perceived value in their mind, they have no real frame of reference to compare the price to. However, if you can show need and create perceived value that is higher than your price you will get the sale.

Posting prices on a menu board, in your ads or on a service menu simply "closes the sales door" before you get it open. Customer sees the price and does not call or simply walks away.

Of course there are some customers who will never buy at any price. Some have no idea of the cost and are calling to see if they can get something done for the price of a car wash. But again that is because they have never been explained the value. And some don't care. That is the skill of a good salesperson to not waste time with these type of customers. Treat them nicely but don't waste time on them.

In closing, remember if someone will not pay you what you think your detail service is worth it is because you have not convinced them that you service is worth what you are charging.

And, remember too, not all people will pay $50,000 for a Rolex and not all people will pay for the cost of a detail. Market only to those that will pay the price.

Bud Abraham



Edited 2 time(s). Last edit at 10/07/2011 10:44PM by buda.